References to "we", "us", "our" or the "Company" are to Altitude Acquisition
Corp., except where the context requires otherwise. The following discussion
should be read in conjunction with our unaudited condensed financial statements
and related notes thereto included elsewhere in this report.
Cautionary 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 of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended (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. Factors that might cause or contribute to
such a discrepancy include, but are not limited to, those described in our other
Securities and Exchange Commission ("SEC") filings.
Overview
We are a blank check company incorporated on August 12, 2020 as a Delaware
corporation and formed for the purpose of effecting a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses (a "Business Combination"). We
consummated our Public Offering (as defined below) on December 11, 2020 and are
currently in the process of locating suitable targets for our Business
Combination. We intend to use the cash proceeds from our Public Offering and the
Private Placement described below as well as additional issuances, if any, of
our capital stock, debt or a combination of cash, stock and debt to complete the
Business Combination.
We expect to incur significant costs in the pursuit of our initial Business
Combination. We cannot assure you that our plans to raise capital or to complete
our initial Business Combination will be successful.
We completed the sale of 30,000,000 units (the "Units" and, with respect to the
shares of Class A common stock included in the Units sold, the "Public Shares"),
including the issuance of 3,900,000 Units as a result of the partial exercise of
the underwriters' over-allotment option, at $10.00 per Unit generating gross
proceeds of $300,000,000. Simultaneous with the closing of the Public Offering,
we completed the sale of 8,000,000 warrants (the "Private Warrants") at a price
of $1.00 per Private Warrant in a private placement to our sponsor, generating
gross proceeds to the Company of $8,000,000.
As of September 30, 2021, a total of $300,000,000 of the net proceeds from the
Public Offering (including the full exercise of the over-allotment option) and
the Private Placements were in a trust account established for the benefit of
the Company's public shareholders. The trust fund account is invested in
interest-bearing U.S. government securities and the income earned on those
investments is also for the benefit of our public shareholders.
Our management has broad discretion with respect to the specific application of
the net proceeds of the Public Offering and the Private Placement, although
substantially all of the net proceeds are intended to be applied generally
towards consummating a business combination.
Results of Operations
As of September 30, 2021, we have not commenced any operations. All activity for
the period from August 12, 2020 (inception) through September 30, 2021, relates
to our formation and initial public offering ("Public Offering" or "IPO"), and,
since the completion of the IPO, searching for a target to consummate a Business
Combination. We will not generate any operating revenues until after the
completion of a Business Combination, at the earliest. We
will generate non-operating income in the
form of interest income from the proceeds derived from the Public Offering and
placed in the Trust Account (defined below).
For the three months ended September 30, 2021 and 2020, we had a net loss of
$569,008 and $6,108, respectively. Net loss for the three months ended
September 30, 2021 consisted primarily of $4,327,824 of change in fair value of
warrant liability and $6,168 of earned interest income, offset by $4,903,000 of
professional fees and other expenses.

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For the nine months ended September 30, 2021 and 2020, we had a net income of
$12,043,581 and net loss of $6,108, respectively. Net loss for the nine months
ended September 30, 2021 consisted primarily $17,773,513 of change in fair value
of warrant liability and $19,262 of earned interest income, offset by $5,749,195
of professional fees and other expenses.
Liquidity and Capital Resources
As of September 30, 2021, we had cash outside our trust account of $134,055,
available for working capital needs. All remaining cash was held in the trust
account and is generally unavailable for our use, prior to an initial business
combination.
On December 11, 2020, we consummated the IPO of 30,000,000 Units (and, with
respect to the common stock included in the Units being offered, the "public
share", the warrants included in the Units, the "public warrants" and the rights
included in the Units, the "rights"), at $10.00 per Unit, generating gross
proceeds of $300,000,000.
Simultaneously with the closing of the IPO, we consummated the sale of 8,000,000
warrants (the "Private Warrants"), at a price of $1.00 per Private Warrant,
generating gross proceeds of $8,000,000.
