Swiftmerge Acquisition Corp. - Quarter Report: 2023 June (Form 10-Q)

SWIFTMERGE ACQUISITION CORP.

Form 10-Q

For the Quarter Ended June 30, 2023

Table of Contents

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Report”), including, without limitation, statements under the heading “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable terminology, but the absence of these words does not mean that a statement is not forward-looking. There can be no assurance that actual results will not materially differ from expectations. Such statements include, but are not limited to, any statements relating to our ability to consummate any acquisition or other business combination and any other statements that are not statements of current or historical facts. These statements are based on management’s current expectations, but actual results may differ materially due to various factors, including, but not limited to:

The forward-looking statements contained in this Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors listed above and others described or referenced under the heading “Risk Factors” in Item 1A of Part I in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (“SEC”) on April 21, 2023, and in our Amended Annual Report on Form 10-K/A for the year ended December 31, 2022 filed with the SEC on September 13, 2023 and in Item 1A of Part II in our Quarterly Reports on Form 10-Q for the three months ended March 31, 2023, filed with the SEC on May 18, 2023, and in our amended Quarterly Report on Form 10-Q/A for the three months ended March 31, 2023 filed with the SEC on September 12, 2023. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation

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to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. These risks and others described or referenced under “Risk Factors” may not be exhaustive.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and developments in the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this Report. In addition, even if our results or operations, financial condition and liquidity, and developments in the industry in which we operate are consistent with the forward-looking statements contained in this Report, those results or developments may not be indicative of results or developments in subsequent periods.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed financial statements and related notes included in Part I, Item 1 of this Quarterly Report. This discussion and other parts of this report contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K, as supplemented by Part II, Item 1A “Risk Factors” of this Quarterly Report.

References to the “Company,” “our,” “us” or “we” refer to Swiftmerge Acquisition Corp. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Special Note Regarding Forward Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Such statements include, but are not limited to, possible business combinations and the financing thereof, and related matters, as well as all other statements other than statements of historical fact included in this Report. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings.

Overview

We are a blank check company incorporated on February 3, 2021 as a Cayman Islands exempted company and formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar Business Combination with one or more businesses (our “Business Combination”). We intend to effectuate our initial Business Combination using cash from the proceeds of the Initial Public Offering and the private placement of the Private Placement Warrants, the proceeds of the sale of our shares in connection with our initial Business Combination (pursuant to forward purchase agreements or backstop agreements we may enter into following the consummation of the Initial Public Offering or otherwise), shares issued to the owners of the target, debt issued to banks or other lenders or the owners of the target, or a combination of the foregoing.

Our registration statement for our Initial Public Offering was declared effective on December 14, 2021. On December 17, 2021, we consummated our Initial Public Offering of 20,000,000 units (the “units” and, with respect to the Class A ordinary shares included in the units being offered, the “Public Shares”) at $10.00 per unit, generating gross proceeds of $200.0 million, and incurring offering costs of approximately $12.6 million, of which $7.0 million was for deferred underwriting commissions. On January 18, 2022, the underwriter partially exercised its Over-Allotment Option, resulting in 2,500,000 additional units being sold at $10.00 per unit, generating gross proceeds of $25.0 million. Simultaneously with the closing of the Initial Public Offering, we consummated the private placement of 8,600,000 Private Placement Warrants, at a price of $1.00 per Private Placement Warrant with the Sponsor and the Anchor Investors, generating gross proceeds of $8.6 million. On January 18, 2022, following the underwriter’s exercise of the Over-Allotment Option, the Sponsor

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purchased from the Company an additional 750,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant. Upon the closing of the Initial Public Offering, the private placement and the Over-Allotment Option, $227.2 million of the net proceeds of the Initial Public Offering and certain of the proceeds of the private placement were placed in the Trust Account with Continental Stock Transfer & Trust Company acting as trustee and invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, or the Investment Company Act, having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations, 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. If we are unable to complete an initial Business Combination within 18 months from the closing of our Initial Public Offering, or March 15, 2024 we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding Public Shares, which redemption will completely extinguish Public Shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.

Results of Operations

We have neither engaged in any operations nor generated any operating revenues to date. Our only activities from February 3, 2021 (inception) through June 30, 2023 were organizational activities, those necessary to prepare for the Initial Public Offering, as described below, and since the closing of the Initial Public Offering, the search for a prospective initial Business Combination. We will not be generating any operating revenues until the closing and completion of our initial Business Combination, at the earliest. We generate non-operating income in the form of interest income on cash and cash equivalents held after the Initial Public Offering. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as due diligence expenses.

