ZALATORIS ACQUISITION CORP. 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 Annual Report on Form 10-
Overview
We are a blank check company incorporated as a
On
On
The net proceeds from the IPO, together with certain of the proceeds from the
Private Placement,
Transaction costs amounted to
As indicated in the accompanying financial statements, as of
46
--------------------------------------------------------------------------------
Table of Contents
Results of Operations
Year Ended
For the Period
from February 1,
For the Year 2021 (Inception)
Ended to
December 31, December 31,
2022 2021
Operating Expenses:
Formation and operating costs $ 747,775 $ 32,217
Professional fees 463,748 5,469
Franchise tax expense 202,795 183,064
Total Operating Expenses 1,414,318 220,750
Loss From Operations (1,414,318 ) (220,750 )
Other Income:
Interest income 2,176,305 9,709
Total Other Income 2,176,305 9,709
Income (loss) before provision for income taxes 761,987 (211,041 )
Provision for income taxes (377,989 ) -
Net Income (Loss) $ 383,998 $ (211,041 )
Formation and Operating Costs
For the year ended
Professional Fees
For the year ended
Franchise Tax Expense
For the year ended
Other Income
For the year ended
Income Tax
For the year ended
Liquidity and Capital Resources
As of
Management has determined that the possibility that the Company may be
unsuccessful in consummating an initial Business Combination within 18 months
(or up to 24 months if the Company extends the period of time to consummate a
business combination for total payment value of
47
--------------------------------------------------------------------------------
Table of Contents
of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.
Cash Flows
Cash Flows from Operating Activities
We experienced negative cash flows from operating activities for the years ended
Cash Flows from Financing Activities
We experienced negative and positive cash flows from financing activities for
the years ended
Off-Balance Sheet Financing Arrangements
As of
Commitments and Contractual Obligations
Other than the below, we do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities.
Administrative Services Agreement
Subsequent to the closing of the IPO, we will pay the Sponsor
Accrued Legal Fees
As of
Registration and Stockholder 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 common stock issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the 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 IPO requiring us to register such securities for resale (in the case of the founder shares, only after conversion to shares of Class A common stock). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that we register such securities. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent our 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 no sales of these securities will be effected until after the expiration of the applicable lock-up period, as described herein. We will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriter had a 45-day option from the date of the IPO to purchase up to
an additional 2,250,000 Units to cover over-allotments. On
48
--------------------------------------------------------------------------------
Table of Contents
The underwriter was paid an underwriting commission of
The underwriters have agreed (i) to waive their conversion rights (or right to participate in any tender offer) with respect to such shares in connection with the initial business combination and (ii) to waive their rights to liquidating distributions from the trust account with respect to such shares if we fail to complete the initial business combination within the completion window.
The Founder Shares received by the underwriter have been deemed compensation by
Critical Accounting Policies and Estimates
The preparation of the financial statement 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 financial statement.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statement, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. We have identified the following as our critical accounting policies:
Offering Costs
We comply with the requirements of the ASC 340-10-S99-1 and
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") Topic
480 "Distinguishing Liabilities from Equity." Class A 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 in temporary equity. At all other times, common stock
is classified as stockholders' equity. Our Class A common stock feature certain
redemption rights that are considered to be outside of our control and subject
to occurrence of uncertain future events. Accordingly, at
Net Loss per Common Share
We comply with accounting and disclosure requirements of FASB ASC Topic 260, "Earnings Per Share". Net loss per common stock is computed by dividing net loss by the weighted average number of common stock for the period. We have 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. We apply the two-class method in calculating earnings per share. Remeasurement adjustments associated with the redeemable Class A common stock is excluded from earnings per share as the redemption value approximates fair value.
49
--------------------------------------------------------------------------------
Table of Contents
The calculation of diluted loss per share does not consider the effect of the
warrants issued in connection with the (i) IPO, and (ii) the private placement
because the warrants are contingently exercisable, and the contingencies have
not yet been met. The warrants are exercisable to purchase 14,350,000 Class A
common stock in the aggregate. As of
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under ASC 740, "Income Taxes." Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740 prescribes a recognition threshold and a measurement attribute for the
financial statement recognition and measurement of tax positions taken or
expected to be taken in a tax return. For those benefits to be recognized, a tax
position must be more likely than not to be sustained upon examination by taxing
authorities. ASC 740 also provides guidance on derecognition, classification,
interest and penalties, accounting in interim period, disclosure and transition.
The Company recognizes accrued interest and penalties related to unrecognized
tax benefits as income tax expense. There were no unrecognized tax benefits and
no amounts accrued for interest and penalties as of
Judgment is required in determining whether deferred tax assets will be realized
in full or in part. Management assesses the available positive and negative
evidence on a jurisdictional basis to estimate if deferred tax assets will be
recognized and when it is more likely than not that all or some deferred tax
assets will not be realized, and a valuation allowance must be established. As
of
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our financial statements.
JOBS Act
On
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: (1) provide an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act; (2) 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; (3) 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 (4) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the CEO's compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of this offering or until we are no longer an "emerging growth company," whichever is earlier.
© Edgar Online, source
