References to the "Company," "
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 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. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our otherSEC filings.
Overview
We are a blank check company incorporated in
The registration statement for our Initial Public Offering was declared
effective on
OnMarch 8, 2021 , we consummated our Initial Public Offering of 30,000,000 units (the "Units" and, with respect to the shares of Class A common stock included in the Units being offered, the "Public Shares"), at$10.00 per Unit, generating gross proceeds of$300.0 million , and incurring offering costs of approximately$17.1 million , of which$10.5 million was for deferred underwriting commissions. We granted the underwriter a 45-day option to purchase up to an additional 4,500,000 Units at the Initial Public Offering price to cover over-allotments, if any. The underwriters exercised the over-allotment option in full onMarch 16, 2021 , purchasing an additional 4,500,000 Units (the "Over-Allotment Units"), generating gross proceeds of$45.0 million . We incurred additional offering costs of approximately$2.5 million , of which approximately$1.6 million was for deferred underwriting commissions.
Each Unit consists of one share of Class A common stock and
one-fifth
of one redeemable warrant (each redeemable warrant, a "Public Warrant"). Each
Public Warrant entitles the holder to purchase one share of Class A common stock
at a price of
Simultaneous with the closing of the Initial Public Offering, we consummated the
private placement ("Private Placement") of 5,333,333 warrants (each, a "Private
Placement Warrant" and collectively, the "Private Placement Warrants") at a
price of
Upon the closing of the Initial Public Offering, the sale of Over-Allotment
Units and the Private Placement,
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Our management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering 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. There is no assurance that we will be able to complete a Business Combination successfully. We must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the income earned on the Trust Account) at the time of the agreement to enter into the initial Business Combination. However, we only intend to complete a Business Combination if the post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act.
If we are unable to complete a Business Combination within 24 months from the
closing of the Initial Public Offering, or
Liquidity and Going Concern
As of
Our liquidity needs prior to the consummation of the Initial Public Offering
were satisfied through the payment of
In connection with the Company's assessment of going concern considerations in accordance with theFinancial Accounting Standards Board's ("FASB") Accounting Standards Codification ("ASC") Topic 205-40, "Presentation of Financial Statements-Going Concern," management has evaluated the Company's liquidity and financial condition and determined that it may not be sufficient to meet the Company's obligation over the period of twelve months from the issuance date of the financial statements. The Company's sponsor has agreed to provide support to enable the Company to continue its operations and meet its potential obligations over a period of one year from the issuance date of these financial statements. Management believes current working capital, and the support from its Sponsor, provides sufficient capital to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements and therefore substantial doubt has been alleviated.
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.
Results of Operations
Our entire activity since inception up to
For the three months endedMarch 31, 2022 , we had a net income of approximately$2.9 million , which consisted of a non-operating gain resulting from a change in fair value of derivative warrant liabilities of approximately$3.2 million and approximately$21,000 of income from investments held in the Trust Account, partially offset by a loss from operations of approximately$296,000 comprised of approximately$249,000 general and administrative expenses, approximately$30,000 in general and administrative expenses to a related party and approximately$17,000 of franchise tax expenses. 19
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For the period fromJanuary 5, 2021 (inception) throughMarch 31, 2021 , we had net income of approximately$476,000 , which consisted of a non-operating gain resulting from a change in fair value of derivative warrant liabilities of approximately$1.0 million and approximately$1,000 of income from investments held in the Trust Account, partially offset by a loss from operations of approximately$127,000 comprised of approximately$70,000 general and administrative expenses, approximately$9,000 in general and administrative expenses to a related party and approximately$48,000 of franchise tax expense, and a non-operating loss of approximately$424,000 for offering costs associated with derivative warrant liabilities.
Contractual Obligations
Administrative Services Agreement
Commencing on the date that our securities were first listed on Nasdaq through
the earlier of consummation of the initial Business Combination and our
liquidation, we agreed to pay an affiliate of the Sponsor a total of
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, our directors, our officers or any of their affiliates.
The Company incurred approximately
Underwriting Agreement
We granted the underwriters a 45-day option from the date of the final prospectus relating to the Initial Public Offering to purchase up to 4,500,000 additional Units to cover over-allotments, if any, at the Initial Public Offering price, less underwriting discounts and commissions. The underwriters exercised the over-allotment option in full and onMarch 16, 2021 , purchasing an additional 4,500,000 Units.
The underwriters are entitled to an underwriting discount of
Critical Accounting Policies
The preparation of financial statements in accordance with accounting principles
generally accepted in
Recent Accounting Pronouncements
See Note 2 to the unaudited condensed financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of recent accounting pronouncements.
Off-Balance Sheet Arrangements As ofMarch 31, 2022 , we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K. 20
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JOBS Act
The Jumpstart Our Business Startups Act of 2012 (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 controls over financial reporting pursuant to Section 404, (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 CEO's compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our Initial Public Offering or until we are no longer an "emerging growth company," whichever is earlier.
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