References to the "Company," "our," "us" or "we" refer to
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. Such statements include, but are not limited to, possible business combinations and the financing thereof, and related matters, as well as all other statements other than statements of historical fact included in this Form 10-Q. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our otherSecurities and Exchange Commission ("SEC") filings.
Overview
We are a blank check company incorporated as a
The registration statement for our initial public offering (the "Initial Public
Offering') became effective on
Simultaneously with the closing of the Initial Public Offering, we consummated
the private placement ("Private Placement") of 415,500 units (each, a "Private
Placement Unit" and collectively, the "Private Placement Units"), at a price of
If we have not completed a Business Combination within 24 months from the closing of the Initial Public Offering, orOctober 20, 2022 (the "Combination Period"), we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our income taxes, if any (less up to$100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding Public 21
--------------------------------------------------------------------------------
Table of Contents
Shares, which redemption will completely extinguish Public Shareholders' rights
as shareholders (including the right to receive further liquidation
distributions, if any); and (iii) as promptly as reasonably possible following
such redemption, subject to the approval of the remaining shareholders and the
board of directors, liquidate and dissolve, subject in the case of clauses
(ii) and (iii), to our obligations under
Liquidity and Going Concern
As of
Our liquidity needs to date have been satisfied through a contribution of
In connection with our assessment of going concern considerations in accordance with FASB ASC Topic 205-40, "Presentation of Financial Statements-Going Concern," management has determined that the liquidity condition, mandatory liquidation date and subsequent dissolution raises substantial doubt about our ability to continue as a going concern. If we are unable to complete a business combination byOctober 20, 2022 , then we will cease all operations except for the purpose of liquidating. No adjustments have been made to the carrying amounts of assets or liabilities should we be required to liquidate afterOctober 20, 2022 .
Results of Operations
Our entire activity since inception up to
For the three months endedJune 30, 2022 , we had a net income of approximately$750,000 , which consisted of non-operating income of approximately$882,000 resulting from changes in fair value of derivative warrant liabilities and approximately$68,000 income from investments held in Trust account, partially offset by approximately$170,000 in general and administrative expenses, and$30,000 in administrative expenses - related party.
For the three months ended
For the six months endedJune 30, 2022 , we had a net income of approximately$1.5 million , which consisted of non-operating income of approximately$2.1 million resulting from changes in fair value of derivative warrant liabilities and approximately$69,000 income from investments held in Trust account, partially offset by approximately$550,000 in general and administrative expenses and$60,000 in administrative expenses - related party.
For the six months ended
22
--------------------------------------------------------------------------------
Table of Contents
Contractual Obligations
Administrative Support Agreement
Commencing on the effective date of our prospectus through the earlier of consummation of the initial Business Combination or the Company's liquidation, we will reimburse our Sponsor for office space, secretarial and administrative services provided to us in the amount of$10,000 per month. We incurred$30,000 in expenses in connection with these services during the three months endedJune 30, 2022 and 2021, which are included in administrative fee-related party on the accompanying unaudited condensed statements of operations. We incurred$60,000 in expenses in connection with these services during the six months endedJune 30, 2022 and 2021, which are included in administrative fee-related party on the accompanying unaudited condensed statements of operations. As ofJune 30, 2022 andDecember 31, 2021 , amounts of approximately$20,000 and$27,900 are outstanding, respectively, in connection with these services, included in due to related party on the accompanying condensed balance sheets. In addition, we agreed to reimburse our Sponsor, executive officers and directors, or their respective affiliates for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our Sponsor, executive officers or directors, or their affiliates. We also agreed to pay (i) the Company's non-employee directors an annual cash retainer of$20,000 and a onetime cash payment of$30,000 to be paid upon the consummation of the initial Business Combination, and (ii) our Chairman will receive an annual cash retainer of$40,000 and a onetime cash payment of$60,000 to be paid upon the consummation of the initial Business Combination.
Other than these payments and reimbursements, no compensation of any kind, including finder's and consulting fees, will be paid by us to our Sponsor, executive officers and directors, or their respective affiliates, prior to completion of the initial Business Combination.
Underwriting Agreement
Our underwriters were entitled to an underwriting discount of
Critical Accounting Policies
The preparation of financial statements in accordance with accounting principles generally accepted inthe United States of America requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. A summary of our significant accounting policies is included in Note 2 to our condensed financial statements in Part I, Item 1 of this Quarterly Report. Certain of our accounting policies are considered critical, as these policies are the most important to the depiction of our condensed financial statements and require significant, difficult or complex judgments, often employing the use of estimates about the effects of matters that are inherently uncertain. Such policies are summarized in the Management's Discussion and Analysis of Financial Condition and Results of Operations section in our 2021 Annual Report on Form 10-K filed with theSEC onMarch 29, 2022 . There have been no significant changes in the application of our critical accounting policies during the six months endedJune 30, 2022 .
Recent Accounting Pronouncements
See Note 2 to the unaudited condensed financial statements included in Part I, Item 1 of this Quarterly Report for a discussion of recent accounting pronouncements.
23
--------------------------------------------------------------------------------
Table of Contents Off-Balance Sheet Arrangements As ofJune 30, 2022 , we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
JOBS Act
The Jumpstart Our Business Startups Act of 2012 (the "JOBS Act") contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an "emerging growth company" and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, the condensed financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
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 controls over financial reporting pursuant to Section 404, (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
© Edgar Online, source