☒ | 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 | ☒ |
Item 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. | ||||||||
PART III | ||||||||
Item 1. | Interim Financial Statements. |
June 30, 2022 | December 31, 2021 | |||||||||||
(Unaudited) | ||||||||||||
ASSETS: | ||||||||||||
Current assets: | ||||||||||||
Cash | $ | 1,716,452 | $ | 254,030 | $ | 1,230,768 | ||||||
Prepaid expenses | 1,024,907 | 648,563 | 907,988 | |||||||||
Total current assets | 2,741,359 | 902,593 | 2,138,756 | |||||||||
Cash and investments held in Trust Account | 310,847,015 | 311,684,500 | 310,877,919 | |||||||||
Total Assets | $ | 313,588,374 | $ | 312,587,093 | $ | 313,016,675 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT): | ||||||||||||
LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT: | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable and accrued expenses | $ | 1,309,834 | $ | 957,941 | $ | 1,059,424 | ||||||
Accrued franchise tax | 88,767 | 100,000 | 97,310 | |||||||||
Income taxes payable | 134,860 | — | ||||||||||
Total current liabilities | 1,398,601 | 1,192,801 | 1,156,734 | |||||||||
Warrant liabilities | 33,317,984 | 4,820,458 | 13,426,650 | |||||||||
Deferred underwriting compensation | 10,666,250 | — | 10,666,250 | |||||||||
Total Liabilities | 45,382,835 | 6,013,259 | 25,249,634 | |||||||||
Commitments and Contingencies | 0 | 0 | 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 | |||||||||||
Class A common stock subject to possible redemption; 30,475,000 shares at $10.21 per share | 311,152,330 | 310,845,000 | ||||||||||
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 | |||||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized;0ne issued and outstanding | — | — | ||||||||||
Class A common stock, $0.0001 par value; 380,000,000 shares authorized;0 nonredeemable shares issued and outstanding | — | — | ||||||||||
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 | — | — | |||||||||
Accumulated deficit | (36,545,223 | ) | (4,579,258 | ) | (23,078,721 | ) | ||||||
Total Stockholders’ Deficit | (36,544,461 | ) | (4,578,496 | ) | (23,077,959 | ) | ||||||
Total Liabilities and Stockholders’ Deficit | $ | 313,588,374 | ||||||||||
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit | $ | 312,587,093 | $ | 313,016,675 | ||||||||
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 | ) | ||
Three Months Ended June 30, 2022 | Six Months Ended June 30, 2022 | Period from April 22, 2021 (inception) through June 30, 2021 | ||||||||||
Operating Expenses: | ||||||||||||
General and administrative expense s | $ | 553,118 | $ | 1,037,370 | $ | 665 | ||||||
Franchise tax expense | 50,000 | 100,000 | — | |||||||||
Loss from operations | (603,118 | ) | (1,137,370 | ) | (665 | ) | ||||||
Other Income: | ||||||||||||
Interest earned on investments held in Trust Account | 730,032 | 806,581 | — | |||||||||
Gain on settlement of deferred underwriting commissions | 10,666,250 | 10,666,250 | — | |||||||||
Change in fair value of warrant liabilities | 6,865,700 | 8,606,192 | — | |||||||||
Income (loss) before provision for income taxes | 17,658,864 | 18,941,653 | (665 | ) | ||||||||
Provisions for Income Taxes | (134,860 | ) | (134,860 | ) | — | |||||||
Net Income (Loss) | $ | 17,524,004 | $ | 18,806,793 | $ | (665 | ) | |||||
Weighted average number of shares of Class A common stock outstanding | 30,475,000 | 30,475,000 | — | |||||||||
Net income per share of common stock, Class A-basic and diluted | $ | 0.46 | $ | 0.49 | $ | — | ||||||
Weighted average number of shares of Class B common stock outstanding | 7,618,750 | 7,618,750 | 7,618,750 | |||||||||
Net income (loss) per share of common stock, Class B-basic and diluted | $ | 0.46 | $ | 0.49 | $ | 0.00 | ||||||
Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Deficit | |||||||||||||||||||||||||
Class A | Class B | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance at December 31, 2021 | — | $ | — | 7,618,750 | $ | 762 | $ | — | $ | (23,078,721 | ) | $ | (23,077,959 | ) | ||||||||||||||
Net income | — | — | — | — | — | 1,282,789 | 1,282,789 | |||||||||||||||||||||
Balance at March 31, 2022 (unaudited) | — | — | 7,618,750 | 762 | — | (21,795,932 | ) | (21,795,170 | ) | |||||||||||||||||||
Re-measurement for Class A common stock to redemption value | — | — | — | — | — | (307,330 | ) | (307,330 | ) | |||||||||||||||||||
Net income | — | — | — | — | — | 17,524,004 | 17,524,004 | |||||||||||||||||||||
Balance at June 30, 2022 (unaudited) | — | $ | — | 7,618,750 | $ | 762 | $ | — | $ | (4,579,258 | ) | $ | (4,578,496 | ) | ||||||||||||||
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 | ) | ||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Equity (Deficit) | |||||||||||||||||||||||||
Class A | Class B | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
