The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with the 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/A.
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 "Cautionary Note Regarding
Forward-Looking Statements," "Item 1A. Risk Factors" and elsewhere in this
Annual Report on Form 10-K/A.
Cautionary Note Regarding Forward-Looking Statements
This Annual Report on Form 10-K/A includes forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Securities
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
SEC filings.
In this Annual Report Form 10-K/A for the year ended December 31, 2022, we are
restating our audited financial statements as of, and for the year ended
December 31, 2022.
The restatement results from our prior accounting for an extinguishment of a
significant contingent obligation, with a resulting non-operating gain
recognized in our statement of operations for the year ended December 31, 2022,
instead of recognizing the extinguishment as a credit to stockholders' deficit.
The Company had recognized a liability upon closing of their initial public
offering in October 2021 for a portion of the underwriter's commissions which
was contingently payable upon closing of a future business combination, with the
offsetting entry resulting in an initial discount to the securities sold in the
initial public offering. The underwriter waived all claim to this deferred
commission in November 2022. The Company recognized the waiver as an
extinguishment, with a resulting non-operating gain recognized in its statement
of operations for the year ended December 31, 2022. Upon subsequent review and
analysis, including with our independent auditors, management concluded that the
Company should have recognized the extinguishment of the contingent liability as
a credit to stockholders' deficit.
Therefore, our management and the Audit Committee of the Company's Board of
Directors (the "Audit Committee") concluded that our previously issued audited
financial statements as of December 31, 2022 (the "Annual Report") should no
longer be relied upon and that it is appropriate to restate the Annual Report.
As such, we will restate its financial statements in this Form 10-K/A for our
audited financial statements as of December 31, 2022.
The change in accounting for the extinguishment did not have any impact on the
Company's liquidity, cash flows, costs of operating in the period.
In connection with the restatement, our management reassessed the effectiveness
of our disclosure controls and procedures for the periods affected by the
restatement. As a result of that reassessment, we determined that our disclosure
controls and procedures for such periods were not effective with respect to the
liability extinguishment. For more information, see Item 9A included in this
Annual Report on Form 10-K/A.
The restatement is more fully described in Note 2 of the notes to the financial
statements included herein.
Overview
Our company, dMY Technology Group, Inc. VI (previously known as TdMY Technology
Group, Inc.) is a blank check company incorporated in Delaware on April 16,
2021. We were 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. We are an emerging growth company and,
as such, we are subject to all of the risks associated with emerging growth
companies.
As of December 31, 2022, we had not commenced any operations. All activity for
the period from April 16, 2021 (inception) through December 31, 2022 relates to
our formation and our initial public offering, described below and, since the
closing of the initial public offering, the search for and efforts toward
completing an initial business combination. We will not generate any operating
revenues until after the completion of the initial business combination, at the
earliest. We will generate non-operating income in the form investment income
from the trust account.
37
--------------------------------------------------------------------------------
Our sponsor is dMY Sponsor VI, LLC, a Delaware limited liability company. The
registration statement for our initial public offering was declared effective on
September 30, 2021. On October 5, 2021, we consummated our initial public
offering of 24,150,000 units, including 3,150,000 additional units to cover
over-allotments, at $10.00 per unit, generating gross proceeds of
$241.5 million, and incurring offering costs of approximately $15.0 million, of
which approximately $8.5 million was for deferred underwriting commissions,
which was later entirely waived on November 18, 2022, and approximately $440,000
was for offering costs allocated to derivate warrant liabilities.
Simultaneously with the closing of our initial public offering, we consummated
the private placement of 6,830,000 warrants, at a price of $1.00 per private
placement warrant to the sponsor, generating proceeds of approximately
$6.8 million.
Upon the closing of our initial public offering and the private placement,
$241.5 million ($10.00 per unit) of the net proceeds of our initial public
offering and certain of the proceeds of the private placement was placed in a
Trust Account located in the United States with American Stock Transfer & Trust
Company acting as trustee, and invested only in U.S. "government securities"
within the meaning of Section 2(a)(16) of the Investment Company Act, having a
maturity of 185 days or less or in money market funds meeting certain conditions
under Rule 2a-7 promulgated under the Investment Company Act which invest only
in direct U.S. government treasury obligations, as determined by the Company,
until the earlier of: (i) the completion of a business combination and (ii) the
distribution of the Trust Account as described below.
Our management has broad discretion with respect to the specific application of
the net proceeds of our initial public offering and the sale of private
placement warrants, although substantially all of the net proceeds are intended
to be applied generally toward consummating a business combination. There is no
assurance that we will be able to complete a business combination successfully.
