What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-11-24 compared with 2021-09-29 · 136 added, 87 removed, 82 unchanged (73% of the section changed)

1 unchanged sentence

of Financial Condition and Results of Operations.

References to “we”,

“us”, “our” or the “Company” are to CENAQ Energy Corp., except where the context requires otherwise.

The following discussion should be read in conjunction with our unaudited condensed financial statements and related notes thereto included

elsewhere in this report.

Cautionary 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 of 1933, as amended, and Section

21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

We have based these forward-looking statements

on our current expectations and projections about future events.

These forward-looking statements are subject to known and unknown risks,

uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially

different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.

In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,”

“would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,”

“continue,” or the negative of such terms or other similar expressions.

Factors that might cause or contribute to such a discrepancy

include, but are not limited to, those described in our other Securities and Exchange Commission (“SEC”) filings.

References to “we”, “us”,

“our” or the “Company” are to CENAQ Energy Corp., except where the context requires otherwise.

The following discussion

should be read in conjunction with our unaudited condensed financial statements and related notes thereto included elsewhere in this report.

Cautionary 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 of 1933, as amended, and Section 21E of the Securities

Exchange Act of 1934, as amended (the “Exchange Act”).

We have based these forward-looking statements on our current expectations

and projections about future events.

These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions

about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future

results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.

In some cases, you can

identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,”

“expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,”

or the negative of such terms or other similar expressions.

Factors that might cause or contribute to such a discrepancy include, but

are not limited to, those described in our other Securities and Exchange Commission (“SEC”) filings.

We are a newly organized blank check company incorporated

4 unchanged sentences

The registration statement for the initial public offering was declared effective on August 12, 2021.

17, 2021, we consummated our initial public offering of 15,000,000 units, at $10.00 per unit, generating gross proceeds of $150 million,

and incurring offering costs of approximately $8.78 million, inclusive of $3.00 million of underwriting discount, $5.25 million in deferred

underwriting commissions and $0.53 million of other cash offering costs.

The underwriter was granted a 45-day option from the date of

the final prospectus relating to the initial public offering to purchase up to 2,250,000 additional units to cover over-allotments, if

any, at $10.00 per unit.

On August 19, 2021, the underwriters exercised the overallotment in full, generating additional gross proceeds

of $22,500,000 which incurred $450,000 of underwriting discount and $787,500 of deferred underwriting discount.

17, 2021, we consummated our initial public offering of 15,000,000 units, at $10.00 per unit, generating gross proceeds of $150,000,000.

The underwriter was granted a 45-day option from the date of the final prospectus relating to the initial public offering to purchase

up to 2,250,000 additional units to cover over-allotments, if any, at $10.00 per unit.

On August 19, 2021, the underwriters exercised

the overallotment in full, generating additional gross proceeds of $22,500,000.

Transaction costs of our initial public offering and the

over-allotment amounted to $17,771,253 consisting of $3,450,000 of underwriting discount, $6,037,500 of deferred underwriting discount,

an excess of fair value of the founder shares acquired by the Anchor Investors of $6,265,215, fair value of the 189,750 representative

shares of $1,442,100 and $576,438 of other cash offering costs were charged to additional paid in capital.

Simultaneously with the closing of the initial

16 unchanged sentences

obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

We have not selected any specific Business Combination

target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any Business

Combination target with respect to the Business Combination.

We intend to focus our search for a target business in the energy industry

in North America.

Results of Operations

Our entire activity since inception up to June

Our entire activity since inception up to September

30, 2021 was in preparation for our initial public offering.

1 unchanged sentence

of our initial Business Combination, at the earliest.

For the three months ended June 30, 2021, we had

a net loss of $3,285, which primarily consisted of Bank Charges of $1,236 and Other Miscellaneous Service Cost of $2,049.

For the six months ended June 30, 2021, we had

a net loss of $5,352, which primarily consisted of Bank Charges of $2,493 and Other Miscellaneous Service Cost of $2,049.

For the three months ended September 30, 2021,

we had a net loss of $67,295, which consists of formation and operating costs of $68,294 and interest income of $999.