April 22, 2021 (inception) | — | $ | — | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Issuance of common stock to initial stockholder at $0.0022 per share (1) | 7,618,750 | 762 | 24,238 | 25,000 | ||||||||||||||||||||||||
Net loss | — | — | — | — | — | (665 | ) | (665 | ) | |||||||||||||||||||
Balance at June 30, 2021 (unaudited) | — | $ | — | 7,618,750 | $ | 762 | $ | 24,238 | $ | (665 | ) | $ | 24,335 | |||||||||||||||
(1) | Shares and the associated amounts have been 1:1.06stock split of each outstanding share of Class B common stock on September |
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 |
Six Months Ended June 30, 2022 | Period from April 22, 2021 (inception) through June 30, 2021 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | 18,806,793 | $ | (665 | ) | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
Interest earned on investments held in Trust Accoun t | (806,581 | ) | — | |||||
Gain on settlement of deferred underwriting commissions | (10,666,250 | ) | — | |||||
Change in fair value of warrant liabilities | (8,606,192 | ) | — | |||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | 259,425 | — | ||||||
Accounts payable and accrued expenses | (101,483 | ) | 665 | |||||
Accrued franchise tax | 2,690 | — | ||||||
Income taxes payable | 134,860 | — | ||||||
Net cash used in operating activities | (976,738 | ) | — | |||||
Net change in cash | (976,738 | ) | — | |||||
Cash at beginning of period | 1,230,768 | — | ||||||
Cash at end of period | $ | 254,030 | $ | — | ||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||
Offering costs paid by Sponsor in exchange for Class B common stock | $ | — | $ | 25,000 | ||||
Deferred offering costs included in accounts payable and accrued expenses | $ | — | $ | 167,793 | ||||
Deferred offering costs paid through Promissory Note - Related Party | $ | — | $ | 101,447 |
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 June 30, 2022 | For the Six Months Ended June 30, 2022 | For the Period from April 22, 2021 to June 30, 2021 | ||||||||||||||||||||||
Class A | Class B | Class A | Class B | Class A | Class B | |||||||||||||||||||
Basic and diluted net income per share of common stock | ||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||
Allocation of net income, as adjusted | $ | 14,019,202 | $ | 3,504,802 | $ | 15,045,434 | $ | 3,761,359 | $ | — | $ | (665 | ) | |||||||||||
Denominator: | ||||||||||||||||||||||||
Basic and diluted weighted average shares outstanding | 30,475,000 | 7,618,750 | 30,475,000 | 7,618,750 | — | 7,618,750 | ||||||||||||||||||
Basic and diluted net income per share of common stock | $ | 0.46 | $ | 0.46 | $ | 0.49 | $ | 0.49 | $ | N/A | $ | (0.00 | ) |
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 | 42,944,405 | ||||||
Class A common stock subject to possible redemption | $ | 304,750,000 | $ | 311,152,330 | ||||
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 June 30, 2022 (1) | $ | 311,623,526 | $ | (475,453 | ) | $ | 311,148,073 | |||||
U.S. Government Treasury Securities as of December 31, 2021 (2) | $ | 310,877,120 | $ | (9,429 | ) | $ | 310,867,691 |
(1) | Maturity date September 22, 2022. |
(2) | Maturity date March 24, 2022. |
7. | Stockholders’ Equity (Deficit) |
8. | Warrant Liabilities |
9. | 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 | Level | December 31, 2021 | June 30, 2022 | ||||||||||||||||
Warrant liabilities—Public | 3 | $ | 20,418,250 | 1 | $ | 8,228,250 | $ | 2,895,125 | ||||||||||||
Warrant liabilities—Private | 3 | $ | 12,899,734 | 3 | $ | 5,198,400 | $ | 1,925,333 |
As of September 30, 2021 | As of December 31, 2021 | As of June 30, 2022 | ||||||||||
Exercise price | $ | 11.50 | $ | 11.50 | $ | 11.50 | ||||||
Stock price | $ | 9.43 | $ | 9.90 | $ | 10.00 | ||||||
Volatility for private warrants | 20.7 | % | 8.4 | % | 14.5 | % | ||||||
Term | 6.33 | 6.06 | 5.73 | |||||||||
Risk-free rate | 1.20 | % | 1.36 | % | 3.02 | % | ||||||
Dividend yield | 0.00 | % | 0 | % | 0 | % | ||||||
Probability of completing Business Combination | 100 | % (1) | 13 | % (2) |
(1) | Estimate based on completed SPAC market data published by third party as of December 31, 2021. |
(2) | Estimate based on public trading of rights for SPACs and their implied business combination probabilities as of June 30, 2022. |
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 | (3,273,067 | ) | ||
Level 3 Derivative warrant liabilities at June 30, 2022 | $ | 1,925,333 | ||
. 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. Evaluation of Disclosure Controls and Procedures |
Item 1. Legal Proceedings. |
Item 1A. Risk Factors. |
None. | Item 4. Mine Safety Disclosures. |
Item 5. Other Information. |
Item 6. Exhibits. |
* | Filed herewith |
** | Furnished herewith |
ARGUS CAPITAL CORP. | ||||||||
Date: August 12, 2022 | By: | /s/ Joseph R. Ianniello | ||||||
Name: Joseph R. Ianniello | ||||||||
Title: Chief Executive Officer | ||||||||
(Principal Executive Officer) |