ACHARI VENTURES HOLDINGS CORP. I References in this report (this " Quarterly Report ") to "we," "us" or the "Company" refer toAchari Ventures Holdings Corp. I References to our "management" or our "management team" refer to our officers and directors, and references to the "Sponsor" refer toAchari Sponsor Holdings I LLC . 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 Quarterly 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 includes "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding the Company's financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as "expect," "believe," "anticipate," "intend," "estimate," "seek" and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management's current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company's final prospectus filed with theU.S. Securities and Exchange Commission (the "SEC "). The Company's securities filings can be accessed on the EDGAR section of theSEC's website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
Achari Ventures Holdings Corp. I was incorporated inDelaware onJanuary 25, 2021 . The Company was formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, reorganization or other similar business transaction with one or more businesses that the Company has not yet identified (a " Business Combination ").
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.
Results of Operations
We have neither engaged in any operations nor generated any operating revenues to date. Our only activities from inception throughJune 30, 2022 were organizational activities and those necessary to prepare and complete the IPO, described below, and since the IPO, the search for a prospective initial business combination. We do not expect to generate any operating revenues until after the completion of an initial business combination, at the earliest. We expect to generate non-operating income in the form of interest income from the proceeds of the IPO placed in the trust account. We have incurred and expect that we will continue to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with searching for, and completing, an initial business combination.
For the three months ended
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For the six months ended
Liquidity and Capital Resources
The registration statement for the Company's IPO was declared effective onOctober 14, 2021 . OnOctober 19, 2021 , the Company consummated the IPO of 10,000,000 Units with respect to the Common stock included in the Units being offered (the " Public Shares ") at$10.00 per Unit generating gross proceeds of$100,000,000 , which is discussed in Note 3. The company has selectedDecember 31 as its fiscal year end.
Simultaneously with the closing of the IPO, the Company consummated the sale of
7,133,333 Private Placement Warrants at a price of
Offering costs for the IPO amounted to
For the three months ended
At
At
In addition, in order to finance transaction costs in connection with a 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 ("
Working Capital Loans
"). If the Company completes a business combination, the Company would repay the
Working Capital Loans out of the proceeds of the trust account released to the
Company. Otherwise, the Working Capital Loans would be repaid only out of funds
held outside the trust account. In the event that a business combination does
not close, the Company may use a portion of proceeds held outside the trust
account to repay the Working Capital Loans but no proceeds held in the trust
account would be used to repay the Working Capital Loans. Except for the
foregoing, the terms of such Working Capital Loans, if any, have not been
determined and no written agreements exist with respect to such loans. As of
June 30, 2022 , the Company had no borrowings under the Working Capital Loans.
Off-Balance
Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as ofJune 30, 2022 . We do not participate in transactions that create relationships with entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets. 19
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Contractual obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities.
The underwriter is entitled to deferred underwriting commissions of
JOBS Act
OnApril 5, 2012 , the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an "emerging growth company" and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As such, our financial statements may not be comparable to companies that comply with public company effective dates. Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an "emerging growth company," we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor's attestation report on our system of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of executive compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our IPO or until we are no longer an "emerging growth company," whichever is earlier.
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in
Critical Accounting Estimates
Critical accounting estimates are estimates where (a) the nature of the estimate
is material due to the levels of subjectivity and judgment necessary to account
for highly uncertain matters or the susceptibility of such matters to change and
(b) the impact of the estimate on financial condition or operating performance
is material. The Company believes these to be estimates used as inputs in the
valuation of the derivative warrant liability. These estimates are the
probability of a successful business combination by
Common Stock Subject to Possible Redemption
We account for our common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (" ASC ") Topic 480 "Distinguishing Liabilities from Equity." Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, common stock is classified as stockholders' equity. Our common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented as temporary equity, outside of the stockholders' equity section of our balance sheets. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid in capital and accumulated deficit.
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Net income per Common Stock
Net income per share is computed by dividing net income by the weighted average
number of shares of common stock outstanding during the period, excluding shares
of common stock subject to forfeiture by the Sponsor. At
Accounting for Warrants
The Company accounts for warrants as either equity-classified or
liability-classified instruments based on an assessment of the instruments'
specific terms and applicable authoritative guidance in ASC 480 and ASC 815,
Derivatives and Hedging ("
ASC 815
"). The assessment considers whether the instruments are free standing financial
instruments pursuant to ASC 480, meet the definition of a liability pursuant to
ASC 480, and whether the instruments meet all of the requirements for equity
classification under ASC 815, including whether the instruments are indexed to
the Company's own common shares and whether the instrument holders could
potentially require "net cash settlement" in a circumstance outside of the
Company's control, among other conditions for equity classification. This
assessment, which requires the use of professional judgment, was conducted at
the time of warrant issuance and as of each subsequent period end date while the
instruments are outstanding. Management has concluded that the Public Warrants
qualify for equity accounting treatment and the Private Placement Warrants
issued pursuant to the warrant agreement qualify for liability accounting
treatment.
Recent Accounting Pronouncements
InAugust 2020 , the FASB issued Accounting Standards Update (" ASU ") No. 2020-06, Debt - debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity (" ASU 2020-06 "), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The Company adopted ASU 2020-06 onJanuary 25, 2021 (inception). Adoption of the ASU did not impact the Company's financial position, results of operations or cash flows.
The Company has reviewed other recent accounting pronouncements and concluded that they are either not applicable to the Company or no material effect is expected on the financial statement as a result of future adoption.
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