For the nine months ended September 30, 2021,

we had a net loss of $72,647, which consists of formation and operating costs of $73,646 and interest income of $999.

Liquidity and Capital Resources

As of June 30, 2021, we had $36,169 in our operating

bank account, and a working capital deficiency of $279,642.

Our liquidity needs up to June 30, 2021 had been

satisfied through a payment from the sponsor of $25,000 for the Founder Shares and borrowings under the promissory note of $263,309.

As of September 30, 2021, we had $539,610 in our

operating bank account, and working capital of $757,200.

Our liquidity needs up to September 30, 2021 had

been satisfied through a payment from the sponsor of $25,000 for the Founder Shares and no borrowings under the promissory note.

close of the initial public offering, there was no amount outstanding on the promissory note.

In order to finance transaction costs in connection

with a Business Combination, the sponsor or an affiliate of the sponsor or certain of our officers and directors may, but are not obligated

to, provide us Working Capital Loans.

As of June 30, 2021, there were no amounts outstanding under any Working Capital Loans.

As of August 17, 2021, we had $1,205,216 in our

operating bank account, $36,691 due from the Sponsor, and working capital of approximately $0.8 million.

In addition, in order to finance transaction costs

in connection with an intended business combination, at November 11, 2021 our sponsor signed a commitment letter to provide loans of up

to an aggregate of $1,500,000 to us.

As of September 30, 2021, there were no amounts outstanding under any Working Capital Loans.

Based on the foregoing, management believes that

4 unchanged sentences

for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business

Restatement of Prior Period Financial Statements

In connection with the preparation of the financial statements as of

September 30, 2021, management identified errors made on the historical balance sheet where, we improperly classified some of its Class

A common stock subject to possible redemption.

In accordance with ASC 480-10-S99, redemption provisions not solely within our control

would require common stock subject to redemption to be classified outside of permanent equity.

We had previously classified 1,082,716

shares in permanent equity.

Although we did not specify a maximum redemption threshold, the charter provides that currently, we will not

redeem the public shares in an amount that would cause the net tangible assets to be less than $5,000,001.

We restated the financial statements

to classify all Class A Common Stock excluding representative shares as temporary equity and for any related impact, as the threshold

in its charter would not change the nature of the underlying shares as redeemable and thus would be required to be presented outside of

permanent equity.

Critical Accounting Policies

The preparation of the unaudited

condensed financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported

amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial

statements and the reported amounts of expenses during the reporting period.

The preparation of the unaudited condensed financial

statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets

and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the

reported amounts of expenses during the reporting period.

Actual results could differ from those estimates.

identified the following as our critical accounting policies:

Deferred Offering Costs

Deferred offering costs consisted of legal and

accounting expenses incurred through the balance sheet date that were directly related to the initial public offering and that were charged

to shareholders’ equity upon the completion of the initial public offering on August 17, 2021.

We have identified the following

as our critical accounting policies:

Offering Costs associated with the Initial

Public Offering

Offering costs consist of underwriting, legal,

accounting and other expenses incurred through the balance sheet date that are directly related to the IPO.

We comply with the requirements

of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A—“Expenses of Offering”.

costs are allocated to the separable financial instruments, if any, issued in the IPO based on a relative fair value basis compared to

total proceeds received.

Class A common stock Subject to Possible

We account for the Class

A common stock subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from

Equity.” Common stock subject to mandatory redemption (if any) are classified as a liability instrument and measured at fair value.

Conditionally redeemable common stock (including common stock that feature redemption rights that are either within the control of the

holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified

as temporary equity.

At all other times, common stock is classified as stockholders’ equity.

We recognize changes in redemption

value immediately as they occur.

Immediately upon the closing of the IPO, we recognized the subsequent remeasurement under ASC 480-10-S99

from initial carrying amount to redemption value.

The change in the carrying value of redeemable common stock resulted in charges against

additional paid-in capital and accumulated deficit.

Net Loss Per Common Stock

We have two classes of common stock, which are

referred to as Class A common stock and Class B common stock.

