What changed in this filing

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Item 1. Financial Statements

2022-08-15 compared with 2022-05-16 · 117 added, 68 removed, 330 unchanged (36% of the section changed)

2 unchanged sentences

CONDENSED BALANCE SHEETS

June 30, 2022

Current assets:

3 unchanged sentences

Marketable securities held in Trust Account

Prepaid expenses - current

Prepaid expenses -non-current

LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT

2 unchanged sentences

Accounts payable

Due to related party

Accrued offering costs

30 unchanged sentences

CONDENSED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2022 (UNAUDITED)

For the Period

April 13, 2021

Insurance expense

Formation and offering costs

Administrative expense

Legal and accounting expense

Legal and accounting expenses

Franchise tax expense

1 unchanged sentence

Loss from operations

Other income:

Change in fair value of warrant liability

Unrealized gain on marketable securities held in Trust Account

Net income (loss)

Weighted average shares outstanding of redeemable Class A common stock

1 unchanged sentence

Weighted average shares outstanding of non-redeemable Class B common stock

Basic and diluted net loss per share, non-redeemable Class B common stock

Basic and diluted net income (loss) per share, non-redeemable Class B common stock

The accompanying notes are an integral part of the financial statements.

SOUTHPORT ACQUISITION CORPORATION

CONDENSED STATEMENT OF CHANGES IN COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2022 (UNAUDITED)

CONDENSED STATEMENT OF CHANGES IN COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ EQUITY (DEFICIT)

THREE AND SIX MONTHS ENDED JUNE 30, 2022

Class A common stock

9 unchanged sentences

( 13,908,166 )

Remeasurement of Class A common stock subject to possible redemption

Balance – June 30, 2022 (unaudited)

( 10,848,512 )

( 10,847,937 )

FOR THE PERIOD FROM APRIL 13, 2021 (INCEPTION) THROUGH JUNE 30, 2021

Class A common stock

Subject to possible

Class B common stock

Stockholders’

Balance – April 13, 2021 (inception)

Issuance of Class B common stock to Sponsor

Balance – June 30, 2021 (unaudited)

The accompanying notes are an integral part of the financial statements.

1 unchanged sentence

CONDENSED STATEMENT OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2022 (UNAUDITED)

For the Period

April 13, 2021

Cash Flows Used in Operating Activities:

Net income (loss)

Adjustments to reconcile net loss to net cash used in operating activities:

10 unchanged sentences

Cash Flows from Financing Activities:

Due from related party

Proceeds from issuance of Class B common stock to Sponsor

Repayment of amounts due from related party

Payments made by related party on behalf of the Company

Net cash provided by financing activities

9 unchanged sentences

Description of Organization and Business Operations

Southport Acquisition Corporation.

(the “Company”) is a blank check company formed in Delaware on April 13, 2021.

Southport Acquisition Corporation (the “Company”) is a blank check company formed in Delaware on April 13, 2021.

The Company was formed 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 (the “Business Combination”).

The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

As of March 31, 2022, the Company had not yet commenced any operations.

All activity for the three months ended March 31, 2022 and for the period April 13, 2021 (inception) through December 31, 2021 relates to the Company’s formation, initial public offering (the “IPO”), and pursuit of a target company to effect a business combination.

As of June 30, 2022, the Company had not yet commenced any operations.

All activity for the three and six months ended June 30, 2022 and for the period April 13, 2021 (inception) through December 31, 2021 relates to the Company’s formation, initial public offering (the “IPO”), and pursuit of a target company to effect a business combination.

The Company has selected December 31 as its fiscal year end.

7 unchanged sentences

Risks and Uncertainties

Management is currently evaluating the impact of the COVID-19 pandemic, the Russia-Ukraine war and the recent proposal by the Securities and Exchange Commission (the “SEC”) for new rules and amendments affecting special purpose acquisition corporations like the Company and has concluded that while it is reasonably possible that such matters could have a negative effect on the Company’s financial position, cash flows, results of its operations and/or search for a target company, the specific impacts are not readily determinable as of March 31, 2022.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Going Concern

As of March 31, 2022 and December 31, 2021, the Company had cash of $ 531,095 and $ 1,950,543 , respectively, and working capital of $ 407,302 and $ 1,010,298 , respectively.

As of June 30, 2022 and December 31, 2021, the Company had cash of $ 472,622 and $ 1,950,543 , respectively, and working capital of $ 139,063 and $ 1,010,298 , respectively.

The Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of time within one year after the date that these financial statements are issued.

