The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with our audited financial
statements and the notes related thereto which are included in "Item 8.
Financial Statements and Supplementary Data" of this Form 10-
Overview
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a business combination will be successful.
Results of Operations
We have neither engaged in any operations nor generated any operating revenues
to date. Our only activities from
For the year ended
Liquidity and Capital Resources
The securities in our initial public offering were registered under the
Securities Act on a Registration Statement on Form S-1 (Registration No.
333-261287). The Registration Statement on Form S-1, as amended (the
"Registration Statement"), for the Company's initial public offering was
declared effective on
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Simultaneously with the closing of our initial public offering, we consummated
the sale of 950,000 private placement units at a price of
Subsequent to the closing of our initial public offering, we consummated the
closing of the sale of 375,000 additional units upon receiving notice of the
underwriter's election to partially exercise their over-allotment option,
generating additional gross proceeds of
Offering costs for our initial public offering amounted to
Following the closing of the initial public offering and partial exercise of the
over-allotment,
For the year ended
For the period from
At
At
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In order to fund working capital deficiencies or finance transaction costs in
connection with a business combination, the Sponsor, or an affiliate of the
Sponsor, or certain of the Company's officers and directors may, but are not
obligated to, loan the Company funds as may be required ("Working Capital
Loans"). If the Company completes a business combination, the Company will repay
the Working Capital Loans out of the proceeds of the Trust Account released to
the Company. Otherwise, the Working Capital Loans would be repaid only out of
funds held outside the Trust Account. 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. Except for the
foregoing, the terms of such Working Capital Loans, if any, have not been
determined and no written agreements exist with respect to such loans. The
Working Capital Loans would either be repaid upon consummation of a business
combination, without interest, or, at the lender's discretion, up to
We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence, and negotiating a business combination is less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our business combination. Moreover, we may need to obtain additional financing either to complete our business combination or because we become obligated to redeem a significant number of our public shares upon consummation of our business combination, in which case we may issue additional securities or incur debt in connection with such business combination.
However, in connection with the Company's assessment of going concern
considerations in accordance with FASB ASC 205-40, management has determined
that mandatory liquidation and subsequent dissolution raise substantial doubt
about the Company's ability to continue as a going concern. The Company intends
to complete its initial business combination before the mandatory liquidation
date; however, there can be no assurance that the Company will be able to
consummate any business combination by
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities, other than an agreement to pay our Sponsor
a monthly fee of
The underwriters are entitled to deferred underwriting commissions of
JOBS Act
On
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Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an "emerging growth company," we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor's attestation report on our system of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of executive compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an "emerging growth company," whichever is earlier.
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:
Common Stock Subject to Possible Redemption
We account for our common stock subject to possible redemption in accordance with the guidance in ASC 480, "Distinguishing Liabilities from Equity" ("ASC 480"). Common stock subject to mandatory redemption is classified as a liability instrument and is 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. Our common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented as temporary equity, outside of the stockholders' deficit section of our condensed balance sheets. This method would view the end of the reporting period as if it were also the redemption date for the security. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid in capital and accumulated deficit.
Net Income (Loss) per Common Stock
The Company complies with accounting and disclosure requirements of ASC 260,
"Earnings Per Share." Net income (loss) per share is computed by dividing net
income (loss) by the weighted average number of shares of common stock
outstanding during the period. The Company has two classes of shares, which are
referred to as Class A common stock and Class B common stock. Earnings and
losses are shared pro rata between the two classes of shares. Public warrants
(see Note 3) and private placement warrants (see Note 4) to purchase 13,164,375
shares of Class A common stock at
Accounting for Warrants
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the instruments' specific terms and applicable authoritative guidance in ASC 480 and ASC 815, "Derivatives and Hedging" ("ASC 815"). The assessment considers whether the instruments are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the instruments meet all of the requirements for equity classification under ASC 815, including whether the instruments are indexed to the Company's own shares of common stock and whether the instrument holders could potentially require "net cash settlement" in a circumstance outside of the Company's control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the instruments are outstanding. As discussed in Note 7, the Company determined that upon review of the warrant agreements, the public warrants and private placement warrants issued pursuant to the warrant agreements qualify for equity accounting treatment.
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