Income and losses are allocated on pro rata basis between redeemable and

non-redeemable common stock.

The 19,612,500 potential common shares for outstanding warrants to purchase our stock were excluded from

diluted earnings per share for the three and nine months ended September 30, 2021 because the warrants are contingently exercisable,

and the contingencies have not yet been met.

As a result, diluted net loss per common share is the same as basic net loss per common

share for the periods.

Recent Accounting Pronouncements

3 unchanged sentences

and Derivatives and Hedging —Contracts in Entity’ Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts

in an Entity’ Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation

models required under current GAAP.

The ASU also removes certain settlement conditions that are required for equity-linked contracts to

qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas.

We are currently

evaluating the impact of the ASU on its financial position, results of operations or cash flows.

Accounting for Convertible Instruments and

Contracts in an Entity’ Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing

major separation models required under current GAAP.

The ASU also removes certain settlement conditions that are required for equity-linked

contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas.

We are currently evaluating the impact of the ASU on the financial position, results of operations or cash flows.

In May 2021, the FASB issued

ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock

Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Issuer’s Accounting

for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues

This guidance clarifies certain aspects of the current guidance to promote consistency among reporting of an issuer’s

accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity

classified after modification or exchange.

The amendments in this update are effective for all entities for fiscal years beginning after

December 15, 2021, including interim periods within those fiscal years.

Early adoption is permitted for all entities, including adoption

in an interim period.

We are currently evaluating the impact of the ASU on the financial position, results of operations or cash flows.

Our management does not believe

4 unchanged sentences

Registration Rights

The holders of the Founder

Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any shares of Class A

common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital

Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement to

be signed prior to or on the effective date of the initial public offering, requiring us to register such securities for resale (in the

case of the Founder Shares, only after conversion to our Class A common stock).

The holders of the majority of these securities are entitled

to make up to three demands, excluding short form demands, that we register such securities.

In addition, the holders have certain “piggy-back”

registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination and

rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act.

However, the registration rights

agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination

of the applicable lock-up period, which occurs (i) in the case of the Founder Shares, on the earlier of (A) six months after the completion

of the initial Business Combination or (B) subsequent to the initial Business Combination, (x) if the last sale price of our 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 75 days after the initial Business Combination, or (y) the

date on which we complete a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all

of our stockholders having the right to exchange their shares of common stock for cash, securities or other property and (ii) in the case

of the Private Placement Warrants and the respective Class A common stock underlying such warrants, 30 days after the completion of the

initial Business Combination.

The holders of the Founder Shares, Private Placement

Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any shares of Class A common stock issuable upon

the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion

of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on

the effective date of the initial public offering, requiring us to register such securities for resale (in the case of the Founder Shares,

only after conversion to our Class A common stock).

The holders of the majority of these securities are entitled to make up to three demands,

excluding short form demands, that we register such securities.

In addition, the holders have certain “piggy-back” registration

rights with respect to registration statements filed subsequent to the completion of the initial Business Combination and rights to require

us to register for resale such securities pursuant to Rule 415 under the Securities Act.

However, the registration rights agreement provides

that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable

lock-up period, which occurs (i) in the case of the Founder Shares, on the earlier of (A) six months after the completion of the initial

Business Combination or (B) subsequent to the initial Business Combination, (x) if the last sale price of our 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 75 days after the initial Business Combination, or (y) the date on which

we complete a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of our stockholders

having the right to exchange their shares of common stock for cash, securities or other property and (ii) in the case of the Private Placement

Warrants and the respective Class A common stock underlying such warrants, 30 days after the completion of the initial Business Combination.

We will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriters Agreement

We granted the underwriters

a 45-day option from the date of this initial public offering to purchase up to an additional 2,250,000 units to cover over-allotments,

On August 19, 2021, the over-allotments were exercised in full.

We granted the underwriters a 45-day option from

the date of this initial public offering to purchase up to an additional 2,250,000 units to cover over-allotments, if any.

On August 19,

2021, the over-allotments were exercised in full.

Simultaneously with the closing of the initial

28 unchanged sentences

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