Management plans to

address this uncertainty through working capital loans whereby, the Sponsor, an affiliate of the Sponsor, or the Company’s officers and directors can, but are not obligated to, loan the Company funds as may be required (see Note 5).

However, there is no assurance that the Company’s plans to raise capital or to consummate a Business Combination will be successful or successful within the Combination Period.

These conditions raise substantial doubt about the Company’s ability to continue as a going

concern for a period of time within one year after the date that these financial statements are issued.

Management plans to address this uncertainty through working capital loans whereby, the Sponsor, an affiliate of the Sponsor, or the Company’s officers and directors can, but are not obligated to, loan the Company funds as may be required (see Note 5).

However, there is no assurance that the Company’s plans to raise capital or to consummate a Business Combination will be successful within the Combination Period.

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern one year from the date the financial statements are issued.

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The financial information as of December 31, 2021 is derived from the audited financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

The interim results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any future interim periods.

The interim results for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any future interim periods.

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable.

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The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.

The Company had $ 531,095 and $ 1,950,543 of cash and no cash equivalents as of March 31, 2022 and December 31, 2021, respectively.

The Company had $ 472,622 and $ 1,950,543 of cash and no cash equivalents as of June 30, 2022 and December 31, 2021, respectively.

Marketable Securities Held in Trust Account

7 unchanged sentences

Offering Costs Associated with IPO

The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A— “Expenses of Offering”.

The Company complies with the requirements of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A—“Expenses of Offering”.

Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the IPO.

6 unchanged sentences

GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for

identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

These tiers include:

7 unchanged sentences

Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

As of March 31, 2022, derivative liabilities are comprised of the warrant liability of $ 6,364,000 .

As of June 30, 2022, derivative liabilities are comprised of the warrant liability of $ 2,937,000 .

Warrant Liability

4 unchanged sentences

Common Stock Subject to Possible Redemption

The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification ("ASC") Topic 480 "Distinguishing Liabilities from Equity."

Common stock subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value.

The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value.

Conditionally redeemable common stock (including common stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity.

1 unchanged sentence

The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events.

Accordingly, at March 31, 2022, 23,000,000 shares of Class A common stock subject to possible redemption is presented, at redemption value, as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet.

Accordingly, at June 30, 2022, 23,000,000 shares of Class A common stock subject to possible redemption is presented, at redemption value, as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet.

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period.

Such changes are reflected in additional paid-in capital, or in the absence of additional capital, in accumulated deficit.

For the three months ended March 31, 2022, the Company has recorded accretion of $ 22,304 to remeasure the value of Class A common stock subject to possible redemption to $ 234,622,994 .

For the three and six months ended June 30, 2022, the Company has recorded accretion of $ 310,960 and $ 333,264 , respectively, to remeasure the value of Class A common stock subject to possible redemption value of $ 234,933,954 .

The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes.

Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect

taxable income.

Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

2 unchanged sentences

The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense.

There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2022.

There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2022.

The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

The provision for income taxes was deemed to be de minimis for the three months ended March 31, 2022.

The provision for income taxes was deemed to be de minimis for the three and six months ended June 30, 2022.

Net Income Per Common Stock

4 unchanged sentences

For purposes of calculating net income per share, any remeasurement of the Class A common stock subject to possible redemption was treated as dividends paid to the public stockholders.

Subsequent to calculating the total income allocable to both sets of stock, the Company split the amount to be allocated using a ratio of 80 % for the Class A redeemable common stock and 20 % for the non-redeemable common stock for the three months ended March 31, 2022, reflective of the respective participation rights.

Subsequent to calculating the total income allocable to both sets of stock, the Company split the amount to be allocated using a ratio of 80 % for the Class A redeemable common stock and 20 % for the non-redeemable common stock for the three and six months ended June 30, 2022, reflective of the respective participation rights.

The following table reflects the calculation of basic and diluted net loss per common stock (in dollars, except per share amounts):

For the Three Months Ended

March 31, 2021

June 30, 2022

Remeasurement of Class A redeemable shares to redemption value

Net income including accretion of Class A redeemable shares to redemption value

Net income excluding accretion of Class A redeemable shares to redemption value

( 3,060,229 )

Three Months Ended

March 31, 2022

For the Three Months Ended

June 30, 2022

Total number of shares

3 unchanged sentences

Accretion applicable to Class A redeemable shares

Total income (loss) based on ownership percentage

Total income based on ownership percentage

Weighted average shares outstanding

Basic and diluted net Income (loss) per share

Basic and diluted net income per share

June 30, 2022

Remeasurement of Class A redeemable shares to redemption value

Net income excluding accretion of Class A redeemable shares to redemption value

( 13,407,766 )

For the Six Months Ended

June 30, 2022

Total number of shares

Ownership percentage

Net income allocated based on ownership percentage

Accretion allocation based on ownership percentage

Accretion applicable to Class A redeemable shares

Total income based on ownership percentage

Weighted average shares outstanding

Basic and diluted net income per share

Related Parties

3 unchanged sentences

Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $ 250,000 .

