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, 2023

☐ 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: 001-40167

IRIS ACQUISITION CORP

(Exact name of registrant as specified in its charter)



Delaware		85-3901431
(State or other jurisdiction of incorporation or organization)		(I.R.S Employer Identification No.)

3rd Floor Zephyr House

122 Mary Street, George Town

PO Box 10085

Grand Cayman KY1-1001, Cayman Islands

(Address of principal executive offices) (Zip Code)

971 4 3966949

(Registrant’s telephone number, including area code)

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-fourth of one Redeemable Warrant	IRAAU	The Nasdaq Capital Market LLC

Class A Common Stock, par value $0.0001 per share	IRAA	The Nasdaq Capital Market LLC

Redeemable Warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50	IRAAW	The Nasdaq Capital 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 definition 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 the 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 21, 2023, there were 1,413,104 shares of the registrant’s Class A common stock, par value $0.0001 per share, issued and outstanding, and 6,900,000 shares of the registrant’s Class B common stock, par value $0.0001 per share, issued and outstanding.

Table of Contents

IRIS ACQUISITION CORP

TABLE OF CONTENTS

		Page
PART I- FINANCIAL INFORMATION

Item 1.	Condensed Financial Statements

	Condensed Balance Sheets as of June 30, 2023 (Unaudited) and December 31, 2022	1

	Unaudited Condensed Statements of Operations for the three and six months ended June 30, 2023 and 2022	2

	Unaudited Condensed Statements of Changes in Stockholders’ Deficit for the three and six months ended June 30, 2023 and 2022	3

	Unaudited Condensed Statements of Cash Flows for the six months ended June 30, 2023 and 2022	4

	Notes to Unaudited Condensed Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	25

Item 4.	Controls and Procedures	25

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	27

Item 1A.	Risk Factors	27

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

Item 3.	Defaults Upon Senior Securities	27

Item 4.	Mine Safety Disclosures	27

Item 5.	Other Information	27

Item 6.	Exhibits	28

SIGNATURES		29

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. CONDENSED FINANCIAL STATEMENTS

IRIS ACQUISITION CORP

CONDENSED BALANCE SHEETS


	June 30, 2023		December 31, 2022
	(Unaudited)
Assets
Current assets
Cash	$	115,176	$	280,640
Due from Sponsor		1,256		1,256
Prepaid expenses and other current assets		66,670		78,753
Total current assets		183,102		360,649
Cash held in Trust Account		14,530,345		15,127,621
Deferred tax asset		3,214		—
Total Assets	$	14,716,661	$	15,488,270

Liabilities, Common Stock Subject to Possible Redemption and Stockholders’ Deficit
Current liabilities
Accounts payable and accrued expenses	$	1,893,977	$	1,489,462
Due to related party		75,000		75,000
Franchise tax payable		100,000		447,133
Income taxes payable		539,823		539,823
Promissory note – related party		1,413,720		1,040,000
Total current liabilities		4,022,520		3,591,418
Deferred underwriting fee payable		9,660,000		9,660,000
Warrant liability		454,098		942,646
Total Liabilities		14,136,618		14,194,064

Commitments and Contingencies (Note 6)
Class A common stock subject to possible redemption, 1,413,104 shares at $10.28 and $10.71 redemption value at June 30, 2023 and December 31, 2022		14,530,345		15,127,621

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; 280,000,000 shares authorized; 0 shares issued and outstanding (excluding 1,413,104 shares subject to possible redemption) at June 30, 2022 and December 31, 2022		—		—
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 6,900,000 shares issued and outstanding as of June 30, 2023 and December 31, 2022		690		690
Additional paid-in capital		140,000		140,000
Accumulated deficit		(14,090,992)		(13,974,105)
Total Stockholders’ Deficit		(13,950,302)		(13,833,415)
Total Liabilities, Common Stock Subject to Possible Redemption and Stockholders' Deficit	$	14,716,661	$	15,488,270

