What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-18 compared with 2022-08-15 · 142 added, 80 removed, 485 unchanged (31% of the section changed)

1 unchanged sentence

Financial Statements:

Condensed Consolidated Balance Sheet as of June 30, 2022 (Unaudited) and as of December 31, 2021

Condensed Consolidated Statements of Operations for the three months ended June 30, 2022 and 2021, six months ended June 30, 2022 and 2021, and for the period from February 8, 2021 (Inception) through June 30, 2021 (Unaudited)

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2022, and for the three months ended June 30, 2021 and for the period from February 8, 2021 (Inception) through June 30, 2021 (Unaudited)

Condensed Consolidated Statement of Cash Flows for the Period from February 8, 2021 (Inception) Through June 30, 2021 (Unaudited) and for the six months ended June 30, 2022

Condensed Consolidated Balance Sheet as of September 30, 2022 (Unaudited) and as of December 31, 2021

Condensed Consolidated Statements of Operations for the three months ended September 30, 2022 and 2021, nine months ended September 30, 2022, and for the period from February 8, 2021 (Inception) through September 30, 2021 (Unaudited)

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2022, and for the three months ended September 30, 2021 and for the period from February 8, 2021 (Inception) through September 30, 2021 (Unaudited)

Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2022 and for the period from February 8, 2021 (Inception) through September 30, 2021 (Unaudited)

Notes to Condensed Consolidated Financial Statements (Unaudited)

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEET

September 30,

Current assets

6 unchanged sentences

Accrued expense

Amount due to relate parties

Income tax payable

Franchise tax payable

2 unchanged sentences

Deferred underwriter fee payable

Extension loan

Working capital loan

Extension loans

Total liabilities

1 unchanged sentence

Class A Common Stock subject to possible redemption;

11,500,000 shares at redemption value of $ 10.30 and $ 10.20 as of June 30, 2022 and December 31, 2021, respectively

11,500,000 shares at redemption value of $ 10.40 and $ 10.20 as of September 30, 2022 and December 31, 2021, respectively

Stockholders’ Deficit

22 unchanged sentences

Three Months Ended

September 30,

Formation and operating costs

6 unchanged sentences

Non-operating expense

Net income (loss) before provision for income taxes

Provision for income taxes

Net income (loss)

6 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

THREE AND SIX MONTHS ENDED JUNE 30, 2022

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022

Stockholders’

2 unchanged sentences

( 8,609,463 )

Balance — March 31, 2022 Unaudited)

Re-measurement of carrying value of Class A redeemable stock to redemption value

( 1,150,000 )

Balance — June 30, 2022 (unaudited)

( 6,614,365 )

( 6,614,018 )

Re-measurement of carrying value of Class A redeemable stock to redemption value

1 unchanged sentence

( 1,150,000 )

Balance — June 30, 2022 (unaudited)

Accretion of Class A common stocks at redemption value

Balance — September 30, 2022 (unaudited)

( 8,451,509 )

( 8,451,162 )

FOR THE THREE MONTHS ENDED JUNE 30, 2021 AND

FOR THE PERIOD FROM FEBRUARY 8, 2021 (INCEPTION) THROUGH JUNE 30, 2021

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021 AND

FOR THE PERIOD FROM FEBRUARY 8, 2021 (INCEPTION) THROUGH SEPTEMBER 30, 2021

Stockholders’

1 unchanged sentence

Issuance of Class B Common Stock to Sponsor

Balance — March 31, 2021 (unaudited)

Sale of units in Initial Public Offering, net of offering costs

13 unchanged sentences

( 9,437,946 )

Balance — September 30, 2021 (unaudited)

( 8,145,328 )

( 8,142,981 )

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

2 unchanged sentences

February 8, 2021

June 30, 2022

June 30, 2021

September 30, 2022

September 30, 2021

Cash flow from operating activities:

2 unchanged sentences

Realized and unrealized gain

Change in fair value of warrant liability

( 4,243,893 )

( 6,391,703 )

Changes in operating assets and liabilities:

