UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the quarterly period ended September 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the transition period from to

Commission File No. 001-40694

CRYPTO 1 ACQUISITION CORP

(Exact name of registrant as specified in its charter)

Cayman Islands

N/A

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

1221 Brickell Avenue, Suite 900

Miami, Florida 33131

(Address of Principal Executive Offices, including zip code)

(Registrant’s telephone number, including area code) (305) 347-5140

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units, each consisting of one Class A ordinary share, par value $0.0001 per share, and three-quarters of one Redeemable Warrant	DAOOU	The Nasdaq Stock Market LLC
Class A ordinary shares, par value $0.0001 per share, included as part of the Units	DAOO	The Nasdaq Stock Market LLC
Redeemable Warrants, each exercisable for one Class A ordinary share for $11.50 per share, included as part of the Units	DAOOW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

	☐ Large accelerated filer	☐ Accelerated filer
	☒ Non-accelerated filer	☒ Smaller reporting company
		☒ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☒ No ☐

As of November 14, 2022 there were 23,000,000 shares of Class A ordinary shares, par value $0.0001 per share, and 5,750,000 shares of Class B ordinary shares, $0.0001 par value per share, issued and outstanding.

Table of Contents

CRYPTO 1 ACQUISITION CORP

Quarterly Report on Form 10-Q

TABLE OF CONTENTS


		Page
PART 1 – FINANCIAL INFORMATION

Item 1.	Interim Financial Statements (Unaudited)	1

	Condensed Balance Sheets as of September 30, 2022 (Unaudited) and as of December 31, 2021	1

	Condensed Statements of Operations for the three and nine months ended September 30, 2022 and for the three months ended September 30, 2022 and for the period May 24, 2021 (inception) through September 30, 2021	2

	Condensed Statements of Changes in Shareholder’s Deficit and Class A ordinary shares subject to possible redemption for the three and nine months ended September 30, 2022 and for the three months ended September 30, 2021 and for the period May 24, 2021 (inception) through September 30, 2021	3

	Condensed Statements of Cash Flows for the nine months ended September 30, 2022 and for the period May 24, 2021 (inception) through September 30, 2021	4

	Notes to Condensed Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	22

Item 4.	Control and Procedures	22

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	23

Item 1A.	Risk Factors	23

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24

Item 3.	Defaults Upon Senior Securities	24

Item 4.	Mine Safety Disclosures	24

Item 5.	Other Information	24

Item 6.	Exhibits	25

SIGNATURES		26

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1. INTERIM FINANCIAL STATEMENTS (UNAUDITED)

CRYPTO 1 ACQUISITION CORP

CONDENSED BALANCE SHEETS


	September 30, 2022		December 31, 2021
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash	$	213,341	$	1,193,008
Prepaid expenses and other assets		199,717		544,282
Total current assets		413,058		1,737,290
Investments held in Trust Account		232,344,675		231,128,639
TOTAL ASSETS	$	232,757,733	$	232,865,929

LIABILITIES, CLASS A REDEEMABLE ORDINARY SHARES AND SHAREHOLDERS’ DEFICIT

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	68,480	$	58,026
Due to affiliate		22,986		199,316
Total current liabilities		91,466		257,342
Deferred underwriting fee payable		8,050,000		8,050,000
Total liabilities		8,141,466		8,307,342

COMMITMENTS AND CONTINGENCIES (NOTE 6)
CLASS A REDEEMABLE ORDINARY SHARES
Class A Ordinary Shares subject to possible redemption, $0.0001 par value, 23,000,000 shares		232,344,675		231,128,639

SHAREHOLDERS’ DEFICIT
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding		—		—
Class A ordinary shares; $0.0001 par value; 200,000,000 shares authorized; none issued or outstanding (excluding 23,000,000 shares subject to possible redemption)		—		—
Class B ordinary shares; $0.0001 par value; 20,000,000 shares authorized; 5,750,000 issued and outstanding		575		575
Additional paid-in capital		—		—
Accumulated deficit		(7,728,983)		(6,570,627)

