References in this report to "we," "us" or the "Company" refer to
Special Note Regarding Forward-Looking Statements
This discussion contains forward-looking statements reflecting our current expectations, estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. 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. The forward-looking statements contained in this 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. 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 final prospectus for our initial public offering filed with theSEC and in our Annual Report on Form 10-K. Except as expressly required by applicable securities law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a blank check company, originally incorporated in
Following the closing of our initial public offering (the "IPO"), onFebruary 17, 2021 ,$300,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was placed in the Trust Account and invested only inU.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in directU.S. government treasury obligations, until the earlier of: (i) the completion of a Business Combination, (ii) the redemption of any Public Shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation, and (iii) the redemption of our Public Shares if the we are unable to complete the initial Business Combination byFebruary 17, 2023 , subject to applicable law. The proceeds deposited in the Trust Account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.
Our management has broad discretion with respect to the specific application of the net proceeds of the IPO and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination.
Results of Operations
As ofJune 30, 2022 , we had not commenced any operations. All activity for the period fromNovember 12, 2020 (inception) throughJune 30, 2022 , relates to preparation and consummation of the IPO and our search for a target to consummate a Business Combination. We will not generate any operating revenues until after the completion of a Business Combination, at the earliest. We will generate non-operating income in the form of interest income from the proceeds derived from the IPO and placed in the Trust Account (defined below). 18
--------------------------------------------------------------------------------
Table of Contents
For the three and six months ended
For the three and six months ended
Liquidity, Capital Resources and Capital Resources
As of
In order to finance transaction costs in connection with a Business Combination
or liquidate, the Sponsors or an affiliate of the Sponsors or certain of our
officers and directors may, but are not obligated to, loan our funds as may be
required (the "Working Capital Loans"). If we complete an initial Business
Combination, we would repay such loaned amounts out of the proceeds of the Trust
Account released to the us. Otherwise, such loans would be repaid only out of
funds held outside the Trust Account. In the event that the 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 the
Trust Account would be used to repay such loaned amounts. Up to
We intend to use substantially all of the funds held in the Trust Account,
including any amounts representing interest earned on the Trust Account
(excluding deferred underwriting commissions) to complete our Business
Combination. We may withdraw interest to pay our taxes. We estimate our annual
franchise tax obligations, based on the number of shares of our common stock
authorized and outstanding after the completion of the IPO, to be
Further, our Sponsor, officers and directors or their respective affiliates may,
but are not obligated to, loan us funds as may be required (the "Working Capital
Loans"). If we complete a Business Combination, we would repay the Working
Capital Loans out of the proceeds of the Trust Account released to us.
Otherwise, the Working Capital Loans would be repaid only out of funds held
outside the Trust Account. In the event that a Business Combination does not
close, we may use a portion of proceeds held outside the Trust Account to repay
the Working Capital Loans but no proceeds held in the Trust Account would be
used to repay the Working Capital Loans. Except for the foregoing, the terms of
such Working Capital Loans, if any, have not been determined and no written
agreements exist with respect to such loans. The Working Capital Loans would
either be repaid upon consummation of a Business Combination or, at the lender's
discretion, up to
We have until
19
--------------------------------------------------------------------------------
Table of Contents Off-Balance Sheet Financing Arrangements We did not have any off-balance sheet arrangement as ofJune 30, 2022 andDecember 31, 2021 .
Contractual Obligations
As of
We entered into an administrative services agreement pursuant to which we will
pay our Sponsor for office space and secretarial and administrative services
provided to members of our management team, in an amount not to exceed
Critical Accounting Policies and Estimates
The preparation of unaudited condensed financial statements and related disclosures in conformity with GAAP 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 unaudited condensed financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:
Derivative Warrant Liabilities
We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. We account for our 11,333,334 warrants issued in connection with its IPO (6,000,000) and Private Placement (5,333,334) as derivative warrant liabilities in accordance with ASC 815-40. Accordingly, we recognize the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our condensed statements of operations. AtJune 30, 2022 andDecember 31, 2021 , we used the quoted stock price in the active market to value the public warrants and a Monte Carlo simulation model to value the private warrants.
Class A Common Stock Subject to Possible Redemption
We account for our common stock subject to possible redemption in accordance with the guidance in theFinancial Accounting Standards Board's Accounting Standards Codification Topic 480 " Distinguishing Liabilities from Equity ." Common stock subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable Class A common stock (including Class A 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 our control) are classified as temporary equity. At all other times, Class A common stock is classified as stockholders' equity. Our Class A common stock feature certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, atJune 30, 2022 andDecember 31, 2021 , 30,000,000 shares of Class A common stock subject to possible redemption are presented as temporary deficit, outside of the stockholders' deficit section of our condensed balance sheets.
Net Income (Loss) per Common Share
We have two classes of stock, which are referred to as Class A common stock and
Class B common stock. Earnings and losses are shared pro rata between the two
classes of stock. Private and public warrants to purchase 11,333,334 Class A
common stock at
20
--------------------------------------------------------------------------------
Table of Contents
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our unaudited condensed financial statements.
© Edgar Online, source