2 unchanged sentences

Franchise tax payable

Change in fair value of warrant liability

( 4,357,722 )

( 5,002,911 )

Income tax payable

Net cash used in operating activities

3 unchanged sentences

( 117,300,000 )

Interest withdraw from Trust Account

Net cash used by investing activities

6 unchanged sentences

Payment of offering costs

Proceeds from extension loan

Proceeds from working capital loan

Amount due to related parties

Proceeds from extension loans

Net cash provided by financing activities

17 unchanged sentences

(“Merger Sub”), a Delaware corporation and a wholly-owned subsidiary of Data Knights Acquisition Corp., was formed.

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

All activity for the period February 8, 2021 (inception) through June 30, 2022, relates to the Company’s formation and the initial public offering (the “Initial Public Offering”), and, since the closing of the initial public offering, the Company has entered into a merger agreement (as described below), and continued a search for a Business Combination candidate.

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

All activity for the period February 8, 2021 (inception) through September 30, 2022, relates to the Company’s formation and the initial public offering (the “Initial Public Offering”), and, since the closing of the initial public offering, the Company has entered into a merger agreement (as described below), and continued a search for a Business Combination candidate.

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

7 unchanged sentences

Following the closing of the Initial Public Offering $ 959,560 of cash was held outside of the Trust Account available for working capital purposes.

As of June 30, 2022, we have available to us $ 7,480 of cash on our balance sheet and working capital deficit of $ 1,158,449 .

As of September 30, 2022, we have available to us $ 234,923 of cash on our balance sheet and working capital deficit of $ 1,218,387 .

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination.

7 unchanged sentences

Pursuant to the Merger Agreement, upon the closing (the “Closing”) of the Business Combination, the Parties will effect the merger of Merger Sub with and into the Target, with the Target continuing as the surviving entity (the “Merger”), as a result of which all of the issued and outstanding capital stock of the Target shall be exchanged shares of the Class A Common Stock of the Company upon the terms set forth in the Merger Agreement.

On May 5, 2022, the Company extended the date by which the Company has to consummate a business combination from May 11, 2022 to August 11, 2022 (the “ Extension ”).

The Extension is the first of two three-month extensions permitted under the Company’s governing documents.

On August 10, 2022, the Company extended the date by which the Company has to consummate a business combination from August 11, 2022 to November 11, 2022 (the “ Extension ”).

The Extension is the second of two three-month extensions permitted under the Company’s governing documents.

The Company will have until November 11, 2022 to consummate a Business Combination.

On May 5, 2022, the Company extended the date by which the Company has to consummate a business combination from May 11, 2022 to August 11, 2022 (the “ First Extension ”).

The First Extension was the first of two three-month extensions permitted under the Company’s governing documents.

On August 10, 2022, the Company extended the date by which the Company has to consummate a business combination from August 11, 2022 to November 11, 2022 (the “ Second Extension ”).

The Second Extension was the second of two three-month extensions permitted under the Company’s governing documents.

On October 27, 2022, the Company filed a definitive proxy statement with the SEC in connection with the Company’s solicitation of proxies for the vote by the stockholders of the Company at a special meeting of the Company’s stockholders to be held on November 11, 2022 (the “Special Meeting”).

At the Special Meeting, the Company’s stockholders approved amendments to its second amended and restated certificate of incorporation (the “Extension Amendment”) and the investment management trust agreement (the “Trust Agreement”) between Continental Stock Transfer & Trust Company, as trustee (“Continental”), and the Company governing the trust account (the “Trust Account”) established in connection with the Company’s initial public offering dated May 11, 2021 (the “Trust Amendment”), which together would allow the Company to extend the deadline by which it must complete its initial business combination by up to nine one-month periods from the current outside date of November 11, 2022.

In connection with each such extension, Data Knights, LLC, the Company’s sponsor, caused $ 0.045 per outstanding share of the Company’s Class A Common Stock, or approximately $ 122,920 , to be deposited in the Trust Account in connection with the exercise of the first monthly extension of the Extended Date to December 11, 2022.

