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 report (the "Quarterly Report"). Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report includes forward-looking statements. These forward-looking statements 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. 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. For example, statements made relating to future business combinations, use of proceeds of past securities offerings, future loans and conversions of warrants 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. Factors that might cause or contribute to such forward-looking statements include, but are not limited to, those set forth in the Risk Factors section of the Company's Annual Report on Form 10-K for the year ended December 31, 2021 filed with the U.S. Securities and Exchange Commission, as supplemented in this Quarterly Report. The following discussion should be read in conjunction with our financial statements and related notes thereto included elsewhere in this Quarterly Report.

Overview

We are a blank check company incorporated as a Delaware corporation and formed for the purpose of effecting a Business Combination. We consummated our Public Offering on March 29, 2021. We intend to use the cash proceeds from our Public Offering and the Private Placement described below as well as additional issuances, if any, of our capital stock, debt or a combination of cash, stock and debt to complete the Business Combination. We expect to incur significant costs in the pursuit of our acquisition plans. There can be no assurance that our plans to raise capital or to complete our initial Business Combination will be successful.

The Company's management team is led by Tilman Fertitta, our Co-Chairman and Chief Executive Officer, and Richard Handler, our Co-Chairman and President. Mr. Fertitta is the sole shareholder of TJF, LLC ("TJF") and Mr. Handler is the Chief Executive Officer of Jefferies Financial Group Inc. ("JFG"), and its largest operating subsidiary, Jefferies Group LLC, a global investment banking firm. The Company's sponsors are TJF and JFG (collectively, the "Sponsors").

Liquidity and Capital Resources

On March 29, 2021, we consummated a $500,000,000 Public Offering consisting of 50,000,000 Units at a price of $10.00 per Unit. Each Unit consists of one share of the Company's Class A common stock, $0.0001 par value and one-fourth of one redeemable Public Warrant. Simultaneously, with the closing of the Public Offering, we consummated a $12,500,000 Private Placement of an aggregate of 8,333,333 Sponsor Warrants at a price of $1.50 per warrant. Upon closing of the Public Offering and Private Placement on March 29, 2021, $500,000,000 in proceeds (including $17,500,000 of deferred underwriting commissions) from the Public Offering and Private Placement was placed in the Trust Account. The remaining $12,500,000 held outside of trust was used to pay underwriting commissions of $10,000,000, loans to our Sponsors, and deferred offering and formation costs, and for working capital.


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As of September 30, 2022, we had an unrestricted balance of $52,473, as well as cash, marketable securities and accrued interest held in the Trust Account of $503,317,449. Our working capital needs will be satisfied through the funds, held outside of the Trust Account, from the Public Offering and Private Placement. Interest on funds held in the Trust Account may be used to pay income taxes and franchise taxes, if any. Further, TJF and JUSH have each agreed, pursuant to the A&R Convertible Notes, to loan us up to $1,000,000, or an aggregate of $2,000,000, as may be required for ongoing business expenses and the Business Combination. As of September 30, 2022, $1,503,712 had been borrowed under the A&R Convertible Notes. TJF and JUSH each have the option to convert any amounts outstanding under their respective A&R Convertible Note, up to an aggregate amount of $1,500,000, into warrants at a price of $1.50 per warrant which would be identical to the Sponsor Warrants.

We did not have any off-balance sheet arrangements as of September 30, 2022 and December 31, 2021.

As of September 30, 2022 and December 31, 2021, we did not have any long-term debt, capital or operating lease obligations.

The Company entered into an administrative services agreement in which we will pay Fertitta Entertainment, Inc., (an affiliate of TJF) for office space, secretarial and administrative services provided to members of our management team, in an amount not to exceed $20,000 per month commencing on the date of effectiveness of the Public Offering and ending on the earlier of the completion of a Business Combination or liquidation.

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 before March 29, 2023, raises substantial doubt about our ability to continue as a going concern. If a Business Combination is not consummated by March 29, 2023, 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 March 29, 2023.

Results of Operations

We have neither engaged in any significant business operations nor generated any revenues to date. All activities to date relate to the Company's formation and its Public Offering and search for a suitable Business Combination. We generate non-operating income in the form of interest income on cash, cash equivalents, and marketable securities held in the Trust Account. We incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses as we locate a suitable Business Combination.

