INSIGHT ACQUISITION CORP. References to the "Company," "
Cautionary Note Regarding Forward-Looking Statements
Some of the statements contained in this Quarterly Report on Form 10-Q may constitute "forward-looking statements" for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team's expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the following risks, uncertainties (some of which are beyond our control) or other factors:
• we have no operating history and no revenues, and you have no basis on
which to evaluate our ability to achieve our business objective;
• our ability to select an appropriate target business or businesses;
• our ability to complete a merger, share exchange, asset acquisition,
share purchase, reorganization or similar business combination with one
or more businesses (the "Business Combination");
• our expectations around the performance of a prospective target business
or businesses;
• our success in retaining or recruiting, or changes required in, our
officers, key employees or directors following our initial Business
Combination;
• our officers and directors allocating their time to other businesses and
potentially having conflicts of interest with our business or in
approving our initial Business Combination;
• our potential ability to obtain additional financing to complete our
initial Business Combination;
• our pool of prospective target businesses;
• our ability to consummate an initial Business Combination due to the
uncertainty resulting from the recent COVID-19 pandemic;
• the ability of our officers and directors to generate a number of
potential Business Combination opportunities;
• our public securities' potential liquidity and trading;
• the use of proceeds not held in the trust account or available to us from
interest income on the trust account balance;
• the trust account not being subject to claims of third parties;
• our financial performance following our initial public offering ("IPO"); and
20
--------------------------------------------------------------------------------
Table of Contents
• the other risks and uncertainties discussed herein, in our filings with
the SEC and in our final prospectus relating to our IPO, filed with the
SEC on September 2, 2021 .
Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Overview
We are a blank check company incorporated in
Our registration statement for our IPO was declared effective on
Simultaneously with the closing of the IPO, the Company consummated the private
placement ("Private Placement") of 7,500,000 and 1,200,000 warrants (each, a
"Private Placement Warrant" and collectively, the "Private Placement Warrants"),
to the Sponsor and
Upon the closing of the IPO and the Private Placement,
Our management has broad discretion with respect to the specific application of the net proceeds of the IPO and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination.
If the Company is unable to complete a Business Combination within 18 months
from the closing of the IPO, or
We intend to effectuate our initial Business Combination using cash from the proceeds of our IPO and the sale of the Private Placement Warrants, our shares, debt or a combination of cash, equity and debt.
21
--------------------------------------------------------------------------------
Table of Contents
The issuance of additional shares in a Business Combination:
• may significantly dilute the equity interest of investors in our IPO,
which dilution would increase if the anti-dilution provisions in the
Class B common stock resulted in the issuance of Class A common stock on
a greater than one-to-one basis upon conversion of the Class B common
stock;
• may subordinate the rights of holders of Class A common stock if
preference shares are issued with rights senior to those afforded our
Class A common stock;
• could cause a change in control if a substantial number of our Class A
common stock are issued, which may affect, among other things, our
ability to use our net operating loss carry forwards, if any, and could
result in the resignation or removal of our present officers and
directors;
• may have the effect of delaying or preventing a change of control of us
by diluting the share ownership or voting rights of a person seeking to
obtain control of us; and
• may adversely affect prevailing market prices for our Class A common stock.
Similarly, if we issue debt or otherwise incur significant debt, it could
result in:
• default and foreclosure on our assets if our operating revenues after an
initial Business Combination are insufficient to repay our debt
obligations;
• acceleration of our obligations to repay the indebtedness even if we make
all principal and interest payments when due if we breach certain
covenants that require the maintenance of certain financial ratios or
reserves without a waiver or renegotiation of that covenant;
• our immediate payment of all principal and accrued interest, if any, if
the debt is payable on demand;
• our inability to obtain necessary additional financing if the debt
contains covenants restricting our ability to obtain such financing while
the debt is outstanding;
• our inability to pay dividends on our Class A common stock;
• using a substantial portion of our cash flow to pay principal and
interest on our debt, which will reduce the funds available for dividends
on our Class A common stock if declared, expenses, capital expenditures,
acquisitions and other general corporate purposes;
• limitations on our flexibility in planning for and reacting to changes in
our business and in the industry in which we operate;
• increased vulnerability to adverse changes in general economic, industry
and competitive conditions and adverse changes in government regulation;
and
• limitations on our ability to borrow additional amounts for expenses,
capital expenditures, acquisitions, debt service requirements, execution
of our strategy and other purposes and other disadvantages compared to
our competitors who have less debt.
Liquidity and Going Concern
As of
Our liquidity needs prior to the consummation of the IPO were satisfied through
the payment of
22
--------------------------------------------------------------------------------
Table of Contents
In connection with our assessment of going concern considerations in accordance
with Financial Accounting Standard Board's Accounting Standards Update ("ASU")
2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as
a Going Concern," the Company has until
Risks and Uncertainties
Management continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on our financial position, results of our operations and/or search for a target company, the specific impact is not readily determinable as of the date of the condensed financial statements. The condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
In
On
Results of Operations
Our entire activity since inception up to
For the three months ended
23
--------------------------------------------------------------------------------
Table of Contents
For the three months ended
For the nine months ended
For the period from
Contractual Obligations
Registration Rights
The holders of Founder Shares, 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 Founder Shares), are entitled to registration rights pursuant to a registration and stockholder rights agreement signed prior to the consummation of the IPO. These holders are entitled to certain demand and "piggyback" registration rights. We will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriters were entitled to an underwriting discount of
Services Agreement
On
The board of directors has also approved payments of up to
24
--------------------------------------------------------------------------------
Table of Contents
Critical Accounting Estimates
The preparation of financial statements in accordance with accounting principles
generally accepted in
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 accompanying condensed financial statements.
Off-Balance Sheet Arrangements
As of
JOBS Act
The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an "emerging growth company" and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, the condensed financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an "emerging growth company," we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor's attestation report on our system of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the executive compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our IPO or until we are no longer an "emerging growth company," whichever is earlier.
© Edgar Online, source
