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-
Overview
We are a blank check company incorporated in
We are a SPAC driven by a unique and purpose-driven mission: to partner with a company making a positive difference in the world and support its growth to create value for all stakeholders. To share in that value creation, each of our Sponsors intends to donate all of their respective Founders Shares and warrants to initiatives supporting the economic empowerment and inclusion of underrepresented groups. It is our and our Sponsors' core belief that by both empowering businesses focused on making a positive difference in the world and our Sponsors using their profits and at-risk capital to reinvest in our communities, we and our Sponsors can deliver significant stockholder value while also promoting a more inclusive economy and society.
We are not limited to a particular industry or sector for purposes of consummating our Initial Business Combination. Rather, we seek to identify a business with a strong, dedicated management team that will benefit from access to public capital markets to support its growth. In particular, we see the opportunity to create significant value by partnering with a well-managed company that can leverage the strategic resources of our Management Team and Sponsors during and after the Initial Business Combination. We are seeking a partner that is focused on delivering products, solutions or services that move society forward, whether that means empowering people, advancing diversity and inclusion, broadening accessibility, increasing societal well-being, or enhancing sustainability. While we are industry agnostic, we are firm in our belief that profit and mission can be mutually re-enforcing to help create a better, more inclusive world.
IPO and Initial Business Combination
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of one Class A common share and one-half of one redeemable warrant, which we
refer to as the Public Warrants. Each whole Public Warrant entitles the holder
to purchase one Class A common share at
We will have until 24 months from the closing of the IPO, or
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.
The issuance of additional shares of our stock in a business combination could:
significantly dilute the equity interest of investors, which dilution would
? increase if the anti-dilution provisions in the Class B common stock resulted
in the issuance of Class A common stock on a greater than one-to-one basis upon
conversion of the Class B common stock;
subordinate the rights of holders of Class A common stock if shares of
? preferred stock are issued with rights senior to those afforded our Class A
common stock;
cause a change in control if a substantial number of shares of our Class A
? common stock are issued, which may affect, among other things, our ability to
use our net operating loss carry forwards, if any, and could result in the
resignation or removal of our present officers and directors;
have the effect of delaying or preventing a change of control of us by diluting
? the share ownership or voting rights of a person seeking to obtain control of
us; and
? adversely affect prevailing market prices for our shares and/or warrants.
Similarly, if we issue debt securities or otherwise incur significant indebtedness, it could result in:
? default and foreclosure on our assets if our operating revenues after an
Initial Business Combination are insufficient to repay our debt obligations;
acceleration of our obligations to repay the indebtedness even if we make all
? principal and interest payments when due if we breach certain covenants that
require the maintenance of certain financial ratios or reserves without a
waiver or renegotiation of that covenant;
? our immediate payment of all principal and accrued interest, if any, if the
debt is payable on demand;
our inability to obtain necessary additional financing if the debt contains
? covenants restricting our ability to obtain such financing while the debt is
outstanding;
? our inability to pay dividends on our Class A common stock; and
increased vulnerability to adverse changes in general economic, industry and
competitive conditions and adverse changes in government regulation; as well as
? limitations on our ability to borrow additional amounts for expenses, capital
expenditures, acquisitions, debt service requirements, execution of our
strategy and other purposes, and other disadvantages compared to our
competitors who have less debt.
77 Table of Contents Results of Operations
Since our inception on
For the year ended
For the year ended
Liquidity and Capital Resources
We intend to effectuate our business combination using the net cash from the IPO and sale of Private Placement Warrants, our capital stock, debt or a combination of cash, stock and debt, including proceeds from the Working Capital Loans that are described below.
Proceeds from IPO
Following the IPO, the full exercise of the over-allotment option by the
underwriters and the sale of the Private Placement Warrants, a total of
We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less income taxes payable), to complete an Initial Business Combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete an 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.
Proceeds from Working Capital Loans
In order to fund working capital deficiencies or finance transaction costs in
connection with an Initial Business Combination, our Sponsors, their affiliates,
or certain of our officers and directors may provide us with Working Capital
Loans, of which up to
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If we complete a business combination, we will repay the Working Capital Loans
out of the proceeds of the Trust Account released to us. In the event that a
business combination does not close, we may use a portion of the 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. The
Working Capital Loans would either be repaid upon consummation of a business
combination, without interest, or, at the lender's discretion, up to
We do not believe we will need to raise additional funds 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 an Initial Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to an Initial Business Combination. Moreover, we may need to obtain additional financing either to complete an Initial Business Combination or because we become obligated to redeem a significant number of our Public Shares upon consummation of an Initial Business Combination, in which case we may issue additional securities or incur debt in connection with such Initial Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of an Initial Business Combination. If we are unable to complete an 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 an Initial Business Combination, if cash on hand is insufficient, we may need to obtain additional financing to meet our obligations.
Based on the foregoing, Management believes that we will have sufficient working capital due to the borrowing capacity from the Working Capital Loans to meet the Company's needs through the earlier of the consummation of the Initial Business Combination or one year from this filing.
Promissory Note -
Until the consummation of the IPO, our only source of liquidity was an initial
purchase of Common Stock by the Sponsors of
Deferred Fees
In connection with our IPO, we incurred
Summary of Cash Flows - Fiscal Year Ended
For the year ended
As of
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similar locations of prospective target businesses or their representatives or owners; review corporate documents and material agreements of prospective target businesses; and structure, negotiate and complete an Initial Business Combination.
Summary of Cash Flows - Fiscal Year Ended
For the year ended
Commitments and Contingencies
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities, other than an agreement to pay an
affiliate of PNCIC a total of
The underwriters are entitled to a deferred fee of
Going Concern
We have until
Critical Accounting Estimates
The preparation of condensed 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 critical accounting policies:
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 ASC 480 (as defined below). Class A common stock
subject to mandatory redemption is classified as a liability instrument and
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 the Company's control) is classified as temporary equity. At all
other times, Common Stock is classified as stockholders' equity. The Class A
common stock features certain redemption rights that are considered to be
outside of the Company's control and subject to the occurrence of uncertain
future events. Accordingly, at
Net Income (Loss) Per Common Share
Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of Common Stock outstanding for the period. The Company applies the two-class method in calculating earnings per share. Accretion associated with the redeemable shares of Class A common stock is excluded from earnings per share as the redemption value approximates fair value.
80 Table of Contents Warrant Liabilities
We account for the Warrants in accordance with ASC 815-40 (as defined below) under which the Warrants do not meet the criteria for equity classification and must be recorded as liabilities. As the Warrants meet the definition of a derivative as contemplated in ASC 815 (as defined below), the Warrants are measured at fair value at inception and at each reporting date in accordance with ASC 820 (as defined below), with changes in fair value recognized in the statement of operations in the period of change.
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements.
Subsequent Events
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