We must complete one or more initial business combinations having an aggregate
fair market value of at least 80% of the net assets held in the Trust Account
(net of amounts disbursed to management for working capital purposes and
excluding the deferred underwriting commissions and taxes payable on the
interest earned on the Trust Account) at the time of the agreement to enter into
the initial business combination. However, we will only complete a business
combination if the post-transaction company owns or acquires 50% or more of the
voting securities of the target or otherwise acquires a controlling interest in
the target sufficient for it not to be required to register as an investment
company under the Investment Company Act.
We will have 18 months from the closing of our initial public offering, to
consummate an initial business combination. However, if we anticipate that we
may not be able to consummate an initial business combination within 18 months,
we may, but are not obligated to, extend the period of time to consummate a
business combination once by an additional three months (for a total of 21
months to complete an initial business combination), provided that, the only way
to extend the time available for us to consummate the initial business
combination is for our sponsor or its affiliates or designees, upon five days'
advance notice prior to the deadline, to deposit into the Trust Account an
amount of $0.10 per share of Class A common stock, or approximately $2.4 million
in the aggregate, on or prior to the date of the applicable deadline. Any such
payments would be made in the form of a loan. Public Stockholders will not be
offered the opportunity to vote on or redeem their shares in connection with any
such extension.
If we are unable to complete a business combination within 18 months from the
closing of our initial public offering, or April 5, 2023, or 21 months from the
closing of our initial public offering, or July 5, 2023, if extended (the
"combination period"), we will (i) cease all operations except for the purpose
of winding up; (2) as promptly as reasonably possible but not more than ten
business days thereafter, redeem the public shares, at a per share price,
payable in cash, equal to the aggregate amount then on deposit in the Trust
Account calculated as of two business days prior to the consummation of the
initial business combination, including interest (net of amounts withdrawn to
fund working capital requirements, and/or to pay for our tax obligations
("permitted withdrawals") and up to $100,000 of interest to pay dissolution
expenses), divided by the number of then outstanding public shares, which
redemption will completely extinguish Public Stockholders' rights as
stockholders (including the right to receive further liquidating distributions,
if any), subject to applicable law; and (3) as promptly as reasonably possible
following such redemption, subject to the approval of the remaining stockholders
and the board of directors, dissolve and liquidate, subject in each case to the
Company's obligations under Delaware law to provide for claims of creditors and
the requirements of other applicable law.
Proposed Business Combination
On December 22, 2022, we (the "Purchaser" or "dMY VI"), entered into a Share
Purchase Agreement (the "Share Purchase Agreement") with Rain Enhancement
Technologies, Inc., a Delaware corporation ("Rainwater Tech") and Rainwater,
LLC, Michael Nefkens and Keri Waters (together referred to as the "Sellers") and
Rainwater, LLC, solely in its capacity as Sellers' Representative, pursuant to
which, dMY VI will acquire Rainwater Tech and Rainwater Tech will become a
wholly owned subsidiary of dMY VI, and dMY VI will change its name to "Rain
Enhancement Technologies, Inc. (the "Merger"), as fully disclosed in the Current
Report on Form 8-K filed with the SEC on December 22, 2022.
38
--------------------------------------------------------------------------------
Going Concern Consideration
As of December 31, 2022, we had approximately $1,000 in cash, approximately
$3.5 million of interest income available in the Trust Account to pay for taxes
and a working capital deficit of approximately $3.8 million (including tax
obligations of approximately $800,000 that may be paid using investment income
earned in Trust Account).
Our liquidity needs prior to the consummation of our initial public offering
were satisfied through the payment of $25,000 from our sponsor to purchase the
founder Shares and a loan under a promissory note with our sponsor (the "note")
in the amount of approximately $75,000. We fully repaid the note balance on
October 4, 2021. Subsequent to the consummation of our initial public offering,
our liquidity has been satisfied through the net proceeds from the consummation
of our initial public offering and the private placement held outside of the
Trust Account.
In addition, 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 us funds as needed
under Working Capital Loans. The Working Capital Loans would either be repaid
upon consummation of a 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 business combination entity at a price of $1.00 per warrant. As of
December 31, 2022 and 2021, we borrowed $295,000 and $0 under the Working
Capital Loans, respectively. In January 2023, we borrowed an additional amount
of $86,000, for an aggregate of $381,000 outstanding under the Working Capital
Loans.
