References in this report (the "Quarterly Report") to "we," "us" or the "Company" refer to Equity Distribution Acquisition Corp. References to our "management" or our "management team" refer to our officers and directors. References to the "Sponsor" refer to Equity Distribution Sponsor, LLC. The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements



This Quarterly Report 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") 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, business strategy and
the plans and objectives of management for future operations, are
forward-looking statements. Words such as "expect," "believe," "anticipate,"
"intend," "estimate," "seek" and variations and similar words and expressions
are intended to identify such forward-looking 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. For information identifying important factors that
could cause actual results to differ materially from those anticipated in the
forward-looking statements, please refer to the Risk Factors section of the
Company's Annual
Report
on
Form10-K
for the year ended December 31, 2021, filed with the U.S. Securities and
Exchange Commission (the "SEC") on February 24, 2022. The Company's securities
filings can be accessed on the EDGAR section of the SEC's website at
www.sec.gov
. Except as expressly required by applicable securities law, the Company
disclaims any intention or obligation to update or revise any forward-looking
statements whether as a result of new information, future events or otherwise.

Overview

We are a blank check company formed under the laws of the State of Delaware on July 7, 2020 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar Business Combination with one or more businesses. We intend to effectuate our Business Combination using cash from the proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, our capital stock, debt or a combination of cash, stock and debt.

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.

Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our only activities from July 7, 2020 (inception) through March 31, 2022 were organizational activities, those necessary to prepare for the Initial Public Offering, described below, and the search for a target company for a Business Combination. We do not expect to generate any operating revenues until after the completion of our 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 three months ended March 31, 2022, we had a net income of $6,948,312, which consists of the change in fair value of warrant liabilities of $7,022,133, interest earned on marketable securities held in Trust Account of $33,465 and an unrealized gain on marketable securities held in Trust Account of $178,120, offset by operating costs of $285,406, which are comprised primarily of professional fees, administrative fees and franchise taxes.

For the three months ended March 31, 2021, we had net income of $13,517,723, which consisted of a change in fair value of warrant liability of $14,663,866 and interest earned on marketable securities held in Trust Account of $65,089, offset by operating and formation costs of $1,209,830, which are comprised primarily of legal fees, consulting fees, printing fees and franchise taxes, as well as a provision for income taxes of $1,402.

Liquidity and Capital Resources

On September 18, 2020, we consummated the Initial Public Offering of 41,400,000 Units at a price of $10.00 per Unit, which includes the full exercise by the underwriters of the over-allotment option to purchase an additional 5,400,000 Units, generating gross proceeds of $414,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 6,853,333 Private Placement Warrants at a price of $1.50 per Private Placement Warrant in a private placement to our Sponsor, generating gross proceeds of $10,280,000.


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For the three months ended March 31, 2022, cash used in operating activities was $308,780. Net income of $6,948,312 was attributable to the change in fair value of warrant liabilities of $7,022,133, interest earned on marketable securities held in the Trust Account of $178,120, an unrealized gain on marketable securities held in Trust Account of $33,465 and changes in operating assets and liabilities which used $23,374 in cash from operating activities.

For the three months ended March 31, 2021, cash used in operating activities was $249,853. Net income of $13,517,723 was attributable to the change in fair value of warrant liability of $14,663,866, interest earned on marketable securities held in the Trust Account of $65,089, and changes in operating assets and liabilities, which provided $961,379 in cash from operating activities.

As of March 31, 2022, we had cash and marketable securities held in the Trust Account of $414,195,135. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account to complete our Business Combination. We may withdraw interest to pay franchise and income taxes. Through March 31, 2022, cash withdrawn from the Trust Account to pay franchise and income taxes totaled $281,342, of which $143,715 was withdrawn during the three months ended March 31, 2022. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our 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.

As of March 31, 2022, we had cash of $419,052 held outside of our Trust Account. We intend to use the funds held outside our Trust Account primarily to identify and 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 a Business Combination.



In order to fund working capital deficiencies or finance transaction costs in
connection with a Business Combination, we intend to borrow additional amounts
under the Promissory Note, under which $1,750,000 remained available to be drawn
as of March 31, 2022. The Promissory Note is
non-interest
bearing and payable on the earlier of (i) September 18, 2022 or (ii) the
consummation of our initial Business Combination.