At December 31, 2021, the Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

As of June 30, 2022, the Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

Recent Accounting Pronouncements

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government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company.

As of March 31, 2022 and December 14, 2021, $ 234,622,994 and $ 234,600,000 was held in the Trust Account, respectively.

In addition, as of March 31, 2022 and December 14, 2021, $ 531,095 and $ 2,034,324 of cash was not held in the Trust Account and is available for working capital purposes, respectively.

As of June 30, 2022 and December 14, 2021, $ 234,933,954 and $ 234,600,000 was held in the Trust Account, respectively.

In addition, as of June 30, 2022 and December 14, 2021, $ 472,622 and $ 2,034,324 of cash was not held in the Trust Account and is available for working capital purposes, respectively.

Transaction costs of the IPO amounted to $ 13,935,218 consisting of $ 4,600,000 of underwriting discount, $ 8,050,000 of deferred underwriting discount and $ 1,285,218 of actual offering costs.

19 unchanged sentences

In addition, in order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Company’s Sponsor, an affiliate of the Sponsor, or the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”).

The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $ 1,500,000 of such Working Capital Loans may be convertible into warrants, at a price of $ 1.00 per warrant.

The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $ 1,500,000 of such Working Capital

Loans may be convertible into warrants, at a price of $ 1.00 per warrant.

If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company.

In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.

As of March 31, 2022, no Working Capital Loans were outstanding.

As of June 30, 2022, no Working Capital Loans were outstanding.

Due to Related Party

The Sponsor has made payments for tax payments and to vendors on behalf of the Company, totaling $ 156,550 for the three and six months ended June 30, 2022.

Administrative Support Agreement

2 unchanged sentences

Preferred stock — The Company is authorized to issue up to 1,000,000 shares of preferred stock with a par value of $ 0.0001 per share.

At March 31, 2022 and December 31, 2021, there were no preferred stock issued or outstanding.

At June 30, 2022 and December 31, 2021, there were no preferred stock issued or outstanding.

Class A common stock — The Company is authorized to issue up to 200,000,000 shares of Class A common stock with a par value of $ 0.0001 per share.

Holders of Class A common stock are entitled to one vote for each share.

At March 31, 2022 and December 31, 2021, there were 23,000,000 shares of Class A common stock issued and outstanding, subject to possible redemption.

At June 30, 2022 and December 31, 2021, there were 23,000,000 shares of Class A common stock issued and outstanding, subject to possible redemption.

Class B common stock — The Company is authorized to issue up to 20,000,000 shares of Class B, $ 0.0001 par value, common stock.

1 unchanged sentence

On May 27, 2021, the Company issued an aggregate of 7,187,500 shares of Class B common stock to the Sponsor for a purchase price of $ 25,000 .

On November 24, 2021, the Sponsor surrendered 1,437,500 shares of Class B common stock for no consideration, resulting in there being an aggregate

of 5,750,000 shares of Class B common stock outstanding.

As of March 31, 2022 and December 31, 2021, as a result of the above surrender, there were 5,750,000 shares of Class B common stock issued and outstanding.

On November 25, 2021, the Sponsor surrendered 1,437,500 shares of Class B common stock for no consideration, resulting in there being an aggregate of 5,750,000 shares of Class B common stock outstanding.

As of June 30, 2022 and December 31, 2021, as a result of the above surrender, there were 5,750,000 shares of Class B common stock issued and outstanding.

The shares of Class B common stock will automatically convert into shares of the Company’s Class A common stock at the time of the Business Combination on a one -for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like.

3 unchanged sentences

The Company accounts for 23,200,000 warrants issued in connection with the IPO ( 11,500,000 Public Warrants and the 11,700,000 Private Placement Warrants) in accordance with the guidance contained in ASC 815-40.

Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability.

Such guidance provides that because

the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability.

Accordingly, the Company classifies each warrant as a liability at its fair value.