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

Table of Contents

IRIS ACQUISITION CORP

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2023		2022		2023		2022
Formation and operating costs	$	650,699	$	291,993	$	1,267,191	$	876,623
Forgiveness of unrelated vendor payables		(275,000)		—		(275,000)		—
Loss from operations		(375,699)		(291,993)		(992,191)		(876,623)

Other income (expense):
Unrealized gain on fair value of warrant liabilities		598,183		4,211,660		488,548		8,605,210
Interest income on cash and Investments held in Trust Account		—		161,103		84,697		167,910
Unrealized loss on investments held in Trust Account		—		(368,082)		—		(368,082)
Total other income, net		598,183		4,004,681		573,245		8,405,038
Income (loss) before provision for income taxes		222,484		3,712,688		(418,946)		7,528,415
Provision for income taxes		10,500		—		3,214		—
Net income (loss)	$	232,984	$	3,712,688	$	(415,732)	$	7,528,415

Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption		1,413,104		27,600,000		1,413,104		27,600,000
Basic and diluted net income (loss) per share, Class A common stock subject to possible redemption	$	0.03	$	0.11	$	(0.05)	$	0.22
Basic and diluted weighted average shares outstanding, Class B common stock		6,900,000		6,900,000		6,900,000		6,900,000
Basic and diluted net income (loss) per share, Class B common stock	$	0.03	$	0.11	$	(0.05)	$	0.22

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

Table of Contents

IRIS ACQUISITION CORP

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023


	Class B Common Stock			Additional		Accumulated		Total Stockholders'
	Shares	Amount		Paid in Capital		Deficit		Deficit
Balance as of December 31, 2022	6,900,000	$	690	$	140,000	$	(13,974,105)	$	(13,833,415)
Remeasurement of Class A common stock to redemption amount	—		—		—		298,845		298,845
Net loss	—		—		—		(648,716)		(648,716)
Balance as of March 31, 2023 (Unaudited)	6,900,000	$	690	$	140,000	$	(14,323,976)	$	(14,183,286)
Remeasurement of Class A common stock to redemption amount	—		—		—		—		—
Net income	—		—		—		232,984		232,984
Balance at June 30, 2023 (Unaudited)	6,900,000	$	690	$	140,000	$	(14,090,992)	$	(13,950,302)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022


								Total
	Class B Common Stock			Additional		Accumulated		Stockholders’
	Shares	Amount		Paid-in Capital		Deficit		Deficit
Balance as of December 31, 2021	6,900,000	$	690	$	—	$	(21,131,825)	$	(21,131,135)
Net income	—		—		—		3,815,727		3,815,727
Balance at March 31, 2022 (Unaudited)	6,900,000		690		—		(17,316,098)	$	(17,315,408)
Forgiveness of payable due to an affiliate of the Sponsor	—		—		140,000		—		140,000
Remeasurement of Class A common stock to redemption amount	—		—		—		183,329		183,329
Net income	—		—		—		3,712,688		3,712,688
Balance at June 30, 2022 (Unaudited)	6,900,000	$	690	$	140,000	$	(13,420,081)	$	(13,279,391)

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

Table of Contents

IRIS ACQUISITION CORP

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Six Months		Six Months
	Ended June 30,		Ended June 30,
	2023		2022
Cash Flows from Operating Activities:
Net income (loss)	$	(415,732)	$	7,528,415
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Unrealized gain on fair value of warrant liability		(488,548)		(8,605,210)
Interest earned on cash and Investments held in Trust Account		(84,697)		(167,910)
Unrealized loss on Investments held in Trust Account		—		368,082
Deferred taxes		(3,214)		—
Forgiveness of unrelated vendor payables		(275,000)		—
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		12,083		(250,479)
Franchise tax payable		(347,133)		100,000
Income tax payable		—		—
Due to related party		—		125,000
Accounts payable and accrued expenses		679,515		316,303
Net cash used in operating activities		(922,726)		(585,799)

Cash Flows from Investing Activities:
Proceeds from Trust Account for tax payments and redemption adjustment		745,563

SEC Form 10-Q filed by Iris Acquisition Corp