In connection with the proposed Business Combination with the Target, the Company will provide its public stockholders with the opportunity to redeem all or a portion of their Class A Common Stock upon the completion of such Business Combination in connection with a stockholder meeting called to approve such Business Combination.

2 unchanged sentences

The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $ 5,000,001 either immediately prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination.

The Company will have until November 11, 2022 to consummate a Business Combination.

If the Company is unable to complete a Business Combination within 18 months from the closing of the Initial Public Offering at the election of the Company subject to satisfaction of certain conditions, including the deposit of up to $ 2,300,000 since the underwriters’ over-allotment option is exercised in full ($ 0.10 per unit in either case), into the Trust Account, or as extended by the Company’s stockholders in accordance with the Company’s amended and restated certificate of incorporation) (the “Combination Period”), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay taxes (less up to $ 100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Company’s board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations under Delaware law to provide for claims of creditors and the requirements of applicable law.

DATA KNIGHTS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Note 1 — Description of Organization and Business Operations (Continued)

The Company will have until December 11, 2022 to consummate a business combination.

As discussed above, the Company filed a definitive proxy statement with the SEC on October 27, 2022 in connection with the Company’s solicitation of proxies for the vote by the stockholders of the Company at the Special Meeting.

The Company’s stockholders approved the Extension Amendment and the Trust Amendment that allowed the Company to extend the deadline by which it must complete its initial business combination by up to nine one-month periods from November 11, 2022.

In connection with each such extension, Data Knights, LLC, the Company’s sponsor, caused $ 0.045 per outstanding share of the Company's Class A Common Stock, or approximately $ 122,920 , to be deposited in the Trust Account in connection with the exercise of the first monthly extension of the Extended Date to December 11, 2022.

If the Company is unable to complete a Business Combination by December 11, 2022, or as extended by the Company’s stockholders as described above(the “Combination Period”), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay taxes (less up to $ 100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Company’s board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations under Delaware law to provide for claims of creditors and the requirements of applicable law.

The underwriter has agreed to waive its rights to the deferred underwriting commission held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Public Shares.

2 unchanged sentences

Such warrants will expire worthless if the Company fails to complete a Business Combination within the 18-month time period.

DATA KNIGHTS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Note 1 — Description of Organization and Business Operations (Continued)

The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $ 10.20 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the day of liquidation of the Trust Account, if less than $ 10.20 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriter of Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”).

The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $ 10.20 per Public Share (or $ 10.445 per Public Share including the Extension deposits) and (ii) the actual amount per Public Share held in the Trust Account as of the day of liquidation of the Trust Account, if less than $ 10.20 per share (or $ 10.445 per share including the Extension deposits) due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriter of Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”).

However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believe that the Sponsor’s only assets are securities of the Company.

2 unchanged sentences

The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

As of June 30, 2022, the Company had $ 7,480 in cash and working capital deficit of $ 1,158,449 .

As of September 30, 2022, the Company had $ 234,923 in cash and working capital deficit of $ 1,218,387 .

DATA KNIGHTS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Note 1 — Description of Organization and Business Operations (Continued)

The Company’s liquidity needs prior to the consummation of its IPO were satisfied through the proceeds of $ 25,000 from the sale of the Founder Shares and proceed from the promissory note from sponsor of $ 78,925 , which was repaid upon closure of the IPO.

Subsequent to the IPO, the Company’s liquidity will be satisfied through a portion of the net proceeds from IPO held outside of the Trust Account.

As of June 30, 2022, we had investments of $ 118,663,377 held in the Trust Account.

As of September 30, 2022, we had investments of $ 120,133,869 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 (less taxes paid and deferred underwriting commissions) to complete our initial business combination.

We may withdraw interest to pay taxes.

During the period ended June 30, 2022, we did not withdraw any interest earned on the Trust Account.

During the nine and three months ended September 30, 2022, we withdrawed $ 266,810 interest earned on the Trust Account to pay DE Franchise tax.

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.