7 unchanged sentences

The Company is not obligated to deliver any Class A common stock pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A common stock issuable upon exercise of the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available.

No Public Warrant are exercisable for cash or on a cashless basis, and the Company is not obligated to issue any shares of Class A common stock to holders seeking to exercise their Public Warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of residence of the exercising holder, or an exemption from registration is available.

No Public Warrants are exercisable for cash or on a cashless basis, and the Company is not obligated to issue any shares of Class A common stock to holders seeking to exercise their Public Warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of residence of the exercising holder, or an exemption from registration is available.

The registration statement for the IPO (the “IPO Registration Statement”) registered the sale for the shares of Class A common stock issuable upon exercise of the Public Warrants.

1 unchanged sentence

The Company will use its commercially reasonable efforts to cause such post-effective amendment or new registration statement, as the case may be, to become effective and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed, as specified in the warrant agreement.

holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption.

If a registration statement covering the shares of Class A common stock issuable upon exercise of the Public Warrants is not effective by the 60 th business day after the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption.

Redemption of warrants when the price per share of Class A common stock equals or exceeds $ 18.00 .

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Accordingly, the warrants may expire worthless.

Company’s board of directors and, (i) in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance, and (ii) without taking into account the transfer of Founder Shares or Private Placement Warrants (including if such transfer is effectuated as a surrender to the Company and subsequent reissuance by the Company) by the Sponsor in connection with such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60 % of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination on the date of the consummation of such initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s Class A common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $ 9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115 % of the higher of the Market Value and the Newly Issued Price, the $ 18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180 % of the greater of the Market Value and the Newly Issued Price and the $ 10.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to the greater of the Market Value and the Newly Issued Price.

In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $ 9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, (i) in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance, and (ii) without taking into account the transfer of Founder Shares or Private Placement Warrants (including if such transfer is effectuated as a surrender to the Company and subsequent reissuance by the Company) by the Sponsor in connection with such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60 % of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination on the date of the consummation of such initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s Class A common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $ 9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115 % of the higher of the Market Value and the Newly Issued Price, the $ 18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180 % of the greater of the Market Value and the Newly Issued Price and the $ 10.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to the greater of the Market Value and the Newly Issued Price.

The Private Placement Warrants are identical to the Public Warrants included in the Units sold in the IPO, except that the Private Placement Warrants and the shares of common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or saleable until 30 days after the completion of a Business Combination, subject to certain limited exceptions.

2 unchanged sentences

If a tender offer, exchange or redemption offer shall have been made to and accepted by the holders of the Class A common stock and upon completion of such offer, the offeror owns beneficially more than 50% of the outstanding Class A common stock, the holder of the warrant shall be entitled to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a stockholder if such warrant had been exercised, accepted such offer and all of the Class A common stock held by such holder had been purchased pursuant to the offer.

If less than 70% of the consideration receivable by the holders of the Class A common stock in the applicable event is payable in the form of common equity in the successor entity that is listed on a national securities exchange or is quoted in an established over-the-counter market, and if the holder of the warrant properly exercises the warrant within thirty days following the public disclosure of the consummation of the applicable event by the Company, the warrant exercise price shall be reduced by an amount equal to the difference (but in no event less than zero) of (i) the warrant price in effect prior to such reduction minus (ii) (A) the Per Share Consideration (as defined in the warrant agreement) minus (B) the value of the warrant based on the Black-Scholes Warrant Value for a Capped American Call on Bloomberg Financial Markets.

If less than 70% of the consideration receivable by the holders of the

Class A common stock in the applicable event is payable in the form of common equity in the successor entity that is listed on a national securities exchange or is quoted in an established over-the-counter market, and if the holder of the warrant properly exercises the warrant within thirty days following the public disclosure of the consummation of the applicable event by the Company, the warrant exercise price shall be reduced by an amount equal to the difference (but in no event less than zero) of (i) the warrant price in effect prior to such reduction minus (ii) (A) the Per Share Consideration (as defined in the warrant agreement) minus (B) the value of the warrant based on the Black-Scholes Warrant Value for a Capped American Call on Bloomberg Financial Markets.

The Company expects to account for the Public Warrants and Private Placement Warrants as liabilities in accordance with the guidance contained in ASC 815-40, “Derivatives and Hedging—Contracts in Entity’s Own Equity”.

22 unchanged sentences

Recurring Fair Value Measurements

At March 31, 2022, the Company’s warrant liability was valued at $ 6,364,000 .

At June 30, 2022, the Company’s warrant liability was valued at $ 2,937,000 .

