The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with our audited financial
statements and the notes related thereto which are included in "Item 8.
Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.
Certain information contained in the discussion and analysis set forth below
includes forward-looking statements. Our actual results may differ materially
from those anticipated in these forward-looking statements as a result of many
factors, including those set forth under "Special Note Regarding Forward-Looking
Statements," "Item 1A. Risk Factors" and elsewhere in this Annual Report on Form
10-K.
Overview
We are a blank check company incorporated on February 10, 2021 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.
In February 2021, we issued an aggregate of 5,750,000 shares of our Class B
common stock (the "Founder Shares") to our Sponsor in exchange for a capital
contribution of $25,000, a purchase price of approximately $0.004 per share. The
number of Founder Shares issued was determined based on the expectation that
such Founder Shares would represent 20% of the outstanding shares upon
completion of our initial public offering (the "Initial Public Offering"). The
per share purchase price of the Founder Shares was determined by dividing the
amount of cash contributed to the Company by the aggregate number of Founder
Shares issued. In October 2021, in connection with our Initial Public Offering,
our Sponsor forfeited a total of 90,000 Founder Shares to us for no
consideration, and we then issued 30,000 Founder Shares to each of our three
independent directors at their original purchase price. Also in October 2021, in
connection with our Initial Public Offering, we effected a stock dividend of
1,150,000 Founder Shares on the Founder Shares, which resulted in our Sponsor
owning 6,810,000 Founder Shares. Such stock dividend has been accounted for
retroactively to all periods. The holders of our Founder Shares prior to our
Initial Public Offering are referred to in this Annual Report on Form 10-K as
our "initial stockholders."
On the Closing Date, we consummated our Initial Public Offering of 24,000,000
Units and, on October 22, 2021, the Underwriters purchased the Over-allotment
Units upon the full exercise of their over-allotment option, resulting in the
sale of 27,600,000 Units in the aggregate. The Units were sold at a price of
$10.00 per unit, generating gross proceeds to us of $276,000,000. Each Unit
consists of one share of our Class A common stock and three quarters of one
public warrant (a "Public Warrant"). Each whole Public Warrant entitles the
holder thereof to purchase one whole share of our Class A common stock at a
price of $11.50 per share, subject to adjustment, and only whole warrants are
exercisable. The warrants will become exercisable on the 30th day after the
completion of our initial business combination (the "Initial Business
Combination") and will expire five years after the completion of our Initial
Business Combination or earlier upon redemption or liquidation.
On the Closing Date, simultaneously with the consummation of our Initial Public
Offering, we completed a private placement of 11,600,000 private placement
warrants (the "Private Placement Warrants") at a purchase price of $1.00 per
warrant to our Sponsor (the "Private Placement"), generating gross proceeds to
us of approximately $11,600,000 and, on October 22, 2021, simultaneously with
the consummation of the over-allotment option, we completed the Private
Placement. Each Private Placement Warrant entitles the holder to purchase one
whole share of our Class A common stock at $11.50 per share. The Private
Placement Warrants (including the Class A common stock issuable upon exercise
thereof) may not, subject to certain limited exceptions, be transferred,
assigned or sold by the holder until 30 days after the completion of our Initial
Business Combination.
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Approximately $281,520,000 of the net proceeds from our Initial Public Offering
and the Private Placement has been deposited in a trust account (the "Trust
Account").
We received gross proceeds from our Initial Public Offering and the sale of the
Private Placement Warrants of $276,000,000 and $13,040,000, respectively, for an
aggregate of $289,040,000. $281,520,000 of the gross proceeds were deposited
into the Trust Account. The $281,520,000 of net proceeds held in the Trust
Account includes $9,660,000 of deferred underwriting discounts and commissions
that will be released to the Underwriters upon completion of our Initial
Business Combination. Of the gross proceeds from our Initial Public Offering and
the sale of the Private Placement Warrants that were not deposited in the Trust
Account, $5,520,000 was used to pay underwriting discounts and commissions in
our Initial Public Offering approximately $195,000 was used to repay loans and
advances from our Sponsor, and the balance was reserved to pay accrued offering
and formation costs, business, legal and accounting due diligence expenses on
prospective acquisitions and continuing general and administrative expenses.
