The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto which are included in "Item 8. Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under "Special Note Regarding Forward-Looking Statements," "Item 1A. Risk Factors" and elsewhere in this Annual Report on Form 10-K.

Overview

We are a blank check company formed under the laws of the State of Delaware on January 15, 2021for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses (the "Business Combination"). 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 (each as defined below), our capital stock, debt or a combination of cash, stock and debt.

Results of Operations



We have neither engaged in any operations nor generated any revenues to date.
Our only activities from January 15, 2021(inception) through December 31, 2021
were organizational activities, those necessary to prepare for our initial
public offering (the "Initial Public Offering"), described below, and the search
for 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 investments held in the Trust Account
(as defined below). 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.

For the period from January 15, 2021 (inception) through December 31, 2021, we had a net income of $749,657 which consists of operating costs of $2,491,946, transaction costs allocated to warrant liability of $380,000, offset by a change in the fair value of our warrant liability of $3,609,996, interest income on marketable securities held in the Trust Account of $3,043 and dividend income of $8,564. In connection with the evaluation of and negotiation with a potential target business for our initial business combination, we incurred $1,433,491 in costs during the period from January 15, 2021 (inception) through December 31, 2021.


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Liquidity and Capital Resources

Until the consummation of the Initial Public Offering, our only source of liquidity was an initial purchase of shares of our Class B common stock by the Sponsor and loans from our Sponsor.

On March 12, 2021, we completed the Initial Public Offering of 23,817,701 Units at a price of $10.00 per Unit, which includes the partial exercise by the underwriters of the over-allotment option to purchase an additional 1,817,701, Units generating gross proceeds of $238,177,010. Simultaneously with the closing of the Initial Public Offering, we completed the sale of 4,509,027 warrants (the "Private Placement Warrants") at a price of $1.50 per Private Placement Warrant in a private placement to our Sponsor, generating gross proceeds of $6,763,540.50.

Following the Initial Public Offering, including the partial exercise of the over-allotment option by the underwriters' and the sale of the Private Placement Warrants, a total of $238,177,010 was placed in a trust account (the "Trust Account") and we had $1,977,519 of cash held outside of the Trust Account, after payment of certain costs related to the Initial Public Offering, and available for working capital purposes.

We incurred $13,341,815 in Initial Public Offering related costs, consisting of $4,367,540 in cash underwriting fees, $8,336,195 of deferred underwriting fees and $638,080 of other offering costs.

For the period from January 15, 2021 (inception) through December 31, 2021, cash used in operating activities was $1,197,377. Net income of $749,657 was affected by transaction costs allocated to warrant liability of $380,000, interest earned on marketable securities held in the Trust Account of $3,043 and dividend income earned on marketable securities held in the Trust Account of $8,564, and change in the fair value of the warrant liability of $3,609,996. Changes in operating assets and liabilities provided $1,294,569 of cash for operating activities.

As of December 31, 2021, we had cash and investments held in the Trust Account of $238,188,617 consisting of exchange-traded funds. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account, to complete our Business Combination. We may withdraw interest to pay franchise and income taxes. During the period ended December 31, 2021, we did not withdraw any interest earned on the Trust Account. 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 December 31, 2021, we had cash of $587,754 outside of 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.

In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor, an affiliate of the Sponsor, or our officers and directors 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, including as to exercise price, exercisability and exercise period. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. The loans would be repaid upon consummation of a Business Combination, without interest.

We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our public shares upon consummation of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our Business Combination. If we are unable to complete our Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.


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Off-Balance
Sheet Arrangements

We have no obligations, assets or liabilities, which would be considered
off-balance
sheet arrangements as of December 31, 2021. 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 an affiliate of the Sponsor a monthly fee of $10,000 for office space, utilities and secretarial and administrative support to the Company. We began incurring these fees on March 9, 2021 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination and the Company's liquidation.

Certain of the underwriters of the Initial Public Offering are entitled to a deferred fee of $0.35 per Unit, or $8,336,195 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. The underwriters did not receive any upfront underwriting discount or commissions on the 1,980,000 Units purchased by the members of our Sponsor that are affiliated with Pacific Investment Management Company LLC, but will receive deferred underwriting commissions with respect to such Units.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America 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 Liability



We account for the warrants issued in connection with our Initial Public
Offering in accordance with the guidance contained in Accounting Standards
Codification ("ASC") 815 "Derivatives and Hedging" under which the warrants do
not meet the criteria for equity treatment and must be recorded as liabilities.
Accordingly, we classify the warrants as liabilities at their fair value and
adjust the warrants to fair value at each reporting period. This liability is
subject to
re-measurement
at each balance sheet date until exercised, and any change in fair value is
recognized in our statement of operations. The initial fair value of the
warrants was estimated using the binomial lattice method.

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 Codification ("ASC") Topic 480 "Distinguishing Liabilities from Equity." Shares of Class A common stock subject to mandatory redemption is classified as a liability instrument and is 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 as temporary equity, outside of the stockholders' deficit section of our balance sheet.

Net Income (Loss) per Common Share

Net income (loss) per share of common stock is computed by dividing net 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.

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 financial statements.

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