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Item 2. Management’s Discussion and Analysis

2023-08-10 compared with 2023-05-11 · 29 added, 12 removed, 56 unchanged (42% of the section changed)

17 unchanged sentences

We cannot assure you that our plans to complete a Business Combination will be successful.

On May 4, 2023, the Company’s stockholders approved at the special meeting of stockholders a proposal to amend the Company’s amended and restated certificate of incorporation (the “charter”) to extend the date by which the Company has to consummate a business combination from May 8, 2023 (the “Termination Date”) to November 8, 2023, or such earlier date as may be determined by the board of directors of the Company (such later date, the “Extended Date”) In connection with the votes to approve the Charter Amendment, the holders of 30,460,066 shares of Class A common stock of the Company properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.42 per share, for an aggregate redemption amount of approximately $317.39 million, leaving approximately $42.10 million in the Trust Account.

In April 2023, the Company and the Sponsor entered into Non-Redemption Agreements with a number of the Company's stockholders in exchange for them agreeing not to redeem shares of the Company's Class A common stock sold in the IPO (the "Non-Redeemed Shares") in connection with the special meeting of stockholders called by the Company and held on May 4, 2023 (described below).

In exchange for the foregoing commitments not to redeem such shares, the Sponsor has agreed to transfer to such stockholders an aggregate of 999,665 shares of the Company's Class B common stock (the "Class B shares"), par value $0.0001 per share, held by the Sponsor immediately following consummation of an initial business combination.

On May 4, 2023, the Company’s stockholders approved at the special meeting of stockholders a proposal to amend the Company’s amended and restated certificate of incorporation (the “charter”) to extend the date by which the Company has to consummate a business combination from May 8, 2023 (the “Termination Date”) to November 8, 2023, or such earlier date as may be determined by the board of directors of the Company (such later date, the “Extended Date”) In connection with the votes to approve the Charter Amendment, the holders of 30,460,066 shares of Class A common stock of the Company properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.42 per share, for an aggregate redemption amount of approximately $317,000,000, leaving approximately $42,000,000 in the Trust Account.

Results of Operations

4 unchanged sentences

government treasury bills or specified money market funds after the IPO and non-operating income or expense from the changes in the fair value of warrant liabilities and Sponsor loans.

There has been no significant

change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements.

There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements.

Until the completion of our initial business combination, we expect 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 March 31, 2023, we had net income of $1,897,057 which consisted of formation and operating costs of $326,530 and income taxes of $783,084 and a change in the fair value of the warrant liability and sponsor loans of $772,300 offset by income from investments held in Trust Account of $3,778,971.

For the three months ended March 31, 2022, we had net income of $8,177,015 which consisted of formation and operating costs of $326,655 offset by the change in the fair value of the warrant liability and sponsor loans of $8,394,500 and interest earned on investments held in the Trust Account of $109,170.

For the three months ended June 30, 2023, we had net loss of $26,989 which consisted of operating costs of $2,962,231 and income taxes of $400,600, partially offset by a change in the fair value of the warrant liability and sponsor loans of $1,378,500, income from investments held in Trust Account of $1,955,134 and income from operating bank account of $2,208.

For the three months ended June 30, 2022, we had net income of $7,379,953 which consisted of operating costs of $282,565 and income taxes of $57,969 offset by the change in the fair value of the warrant liability and sponsor loans of $7,301,500 and income from investments held in the Trust Account of $418,987.

For the six months ended June 30, 2023, we had net income of $1,870,068 which consisted of a change in the fair value of the warrant liability and sponsor loans of $606,200, income from investments held in Trust Account of $5,734,105 and income from operating bank account of $2,208, partially offset by operating costs of $3,288,761 and income taxes of $1,183,684.

For the six months ended June 30, 2022, we had net income of $15,556,968 which consisted of operating costs of $609,220 and income taxes of $57,969 offset by the change in the fair value of the warrant liability and sponsor loans of $15,696,000 and income from investments held in Trust Account of $528,157.

Liquidity and Capital Resources

3 unchanged sentences

The Sponsor Loan Warrants will be identical to the Private Placement Warrants.

As of March 31, 2023, we had available to us $376,300 of cash held outside the Trust Account.

As of June 30, 2023, we had available to us $699,150 of cash held outside the Trust Account (which included approximately $600,000 of cash withdrawn by the Company from the Trust Account to pay taxes yet to be paid and excluding excise taxes).

We will use these funds primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a business combination, and to pay taxes to the extent the interest earned on the Trust Account is not sufficient to pay our taxes.

