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Item 2. Management’s Discussion and Analysis

2022-11-14 compared with 2022-08-15 · 33 added, 36 removed, 71 unchanged (49% of the section changed)

5 unchanged sentences

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes

“forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of 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.

All statements other than statements of historical fact included in this Form 10-Q including

statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements.

This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of 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.

All statements other than statements of historical fact included in this Form 10-Q including statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements.

Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements.

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Results of Operations

For the three months ended June 30, 2022, we had a loss from operations of $1,544,496.

For the three months ended September 30, 2022, we had a loss from operations of $633,050.

In addition to the loss from operations, we recognized other income of $3,118,342 consisting of an unrealized gain on our warrant liabilities of $1,674,871 and interest earned on cash held in the Trust Account of $1,443,471.

For the six months ended June 30, 2022, we had a loss from operations of $2,053,572.

For the nine months ended September 30, 2022, we had a loss from operations of $2,686,622.

In addition to the loss from operations, we recognized other income of $10,422,422 consisting of an unrealized gain on our warrant liabilities of $8,499,501 and interest earned on cash held in the Trust Account of $1,922,921.

For the three months ended June 30, 2021, we had a loss from operations of $822,896.

For the three months ended September 30, 2021, we had a loss from operations of $481,907.

In addition to the loss from operations, we recognized other income of $3,325,655 consisting of an unrealized gain on our warrant liabilities of $3,320,750, and interest earned on cash held in the Trust Account of $4,905, partially offset by transaction costs of $0.

For the period from January 11, 2021 (inception) through June 30, 2021, we had a loss from operations of $912,461.

For the period from January 11, 2021 (inception) through September 30, 2021, we had a loss from operations of $1,394,368.

In addition to the loss from operations, we recognized other income of $6,659,509 consisting of an unrealized gain on our warrant liabilities of $7,188,075, interest earned on cash held in the Trust Account of $10,209 and interest earned from operating account of $2, partially offset by transaction costs of $538,777.

Through June 30, 2022, our efforts have been limited to organizational activities, activities relating to identifying and evaluating prospective acquisition candidates and activities relating to general corporate matters.

Through September 30, 2022, our efforts have been limited to organizational activities, activities relating to identifying and evaluating prospective acquisition candidates and activities relating to general corporate matters.

We have not generated any realized income, other than interest income.

The unrealized gain on the warrant liabilities resulted from the change in fair value of our warrant liabilities and had no impact on cash.

As of June 30, 2022, $319,712,052 was held in the Trust Account.

We had cash outside of trust of $73,736 at June 30, 2022 and $2,325,428 in offering costs and accounts payable as of June 30, 2022.

As of September 30, 2022, $321,155,523 was held in the Trust Account.

We had cash outside of trust of $108,859 at September 30, 2022 and $2,634,195 in offering costs and accounts payable as of September 30, 2022.

Except with respect to interest earned on the funds held in the Trust Account that may be released to us to pay taxes, if any, the proceeds in the Trust will not be released from the Trust Account (1) to us, until the completion of our initial Business Combination, or (2) to the Public Shareholders, until the earliest of (i) the completion of our initial Business Combination, and then only in connection with those Class A ordinary shares that such shareholders properly elected to redeem, subject to the limitations, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial Business Combination or to redeem 100% of the public shares if we do not complete an initial Business Combination within 24 months from the closing of the IPO (the “Combination Period”) or (B) with respect to any other provision relating to the rights of holders of the Class A ordinary shares, and (iii) the redemption of the public shares if we have not consummated a Business Combination within the Combination Period, subject to applicable law.

Liquidity, Capital Resources and Going Concern

As of June 30, 2022, we had cash outside our Trust Account of $73,736, available for working capital needs.

As of September 30, 2022, we had cash outside our Trust Account of $108,859, available for working capital needs.

We intend to use the funds held outside the Trust Account for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination.

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We incurred $18,336,269 in Initial Public Offering related costs, including $6,384,327 of underwriting fees, $11,172,572 of deferred underwriting discount and $779,370 of other costs with $564,701 which was allocated to the Public Warrants and Private Warrants, included in the statements of operations and $17,771,568 included in temporary equity.

As of June 30, 2022, we had investments held in the Trust Account of $319,712,052 (including $479,450 of income) consisting of money market funds.

As of September 30, 2022, we had investments held in the Trust Account of $321,155,523 (including $1,922,921 of income) consisting of money market funds.

Income on the balance in the Trust Account may be used to pay taxes.

Through June 30, 2022, we did not withdraw any interest earned on the Trust Account to pay our taxes.

For six months ended June 30, 2022, cash used in operating activities was $533,488.

Net income of $5,250,508 was primarily offset by an unrealized gain on the change in the fair value of our warrant liabilities of $6,824,630 and interest earned on investments held in Trust Account of $479,450.

