MAQUIA CAPITAL ACQUISITION CORPORATION Recent Developments
Effective
On
In connection with the Meeting, stockholders holding 13,769,910 shares of Class
A common stock ("Public Shares") exercised their right to redeem such shares for
a pro rata portion of the funds in the Company's trust account ("Trust
Account"). As a result, approximately
As a result of the stockholder approval of Charter Amendment, the Sponsor or
its designees will contribute to the Company as a loan an aggregate of
Based on the outstanding 3,539,809 Public Shares following redemptions as
disclosed above, each Contribution is in total of
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Results of Operations
We have not generated any revenues to date, and we will not be generating any
operating revenues until the closing and completion of our initial Business
Combination. Our entire activity up to
For the three months ended
For the nine months ended
Going Concern, Liquidity and Capital Resources
Until the consummation of the initial public offering, our only source of liquidity will be the initial sale of the Founder Shares to our Sponsor and advances under the promissory note with the Sponsor.
Pursuant to the Initial Public Offering, which was consummated in
Simultaneously with the closing of the Initial Public Offering, the Company
consummated the private sale (the "Private Placement") of an aggregate of
583,743 Units, which includes underwriters' over-allotment, (the "Private
Placement Units") to
A portion of the proceeds from the Private Placement Units was added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Units held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Units will be worthless.
As indicated in the accompanying financial statements, at
2
In order to finance transaction costs in connection with a Business Combination,
the Company's Sponsor or an affiliate of the Sponsor, or the Company's officers
and directors may, but are not obligated to, loan the Company funds as may be
required ("Working Capital Loans"). Such Working Capital Loans would be
evidenced by promissory notes. The notes would either be repaid upon
consummation of a Business Combination, without interest, or, at the lender's
discretion, up to
We may also need to obtain additional financing either to complete a business combination or because we become obligated to redeem a significant number of shares of our Class A common stock upon completion of the business combination, in which case we may issue additional securities or incur debt in connection with the business combination.
Based on the foregoing, management does not believe that the Company will have
sufficient working capital and borrowing capacity to meet its needs through the
earlier of the consummation of a Business Combination or one year from this
filing. Over this time period, the Company will be using the funds held outside
of the Trust Account for paying existing accounts payable and accrued
liabilities, identifying and evaluating prospective initial Business Combination
candidates, performing due diligence on prospective target businesses, paying
for travel expenditures, selecting the target business to merge with or acquire,
and structuring, negotiating and consummating the Business Combination. The
Company believes it may need to raise additional funds in order to meet the
expenditures required for operating the business. Furthermore, if the Company's
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, the Company may have insufficient funds
available to operate the business prior to the Initial Business Combination.
Moreover, the Company may need to obtain additional financing either to complete
the Initial Business Combination or to redeem a significant number of our public
shares upon completion of the Initial Business Combination, in which case the
Company may issue additional securities or incur debt in connection with such
Initial Business Combination. The Company's Sponsor, officers and directors may,
but are not obligated to, loan the Company funds from time to time or at any
time, in whatever amount they deem reasonable in their sole discretion, to meet
the Company's working capital needs. The Company has until
There is no assurance that the Company's plans to consummate an Initial Business Combination will be successful within the Combination Period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
On
3
Critical Accounting Policies
We have identified the following as our critical accounting policies:
Use of Estimates
The preparation of the financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Class A Common Stock Subject to Possible Redemption
We account for the Class A common stock subject to possible redemption in
accordance with the guidance enumerated in ASC 480, "Distinguishing Liabilities
from Equity." Shares of the common stock subject to mandatory redemption are
classified as a liability instrument and are measured at fair value.