In connection with our management's assessment of going concern considerations
in accordance with FASB ASC 205-40, "Basis of Presentation - Going Concern,"
management has determined that the liquidity and mandatory liquidation and
subsequent dissolution raise substantial doubt about our ability to continue as
a going concern. Our management plans to consummate a Business Combination prior
to the mandatory liquidation date. No adjustments have been made to the carrying
amounts of assets or liabilities should we be required to liquidate after
April 5, 2023. Our management plans to complete a Business Combination prior to
the mandatory liquidation date and expects to receive financing to meet its
obligations through the time of liquidation; however no financing is currently
committed. The financial statements do not include any adjustment that might be
necessary if we are unable to continue as a going concern.
Risks and Uncertainties
Our management continues to evaluate
the impact of the COVID-19 pandemic on the industry and has concluded that while
it is reasonably possible that the virus could have a negative effect on our
financial position, results of our operations and/or search for a target
company, the specific impact is not readily determinable as of the date of these
financial statements. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
In February 2022, the Russian Federation and Belarus commenced a military action
with the country of Ukraine. As a result of this action, various nations,
including the United States, have instituted economic sanctions against the
Russian Federation and Belarus. Further, the impact of this action and related
sanctions on the world economy are not determinable as of the date of these
financial statements. The specific impact on the Company's financial condition,
results of operations, and cash flows is also not determinable as of the date of
these financial statements.
On August 16, 2022, the Inflation Reduction Act of 2022 (the "IR Act") was
signed into federal law. The IR Act provides for, among other things, a new U.S.
federal 1% excise tax on certain repurchases of stock by publicly traded U.S.
domestic corporations and certain U.S. domestic subsidiaries of publicly traded
foreign corporations occurring on or after January 1, 2023. The excise tax is
imposed on the repurchasing corporation itself, not its shareholders from which
shares are repurchased. The amount of the excise tax is generally 1% of the fair
market value of the shares repurchased at the time of the repurchase. However,
for purposes of calculating the excise tax, repurchasing corporations are
permitted to net the fair market value of certain new stock issuances against
the fair market value of stock repurchases during the same taxable year. In
addition, certain exceptions apply to the excise tax. The U.S. Department of the
Treasury (the "Treasury") has been given authority to provide regulations and
other guidance to carry out and prevent the abuse or avoidance of the excise
tax. Any share redemption or other share repurchase that occurs after
December 31, 2022, in connection with a Business Combination, extension vote or
otherwise, may be subject to the excise tax. Whether and to what extent the
Company would be subject to the excise tax in connection with a Business
Combination, extension vote or otherwise will depend on a number of factors,
including (i) the fair market value of the redemptions and repurchases in
connection with the Business Combination, extension or otherwise, (ii) the
structure of a Business Combination, (iii) the nature and amount of any private
investment in public equity (PIPE) financing or other equity issuances in
connection with a Business Combination (or otherwise issued not in connection
with a Business Combination but issued within the same taxable year of a
Business Combination) and (iv) the content of regulations and other guidance
from the Treasury. In addition, because the excise tax would be payable by the
Company and not by the redeeming holder, the mechanics of any required payment
of the excise tax have not been determined. The foregoing could cause a
reduction in the cash available on hand to complete a Business Combination and
in the Company's ability to complete a Business Combination.
On December 27, 2022, the Treasury and Internal Revenue Service ("IRS") issued a
Notice 2023-2 ("Notice"), which provided interim guidance regarding the
application of the corporate stock repurchase excise tax until the issuance of
proposed regulations. The Notice excluded the distributions complete liquidation
of a corporation from the base of the excise tax. The Notice also excludes from
the scope of the excise tax any distribution made during the taxable year in
which a corporation fully liquidates and dissolves, even if a distribution
precedes the formal decision to liquidate.
39
--------------------------------------------------------------------------------
Results of Operations
Our entire activity since inception up to December 31, 2022 related to our
formation, the preparation for our initial public offering, and since the
closing of our initial public offering, the search for a prospective initial
business combination. We will not generate any operating revenues until after
the completion of our initial business combination.
We generate non-operating income in the form of investment income from the Trust
Account. 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. Additionally, we
recognize non-cash gains and losses within other income (expense) related to
changes in recurring fair value measurement of our derivative liabilities at
each reporting period.
For the year ended December 31, 2022, we had net income of approximately
$22.2 million, which consisted of approximately $3.4 million of interest income
from operating account and investment held in trust account, and non-operating
gains of approximately $23.1 million of change in fair value of the derivative
liabilities and approximately $258,000 of gain from extinguishment of deferred
underwriting commissions, partially offset by approximately $3.7 million of
general and administrative expenses, approximately $204,000 of franchise tax
expense, approximately $3,000 of interest expense, and approximately $681,000 of
income tax expense.