For the three months ended June 30, 2023, we had net income of $1,472,815, which resulted from a gain on investments held in the Trust Account of $2,685,418, offset by $1,212,603 of formation and operating costs.

For the three months ended June 30, 2022, we had a net loss of $54,614, which resulted from a gain on investments held in the Trust Account of $301,214, offset by formation and operating costs of $355,828.

For the six months ended June 30, 2023, we had net income of $2,583,055, which resulted from a gain on investments held in the Trust Account of $5,014,364, offset by formation and operating costs of $2,431,309.

For the six months ended June 30, 2022, we had a net loss of $488,977, which resulted from a loss on the sale of private placement warrants to our sponsor of $30,000, offset in part by formation and operating costs of $781,733 and a gain on investments held in the Trust Account of $322,756.

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Liquidity, Capital Resources and Going Concern

As of June 30, 2023, the Company had cash held outside of the Trust Account of $172,900 and a working capital deficit of $2,168,059.

For the six months ended June 30, 2023, net cash used in operating activities was $489,014, which was due to our net income of $2,583,055 and a gain on investments held in the Trust Account of $5,014,364, offset in part by changes in working capital of $1,942,295.

For the six months ended June 30, 2022, net cash used in operating activities was $296,972, which was due to our net loss of $488,977 and a gain on investments held in the Trust Account of $322,756, offset in part by changes in working capital of $484,761 and a loss on the sale of Private Placement Warrants to our Sponsor of $30,000.

For the six months ended June 30, 2023, net cash provided by investing activities of $211,918,104 represents the proceeds from the Trust account for payment to redeeming shareholders.

For the six months ended June 30, 2022, net cash used in investing activities of $25,250,000 was the result of the amount of net proceeds from the exercise of the Over-Allotment Option and proceeds from the sale of the Private Placement Warrants being deposited to the Trust Account.

For the six months ended June 30, 2023, net cash used in financing activities of $211,718,104 due to payment to redeeming shareholders, partially offset by cash inflow from related party promissory note.

For the six months ended June 30, 2022, net cash provided by financing activities of $25,250,000 was comprised of $24,500,000 in proceeds from the Initial Public Offering net of underwriting discount paid and $750,000 in proceeds from the sale of Private Placement Warrants.

As of June 30, 2023, we had cash of $172,900 held outside the Trust Account. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.

In order to finance transaction costs in connection with an intended initial Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required. If the Company completes an initial Business Combination, the Company may repay such loaned amounts out of the proceeds of the Trust Account released to the Company. Otherwise, such loans may be repaid only out of funds held outside the Trust Account. In the event that we do not consummate an initial Business Combination, the Company may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into warrants of the post-Business Combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants. To date, there were no amounts outstanding under any of these loans.

Through June 30, 2023, our liquidity needs were satisfied through $200,000 of advances outstanding subsequently covered under the Promissory Note (See Note 6).

Prior to the completion of the Initial Public Offering, substantial doubt about the Company’s ability to continue as a going concern existed as the Company lacked the liquidity it needed to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements. The Company has since completed its Initial Public Offering at which time capital in excess of the funds deposited in the Trust Account and/or used to fund offering expenses was released to the Company for general working capital purposes.

Based on the cash forecast we prepared as of June 30, 2023, the amounts held in the operating account will not provide the Company with sufficient funds to meet its operational and liquidity obligations up to the expiration date of March 15, 2024.

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Unless further extended, the Company will have until March 15, 2024 to complete a Business Combination. If a Business Combination is not consummated by March 15, 2024 and an extension has not been effected, there will be a mandatory liquidation and subsequent dissolution of the Company.

Based on the liquidity issue, mandatory liquidation and subsequent dissolution we have determined that there is substantial doubt about the Company’s ability to continue as a going concern for a period of time within one year after the date that the financial statements are issued. Although the Company intends to consummate a business combination on or before March 15, 2024, it is uncertain whether the Company will be able to do so by this time. While we expect to have sufficient access to additional sources of capital if necessary, there is no current confirmed financing commitment, and no assurance can be provided that such additional financing will become available to the Company. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of June 30, 2023 or December 31, 2022.

Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of our Sponsor a monthly fee of up to $1,000 for office space and administrative support to the Company. We began incurring service fees on December 17, 2021 and will continue to incur such fees monthly until the earlier of the completion of the Business Combination and the Company’s liquidation.

Registration and Shareholder Rights Agreement

The holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of working capital loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants issued upon conversion of the working capital loans) have registration and shareholder rights to require the Company to register a sale of any of its securities held by them pursuant to a registration and shareholder rights agreement entered into on the date of the Initial Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of an initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriting Agreement

The Company granted the underwriter a 45-day option from the date of the Initial Public Offering to purchase up to 3,000,000 additional Units to cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions. On January 18, 2022, the Company announced the closing of its sale of an additional 2,500,000 Units pursuant to the partial exercise by the underwriter of its Over-Allotment Option. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $25,000,000.

The underwriter was paid a cash underwriting discount of $0.20 per Unit, or $4,500,000 in the aggregate, upon the closing of the Initial Public Offering and including the Units sold pursuant to the over-allotment. In addition, $0.35 per Unit, or $7,875,000 in the aggregate would have been payable to the underwriter for deferred underwriting commissions.

Promissory Notes—Related Party

On May 19, 2023, the Sponsor provided a $200,000 advance (“Advance”) to the Company. On September 15, 2023, the Company issued an unsecured promissory note (the “Note”) with the Sponsor of up to $500,000 in the aggregate for costs and expenses reasonably related to the Company’s working capital needs prior to the consummation of the Business Combination and the Advance was converted into the first proceeds on the Note. The Note is non-interest bearing and is due the earlier of the consummation of a business combination or the date of liquidation. The Sponsor may elect to convert all or any portion of the unpaid principal balance of this Note into warrants, at a price of $1.00 per warrant.

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Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:

Warrant Classification

The Company accounts for the warrants issued in connection with the Initial Public Offering and the private placement in accordance with the guidance contained in ASC 815-40 under which the warrants meet the criteria for equity treatment and are recorded as equity.

Ordinary Shares Subject to Possible Redemption

All of the 22,500,000 Class A ordinary shares sold as part of the Units in the Initial Public Offering (and including the Units sold in connection with the underwriters’ partial exercise of the Over-Allotment Option) contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation, if there is a shareholder vote or tender offer in connection with the initial Business Combination and in connection with certain amendments to the Amended and Restated Memorandum and Articles of Association. In accordance with ASC 480-10-S99, redemption provisions not solely within the control of the Company require ordinary shares subject to redemption to be classified outside of permanent equity. Therefore, all Class A ordinary shares have been classified outside of permanent equity.

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid-in capital and accumulated deficit. The redemption value of the redeemable ordinary shares as of June 30, 2023 increased as the income earned on the Trust Account exceeds the Company’s expected dissolution expenses (up to $100,000). As such, the Company recorded an increase in the carrying amount of the redeemable ordinary shares of 2,685,418 as of June 30, 2023.

Net Income (Loss) Per Ordinary Share

Net income (loss) per ordinary share is computed by dividing net loss by the weighted-average number of ordinary shares outstanding during the period. The Company has not considered the effect of the warrants sold in the Initial Public Offering as part of the Units and the Private Placement Warrants in the calculation of diluted loss per share, because the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.

Recent Accounting Standards

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.

Recent Developments

The Merger Agreement

On August 11, 2023, Swiftmerge entered into a Merger Agreement (the “Merger Agreement”) with HDL Therapeutics, Inc., a Delaware corporation (“HDL”), and IVCP Merger Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of Swiftmerge (“Merger Sub” and, together with Swiftmerge and HDL the “Parties”).

The Merger Agreement provides that, among other things and upon the terms and subject to the conditions thereof, the following transactions will occur (together with the other agreements and transactions contemplated by the Merger Agreement, the “Business Combination”):

(i) at the closing of the transactions contemplated by the Merger Agreement (the “Closing”), upon the terms and subject to the conditions of the Merger Agreement, in accordance with the General Corporation Law of the State of Delaware, as amended (the “DGCL”), Merger Sub will merge with and into HDL, the separate corporate existence of Merger Sub will cease and HDL will be the surviving corporation and a wholly owned subsidiary of Swiftmerge (the “Merger”);

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(ii) as a result of the Merger, among other things, all outstanding shares of HDL capital stock will be canceled in exchange for the right to receive, in the aggregate, a combination of cash and shares of Domesticated Swiftmerge Common Stock (as defined below) (valued at $10.00 per share) having a total value of $400,000,000; and

(iii) in connection with the Business Combination, Swiftmerge will be renamed “HDL Therapeutics, Inc.”

