References to the "Company," "
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 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 otherSEC filings.
Overview
We are a blank check company formed under the laws of the
15
--------------------------------------------------------------------------------
Table of Contents
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.
16
--------------------------------------------------------------------------------
Table of Contents
Liquidity and Capital Resources
As of
In order to finance transaction costs in connection with a Business Combination
or any extension of the deadline by which the Company must consummate its
initial Business Combination or liquidate, the Sponsor or an affiliate of the
Sponsor or certain of the Company's officers and directors may, but are not
obligated to, provide the Company Working Capital Loans. If the Company
completes an initial Business Combination, the Company would repay such loaned
amounts out of the proceeds of the Trust Account released to the Company.
Otherwise, such loans would be repaid only out of funds held outside the Trust
Account. In the event that the initial Business Combination does not close, the
Company may use a portion of the working capital held outside the Trust Account
to repay such loaned amounts but no proceeds from the Trust Account would be
used to repay such loaned amounts. Up to
The Company will have only 15 months from the closing of the Public Offering
(
Based on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, the Company will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.
Off-Balance Sheet Arrangements
As of
Risks and Uncertainties
Management is currently evaluating the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company's financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Results of Operations
As ofMarch 31, 2022 , we had not commenced any operations. All activity for the period fromMarch 9, 2021 (inception) throughMarch 31, 2022 relates to our formation and the Public Offering, and, since the closing of the Public Offering, a search for a Business Combination candidate. We have neither engaged in any operations nor generated any revenues to date. We will not generate any operating revenues until after the completion of our initial Business Combination, at the earliest. We will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Public Offering. We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
For the three months ended
For the period from
Contractual Obligations
We do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities.
Administrative Services Agreement
Commencing on the date that our securities were first listed on the NYSE, we
agreed to pay our Sponsor
17
--------------------------------------------------------------------------------
Table of Contents
Registration Rights
The holders of the (i) founder shares, which were issued in a private placement prior to the closing of the Public Offering, (ii) Private Placement Warrants, which were issued in a private placement simultaneously with the closing of the Public Offering and the shares of Class A common stock underlying such Private Placement Warrants and (iii) Private Placement Warrants that may be issued upon conversion of Working Capital Loans will have registration rights to require the Company to register a sale of any of the Company's securities held by them pursuant to a registration rights agreement signed on the effective date of the Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent to the Company's completion of the initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriters were paid a cash underwriting discount of two percent (2%) of
the gross proceeds of the Public Offering (including the exercise of the
over-allotment option), or
Critical Accounting Policies and Estimates
Class A Common Stock Subject to Possible Redemption
We account for shares of Class A common stock subject to possible redemption in
accordance with the guidance in Accounting Standards Codification ("ASC") Topic
480 "Distinguishing Liabilities from Equity." Shares of Class A common stock
subject to mandatory redemption (if any) is classified as liability instruments
and are measured at fair value. Conditionally redeemable shares of Class A
common stock (including shares of Class A 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)
is classified as temporary equity. At all other times, shares of Class A common
stock are classified as stockholders' equity. The Company's shares of Class A
common stock feature certain redemption rights that are considered to be outside
of the Company's control and subject to the occurrence of uncertain future
events. Accordingly, as of
18
--------------------------------------------------------------------------------
Table of Contents
Net Income (Loss) Per Share of Common Stock
The Company has two classes of stock, 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 stock. The 23,200,000 potential shares of common stock for
which outstanding warrants to purchase the Company's shares are exercisable were
excluded from diluted earnings per share for the three months ended
Our condensed statements of operations applies the two-class method in calculating net income (loss) per share. Basic and diluted net income (loss) per share of Class A common stock and Class B common stock is calculated by dividing net income (loss) attributable to the Company plus any deemed dividends by the weighted average number of shares of Class A common stock and Class B common stock outstanding, allocated proportionally to each class of common stock.
Warrant Liability
We evaluated the Public Warrants and Private Placement Warrants issued in the Public Offering in accordance with ASC 815-40, "Derivatives and Hedging - Contracts in Entity's Own Equity", and concluded that a provision in the warrant agreement related to certain tender or exchange offers precludes the Public Warrants and Private Placement Warrants from being accounted for as components of equity. As the Public Warrants and Private Placement Warrants meet the definition of a derivative as contemplated in ASC 815, they are recorded as derivative liabilities on the balance sheets and measured at fair value at inception (on the date of the Public Offering) and at each reporting date in accordance with ASC 820, "Fair Value Measurement", with changes in fair value recognized in the statements of operations in the period of change. 19
--------------------------------------------------------------------------------
Table of Contents
© Edgar Online, source