If we fully draw down on the Promissory Note and require additional funds for working capital purposes, the sponsor, an affiliate of the sponsor, or our officers and directors may, but are not obligated to, loan us such additional funds as may be required. If we complete a Business Combination, we would repay such additional loaned amounts, without interest, upon consummation of the Business Combination. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the trust account to repay such additional loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such additional loans (if any) may be convertible into warrants, at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period. Except for the foregoing, the terms of such additional loans (if any) have not been determined and no written agreements exist with respect to such loans.

We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if we do need to raise additional capital and are unable to, then we may be required to take additional measures to conserve liquidity, which could include, but not necessarily include or be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all.



Off-Balance
Sheet Arrangements

We have no obligations, assets or liabilities, which would be considered
off-balance
sheet arrangements as of March 31, 2022. We do not participate in transactions
that create relationships with unconsolidated entities or financial
partnerships, often referred to as variable interest entities, which would have
been established for the purpose of facilitating
off-balance
sheet arrangements. We have not entered into any
off-balance
sheet financing arrangements, established any special purpose entities,
guaranteed any debt or commitments of other entities, or purchased any
non-financial
assets.

Contractual Obligations

On June 29, 2021, we issued an unsecured promissory note to our Sponsor (the
"Promissory Note"), pursuant to which we may borrow up to an aggregate principal
amount of $2,500,000. The Promissory Note is
non-interest
bearing and payable on the earlier of (i) September 18, 2022 or (ii) the
consummation of the Initial Business Combination. As of March 31, 2022, the
outstanding balance under the Promissory Note was $750,000 and the remaining
amount available to be drawn was $1,750,000.

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than the Promissory Note and an agreement to pay an affiliate of the Sponsor a monthly fee of $10,000 for office space and administrative support to the Company. We began incurring these fees on September 15, 2020 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination and the Company's liquidation.

The underwriters are entitled to a deferred fee of $0.35 per Unit, or $14,490,000 in the aggregate. Subject to the terms of the underwriting agreement, (i) the deferred fee will be placed in the Trust Account and released to the underwriters only upon the completion of a Business Combination and (ii) the deferred fee will be waived by the underwriters in the event that we do not complete a Business Combination. Up to 50% of the deferred underwriting commissions may be paid at the sole discretion of our management team to the underwriters in the allocations determined by our management team and/or to third parties not participating in the Initial Public Offering (but who are members of the Financial Industry Regulatory Authority) that assist us in consummating its initial Business Combination.

Going Concern


In connection with our assessment of going concern considerations in accordance
with the authoritative guidance in Financial Accounting Standard Board ("FASB")
Accounting Standards Update ("ASU")
2014-15,
"Disclosures of Uncertainties about an Entity's Ability to Continue as a Going
Concern," management has determined that the mandatory liquidation and
subsequent dissolution, should we be unable to complete a business combination,
raises substantial doubt about the our ability to continue as a going concern.
We have until September 18, 2022 to consummate a Business Combination. It is
uncertain that we will be able to consummate a Business Combination by this
time. If a Business Combination is not consummated by this date, there will be a
mandatory liquidation and subsequent dissolution. No adjustments have been made
to the carrying amounts of assets or liabilities should the Company be required
to liquidate after September 18, 2022.

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Critical Accounting Policies

The preparation of condensed 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 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 shares of Class A common stock subject to possible redemption in accordance with the guidance in Accounting Standards ASC Topic 480. Shares of Class A common stock subject to mandatory redemption are classified as a liability instrument and are 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 our control) is classified as temporary equity. At all other times, common stock is classified as stockholders' equity. Our common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, the Class A common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders' equity section of our condensed balance sheets.

Warrant Liabilities

We account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in ASC Topic 480 and ASC Topic 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC Topic 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC Topic 815, including whether the warrants are indexed to our own common shares and whether the warrant holders could potentially require "net cash settlement" in a circumstance outside of our control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent balance sheet date thereafter while the warrants are outstanding.



For issued or modified warrants that meet all of the criteria for equity
classification, the warrants are required to be recorded as a component of
additional
paid-in
capital at the time of issuance. For issued or modified warrants that do not
meet all the criteria for equity classification, the warrants 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 warrants are
recognized as a
non-cash
gain or loss within change in fair value of warrant liability on the statements
of operations. The fair value of the warrants was initially estimated using a
Monte Carlo Simulation approach. Subsequent measurement of the fair value of the
warrants was estimated using the publicly traded price of our warrants.

Net Income per Common Share

Net income per common share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Accretion associated with the redeemable shares of Class A common stock is excluded from earnings per share as the redemption value approximates fair value.

Recent accounting standards

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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