☒ | 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 | 86-3426828 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
3 Columbus Circle, 24th Floor New York, New York | 10019 | |
(Address of Principal Executive Offices) | (Zip Code) |
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, $0.0001 par value, and one-half of one redeemable warrant | ARGUU | The Nasdaq Stock Market LLC | ||
Class A common stock, par value $0.0001 per share | ARGU | The Nasdaq Stock Market LLC | ||
Redeemable warrants, each warrant exercisable for one share of Class A common stock, each at an exercise price of $11.50 per share | ARGUW | The Nasdaq Stock Market LLC |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
Page | ||||||
Item 1. | 1 | |||||
1 | ||||||
2 | ||||||
3 | ||||||
4 | ||||||
5 | ||||||
Item 2. | ||||||
Item 3. | ||||||
Item 4. | ||||||
Item 1. | ||||||
Item 1A. | ||||||
Item 2. | ||||||
Item 3. | ||||||
Item 4. | ||||||
Item 5. | ||||||
Item 6. | ||||||
Item 1. | Interim Financial Statements. |
March 31, 2022 | December 31, 2021 | |||||||
(Unaudited) | ||||||||
ASSETS: | ||||||||
Current assets: | ||||||||
Cash | $ | 696,180 | $ | 1,230,768 | ||||
Prepaid expenses | 778,275 | 907,988 | ||||||
Total current assets | 1,474,455 | 2,138,756 | ||||||
Cash and investments held in Trust Account | 310,954,468 | 310,877,919 | ||||||
Total Assets | $ | 312,428,923 | $ | 313,016,675 | ||||
LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT: | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 976,685 | $ | 1,059,424 | ||||
Accrued franchise tax | 50,000 | 97,310 | ||||||
Total current liabilities | 1,026,685 | 1,156,734 | ||||||
Warrant liabilities | 11,686,158 | 13,426,650 | ||||||
Deferred underwriting compensation | 10,666,250 | 10,666,250 | ||||||
Total Liabilities | 23,379,093 | 25,249,634 | ||||||
Commitments and Contingencies | 0 | |||||||
Class A common stock subject to possible redemption; 30,475,000 shares at $10.20 per share | 310,845,000 | 310,845,000 | ||||||
Stockholders’ deficit: | ||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 0ne issued and outstanding | 0 | 0 | ||||||
Class A common stock, $0.0001 par value; 380,000,000 shares authorized; 0ne issued and outstanding | 0 | 0 | ||||||
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 7,618,750 shares issued and outstanding | 762 | 762 | ||||||
Additional paid-in capital | 0 | 0 | ||||||
Accumulated deficit | (21,795,932 | ) | (23,078,721 | ) | ||||
Total Stockholders’ Deficit | (21,795,170 | ) | (23,077,959 | ) | ||||
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit | $ | 312,428,923 | $ | 313,016,675 | ||||
ASSETS: | ||||
Current assets: | ||||
Cash | $ | 1,716,452 | ||
Prepaid expenses | 1,024,907 | |||
Total current assets | 2,741,359 | |||
Cash and investments held in Trust Account | 310,847,015 | |||
Total Assets | $ | 313,588,374 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT): | ||||
Current liabilities: | ||||
Accounts payable and accrued expenses | $ | 1,309,834 | ||
Accrued franchise tax | 88,767 | |||
Total current liabilities | 1,398,601 | |||
Warrant liabilities | 33,317,984 | |||
Deferred underwriting compensation | 10,666,250 | |||
Total Liabilities | 45,382,835 | |||
Commitments and Contingencies | 0 | |||
Class A common stock subject to possible redemption; 30,475,000 shares at $10.00 per share at September 30, 2021 | 304,750,000 | |||
Stockholders’ deficit: | ||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 0ne issued and outstanding | 0 | |||
Class A common stock, $0.0001 par value; 380,000,000 shares authorized; 0ne issued and outstanding | 0 | |||
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 7,618,750 shares issued and outstanding at September 30, 2021 | 762 | |||
