References in this report (the "Quarterly Report") to "we," "us" or the
"Company" refer to
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding the Company's financial position, business strategy and the plans and objectives of management for future operations and the Company's plans to dissolve and liquidate, are forward-looking statements. Words such as "expect," "believe," "anticipate," "intend," "estimate," "seek" and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management's current beliefs, based on information currently available. 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 Company's Annual Report on Form10-K for the year endedDecember 31, 2021 , filed with theU.S. Securities and Exchange Commission (the "SEC") onFebruary 24, 2022 . The Company's securities filings can be accessed on the EDGAR section of theSEC's website at www.sec.gov . Except as expressly required by applicable securities law, the Company disclaims 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 formed under the laws of the
The board of directors of the Company has determined that it is in the best
interests of the Company and its stockholders to dissolve and liquidate in
accordance with the provisions of Amended and Restated Certificate of
Incorporation, due to the Company's inability to consummate an initial Business
Combination by
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities from
For the three months ended
For the three months ended
For the six months ended
For the six months ended
Liquidity and Capital Resources
On
15
--------------------------------------------------------------------------------
For the six months ended
For the six months ended
As of
As ofJune 30, 2022 , we had cash of$272,545 held outside of our Trust Account. In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, we may borrow additional amounts under the Promissory Note, under which$1,750,000 remained available to be drawn as ofJune 30, 2022 . The Promissory Note is non-interest bearing and payable on the earlier of (i)September 18, 2022 or (ii) the consummation of our initial Business Combination.
If we fully draw down on the Promissory Note and require additional funds for
working capital purposes, the sponsor, an affiliate of the sponsor, or our
officers and directors may, but are not obligated to, loan us such additional
funds as may be required. If we complete a Business Combination, we would repay
such additional loaned amounts, without interest, upon consummation of the
Business Combination. 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 additional loaned amounts but no proceeds from our trust account
would be used for such repayment. 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 we do need to raise additional capital and are unable to, then we may be required to take additional measures to conserve liquidity, which could include, but not necessarily include or 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.
Off-Balance Sheet Arrangements We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as ofJune 30, 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 OnJune 29, 2021 , we issued an unsecured promissory note to our Sponsor (the "Promissory Note"), pursuant to which we may borrow up to an aggregate principal amount of$2,500,000 . The Promissory Note is non-interest bearing and payable on the earlier of (i)September 18, 2022 or (ii) the consummation of the Initial Business Combination. As ofJune 30, 2022 , the outstanding balance under the Promissory Note was$750,000 and the remaining amount available to be drawn was$1,750,000 .
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities, other than the Promissory Note and an
agreement to pay an affiliate of the Sponsor a monthly fee of
The underwriters are entitled to a deferred fee of
Going Concern
In connection with our assessment of going concern considerations in accordance with the authoritative guidance in Financial Accounting Standard Board ("FASB") Accounting Standards Update ("ASU") 2014-15,"Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern," management has determined that the mandatory liquidation and subsequent dissolution, should we be unable to complete a business combination, raises substantial doubt about the our ability to continue as a going concern. We have untilSeptember 18, 2022 to consummate a Business Combination. As described below, we will be unable to consummate a Business Combination by the Liquidation Date, and we intend to dissolve and liquidate in accordance with the terms of our Amended and Restated Certificate of Incorporation. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate afterSeptember 18, 2022 . 16
--------------------------------------------------------------------------------
Critical Accounting Policies
The preparation of condensed financial statements and related disclosures in
conformity with accounting principles generally accepted in
Class A Common Stock Subject to Possible Redemption
We account for our shares of Class A common stock subject to possible redemption in accordance with the guidance in Accounting Standards ASC Topic 480. Shares of Class A common stock subject to mandatory redemption are classified as a liability instrument and are 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 as temporary equity. At all other times, common stock is classified as stockholders' equity. Our common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, the Class A common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders' equity section of our condensed balance sheets.
Warrant Liabilities
We account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in ASC Topic 480 and ASC Topic 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC Topic 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC Topic 815, including whether the warrants are indexed to our own common shares and whether the warrant holders could potentially require "net cash settlement" in a circumstance outside of our control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent balance sheet date thereafter while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss within change in fair value of warrant liability on the statements of operations. The fair value of the warrants was initially estimated using a Monte Carlo Simulation approach. Subsequent measurement of the fair value of the warrants was estimated using the publicly traded price of our warrants.
Net Income per Common Share
Net income per common share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Accretion associated with the redeemable shares of Class A common stock is excluded from earnings per share as the redemption value approximates fair value.
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 condensed financial statements.
© Edgar Online, source