For the three months ended September 30, 2022 and 2021, we had net income of $5,467,610 and $321,123, respectively. Net income for the three months ended September 30, 2022 included $320,650 of general and administrative costs related the formation of the Company and on-going expenses as we search for a Business Combination and $60,000 in management fees, offset by $2,592,257 in earnings on the Trust Account assets, a gain on warrant derivative liability of $3,541,667 and income tax provision of $285,664. Net income for the three months ended September 30, 2021 related to $876,559 of general and administrative costs for on-going expenses as we search for a Business Combination and $60,000 in management fees, offset by a gain of $1,250,000 in the change in the fair value of the warrant derivative liability and $7,682 in earnings on the Trust Account assets.

For the nine months ended September 30, 2022 and 2021, we had net income of $19,955,859 and $10,268,480. Net income for the nine months ended September 30, 2022 included $1,123,786 of general and administrative costs related to the formation of the Company and on-going expenses as we search for a Business Combination and $180,000 in management fees, offset by $3,428,572 in earnings on the Trust Account assets, a gain on warrant derivative liability of $17,916,666 and income tax provision of $85,593. Net income for the nine months ended September 30, 2021 related to $1,172,311 of general and administrative costs related to the formation of the Company and on-going expenses as we search for a Business Combination, $140,000 in management fees, and $942,390 in offering costs expensed, were offset by a gain of $12,500,000 in the change in the fair value of the warrant derivative liability and $23,181 in earnings on the Trust Account assets.



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Critical Accounting Policies

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited financial statements and accompanying notes. Actual results could differ from those estimates. The Company has identified the following as its critical accounting policies:

Warrant Derivative Liability

In accordance with FASB ASC 815-40, Derivatives and Hedging: Contracts in an Entity's Own Equity, an entity must consider whether to classify contracts that may be settled in its own stock, such as warrants, as equity of the entity or as an asset or liability. If an event that is not within the entity's control could require net cash settlement, then the contract should be classified as an asset or a liability rather than as equity. We have determined because the terms of Public Warrants include a provision that entitles all warrantholders to cash for their warrants in the event of a qualifying cash tender offer, while only certain of the holders of the underlying shares of common stock would be entitled to cash, our warrants should be classified as derivative liability measured at fair value, with changes in fair value each period reported in earnings. Further if our Sponsor Warrants are held by someone other than the Sponsors, JUSH or their permitted transferees, the Sponsor Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. Because the terms of the Sponsor Warrants and Public Warrants are so similar, we classified both types of warrants as a derivative liability measured at fair value. Volatility in our Common Stock and Public Warrants may result in significant changes in the value of the derivatives and resulting gains and losses on our statement of operations.

Redeemable Shares

All of the 50,000,000 Public Shares sold as part of the Public Offering contain a redemption feature as described in our Annual Report on Form 10-K for the year ended December 31, 2021 filed by the Company with the SEC on April 14, 2022. In accordance with FASB ASC 480, "Distinguishing Liabilities from Equity", redemption provisions not solely within the control of the Company require the security to be classified outside of permanent equity. Although the Company's Charter provides a minimum net tangible asset threshold of $5,000,001, the Company has determined all of the 50,000,000 Public Shares should be included in temporary equity, classified outside of permanent equity, regardless of the minimum net tangible assets required by the Company's Charter.

Income per Common Share

Basic net income per common share is computed by dividing net income applicable to common stockholders by the weighted average number of common shares outstanding during the period. All shares of Class B common stock are assumed to convert to shares of Class A common stock on a one-for-one basis. For the three and nine months ended September 30, 2022 and 2021, the Company did not have any dilutive warrants, securities or other contracts that could, potentially, be exercised or converted into common stock. As a result, diluted income per common share is the same as basic income per common share for all periods presented. The income per common share calculation allocates income shared pro rata between Class A and Class B common stock. As a result, the calculated net income per share is the same for Class A and Class B shares of common stock. For the three months ended September 30, 2022 and 2021, the Company reported basic and diluted net income per common share of $0.09 and $0.01, respectively. For the nine months ended September 30, 2022 and 2021, the Company reported basic and diluted net income per common share of $0.32 and $0.16, respectively.

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 the accompanying financial statements.

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