Additional paid-in capital | 0 | |||
Accumulated deficit | (36,545,223 | ) | ||
Total Stockholders’ Deficit | (36,544,461 | ) | ||
Total Liabilities and Stockholders’ Deficit | $ | 313,588,374 | ||
For the three months ended September 30, 2021 | For the period from April 22, (inception) through September 30, 2021 | |||||||
Operating Expenses: | ||||||||
General and administrative expenses | $ | 50,140 | $ | 50,805 | ||||
Franchise tax expense | 88,767 | 88,767 | ||||||
Loss from operations | (138,907 | ) | (139,572 | ) | ||||
Other income (expense): | ||||||||
Interest income earned on Trust Account | 2,015 | 2,015 | ||||||
Change in fair value of warrant liabilities | (152,375 | ) | (152,375 | ) | ||||
Warrant issuance transaction costs | (1,277,720 | ) | (1,277,720 | ) | ||||
Income before provision for income taxes | (1,566,987 | ) | (1,567,652 | ) | ||||
Net loss | $ | (1,566,987 | ) | $ | (1,567,652 | ) | ||
Weighted average shares outstanding of Class A common stock | 1,987,500 | 1,128,704 | ||||||
Net loss per common stock, Class A—basic and diluted | $ | (0.16 | ) | $ | (0.18 | ) | ||
Weighted average shares outstanding of Class B common stock | 7,618,750 | 7,618,750 | ||||||
Net loss per common stock, Class B—basic and diluted | $ | (0.16 | ) | $ | (0.18 | ) | ||
Common Stock | Additional Paid- in Capital | Accumulated Deficit | Total Stockholders’ Deficit | |||||||||||||||||||||||||
Class A | Class B | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance at April 22, 2021 (inception) | 0 | $ | 0 | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||
Issuance approximately $0.0002 per share (1) | — | — | 7,618,750 | 762 | 24,238 | — | 25,000 | |||||||||||||||||||||
Net loss | — | — | — | — | — | (665 | ) | (665 | ) | |||||||||||||||||||
Balance at June 30, 2021 | — | — | 7,618,750 | 762 | 24,238 | (665 | ) | 24,335 | ||||||||||||||||||||
Cash received in excess of fair value of private | — | — | — | — | 1,540,266 | — | 1,540,266 | |||||||||||||||||||||
Accretion of Class A common stock subject to redemption | — | — | — | — | (1,564,504 | ) | (34,977,571 | ) | (36,542,075 | ) | ||||||||||||||||||
Net loss | — | — | — | — | — | (1,566,987 | ) | (1,566,987 | ) | |||||||||||||||||||
Balance at September 30, 2021 | 0 | $ | 0 | 7,618,750 | $ | 762 | $ | 0 | $ | (36,545,223 | ) | $ | (36,544,461 | ) | ||||||||||||||
Operating Expenses: | ||||
General and administrative expenses | $ | 484,252 | ||
Franchise tax expense | 50,000 | |||
Loss from operations | (534,252 | ) | ||
Other income: | ||||
Interest earned on investments held in Trust Account | 76,549 | |||
Change in fair value of warrant liabilities | 1,740,492 | |||
Income before provision for income taxes | 1,282,789 | |||
Provisions for Income Taxes | 0 | |||
Net Income | $ | 1,282,789 | ||
Weighted average number of shares of Class A common stock outstanding | 30,475,000 | |||
Net income per share of common stock, Class A-basic and diluted | $ | 0.03 | ||
Weighted average number of shares of Class B common stock outstanding | 7,618,750 | |||
Net income per share of common stock, Class B-basic and diluted | $ | 0.03 | ||
Common Stock | Additional Paid- in Capital | Accumulated Deficit | Total Stockholders’ Deficit | |||||||||||||||||||||||||
Class A | Class B | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance at December 31, 2021 | 0 | $ | 0 | 7,618,750 | $ | 762 | $ | $ | (23,078,721 | ) | $ | (23,077,959 | ) | |||||||||||||||
Net income | — | — | — | — | — | 1,282,789 | 1,282,789 | |||||||||||||||||||||
Balance at March 31, 2022 (unaudited) | 0 | $ | 0 | 7,618,750 | $ | 762 | $ | 0 | $ | (21,795,932 | ) | $ | (21,795,170 | ) | ||||||||||||||
Cash flows from operating activities: | ||||
