Summary
Duddell Street Acquisition Corp reported revenue of $24.46 million for the quarter ended December 31, 2021 and $82.91 million for the full year. The company posted an operating loss of $2.58 million in the quarter and $5.94 million for the year. Net loss was $11.61 million in the fourth quarter, while the full-year net loss was $3.66 million. Diluted loss per share for the year was $19.80. Operating margin was -10.6% for the quarter and -7.2% for the year.
The company is a Cayman Islands blank check vehicle formed on August 28, 2020 to pursue a merger, share exchange, asset acquisition or similar combination. It raised $175.0 million in an initial public offering of 17,500,000 units at $10.00 per unit that closed on November 2, 2020, and placed the net proceeds in a trust account. Offering costs ran to about $10.1 million, including roughly $6.1 million of deferred underwriting commissions. A concurrent private placement of 5,500,000 warrants at $1.00 each generated $5.5 million. On October 18, 2021, the sponsor agreed to purchase an additional 1,500,000 private placement warrants for $1.5 million, each exercisable at $11.50 per share. The company has until November 2, 2022, or 24 months from the IPO close, to finish a business combination.
On November 7, 2021, the company signed a merger agreement with FiscalNote Holdings, Inc. The transaction values FiscalNote at $1 billion and is expected to close in the second quarter of 2022, subject to shareholder approvals and other customary conditions. Newco will adopt a dual class structure in which Class B shares carry 25 votes each. A PIPE of 10,000,000 shares at $10.00 per share will raise $100,000,000 in gross proceeds. Backstop purchasers affiliated with the sponsor agreed to subscribe for up to $175,000,000 of Newco Class A common stock to fund redemptions. Sponsor equity faces a 180-day lockup, and half of each type of restricted security stays locked up until the first anniversary of the effective time.
Liquidity is the central risk. Management flagged substantial doubt about the company's ability to continue as a going concern, tied to the November 2, 2022 deadline and the mandatory liquidation and dissolution that would follow a failed deal. Operating cash flow was -$0.98 million in the quarter and -$1.03 million for the year. Capital expenditures, reported as purchases of property and equipment, were $1.64 million in the quarter and $5.57 million for the year. Deferred revenue reached $30.10 million at December 31, 2021, up from $17.52 million a year earlier, a rise of 71.8%.
The full-year net loss of $3.66 million included about $6.0 million of general and administrative expenses, partly offset by a $2.2 million non-operating gain on the fair value of derivative warrant liabilities and roughly $71,000 of interest income from the trust account. The prior period, from inception through December 31, 2020, carried an $8.0 million non-operating loss on warrant liabilities and $469,000 of financing costs. The company carries no long-term debt, capital lease, operating lease or purchase obligations. Deferred underwriting commissions of $0.35 per unit, about $6.1 million, are payable only if a business combination closes. No amounts were outstanding under working capital loans at December 31, 2021.
Two accounting features shape the reported numbers. The Class A ordinary shares carry redemption rights outside the company's control, so they sit in temporary equity at redemption value, and changes in that value are charged against additional paid-in capital and accumulated deficit. The public and private placement warrants are carried as derivative liabilities and remeasured each period, which drives the swings in non-operating income. Diluted loss per share equals basic loss per share because 15,750,000 warrants were anti-dilutive. Management also said the specific impact of the COVID-19 pandemic is not readily determinable.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2021 | Q3 FY2021 | QoQ | Q4 FY2020 | YoY |
|---|---|---|---|---|---|
| General & administrative | $2.6M | $1.1M | +141.2% | — | — |
| Operating income (loss) | -$2.6M | -$1.1M | -141.2% | — | — |
| Net income (loss) | -$11.6M | $2.5M | -565.6% | — | — |
Risks
As of December 31, 2021, the Company had cash of approximately $618,000 and a working capital deficit of approximately $3.6 million, and the auditor expressed substantial doubt about its ability to continue as a going concern. If no Business Combination is consummated by November 2, 2022, there will be a mandatory liquidation and subsequent dissolution.
The Company identified a material weakness in internal control over financial reporting related to the interpretation and accounting for complex features of Class A ordinary shares and warrants issued in the November 2020 IPO, leading to a restatement and a conclusion that internal control over financial reporting was ineffective as of December 31, 2021. This could result in litigation, SEC sanctions, and ineligibility to use Form S-3 or Form S-4.
The Proposed Business Combination with FiscalNote, announced November 7, 2021 and expected to close in the second quarter of 2022, requires shareholder approvals and other closing conditions. Failure to complete it by November 2, 2022 would trigger mandatory liquidation.
Public shareholders may redeem shares for cash, and large redemptions could prevent the Company from satisfying minimum cash or net tangible asset closing conditions, making it difficult to complete the Business Combination. Trust account proceeds may also be reduced by third-party claims, potentially leaving less than $10.00 per public share.
The Company may need additional financing to complete the Business Combination or fund target operations; the PIPE Financing of $100 million and Sponsor Backstop of up to $175 million are intended to address redemptions, but financing may not be available on acceptable terms.
The Company faces significant competition from other blank check companies, private investors, and well-established entities for business combination targets, and its relatively limited financial resources may disadvantage it in negotiating a transaction.
Maso Capital, which owns the sponsor, and certain management members have overlapping investment objectives and may have greater financial interests in other Maso Capital entities, creating conflicts in sourcing and allocating investment opportunities.
The COVID-19 pandemic could restrict travel and meetings, limit due diligence, and adversely affect financing or target business operations, potentially delaying or preventing a Business Combination.
Failure to maintain Nasdaq continued listing requirements or to meet initial listing requirements in connection with the Business Combination could result in delisting, reduced liquidity, and penny stock classification.
Warrants are classified as derivative liabilities and remeasured at fair value each period, causing non-cash gains or losses that may be material and cause quarterly financial fluctuations; the SEC statement on SPAC warrants led to a restatement.
As of April 13, 2022, the sponsor and its affiliates owned 4,375,000 Class B ordinary shares and 4,000,000 Class A ordinary shares, giving them substantial influence over shareholder votes, and the staggered board may delay shareholder ability to appoint directors.
If the Company combines with a non-U.S. target, it would face cross-border regulatory, currency, and operational risks, and potential FCPA exposure in Asia.
Summary, forecast, risks and KPIs are extracted from FiscalNote Holdings, Inc.'s SEC filings for Q4 FY2021 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.