What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-05-19 compared with 2021-11-22 · 50 added, 29 removed, 65 unchanged (55% of the section changed)

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Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected.

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Proposed Business Combination

On October 20, 2021, the Company entered into the Merger Agreement with Merger Sub, TMTG, the Sponsor in the capacity as the representative for certain stockholders of the Company, and TMTG’s Chief Legal Officer, in the capacity as the representative for stockholders of TMTG.

The Company entered into the Merger Agreement, dated as of October 20, 2021 (as amended by the First Amendment to Agreement and Plan of Merger, dated May 11, 2022, and as it may be further amended or supplemented from time to time) with Merger Sub, TMTG, the Sponsor in the capacity as the representative for certain stockholders of the Company, and TMTG’s General Counsel, in the capacity as the representative for stockholders of TMTG.

Subject to the terms and conditions set forth therein, (i) upon the consummation of the transactions contemplated by the Merger Agreement (the “Closing”), Merger Sub will merge with and into TMTG (the “Merger” and, together with the other transactions contemplated by the Merger Agreement, the “Transactions”), with TMTG continuing as the surviving corporation in the Merger and a wholly-owned subsidiary of the Company.

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At the Closing, the Company will change its name to “Trump Media & Technology Group Corp.”.

The aggregate Merger Consideration to be paid pursuant to the Merger Agreement to the TMTG Stockholders as of immediately prior to the Effective Time will be an amount equal to $875,000,000, subject to adjustments for TMTG’s closing debt, net of cash and unpaid transaction expenses, plus the additional contingent right to receive certain earnout shares after the Closing.

The Merger Consideration to be paid to TMTG Stockholders will be paid solely by the delivery of new shares of the Company’s common stock, with each valued at the price per share at which each share of the Company’s common stock is redeemed or converted pursuant to the redemption by the Company of its public stockholders in connection with the Company’s initial Business Combination, as required by the Company’s Amended and Restated Certificate of Incorporation and by-laws and the Company’s Initial Public Offering prospectus.

and the Company’s Initial Public Offering prospectus.

The Merger Consideration will be subject to a post-Closing true up 90 days after the Closing.

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Under the Voting Agreement, the TMTG Stockholder agreed to vote all of his shares of TMTG Stock in favor of the Merger Agreement and related transactions and to otherwise take certain other actions in support of the Merger Agreement and related transactions and the other matters submitted to the TMTG Stockholders for their approval.

Upon Closing, (i) certain senior executive officers of TMTG who own shares of TMTG and (ii) stockholders of TMTG who own more than 10% of the issued and outstanding shares of TMTG Stock immediately prior to the Effective Time (each, a “Significant Stockholder”) shall entered into a Lock-Up Agreement with the Company and the Sponsor (each, a “Lock-Up Agreement”).

Pursuant to the Lock-Up Agreement, with respect to the shares received as merger consideration, each Significant Stockholder shall agree not to, during the period commencing from the Closing and ending on the earliest of (a) the six-month anniversary of the Closing, (b) the date on which the closing price of the Company’s common stock equals or exceeds $12.00 per share for any 20 trading days within any 30 trading day period commencing at least 150 days after the Closing and (c) the date that the Company consummates a liquidation, merger, share exchange or other similar transaction with an unaffiliated third party that results in all of the Company stockholders having the right to exchange their equity holdings in the Company for cash, securities or other property:

Agreement with the Company and the Sponsor (each, a “Lock-Up

Pursuant to the Lock-Up

Agreement, with respect to the shares received as merger consideration, each Significant Stockholder shall agree not to, during the period commencing from the Closing and ending on the earliest of (a) the six-month

anniversary of the Closing, (b) the date on which the closing price of the Company’s common stock equals or exceeds $12.00 per share for any 20 trading days within any 30 trading day period commencing at least 150 days after the Closing and (c) the date that the Company consummates a liquidation, merger, share exchange or other similar transaction with an unaffiliated third party that results in all of the Company stockholders having the right to exchange their equity holdings in the Company for cash, securities or other property:

(i) lend, offer, pledge, hypothecate, encumber, donate, assign, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any restricted securities, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the restricted securities, or (iii) publicly disclose the intention to do any of the foregoing.

The Merger Agreement and related agreements are further described in the Form 8-K, filed by the Company on October 26, 2021.

The Company intends to file with the SEC a registration statement on Form S-4 (as amended, the “Form S-4”), which will include a preliminary proxy statement of the Company, and a prospectus in connection with the proposed Transactions.

For additional information regarding the Merger Agreement and the Transactions contemplated therein, including a discussion of risks and uncertainties associated with the Merger and TMTG, please see the Form S-4 which the company intends to file after the filing of this Quarterly Report.

The Merger Agreement and related agreements are further described in the registration statement on Form S-4

(as amended, the “Form S-4”),

which was filed with the SEC on May 16, 2022 and includes a preliminary proxy statement of the Company, and a prospectus in connection with the proposed Transactions.

which was initially filed with the SEC on May 16, 2022.

Results of Operations

We have neither engaged in any operations nor generated any revenues to date.