DATA KNIGHTS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Note 1 — Description of Organization and Business Operations (Continued)

The accompanying financial statements have been prepared in conformity with U.S.

3 unchanged sentences

Management plans to address this uncertainty during the period leading up to the business combination, however this cannot be guaranteed.

Originally, the Company will have until November 11, 2022 to consummate a Business Combination.

On May 5, 2022, the Company extended the date by which the Company has to consummate a business combination from May 11, 2022 to August 11, 2022 (the “ Extension ”).

The Extension is the first of two three-month extensions permitted under the Company’s governing documents.

Originally, the Company will have until May 11, 2022 to consummate a Business Combination.

On May 5, 2022, the Company extended the date by which the Company has to consummate a business combination from May 11, 2022 to August 11, 2022 (the “1 st Extension ”).

On August 10, 2022, the Company extended the date by which the Company has to consummate a business combination from August 11, 2022 to November 11, 2022 (the “2 nd Extension ”).

The 2 nd Extension is the second of two three-month extensions permitted under the Company’s governing documents.

The Company will have until November 11, 2022 to consummate a Business Combination.

If our initial business combination is not consummated by November 11, 2022, less than one year after the date the financial statements are issued, then our existence will terminate, and we will distribute all amounts in the trust account.

On November 11, 2022, the Stockholders of the Company approved the Extension Amendment and the Trust Amendment to allow the Company to extend the deadline by which it must complete its initial business combination by up to nine one-month periods from November 11, 2022.

The Company has extended the deadline by which it must complete its initial business combination following stockholder approval of the Extension Amendment and the Trust Amendment, if our initial business combination is not consummated by December 11, 2022, less than one year after the date the financial statements are issued, then our existence will terminate, and we will distribute all amounts in the trust account.

The Company intends to complete a business combination before the liquidation date and no adjustments have been made to the carrying amounts of assets or liabilities should the company be required to liquidate after such date.

There can be no assurance that the Company will be able to consummate an initial business combination by November 11, 2022 and/or have sufficient working capital and borrowing capacity to meet its needs.

There can be no assurance that the Company will be able to consummate an initial business combination by December 11, 2022 and/or have sufficient working capital and borrowing capacity to meet its needs.

Based upon the above analysis, management determined that these conditions raise substantial doubt about the Company’s ability to continue as a going concern.

3 unchanged sentences

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

DATA KNIGHTS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Note 1 — Description of Organization and Business Operations (Continued)

Risks and Uncertainties

28 unchanged sentences

Cash equivalents are carried at cost, which approximates fair value.

The Company had $ 7,480 and $ 453,151 in cash and no cash equivalents as of June 30, 2022 and December 31, 2021.

The Company had $ 234,923 and $ 453,151 in cash and no cash equivalents as of September 30, 2022 and December 31, 2021.

DATA KNIGHTS ACQUISITION CORP.

16 unchanged sentences

The Company’s shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events.

On June 30, 2022, there were 585,275 shares of Class A Common Stock issued and outstanding that were issued as component securities of the Private Placement Units (Note 4).

On September 30, 2022, there were 585,275 shares of Class A Common Stock issued and outstanding that were issued as component securities of the Private Placement Units (Note 4).

11,500,000 shares of Class A Common Stock are subject to possible redemption.

8 unchanged sentences

February 8, 2021

September 30,

December 31, 2021

23 unchanged sentences

February 8, 2021

September 30,

(inception) Through

June 30, 2021

September 30, 2021

Redeemable Class A Common Stock subject to possible redemption

27 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 Company is subject to income tax examinations by major taxing authorities since inception.

The provision for income taxes was deemed to be immaterial for the six months ended June 30, 2022 and for the period from February 8, 2021 (inception) through June 30, 2021.

The Company’s effective tax rate for the three and nine months ended September 30, 2022, was - 220.93 % and 3.44 %, respectively, and for the three months ended September 30, 2021, and for the period from February 8, 2021 (inception) through September 30, 2021 was 0.00 %.

