What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-14 compared with 2022-08-15 · 25 added, 35 removed, 95 unchanged (39% of the section changed)

14 unchanged sentences

Risk Factors” in our annual report on Form 10-K for the fiscal year ended December 31, 2021 filed with the U.S.

Securities and Exchange Commission (the “SEC”).

Securities and Exchange Commission (the “SEC”) and the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.

The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov.

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The net proceeds deposited into the Trust Account remain on

deposit in the Trust Account earning interest and are available for a business combination, assuming no redemptions, after payment of $8,050,000 of deferred fees, before fees and expenses associated with our initial business combination.

deposit in the Trust Account earning interest and are available for a business combination, assuming no redemptions, before fees and expenses associated with our initial business combination.

Except with respect to interest earned on the funds held in the Trust Account that may be released to us to pay our tax obligations (less up to $100,000 of interest to pay dissolution expenses), the proceeds deposited in the Trust Account will not be released from the Trust Account until the earliest of (a) the completion of our initial business combination, (b) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to provide our public stockholders the right to have their public shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by June 14, 2023 or during any extended time we have to consummate our initial business combination beyond June 14, 2023 as a result of a stockholder vote to amend our amended and restated certificate of incorporation (an “Extension Period”) or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, and (c) the redemption of all of our public shares if we are unable to complete our initial business combination by June 14, 2023 or during any Extension Period, subject to applicable law.

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government treasury obligations.

As of June 30, 2022, we 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 our formation, our IPO and our pursuit of a target company with which to effect our initial business combination.

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

All activity for the three and nine months ended September 30, 2022 and for the period April 13, 2021 (inception) through December 31, 2021 relates to our formation, our IPO and our pursuit of a target company with which to effect our initial business combination.

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

Results of Operations and Known Trends or Future Events

Our entire activity from inception through June 30, 2022 relates solely to our formation, our IPO and, since the closing of our IPO, a search for a business combination candidate.

Our entire activity from inception through September 30, 2022 relates solely to our formation, our IPO and, since the closing of our IPO, a search for a business combination candidate.

We have not generated any operating revenues to date, and we will not generate any operating revenues until after completion of our initial business combination.

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We have incurred and expect to continue to incur increased 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 three months ended June 30, 2022, we had net income of $3,371,189, which consisted of a $3,427,000 gain on the change in fair value of warrant liabilities and a $310,960 unrealized gain on marketable securities held in the Trust Account, offset by $83,098 in legal and accounting expenses, $49,863 of franchise tax expense, $129,063 of insurance expense, $90,124 of listing fees, and $14,623 of administrative expenses and bank fees expenses.

For the six months ended June 30, 2022, we had net income of $13,741,030, which consisted of a $14,279,000 gain on the change in fair value of warrant liabilities and a $333,264 unrealized gain on marketable securities held in the Trust Account, offset by $347,128 in legal and accounting expenses, $99,178 of franchise tax expense, $258,125 of insurance expense, $90,124 of listing fees, and $76,679 of administrative expenses and bank fees expenses.

For the three months ended September 30, 2022, we had net income of $1, 306,458, which consisted of a $593,000 gain on the change in fair value of warrant liabilities, a $657,605 unrealized gain on marketable securities held in the Trust Account, and $408,362 of dividend income on marketable securities held in the Trust Account, offset by $82,705 in legal and accounting expenses, $50,411 of franchise tax expense, $129,063 of insurance expense, $63,750 of listing fees, and $26,581 of administrative expenses and bank fees expenses.

For the nine months ended September 30, 2022, we had net income of $15, 047,487, which consisted of a $14,872,000 gain on the change in fair value of warrant liabilities, a $990,869 unrealized gain on marketable securities held in the Trust Account, and $408,362 of dividend income on marketable securities held in the Trust Account, offset by $429,833 in legal and accounting expenses, $149,589 of franchise tax expense, $387,189 of insurance expense, $153,874 of listing fees, and $101,395 of administrative expenses and bank fees expenses.

