References to "we", "us", "our" or the "Company" are to
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 (the "Securities Act"), 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 otherSecurities and Exchange Commission ("SEC") filings. 20
--------------------------------------------------------------------------------
Table of Contents
Overview
We are a blank check company incorporated on
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"), with each Unit
comprised of one share of Class A common stock (the "Public Shares") and
one-half
of one warrant (the "Public Warrants"), including the issuance of 3,900,000
Units as a result of the partial exercise of the underwriters' over-allotment
option, at
As of
Our management has broad discretion with respect to the specific application of the net proceeds of the IPO and the Private Placement, although substantially all of the net proceeds are intended to be applied generally towards consummating a Business Combination.
Proposed Business Combination
OnMarch 1, 2022 , we signed a non-binding letter of intent with a Business Combination target company.
Results of Operations
As ofMarch 31, 2022 , we have not commenced any operations. All activity for the period fromAugust 12, 2020 (inception) throughMarch 31, 2022 relates to our formation and IPO, and, since the completion of the IPO, our 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 generate non-operating income in the form of interest income from the proceeds derived from the IPO and placed in the Trust Account (defined above).
For the three months ended
For the three months ended
21
--------------------------------------------------------------------------------
Table of Contents
Liquidity and Capital Resources
As of
On
Simultaneously with the closing of the IPO, we consummated the sale of the
Private Warrants at a price of
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
Following our IPO and the sale of the Private Warrants, a total of
As of
For the three months ended
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
On
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
22
--------------------------------------------------------------------------------
Table of Contents
OnNovember 16, 2021 ,January 18, 2022 andFebruary 1, 2022 , we received$100,000 ,$100,000 and 250,000 advances from Sponsor to be used for working capital purposes, respectively. The advances are non-interest bearing and due on demand. As ofMarch 31, 2022 andDecember 31, 2021 , we owed the Sponsor$450,000 and$100,000 related to these advances, respectively.
On
We have incurred and expect to continue to incur significant costs in pursuit of our acquisition plans. We will need to raise additional capital through loans or additional investments from our Sponsor, stockholders, officers, directors, or third parties. Our officers, directors and Sponsor may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet our working capital needs. Accordingly, we may not be able to obtain additional financing. These conditions raise substantial doubt about our ability to continue as a going concern for a period of time within one year after the date that the financial statements are issued. If the 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 or draw on the Working Capital Loans either to complete a Business Combination or because we become obligated to redeem a significant number of the Public Shares upon consummation of the 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 a Business Combination.
Off-Balance
Sheet Financing Arrangements
We did not have any off-balance sheet arrangement as ofMarch 31, 2022 .
Contractual Obligations
As of
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
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. 23
--------------------------------------------------------------------------------
Table of Contents
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
Net Income (loss) Per Share of 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 shares of Class A common stock potentially
issuable upon the exercise of outstanding warrants to purchase our shares were
excluded from diluted earnings per share for the three months ended
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.
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. 24
--------------------------------------------------------------------------------
Table of Contents
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.
© Edgar Online, source