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 quarter ended June 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-40933

EXCELFIN ACQUISITION CORP.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

86-2933776

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

100 Kingsley Park Dr.

Fort Mill, South Carolina 29715

(Address of principal executive offices)

(917) 209-8581

(Issuer’s telephone number)

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 share of Class A common stock and one-half of one redeemable warrant	XFINU	The Nasdaq Stock Market
Class A common stock, par value $0.0001 per share	XFIN	The Nasdaq Stock Market
Redeemable warrants, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50	XFINW	The Nasdaq Stock Market

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 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 August 19, 2024, there were 6,583,986 shares of Class A common stock, $0.0001 par value, issued and outstanding.

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EXCELFIN ACQUISITION CORP.

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2024

TABLE OF CONTENTS


		Page
PART I. FINANCIAL INFORMATION

Item 1.	Condensed Financial Statements (unaudited)

	Condensed Balance Sheets as of June 30, 2024 (unaudited) and December 31, 2023	3

	Condensed Statements of Operations for the three and six months ended June 30, 2024 and June 30, 2023 (unaudited)	4

	Condensed Statements of Changes in Stockholders’ Deficit for the three and six months ended June 30, 2024 and June 30, 2023 (unaudited)	5

	Condensed Statements of Cash Flows for the six months ended June 30, 2024 and June 30, 2023 (unaudited)	6

	Notes to Condensed Financial Statements (unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32

Item 4.	Controls and Procedures	33

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	35

Item 1A.	Risk Factors	35

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities	35

Item 3.	Defaults Upon Senior Securities	35

Item 4.	Mine Safety Disclosures	35

Item 5.	Other Information	35

Item 6.	Exhibits	36

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

EXCELFIN ACQUISITION CORP.

CONDENSED BALANCE SHEETS

(UNAUDITED)


	June 30,		December 31,
	2024		2023
ASSETS
Current Assets:
Cash	$	110,602	$	45,219
Prepaid expenses		92,801		72,319
Total Current Assets		203,403		117,538
Cash held in trust		17,103,287		23,995,629
Income Tax Receivable		203,916		—
Deferred Tax Asset		3,845		9,474
Total Assets	$	17,514,451	$	24,122,641

LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable and accrued expenses	$	7,600,692	$	5,874,382
Excise tax payable		2,242,508		2,170,277
Income taxes payable		—		96,158
Franchise tax payable		134,800		36,400
Unrecognized tax benefit		182,975		130,909
Accrued offering costs		400,907		400,907
Due to related parties		1,543,095		322,724
Working capital loan - Sponsor		1,296,653		1,296,654
Total Current Liabilities		13,401,630		10,328,411
Deferred underwriting compensation		1,610,000		1,610,000
Total liabilities		15,011,630		11,938,411

Commitments and Contingencies (Note 6)

Common stock, subject to possible redemption (1,539,316 and 2,201,533 shares at redemption value as of June 30, 2024, and December 31, 2023, respectively)		16,677,857		23,750,019
Stockholders’ deficit:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding		—		—
Class A common stock, $0.0001 par value, 200,000,000 authorized, 5,750,000 issued and outstanding as of June 30, 2024, and December 31, 2023 (excluding 1,539,316 and 2,201,533 shares subject to possible redemption as of June 30, 2024, and December 31, 2023, respectively)		575		575
Additional paid-in capital		—		—
Accumulated deficit		(14,175,611)		(11,566,364)
Total Stockholders’ Deficit:		(14,175,036)		(11,565,789)
Total Liabilities, Common Stock Subject to Possible Redemption and Stockholders’ Deficit	$	17,514,451	$	24,122,641

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

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EXCELFIN ACQUISITION CORP.