Liquidity and Capital Resources

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

We expect to use our working capital primarily for legal and accounting fees related to our regulatory reporting requirements, fees for office space, utilities, and secretarial and administrative services, continued listing fees on the New York Stock Exchange (“NYSE”), and for expenses in connection with identifying and evaluating target businesses, performing business due diligence on prospective target businesses, travelling to and from the offices or similar locations of prospective target businesses or their representatives or owners, reviewing corporate documents and material agreements of prospective target businesses and structuring, negotiating and completing a business combination.

Specifically, we expect that our primarily liquidity requirements over the next 12 months from June 30, 2022 will include, among other things, approximately $180,000 for office space, utilities, and secretarial and administrative services pursuant to our agreement with our sponsor to pay our sponsor $15,000 per month for these services until our initial business combination or liquidation;

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

representatives or owners, reviewing corporate documents and material agreements of prospective target businesses and structuring, negotiating and completing a business combination.

Specifically, we expect that our primarily liquidity requirements over the next 12 months from September 30, 2022 will include, among other things, approximately $180,000 for office space, utilities, and secretarial and administrative services pursuant to our agreement with our sponsor to pay our sponsor $15,000 per month for these services until our initial business combination or liquidation;

$300,000 for legal, accounting, due diligence, travel and other expenses in connection with any business combination;

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These warrants would be identical to the private placement warrants.

These conditions raise substantial doubt about our ability to continue as a going concern for a period of time within 12 months from June 30, 2022.

These conditions raise substantial doubt about our ability to continue as a going concern for a period of time within 12 months from September 30, 2022.

Moreover, we may need to obtain additional financing either to complete our initial business combination or because we become obligated to redeem a significant number of our public shares upon completion of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination.

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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 June 30, 2022 or December 31, 2021.

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of September 30, 2022 or 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.

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Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities as of June 30, 2022 or December 31, 2021.

Pursuant to the underwriting agreement for our IPO, the underwriter of our IPO is entitled to a deferred fee of $0.35 per unit, or $8,050,000 in the aggregate.

The deferred fee will become payable to the underwriter 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.

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities as of September 30, 2022 or December 31, 2021.

Pursuant to the underwriting agreement for our IPO, the underwriter of our IPO 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 we complete a business combination, subject to the terms of the underwriting agreement.

However, 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.

We have entered into a letter agreement with our sponsor pursuant to which we are required to pay our sponsor a total of $15,000 per month for office space, utilities, and secretarial and administrative services, commencing on December 10, 2021, the date that our securities were first listed on the NYSE, through the earlier of our initial business combination and our liquidation.

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

Critical Accounting Policies and Estimates

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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 $22,304 and $333,264 to remeasure the value of Class A common stock subject to possible redemption to $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 to remeasure the value of Class A common stock subject to possible redemption to $235,999,921.

Warrant Liability

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The warrants are subject to remeasurement at each balance sheet date and any change in fair value is recognized as a component of other income (expense), net on the statement of operations.

The Company will continue to adjust the

liability for changes in fair value until the earlier of the exercise or expiration of the common stock warrants.

The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the common stock warrants.

At that time, the portion of the warrant liability related to the common stock warrants will be reclassified to additional paid-in capital.

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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.

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.

Recent Accounting Pronouncements

In March 2020, FASB issued ASU No.

2020-03, Codification Improvements to Financial Instruments.

This ASU improves and clarifies various financial instruments topics, including the current expected credit losses standard issued in 2016 (ASU No.

The ASU includes seven different issues that describe the areas of improvement and the related amendments to GAAP, intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications.

The amendments have different effective dates.

The issues 1-5 are conforming amendments, which are effective upon issuance of this final update.

The Company determined that issues 1-5 have no impact on its financials.

The amendments related to issue 6 and 7 effect ASU No.

2016- 13, Financial instruments – credit losses (Topic 326):

measurement of credit losses on financial statements.

Effective dates of issue 6 and 7 are the same as the effective date of ASU No.

The Company will adopt the new standard in the first quarter of fiscal year 2023.

In August 2020, the FASB issued ASU No.

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ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted.

The Company is currently assessing the impact, if any, that ASU 2020-03 and ASU 2020-06 would have on its financial position, results of operations or cash flows.

The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows.

Our management does not believe that there are any other recently issued, but not yet effective, accounting pronouncements, that if currently adopted, would have a material effect on our balance sheet.

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 2. Management’s Discussion and Analysis