What changed in this filing

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Item 1. Financial Statements

2022-11-14 compared with 2022-08-15 · 144 added, 78 removed, 369 unchanged (38% of the section changed)

2 unchanged sentences

CONDENSED BALANCE SHEETS

June 30, 2022

September 30, 2022

Current Assets:

2 unchanged sentences

Total Current Assets

Non-Current Assets:

Marketable securities held in Trust Account

Prepaid expenses - non-current

Total Non-Current Assets

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

13 unchanged sentences

200,000,000 shares authorized;

23,000,000 shares issued and outstanding subject to possible redemption

23,000,000 shares issued and outstanding subject to possible redemption at redemption value

Stockholders’ Deficit

16 unchanged sentences

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

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

The accompanying notes are an integral part of these unaudited condensed financial statements.

SOUTHPORT ACQUISITION CORPORATION

CONDENSED STATEMENT OF OPERATIONS

CONDENSED STATEMENTS OF OPERATIONS

For the Period

April 13, 2021

September 30,

Insurance expense

5 unchanged sentences

Loss from operations

( 1,223,744 )

Other income:

Change in fair value of warrant liability

Dividend income on marketable securities held in Trust Account

Unrealized gain on marketable securities held in Trust Account

4 unchanged sentences

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.

The accompanying notes are an integral part of these unaudited condensed financial statements.

SOUTHPORT ACQUISITION CORPORATION

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

THREE AND SIX MONTHS ENDED JUNE 30, 2022

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022

Class A common stock

13 unchanged sentences

( 10,847,937 )

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

Remeasurement of Class A common stock subject to possible redemption

( 1,065,967 )

Gain on waiver of deferred underwriting fee

Balance – September 30, 2022 (unaudited)

( 2,558,021 )

( 2,557,446 )

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

Class A common stock

5 unchanged sentences

Balance – June 30, 2021 (unaudited)

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

Balance – September 30, 2021 (unaudited)

The accompanying notes are an integral part of these unaudited condensed financial statements.

SOUTHPORT ACQUISITION CORPORATION

2 unchanged sentences

April 13, 2021

September 30,

Cash Flows Used in Operating Activities:

2 unchanged sentences

Unrealized gain on marketable securities held in Trust Account

Dividend income on marketable securities held in Trust Account

Change in fair value of warrant liabilities

4 unchanged sentences

Accrued offering costs

Payments made by related party on behalf of the Company

Prepaid expenses

3 unchanged sentences

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

Receipt of amounts due from related party

Net cash provided by financing activities

5 unchanged sentences

Remeasurement of Class A common stock subject to possible redemption

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

Gain on waiver of deferred underwriting fee

The accompanying notes are an integral part of these unaudited condensed financial statements.

SOUTHPORT ACQUISTION CORPORATION

4 unchanged sentences

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 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.

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

All activity for the three and six months ended September 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 June 30, 2022.

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

Going Concern

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.

As of September 30, 2022 and December 31, 2021, the Company had cash of $ 173,387 and $ 1,950,543 , respectively, and working capital deficit of $ 213,445 and working capital of $ 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.

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).

10 unchanged sentences

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 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.

The interim results for the three and nine months ended September 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

11 unchanged sentences

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

The Company had $ 173,387 and $ 1,950,543 of cash and no cash equivalents as of September 30, 2022 and December 31, 2021, respectively.

Marketable Securities Held in Trust Account

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

As of September 30, 2022, derivative liabilities are comprised of the warrant liability of $ 2,344,000 .

Warrant Liability

8 unchanged sentences

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 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.

Accordingly, at September 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 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 .

For the three and nine months ended September 30, 2022, the Company has recorded accretion of $ 1,065,967 and $ 1,399,231 , respectively, to remeasure the value of Class A common stock subject to possible redemption value of $ 235,999,921 .

As of September 30, 2022 and December 31, 2021, the Class A common stock, classified as temporary equity in the condensed balance sheets, are reconciled in the following tables:

Gross proceeds from initial public offering

Proceeds allocated to public warrants

( 10,060,000 )

Offering costs allocated to Class A common stock subject to possible redemption

( 13,325,704 )

Remeasurement of Class A common stock subject to possible redemption

Class A common stock subject to possible redemption, December 31, 2021

Remeasurement of Class A common stock subject to possible redemption

Class A common stock subject to possible redemption, September 30, 2022

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.

4 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 June 30, 2022.

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

The provision for income taxes was deemed to be de minimis for the three and nine months ended September 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 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):

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 nine months ended September 30, 2022, reflective of the respective participation rights.