The Founder Shares that we issued prior to the Closing Date will automatically
convert into shares of our Class A common stock at the time of our Initial
Business Combination on a one-for-one basis, subject to adjustment for stock
splits, stock dividends, reorganizations, recapitalizations and the like. In the
case that additional shares of Class A common stock, or equity-linked
securities, are issued or deemed issued in excess of the amounts sold in our
Initial Public Offering and related to the closing of the Initial Business
Combination the ratio at which the shares of our Class B common stock will
convert into shares of our Class A common stock will be adjusted (unless the
holders of a majority of the outstanding shares of our Class B common stock
agree to waive such adjustment with respect to any such issuance or deemed
issuance) so that the number of shares of our Class A common stock issuable upon
conversion of all issued and outstanding shares of Class B common stock will
equal, in the aggregate, on an as-converted basis, 20% of the sum of the total
number of all shares of common stock outstanding upon the completion of our
Initial Public Offering plus all shares of Class A common stock and
equity-linked securities issued or deemed issued in connection with the Initial
Business Combination (after giving effect to any redemptions of shares of our
Class A common stock by public stockholders and excluding any shares or
equity-linked securities issued, or to be issued, to any seller in the business
combination and any Private Placement Warrants issued to our Sponsor, any
affiliate of our Sponsor or any of our officers or directors upon conversion of
any working capital loans (the "Working Capital Loans").
On November 9, 2021, we announced that, commencing November 12, 2021, holders of
the Units sold in our Initial Public Offering may elect to separately trade the
shares of Class A common stock and Public Warrants included in the Units. The
shares of Class A common stock and Public Warrants that are separated will trade
on the New York Stock Exchange ("NYSE") under the symbols "BMAC" and "BMAC WS,"
respectively. Those Units not separated will continue to trade on the NYSE under
the symbol "BMAC.U."
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities from February 10, 2021 (inception) through December 31,
2022, were organizational activities, those necessary to prepare for the Initial
Public Offering, described below, and identifying a target company for an
Initial Business Combination. We do not expect to generate any operating
revenues until after the completion of our Initial Business Combination. We
generate non-operating income in the form of interest income on marketable
securities held in the Trust Account. We incur expenses as a result of being a
public company (for legal, financial reporting, accounting and auditing
compliance), as well as for due diligence expenses.
For the year ended December 31, 2022, we had a net income of $2,199,522, which
consisted of interest earned on funds held in Trust Account of $4,121,363,
partially offset by operating costs of $1,134,928 and provision for income taxes
of $786,913.
For the period from February 10, 2021 (inception) through December 31, 2021, we
had a net loss of $684,917, which consisted of $688,891 in formation and
operating costs, partially offset by interest earned on funds held in Trust
Account of $3,974.
Liquidity, Capital Resources and Going Concern
As of December 31, 2022, we had $289,657 in cash and a working capital deficit
of $427,206.
Our liquidity needs up to December 31, 2022, had been satisfied through a
payment of $25,000 in offering costs by the Sponsor in exchange for the Founder
Shares, and borrowings under the promissory note of $195,000. The promissory
note was fully repaid on October 20, 2021, from the proceeds of the IPO.
In October 2021, we consummated our initial Public Offering and Private
Placement and subsequently the underwriters fully exercised their over-allotment
option. Of the net proceeds from the IPO and associated Private Placements and
subsequent exercise of the over-allotment option by the underwriters,
$281,520,000 of cash was placed in the Trust Account and $1,960,476 of cash was
held outside of the Trust Account and is available for working capital purposes.
