The following discussion and analysis of our 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 "Cautionary 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 in Delaware on August 19, 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 (the "Business Combination"). We are an emerging growth
company and, as such, we are subject to all of the risks associated with
emerging growth companies. We intend to effectuate our Business Combination
using cash from the proceeds of the Initial Public Offering and the sale of the
Private 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 raise capital or to
complete our initial 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 inception to December 31, 2021 were organizational
activities, those necessary to prepare for the Initial Public Offering ("Initial
Public Offering"), conducting the Initial Public Offering and identifying a
target company for a business combination. The Company will not generate any
operating revenues until after the completion of its initial Business
Combination, at the earliest. The Company will generate non-operating income in
the form of interest income on cash and cash equivalents from the proceeds
derived from the Initial Public Offering 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 end December 31, 2022, we had net income of $700,015, which
consisted of investment income of $1,676,585, partially offset by expenses of
$666,311 and tax expense of $310,259.
For the period from August 19, 2021 (inception) through December 31, 2021, we
had a net loss of $438 which consisted of formation costs.
11
Liquidity and Capital Resources
In connection with the Company's assessment of going concern considerations in
accordance with Financial Accounting Standard Board's Accounting Standards
Update ("ASU") 2014-15, "Disclosures of Uncertainties about an Entity's Ability
to Continue as a Going Concern," the Company has until May 18, 2023 to complete
a Business Combination. It is uncertain that the Company will be able to
consummate an initial Business Combination by this time. If an initial Business
Combination is not consummated by this date and the Company has not exercised
its option to extend the deadline, there will be a mandatory liquidation and
subsequent dissolution of the Company. These factors, among others, raise
substantial doubt about the Company's ability to continue as a going concern.
The financial statements do not include any adjustments that might result from
the Company's inability to continue as a going concern.
The Company considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents. Cash equivalents are
carried at cost, which approximates fair value. The Company had $262,756 in cash
and no cash equivalents as of December 31, 2022.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of December 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
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities. The underwriter is entitled to a deferred
fee of three percent (3.00%) of the gross proceeds of the Offering upon closing
of the Business Combination, or $3,450,000. The deferred fee will be paid in
cash upon the closing of a Business Combination from the amounts held in the
Trust Account, subject to the terms of the underwriting agreement.
Critical Accounting Policies
The preparation of audited 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 audited financial statements, and income and
expenses during the periods reported. Actual results could materially differ
from those estimates. As of December 31, 2022, there were no critical accounting
policies.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective,
accounting pronouncements, if currently adopted, would have a material effect on
our audited financial statements.
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