The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with our audited financial
statements and the notes related thereto which are included in "Item 8.
Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.
Certain information contained in the discussion and analysis set forth below
includes forward-looking statements. 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 "Special Note Regarding Forward-Looking
Statements," "Item 1A. Risk Factors" and elsewhere in this Annual Report on Form
10-K.
Overview
We are a blank check company incorporated in the Cayman Islands on February 11,
2021 for the purpose of effecting a merger, share exchange, asset acquisition,
share purchase, reorganization or similar business combination with one or more
businesses or entities (a "Business Combination"). We intend to effectuate our
Business Combination using cash derived from the proceeds of the Initial Public
Offering and the sale of the Placement Units, our shares, debt or a combination
of cash, shares and debt.
As of December 31, 2022, the Company had not commenced any operations. All
activity for the period from February 11, 2021 (inception) through December 31,
2022 relates to the Company's formation, the initial public offering ("Initial
Public Offering"), which is described below, and subsequent to the Initial
Public Offering, identifying a target company for a Business Combination. The
Company will not generate any operating revenues until after the completion of a
Business Combination, at the earliest. The Company generates non-operating
income in the form of interest income from the proceeds derived from the Initial
Public Offering.
We expect to continue to incur significant costs in the pursuit of our
acquisition plans. We cannot assure you that our plans to complete a Business
Combination will be successful.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities from February 11, 2021 (inception) through December 31, 2022
were organizational activities, those necessary to prepare for the Initial
Public Offering, described below, and identifying a target company for a
Business Combination. We do not expect to generate any operating revenues until
after the completion of our Business Combination. We generate non-operating
income derived from the proceeds of initial public offering 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.
For the year ended December 31, 2022, we had net income of $1,995,932, which
consisted of interest earned on marketable securities held in the Trust Account
of $3,167,128, partially offset by operating costs of $1,171,196.
For the period from February 11, 2021 (inception) through December 31, 2021, we
had net loss of $140,200, which consisted of formation and operating costs of
$148,895, offset by interest earned on marketable securities held in the Trust
Account of $8,695.
Liquidity and Capital Resources
On December 7, 2021, we consummated the Initial Public Offering of 23,000,000
Units, which includes the full exercise by the underwriter of its over-allotment
option in the amount of 3,000,000 Units, at $10.00 per Unit, generating gross
proceeds of $230,000,000.
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Simultaneously with the closing of the Initial Public Offering, we consummated
the sale of 560,000 Placement Units at a price of $10.000 per Placement Unit in
a private placement to the Sponsor and Cantor, generating gross proceeds of
$5,600,000.
Following the Initial Public Offering, the full exercise of the over-allotment
option, and the sale of the Placement Units, a total of $234,600,000 was placed
in the Trust Account. We incurred $14,483,021 in Initial Public Offering related
costs, including $4,000,000 of underwriting fees and $683,021 of other offering
costs.
For the year ended December 31, 2022, cash used in operating activities was
$691,465. Net income of $1,995,932 was affected by interest earned on marketable
securities held in the Trust Account of $3,167,128. Changes in operating assets
and liabilities provided $479,731 of cash for operating activities.
For the year ended December 31, 2021, cash used in operating activities was
$773,937. Net loss of $140,200 was affected by interest earned on marketable
securities held in the Trust Account of $8,695. Changes in operating assets and
liabilities used $625,042 of cash for operating activities.
As of December 31, 2022, we had investments held in the Trust Account of
$237,775,823 (including approximately $3,167,128 of interest income) consisting
of U.S. Treasury Bills with a maturity of 185 days or less and or money market
funds investing solely in U.S. government treasury obligations and meeting
certain conditions under Rule 2a-7 under the Investment Company Act. We may
withdraw interest from the Trust Account to pay taxes, if any. We intend to use
substantially all of the funds held in the Trust Account, including any amounts
representing interest earned on the Trust Account (less income taxes payable),
to complete our Business Combination. To the extent that our share capital or
debt is used, in whole or in part, as consideration to complete our Business
Combination, the remaining proceeds held in the Trust Account will be used as
working capital to finance the operations of the target business or businesses,
make other acquisitions and pursue our growth strategies.
