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References in this report (the “Quarterly Report”) to “we,” “us” or the
“Company” refer to
“management” or our “management team” refer to our officers and directors, and
references to the “Sponsor” refer to
discussion and analysis of the Company’s financial condition and results of
operations should be read in conjunction with the condensed financial statements
and the notes thereto contained elsewhere in this Quarterly Report. Certain
information contained in the discussion and analysis set forth below includes
forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly 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 Quarterly 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 the Risk
Factors section of the Company’s Annual Report on Form 10-K for the year ended
“SEC”) on
from time to time. The Company’s securities filings can be accessed on the EDGAR
section of the
applicable securities law, the Company disclaims any intention or obligation to
update or revise any forward-looking statements whether as a result of new
information, future events or otherwise.
Overview
We are a blank check company incorporated on
corporation and formed for the purpose of effectuating a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses, which we refer to throughout this
Quarterly Report as our “initial business combination”. We intend to effectuate
our initial business combination using cash from the proceeds of our initial
public offering and the private placement of the private placement warrants, the
proceeds of the sale of our shares in connection with our initial business
combination (pursuant to forward purchase agreements or backstop agreements we
may enter into), shares issued to the owners of the target, debt issued to bank
or other lenders or the owners of the target, or a combination of the foregoing.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities for the nine months ended
period from
organizational activities, those necessary to prepare for our initial public
offering, described below and activities related to searching for a potential
business combination. We do not expect to generate any operating revenues until
after the completion of our initial business combination. We generate
non-operating income in the form of interest income on cash and cash equivalents
held after our initial public offering. We incur expenses as a result of being a
public company (for legal, financial reporting, accounting and auditing
compliance), as well as due diligence expenses.
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For the three months ended
which resulted from gains on the change in fair value of warrant liabilities of
franchise tax expense of
warrant liabilities was due in large part to the decrease in the publicly traded
price of the public warrants.
For the nine months ended
which resulted from gains on the change in fair value of warrant liabilities of
franchise tax expense of
warrant liabilities was due in large part to the decrease in the publicly traded
price of the public warrants.
For the three months ended
which resulted from gains on the fair value of warrant liabilities of
and unrealized gains on investments held in the Trust Account of
partially offset by expensed offering costs of
costs of
For the period from
a net income of
warrant liabilities of
the Trust Account of
of 116,393
Liquidity, Capital Resources, and Going Concern
On
generating gross proceeds to the Company of
the consummation of the initial public offering, we completed the private sale
of 7,850,000 warrants to the Sponsor at a purchase price of
(the “private placement warrants”), generating gross proceeds of
proceeds from the sale of the private placement warrants were added to the net
proceeds from our initial public offering held in a trust account (the “trust
account”). If we do not sign a definitive agreement for an initial business
combination within 18 months from the closing of our initial public offering
(
months from the closing of our initial public offering (
cease all operations except for the purpose of winding up, the proceeds from the
sale of the private placement warrants will be used to fund the redemption of
the public shares (subject to the requirements of applicable law) and the
private placement warrants will expire worthless.
We had granted the underwriter in our initial public offering a 45-day option to
purchase up to 2,625,000 additional units to cover over-allotments, if any. On
and purchased an additional 541,500 units, generating gross proceeds of
will be payable to the underwriter for deferred underwriting commissions.
Simultaneously with the underwriter partially exercising the over-allotment
option, our sponsor purchased an additional 162,450 private placement warrants
(the “over-allotment private placement warrants”) at a price of
over-allotment private placement warrant (
For the nine months ended
activities was
of warrant liabilities of
Trust Account of
income of
For the period from
cash used in operating activities was
fair value of warrant liabilities of
partially offset by our net income of
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For the nine months ended
activities was
government treasury obligations of
For the period from
cash used in investing activities was
amount of net proceeds from the initial public offering and partial exercise of
the over-allotment option by the underwriter being deposited to the Trust
Account.