The Company’s effective tax rate differs from the statutory income tax rate of 21 % primarily due to the recognition of gains or losses from the change in the fair value of warrant liabilities, which are not recognized for tax purposes, and recording a full valuation allowance on deferred tax assets.

The Company has historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full fiscal year to income or loss for the reporting period.

The Company has used a discrete effective tax rate method to calculate taxes for the three and nine months ended September 30, 2022.

The Company believes that, at this time, the use of the discrete method for the three and nine months ended September 30, 2022 is more appropriate than the estimated annual effective tax rate method as the estimated annual effective tax rate method is not reliable due to a high degree of uncertainty in estimating annual pretax earnings.

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into law.

The IR Act provides for, among other measures, a new 1% U.S.

federal excise tax on certain repurchases (including redemptions) of stock by publicly traded domestic (i.e., U.S.) corporations.

The excise tax is imposed on the repurchasing corporation itself, not its shareholders from whom the shares are repurchased.

The amount of the excise tax is generally 1% of the fair market value of the shares repurchased.

For purposes of calculating the excise tax, however, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year.

In addition, certain exceptions apply to the excise tax.

Department of the Treasury (the “Treasury Department”) has been given authority to provide regulations and other guidance to carry out, and prevent the abuse or avoidance of, the excise tax.

The IR Act applies only to repurchases that occur after December 31, 2022.

Any redemption or other repurchase effected by us that occurs after December 31, 2022, in connection with a Business Combination or otherwise, may be subject to this excise tax.

Whether and to what extent we would be subject to the excise tax in connection with a Business Combination will depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, (ii) the nature and amount of any PIPE financing or other equity issuances in connection with the Business Combination (or any other equity issuances within the same taxable year of the Business Combination) and (iii) the content of any regulations and other guidance issued by the Treasury Department and/or the Internal Revenue Service.

In addition, because the excise tax would be payable by us and not by the redeeming holder, it could cause a reduction in the value of our stock.

The foregoing could cause a reduction in the cash available on hand to complete a business Combination in the required time and redeem 100 % of our public shares in accordance with our amended and restated certificate of incorporation) could be subject to the excise tax, in which case the amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

DATA KNIGHTS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Note 2 — Summary of Significant Accounting Policies (Continued)

Recently Issued Accounting Standards

12 unchanged sentences

Simultaneously with the Initial Public Offering, the Sponsor purchased an aggregate of 585,275 Private Placement Units at a price of $ 10.00 per Private Placement Unit for an aggregate purchase price of $ 5,852,750 .

DATA KNIGHTS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Note 4 — Private Placement (Continued)

The Private Placement Units are identical to the Units, except that (a) the Private Placement Units and their component securities will not be transferable, assignable or saleable until the consummation of the Company’s initial business combination except to permitted transferees and (b) the Placement Warrants, so long as they are held by the Sponsor or its permitted transferees, (i) may be exercised by the holders on a cashless basis and (ii) will be entitled to registration rights.

5 unchanged sentences

The Founder Shares which the Sponsor and its permitted transferees will collectively own, on an as-converted basis, represent 20 % of the Company’s issued and outstanding shares after the Initial Public Offering.

DATA KNIGHTS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Note 5 — Related Party Transactions (Continued)

The Sponsor has agreed not to transfer, assign or sell any of its Founder Shares until the earlier to occur of:

(A) six months after the completion of a Business Combination or (B) the date on which the Company completes a liquidation, merger, capital stock exchange or similar transaction that results in the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.

(A) Nine months after the completion of a Business Combination or (B) the date on which the Company completes a liquidation, merger, capital stock exchange or similar transaction that results in the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.

Notwithstanding the foregoing, if the last reported sale price of the Company’s Class A common stock equals or exceeds $ 12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 -trading day period commencing at least 150 days after the Business Combination, the Founder Shares will be released from the lock-up.

3 unchanged sentences

On June 1, 2021, the $ 78,925 outstanding under the promissory note was repaid in full.

On June 30, 2022 and December 31, 2021, there is no amount outstanding under the promissory note.

