The following discussion and analysis of financial condition and results of operations should be read together in conjunction with our interim consolidated financial statements and notes thereto presented in this Quarterly Report on Form 10-Q (this "Quarterly Report"), as well as our audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022 (the "2022 Form 10-K").

Cautionary Statement Regarding Forward-Looking Statements

Some of the statements contained in this Quarterly Report may constitute "forward-looking statements" for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team's expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intends," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Quarterly Report may include, but are not limited to, for example, statements about:

? our being a blank check company with no operating history and no revenues;

? our ability to select an appropriate target business or businesses;

? our ability to complete our initial business combination;

? our expectations around the performance of a prospective target business or

businesses;

? our success in retaining or recruiting, or changes required in, our officers,

key employees or directors following our initial business combination;

our officers and directors allocating their time to other businesses and

? potentially having conflicts of interest with our business or in approving our

initial business combination;

actual and potential conflicts of interest relating to Kimbell Royalty

? Partners, LP ("KRP"), our sponsor and other entities in which members of our

management team are involved;

? our potential ability to obtain additional financing to complete our initial

business combination including from our sponsor, KRP or other third parties;

? our pool of prospective target businesses, including the location and industry

of such target businesses;

our ability to consummate an initial business combination due to the

? uncertainty resulting from the recent COVID-19 pandemic and other events (such

as terrorist attacks, military actions, natural disasters or a significant

outbreak of other infectious diseases);

? the ability of our officers and directors to generate a number of potential

business combination opportunities;

? our public securities' potential liquidity and trading;

? the lack of a market for our securities;

? the use of proceeds not held in the trust account ("Trust Account") or

available to us from interest income on the Trust Account balance;

? the Trust Account not being subject to claims of third parties; or

? our financial performance.




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The forward-looking statements contained in this Quarterly Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading "Risk Factors" in our 2022 Form 10-K. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. All forward-looking statements are expressly qualified in their entirety by the foregoing cautionary statements.

Overview

We are a blank check company incorporated in Delaware on April 9, 2021 formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. We intend to effectuate our initial business combination using cash derived from the proceeds of our initial public offering (the "IPO") and the sale of the private placement warrants our capital stock, debt or a combination of cash, stock and debt.

We have until May 8, 2023 to consummate an initial business combination. If we anticipate that we may not be able to consummate our initial business combination before that date, the sponsor may, but is not obligated to, cause us to extend the available time to consummate our initial business combination by three months. In order to exercise the extension option, our sponsor must deposit into the Trust Account $0.10 per public share (a total of $2,300,000) on or prior to the date of the applicable deadline. The sponsor may exercise the extension option up to two times to August 8, 2023 and to November 8, 2023, allowing for up to an additional six months (for a total of 21 months) to complete an initial business combination. It is uncertain that we will be able to consummate an initial business combination by this time. If an initial business combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution.

We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure 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 for the three months ended March 31, 2023 and 2022 were organizational activities, those necessary to prepare for the IPO, described below, and identifying 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 investments 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, 2023, we had a net income of approximately $1.7 million, which consisted of interest income earned on the amounts held in the Trust Account, offset by operating expenses. For the three months ended March 31, 2022, we had a net loss of approximately $0.6 million, which consisted of formation and operating expenses, offset by interest income earned on the amounts held in Trust.

Liquidity, Capital Resources and Going Concern Consideration

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 and excluding deferred underwriting commissions, to complete our initial business combination. We may withdraw interest from the Trust Account to pay taxes, if any. To the extent that our share capital 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. As of March 31, 2023, we had cash on hand of $0.1 million, excluding the amounts held in the Trust Account.

In connection with our assessment of going concern considerations in accordance with FASB's Accounting Standards Update ("ASU") 2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern", management has determined the liquidity condition and its inability to satisfy its obligations in the event of liquidation raises substantial doubt about our ability to continue as a going concern, if it does not complete a business combination prior to the end of the business combination period.



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These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern. We intend to complete a business combination within the combination period.

We intend to use the funds held outside the 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 an initial business combination.

The Company believes it has sufficient liquidity to operate its business through the Combination Period. In the event additional resources are needed to fund working capital deficiencies or finance transaction costs in connection with an initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may loan us funds as may be required. If we complete an initial business combination, we may repay such loaned amounts out of the proceeds of the Trust Account released to us. In the event that an 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. Upon completion of a business combination, up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.00 per warrant, at the option of the lender. The warrants would be identical to the private placement warrants.

We do not believe we will need to raise additional funds in order 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 our initial business combination. Moreover, we may need to obtain additional financing either to complete our initial business combination or because we become obligated to redeem a significant number of our public shares upon completion of our initial business combination, in which case we may issue additional securities or incur debt in connection with such initial business combination.

If mandatory liquidation occurs, we may not have sufficient resources to pay our creditors based on our working capital deficit. If the Sponsor elects to exercise the extension option and deposits additional amounts to the Trust Account, those proceeds will not be available for use in operations, but rather fund the incremental redemption price. Interest earned on the Trust Account is not available for use in operations.

Off-Balance Sheet Financing Arrangements

As of March 31, 2023, we did not have any off-balance sheet arrangements, as defined in Item 303 (a)(4)(ii) of Regulation S-K, and did not have any commitments or contractual obligations.

Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay KRP and certain of its subsidiaries a total of $25,000 per month for administrative and support services. We began incurring these fees on February 4, 2022 and will continue to incur these fees monthly until the earlier of the completion of the business combination and our liquidation.

The underwriter is entitled to a deferred fee of $0.35 per unit, or $8,050,000 in the aggregate. The deferred fee will become payable to the underwriter from the amounts held in the Trust Account solely in the event that the company completes a business combination, subject to the terms of the underwriting agreement.



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Critical Accounting Policies and Related Estimates

There have been no substantial changes to our critical accounting policies and related estimates from those previously disclosed in our 2022 Form 10-K.

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