The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the notes related thereto, which are included in "Part II, Item 8. Financial Statements and Supplementary Data" of this Annual Report.
Cautionary Note Regarding Forward Looking Statements
This Annual Report includes "forward looking statements" 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 Annual Report including, without
limitation, 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.
Such forward looking statements relate to future events or future performance,
but reflect management's current beliefs, based on information currently
available. A number of factors could cause actual events, performance or results
to differ materially from the events, performance and results discussed in the
forward looking statements. For information identifying important factors that
could cause actual results to differ materially from those anticipated in the
forward looking statements, please refer to "Cautionary Note Regarding Forward
Looking Statements," "Part I, Item 1A. Risk Factors" and elsewhere in this
Annual Report. The Company's securities filings can be accessed on the EDGAR
section of the
Overview
We are a blank check company incorporated on
Recent Developments
On
The Business Combination Agreement and the transactions contemplated thereby were approved by the boards of directors of each of the Company and Senti. We intend to effectuate our proposed initial business combination with Senti using a combination of cash from the proceeds of our initial public offering (and the concurrent private placement of shares to our sponsor), the proceeds of the sale of our shares to private investors in connection with our initial business combination and shares issued to the current owners of Senti.
For further information regarding the Business Combination Agreement and our
proposed initial business combination with Senti, please refer to "Part I, Item
1. Business" of this Annual Report and the Current Report on Form
8-K
announcing the proposed business combination, which was filed with the
65
--------------------------------------------------------------------------------
Table of Contents PART II Results of Operations
We have neither engaged in any operations nor generated any operating revenues
to date. Our only activities for the period from
For the period from
Liquidity and Capital Resources
On
Simultaneously with the closing of our initial public offering, our sponsor
purchased an aggregate of 715,500 shares of Class A Common Stock at a price of
For the period fromMarch 1, 2021 (inception) throughDecember 31, 2021 , net cash used in operating activities was$1,142,247 , which was due to our net loss of$3,857,088 , and non-cash interest and dividend income on investments held in the trust account, partially offset by changes in working capital of$2,723,625 .
For the period from
Net cash provided by financing activities for the period from
66
--------------------------------------------------------------------------------
Table of Contents
PART II
As of
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 payable and deferred underwriting fees), to complete our initial business combination with Senti. We may withdraw interest income (if any) to pay franchise and income taxes, if any. Our annual income tax obligations will depend on the amount of interest and other income earned on the amount held in the trust account. We expect the interest income earned on the amount in the trust account (if any) will be sufficient to pay our income taxes. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining amount held in the trust account will be used as working capital to finance the operations of Senti, to make other acquisitions and to pursue our growth strategies.
We do not believe we will need to raise additional funds in order to meet the
expenditures required for operating our business while our initial business
combination with Senti is completed. However, if our estimates of the costs of
operating our business during this period are less than the actual amount
necessary to do so, we may have insufficient funds available to operate our
business prior to our initial business combination. In order to fund working
capital deficiencies or finance transaction costs in connection with our
proposed initial business combination with Senti, our sponsor, or an affiliate
of our sponsor, or certain of our officers or directors may, but are not
obligated to, loan us funds as may be required. If we complete our initial
business combination, we would repay such loaned amounts. In the event that our
initial business combination does not close, we may use a portion of the working
capital held outside the trust account to repay such loaned amounts, but no
proceeds from our trust account would be used for such repayment. Up to
You should note that our independent registered public accounting firm's report ( which is set forth in this Report) contains an explanatory paragraph that expresses substantial doubt about our ability continue as a "going concern."
Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements as ofDecember 31, 2021 .
Contractual Obligations
Underwriting Agreement
In connection with our initial public offering, the Company granted the underwriter a 45-day option to purchase up to 3,000,000 additional shares of Class A Common Stock to cover over-allotments at the initial public offering price, less the underwriting discounts and fees. The underwriter exercised its over-allotment option in full onMay 28, 2021 .
The underwriter was paid a cash underwriting fee of
Financial Advisor Agreement
On
Placement Agent Agreement
On
Registration Rights
The holders of the Founder Shares, private placement shares and any Class A Common Stock issuable upon conversion of any working capital loans from our sponsor, officers or directors have registration rights pursuant to a registration and stockholder rights agreement signed in connection with our initial public offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent to the completion of our initial business combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
In addition, it is anticipated that each signatory to the investor rights agreement to be entered into at Closing, other than the Company, will be granted certain registration rights with respect to their respective shares of Class A Common Stock.
Business Combination
Agreement As set forth in "Part I, Item 1. Business" of this Report, we have entered into the Business Combination Agreement with Merger Sub and Senti pursuant to which, among other things, Merger Sub will merge with and into Senti, with Senti surviving as a wholly-owned subsidiary of the Company. We have also entered into various ancillary transaction documents to give effect to the Merger, which are described throughout this Report.
67
--------------------------------------------------------------------------------
Table of Contents PART II Critical Accounting Policies
The preparation of consolidated financial statements and related disclosures in
conformity with accounting principles generally accepted in
Net Loss Per Common Share
Net loss per common share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period.
Class A Common Stock Subject to Possible Redemption
We account for our Class A Common Stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification ("ASC") 480, Distinguishing Liabilities from Equity . Shares of Class A Common Stock subject to mandatory redemption are classified as a liability instrument and 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 Class A Common Stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, Class A Common Stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders' equity section of our consolidated balance sheet. Immediately upon the closing of the initial public offering, the Company recognized the remeasurement from initial book value to redemption amount value. The change in the carrying value of the redeemable Class A Common Stock subject to possible redemption resulted in charges against additional paid-in capital and accumulated deficit.
Recent Accounting Standards
InAugust 2020 , theFinancial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40) ("ASU 2020-06") to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity's own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity's own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effectiveJanuary 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning onJanuary 1, 2021 . The Company adopted ASU 2020-06 effectiveJanuary 1, 2021 using the modified retrospective method of transition. The adoption of ASU 2020-06 did not have a material impact on our consolidated financial statements for the fiscal year endedDecember 31, 2021 .
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our consolidated financial statements.
© Edgar Online, source