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

For the Three Months Ended

June 30, 2022

September 30, 2022

Remeasurement of Class A redeemable shares to redemption value

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

( 1,065,967 )

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

For the Three Months Ended

June 30, 2022

September 30, 2022

Total number of shares

2 unchanged sentences

Accretion allocation based on ownership percentage

( 1,065,967 )

Accretion applicable to Class A redeemable shares

2 unchanged sentences

Basic and diluted net income per share

June 30, 2022

September 30, 2022

Remeasurement of Class A redeemable shares to redemption value

( 1,399,231 )

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

For the Nine Months Ended

September 30, 2022

Total number of shares

Ownership percentage

Net income allocated based on ownership percentage

Accretion allocation based on ownership percentage

( 1,119,385 )

For the Six Months Ended

June 30, 2022

( 1,399,231 )

Accretion applicable to Class A redeemable shares

Total income based on ownership percentage

Weighted average shares outstanding

Basic and diluted net income per share

For the Three

September 30, 2021

Remeasurement of Class A redeemable shares to redemption value

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

For the Three Months Ended

September 30, 2022

Total number of shares

Ownership percentage

Net loss allocated based on ownership percentage

Accretion allocation based on ownership percentage

Accretion applicable to Class A redeemable shares

Total loss based on ownership percentage

Weighted average shares outstanding

Basic and diluted net loss per share

Period from April 13, 2021

(Inception) through

September 30, 2021

Remeasurement of Class A redeemable shares to redemption value

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

For the Three Months Ended

September 30, 2022

Total number of shares

Ownership percentage

Net income allocated based on ownership percentage

9 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.

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.

As of September 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

14 unchanged sentences

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 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.

As of September 30, 2022 and December 14, 2021, $ 235,999,921 and $ 234,600,000 was held in the Trust Account, respectively.

In addition, as of September 30, 2022 and December 14, 2021, $ 173,387 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.

9 unchanged sentences

On November 25, 2021, the Sponsor surrendered 1,437,500 shares of the Company’s Class B common stock for no consideration, resulting in there being an aggregate of 5,750,000 shares of the Company’s Class B common stock outstanding (the “Founder Shares”), up to 750,000 of which were then subject to forfeiture to the extent that the over-allotment option is not exercised in full by the underwriter for the IPO.

On December 13, 2021, the underwriter for the IPO exercised its over-allotment option in full, with the related closing of the additional 3,000,000 covered by the option occurring on December 14, 2021.

On December 13, 2021, the underwriter for the IPO exercised its over-allotment option in full,

with the related closing of the additional 3,000,000 covered by the option occurring on December 14, 2021.

Accordingly, no Founder Shares remain subject to forfeiture.

7 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 June 30, 2022, no Working Capital Loans were outstanding.

As of September 30, 2022 and December 31, 2021, 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.

The Sponsor has made tax payments and payments to various vendors on behalf of the Company.

As of September 30, 2022 and December 31, 2021, the Company owed $ 156,550 and $ 0 , respectively.

Administrative Support Agreement

Commencing on December 10, 2021 and until completion of the Company’s initial Business Combination or liquidation, the Company is required to pay the Sponsor $ 15,000 per month for administrative support and services.

The Company pays the Sponsor for rent and costs incurred under the administrative support and services agreement and waives the excess amounts under the agreement.

For the three and nine months ended September 30, 2022, the Company has paid $ 21,000 and $ 72,000 , receptively.

The Company did not pay anything under the administrative support and services agreement from April 13, 2021 (inception) through December 31, 2021.

Stockholders’ Equity

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

At September 30, 2022 and December 31, 2021, there were no shares of 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 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.

At September 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 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.

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 September 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.

11 unchanged sentences

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.

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.

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 .

17 unchanged sentences

Accordingly, the warrants may expire worthless.

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.

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”.

19 unchanged sentences

The underwriter was paid an underwriting commission of $ 4,600,000 upon the closing of the IPO.

In addition, the underwriter is entitled to a deferred fee of $ 0.35 per Unit, or $ 8,050,000 in the aggregate.

The deferred fee is payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.

In addition, the underwriter was entitled to a deferred fee of $ 0.35 per Unit, or $ 8,050,000 in the aggregate, payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.

On August 22, 2022, the underwriter delivered a letter to the Company pursuant to which the underwriter waived its entitlement to the payment of the deferred underwriting fee.

The $ 8,050,000 waived fee was recorded to accumulated deficit.

Recurring Fair Value Measurements

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

At September 30, 2022, the Company’s warrant liability was valued at $ 2,344,000 .

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 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 following table presents fair value information as of September 30, 2022 and December 31, 2021, 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.

2 unchanged sentences

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:

Cash and marketable securities held in trust account

Public Warrants

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

Derivative warrant liabilities at April 13, 2021 (inception)

Initial fair value at issuance of public and private placement warrants

Change in fair value

( 1,539,000 )

1 unchanged sentence

( 3,164,000 )

Transfers out of Level 3

Level 3 derivative warrant liabilities as of December 31, 2021

Transfer of public warrants to Level 1 measurement

( 8,521,000 )

Transfer of private warrants to Level 2 measurement

( 8,695,000 )

Balance at June 30, 2022

( 8,695,000 )

Level 3 derivative warrant liabilities as of September 30, 2022

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 at September 30, 2022 and December 31, 2021:

September 30, 2022

Marketable securities held in trust account

Public Warrants

Private Placement Warrants

December 31, 2021

Marketable securities held in trust account

Public Warrants

Private Placement Warrants

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

1 unchanged sentence

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

Exercise price

Risk-free rate of interest

Warrant to buy one share

Dividend yield

As of September 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 September 30, 2022.

The key inputs into the lattice model and Monte Carlo simulation model formula were as follows at December 31, 2021:

4 unchanged sentences

Dividend yield

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.

During the three and nine months ended September 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 June 30, 2022 and December 31, 2021

As such, the Company recorded a full valuation allowance against net deferred tax assets as of September 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