The Merger Agreement also provides, among other things, that certain HDL stockholders may receive an earnout consideration payment following the Closing of up to 11,000,000 shares of Domesticated Swiftmerge Common Stock (the “Earnout Shares”), subject to the following achievement triggers, respectively:

(i) 6,000,000 Earnout Shares, in the aggregate, if, at any time during the period starting on the Closing Date and ending on the second anniversary of the Closing Date (the “Applicable Earnout Period”), over any twenty (20) Trading Days within any thirty (30) Trading Day period the VWAP of the Parent Common Shares is greater than or equal to $12.50 per share (the “First Share Price Performance Milestone”); and

(ii) 5,000,000 Earnout Shares, in the aggregate, if, at any time during the Applicable Earnout Period, over any twenty (20) Trading Days within any thirty (30) Trading Day period the VWAP of the Parent Common Shares is greater than or equal to $15.00 per share (the “Second Share Price Performance Milestone”);

provided that each achievement trigger will only occur once, if at all, and in no event will the HDL stockholders be entitled to receive more than an aggregate of 11,000,000 Earnout Shares.

For purposes of determining whether the First Share Price Performance Milestone or the Second Share Price Performance Milestone, as applicable, is achieved, the Parties have agreed to the definition of the term “VWAP” (or dollar volume-weighted average price) in the Merger Agreement. In the event that the VWAP on the applicable measurement date cannot be calculated in accordance with the Merger Agreement, then the applicable VWAP shall be the fair market value per share on the applicable measurement date as reasonably determined by the Board of Directors of Swiftmerge (the “Board”).

The Board has unanimously (i) approved and declared advisable the Merger Agreement, the Business Combination and the other transactions contemplated thereby and (ii) resolved to recommend approval of the Merger Agreement and related matters by the shareholders of Swiftmerge.

The Domestication

On the day that is at least one Business Day prior to the Closing, subject to the approval of Swiftmerge’s shareholders and on the terms and subject to the conditions of the Merger Agreement, and in accordance with the DGCL, Part XII of the Cayman Islands Companies Act (Revised) and Swiftmerge’s Amended and Restated Memorandum and Articles of Association, Swiftmerge will effect a deregistration from the Register of Companies in the Cayman Islands by way of continuation out of the Cayman Islands and into the State of Delaware so as to migrate to and domesticate as a Delaware corporation (the “Domestication”).

In connection with the Domestication,

(i) each of the then issued and outstanding Class A ordinary shares, par value $0.0001 per share, of Swiftmerge (“Swiftmerge Class A Common Shares”), will convert automatically into one share of common stock, par value $0.0001, of Swiftmerge (after its Domestication) (the “Domesticated Swiftmerge Common Stock”);

(ii) each of the then issued and outstanding Class B ordinary shares, par value $0.0001 per share, of Swiftmerge (“Swiftmerge Class B Common Shares”), will convert automatically into one share of Domesticated Swiftmerge Common Stock;

(iii) each then issued and outstanding warrant of Swiftmerge will become exercisable for one share of Domesticated Swiftmerge Common Stock (“Domesticated Swiftmerge Warrant”), pursuant to the Warrant Agreement, dated December 14, 2021, between Swiftmerge and Continental Stock Transfer & Trust HDL, as warrant agent, as amended; and

(iv) each then issued and outstanding unit of Swiftmerge will separate and convert automatically into one share of Domesticated Swiftmerge Common Stock and one-half of one Domesticated Swiftmerge Warrant.

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Pre-Closing Financing by HDL

After the date of the Merger Agreement, HDL has agreed to use commercially reasonable efforts to obtain additional financing, in form and substance reasonably acceptable to Parent and HDL, including through the sale of additional Series X Preferred Stock of HDL with an aggregate purchase price of up to $2,680,000 through December 31, 2023, and up to an additional $3,000,000 thereafter, for the purposes of funding the performance by HDL of certain enumerated covenants and agreements set forth in the Merger Agreement (the “Pre-Closing Financing”). HDL shall not enter into any agreement to sell shares of its Series X Preferred Stock unless the purchaser of such Series X Preferred Stock agrees that any additional consideration payable with respect to such Series X Preferred Stock upon the consummation of the Merger will be payable solely in Parent Common Shares. Further, notwithstanding anything to the contrary in the Merger Agreement, the obligation of HDL to perform any of the enumerated covenants and agreements to the extent the performance of any such covenant or agreement requires HDL to incur expenses, is (i) with respect to the period from the date of the Merger Agreement through December 31, 2023 (the “2023 Period”), expressly conditioned on HDL raising an aggregate of $2,680,000 in Pre-Closing Financing during the 2023 Period (the “2023 Minimum Pre-Closing Financing”), and until HDL has obtained the 2023 Minimum Pre-Closing Financing, any non-performance during the 2023 Period of any such covenant or agreement shall not be deemed to be a breach of the Merger Agreement and (ii) with respect to the period after December 31, 2023 (the “2024 Period”), expressly conditioned on HDL’s ability to pay its expenses, debts and other liabilities and commitments as they come due in the ordinary course of business unrelated to such covenants or agreements (and any non-performance during the 2024 Period of any such covenant or agreement shall not be deemed a breach of the Merger Agreement to the extent HDL is unable to so pay such expenses, debts and other liabilities and commitments), until HDL has raised an aggregate amount of Pre-Closing Financing of at least $3,000,000 during the 2024 Period (the “2024 Minimum Pre-Closing Financing”).

Certain Related Agreements

Sponsor Support Agreement

Concurrently with the execution of the Merger Agreement, Swiftmerge entered into a Sponsor Support Agreement (the “Sponsor Support Agreement”), by and among Swiftmerge, HDL, the Sponsor, and the other parties thereto, pursuant to which during the period commencing upon the signing of the Merger Agreement and ending on the earliest of (x) the Effective Time, (y) such date and time as the Merger Agreement shall have been validly terminated in accordance with its terms, and (z) the liquidation of Swiftmerge, the Sponsor and the other parties thereto, each agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby and in favor of any extension of Swiftmerge’s deadline to consummate a “Business Combination” as such term is defined in Swiftmerge’s governing documents, in each case, subject to the terms and conditions contemplated by the Sponsor Support Agreement.

HDL Support Agreement

Following the signing of the Merger Agreement, Swiftmerge entered into a HDL Support Agreement (the “HDL Support Agreement”), by and among Swiftmerge, HDL and certain stockholders of HDL (the “HDL Holders”), pursuant to which the HDL Holders agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, in each case, subject to the terms and conditions contemplated by the HDL Support Agreement.

Registration Rights Agreement

The Merger Agreement contemplates that, at the Closing, Swiftmerge, the Sponsor and certain equityholders of HDL and certain of their respective affiliates will enter into an Amended and Restated Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which Swiftmerge will agree to register for resale, pursuant to Rule 415 under the Securities Act, certain shares of Domesticated Swiftmerge Common Stock and other equity securities of Swiftmerge that are held by the parties thereto from time to time.

Lock-Up Agreement

At the Closing, Swiftmerge, HDL, the Sponsor, certain stockholders of HDL (such stockholders, the “Target Holders”), and other persons and entities (collectively, the “Holders” and each, a “Holder”), will enter into a lock-up agreement (the “Lock-Up Agreement”) with respect to the Domesticated Swiftmerge Common Stock and any other equity securities convertible into or exercisable or exchangeable for or representing the rights to receive shares of Domesticated Swiftmerge Common Stock held by the Holders immediately following the Closing or acquired during the one hundred eighty (180) days after the Closing, but excluding any Domesticated Swiftmerge Common Stock acquired by a Holder in open market transactions during such period (the “Lock-Up Shares”), pursuant to which, each Holder will agree not to offer, sell, contract to sell, pledge, grant any option to purchase, or otherwise dispose of, directly or indirectly, any Lock-Up Shares during the Lock-Up Period (as defined below), on the terms and subject to the conditions set forth in the Lock-Up Agreement. “Lock-Up Period”

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means the six month period following the Closing. Notwithstanding the provisions of the Lock-Up Agreement that restrict the Holders, the Holders will be permitted to engage in any transaction with respect to the Lock-Up Shares if, subsequent to the Closing, the closing price of the Domesticated Swiftmerge Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, rights issuances, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Closing, or Swiftmerge consummations a liquidation, merger, share exchange or other similar transaction which results in Swiftmerge’s shareholders having the right to exchange their Domesticated Swiftmerge Common Shares for cash, securities or other property.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

