☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 001-40831 | 86-3676785 | ||
(State or other jurisdiction incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Units, each consisting of one share of Class A common stock and one redeemable warrant | DSAQ.U | New York Stock Exchange | ||
Class A common stock, par value $0.0001 per share | DSAQ | New York Stock Exchange | ||
Redeemable warrants, each warrant exercisable for one share of Class A common stock, each at an exercise price of $11.50 per share | DSAQ.WS | New York Stock Exchange |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
Page | ||||||
1 | ||||||
1 | ||||||
1 | ||||||
2 | ||||||
3 | ||||||
4 | ||||||
5 | ||||||
18 | ||||||
23 | ||||||
23 | ||||||
24 | ||||||
24 | ||||||
24 | ||||||
24 | ||||||
24 | ||||||
24 | ||||||
25 | ||||||
26 |
September 30, 2021 | March 31, 2022 | December 31, 2021 | ||||||||||
(unaudited) | (Unaudited) | |||||||||||
Assets: | ||||||||||||
Current assets: | ||||||||||||
Cash | $ | 1,111,726 | $ | 709,748 | $ | 1,041,948 | ||||||
Prepaid expenses | 467,181 | 529,659 | 713,140 | |||||||||
Total current assets | 1,578,907 | 1,239,407 | 1,755,088 | |||||||||
Long-term prepaid expenses | 447,966 | |||||||||||
Investments held in Trust Account | 234,599,408 | 234,638,898 | 234,618,018 | |||||||||
Cash held in Trust Account | 785 | |||||||||||
Total assets | $ | 236,627,066 | ||||||||||
Total Assets | $ | 235,878,305 | $ | 236,373,106 | ||||||||
Liabilities, Redeemable Common Stock and Stockholders’ Deficit | ||||||||||||
Liabilities: | ||||||||||||
Franchise taxes payable | 112,329 | $ | 50,000 | $ | 60,274 | |||||||
Due to related party | 667 | |||||||||||
Due to Related Party | 667 | 667 | ||||||||||
Accrued offering costs and expenses | $ | 40,619 | 323,199 | 36,350 | ||||||||
Total current liabilities | 153,615 | 373,866 | 97,291 | |||||||||
Warrant liability | 17,632,000 | 5,800,000 | 11,600,000 | |||||||||
Deferred underwriters’ discount | 8,050,000 | 8,050,000 | 8,050,000 | |||||||||
Total liabilities | 25,835,615 | |||||||||||
Total Liabilities | 14,223,866 | 19,747,291 | ||||||||||
Commitments and Contingencies | 0 | |||||||||||
Redeemable Class A common stock subject to possible redemption, 23,000,000 shares at redemption value | 234,600,000 | |||||||||||
Commitments and Contingencies (Note 7) | 0 | 0 | ||||||||||
Redeemable Class A common stock subject to possible redemption, 23,000,000 shares at redemption value of $10.20 | 234,600,000 | 234,600,000 | ||||||||||
Stockholders’ Deficit: | ||||||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; NaN issued and outstanding | 0 | |||||||||||
Class A common stock, $0.0001 par value; 200,000,000 shares authorized | 0 | |||||||||||
Preferred stock, $0.0001 par valu e; 1,000,000 shares authorized; NaNissued and outstanding | 0 | 0 | ||||||||||
Class A common stock, $0.0001 par value; 380,000,000 shares authorized; NaNissued or outstanding (excluding 23,000,000 shares subject to redemption) | 0 | 0 | ||||||||||
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 5,750,000 shares issued and outstanding | 575 | 575 | 575 | |||||||||
Additional paid-in capital | 0 | 0 | 0 | |||||||||
Accumulated deficit | (23,809,124 | ) | (12,946,136 | ) | (17,974,760 | ) | ||||||
Total Stockholders’ Deficit | (23,808,549 | ) | (12,945,561 | ) | (17,974,185 | ) | ||||||
Total Liabilities, Redeemable Common Stock and Stockholders’ Deficit | $ | 236,627,066 | $ | 235,878,305 | $ | 236,373,106 | ||||||
For the three months ended September 30, 2021 | For the period from March 9, 2021 (inception) through September 30, 2021 | |||||||
Formation and operating costs | $ | 160,580 | $ | 161,199 | ||||
Loss from operations | (160,580 | ) | (161,199 | ) | ||||
Other income (loss) | ||||||||
Offering expenses related to warrants | (505,566 | ) | (505,566 | ) | ||||
Interest earned on trust | 193 | 193 | ||||||
Total other loss | (505,373 | ) | (505,373 | ) | ||||
Net loss | $ | (665,953 | ) | $ | (666,572 | ) | ||
Weighted average shares outstanding of Class A common stock | 23,000,000 | 23,000,000 | ||||||
Basic and diluted net loss per share, Class A common stock | $ | (0.93 | ) | $ | (0.93 | ) | ||
Weighted average shares outstanding of Class B common stock (1) | 5,750,000 | 5,750,000 | ||||||
Basic and diluted net loss per share, Class B common stock | $ | (0.93 | ) | $ | (0.93 | ) | ||
