What caused ZAPP's drastic operating profit drop in 2022?

Zapp Electric Vehicles experienced a significant drop in operating profit in 2022, with a reported operating income of -$55,593 for the period ending Q3 2022, and a further decline to -$1.46 million by the end of Q4 2022. The main reasons for this drastic decline are: 1. **Business Combination and Financial Projections**: Zapp's merger with CIIG Capital Partners II is expected to bring a post-money valuation of $573 million, including up to $274 million in new cash, assuming no redemptions by CIIG II public stockholders. This strategic move has significant implications for Zapp's financial outlook. 2. **Redemption Rates and Cash Proceeds**: In the SPAC market, redemption rates have risen to around 81% in 2022. If a significant number of investors decide to redeem their shares, Zapp might face cash constraints, impacting its ability to operate efficiently and meet financial obligations. In summary, Zapp's operating profit drop in 2022 is primarily due to the company's merger with CIIG Capital Partners II, which, although providing potential benefits, also introduces uncertainties around cash proceeds and financial adjustments. |code|Ticker|Name|Date|Operating Profit Margin|Operating Income|market_code| |---|---|---|---|---|---|---| |ZAPP|ZAPP.O|Zapp Electric|2021 Q1||-1000|186| |ZAPP|ZAPP.O|Zapp Electric|2021 Q2||0|186| |ZAPP|ZAPP.O|Zapp Electric|2021 Q3||-55593|186| |ZAPP|ZAPP.O|Zapp Electric|2021 Q4||-1461687|186| |ZAPP|ZAPP.O|Zapp Electric|2022 Q1||-747202|186| |ZAPP|ZAPP.O|Zapp Electric|2022 Q2||-356054|186| |ZAPP|ZAPP.O|Zapp Electric|2022 Q3||1315661|186| |ZAPP|ZAPP.O|Zapp Electric|2022 Q4||-1022369|186|