In connection with the IPO, the underwriters were granted a
45-day
option from the date of the prospectus (the "Over-Allotment Option") to purchase
up to 3,915,000 additional Units to cover over-allotments (the "Over-Allotment
Units"), if any. On December 11, 2020, the underwriters partially exercised
their Over-Allotment Option and purchased an additional 3,900,000 Units. The
unexercised portion of the over-allotment option was forfeited.
Following our IPO and the sale of the Private Warrants, a total of $300,000,000
($10.00 per Unit) was placed in the Trust Account. We incurred $17,107,057 in
IPO related costs, including $6,000,000 of underwriting fees, $10,500,000 of
deferred underwriting discount and $607,057 of other costs.
As of September 30, 2021, we had investments held in the Trust Account of
$300,019,322 (including approximately $19,000 of interest income) consisting of
mutual funds. Interest income on the balance in the Trust Account may be used by
us to pay taxes.
For the nine months ended September 30, 2021, cash used in operating activities
was $630,274. Net income of $12,043,581 was impacted by interest earned on
investments held in the Trust Account of $19,240, change in fair value of
warrant liability of $17,773,513, and changes in operating assets and
liabilities, which provided $5,118,898 of cash for operating activities.
We intend to use substantially all of the funds held in the trust account,
including any amounts representing interest earned on the trust account
(excluding the deferred underwriters' discount) to complete our initial Business
Combination. We may withdraw interest to pay our taxes and liquidation expenses
if we are unsuccessful in completing a Business Combination. We estimate our
annual franchise tax obligations to be $200,000, which is the maximum amount of
annual franchise taxes payable by us as a Delaware corporation per annum, which
we may pay from funds from the Public Offering held outside of the trust account
or from interest earned on the funds held in the trust account and released to
us for this purpose. Our annual income tax obligations will depend on the amount
of interest and other income earned on the amounts held in the trust account
reduced by our operating expense and franchise taxes. We expect the interest
earned on the amount in the trust account will be sufficient to pay our income
taxes. To the extent that our equity or debt is used, in whole or in part, as
consideration to complete our initial Business Combination, the remaining
proceeds held in the trust account will be used as working capital to finance
the operations of the target business or businesses, make other acquisitions and
pursue our growth strategies.
On June 2, 2021, we issued an unsecured promissory note to the Sponsor for an
aggregate available principal amount of $300,000 to be used for a portion of the
expenses of the Business Combination. This loan
is non-interest
bearing, unsecured and due at the earlier of December 31, 2021 or the closing of
the Business Combination. As of September 30, 2021, there were no borrowings
under the promissory note.
Further, our Sponsor, officers and directors or their respective affiliates may,
but are not obligated to, loan us funds as may be required (the "Working Capital
Loans"). If we complete a Business Combination, we would repay the Working
Capital Loans. In the event that a Business Combination does not close, we 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. Such Working Capital Loans would be evidenced by
promissory notes. The notes would either be repaid upon consummation of a
Business Combination, without interest, or, at the lender's discretion. As of
September 30, 2021, no Working Capital Loans have been issued.

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We do not believe we will need to raise additional funds in order to meet the
expenditures required for operating our business. However, if our estimate of
the costs of identifying a target business,
undertaking in-depth
due diligence and negotiating a Business Combination are less than the actual
amount necessary to do so, we may have insufficient funds available to operate
our business prior to our Business Combination. Moreover, we may need to obtain
additional financing either to complete our Business Combination or because we
become obligated to redeem a significant number of our public shares upon
consummation of our Business Combination, in which case we may issue additional
securities or incur debt in connection with such Business Combination. Subject
to compliance with applicable securities laws, we would only complete such
financing simultaneously with the completion of our Business Combination. If we
are unable to complete our Business Combination because we do not have
sufficient funds available to us, we will be forced to cease operations and
liquidate the Trust Account. In addition, following our Business Combination, if
cash on hand is insufficient, we may need to obtain additional financing in
order to meet our obligations.