On September 30, 2022 and December 31, 2021, there is no amount outstanding under the promissory note.

Related Party Loans

4 unchanged sentences

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.

To date, the Company has no working capital loans outstanding.

As of September 30, 2022, the Company has $ 300,000 working capital loans outstanding.

DATA KNIGHTS ACQUISITION CORP.

1 unchanged sentence

Note 5 — Related Party Transactions (Continued)

If the Company anticipates that it may not be able to consummate a Business Combination within 12 months, the Company may, by resolution of the Company’s board if requested by the Sponsor, extend the period of time to consummate a Business Combination up to two times, each by an additional three months (for a total of up to 18 months to complete a Business Combination), subject to the Sponsor depositing additional funds into the Trust Account as set out below.

Pursuant to the terms of the Company’s amended and restated certificate of incorporation and the trust agreement entered into between the Company and Continental Stock Transfer & Trust Company, in order for the time available for the Company to consummate the initial Business Combination to be extended, the Sponsor or its affiliates or designees, upon five business days advance notice prior to the applicable deadline, must deposit into the Trust Account $ 1,150,000 since the underwriters’ over-allotment option is exercised in full ($ 0.10 per unit), on or prior to the date of the applicable deadline, for each of the available three month extensions, providing a total possible Business Combination period of 18 months at a total payment value of $ 2,300,000 since the underwriters’ over-allotment option is exercised in full ($ 0.10 per unit) (the “Extension Loans”).

The Company’s second amended and restated certificate of incorporation provides that, if the Company anticipates that it may not be able to consummate a Business Combination within 12 months from the closing of the Company’s initial public offering, the Company may, by resolution of the Company’s board if requested by the Sponsor, extend the period of time to consummate a Business Combination up to two times, each by an additional three months (for a total of up to 18 months to complete a Business Combination), subject to the Sponsor depositing additional funds into the Trust Account as set out below.

Pursuant to the terms of the Company’s second amended and restated certificate of incorporation and the trust agreement entered into between the Company and Continental Stock Transfer & Trust Company, in order for the time available for the Company to consummate the initial Business Combination to be extended, the Sponsor or its affiliates or designees, upon five business days advance notice prior to the applicable deadline, must deposit into the Trust Account $ 1,150,000 since the underwriters’ over-allotment option is exercised in full ($ 0.10 per unit), on or prior to the date of the applicable deadline, for each of the available three month extensions, providing a total possible Business Combination period of 18 months at a total payment value of $ 2,300,000 since the underwriters’ over-allotment option is exercised in full ($ 0.10 per unit) (the “Extension Loans”).

Any such payments would be made in the form of non-interest-bearing loans.

4 unchanged sentences

The public stockholders will not be afforded an opportunity to vote on the extension of time to consummate an initial Business Combination from 12 months to 18 months described above or redeem their shares in connection with such extensions.

Pursuant to the foregoing, on May 5, 2022, the Company extended the date by which the Company had to consummate a business combination from May 11, 2022 to August 11, 2022.

On August 10, 2022, the Company extended the date by which the Company had to consummate a business combination from August 11, 2022 to November 11, 2022.

As described in Note 1, the Company filed a definitive proxy statement with the SEC on October 27, 2022 in connection with the Company’s solicitation of proxies for the vote by the stockholders of the Company at the Special Meeting.

The Stockholers of the Compnay approved the Extension Amendment and the Trust Amendment to allow the Company to extend the deadline by which it must complete its initial business combination by up to nine one-month periods from November 11, 2022.

In connection with each such extension, the Company will have until December 11, 2022 to consummate a Business Combination, as noted above.

Administrative Support Agreement

Commencing on the date of the Initial Public Offering and until completion of the Company’s Business Combination or liquidation, the Company may reimburse Luminous Capital Inc., an affiliate of the Sponsor, up to an amount of $ 10,000 per month for office space, secretarial and administrative support.

For the three months and six months ended June 30, 2022, $ 30,000 and $ 60,000 support fees were incurred, respectively.