For the three months ended March 31, 2022 | For the period from March 9, 2021 (inception) through March 31, 2021 | |||||||
Formation and operating costs | $ | 792,281 | $ | 619 | ||||
Loss from operations | $ | (792,281 | ) | (619 | ) | |||
Other Income | — | — | ||||||
Bank interest income | 25 | 0 | ||||||
Interest on Trust investments | 20,880 | 0 | ||||||
Change in fair value of warrant liability | 5,800,000 | 0 | ||||||
Total other income | 5,820,905 | 0 | ||||||
Net Income (Loss) | $ | 5,028,624 | | $ | (619 | ) | ||
Weighted average shares outstanding of Class A common stock | 23,000,000 | 0 | ||||||
Basic and diluted net income per share, Class A common stock | $ | 0.17 | $ | 0 | ||||
Weighted average shares outstanding of Class B common stock | 5,750,000 | 0 | ||||||
Basic and diluted net income (loss) per share, Class B common stock | $ | 0.17 | $ | 0 | ||||
Class B Common stock | Additional | Accumulated | Total Stockholders’ | |||||||||||||||||
Shares | Amount | Paid-in Capital | Deficit | Deficit | ||||||||||||||||
Balance as of December 31, 2021 | 5,750,000 | $ | 575 | $ | 0 | $ | (17,974,760 | ) | $ | (17,974,185 | ) | |||||||||
Net income | 0 | 0 | 0 | 5,028,624 | 5,028,624 | |||||||||||||||
Balance as of March 31, 2022 (unaudited) | 5,750,000 | $ | 575 | $ | 0 | $ | (12,946,136 | ) | $ | (12,945,561 | ) | |||||||||
Class B Common stock | Additional | Accumulated | Total Stockholders’ | |||||||||||||||||
Shares | Amount | Paid-in Capital | Deficit | Equity (Deficit) | ||||||||||||||||
Balance as of March 9, 2021 (inception) | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||
Net loss | — | 0 | 0 | 0 | 0 | |||||||||||||||
Balance as of March 31, 2021 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
Class B common stock issued to founders | 5,750,000 | 575 | 24,425 | — | 25,000 | |||||||||||||||
Net loss | — | 0 | 0 | (619 | ) | (619 | ) | |||||||||||||
Balance as of June 30, 2021 | 5,750,000 | 575 | 24,425 | (619 | ) | 24,831 | ||||||||||||||
Sale of 11,700,000 Private Placement Warrants | — | — | 11,700,000 | — | 11,700,000 | |||||||||||||||
Deemed dividend to Class A stockholders to provide for the additional $0.20 of funding to the Trust | — | — | — | (4,600,000 | ) | (4,600,000 | ) | |||||||||||||
Initial classification of warranty liability- Private Placement Warrants | — | — | (8,892,000 | ) | — | (8,892,000 | ) | |||||||||||||
Deemed dividend to Class A stockholders to state the Trust at redemption value | — | — | (2,832,425 | ) | (18,542,552 | ) | (21,374,977 | ) | ||||||||||||
Net loss | — | 0 | 0 | (665,953 | ) | (665,953 | ) | |||||||||||||
Balance as of September 30, 2021 | 5,750,000 | $ | 575 | $ | 0 | $ | (23,809,124 | ) | $ | (23,808,549 | ) | |||||||||
Class B Common stock | Additional | Accumulated | Total Stockholder’s | |||||||||||||||||
Shares | Amount | Paid-in Capital | Deficit | Deficit | ||||||||||||||||
Balance as of March 9, 2021 (inception) | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||
Net loss | 0 | 0 | 0 | (619 | ) | (619 | ) | |||||||||||||
Balance as of March 31, 2021 (unaudited) | 0 | $ | 0 | $ | 0 | $ | (619 | ) | $ | (619 | ) | |||||||||
Cash flows from operating activities: | ||||
Net loss | $ | (666,572 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||
Offering costs allocated to warrants | 505,566 | |||
Interest earned on cash and marketable securities held in Trust Account | (193 | ) | ||
Changes in current assets and liabilities: | ||||
Prepaid assets | (915,147 | ) | ||
Taxes payable | 112,329 | |||
Due to related party | 667 | |||
Accrued offering costs and expenses | 40,619 | |||
Net cash used in operating activities | (922,731 | ) | ||
Cash flows from investing activities: | ||||
Principal deposited in Trust Account | (234,600,000 | ) | ||
Net cash used in investing activities | (234,600,000 | ) | ||
Cash flows from financing activities: | ||||
Proceeds from private placement warrants | 11,700,000 | |||
Proceeds from initial public offering, net of costs | 225,400,000 | |||
Proceed from sale of Class B common stock | 25,000 | |||
Proceeds from issuance of promissory note to related party | 110,000 | |||
Payment of deferred offering costs | (490,543 | ) | ||
Repayment of promissory note to related party | (110,000 | ) | ||
Net cash provided by financing activities | 236,634,457 | |||
Net change in cash | 1,111,726 | |||