Under the guidance in ASC 815-40, the Public Warrants and the Private Placement Warrants do not meet the criteria for equity treatment.

As such, the Public Warrants and the Private Placement Warrants must be recorded on the balance sheet at fair value.

As such, the Public Warrants and the Private

Placement Warrants must be recorded on the balance sheet at fair value.

This valuation is subject to re-measurement at each balance sheet date.

With each re-measurement, the valuations will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations.

The following table presents fair value information as of March 31, 2022, of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

The following table presents fair value information as of June 30, 2022, of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

The Company’s warrant liability is based on a valuation model utilizing management judgment and pricing inputs from observable and unobservable markets with less volume and transaction frequency than active markets.

Significant deviations from these estimates and inputs could result in a material change in fair value.

The fair value of the warrant liability is classified within Level 3 of the fair value hierarchy.

The Company transferred the fair value of the Public Warrant liability from Level 3 to Level 1 of the fair value hierarchy as the Company’s Public Warrants detached and commenced separate public trading (PORT.W) on the New York Stock Exchange on January 31, 2022.

The fair value of the Private Placement Warrant liability was transferred from Level 3 to Level 2 of the fair value hierarchy as they are identical to the Public Warrants.

The following table sets forth by level within the fair value hierarchy the Company’s assets and liabilities that were accounted for at fair value on a recurring basis:

2 unchanged sentences

Private Placement Warrants

The following table sets forth the changes in Level 3 fair value instruments for the six months ended June 30, 2022:

Private Placement

Total Level 3

Financial Instruments

Balance at December 31, 2021

Changes in fair value

( 7,256,000 )

( 7,023,000 )

( 14,279,000 )

Transfers out of Level 3

( 1,265,000 )

( 1,672,000 )

( 2,937,000 )

Balance at June 30, 2022

The Company established the initial fair value for the warrants on December 14, 2021, the date of the consummation of the Company’s IPO.

The Company used a Black-Scholes-Merton formula to value the warrants.

The Company allocated the proceeds received from (i) the sale of Units (which is inclusive of one share of Class A common stock and one-half of one Public Warrant),

(ii) the sale of Private Placement Warrants, and (iii) the issuance of Class B common stock, first to the warrants based on their fair values as determined at initial measurement, with the remaining proceeds allocated to Class A common stock subject to possible redemption (temporary equity), Class A common stock (permanent equity) and Class B common stock (permanent equity) based on their relative fair values at the initial measurement date.

As of March 31, 2022, the public warrants detached from the Units and are separately tradable on the New York Stock Exchange (PORT.WS).

The closing price of the public warrants was utilized in determining the fair value of the public warrants as of March 31, 2022.

The key inputs into the lattice model and Monte Carlo simulation model formula were as follows at March 31, 2022:

The Company allocated the proceeds received from (i) the sale of Units (which is inclusive of one share of Class A common stock and one-half of one Public Warrant), (ii) the sale of Private Placement Warrants, and (iii) the issuance of Class B common stock, first to the warrants based on their fair values as determined at initial measurement, with the remaining proceeds allocated to Class A common stock subject to possible redemption (temporary equity), Class A common stock (permanent equity) and Class B common stock (permanent equity) based on their relative fair values at the initial measurement date.

As of June 30, 2022, the public warrants have detached from the Units and are separately tradable on the New York Stock Exchange (PORT.W).

The closing price of the public warrants was utilized in determining the fair value of the public warrants as of June 30, 2022.

The key inputs into the lattice model and Monte Carlo simulation model formula were as follows at June 30, 2022:

Common stock price

9 unchanged sentences

Dividend yield

During the three months ended March 31, 2022, the Company did not record any income tax benefits for the net operating losses incurred due to the uncertainty of realizing a benefit from those items.

During the three and six months ended June 30, 2022, the Company did not record any income tax benefits for the net operating losses incurred due to the uncertainty of realizing a benefit from those items.

The Company has evaluated the positive and negative evidence bearing upon its ability to realize its deferred tax assets, which primarily consist of net operating loss carryforwards.

The Company considered the history of cumulative net losses, estimated future taxable income and prudent and feasible tax planning strategies, and have concluded that it is more likely than not that the Company will not realize the benefits of its deferred tax assets.

As such, the Company recorded a full valuation allowance against net deferred tax assets as of March 31, 2022 and December 31, 2021.

As such, the Company recorded a full valuation allowance against net deferred tax assets as of June 30, 2022 and December 31, 2021

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements