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 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 No. 001-41223

PAPAYA GROWTH OPPORTUNITY CORP. I

(Exact name of registrant as specified in its charter)


Delaware		87-3071107
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3500 South Dupont Highway, Suite HX-102
Dover, DE 19901

(Address of Principal Executive Offices, including zip code)

(510) 214-3750

(Registrant’s telephone number, including area code)

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

Units, each consisting of one share of Class A common stock, par value $0.0001 per share, and one-half of one Redeemable Warrant	PPYAU	The Nasdaq Stock Market LLC
Shares of Class A common stock, par value $0.0001 per share, included as part of the Units	PPYA	The Nasdaq Stock Market LLC
Redeemable Warrants, each exercisable for one share of Class A common stock for $11.50 per share, included as part of the Units	PPYAW	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

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

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. ☐

As of August 6, 2024, there were 9,604,904 shares of Class A common stock, $0.0001 par value, and no shares of Class B common stock, $0.0001 par value, issued and outstanding.

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PAPAYA GROWTH OPPORTUNITY CORP. I

Quarterly Report on Form 10-Q

TABLE OF CONTENTS

		Page
PART 1 – FINANCIAL INFORMATION		2
Item 1.	Interim Financial Statements	2
	Condensed Balance Sheets as of June 30, 2024 (Unaudited) and December 31, 2023 (Restated)	2
	Unaudited Condensed Statements of Operations for the Three and Six months ended June 30, 2024 and 2023 (Restated)	3
	Unaudited Condensed Statements of Changes in Stockholders’ Deficit for the Three and Six months ended June 30, 2024 and 2023 (Restated)	4
	Unaudited Condensed Statements of Cash Flows for the Six months ended June 30, 2024 and 2023 (Restated)	5
	Notes to Unaudited Condensed Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	24
Item 4.	Control and Procedures	24
PART II – OTHER INFORMATION		26
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5.	Other Information	27
Item 6.	Exhibits	27
SIGNATURES		28

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Interim Financial Statements

PAPAYA GROWTH OPPORTUNITY CORP. I

CONDENSED BALANCE SHEETS


	June 30, 2024		December 31, 2023
	(Unaudited)		(Audited) (Restated)
ASSETS

CURRENT ASSETS
Cash	$	7,326	$	2,013
Prepaid expenses and other assets		71,147		43,677
Advance taxes paid		26,205		41,000
Interest income receivable		29,426		53,054
Total current assets		134,104		139,744
OTHER ASSETS
Cash held in Trust Account		7,854,571		24,976,375
TOTAL ASSETS	$	7,988,675	$	25,116,119

LIABILITIES, CLASS A COMMON STOCK SUBJECT TO REDEMPTION AND STOCKHOLDERS’ DEFICIT

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	525,085	$	480,958
Due to affiliate		261,000		174,000
Note payable-related party		3,429,360		2,624,070
State franchise tax payable		7,560		40,200
Excise tax liability		2,944,778		2,770,478
Deferred underwriting fee payable		15,125,000		15,125,000
Total current liabilities		22,292,783		21,214,706
Total liabilities		22,292,783		21,214,706
COMMITMENTS AND CONTINGENCIES (Note 6)
Class A common stock subject to possible redemption, $0.0001 par value; 710,529 and 2,303,207 shares at redemption value of $11.05 and $10.84 per share on June 30, 2024 and December 31, 2023, respectively		7,854,571		24,976,375
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; 110,000,000 shares authorized; 8,894,375 and 1,365,000 shares issued and outstanding excluding, 710,529 and 2,303,207 shares subject to possible redemption at June 30, 2024 and December 31, 2023, respectively		890		137
Class B common stock; $0.0001 par value; 20,000,000 shares authorized; 0 and 7,528,875 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively		—		753
Accumulated deficit		(22,159,569)		(21,075,852)
Total stockholders’ deficit		(22,158,679)		(21,074,962)
TOTAL LIABILITIES, CLASS A COMMON STOCK SUBJECT TO REDEMPTION AND STOCKHOLDERS’ DEFICIT	$	7,988,675	$	25,116,119

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

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PAPAYA GROWTH OPPORTUNITY CORP. I

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS


	For the Three Months Ended				For The Six Months Ended
	June 30,				June 30,
	2024		2023 (as restated)		2024		2023 (as restated)
OPERATING EXPENSES
General and administrative	$	235,394	$	350,728	$	793,700	$	968,491
Franchise tax		30,240		50,000		18,651		100,000
Total expenses		265,634		400,728		812,351		1,068,491

OTHER INCOME
Interest earned on investments in Trust Account		89,187		1,741,734		285,931		4,283,238
Realized gain on investments held in Trust Account		—		―		―		479,857
Total other income		89,187		1,741,734		285,931		4,763,095

(LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES		(176,447)		1,341,006		(526,420)		3,694,604
Income tax expense		(28,795)		(357,000)		(74,795)		(1,703,980)
Net (loss) income	$	(205,242)	$	984,006	$	(601,215)	$	1,990,624

Weighted average shares outstanding of Class A common stock		9,604,904		13,512,510		8,069,543		21,768,140
Basic and diluted net income (loss) per share, Class A	$	(0.02)	$	0.12	$	(0.02)	$	0.39
Weighted average shares outstanding of Class B common stock		—		7,528,875		1,902,902		7,528,875
Basic and diluted net income (loss) per share, Class B	$	0.00	$	0.05	$	(0.06)	$	0.07

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

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PAPAYA GROWTH OPPORTUNITY CORP. I

UNAUDITED CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024


	Common stock									Total
	Class A			Class B				Accumulated		stockholders’
	Shares	Amount		Shares		Amount		Deficit		Deficit
Balance, December 31, 2023 (As Restated)	1,365,500	$	137		7,528,875	$	753	$	(21,075,852)	$	(21,074,962)
Accretion of Class A common stock to redemption value	—		—		—		—		(281,479)		(281,479)
Excise taxes on stock redemption	—		—		—		—		(174,300)		(174,300)
Conversion from Class B to Class A common shares	7,528,875		753		(7,528,875)		(753)		—		—
Net loss	—		—		—		—		(395,973)		(395,973)
Balance, March 31, 2024	8,894,375	$	890		—	$	—	$	(21,927,604)	$	(21,926,714)
Accretion of Class A common stock to redemption value	—		—		—		—		(26,723)		(26,723)
Net loss	—		—		—		—		(205,242)		(205,242)
Balance, June 30, 2024	8,894,375	$	890		—	$	—	$	(22,159,569)	$	(22,158,679)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 (as restated)


	Common stock								Total
	Class A			Class B			Accumulated		stockholders’
	Shares	Amount		Shares	Amount		Deficit		Deficit
Balance, December 31, 2022	1,365,500	$	137	7,528,875	$	753	$	(11,250,903)	$	(11,250,013)
Accretion of Class A common stock to redemption value	—		—	—		—		(5,910,917)		(5,910,917)
Net income	—		—	—		—		1,006,619		1,006,619
Balance, March 31, 2023	1,365,500	$	137	7,528,875	$	753	$	(16,155,201)	$	(16,154,311)
Accretion of Class A common stock to redemption value	—		—	—		—		(1,044,125)		(1,044,125)
Excise taxes on stock redemption	—		—	—		—		(1,962,245)		(1,962,245)
Net income	—		—	—		—		984,006		984,006
Balance, June 30, 2023	1,365,500	$	137	7,528,875	$	753	$	(18,177,565)	$	(18,176,675)

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

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PAPAYA GROWTH OPPORTUNITY CORP. I

UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023


	For the Six Months Ended
	June 30
	2024		2023 (as restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income	$	(601,215)	$	1,990,624
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Interest earned on investments held in Trust Account		(285,931)		(4,283,238)
Realized gain on investment held in Trust Account		—		(479,857)
Deferred taxes (benefit)		—		(555,020)
Changes in operating assets and liabilities:
Prepaid expenses and other assets		(27,469)		157,371
Due to affiliate		87,000		72,500
Accounts payable and accrued expenses		44,128		13,056
Advance taxes paid		14,795		—
State income tax payable		—		(27,000)
State franchise tax payable		(32,640)		(180,000)
Net cash used in operating activities		(801,332)		(3,291,564)

CASH FLOWS FROM INVESTING ACTIVITIES
Withdrawal from Trust Account for tax payments		111,291		2,664,050
Cash deposited in Trust Account		(109,935)		(961,750)
Cash withdrawn from Trust Account in connection with redemption		17,430,006		196,390,058
Net cash provided by investing activities		17,431,362		198,092,358

CASH FLOWS FROM FINANCING ACTIVITIES
Redemption of common stock		(17,430,006)		(196,390,058)
Proceeds from notes payable - related party		805,290		1,283,102
Net cash used in financing activities		(16,624,716)		(195,106,956)

NET CHANGE IN CASH		5,313		(306,162)
CASH, BEGINNING OF PERIOD		2,013		320,067
CASH, END OF PERIOD	$	7,326	$	13,905

Supplemental disclosure of cash flow activities:
Income taxes paid	$	60,000	$	1,405,144
Supplemental disclosure of noncash financing activities:
Excise taxes on stock redemption	$	174,300	$	1,962,245
Accretion for Class A common stock to redemption value	$	308,202	$	6,955,042

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

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PAPAYA GROWTH OPPORTUNITY CORP. I

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2024 (UNAUDITED)

Note 1 — Description of Organization, Business Operations and Liquidity

Papaya Growth Opportunity Corp. I (the “Company”) was incorporated in Delaware on October 8, 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 June 30, 2024, the Company had not commenced any operations. All activity from October 8, 2021 (inception) through June 30, 2024, relates to the Company’s formation and Initial Public Offering (“IPO”), which is described below and, since the IPO, the search for a prospective 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 earned on investments from the proceeds derived from the IPO held in the Trust Account (defined below). The registration statement for the Company’s IPO was declared effective on January 13, 2022. On January 19, 2022, the Company consummated the IPO of 25,000,000 units (“Units”), including shares of Class A common stock in the Units offered (the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $250,000,000, which is discussed in Note 3. The Company has selected December 31 as its fiscal year end.

Simultaneously with the closing of the IPO, the Company consummated the sale of 1,290,500 private placement units (“Private Placement Units”) at a price of $10.00 per Private Placement Unit in a private placement to the Company’s sponsor, Papaya Growth Opportunity I Sponsor, LLC (the “Sponsor”), Cantor Fitzgerald & Co. (“Cantor”), and J.V.B. Financial Group, LLC on behalf of its Cohen & Company Capital Markets division (“CCM”), generating gross proceeds of $12,905,000 which is described in Note 4.

Simultaneously with the closing of the IPO and the sale of the Private Placement Units, the Company consummated the sale of 3,750,000 additional Units upon receiving notice of the underwriter’s election to fully exercise its overallotment option (“Overallotment Units”), generating additional gross proceeds of $37,500,000. Simultaneously with the exercise of the overallotment, the Company consummated the private placement of an additional 75,000 Private Placement Units to the Sponsor, generating gross proceeds of $750,000.

Offering costs for the IPO and sale of the Private Placement Units and Overallotment Units amounted to $20,697,498, consisting of $5,000,000 of upfront underwriting fees, $15,125,000 of deferred underwriting fees payable (which are held in the Trust Account), and $572,498 of other offering costs. As described in Note 6, the $15,125,000 of deferred underwriting fees payable is contingent upon the consummation of a Business Combination by January 19, 2025, 36 months from the closing of the IPO, subject to the terms of the underwriting agreement.

Following the closing of the IPO and the sale of the Private Placement Units and Overallotment Units, $293,250,000 ($10.20 per Unit) from the net proceeds of the sale of the Units in the IPO, Overallotment Units, and the Private Placement Units was placed in a trust account (“Trust Account”). The amounts placed in the Trust Account are invested in (i) interest - bearing bank demand deposit accounts, (ii) uninvested, (iii) U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or (iv) money market funds selected by the Company meeting the conditions of paragraphs (d)(2), (d)(3), (d)(4) and (d)(5) of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account, as described below.

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The Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPO and the sale of the Private Placement Units and Overallotment Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of the agreement to enter into the initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance the Company will be able to successfully effect a Business Combination.

The Company will provide the holders of the outstanding Public Shares (the “Public Stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially $10.20 per Public Share, plus any pro rata interest then in the Trust Account, net of tax

SEC Form 10-Q filed by Papaya Growth Opportunity Corp. I