There were no cash flows from financing activities for the nine months ended
For the period from
cash provided by financing activities was
proceeds from the Initial Public Offering and the partial exercise of the
over-allotment option by the underwriter, net of underwriter’s discount paid of
the proceeds from the promissory note – related party of
proceeds from the sale of Class B common stock to the Sponsor of
partially offset by the payment of offering costs of
of the promissory note – related party of
As of
capital surplus of
the Company issued an unsecured promissory note to the Sponsor, pursuant to
which the Company could borrow up to
business combination, as described in Note 11. The Company anticipates that the
cash held outside of the Trust Account as of
sufficient to allow the Company to operate for at least the next 12 months from
the issuance of the condensed financial statements, assuming that a Business
Combination is not consummated during that time. Over this time period, the
Company will be using the funds held outside of the Trust Account for paying
existing accounts payable and accrued liabilities, 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. These conditions raise substantial doubt
about the Company’s ability to continue as a going concern for a period of time
within one year after the date that the condensed financial statements are
issued. Management plans to address this uncertainty through the Business
Combination as discussed above. In addition, 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 additional funds as may be required under the
Working Capital Loans (as defined in Note 5). There is no assurance that the
Company’s plans to consummate the Business Combination will be successful or
successful within the Combination Period or that the Sponsor or an affiliate of
the Sponsor, or certain of the Company’s officers and directors will loan the
Company funds as may be required under the Working Capital Loans.
As a result of the above, in connection with the Company’s assessment of going
concern, management has determined that the conditions described above raise
substantial doubt about the Company’s ability to continue as a going concern
through approximately one year from the date the condensed financial statements
are issued. The condensed financial statements do not include any adjustments
relating to the recovery of the recorded assets or the classification of the
liabilities that might be necessary should the Company be unable to continue as
a going concern.
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Table of Contents Contractual Obligations Underwriting Agreement
We granted the underwriter a 45-day option to purchase up to 2,625,000
additional units to cover over-allotments at our initial public offering price,
less the underwriting discounts and commissions. On
underwriter partially exercised the over-allotment option to purchase an
additional 541,500 units at an offering price of
aggregate purchase price of
The underwriter was paid a cash underwriting discount of
partial exercise of the over-allotment option. In addition,
underwriting commissions. The deferred fee will become payable to the
underwriter from the amounts held in the trust account solely in the event that
we complete an initial business combination, subject to the terms of the
underwriting agreement.
Critical Accounting Policies
The preparation of condensed financial statements and related disclosures in
conformity with accounting principles generally accepted in
America
reported amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the condensed 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.
Warrant Liabilities
We account for warrants as either equity-classified or liability-classified
instruments based on an assessment of the warrant’s specific terms and
applicable authoritative guidance in Accounting Standards Codification 480,
Distinguishing Liabilities from Equity (“ASC 480”) and Accounting Standards
Codification 815, Derivatives and Hedging (“ASC 815”). The assessment considers
whether the warrants are freestanding financial instruments pursuant to ASC 480,
meet the definition of a liability pursuant to ASC 480, and whether the warrants
meet all of the requirements for equity classification under ASC 815, including
whether the warrants are indexed to our own common stock, 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 warrants are outstanding.
Upon initial measurement as of
model to value the public warrants and private placement warrants. The estimated
fair value upon the initial measurement of the warrant liabilities as of
30, 2021
research on comparable companies with the same type of warrants along with the
implied volatilities shortly after they start trading. The risk-free interest
rate was based on the
for a maturity similar to the expected remaining life of the warrants. The
expected life of the warrants was assumed to be equivalent to their remaining
contractual term. The dividend rate was based on the historical rate, which we
anticipated to remain at zero. After the public warrants were separately listed
and traded in
warrants are subject to certain make-whole provisions, the private placement
warrants have the same value as the public warrants and the public trading price
is used.
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The following table provides the significant unobservable inputs used in the
binomial/lattice model for the initial valuation of the public warrants and
private placement warrants as of
As of July 30, 2021
(Initial
Measurement)
Stock price $ 9.47
Exercise price $ 11.50
Dividend yield - %
Expected term (in years) 5.5
Volatility 20.0 %
Risk-free rate 0.80 %
Fair value $ 0.95
Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting
period. The estimated fair value of the public warrants transferred from a Level
3 measurement to a Level 1 fair value measurement in
public warrants were separately listed and traded. The estimated fair value of
the private placement warrants transferred from a Level 3 measurement to a Level
2 fair value measurement in
market quote for a similar asset in an active market.
Recent Accounting Pronouncements
See “Recent Accounting Pronouncements” in Note 2 of the accompanying condensed
financial statements.
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