For the period from February 8, 2021 (inception) through June 30, 2021, $ 20,000 support fees were incurred.

For the three months and nine months ended September 30, 2022, $ 30,000 and $ 90,000 support fees were incurred, respectively.

For the period from February 8, 2021 (inception) through September 30, 2021, $ 50,000 support fees were incurred.

For the three months ended September 30, 2021, $ 30,000 support fees were incurred.

DATA KNIGHTS ACQUISITION CORP.

51 unchanged sentences

If the Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

At June 30, 2022, the Company accounted for the aggregate 12,085,275 warrants issued in connection with the Initial Public Offering (the 11,500,000 Public Warrants and the 585,275 Placement Warrants) in accordance with the guidance contained in ASC 815-40.

At September 30, 2022, the Company accounted for the aggregate 12,085,275 warrants issued in connection with the Initial Public Offering (the 11,500,000 Public Warrants and the 585,275 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.

4 unchanged sentences

Preferred Stock — The Company is authorized to issue 1,000,000 preferred shares with a par value of $ 0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s Board of Directors.

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

At September 30, 2022 and December 31, 2021, there were no preferred shares issued or outstanding.

Class A Common Stock — The Company is authorized to issue up to 100,000,000 shares of Class A common stock with a par value of $ 0.0001 per share.

Holders of the Company’s Class A common stock are entitled to one vote for each share.

At June 30, 2022 and December 31, 2021, there were 585,275 shares of Class A Common Stock issued or outstanding, excluding 11,500,000 shares of Class A Common Stock subject to possible redemption.

At September 30, 2022 and December 31, 2021, there were 585,275 shares of Class A Common Stock issued or outstanding, excluding 11,500,000 shares of Class A Common Stock subject to possible redemption.

Class B Common Stock — The Company is authorized to issue up to 10,000,000 shares of Class B common stock with a par value of $ 0.0001 per share.

2 unchanged sentences

Following the determination of the Company’s third independent director, on March 23, 2021, the Sponsor transferred 5,000 shares to such independent director.

At June 30, 2022 and December 31, 2021, there were 2,875,000 shares of Class B common stock issued and outstanding .

At September 30, 2022 and December 31, 2021, there were 2,875,000 shares of Class B common stock issued and outstanding.

Holders of Class A Common Stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of stockholders, except as required by law.

3 unchanged sentences

Note 9 – Fair Value Measurements

The following table presents information about the Company’s assets and derivative warrant liabilities that are measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value:

June 30, 2022

The following table presents information about the Company’s assets and derivative warrant liabilities that are measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value:

September 30, 2022

Quoted Prices in

24 unchanged sentences

The Public Warrants were valued initially and at each reporting period that the warrants were not actively traded, using a Monte Carlo simulation.

As of June 30, 2022 and December 31, 2021, the Public Warrants were valued using the instrument’s publicly listed trading price, which is considered to be a Level 1 measurement due to the use of an observable market quote in an active market.

Private Placement Warrants were valued using a Monte Carlo valuation model using level 3 inputs at initial valuation and as of June 30, 2022 and December 31, 2021.

At June 30, 2022 and December 31, 2021, assets held in the Trust Account were comprised of $ 118,663,377 and $ 117,320,973 in cash and U.S.

As of September 30, 2022 and December 31, 2021, the Public Warrants were valued using the instrument’s publicly listed trading price, which is considered to be a Level 1 measurement due to the use of an observable market quote in an active market.

Private Placement Warrants were valued using a Monte Carlo valuation model using level 3 inputs at initial valuation and as of September 30, 2022 and December 31, 2021.

At September 30, 2022 and December 31, 2021, assets held in the Trust Account were comprised of $ 120,133,869 and $ 117,320,973 in cash and U.S.

Treasury Securities, respectively.

17 unchanged sentences

Once publicly traded, the observable input qualifies the liability for treatment as a Level 1 liability.

As such, as of June 30, 2022 and December 31, 2021, the Company classified the Public Warrants as Level 1.

As such, as of September 30, 2022 and December 31, 2021, the Company classified the Public Warrants as Level 1.