Off-Balance
Sheet Financing Arrangements
We did not have any
off-balance
sheet arrangement as of September 30, 2021.
Contractual Obligations
As of September 30, 2021, we did not have any long-term debt, capital or
operating lease obligations.
We entered into an administrative services agreement pursuant to which we will
pay an affiliate of one of our directors for office space and secretarial and
administrative services provided to members of our management team, in an amount
not to exceed $10,000 per month. We have incurred $97,667 of administrative
service fees for the period from December 8, 2020 through September 30, 2021.
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity
with GAAP 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 as our critical accounting policies:
Derivative Financial Instruments
We evaluate our financial instruments to determine if such instruments are
derivatives or contain features that qualify as embedded derivatives in
accordance with ASC Topic 815, "
Derivatives
and
Hedging
". Derivative instruments are recorded at fair value on the grant date
and re-valued
at each reporting date, with changes in the fair value reported in the
statements of operations. Derivative assets and liabilities are classified on
the balance sheet as current
or non-current
based on whether or
not net-cash
settlement or conversion of the instrument could be required within 12 months of
the balance sheet date. We have determined the warrants are a derivative
instrument.
FASB
ASC 470-20,
Debt with Conversion and Other Options addresses the allocation of proceeds from
the issuance of convertible debt into its equity and debt components. We apply
this guidance to allocate IPO proceeds from the Units between Class A common
stock and warrants, using the residual method by allocating IPO proceeds first
to fair value of the warrants and then the Class A common stock.
Class A Common Stock Subject to Possible Redemption
We account for our Class A common stock subject to possible redemption in
accordance with the guidance in the Financial Accounting Standards Board's
("FASB") Accounting Standards Codification ("ASC") Topic 480 "
Distinguishing Liabilities from Equity
." Common stock subject to mandatory redemption (if any) are classified as
liability instruments and are measured at fair value. Conditionally redeemable
Class A common stock (including common stock that feature 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) are classified as
temporary equity. At all other times, common stock is classified as
stockholders' equity. Our Class A common stock feature certain redemption rights
that are considered to be outside of our control and subject to the occurrence
of uncertain future events. Accordingly, at September 30, 2021 and December 31,
2020, 30,000,000 Class A common stock subject to possible redemption are
presented as temporary equity, outside of the stockholders' equity section of
our balance sheet.


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Net Income (loss) Per Common Stock
We have two classes of shares, which are referred to as Class A common stock and
Class B common stock. Earnings and losses are shared pro rata between the two
classes of shares. The 23,000,000 potential common stock for outstanding
warrants to purchase our shares were excluded from diluted earnings per share
for the three and nine months ended September 30, 2021 because the warrants are
contingently exercisable, and the contingencies have not yet been met. As a
result, diluted net loss per common share is the same as basic net loss per
common share for the periods.
Recent Accounting Standards
Management does not believe that any recently issued, but not effective,
accounting standards, if currently adopted, would have a material effect on our
condensed financial statements.
In August 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. We adopted ASU
2020-06
on January 1, 2021. Adoption of the ASU did not impact our financial position,
results of operations or cash flows.
JOBS Act
The JOBS Act contains provisions that, among other things, relax certain
reporting requirements for qualifying public companies. We qualify as an
"emerging growth company" under the JOBS Act and are 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 a result, our financial statements may not be comparable to
companies that comply with new or revised accounting pronouncements as of 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 independent registered public
accounting firm's attestation report on our system of internal controls over
financial reporting pursuant to Section 404, (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 independent
registered public accounting firm'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
the CEO's compensation to median employee compensation. These exemptions will
apply for a period of five years following the completion of this offering or
until we are no longer an "emerging growth company," whichever is earlier.

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