For the period from April 16, 2021 (inception) through December 31, 2021, we had
net loss of approximately $14.4 million, which consisted of approximately
$394,000 of general and administrative expenses, approximately $55,000 of
franchise tax expense, non-operating losses of approximately $13.6 million from
the change in fair value of the derivative warrant liabilities and approximately
$441,000 of offering costs allocated to derivative warrant liabilities, offset
by approximately $15,000 of interest income from investments held in the trust
account.
Contractual Obligations
Administrative Services Agreement
On October 5, 2021, we entered into an agreement with our sponsor, pursuant to
which we agreed to pay our sponsor $10,000 per month for office space,
administrative and support services. Upon completion of a business combination
or our liquidation, we will cease paying these monthly fees. We recorded
$120,000 and $30,000 in connection with such fees during the year ended
December 31, 2022 and 2021, respectively, in the accompanying statements of
operations. We prepaid such fees in full and as of December 31, 2022 and 2021,
we had an unused balance of $30,000 and $150,000 in prepaid expenses recorded in
the accompanying balance sheets, respectively.
Our sponsor, executive officers and directors, or any of their respective
affiliates will be reimbursed for any out-of-pocket expenses incurred in
connection with activities on our behalf such as identifying potential target
businesses and performing due diligence on suitable business combinations. Our
audit committee will review on a quarterly basis all payments that are made to
our sponsor, executive officers or directors of our sponsor, or our executive
officers or directors or their affiliates.
Registration and Stockholder Rights
The holders of Founder Shares, private placement warrants and warrants that may
be issued upon conversion of Working Capital Loans (and any shares of common
stock issuable upon the exercise of the private placement warrants), or warrants
that may be issued upon conversion of the Working Capital Loans and loan made to
extend our time period of consummating an initial business combination, are
entitled to registration rights pursuant to a registration and stockholder
rights agreement signed upon the consummation of our initial public offering.
These holders are entitled to certain demand and "piggyback" registration
rights. We will bear the expenses incurred in connection with the filing of any
such registration statements.
Underwriting Agreement
In connection with our initial public offering, the underwriters were entitled
to (i) an underwriting discount of $0.20 per unit, or approximately $4.8 million
in the aggregate, paid upon the closing of our initial public offering, and
(ii) an additional fee of $0.35 per unit, or approximately $8.5 million in the
aggregate will be payable the underwriters for deferred underwriting
commissions. The deferred fee will become payable to certain of the underwriters
from the amounts held in the Trust Account solely in the event that we complete
a business combination, subject to the terms of the underwriting agreement.
40
--------------------------------------------------------------------------------
On November 18, 2022, we received a formal letter from Goldman Sachs & Co. LLC
("Goldman Sachs"), the underwriter in our initial public offering, advising that
it had waved any entitlement it may have to the deferred underwriting
commissions of approximately $8.5 million in respect of any business
combination. During the year ended December 31, 2022, we derecognized the
deferred underwriting commission of approximately $8.5 million and recorded such
extinguishment of liability as income in the accompanying statements of
operations.
On December 20, 2022, we engaged Needham & Company, LLC ("Needham") as our
exclusive financial advisor and as our exclusive placement agent in connection
with the possible Merger with Rainwater Tech. We agreed to pay Needham fees to
be mutually agreed upon at a later date ("Advisor Fee"), solely in the event
that we complete our business combination. As of December 31, 2022, we
determined that a business combination is not considered probable. If the fee is
determined to be a transaction cost for the business combination then the amount
payable to Needham may be accounted for as an expense in the period the
liability is recorded.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in the United States of America
("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 the reported amounts of
income and expenses during the period reported. Actual results could materially
differ from those estimates. The Company has not identified any critical
accounting estimates.
41
--------------------------------------------------------------------------------
Off-Balance Sheet Arrangements and Contractual Obligations
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 and did not have any commitments
or contractual obligations.
JOBS Act
On April 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 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 elected 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.
As an "emerging growth company", we are not required to, among other things,
(i) provide an auditor'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 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 the CEO's compensation to median employee
compensation. These exemptions will apply for a period of five years following
the completion of our initial public offering or until we are no longer an
"emerging growth company," whichever is earlier.
© Edgar Online, source Glimpses
DMY TECHNOLOGY GROUP, INC. VI 