DATA KNIGHTS ACQUISITION CORP.

9 unchanged sentences

Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs.

During the six months ended June 30, 2022 and for the period from February 8, 2021 (inception) through June 30, 2021 there were no transfers between levels.

During the Nine months ended September 30, 2022 and for the period from February 8, 2021 (inception) through September 30, 2021 there were no transfers between levels.

The following table provides quantitative information regarding Level 3 fair value measurements inputs as their measurement dates:

June 30, 2022

September 30, 2022

December 31, 2021

6 unchanged sentences

Dividend yield (per share)

The change in the fair value of the derivative warrant liabilities for the period from December 31, 2021 through June 30, 2022 is summarized as follows:

The change in the fair value of the derivative warrant liabilities for the period from December 31, 2021 through September 30, 2022 is summarized as follows:

Private Placement

5 unchanged sentences

( 4,243,893 )

Fair value as of June 30, 2022

Fair value as of September 30, 2022

(1) Changes in valuation inputs or other assumptions are recognized in change in fair value of warrant liability in the statement of operations .

Note 10 – Subsequent Events

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after September 30, 2022, up to November 18, 2022, the date the Company issued the audited financial statements.

Based upon this review, the Company identifed the following subsequent events:.

- On November 11, 2022, the Company held a Special Meeting of its stockholders.

The Stockholders of the Company approved the First Amendment to the Second Amended and Restated Certificate of Incorporation (the “Extension Amendment”).

The Company has the right to extend the date by which the Company must (i) consummate a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving the Company and one or more businesses (a “business combination”), (ii) cease its operations if it fails to complete such business combination, and (iii) redeem or repurchase 100 % of the Company’s Class A common stock included as part of the units sold in the

DATA KNIGHTS ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Note 10 – Subsequent Events

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after June 30, 2022, up to August 15, 2022, the date the Company issued the audited financial statements.

Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements.

- On August 10, 2022, the Company extended the date by which the Company has to consummate a business combination from August 11, 2022 to November 11, 2022 (the “Extension”).

The Extension is the second of two three-month extensions permitted under the Company’s governing documents.

In connection with the Extension, the Sponsor deposited an aggregate of $ 1,150,000 (representing $ 0.10 per public share) into the Company’s trust account on August 11, 2022.

The Extension provides the Company with additional time to complete its initial business combination (the “Business Combination”) with OneMedNet, previously announced by the Company and OneMedNet on April 25, 2022.

Company’s initial public offering that was closed on May 11, 2021 (the “IPO”) from November 11, 2022 (the “Termination Date”) up to nine ( 9 ) one-month extensions to August 11, 2023 (the “Extension Amendment Proposal”).

- At the Special Meeting held on November 11, 2022, the Stockholders also approved of Trust Amendment Proposal, pursuant to which the Investment Management Trust Agreement (the “Trust Agreement”), dated May 11, 2021, by and between the Company and Continental Stock Transfer & Trust Company, as trustee (“Continental”), was amended to extend the date on which Continental must liquidate the Trust Account (the “Trust Account”) established in connection with the IPO if the Company has not completed its initial business combination, from November 11, 2022 to August 11, 2023 (or such earlier date after November 11, 2022, as determined by the Data Knights Board).

- In connection with the voting on the Extension Amendment Proposal and the Trust Amendment Proposal at the special meeting, holders of 8,768,456 shares of Class A Common Stock exercised their right to redeem those shares for cash at an approximate price of $ 10.42 per share, for an aggregate of approximately $ 91.4 million.

Following the payment of the redemptions, the Trust Account had a balance of approximately $ 28.5 million.

- In connection with approval of the Extension Amendment Proposal and the Trust Amendment Proposal, Data Knights, LLC, the Company’s sponsor, caused $ 0.045 per outstanding share of the Company’s Class A Common Stock, giving effect to the redemptions disclosed above, or approximately $ 122,920 , to be deposited in the Trust Account in connection with the exercise of the first monthly extension of the Extended Date to December 11, 2022.

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