Cash, beginning of the period | 0 | |||
Cash, end of the period | $ | 1,111,726 | ||
Supplemental disclosure of non-cash financing activities: | ||||
Deferred underwriting commissions payable charged to additional paid in capital | $ | 8,050,000 | ||
Class A common stock subject to possible redemption | $ | 213,225,023 | ||
Accretion of carrying value to redemption value | $ | 21,374,977 | ||
Initial classification of warrant liability | $ | 17,632,000 | ||
For the three months ended March 31, 2022 | For the Period from March 9, 2021 (Inception) through March 31, 2021 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | 5,028,624 | $ | (619 | ) | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
Change in fair value of warrant liability | (5,800,000 | ) | 0 | |||||
Interest earned on investments held in Trust Account | (20,880 | ) | 0 | |||||
Changes in operating assets and liabilities: | ||||||||
Prepaid assets | 183,481 | 0 | ||||||
Taxes payable | (10,274 | ) | 0 | |||||
Accrued offering costs and expenses | 286,849 | 619 | ||||||
Net cash used in operating activities | (332,200 | ) | 0 | |||||
Net change in cash | (332,200 | ) | 0 | |||||
Cash, beginning of the period | 1,041,948 | 0 | ||||||
Cash, end of the period | $ | 709,748 | $ | 0 | ||||
For the three months ended March 31, 2022 | For the period from March 9, 2021 (inception) through March 31, 2021 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net income (loss) per share of common stock: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income (loss) | $ | 4,022,899 | $ | 1,005,725 | $ | 0 | $ | (619 | ) | |||||||
Denominator: | ||||||||||||||||
Weighted-average shares outstanding | 23,000,000 | 5,750,000 | 0 | 0 | ||||||||||||
Basic and diluted net income (loss) per common stock | $ | 0.17 | $ | 0.17 | $ | 0 | $ | 0 | ||||||||
For the three months ended September 30, 2021 | For the period from March 9, 2021 (inception) through September 30, 2021 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net loss per common stock: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net loss and deemed dividends | $ | (21,312,744) | $ | (5,328,186) | $ | (21,313,239) | $ | (5,328,310) | ||||||||
Denominator: | ||||||||||||||||
Weighted-average shares outstanding | 23,000,000 | 5,750,000 | 23,000,000 | 5,750,000 | ||||||||||||
Basic and diluted net loss per common stock | $ | (0.93) | $ | (0.93) | $ | (0.93) | $ | (0.93) | ||||||||
Gross proceeds from IPO | $ | 234,600,000 | ||||||
Gross proceeds from the Public Offering | $ | 234,600,000 | ||||||
Less: | ||||||||
Proceeds allocated to Public Warrants | (8,740,000 | ) | (8,740,000 | ) | ||||
Common stock issuance costs | (12,634,977 | ) | (12,634,977 | ) | ||||
Plus: | ||||||||
Accretion of carrying value to redemption value | 21,374,977 | 21,374,977 | ||||||
Contingently redeemable common stock | $ | 234,600,000 | $ | 234,600,000 | ||||
• | if, and only if, the closing price of the common stock equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant for any 20 trading days within a 30-trading day period endingthree trading days before the Company sends the notice of redemption to the warrant holders. |
Amortized Cost and Carrying Value | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value as of December 31, 2021 | |||||||||||||
Cash | $ | 898 | $ | — | $ | — | $ | 898 | ||||||||
U.S. Treasury Securities | 234,617,120 | — | (9,623 | ) | 234,607,497 | |||||||||||
$ | 234,618,018 | $ | — | $ | (9,623 | ) | $ | 234,608,395 | ||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
Public Warrants | $ | — | $ | — | $ | 8,740,000 | ||||||
Private Placement Warrants | $ | — | $ | — | $ | 8,892,000 |
Input | September 30, 2021 | September 28, 2021 (Initial Measurement) | ||||||
Risk-free interest rate | 1.01 | % | 1.01 | % | ||||
Expected term (years) | 5.2 | 5.2 | ||||||
Expected volatility | 13.8 | % | 13.8 | % | ||||
Exercise price | $ | 11.50 | $ | 11.50 | ||||
Dividend rate | 0.0 | % | 0.0 | % |
Fair value at March 9, 2021 (inception) | $ | 0 | ||
Issuance due to IPO at September 28, 2021 | 17,632,000 | |||
Change in fair value | 0 | |||
Fair Value at September 30, 2021 | $ | 17,632,000 | ||
* | These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. |
DIRECT SELLING ACQUISITION CORP. | ||||||||
Date: | /s/ Dave Wentz | |||||||
Dave Wentz | ||||||||
Chief Executive Officer |