References in this quarterly report on Form 10-Q (the "Quarterly Report") to
"we," "us" or the "Company" refer to InterPrivate IV InfraTech Partners Inc.
References to our "management" or our "management team" refer to our officers
and directors, and references to the "Sponsor" refer to InterPrivate Acquisition
Management IV, LLC. The following discussion and analysis of the Company's
financial condition and results of operations should be read in conjunction with
the financial statements and the notes thereto contained elsewhere in this
Quarterly Report and the Annual Report. Certain information contained in the
discussion and analysis set forth below includes forward-looking statements that
involve risks and uncertainties.
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 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, 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
Annual Report. The Company's securities filings can be accessed on the EDGAR
section of the SEC'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 State of Delaware on
September 10, 2020 for the purpose of effectuating a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or other similar
business combination with one or more businesses. We intend to effectuate our
Business Combination using cash from the proceeds of the Initial Public Offering
and the sale of the Private Placement Warrants, 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 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 through June 30, 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 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.
The three months ended June 30, 2022 compared to the three months ended June 30,
2021
For the three months ended June 30, 2022 and 2021, we had net income of
$2,780,321 versus a net loss of $4,175,019, respectively, a change of
$6,955,340. This change was primarily driven by a slight reduction in operating
costs of $129,826, offset by a gain in fair value of warrant liability of
$6,500,386 due to fluctuations in the market.
15
Period-to-period changes in our results also include interest income on
marketable securities held in the Trust Account for the three months ended June
30, 2022 of $457,153 compared to $21,650 for the three months ended June 30,
2021, and we had an unrealized loss on marketable securities held in the Trust
Account for the three months ended June 30, 2022 of $55,334 compared to $8,568
for the three months ended June 30, 2021.
The six months ended June 30, 2022 compared to the six months ended June 30,
2021
For the six months ended June 30, 2022 and 2021, we had net income of $5,755,690
versus a net loss of $4,427,860, respectively, a change of $10,183,550. This
change was primarily driven by increases in operating costs of $240,402, offset
by the change in fair value of warrant liability of $9,756,024 and an increase
in interest income on marketable securities of $514,654.
Period-to-period changes in our results also include interest income on
marketable securities held in the Trust Account for the three months ended June
30, 2022 of $541,300 compared to $26,646 for the six months ended June 30, 2021,
and we had an unrealized loss on marketable securities held in the Trust Account
for the six months ended June 30, 2022 of $48,052 compared to $3,780 for the six
months ended June 30, 2021. In addition, during the six months ended June 30,
2021, the Company incurred offering costs of $261,155 related to the warrants
issued.
Liquidity and Capital Resources
On March 9, 2021, we consummated the Initial Public Offering of 28,750,000
Units, which includes the full exercise by the underwriters of their
over-allotment option in the amount of 3,750,000 Units, at $10.00 per Unit,
generating gross proceeds of $287,500,000. Simultaneously with the closing of
the Initial Public Offering, we consummated the sale of 5,000,000 Private
Placement Warrants at a price of $1.50 per Private Placement Warrant in a
private placement to the Sponsor, generating gross proceeds of $7,500,000.
Following the Initial Public Offering, the full exercise of the over-allotment
option, and the sale of the Private Placement Warrants, a total of $287,500,000
was placed in the Trust Account.
For the six months ended June 30, 2022, cash used in operating activities was
$516,394. Net income of $5,755,690 was affected by a non-cash income related to
the change in warrant liability of $6,051,024, interest earned on marketable
securities held in the Trust Account of $541,300 and an unrealized loss on
marketable securities held in in the Trust Account of $48,052. Changes in
operating assets and liabilities provided $272,187 of cash for operating
activities.
As of June 30, 2022, we had marketable securities held in the Trust Account of
$287,798,366 (including $541,300 of interest income and unrealized gains on U.S.
Treasury Bills with a maturity of 185 days or less). Interest income on the
balance in the Trust Account may be used by us to pay taxes. Through June 30,
2022, we have withdrawn $274,040 from the Trust Account related to payments for
Delaware franchise taxes.
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 capital stock 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 June 30, 2022, we had cash of $79,522 held outside the Trust Account. 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.
16
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 loans may be convertible into warrants
at a price of $1.50 per warrant, at the option of the lender. The warrants would
be identical to the Private Placement Warrants.
We will need to raise additional capital through loans or additional investments
from our initial stockholders, officers or directors. 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. These conditions
raise substantial doubt about our ability to continue as a going concern through
one year and one day from the issuance of this report.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities that would be considered
off-balance sheet arrangements as of June 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
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities, other than an agreement to pay the Sponsor
a monthly fee of $10,000 for office space, administrative and support services.
We began incurring these fees on March 4, 2021 and will continue to incur these
fees monthly until the earlier of the completion of the Business Combination and
our liquidation.
We have entered into an agreement, pursuant to which we will pay the Vice
President a total of $10,000 per month for assisting us in negotiating and
consummating an initial Business Combination. Upon completion of the Business
Combination or the Company's liquidation, the agreement will terminate, and the
Company will cease paying these monthly fees.
The underwriters are entitled to a deferred fee of $0.35 per unit, or
$10,062,500 in the aggregate. The deferred fee will become payable to the
underwriters from the amounts held in the Trust Account solely in the event that
we complete a Business Combination, subject to the terms of the underwriting
agreement.
Critical Accounting Policies
The preparation of condensed 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. We have identified the following critical accounting
policies:
Warrant Classification
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 Financial Accounting Standards Board
("FASB") Accounting Standards Codification ("ASC") Topic 480, "Distinguishing
Liabilities from Equity" ("ASC 480") and ASC Topic 815, "Derivatives and
Hedging" ("ASC 815"). The assessment considers whether the warrants are
freestanding financial instruments pursuant to ASC 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 815, including whether the
warrants are indexed to the Company's own shares of common stock and whether the
warrant holders could potentially require "net cash settlement" in a
circumstance outside of the Company's 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
quarterly period end date while the warrants are outstanding. As of June 30,
2022 and December 31, 2021, both the Public Warrants and the Private Placement
Warrants were accounted for as liabilities.
17
Common Stock Subject to Possible Redemption
We account for our common stock subject to possible conversion in accordance
with the guidance in ASC 480. Common stock subject to mandatory redemption is
classified as a liability instrument and 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 the occurrence of
uncertain future events. Accordingly, common stock subject to possible
redemption is presented as temporary equity, outside of the stockholders' equity
section of our condensed balance sheets.
Net Income (Loss) Per Share of Common Stock
Net income (loss) per common share is computed by dividing net income (loss) 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.
The Company's statement of operations includes a presentation of income (loss)
per share of common stock in a manner similar to the two-class method of income
(loss) per share.
Non-redeemable Class A common stock includes the Founder Shares and other shares
of Class A common stock that do not have redemption features.
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 Glimpses