References in this report (the "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 of 1933, as amended (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, 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," "may," "might," "plan," "possible," "potential,"
"should, "would" 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 Form 10-K filed with the
Overview
We are a newly organized Private-to-Public Equity (PPE) company, also known as a
blank check company or special purpose acquisition vehicle, incorporated in the
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The issuance of additional shares of common stock or the creation of one or more classes of preferred stock during our initial business combination:
• may significantly dilute the equity interest of investors in the Offering who would not have pre-emption rights in respect of any such issue; • may subordinate the rights of holders of common stock if the rights, preferences, designations and limitations attaching to the preferred shares are senior to those afforded our shares of common stock; • could cause a change in control if a substantial number of shares of 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; • may 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 • may adversely affect prevailing market prices for our shares of common stock.
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 our 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 any document governing such debt contains covenants restricting our ability to obtain such financing while the debt security is outstanding; • our inability to pay dividends on our shares of common stock; • using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; • limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; • increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and • 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.
We expect to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete our initial business combination will be successful.
Results of Operations and Known Trends or Future Events
We have neither engaged in any operations nor generated any revenues to date.
For the period from
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2021 as filed with the
For the three months ended
For the period from
Liquidity and Capital Resources
During the period from
On
As of
For the three months ended
For the period from
There were no cash flows from investing activities during the three months ended
There were no cash flows from financing activities during the three months ended
We intend to use substantially all of the funds held in the Trust Account,
including any amounts representing interest earned on the Trust Account (which
interest shall be net of taxes payable by us). We may withdraw interest to pay
taxes. We estimate our annual franchise tax obligations to be approximately
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operating expenses or finders' fees which we had incurred prior to the completion of our initial business combination if the funds available to us outside of the Trust Account were insufficient to cover such expenses.
As of
If our estimates of the costs of undertaking in-depth due diligence and
negotiating our 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 our initial business combination. Moreover, we may need to
obtain additional financing either to consummate our initial business
combination or because we become obligated to redeem a significant number of our
public shares upon consummation of our initial business combination, in which
case we may issue additional securities or incur debt in connection with such
business combination. In order to finance operating and/or transaction costs in
connection with a business combination, our Founder, executive officers,
directors, or their affiliates may, but are not obligated to, loan us funds. In
the event that our initial business combination does not close, we may use a
portion of the working capital held outside the Trust Account to repay such
loaned amounts but no proceeds from our Trust Account would be used for such
repayment. Up to
Following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
Off-Balance Sheet Arrangements
As of
Contractual Obligations
As of
On
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in
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Emerging Growth Company
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when an accounting standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, will adopt the new or revised accounting standard at the time private companies adopt the new or revised standard.
Net Loss Per Common Share
Our condensed statements of operations and comprehensive loss include a presentation of income per share for common stock subject to possible redemption in a manner similar to the two-class method of income (loss) per share. Net income per share, basic and diluted, for common stock subject to possible redemption is calculated by dividing the proportionate share of income or loss on marketable securities held by the Trust Account, net of tax, by the weighted-average number of common stock subject to possible redemption outstanding since original issuance.
Net loss per share, basic and diluted, for non-redeemable common stock is calculated by dividing the net loss, adjusted for income or loss on marketable securities attributable to common stock subject to possible redemption, net of tax, by the weighted-average number of non-redeemable common stock outstanding for the period, basic and diluted.
When calculating our diluted net loss per share, we have not considered the
effect of (i) the incremental number of shares of common stock to settle
warrants sold in the Offering and Private Placement, as calculated using the
treasury stock method and (ii) the shares issued to
In accordance with the two-class method, our net loss is adjusted for net income that is attributable to common stock subject to redemption, net of tax, as these shares only participate in the income of the Trust Account and not our losses. Accordingly, net loss per common share, basic and diluted, is calculated as follows:
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Period from February 23, 2021 (Date of For the Three Inception) Months Ended through March 31, March 31, 2022 2021 Common stock subject to possible redemption Numerator: Earnings allocable to common stock subject to redemption Interest earned on marketable securities held in Trust Account, net of taxes $ 11,377 $ - Net income attributable to common stock subject to possible redemption $ 11,377 $ - Denominator: Weighted-average common shares subject to redemption Basic and diluted weighted-average shares outstanding, common stock subject to possible redemption 20,900,000 - Basic and diluted net income per share, common stock subject to possible redemption $ 0.00 $ - Non-Redeemable common stock Numerator: Net loss minus net earnings - Basic and diluted Net loss$ (559,756 ) $ (35,720 ) Less: net income attributable to common stock subject to redemption (11,377 ) - Net loss attributable to non-redeemable common stock$ (571,133 ) $ (35,720 ) Denominator: Weighted-average non-redeemable common shares Weighted-average non-redeemable common shares outstanding, basic and diluted 6,179,000 3,233,514 Basic and diluted net loss per share, non-redeemable common stock $ (0.09 ) $ (0.01 )
Common Stock subject to possible redemption
Common stock subject to mandatory redemption (if any) is classified as a
liability instrument and is 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, as of
Warrant Liability
The Company accounts for warrants for shares of the Company's common stock that are not indexed to its own stock as liabilities at fair value on the condensed balance sheets. The warrants are subject to remeasurement at each balance sheet date and any change in fair value is recognized as a component of other income (expense) on the condensed statements of operations and comprehensive loss. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the common stock warrants. At that time, the portion of the warrant liability related to the common stock warrants will be reclassified to additional paid-in capital.
Recent Accounting Pronouncements
The Company does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company's financial statements.
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