5 unchanged sentences

The Company has until the Extended Date to consummate a Business Combination.

If a Business Combination is not consummated by this date and extension(s) are not obtained, there will be a mandatory liquidation and subsequent dissolution of the Company.

If a Business Combination is not consummated by this date and any additional extension(s) are not obtained, there will be a mandatory liquidation and subsequent dissolution of the Company.

Although the Company intends to consummate a Business Combination on or before the Extended Date, it is uncertain whether the Company will be able to consummate a Business Combination by this time.

In connection with the Company’s assessment of going concern considerations in accordance with ASC Subtopic 205-40, “Presentation of Financial Statements – Going Concern”, Management has determined that the mandatory liquidation, should a Business Combination not occur, and an extension is not obtained, and potential subsequent dissolution, as well as the potential for the Company to have insufficient funds available to operate its business prior to a Business Combination, raise substantial doubt about the Company’s ability to continue as a going concern.

No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after the Extended Date.

In connection with the Company’s assessment of going concern considerations in accordance with ASC Subtopic 205-40, “Presentation of Financial Statements – Going Concern”, Management has determined that the mandatory liquidation, should a Business Combination not occur, and an additional extension is not obtained, and potential subsequent dissolution, as well as the potential for the Company to have insufficient funds available to operate its business prior to a Business Combination, raise substantial doubt about the Company’s ability to continue as a going concern.

No adjustments have been made to the carrying amounts and classification of assets or liabilities should the Company be required to liquidate after the Extended Date.

Off-Balance Sheet Arrangements;

Commitments and Contractual Obligations

We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements as of March 31, 2023.

We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements as of June 30, 2023.

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.

6 unchanged sentences

The Company had not borrowed any amount under the promissory note.

There was no balance outstanding as of both March 31, 2023 and December 31, 2022.

There was no balance outstanding as of both June 30, 2023 and December 31, 2022.

Additionally, our underwriters are entitled to a deferred underwriting discount of $12,075,000 of the gross proceeds of the IPO held in the Trust Account upon the completion of the Company’s initial Business Combination subject to the terms of the underwriting agreement.

On March 29, 2023, the Company engaged a capital markets advisor in connection with seeking an extension for completing a business combination, a possible acquisition of a third party by merger, consolidation, acquisition of stock or assets or other business combination, and as a placement agent in connection with a private placement of debt, equity, equity-linked or convertible securities.

The Company agreed to pay the capital markets advisor a transaction fee in connection with the services provided, payable upon and subject to the Company’s consummation of an initial business combination.

The fee consists of a fixed and determinable portion and a variable portion contingent upon certain future events expected to take place upon completion of a business combination.

As of June 30, 2023, $2,500,000 was accrued for the fee as the amount was fixed and determinable.

These costs may be paid for using the proceeds of the cash available once a business combination is complete.

Critical Accounting Policies and Significant Judgments and Estimates

3 unchanged sentences

Actual results could differ significantly from the estimates made by our management.

There have been no material changes to our critical accounting policies and estimates from those disclosed in our financial statements and the related notes and other financial information included in our Form 10-K for the year ended December 31, 2022, on file with the SEC.

Non-Redemption Agreements

In April 2023, the Sponsor and certain investors (“Investors”) of the Company’s Class A common stock entered into Non-Redemption Agreements.

The Non-Redemption Agreements provide for the assignment of economic interest of an aggregate of 999,665 shares of Class B common stock of the Company held by the Sponsor to the Investors in exchange for such Investors agreeing to hold and not redeem their Class A common stock at the special meeting of stockholders held on May 4, 2023.

Pursuant to the Non-Redemption Agreements, the Sponsor has agreed to transfer to such Investors an aggregate of 999,665 Class B common stock upon the consummation of an initial Business Combination.

The Company estimated the aggregate fair value of the shares attributable to the Investors to be $884,554 or $0.88 per share.

The Company complies with the requirements of SEC Staff Accounting Bulletin (“SAB”) Topic 5(A) – “Expenses of Offering” and SAB Topic 5(T):

Miscellaneous Accounting - Accounting for Expenses or Liabilities Paid by Principal Stockholder(s).

As such, the value of the Class B common stock assigned to the Investors are recognized as offering costs and charged to shareholders’ deficit.

The value of the Class B common stock contributed by the Sponsors is reported as an increase to shareholders’ deficit.

Quantitative and Qualitative Disclosures About Market Risk

1 unchanged sentence

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