Our only activities from inception through September 30, 2021 were organizational activities and those necessary to prepare for the Initial Public Offering and the search for targets for our initial Business Combination, including the proposed Merger with TMTG.

Our only activities from inception through March 31, 2022 were organizational activities and those necessary to prepare for the Initial Public Offering and the search for targets for our initial Business Combination, including the proposed Merger with TMTG.

We do not expect to generate any operating revenues until after the completion of our initial Business Combination.

We expect to generate non-operating income in the form of interest income on marketable securities held after the Initial Public Offering.

We incur expenses as a result of being a public company (for

legal, financial reporting, accounting and auditing compliance), as well as for due diligence in connection with our search for targets for our initial Business Combination.

For the three months ended September 30, 2021, we had a net loss of $159,170, which consists primarily of franchise tax expense of $149,042.

For the nine months ended September 30, 2021, we had a net loss of $160,395, which consists primarily of franchise tax expense of $149,042.

We generate non-operating

income in the form of interest income on marketable securities held in the Trust Account.

We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence in connection with our search for targets for our initial Business Combination.

For the three months ended March 31, 2022, we had a net loss of $1,884,389, which consists primarily of general and administrative costs of $1,863,920.

For the three months ended March 31, 2021, we had a net loss of $485, which consists of general and administrative costs of $485.

Liquidity and Capital Resources

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We incurred $15,668,029 in transaction costs, including $3,593,750 of underwriting fees, $10,062,500 of deferred underwriting fees, fair value of representative shares of $1,437,500 and $574,279 of other offering costs.

For the nine months ended September 30, 2021, cash provided by operating activities was $52,820.

Net loss of $160,395 was offset by changes in franchise tax payable and accrued expenses.

As of September 30, 2021, we had cash of $293,250,902 held in the Trust Account.

For the three months ended March 31, 2022, net decrease in cash was $286,239 and was comprised of net cash used in operating activities of $586,239 and net cash provided by financing activities of $300,000.

Net cash used in operating activities of $586,239 consisted of a net loss of $1,884,389 partially offset by a change in accrued expenses of $1,281,263.

Net cash provided by financing activities of $300,000

consisted of proceeds from working capital loans.

For the three months ended March 31, 2021, net increase in cash was $25,000 and was comprised of net cash provided by financing activities of $25,000.

Net cash provided by financing activities of $25,000 consisted of proceeds from issuance of Class B common stock to Sponsor.

As of March 31, 2022, we had cash of $293,286,629 held in the Trust Account.

We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account to complete our initial Business Combination.

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To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

As of September 30, 2021, we had cash of $1,494,632 outside of the Trust Account.

As of March 31, 2022, we had cash of $41,492 outside of the Trust Account.

We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.

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In the event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, but no proceeds from our Trust Account would be used for such repayment.

Up to $1,500,000 of such loans may be convertible into units, at a price of $10.00 per unit, at the option of the lender.

Initially up to $1,500,000 of such loans may be convertible into units, at a price of $10.00 per unit, at the option of the lender.

The amount of such loans that can be converted to Working Capital Units has subsequently been increased to $30,000,000.

The units would be identical to the Placement Units.

In November 2021, our Sponsor committed to provide loans of up to an aggregate of $1,000,000 to the Company through September 8, 2022, which loans will be non-interest bearing, unsecured and will be payable upon the the consummation of a Business Combination.

We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business.

However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination.

In November 2021, our Sponsor committed to provide loans of up to an aggregate of $1,000,000 to the Company through September 8, 20 22 (or up to March 8, 2023 if the Company extends the maximum time to complete a Business Combination), wh

ich loans will be non-interest

bearing, unsecured and will be payable upon the consummation of a Business Combination.

At March 31, 2022, $300,000 was outstanding under this commitment.

We believe we will need to raise additional funds in order to meet the expenditures required for operating our business.

Additionally, if our estimate of the costs of identifying a target business, undertaking in-depth

due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination.

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

Subject to compliance with

applicable securities laws, we would only complete such financing simultaneously with the completion of our Business Combination.

Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our Business Combination.

If we are unable to complete our Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account.

In addition, following our Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

Over this time period, the Company will be using the funds held outside of the Trust Account for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of September 30, 2021.

Management believes that the Company has sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a Business Combination or September 8, 2022 (or up to March 8, 2023 if the Company extends the maximum time to complete a Business Combination), the liquidation date should a Business Combination not be consummate.

Over this time period, the Company will be using the funds held outside of the Trust Account and additional funds it will need to raise for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.

The Company has until September 8, 2022 (or up to March 8, 2023 if the Company extends the maximum time to complete a Business Combination) to consummate a Business Combination.

It is uncertain that the Company will be able to consummate a Business Combination by this time.

If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company.

Additionally, the Company has incurred and expects to incur significant costs in pursuit of its acquisition plans.

The Company lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the date of the issuance of the financial statements.

As a result, these factors raise substantial doubt about the Company’s ability to continue as a going concern.

Sheet Arrangements

We did not have any off-balance

sheet arrangements as of March 31, 2022.

Contractual Obligations

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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