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)


	For the Three Months				For the Six Months
	Ended				Ended
	June 30,				June 30,
	2024		2023		2024		2023
EXPENSES
Financial services and admin fee - related party	$	30,000	$	30,000	$	60,000	$	60,000
Franchise tax		50,000		51,622		100,000		101,622
General and administrative		935,684		3,394,865		2,678,350		3,822,823
TOTAL EXPENSES		1,015,684		3,476,487		2,838,350		3,984,445

OTHER INCOME
Income earned on Cash and Investments held in Trust Account		198,002		1,376,395		451,183		3,897,723
TOTAL OTHER INCOME		198,002		1,376,395		451,183		3,897,723

Net (loss) before provision for income taxes		(817,682)		(2,100,092)		(2,387,167)		(86,722)
Provision for income taxes		41,049		278,202		87,621		797,181
Net (loss)	$	(858,731)	$	(2,378,294)	$	(2,474,788)	$	(883,903)
Weighted average number of shares Class A redeemable common stock outstanding, basic and diluted		1,721,244		7,390,393		1,961,388		15,152,076
Basic and diluted net (loss) per share of Class A redeemable common stock	$	(0.11)	$	(0.18)	$	(0.32)	$	(0.04)
Weighted average number of shares of Class A & Class B non - redeemable common stock outstanding, basic and diluted		5,750,000		5,750,000		5,750,000		5,750,000
Basic and diluted net (loss) per share of Class A & Class B non - redeemable common stock	$	(0.11)	$	(0.18)	$	(0.32)	$	(0.04)

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

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EXCELFIN ACQUISITION CORP.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024


	Class B			Additional
	Common Stock			Paid-In		Accumulated			Stockholders’
	Shares	Amount		Capital		Deficit			Deficit
Balance as of January 1, 2024	5,750,000	$	575	$	—	$	(11,566,364)	$	(11,565,789)
Current period remeasurement to redemption value	—		—		—		(296,509)		(296,509)
Capital contribution from Sponsor	—		—		—		88,676		88,676
Net loss	—		—		—		(1,616,057)		(1,616,057)
Balance as of March 31, 2024	5,750,000	$	575	$	—	$	(13,390,254)	$	(13,389,679)
Current period remeasurement to redemption value	—		—		—		145,605		145,605
Excise tax on Class A common stock redemption	—		—		—		(72,231)		(72,231)
Net loss	—		—		—		(858,731)		(858,731)
Balance as of June 30, 2024	5,750,000		575		—	$	(14,175,611)	$	(14,175,036)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023


	Class B			Additional
	Common Stock			Paid-In		Accumulated		Stockholders’
	Shares	Amount		Capital		Deficit		Deficit
Balance as of January 1, 2023	5,750,000	$	575	$	—	$	(8,806,536)	$	(8,805,961)
Current period remeasurement to redemption value	—		—		—		(1,952,348)		(1,952,348)
Net income	—		—		—		1,494,391		1,494,391
Balance as of March 31, 2023	5,750,000	$	575	$	—	$	(9,264,493)	$	(9,263,918)
Current period remeasurement to redemption value	—		—		—		(1,046,571)		(1,046,571)
Excise tax on Class A common stock redemption	—		—		—		(1,893,966)		(1,893,966)
Net loss	—		—		—		(2,378,294)		(2,378,294)
Balance as of June 30, 2023	5,750,000		575		—	$	(14,583,324)	$	(14,582,749)

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

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EXCELFIN ACQUISITION CORP.

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	For the		For the
	Six Months		Six Months
	Ended		Ended
	June 30,		June 30,
	2024		2023
Cash Flows From Operating Activities:
Net (loss)	$	(2,474,788)	$	(883,903)
Adjustments to reconcile net (loss) to net cash used in operating activities:
Income earned on Cash and Investments held in Trust Account		(451,183)		(3,897,723)
Changes in operating assets and liabilities:
Due to related parties		—		(275,834)
Prepaid expenses		(20,482)		204,893
Income tax payable (receivable)		(300,074)		(329,695)
Franchise tax payable		98,400		(111,090)
Unrecognized tax benefit		52,066		—
Deferred tax asset		5,629		—
Accounts payable and accrued expenses		1,726,308		3,216,005
Net Cash Used in Operating Activities		(1,364,124)		(2,077,347)

Cash Flows From Investing Activities:
Cash redemption withdrawn from Trust Account		7,223,066		189,396,563
Deposits into Trust Account		(247,541)		—
Withdrawal of trust account funds for taxes		368,000		1,418,788
Net Cash Provided by Investing Activities		7,343,525		190,815,351

