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Risk Factors” and elsewhere in this Annual Report.
−Removed: We are a blank check company incorporated in Delaware on February 1, 2021 formed for the purpose of effecting a merger, stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.
+Added: We are a blank check company incorporated in Delaware on February 1, 2021 for the purpose of effecting a merger, stock exchange, asset acquisition, stock purchase, reorganization or similar Business Combination with one or more businesses.
We intend to effectuate our Business Combination using cash derived from the proceeds of the Initial Public Offering and the sale of the Private Placement Shares, our shares, debt or a combination of cash, shares and debt.
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We have neither engaged in any operations nor generated any revenues to date.
−Removed: Our only activities from February 1, 2021 (inception) through December 31, 2021 were organizational activities, those necessary to prepare for the Initial Public Offering, described below, and subsequent to the Initial Public Offering, identifying a target company for a business combination.
+Added: Our only activities from February 1, 2021 (inception) through December 31, 2022 were organizational activities, those necessary to prepare for the Initial Public Offering, described below, and subsequent to the Initial Public Offering, identifying a target company for our Business Combination.
We do not expect to generate any operating revenues until after the completion of our Business Combination.
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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 expenses.
+Added: For the year ended December 31, 2022, we had a net income of $3,925,770, which consisted of interest earned on marketable securities held in Trust Account of $7,277,660 and unrealized gain on marketable securities held in Trust Account of $68,050, offset by operational costs of $1,809,484 and a provision for income taxes of $1,474,356.
For the period from February 1, 2021 (inception) through December 31, 2021, we had net loss of $1,056,706, which consists of formation and operating costs of $1,179,760 and a provision for income taxes of $2,416, offset by interest earned on marketable securities held in Trust Account of $117,677 and an unrealized gain on marketable securities held in the Trust Account of $7,793.
−Removed: Liquidity and Capital Resources
+Added: Liquidity, Capital Resources and Going Concern
On July 12, 2021, we completed the Initial Public Offering of 50,000,000 Public Shares, which includes the full exercise by the underwriters of their over-allotment option in the amount of 5,000,000 Public Shares, at $10.00 per Public Share, generating gross proceeds of $500,000,000.
Simultaneously with the closing of the Initial Public Offering, we completed the sale of 1,450,000 Private Placement Shares at a price of $10.00 per Private Placement Share in a private placement to the Sponsor, generating gross proceeds of $14,500,000.
−Removed: Following the Initial Public Offering and the sale of the private placement shares, a total of $500,000,000 was placed in the Trust Account.
+Added: Following the Initial Public Offering, the exercise of the over-allotment option and the sale of the Private Placement Shares, a total of $500,000,000 was placed in the Trust Account.
We incurred $26,652,125 of transaction costs, consisting of $8,580,000 of underwriting fees, which is net of $1,420,000 reimbursed fees from the underwriters, $17,500,000 of deferred underwriting fees and $572,125 of other offering costs.
+Added: In addition, $5,285,860 of cash was held outside of the Trust Account and available for working capital purposes.
+Added: For the year ended December 31, 2022, cash used in operating activities was $954,691.
+Added: The net income of $3,925,770 was affected by interest earned on marketable securities held in the Trust Account of $7,277,660, unrealized gain on marketable securities held in our Trust Account of $68,050 and deferred tax benefit of $294,084.
+Added: Changes in operating assets and liabilities provided $2,035,065 of cash for operating activities.
For the period from February 1, 2021 (inception) through December 31, 2021, cash used in operating activities was $1,880,180.
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Interest income on the balance in the Trust Account may be used by us to pay taxes.
−Removed: Through December 31, 2021, we have not withdrawn any interest earned from the Trust Account.
−Removed: We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less income taxes payable), to complete our Business Combination.
+Added: Through December 31, 2022, we withdrew an amount of $1,195,000 from interest earned from the Trust Account for working capital purposes and to pay income tax obligations.
+Added: We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less deferred underwriting commissions and income taxes payable), to complete our Business Combination.
To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our 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.
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In addition, following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
+Added: In connection with the Company’s assessment of going concern considerations in accordance with ASC Subtopic 205-40, Presentation of Financial Statements- Going Concern, the Company has until July 12, 2023 (or by October 12, 2023, if the Company has an executed letter of intent, agreement in principle or definitive agreement for a Business Combination by July 12, 2023) to consummate a Business Combination.
+Added: It is uncertain that the Company will be able to consummate a Business Combination by this time.
+Added: If a Business Combination is not consummated by this date and an extension not obtained by the Sponsor, there will be a mandatory liquidation and subsequent dissolution of the Company.
+Added: Management has determined that the potential mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern.
+Added: No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after July 12, 2023 (or by October 12, 2023, if the Company has an executed letter of intent, agreement in principle or definitive agreement for a Business Combination by July 12, 2023).
+Added: The Company intends to complete a Business Combination before the mandatory liquidation date.
Off-Balance Sheet Financing Arrangements
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Contractual Obligations
−Removed: We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of the Sponsor a monthly fee of $30,000 for office space, administrative and support services.
−Removed: We began incurring these fees on July 8, 2021 and will continue to incur these fees monthly until the earlier of the completion of the business combination and our liquidation.
+Added: The Company agreed, commencing on July 8, 2021 through the earlier of the Company’s consummation of a Business Combination and its liquidation, to pay an affiliate of the Sponsor a total of $30,000 per month for office space, administrative and support services.
The underwriters are entitled to a deferred fee of $0.35 per Public Share, or $17,500,000 in the aggregate.
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Actual results could materially differ from those estimates.
−Removed: We have identified the following critical accounting policies as of December 31, 2021:
−Removed: Common Stock Subject to Possible Redemption
−Removed: We account for our common stock subject to possible conversion in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and measured at fair value.
+Added: We have identified the following critical accounting policies:
+Added: Class A Common Stock Subject to Possible Redemption
+Added: We account for our Class A common stock subject to possible conversion in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Shares of Class A common stock subject to mandatory redemption is classified as a liability instrument and measured at fair value.
Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity.
At all other times, common stock is classified as stockholders’ equity.
−Removed: Our common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events.
−Removed: Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of our balance sheet.
−Removed: Net Loss Per Common Share
−Removed: Net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period.
−Removed: Accretion associated with the redeemable shares of Class A common stock is excluded from earnings per share as the redemption value approximates fair value.
+Added: Our Class A common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events.
+Added: Accordingly, Class A common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of our balance sheets.
+Added: Net Income (Loss) Per Common Share
+Added: Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period.
+Added: Remeasurement associated with the redeemable shares of Class A common stock is excluded from earnings per share as the redemption value approximates fair value.
Recent Accounting Standards
−Removed: In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments.
−Removed: ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity.
−Removed: The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity.
−Removed: ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments.
−Removed: ASU 2020-06 is effective January 1, 2024 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021.
−Removed: We adopted ASU 2020-06 effective February 1, 2021.
−Removed: The adoption of ASU 2020-06 did not have an impact on our financial statements.
−Removed: Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements.
+Added: The Company’s management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements.
Quantitative and Qualitative Disclosures about Market Risk
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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.