As of December 31, 2022, we had cash of $140,302. We intend to use the funds
held outside the Trust Account primarily to identify and evaluate target
businesses, perform business due diligence on prospective target businesses,
travel to and from the offices, plants or similar locations of prospective
target businesses or their representatives or owners, review corporate documents
and material agreements of prospective target businesses, and structure,
negotiate and complete a Business Combination.
In order to fund working capital deficiencies or finance transaction costs in
connection with a Business Combination, the Sponsor, or certain of our officers
and directors or their affiliates may, but are not obligated to, loan us funds
as may be required. If we complete a Business Combination, we would repay such
loaned amounts. In the event that a 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 our Trust Account would be used for
such repayment. Up to $1,500,000 of such Working Capital Loans may be
convertible into Units of the post-Business Combination entity at a price of
$10.00 per Unit. The Units would be identical to the Private Placement Units.
We believe we will need to raise additional funds in order to meet the
expenditures required for operating our business. We may need to obtain
additional financing to operate our business prior to our Business Combination,
to complete our Business Combination or, if we become obligated to redeem a
significant number of our Public Shares upon consummation of our Business
Combination, we may issue additional securities or incur debt in connection with
such Business Combination.
Liquidity and Going Concern
As of December 31, 2022, the Company had $140,302 in its operating bank account
and a working capital of $21,887. In order to finance transaction costs in
connection with a Business Combination, the Sponsor or an affiliate of the
Sponsor, or certain of the Company's officers and directors may, but are not
obligated to, provide the Company Working Capital Loans (as defined below) (see
Note 5). Accordingly, we may not be able to obtain additional financing. If we
are unable to raise additional capital, we may be required to take additional
measures to conserve liquidity, which could include, but not necessarily be
limited to, curtailing operations, suspending the pursuit of a potential
transaction and reducing overhead expenses. We cannot provide any assurance that
new financing will be available to us on commercially acceptable terms, if at
all.
Also, in connection with the Company's assessment of going concern
considerations in accordance with the authoritative guidance in FASB Accounting
Standards Update ("ASU") Subtopic 205-40, "Presentation of Financial
Statements-Going Concern," management has determined that if the Company is
unable to raise additional funds to alleviate liquidity needs as well as
complete a Business Combination by June 7, 2023 then the Company will cease all
operations except for the purpose of liquidating. The liquidity condition as
well as the date for mandatory liquidation and subsequent dissolution raise
substantial doubt about the Company's ability to continue as a going concern. No
adjustments have been made to the carrying amounts of assets or liabilities
should the Company be required to liquidate after June 7, 2023. The Company
intends to complete a Business Combination before the mandatory liquidation
date.
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Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of December 31, 2022. We do not participate in
transactions that create relationships with unconsolidated entities or financial
partnerships, often referred to as variable interest entities, which would have
been established for the purpose of facilitating off-balance sheet arrangements.
We have not entered into any off-balance sheet financing arrangements,
established any special purpose entities, guaranteed any debt or commitments of
other entities, or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities, other than an agreement, to pay an
affiliate of the Sponsor a total of $20,000 per month for office space,
utilities and secretarial and administrative support services. We began
incurring these fees on December 2, 2021 and will continue to incur these fees
monthly until the earlier of the completion of the Business Combination and our
liquidation.
The underwriters were entitled to a cash underwriting discount of $0.20 per
Unit, or $4,000,000 in the aggregate, which was paid upon the closing of the
Initial Public Offering. In addition, the underwriters are entitled to a
deferred fee of (i) $0.40 per Unit of the gross proceeds of the initial
20,000,000 Units sold in the Initial Public Offering, or $8,000,000 in the
aggregate, and (ii) $0.60 per Unit of the gross proceeds from the Units sold
pursuant to the over-allotment option, or $1,800,000. The deferred fee will
become payable to the underwriters from the amounts held in the Trust Account
solely in the event that the Company completes a Business Combination, subject
to the terms of the underwriting agreement.
Critical Accounting Estimates
The preparation of 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 financial statements, and income and expenses
during the periods reported. Actual results could materially differ from those
estimates. The Company did not identify any critical accounting estimates.
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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 Ukraine. We cannot at
this time fully predict the likelihood of one or more of the above events, their
duration or magnitude or the extent to which they may negatively impact our
business and our ability to complete initial business combination.
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