Net loss | $ | (1,567,652 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Interest income earned on Trust Account | (2,015 | ) | ||
Change in fair value of warrant liabilities | 152,375 | |||
Warrant issuance transaction costs | 1,277,720 | |||
Changes in operating assets and liabilities: | ||||
Prepaid expenses | (1,024,907 | ) | ||
Accounts payable and accrued expenses | 1,075,047 | |||
Accrued franchise tax | 88,767 | |||
Net cash used in operating activities | (665 | ) | ||
Cash flows from investing activities: | ||||
Principal deposited in Trust Account | (310,845,000 | ) | ||
Net cash used in investing activities | (310,845,000 | ) | ||
Cash flows from financing activities: | ||||
Proceeds from private placement of warrants | 14,440,000 | |||
Proceeds from sale of units in initial public offering | 304,750,000 | |||
Payment of underwriters’ discount | (6,095,000 | ) | ||
Payment of offering costs | (532,883 | ) | ||
Advances received from Promissory note | 188,915 | |||
Repayment of advances received from Promissory note | (188,915 | ) | ||
Net cash provided by financing activities | 312,562,117 | |||
Increase in cash during period | 1,716,452 | |||
Cash at beginning of period | 0 | |||
Cash at end of period | $ | 1,716,452 | ||
Supplemental disclosure of non-cash investing and financing activities: | ||||
Deferred underwriting compensation | $ | 10,666,250 | ||
Offering costs paid by sponsor in exchange for founder shares | $ | 25,000 | ||
Deferred offering costs included in accounts payable and accrued expenses | $ | 234,787 |
Cash flows from operating activities: | ||||
Net income | $ | 1,282,789 | ||
Adjustments to reconcile net income to net cash used in operating activities: | ||||
Interest earned on investments held in Trust Account | (76,549 | ) | ||
Change in fair value of warrant liabilities | (1,740,492 | ) | ||
Changes in operating assets and liabilities: | ||||
Prepaid expenses | 129,713 | |||
Accounts payable and accrued expenses | (82,739 | ) | ||
Accrued franchise tax | (47,310 | ) | ||
Net cash used in operating activities | (534,588 | ) | ||
Net change in cash | (534,588 | ) | ||
Cash at beginning of period | 1,230,768 | |||
Cash at end of period | $ | 696,180 | ||
1. | Organization and Business Operations |
2. | Significant Accounting Policies |
For the Three Months Ended September 30, 2021 | For the period from April 22, 2021 (inception) through September 30, 2021 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net income (loss) per common stock | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income (loss), as adjusted | $ | 324,204 | $ | 1,242,783 | $ | 202,278 | $ | 1,365,374 | ||||||||
Denominator: | ||||||||||||||||
Basic and diluted weighted average shares outstanding | 1,987,500 | 7,618,750 | 1,128,704 | 7,618,750 | ||||||||||||
Basic and diluted net income (loss) per common stock | $ | (0.16 | ) | $ | (0.16 | ) | $ | (0.18 | ) | $ | (0.18 | ) |
For the Three Months Ended March 31, 2022 | ||||||||
Class A | Class B | |||||||
Basic and diluted net income per share of common stock | ||||||||
Numerator: | ||||||||
Allocation of net income , as adjusted | $ | 1,034,867 | $ | 258,717 | ||||
Denominator: | ||||||||
Basic and diluted weighted average shares outstanding | 30,475,000 | 7,618,750 | ||||||
Basic and diluted net income per share of common stock | $ | 0.03 | $ | 0.03 |
Gross proceeds | $ | 304,750,000 | $ | 304,750,000 | ||||
Less: | ||||||||
Proceeds allocated to Public Warrants | (20,265,875 | ) | (20,265,875 | ) | ||||
Class A common stock issuance costs | (16,276,200 | ) | (16,276,200 | ) | ||||
Plus: | ||||||||
Accretion of carrying value to redemption value | 36,542,075 | 42,637,075 | ||||||