Through September 30, 2022, we did not withdraw any interest earned on the Trust Account to pay our taxes.

For nine months ended September 30, 2022, cash used in operating activities was $748,365.

Net income of $7,735,800 was primarily offset by an unrealized gain on our warrant liabilities of $8,499,501 and interest earned on cash held in the Trust Account of $1,922,921.

Other operational activities including amounts due to related party generated $1,938,257.

For the period from January 11, 2021 (inception) through June 30, 2021, cash provided by operating activities was $1,541,611.

Net income of $2,421,393 was primarily offset by an unrealized gain on the change in the fair value of our warrant liabilities of $3,867,325 and interest earned on investments held in Trust Account of $5,304.

For the period from January 11, 2021 (inception) through September 30, 2021, cash used in operating activities was $1,877,420.

Net income of $5,265,141 was primarily offset by an unrealized gain on the change in the fair value of our warrant liabilities of $7,188,075, interest earned on cash held in the Trust Account of $10,209 and payments generating prepaid assets of $660,308.

Partially offsetting the net income was $538,777 from IPO related transaction costs.

7 unchanged sentences

The notes would either be repaid upon consummation of a business combination, without interest, or, at the lender’s discretion, or converted upon consummation of a business combination into additional Private Warrants at a price of $1.50 per Private Warrant.

As of June 30, 2022, $500,000 Working Capital Loans have been issued (Note 5).

In connection with the Company’s assessment of going concern considerations in accordance with FASB ASC 205-40,

Presentation of Financial Statements—Going Concern”, management has determined that the Company has and will continue to incur significant costs in pursuit of its acquisition plans which raises substantial doubt about the Company’s ability to continue as a going concern.

As of September 30, 2022, $750,000 Working Capital Loans have been issued (Note 5).

In connection with the Company’s assessment of going concern considerations in accordance with FASB ASC205-40, Presentation of Financial Statements—Going Concern”, management has determined that the Company has and will continue to incur significant costs in pursuit of its acquisition plans which raises substantial doubt about the Company’s ability to continue as a going concern.

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

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The Company intends to complete a Business Combination before the mandatory liquidation date.

Off-Balance Sheet

We have no obligations, assets or liabilities which would be considered off-balance sheet

arrangements as of June 30, 2022.

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.

We have not entered into any off-balance sheet

financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered into any non-financial agreements

involving assets.

Off-Balance Sheet Arrangements

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

We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered into any non-financial agreements involving assets.

Contractual obligations

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This assessment, which requires the use of professional judgment, is conducted at the time of issuance of the Warrants and as of each subsequent quarterly period end date while the Warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, such warrants are required to be recorded as a component of additional paid-in

capital at the time of issuance.

For issued or modified warrants that meet all of the criteria for equity classification, such warrants are required to be recorded as a component of additional paid-in capital at the time of issuance.

For issued or modified warrants that do not meet all the criteria for equity classification, liability-classified warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter.

Changes in the estimated fair value of such warrants are recognized as a non-cash

gain or loss on the statements of operations.

Changes in the estimated fair value of such warrants are recognized as a non-cash gain or loss on the statements of operations.

We account for the Public and Private warrants in accordance with guidance contained in ASC815-40.

Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability.

Convertible Promissory Note

The Company accounts for its convertible promissory note under ASC 815, “Derivatives and Hedging” (“ASC 815”).

Under 815-15-25, the election can be at the inception of a financial instrument to account for the instrument under the fair value option under ASC 825, “Financial Instruments” (“ASC 825”).

The Company has made such election for its convertible promissory note.

Using fair value option, the convertible promissory note is required to be recorded at its initial fair value on the date of issuance and each balance sheet date thereafter.

Differences between the face value of the note and fair value at issuance are recognized as either an expense in the condensed statements of operations (if issued at a premium) or as a capital contribution (if issued at a discount).

Changes in the estimated fair value of the notes are recognized as non-cash gains or losses in the condensed statements of operations.

Redeemable Shares of Class A Ordinary shares

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Earnings and losses are shared pro rata between the two classes of shares.

The potential ordinary shares for outstanding warrants to purchase the Company’s shares were excluded from diluted earnings per share for the three and six months ended June 30, 2022, for the three months ended June 30, 2021 and for the period from January 11, 2021 (inception) through June 30, 2021 because the warrants are contingently exercisable, and the contingencies have not yet been met.

The potential ordinary shares for outstanding warrants to purchase the Company’s shares were excluded from diluted earnings per share for the three and nine months ended September 30, 2022, for the three months ended September 30, 2021 and for the period from January 11, 2021 (inception) through September 30, 2021 because the warrants are contingently exercisable, and the contingencies have not yet been met.

As a result, diluted net income per common share is the same as basic net income per common share for the periods.

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Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange

Act and are not required to provide the information otherwise required under this item.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

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