References to the "Company," "us," "our" or "we" refer
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "continue," or the negative of such terms or other similar expressions. Such statements include, but are not limited to, possible business combinations and the financing thereof, and related matters, as well as all other statements other than statements of historical fact included in this Form 10-Q. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our otherSecurities and Exchange Commission ("SEC") filings.
Overview
We are a newly organized blank check company incorporated on
Our units began trading on
Transaction costs of the initial public offering amounted to
Our management has broad discretion with respect to the specific application of the net proceeds of the initial public offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a business combination.
If we are unable to consummate an initial business combination within 18 months
from the closing of the initial public offering (or 21 months or 24 months, as
applicable), we will, as promptly as reasonably possible but not more than ten
business days thereafter, redeem 100% of the outstanding public shares, at
a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the trust
account, including any interest earned on the funds held in the trust account,
less up to
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Results of Operations
Our only activities from inception throughJune 30, 2022 were organizational activities, those necessary to prepare for our Initial Public Offering, described below, and after our Initial Public Offering, identifying a target company for a Business Combination. We will not generate any operating revenues until the closing and completion of our initial Business Combination, at the earliest. We generate non-operating income in the form of interest income on marketable securities held after the Initial Public Offering and the change in fair value of warrant liabilities. We are incurring 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 a Business Combination.
For the three months ended
For the six months ended
For the three months ended
For the period from
Our management continues to evaluate the impact of
the COVID-19 pandemic
and the
Liquidity and Capital Resources
Sources of Liquidity
Our liquidity needs from the period ofFebruary 23, 2021 (date of inception) throughOctober 7, 2021 (date of the initial public offering) had been satisfied through the cash receipt of$25,000 from our initial stockholders to purchase the Founder Shares, and a loan of$300,000 pursuant to a note issued to our Sponsor (the "Note"). The Note was non-interest bearing and payable on the earlier ofDecember 31, 2021 or the completion of the Initial Public Offering. We borrowed$145,000 under the Promissory Note and the full amount was repaid onOctober 7, 2021 . Subsequent to the consummation of the initial public offering, our liquidity needs have been satisfied with the net proceeds from the consummation of the Private Placement not held in the Trust Account. In addition, in order to finance transaction costs in connection with a business combination, our Sponsor or its affiliates may, but are not obligated to, provide us working capital loans ("Working Capital Loans"). The Working Capital Loans would either be repaid upon consummation of a Business Combination or, at the lender's discretion, up to$1.5 million of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of$1.50 per warrant. The warrants would be identical to the Private Placement Warrants. To date, there are no amounts outstanding under any Working Capital Loans.
As of
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The Sponsor, officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. Our audit committee will review on a quarterly basis all payments that were made to the Sponsor, officers or directors, or their affiliates.
We have incurred and expect to continue to incur additional costs in pursuit of
our acquisition plans. We have determined that we will not be able to sustain
operations for the next twelve months without obtaining additional financing.
These conditions raise a substantial doubt about our ability to continue as a
going concern for the next twelve months from the issuance of these condensed
consolidated financial statements. Based on our plan to request Working Capital
Loans of up to
Founder Shares
In
Holders of our Founder Shares (including the anchor investors) have agreed not
to transfer, assign or sell any of their founder shares and any shares of our
Class A common stock issuable upon conversion thereof until the earlier to occur
of: (i) one year after the completion of our initial business combination; and
(ii) subsequent to our initial business combination, (x) if the last reported
sale price of our Class A common stock equals or exceeds
Private Placement Warrants
Simultaneously with the closing of the initial public offering, on
Each whole Private Placement Warrant is exercisable for one share of Class A common stock at a price of$11.50 per share. A portion of the proceeds from the sale of the Private Placement Warrants to our Sponsor was added to the proceeds from the initial public offering held in the Trust Account. If we do not complete a Business Combination byApril 7, 2023 (or byJuly 7, 2023 orOctober 7, 2023 , as applicable, if we extend the period of time to consummate a Business Combination), the Private Placement Warrants will expire worthless. The Private Placement Warrants will be non-redeemable for cash and exercisable on a cashless basis so long as they are held by our Sponsor or permitted transferees.
The Sponsor and our officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants until 30 days after the completion of the initial Business Combination.
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Contractual Obligations
At
The underwriters were entitled to an underwriting discount of
Registration Rights
The holders of the founder shares, private placement warrants and warrants that may be issued upon conversion of working capital loans (and any Class A common stock issuable upon the exercise of the private placement warrants and warrants that may be issued upon conversion of working capital loans) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of the initial public offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent to our completion of our initial business combination.
However, the registration rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lockup period, which occurs (i) in the case of the founder shares, as described in the following paragraph, and (ii) in the case of the private placement warrants and the respective shares of our Class A common stock underlying such warrants, 30 days after the completion of our initial business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.
Except as described in this Quarterly Report, the holders of the founder shares (including the anchor investors) have agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of (a) one year after the completion of our initial business combination, or (b) subsequent to our initial business combination, (x) if the last reported sale price of our Class A common stock equals or exceeds$12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, capital stock exchange or other similar transaction that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property. Any permitted transferees will be subject to the same restrictions and other agreements of our sponsor with respect to any founder shares. We refer to such transfer restrictions throughout this Annual Report as the lock-up.
In addition, pursuant to the registration rights agreement, our sponsor, upon completion of an initial business combination, will be entitled to nominate up to three individuals for election to our board of directors, as long as the sponsor holds any securities covered by the registration rights agreement.
Off-Balance
Sheet Financing Arrangements
As ofJune 30, 2022 , we did not have any off-balance sheet arrangements.
Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity
with
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statements included elsewhere in this Report. Our critical accounting policies and estimates were described in Part II, Item 7, Critical Accounting Policies in our Annual Report. There have been no material changes to our critical accounting policies and estimates since our Annual Report. Accordingly, these are the policies and estimates we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of operations:
• The estimates used in the determination of the fair value of the warrant liability • The recognition, measurement and valuation of marketable debt securities held in our Trust Account • The recognition and measurement of Class A Common Stock subject to possible redemption • The computation of net income (loss) per share of common stock
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our unaudited condensed financial statements.
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