Total Shareholders’ deficit		(7,728,408)		(6,570,052)

LIABILITIES, CLASS A REDEEMABLE ORDINARY SHARES AND SHAREHOLDERS' DEFICIT	$	232,757,733	$	232,865,929

The accompanying notes are an integral part of these unaudited condensed financial statements

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CRYPTO 1 ACQUISITION CORP

CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)


					For the nine		For the period from
	For the three months				months ended		May 24, 2021(inception)
	ended September 30,				September 30,		through September 30,
	2022		2021		2022		2021
OPERATING EXPENSES
General and administrative	$	334,401	$	9,436	$	1,158,355	$	39,022
Total operating expenses		334,401		9,436		1,158,355		39,022

OTHER INCOME
Realized gain on marketable securities		773,856		—		907,992		—
Unrealized gain on marketable securities		308,044		—		308,044		—
Total other income		1,081,900		—		1,216,036		—

NET INCOME (LOSS)	$	747,499	$	(9,436)	$	57,680	$	(39,022)

Weighted average shares outstanding of Class A ordinary shares subject to possible redemption		23,000,000		—		23,000,000		—

Basic and diluted net income per share, Class A ordinary shares subject to possible redemption	$	0.04	$	—	$	0.01	$	—

Weighted average shares outstanding of Class B ordinary shares		5,750,000		5,750,000		5,750,000		5,750,000

Basic and diluted net loss per share, Class B	$	(0.01)	$	(0.00)	$	(0.04)	$	(0.01)

The accompanying notes are an integral part of these unaudited condensed financial statements.

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CRYPTO 1 ACQUISITION CORP

CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDER’S DEFICIT

AND CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 (UNAUDITED)


	Class A ordinary share										Total
	subject to possible redemption			Class B ordinary share			Additional		Accumulated		Shareholders’
	Shares	Amount		Shares	Amount		paid-in capital		deficit		deficit
Balance, Dec 31, 2021	23,000,000	$	231,128,639	5,750,000	$	575	$	—	$	(6,570,627)	$	(6,570,052)
Accretion of Class A ordinary shares to redemption value	—		(64,336)	—		—		—		64,336		64,336
Net Loss	—		—	—		—		—		(406,499)		(406,499)
Balance, Mar 31, 2022	23,000,000		231,064,303	5,750,000		575		—		(6,912,790)		(6,912,215)
Accretion of Class A ordinary shares to redemption value	—		198,472	—		—		—		(198,472)		(198,472)
Net Loss	—		—	—		—		—		(283,320)		(283,320)
Balance, June 30, 2022	23,000,000	$	231,262,775	5,750,000	$	575	$	—	$	(7,394,582)	$	(7,394,007)
Accretion of Class A ordinary shares to redemption value	—		1,081,900	—		—		—		(1,081,900)		(1,081,900)
Net Income	—		—	—		—		—		747,499		747,499
Balance, September 30, 2022	23,000,000	$	232,344,675	5,750,000	$	575	$	—	$	(7,728,983)	$	(7,728,408)

FOR THE PERIOD FROM MAY 24, 2021 (INCEPTION) THROUGH SEPTEMBER 30, 2021


				Additional				Total
	Class B ordinary share			paid-in		Accumulated		Shareholders’
	Shares	Amount		capital		deficit		deficit
Balance, May 24, 2021 (inception)	—	$	—	$	—	$	—	$	—
Issuance of Class B ordinary shares to Sponsor	5,750,000		575		24,425		—		25,000
Net Loss	—		—		—		(29,586)		(29,586)
Balance, June 30, 2021	5,750,000	$	575	$	24,425	$	(29,586)	$	(4,586)
Net Loss	—		—		—		(9,436)		(9,436)
Balance, September 30, 2021	5,750,000	$	575	$	24,425	$	(39,022)	$	(14,022)

The accompanying notes are an integral part of these unaudited condensed financial statements.