In order to finance transaction costs in connection with a business combination,
our Sponsor or an affiliate of the Sponsor or certain of our officers and
directors may, but are not obligated to, provide Working Capital Loans. As of
December 31, 2022, there were no amounts outstanding under any Working Capital
Loans.
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In connection with the Company's assessment of going concern considerations in
accordance with ASU 2014-15, management has determined that the Company has and
will continue to incur significant costs in pursuit of its acquisition plans
which raises substantial doubt about the Company's ability to continue as a
going concern. Moreover, we may need to obtain additional financing either to
complete our Initial Business Combination or because we become obligated to
redeem a significant number of our public shares (the "Public Shares") upon
consummation of our Initial 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 Initial
Business Combination. If we are unable to complete our Initial 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 Initial Business Combination if cash on hand is insufficient, we
may need to obtain additional financing in order to meet our obligations.
In connection with the Company's assessment of going concern considerations in
accordance with ASC 204-40 management has determined that if the Company is
unable to complete a business combination by April 18, 2023 (the "Combination
Period"), then the Company will cease all operations except for the purpose of
liquidating. The date for mandatory liquidation and subsequent dissolution as
well as the Company's working capital deficit raise substantial doubt about the
Company's ability to continue as a going concern. No adjustments have been made
to the carrying amounts of assets or liabilities should the Company be required
to liquidate after the Combination Period. The Company intends to complete a
business combination before the mandatory liquidation date.
Related Party Transactions
Founder Shares
On February 10, 2021, our Sponsor acquired 5,750,000 founder shares in exchange
for a capital contribution of $25,000. Prior to the initial investment in the
Company of $25,000 by our Sponsor, the Company had no assets, tangible or
intangible. The per share purchase price of the Founder Shares was determined by
dividing the amount of cash contributed to the Company by the aggregate number
of Founder Shares issued. In October, we effected a dividend of 1,150,000 of our
Founder Shares, which resulted in our Sponsor owning 6,900,000 Founder Shares.
In connection with our Initial Public Offering, our Sponsor forfeited a total of
90,000 Founder Shares, and 30,000 Founder Shares were then issued to each of the
independent directors, Mel G. Riggs, Charles W. Yates and Stephen Straty, at
their original purchase price.
The holders of the Founder Shares agreed, subject to limited exceptions, not to
transfer, assign or sell any of their Founder Shares until the earlier to occur
of: (i) 180 days after the completion of the Initial Business Combination or
(ii) subsequent to the Initial Business Combination, the date on which the
Company completes a liquidation, merger, capital stock exchange, reorganization
or other similar transaction that results in all of the Company's stockholders
having the right to exchange their shares of common stock for cash, securities
or other property.
Registration Rights
The holders of the Founder Shares, Warrants that may be issued upon conversion
of Working Capital Loans (and any shares of Class A common stock issuable upon
the exercise of the Warrants that may be issued upon conversion of Working
Capital Loan and upon conversion of the Founder Shares) will be entitled to
registration rights pursuant to a registration rights agreement, requiring us to
register such securities for resale (in the case of the Founder Shares, only
after conversion to our Class A common stock). The holders of at least
$25 million in value of these securities are entitled to demand that we file a
registration statement covering such securities and to require us to effect up
to an aggregate of three underwritten offerings of such securities. In addition,
the holders have certain "piggy-back" registration rights with respect to
registration statements filed subsequent to our completion of our Initial
Business Combination.
Related Party Working Capital Loan
In addition, in order to finance transaction costs in connection with an Initial
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 non-interest Working Capital Loans. If the Company completes an Initial
Business Combination, the Company will 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 the Initial 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. The Working Capital Loans would
either be repaid upon consummation of the Initial Business Combination or, at
the lender's discretion, up to $1.5 million of such Working Capital Loans may be
convertible into warrants of the post-Initial Business Combination entity at a
price of $1.00 per warrant. Such warrants would be identical to the Private
Placement Warrants. To date, the Company had no borrowings under the Working
Capital Loans.
