Blue Safari Group Acquisition Corp. (NASDAQ:BSGA) is a blank check company incorporated in the British Virgin Islands, formed for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses. The company has not yet identified a specific target business, but it is actively searching for an attractive merger opportunity.
Business Overview
Blue Safari Group Acquisition Corp. was incorporated in February 2021 and completed its initial public offering in June 2021, raising $57.5 million in gross proceeds. The company was formed to identify and acquire a target business that can benefit from its management team's operational expertise and access to capital. The company has not generated any revenue to date and has incurred a net loss of $3,393,905 for the nine months ended September 30, 2022.
The company's management team has significant experience in identifying and executing business combinations, as well as operating and growing businesses across various industries. The team is led by Alex Yamashita, the Chief Executive Officer, who has a proven track record of successful investments and business transformations.
Financials
For the nine months ended September 30, 2022, Blue Safari Group Acquisition Corp. reported a net loss of $3,393,905, compared to a net loss of $390,962 for the period from February 23, 2021 (inception) to September 30, 2021. The company's operating expenses for the nine-month period amounted to $3,744,119, primarily consisting of formation and operating costs. The company's cash and cash equivalents stood at $359,112 as of September 30, 2022, with a working capital deficit of $5,428,385.
The company's financial performance reflects the typical expenses associated with a blank check company during the pre-merger phase, including legal, accounting, and other professional fees, as well as the costs of searching for and evaluating potential merger targets. The company has not generated any revenue to date, as it has not yet completed a business combination.
Merger Agreement and Outlook
On November 18, 2021, Blue Safari Group Acquisition Corp. entered into an Agreement and Plan of Merger with Bitdeer Technologies Holding Company, an exempted company incorporated in the Cayman Islands. The merger agreement was subsequently amended and restated on December 15, 2021, to effect a change in the structure of the business combination without affecting the underlying economic interests.
Under the amended merger agreement, Blue Safari Group Acquisition Corp. will merge with Bitdeer Technologies Group, with Bitdeer Technologies Group becoming the surviving entity and a wholly-owned subsidiary of Blue Safari Group Acquisition Corp. The transaction is expected to be completed after obtaining the required shareholder approvals and satisfying other customary closing conditions.
Bitdeer is a leading digital asset mining infrastructure provider, offering comprehensive mining solutions and services to individual and institutional clients worldwide. The proposed merger with Bitdeer represents a transformative opportunity for Blue Safari Group Acquisition Corp. to acquire a fast-growing, technology-driven business with a strong market position and significant growth potential.
Liquidity
As of September 30, 2022, Blue Safari Group Acquisition Corp. had $359,112 in cash and cash equivalents, with a working capital deficit of $5,428,385. The company's liquidity has been primarily funded through the net proceeds from its initial public offering and private placement, as well as a promissory note from Bitdeer.
On June 1, 2022, and September 6, 2022, the company deposited an additional $575,000 (representing $0.10 per Class A ordinary share) into its trust account to extend the combination period from June 14, 2022, to December 14, 2022. The company's ability to complete a business combination by this date is critical, as failure to do so would result in a mandatory liquidation and dissolution.
Risks and Challenges
Blue Safari Group Acquisition Corp. faces several risks and uncertainties that could impact its ability to successfully complete a business combination and create value for its shareholders. These include:
1. Inability to identify and complete a suitable merger target within the required timeframe. 2. Failure to obtain the necessary shareholder approvals for the proposed merger with Bitdeer. 3. Potential challenges in integrating Bitdeer's operations and realizing the expected synergies. 4. Volatility in the digital asset and cryptocurrency markets, which could affect Bitdeer's business and financial performance. 5. Regulatory changes or increased scrutiny of the digital asset industry, which could impact Bitdeer's operations. 6. Ongoing global economic and geopolitical uncertainties, which could affect the company's ability to secure financing or complete the proposed merger.
Conclusion
Blue Safari Group Acquisition Corp. is a blank check company actively searching for a transformative merger opportunity. The proposed merger with Bitdeer represents a compelling opportunity to acquire a fast-growing, technology-driven business in the digital asset mining industry. However, the company faces several risks and uncertainties, including the ability to complete the merger within the required timeframe and successfully integrate Bitdeer's operations.
Investors should closely monitor the company's progress in identifying and completing a suitable business combination, as well as the ongoing developments in the digital asset industry and the broader economic and geopolitical landscape. The company's ability to navigate these challenges and execute a successful merger will be crucial in determining its long-term prospects and value creation potential for shareholders.