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CRYPTO 1 ACQUISITION CORP

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)


		For the	For the period
	nine months		May 24, 2021
	ended		(inception) through
	September 30, 2022		September 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss)	$	57,680	$	(39,022)
Adjustments to reconcile net loss to net cash used in operating activities:
General and administrative expenses paid by affiliate				39,022
Realized gain on marketable securities		(907,992)
Unrealized gain on marketable securities		(308,044)		—
Changes in operating assets and liabilities:
Prepaid expenses and other assets		344,565		—
Accounts payable and accrued expenses		10,454		—
Due to affiliates		(176,330)		—
Net cash used in operating activities		(979,667)		—

CASH FLOWS FROM INVESTING ACTIVITIES
Redemption of marketable securities		463,302,804		—
Purchase of marketable securities		(463,302,804)		—
Net cash used in investing activities		—		—

NET DECREASE IN CASH		(979,667)		—

CASH, BEGINNING OF PERIOD		1,193,008		—

CASH, END OF PERIOD	$	213,341	$	—

Supplemental disclosure of noncash activities:

Accretion of Class A ordinary shares to redemption value	$	1,216,036	$	—
Payment of deferred offering costs and prepaid expenses by note payable - related party	$	—	$	157,725
Deferred offering costs paid by affiliate	$	—	$	11,919
Prepaid expenses paid directly by affiliates	$	—	$	35,000
Payment of prepaid expenses by the Sponsor in exchange for the issuance of Class B ordinary shares	$	—	$	25,000
Deferred offering costs included in accrued offering costs	$	—	$	28,010

The accompanying notes are an integral part of these unaudited condensed financial statements.

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CRYPTO 1 ACQUISITION CORP

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022

(Unaudited)

Note 1 — Description of Organization and Business Operations and Liquidity

Crypto 1 Acquisition Corp (the “Company”, “we”, “our”) was incorporated in the Cayman Islands on May 24, 2021. The Company is a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities (the “Business Combination”).

The Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

As of September 30, 2022, the Company had not commenced any operations. All activity through September 30, 2022, relates to the Company’s formation and Initial Public Offering (“IPO”), which is described below and, since the offering, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the IPO. The Company did not have any activity for the period from May 24, 2021 (inception) through September 30, 2022.

The registration statement for the Company’s IPO (the “Registration Statement”) was declared effective on December 6, 2021. On December 9, 2021, the Company consummated the sale of 20,000,000 units (“Units”) with each Unit consisting of one Class A ordinary share of the Company, par value $0.0001 per share(the “Public Shares”), and three-quarters of one redeemable warrant of the Company, with each whole warrant entitling the holder thereof to purchase one Ordinary Share for $11.50 per share at $10.00 per Unit generating gross proceeds of $200,000,000, which is discussed in Note 3. Such amount does not include the simultaneous sale of the Over-allotment Units as discussed below. The Company has selected December 31 as its fiscal year end.

Simultaneously with the closing of the IPO, the Company consummated the sale of 7,400,000 warrants (“Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to the Company’s sponsor, Crypto 1 Sponsor LLC (the “Sponsor”) generating gross proceeds of $7,400,000 which is discussed in Note 4.

Additionally with the closing of the IPO, the Company consummated the closing of the sale of 3,000,000 additional Units at $10.00 per Unit upon receiving notice of the underwriter’s election to exercise its overallotment option (“Over-allotment Units”), generating additional gross proceeds of $30,000,000 . Since the underwriter’s over-allotment was exercised in full, the Sponsor did not forfeit any Founder Shares (as defined in Note 5). Simultaneously with the exercise of the overallotment, the Company consummated the sale of an additional 750,000 Private Placement Warrants at $1.00 per Private Placement Warrant to the Sponsor, generating gross proceeds of $

SEC Form 10-Q filed by Crypto 1 Acquisition Corp