Related Party Promissory Note
On February 10, 2021, the Sponsor agreed to loan the Company an aggregate of up
to $250,000 to cover expenses related to the proposed public offering pursuant
to an unsecured promissory note (the "Note"). This Note was non-interest bearing
and payable upon the earlier of (i) the date that is 180 days following the date
of the Note and (ii) the closing date of the Initial Public Offering. Prior to
the consummation of the Initial Public Offering, the Company borrowed $195,000
under the Note. The Note was fully repaid on October 20, 2021 from the proceeds
of the Initial Public Offering.
Administrative Support Agreement
Beginning on October 14, 2021, the Company has agreed to pay an affiliate of the
Sponsor a total of $10,000 per month for office space, utilities and secretarial
and administrative support.
Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in the United States of America
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 expenses during the
period reported. Actual results could materially differ from those estimates. We
have identified the following critical accounting estimates affecting our
financial statements:
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Class A Common Stock Subject to Possible Redemption
As a result of the right of stockholders to redeem their Public Shares in
connection with a tender offer for shares or an Initial Business Combination,
all such Public Shares are recorded at redemption amount and classified as
temporary equity upon the completion of the Initial Public Offering in
accordance with ASC 480.
Offering Costs Associated with the Initial Public Offering
The Company complies with the requirements of the ASC 340-10-S99-1. Offering
costs consisted of legal, accounting, underwriting fees and other costs incurred
through the Initial Public Offering that were directly related to the Initial
Public Offering. The Company incurred offering costs amounting to $15,774,999 as
a result of the Initial Public Offering consisting of $5,520,000 of underwriting
commissions, $9,660,000 of deferred underwriting commissions, and $594,999 of
other offering costs. The Offering costs were charged to stockholders' deficit
upon the completion of the Initial Public Offering.
Net Income per Share
Net income per share is computed by dividing net income by the weighted average
number of shares of common stock outstanding during the period. We apply the
two-class method in calculating earnings per share. Adjustment associated with
the redeemable shares of Class A common stock is excluded from earnings per
share as the redemption value approximates fair value.
Off-Balance Sheet Financing Arrangements
As of December 31, 2022, we did not have any off-balance sheet arrangements as
defined in Item 303(a)(4)(ii) of Regulation S-K.
Contractual Obligations
As of December 31, 2022, we did not have any long-term debt, capital lease
obligations, operating lease obligations or long-term liabilities. Beginning on
October 14, 2021, the Company agreed to pay an affiliate of the Sponsor a total
of $10,000 per month for office space, utilities and secretarial and
administrative support. Upon completion of the Initial Business Combination or
the Company's liquidation, the Company will cease paying these monthly fees. As
of December 31, 2022, we did not have any accrued administrative support.
The underwriters of the Initial Public Offering were entitled to underwriting
discounts and commissions of 5.5%, of which 2% ($5,520,000) was paid at the
closing of the Initial Public Offering and 3.5% ($9,660,000) was deferred. The
deferred underwriting discounts and commissions will become payable to the
underwriters upon the consummation of the Initial Business Combination and will
be paid from the amounts held in the Trust Account. The underwriters are not
entitled to any interest accrued on the deferred underwriting discounts and
commissions.
JOBS Act
The Jumpstart Our Business Startups Act of 2012 (the "JOBS Act") contains
provisions that, among other things, relax certain reporting requirements for
qualifying public companies. We 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 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, (a) provide an auditor's attestation report on our system of
internal controls over financial reporting pursuant to Section 404 of the JOBS
Act, (b) 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, (c) comply with any requirement that may be adopted by
the Public Company Accounting and Oversight Board 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 (d) disclose certain executive compensation related items such as
the correlation between executive compensation and performance and comparisons
of our Chief Executive Officer's compensation to median employee compensation.
These exemptions will apply for a period of five years following the closing of
the Initial Public Offering or until we are no longer an "emerging growth
company," whichever is earlier.
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