Cash Flows From Financing Activities:
Payments made in relation to redemptions of Class A common stock		(7,223,066)		(189,396,563)
Payments for offering costs		—		(15,000)
Capital contribution from Sponsor		88,676		—
Advances from related party		1,220,371		—
Proceeds from Working Capital Loan		—		502,450
Net Cash Used in Financing Activities		(5,914,019)		(188,909,113)

Net change in cash		65,383		(171,109)
Cash at beginning of period		45,219		351,432
Cash at end of period	$	110,602	$	180,323

Supplemental disclosure of cash flow information:
Cash Paid for Taxes	$	371,456	$	1,128,498

Supplemental Disclosure of Non-cash Financing Activities:
Current period remeasurement to redemption value	$	150,904	$	2,998,919
Excise tax on Class A common stock redemptions	$	72,231	$	1,893,966

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

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ExcelFin Acquisition Corp.

Notes to Unaudited Condensed Financial Statements

NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS AND LIQUIDITY

ExcelFin Acquisition Corp. (the “Company”) was incorporated in Delaware on March 15, 2021. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”).

The Company is not limited to a particular industry or sector 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 June 30, 2024, the Company had not commenced any operations. All activity for the period from March 15, 2021 (inception) through June 30, 2024 relates to the Company’s formation and initial public offering (“Initial Public Offering”), which is described below. 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 Initial Public Offering. The Company has selected December 31 as its fiscal year end.

The registration statement for the Company’s Initial Public Offering was declared effective on October 21, 2021. On October 25, 2021, the Company consummated the Initial Public Offering of 20,000,000 units (“Units” and, with respect to the common stock included in the Units being offered, the “Public Shares”), generating gross proceeds of $200,000,000, which is described in Note 3.

Simultaneously with the closing of the Initial Public Offering, the Company consummated the private sale (the “Private Placement”) of an aggregate of 11,700,000 warrants (the “Private Placement Warrants”) to ExcelFin SPAC LLC (the “Sponsor”) at a purchase price of $1.00 per Private Placement Warrant, generating gross proceeds to the Company in the amount of $11,700,000.

On October 25, 2021, the underwriters purchased an additional 3,000,000 Option Units pursuant to the full exercise of the over-allotment option. The Option Units were sold at an offering price of $10.00 per Unit, generating additional gross proceeds to the Company of $30,000,000.

As of October 25, 2021, transaction costs amounted to $22,726,465 consisting of $4,600,000 of underwriting fees paid in cash, $8,050,000 of deferred underwriting fees payable (which are held in a trust account with U S Bank acting as trustee (the “Trust Account”), $9,200,000 funded to the trust account and $876,465 of costs related to the Initial Public Offering. Cash of $110,602 was held outside of the Trust Account on June 30, 2024, and was available for working capital purposes. The $8,050,000 deferred underwriting fees are contingent upon the consummation of the Business Combination. The Company entered into fee waiver agreements with KeyBanc Capital Markets Inc. and UBS Securities LLC on August 7, 2023 and August 11, 2023, respectively. Eighty percent (80%), or $6,440,000 in the aggregate, of the deferred underwriting fees have been waived, leaving $1,610,000 of deferred underwriting fees payable to EXOS Securities LLC upon closing pursuant to the Business Combination Agreement. The Company recorded a reduction of $6,440,000 of deferred underwriting fees payable and a gain on forfeiture of deferred underwriting compensation payable in the period ending September 30, 2023. Although the UBS Securities LLC waiver of $6,037,500 relates only to the business combination that may be consummated pursuant to the Business Combination Agreement with Betters, the Company believes that there is only a remote possibility that the Company could consummate another business combination if the Business Combination Agreement with Betters were to be terminated for any reason.