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ITEM 4. DISCLOSURE CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Our management evaluated, with the participation of our principal executive officer and principal financial and accounting officer (our “certifying officers”), the effectiveness of our disclosure controls and procedures as of June 30, 2023, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our certifying officers concluded that, as of June 30, 2023, our disclosure controls and procedures were not effective due to a material weakness in our internal controls over financial reporting related to the recording of unbilled amounts due to third-party service providers, failure to timely remove liability associated with the deferred underwriting fees, and interest income during the preparation of our annual report on Form 10-K as of and for the year ended December 31, 2022. In light of this material weakness, we performed additional analysis as deemed necessary to ensure that our annual financial statements were prepared in accordance with US GAAP. Accordingly, management believes that the financial statements included in this Report present fairly in all material respects our financial position, results of operations and cash flows for the period presented.

In November 2022, the Company obtained a waiver letter from the underwriter in the Company’s initial public offering that waived all rights to the deferred underwriting commissions payable to the underwriter at the closing of the Company’s initial Business Combination. On August 21, 2023, in connection with the preparation of the Company’s unaudited financial statements for the quarter and six-months ended June 30, 2023, management determined that the waived deferred underwriting commission had previously been improperly classified as a liability after the waiver was obtained. As a result, management determined that it is appropriate to restate the Company’s previously issued audited financial statements as of and for the year ended December 31, 2022, included in the Company’s previously filed Annual Report on Form 10-K with the Securities and Exchange Commission (the “Form 10-K”), and the unaudited financial statements as of and for the three months ended March 31, 2023, included in the Company’s previously filed Quarterly Report on Form 10-Q with the Securities and Exchange Commission (the “Form 10-Q” and collectively with the Form 10-K and the financial statements included in the Form 10-K and the Form 10-Q, the “Non-Reliance Financial Statements”). The Company’s audit committee concluded that the Non-Reliance Financial Statements should no longer be relied upon, and that the Company will amend the Form 10-K and the Form 10-Q to include restatements of the Non-Reliance Financial Statements. The changes do not impact the Company’s cash position.

As a result of the foregoing, the Company’s management reassessed the effectiveness of its disclosure controls and procedures for the periods affected by the restatement. After that reassessment, the Company’s management determined that its disclosure controls and procedures for such periods were not effective as a result of the foregoing.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended June 30, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 1. Legal Proceedings.

None.

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Item 1A. Risk Factors.

As of the date of this Report, except as disclosed below, there have been no material changes to the risk factors disclosed in our Annual Report for year ended December 31, 2022, on Form 10-K, filed with the SEC on April 21, 2023 (the “2022 Annual Report”). The information presented below updates, and should be read in conjunction with, the risk factors disclosed in our 2022 Annual Report.

Our financial conditions raise substantial doubt about our ability to continue as a “going concern” through one year from the date of the financial statements contained herein if a Business Combination is not consummated.

As of June 30, 2023, the Company had cash held outside of the Trust Account of $172,900 and a working capital deficit of $2,368,059. We have incurred and expect to continue to incur significant costs in pursuit of our acquisition plans. Based on the cash forecast prepared by management as of June 30, 2023, the amounts held in the operating account will not provide the Company with sufficient funds to meet its operational and liquidity obligations up to the expiration date of March 15, 2024, the date at which we must complete a Business Combination. We have filed a preliminary proxy statement in connection with a special meeting of shareholders to be held to extend the period of time that we have to effect our initial Business Combination, however if the extension is not been effected, there will be a mandatory liquidation and subsequent dissolution of the Company. The liquidity issue, mandatory liquidation and subsequent dissolution raise substantial doubt about our ability to continue as a going concern for a period of time within one year after the date that these condensed financial statements are issued.

Management plans to address this uncertainty through a Business Combination, although it also anticipates that if the working capital loans are provided by our officers, directors and initial shareholders, that will provide sufficient liquidity to meet our working capital needs through the earlier of the consummation of a Business Combination and one year from the date of this filing. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily include or be limited to, curtailing operations, suspending the pursuit of a potential transaction and reducing overhead expenses. We cannot provide any assurance that financing sources will be available to us on commercially acceptable terms or if at all, or that our plans to consummate a Business Combination will be successful or successful by March 15, 2024. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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

None

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Not applicable.

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Item 6. Exhibits.

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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