References in this Quarterly Report on Form 10-Q (this "Quarterly Report") to
"we," "us," "our" or the "Company" refer to
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements other than statements of historical fact included in this Quarterly Report, including, without limitation, statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding the Company's financial position and business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as "expect," "believe," "anticipate," "may," "plan," "intend," "estimate," "seek" or the negative of these terms and variations and similar words and expressions are intended to identify such forward-looking statements. Forward-looking statements inherently involve many risks and uncertainties that could cause actual results to differ materially from those projected in these statements. Such forward-looking statements relate to future events or future performance but reflect management's current beliefs based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. The following include some, but not all, of the factors that could cause actual results or events to differ materially from those anticipated: (i) our ability to select an appropriate target business or businesses; (ii) our ability to complete our Initial Business Combination; (iii) our expectations around the performance of the prospective target business or businesses; (iv) our success in retaining or recruiting, or changes required in, our management team following our Initial Business Combination; (v) our management team allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our Initial Business Combination, as a result of which they would then receive expense reimbursements; (vi) our potential ability to obtain additional financing to complete our Initial Business Combination; (vii) our pool of prospective target businesses; (viii) the ability of our management team to generate a number of potential business combination opportunities; (ix) our public securities' potential liquidity and trading; (x) the lack of a market for our securities; (xi) the use of proceeds not held in the Trust Account or available to us from interest income on the Trust Account balance; (xii) the Trust Account not being subject to claims of third parties; or (xiii) our financial performance following our IPO.
For additional risk factors, please refer to the Risk Factors section of our
Annual Report on Form 10-K for the fiscal year ended
Overview
We are a blank check company incorporated in
We are a special purpose acquisition company 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,
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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
On
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 management team;
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;
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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.
Results of Operations
Since our inception on
Results of Operations - Three Months Ended
For the three months ended
Results of Operations - Three Months Ended
For the three months ended
Liquidity and Capital Resources
We intend to effectuate our Initial 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
As of
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evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or 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.
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
On
On
If we complete an Initial Business Combination, we will repay the Working
Capital Loans out of the proceeds of the Trust Account released to us. In the
event that an Initial Business Combination is not completed, 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 an Initial Business Combination, without interest, or, at the
lender's discretion, up to
We do believe we will need to obtain additional funds to meet the expenditures required for operating our business. In addition, 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.
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We have until
Summary of Cash Flows - Three Months Ended
For the three months ended
As of
Summary of Cash Flows - Three Months Ended
For the three months 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
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. Class A common stock subject to mandatory redemption is classified as a liability instrument and measured at fair value. Conditionally redeemable
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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 Company's Class A common stock features certain
redemption rights that are considered to be outside of the Company's control and
subject to 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 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.
Warrant Liabilities
We account for the Warrants in accordance with ASC 815-40 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, the Warrants are measured at fair value at inception and at each reporting date in accordance with ASC 820, with changes in fair value recognized in the statement of operations in the period of change.
Convertible Working Capital Promissory Notes
The Company accounts for its convertible Working Capital Promissory Notes under ASC 815. Under section 815-15-25 of ASC 815, the election can be made at the inception of a financial instrument to account for the instrument under the fair value option under ASC 825. The Company has made such election for its Working Capital Promissory Notes. Using the fair value option, the Working Capital Promissory Notes are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the notes are recognized as a non-cash gain or loss on the condensed statements of operations (see Note 5 to the Condensed Financial Statements).
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.
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