Conditionally redeemable shares of the common stock (including shares of the
common stock that feature redemption rights that are either within the control
of the holder or subject to redemption upon the occurrence of uncertain events
not solely within the issuer's control) are classified as temporary equity. At
all other times, shares of the common stock are classified as stockholders'
equity. The Class A common stock features certain redemption rights that are
considered by the Company to be outside of our control and subject to the
occurrence of uncertain future events. Accordingly, as of
Net income (loss) per share
We comply with accounting and disclosure requirements of FASB ASC Topic 260, "Earnings Per Share". Net income (loss) per share of common stock is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period. We apply the two-class method in calculating income (loss) per share of common stock. Re-measurement associated with the redeemable shares of Class A common stock is excluded from income (loss) per common share as the redemption value approximates fair value.
The calculation of diluted income (loss) per share of common stock does not
consider the effect of the warrants issued in connection with the (i) Initial
Public Offering, and (ii) the Private Placement since the exercise of the
warrants is contingent upon the occurrence of future events. The warrants are
exercisable to purchase 8,946,731 shares of Class A common stock in the
aggregate. As of
Founder Shares subject to forfeiture are not included in weighted average shares outstanding until the forfeiture restrictions lapse.
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Financial Instruments
We determine fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:
Level 1 Inputs: Unadjusted quoted prices for identical assets or instruments in active markets.
Level 2 Inputs: Quoted prices for similar instruments in active markets and quoted prices for identical or similar instruments in markets that are not active and model derived valuations whose inputs are observable or whose significant value drivers are observable.
Level 3 Inputs: Significant inputs into the valuation model are unobservable.
We do not have any recurring Level 2 assets or liabilities, see Note 9 for recurring Level 3 liabilities. The carrying value of our financial instruments including its cash and accrued liabilities approximate their fair values principally because of their short-term nature.
Derivative Financial Instruments
We evaluate our financial instruments to determine if such instruments are
derivatives or contain features that qualify as embedded derivatives in
accordance with ASC Topic 815, "Derivatives and Hedging." Our derivative
instruments are recorded at fair value as of the closing date of our Initial
Public Offering (
We have determined that the Public Warrants and the Placement Warrants are derivative instruments. As the Public Warrants and the Placement Warrants meet the definition of a derivative, the Public Warrants and the placement warrants are measured at fair value at issuance and at each reporting date in accordance with ASC 820, "Fair Value Measurement," with changes in fair value recognized in the statement of operations in the period of change.
We have determined that the conversion option of the Note is a derivative instrument. We have elected to recognize the Note, including the conversion option, at fair value as permitted under ASC Topic 815. The Note is measured at fair value at issuance and at each reporting date in accordance with ASC 820, with changes in fair value recognized in the statement of operations in the period of change.
Warrant Instruments
We account for the Public Warrants and the Placement Warrants issued in connection with our Initial Public Offering and the Private Placement, respectively, in accordance with the guidance contained in FASB ASC 815, "Derivatives and Hedging," whereby under that provision the Public Warrants and the Placement Warrants do not meet the criteria for equity treatment and must be recorded as a liability. Accordingly, We classify the warrant instrument as a liability at fair value and adjusts the instrument to fair value at each reporting period. This liability will be re-measured at each balance sheet date until the Public Warrants and the Placement Warrants are exercised or expire, and any change in fair value will be recognized in our statement of operations. The fair value of the Public Warrants and the Placement Warrants will be estimated using an internal valuation model. Our valuation model utilizes inputs and other assumptions and may not be reflective of the price at which they can be settled. Such warrant classification is also subject to re-evaluation at each reporting period.
Other Factors That May Adversely Affect our Results of Operations
Our results of operations and our ability to complete an Initial Business
Combination may be adversely affected by various factors that could cause
economic uncertainty and volatility in the financial markets, many of which are
beyond our control. Our business could be impacted by, among other things,
downturns in the financial markets or in economic conditions, increases in oil
prices, inflation, increases in interest rates, supply chain disruptions,
declines in consumer confidence and spending, the ongoing effects of the
COVID-19 pandemic, including resurgences and the emergence of new variants, and
geopolitical instability, such as the military conflict in
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