Class A common stock subject to possible redemption | $ | 304,750,000 | $ | 310,845,000 | ||||
3. | Public Offering |
4. | Related Party Transactions |
5. | Commitments and Contingencies |
6. | Trust Account |
Carrying Value | Gross Unrealized Holding (Loss) | Quoted Prices in Active Markets (Level 1) | ||||||||||
U.S. Government Treasury Securities as of March 31, 2022 (1) | $ | 310,893,494 | $ | (10,888 | ) | $ | 310,882,606 | |||||
U.S. Government Treasury Securities as of December 31, 2021 (1) | $ | 310,877,120 | $ | (9,429 | ) | $ | 310,867,691 |
(1) | Maturity date September 22, 2022. |
7. | Stockholders’ |
8. | Warrant Liabilities |
9. | Income Tax |
March 31, | ||||
2022 | ||||
Current | ||||
Federal | $ | 0 | ||
State | 0 | |||
Deferred | — | |||
Federal | 93,851 | |||
State | 0 | |||
Valuation allowance | (93,851 | ) | ||
Income tax provision | $ | 0 | ||
December 31, | March 31, | |||||||
2021 | 2022 | |||||||
Total Deferred tax asset | ||||||||
Net Operating loss | $ | 98,152 | $ | 192,003 | ||||
Accrued expense | 0 | 0 | ||||||
Less: Valuation allowance | (98,152 | ) | (192,003 | ) | ||||
Net deferred tax assets | $ | 0 | $ | 0 | ||||
Deferred tax liabilities | ||||||||
Unrealized (gain) or loss | 0 | 0 | ||||||
Net Deferred tax assets (liabilities) | $ | 0 | $ | 0 | ||||
March 31, | ||||
2022 | ||||
Statutory federal income tax rate | 21.0 | % | ||
Fair value change in warrant liability | (28.3 | ) | ||
Change in valuation allowance | 7.3 | |||
Total tax provision | 0 | % | ||
10. | Fair Value Measurements |
Carrying Value | Gross Unrealized Holding (Loss) | Quoted Prices in Active Markets (Level 1) | ||||||||||
U.S. Government Treasury Securities as of September 30, 2021 (1) | $ | 310,846,216 | $ | (9,615 | ) | $ | 310,836,601 |
Level | September 30, 2021 | |||||||
Warrant liabilities—Public | 3 | $ | 20,418,250 | |||||
Warrant liabilities—Private | 3 | $ | 12,899,734 |
Level | December 31, 2021 | March 31, 2022 | ||||||||
Warrant liabilities—Public | 1 | $ | 8,228,250 | $ | 7,161,625 | |||||
Warrant liabilities—Private | 3 | $ | 5,198,400 | $ | 4,524,533 |
As of September 30, 2021 | ||||
Exercise price | $ | 11.50 | ||
Stock price | $ | 9.43 | ||
Volatility for private warrants | 20.7 | % | ||
Term | 6.33 | |||
Risk-free rate | 1.20 | % | ||
Dividend yield | 0.00 | % |
As of December 31, 2021 | As of March 31, 2022 | |||||||
Exercise price | $ | 11.50 | $ | 11.50 | ||||
Stock price | $ | 9.90 | $ | 9.98 | ||||
Volatility for private warrants | 8.4 | % | 5 | % | ||||
Term | 6.06 | 5.82 | ||||||
Risk-free rate | 1.36 | % | 0 | % | ||||
Dividend yield | 0 | % | 0 | % |
Level 3 Derivative warrant liabilities at April 22, 2021 (inception) | $ | 0 | ||
Issuance of Public and Private Warrants | 33,165,609 | |||
Change in fair value of derivative warrant liabilities | 152,375 | |||
Level 3 Derivative warrant liabilities at September 30, 2021 | $ | 33,317,984 | ||
Level 3 Derivative warrant liabilities at December 31, 2021 | $ | 5,198,400 | ||
Change in fair value of derivative warrant liabilities | (673,867 | ) | ||
Level 3 Derivative warrant liabilities at March 31, 2022 | $ | 4,524,533 | ||
11. | Subsequent Events |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk. |
Item 4. | Controls and Procedures. |
Item 1. | Legal Proceedings. |
Item 1A. | Risk Factors. |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
Item 3. | Defaults Upon Senior Securities. |
Item 4. | Mine Safety Disclosures. |
Item 5. | Other Information. |
Item 6. | Exhibits. |
* | Filed herewith |
** | Furnished herewith |
ARGUS CAPITAL CORP. | ||||||||
Date: | By: | /s/ Joseph R. Ianniello | ||||||
Name: Joseph R. Ianniello | ||||||||
Title: Chief Executive Officer | ||||||||
(Principal Executive Officer) |