ZALATORIS ACQUISITION CORP. References to the " Company ," "Trajectory Alpha Acquisition Corp. ," " our ," " us " or " we " refer toTrajectory Alpha Acquisition Corp. , references to " management " or " management team " refer to the Company's officers and directors and references to the " Sponsor " refer toTrajectory Alpha Sponsor, LLC . The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report on Form 10-Q (this " 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, and oral statements made from time to time by
representatives of the Company may include, forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Exchange Act and are intended to be covered by the safe
harbor created thereby. The Company has based these forward-looking statements
on management's current expectations, projections and forecasts about future
events. These forward-looking statements are subject to known and unknown risks,
uncertainties and assumptions about the Company that may cause its actual
business, financial condition, results of operations, performance and/or
achievements to be materially different from any future business, financial
condition, results of operations, performance and/or achievements expressed or
implied by these forward-looking statements. Factors that might cause or
contribute to such a discrepancy include, but are not limited to, those
described in the Company's other filings with the
Overview
We are a blank check company incorporated as a
OnDecember 14, 2021 , we consummated the initial public offering (the "IPO") of 17,250,000 units (the "Units"), including the issuance of 2,250,000 Units as a result of the underwriters' exercise of their over-allotment option in full. Each Unit consists of one share of our Class A common stock, par value$0.0001 per share (the "Class A common stock"), and one-half of one of our redeemable public warrants (each whole warrant, a "Public Warrant"), with each whole Public Warrant entitling the holder thereof to purchase one share of Class A common stock for$11.50 per share, subject to adjustment. The Units were sold at a price of$10.00 per Unit, generating gross proceeds of$172,500,000 .
On
The net proceeds from the IPO, together with certain of the proceeds from the
Private Placement,
Transaction costs amounted to
As of
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Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for the IPO. Following the IPO, we will not generate any operating revenues until after completion of our initial business combination. We will generate non-operating income in the form of interest income on cash and cash equivalents after the IPO. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our financial statements. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as expenses as we conduct due diligence on prospective business combination candidates.
For the three months ended
Liquidity and Capital Resources
As of
Based on the foregoing, management believes 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, we will use these funds to pay existing accounts payable, identify and evaluate prospective initial Business Combination candidates, perform due diligence on prospective target businesses, pay for travel expenditures, select the Target Business to merge with or acquire, and structure, negotiate and consummate the Business Combination.
Off-Balance
Sheet Financing Arrangements
As ofMarch 31, 2022 andDecember 31, 2021 , we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
Commitments and Contractual Obligations
Other than the below, we do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities.
Administrative Services Agreement
We entered into an agreement, commencing on the effective date of the IPO, to
pay the Sponsor
Registration and Stockholder Rights
The holders of the Class B common stock, Private Placement Warrants and warrants that may be issued upon conversion of working capital loans (and any shares of common stock issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the working capital loans and upon conversion of the Class B common stock) are entitled to registration rights pursuant to a registration rights agreement entered into on the effective date of the IPO requiring us to register such securities for resale (in the case of the Class B common stock, only after conversion to shares of Class A common stock). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that we register such securities. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent our completion of the initial Business Combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that no sales of these securities will be effected until after the expiration of the applicable lock-up period, as described herein. We will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriter had a 45-day option from the date of the IPO to purchase up to an additional 2,250,000 Units to cover over-allotments. OnDecember 14, 2021 , the underwriter fully exercised its over-allotment option. 10
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The underwriter was paid an underwriting commission of
The underwriters have agreed (i) to waive their conversion rights (or right to participate in any tender offer) with respect to such shares in connection with the initial business combination and (ii) to waive their rights to liquidating distributions from the trust account with respect to such shares if we fail to complete the initial business combination within the completion window.
The Class B common stock received by the underwriter has been deemed compensation byFINRA and are therefore subject to a 180-day lock-up pursuant to FINRA Rule 5110(e)(1). Additionally, these Class B common stock may not be sold, transferred, assigned, pledged or hypothecated or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any person for a 180-day period following the effective date of this prospectus except to any selected dealer participating in the offering and the bona fide officers or partners of the underwriter and any such participating selected dealer. The underwriter has agreed that the Class B common stock they receive will not be sold or transferred by them (except to certain permitted transferees) until after we completed an initial Business Combination. We granted the holders of Class B common stock the registration rights. In compliance with FINRA Rule 5110, the underwriter's registration rights are limited to demand and "piggy back" rights for periods of five and seven years, respectively, from the effective date of this prospectus with respect to the registration under the Securities Act of the Class B common stock.
Critical Accounting Policies and Estimates
The preparation of the financial statement in conformity with US GAAP requires 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 statement.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statement, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. We have identified the following as our critical accounting policies:
Offering Costs
We comply with the requirements of the ASC 340-10-S99-1 andSEC Staff Accounting Bulletin ("SAB") Topic 5A - "Expenses of Offering". Offering costs consist of legal, accounting, underwriting fees and other costs incurred through the IPO date that are directly related to the IPO. Offering costs directly attributable to the issuance of an equity contract to be classified in equity are recorded as a reduction of equity. Offering costs for equity contracts that are classified as assets and liabilities are expensed immediately.
Class A Common Stock Subject to Possible Redemption
We account for our Class A common stock subject to possible redemption in
accordance with the guidance in Accounting Standards Codification ("ASC") Topic
480 "Distinguishing Liabilities from Equity." Class A common stock subject to
mandatory redemption 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 in temporary equity. At all other times, 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 occurrence of uncertain future events. Accordingly, at
Net Loss per Common Share
We comply with accounting and disclosure requirements of FASB ASC Topic 260,
"Earnings Per Share". Net loss per common stock is computed by dividing net loss
by the weighted average number of common stock for the period. 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. We apply the
two-class
method in calculating earnings per share. Remeasurement adjustments associated
with the redeemable Class A common stock are excluded from earnings per share as
the redemption value approximates fair value.
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The calculation of diluted loss per share does not consider the effect of the
warrants issued in connection with the (i) IPO, and (ii) the private placement
because the warrants are contingently exercisable, and the contingencies have
not yet been met. The warrants are exercisable to purchase 14,350,000 Class A
common stock in the aggregate. As of
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 Company's financial statements.
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