The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under "Cautionary Note Regarding Forward-Looking Statements and Risk Factor Summary," "Item 1A. Risk Factors" and elsewhere in this report.
Overview
We are a blank check company incorporated on
OnSeptember 27, 2021 , the registration statement on Form S-1 (File No. 333-259470) relating to our initial public offering was declared effective by theSEC . OnSeptember 30, 2021 , we consummated our initial public offering of 25,000,000 units, with each unit consisting of one share of Class A common stock and one-half of one redeemable warrant, each whole warrant entitling the holder thereof to purchase one share of Class A common stock at an exercise price of$11.50 per share, subject to adjustment. The units were sold at an offering price of$10.00 per unit, generating total gross proceeds of$250,000,000 .
Simultaneously with the consummation of our initial public offering, we
consummated the private placement of 7,000,000 private placement warrants to our
sponsor at a price of
On
A total of
Our units began trading on
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We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering and the private placement, our capital stock, debt or a combination of cash, stock and debt. We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete our initial business combination will be successful.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities fromJune 1, 2021 (inception) throughDecember 31, 2021 were organizational activities and those necessary to prepare for our initial public offering, and since our initial public offering, our activity has been limited to identifying a target company for a business combination. We do not expect to generate any operating revenues until after the completion of our initial business combination. We generate non-operating income in the form of interest income on marketable securities 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 in connection with searching for, and completing, a business combination.
For the period from
Liquidity and Capital Resources
As of
On
Following our initial public offering (including the partial exercise of the
over-allotment option), and the sale of the private placement warrants, a total
of
For the period from
As of
As of
In order 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 will loan us funds as may
be required. If we complete our initial business combination, we expect to repay
such loaned amounts out of the proceeds of the trust account released to us.
Otherwise, such loans may be repaid only out of funds held outside the trust
account. Up to
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 estimates 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 consummation of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination.
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Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on our financial position, results of its operations and/or our ability to consummate an initial business combination, the specific impact is not readily determinable as of the date of the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our ability to consummate an initial business combination may also be dependent on raising additional equity and debt financing, which may be impacted by the COVID-19 pandemic and resulting market volatility. The impact of the COVID-19 pandemic on our results of operations, financial position and cash flows will depend on future developments, including the continued duration and spread of the pandemic and related advisories and restrictions, which are highly uncertain
and cannot be predicted. Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements as ofDecember 31, 2021 .
Contractual Obligations
We do not have any long-term debt obligations, capital lease obligations,
operating lease obligations, purchase obligations or long-term liabilities,
other than an agreement to pay our sponsor a monthly fee of
The underwriters of our initial public offering are entitled to a deferred
underwriting commission of
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in
Common Stock Subject to Possible Redemption
We account for our shares of common stock subject to possible redemption in accordance with ASC Topic 480 "Distinguishing Liabilities from Equity." In accordance with theSEC and its staff's guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within our control require common stock subject to redemption to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity's equity instruments, are excluded from the provisions of ASC 480. All of our shares of Class A common stock sold as part of the units in our initial public offering contain a redemption feature which allows for the redemption of such public shares in connection with our liquidation if there is a stockholder vote or tender offer in connection with a business combination and in connection with certain amendments to our amended and restated certificate of incorporation. We recognize changes in redemption value immediately as they occur and adjust the carrying value of redeemable shares of common stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable shares of common stock are affected by charges against additional paid-in capital and accumulated deficit.
Net Income (Loss) per Share of Common Stock
We apply the two-class method in calculating net loss per share of common stock. The contractual formula utilized to calculate the redemption amount approximates fair value. The class feature to redeem at fair value means that there is effectively only one class of stock. Changes in fair value are not considered a dividend for the purposes of the numerator in the earnings per share calculation. Net loss per share of common stock is computed by dividing the pro rata net loss between the shares of Class A common stock and the shares of Class B common stock by the weighted average number of shares common stock outstanding for each of the periods. The calculation of diluted loss per share of common stock does not consider the effect of the warrants and rights issued in connection with our initial public offering since the exercise of the warrants and rights are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. The warrants are exercisable for 21,257,000 shares of Class A common stock in the aggregate.
Public Warrants and Private Placement Warrants
We account for the public warrants and the private placement warrants in
accordance with ASC Topic 815-40, Derivatives and Hedging, Contracts in Entity's
Own Equity, under which the warrants do not meet the criteria for equity
classification and must be recorded as liabilities. As the warrants meet the
definition of a derivative as contemplated in ASC 815, the warrants are measured
at fair value at inception and at each reporting date in accordance with ASC
820, "Fair Value Measurement", with changes in fair value recognized in the
statements of operations in the period of change. As of
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Recent Accounting Standards
InAugust 2020 , the Financial Accounting Standard Board's ("FASB") issued Accounting Standards Update ("ASU") No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06"), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. ASU 2020-06 also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. We adopted ASU 2020-06 onJune 1, 2021 (inception). Our adoption of ASU 2020-06 did not impact our financial position, results of operations or cash flows.
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements.
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