Following the closing of the Initial Public Offering on October 25, 2021, an amount of $234,600,000 ($10.20 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the Private Placement was placed in a trust account (“Trust Account”) until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the Trust Account, as described below. Until October 26, 2023, funds in the Trust Account were held only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended (the “Investment Company Act”). However, to mitigate the risk of us being deemed to have been operating as an unregistered investment company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act), prior to the 24-month anniversary of the effective date of the registration statement relating to the

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Company’s initial public offering, the Company instructed American Stock Transfer & Trust Company, the trustee with respect to the Trust Account (the “Trustee”), to liquidate the U.S. government treasury obligations or money market funds held in the Trust Account and to hold all funds in the Trust Account in cash in an interest bearing account until the earlier of consummation of our initial business combination or liquidation. In connection with such instructions, on October 26, 2023, the Company and the Trustee entered into an amendment to the Investment Management Trust Agreement dated October 25, 2021, which governs the investment of monies held in the Trust Account, to specifically allow the investment of those funds into an interest bearing account.

On April 13, 2023, the Company held a special meeting of stockholders (the “First Extension Meeting”) to vote on a proposal to extend the date by which the Company must complete its initial business combination from April 25, 2023 to October 25, 2023 (the “First Extension Amendment Proposal”), and the stockholders approved the First Extension Amendment Proposal at that meeting. In connection with the vote to approve the First Extension Amendment Proposal, the holders of 18,211,208 shares of the Company’s Class A common stock (representing 79% of the shares of Class A common stock then outstanding) properly exercised their rights to redeem their shares for cash. On October 20, 2023, the Company held a special meeting of stockholders (the “Second Extension Meeting”) to vote on a proposal to extend the date by which the Company must complete its initial business combination from October 25, 2023 to April 25, 2024 (the “Second Extension Amendment Proposal”), and the stockholders approved the Second Extension Amendment Proposal at that meeting. In connection with the vote to approve the Second Extension Amendment Proposal, the holders of 2,587,259 shares of the Company’s Class A common stock (representing 54% of the shares of Class A common stock then outstanding) properly exercised their rights to redeem their shares for cash. The Company deposited $132,000 into the Trust Account providing the extension to complete the initial business combination to January 25, 2024, and subsequently, made three equal monthly deposits in January, February, and March 2024 of $44,031 each extending the initial business combination period to April 25, 2024. On April 25, 2024, the Company held a special meeting of stockholders (the “Third Extension Meeting”) to vote on a proposal to extend the date by which the Company must complete its initial business combination from April 25, 2024 to July 25, 2024 (the “Third Extension Amendment Proposal”), and the stockholders approved the Third Extension Amendment Proposal at that meeting. In connection with the vote to approve the Third Extension Amendment Proposal, the holders of 662,217 shares of the Company’s Class A common stock (representing 30% of the shares of Class A common stock then outstanding) properly exercised their rights to redeem their shares for cash. The Company deposited made three equal monthly deposits in April, May, and June 2024 of $38,483 each extending the initial business combination period to July 25, 2024. On July 24, 2024, the Company held a special meeting of stockholders (the “Fourth Extension Meeting”) to vote on a proposal to extend the date by which the Company must complete its initial business combination from July 25, 2024 to December 25, 2024 (the “Fourth Extension Amendment Proposal”), and the stockholders approved the Fourth Extension Amendment Proposal at that meeting. In connection with the vote to approve the Fourth Extension Amendment Proposal, the holders of 705,330 shares of the Company’s Class A common stock (representing approximately 46% of the shares of Class A common stock then outstanding) properly exercised their rights to redeem their shares for cash. In connection with this these redemptions, approximately $7.7 million was withdrawn from the trust account to fund such redemptions, leaving a balance of approximately $9.1 million. The Company subsequently deposited approximately $25,020 into the Trust Account as was required to effect the initial one-month extension approved as part of the Fourth Extension Amendment Proposal extending the period for an initial business combination to August 25, 2024, and ability to continue one month extensions through December 25, 2024 if additional deposits into the Trust Account are made accordingly.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations with one or more operating businesses or assets with a fair market value equal to at least 80% of the value of the net assets held in the Trust Account (as defined below) (excluding the deferred underwriting commissions and taxes payable on the interest earned on t

SEC Form 10-Q filed by ExcelFin Acquisition Corp