☒ | 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 | 001-39948 | 85-3310839 | ||
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (IRS Employer Identification No.) |
515 North Flagler Drive, Suite 520 West Palm Beach, FL | 33401 | |
(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 Class A common share, $0.0001 par value, and one-third of one redeemable warrant | TLGA.U | NYSE | ||
Class A common shares included as part of the units | TLGA | NYSE | ||
Redeemable warrants included as part of the units | TLGA WS | NYSE |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ||||||
Emerging growth company | ☒ | |||||
TLG ACQUISITION ONE CORP.
Form
For the Quarter Ended March 31,September 30, 2022
Table of Contents
Page | ||||||
Item 1. | 1 | |||||
1 | ||||||
2 | ||||||
3 | ||||||
4 | ||||||
5 | ||||||
Item 2. | ||||||
22 | ||||||
Item | ||||||
Item 4. | 26 | |||||
PART II. OTHER INFORMATION | ||||||
Item 1. | ||||||
Item 1A. | ||||||
Item 2. | ||||||
Item 3. | ||||||
Item 4. | ||||||
Item 5. | ||||||
Item 6. | ||||||
Item 1. | Condensed Consolidated Financial Statements |
March 31, 2022 | December 31, 2021 | |||||||||||||||
(unaudited) | September 30, 2022 | December 31, 2021 | ||||||||||||||
Assets: | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash | $ | 71,468 | $ | 48,491 | $ | 242,304 | $ | 48,491 | ||||||||
Prepaid expenses | 832,926 | 105,654 | 413,132 | 105,654 | ||||||||||||
Total current assets | 904,394 | 154,145 | 655,436 | 154,145 | ||||||||||||
Investments held in Trust Account | 400,056,330 | 400,023,684 | 402,112,433 | 400,023,684 | ||||||||||||
Total Assets | $ | 400,960,724 | $ | 400,177,829 | $ | 402,767,869 | $ | 400,177,829 | ||||||||
Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit: | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable | $ | 94,135 | $ | 48,917 | $ | 167,288 | $ | 48,917 | ||||||||
Accrued expenses | 1,988,896 | 2,428,864 | 2,770,245 | 2,428,864 | ||||||||||||
Working Capital Loan - related party | 2,320,000 | 920,000 | ||||||||||||||
Working capital loan—related party | 2,820,000 | 920,000 | ||||||||||||||
Income tax payable | 426,868 | — | ||||||||||||||
Franchise tax payable | 50,000 | 121,425 | 30,000 | 121,425 | ||||||||||||
Total current liabilities | 4,453,031 | 3,519,206 | 6,214,401 | 3,519,206 | ||||||||||||
Derivative warrant liabilities | 4,000,000 | 10,600,000 | 1,000,000 | 10,600,000 | ||||||||||||
Deferred underwriting commissions | 14,000,000 | 14,000,000 | 14,000,000 | 14,000,000 | ||||||||||||
Total Liabilities | 22,453,031 | 28,119,206 | 21,214,401 | 28,119,206 | ||||||||||||
Commitments and Contingencies | 0 | 0 | ||||||||||||||
Class A common stock subject to possible redemption, $0.0001 par value; 40,000,000 shares at redemption value of $10.00 per share as of March 31, 2022 and December 31, 2021 | 400,000,000 | 400,000,000 | ||||||||||||||
Class A common stock subject to possible redemption, $0.0001 par value; 40,000,000 shares at redemption value of approximately $10.04 and $10.00 per share as of September 30, 2022 and December 31, 2021 | 401,505,838 | 400,000,000 | ||||||||||||||
Stockholders’ Deficit: | ||||||||||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; NaNissued and outstanding as of March 31, 2022 and December 31, 2021 | 0— | 0 | ||||||||||||||
Class A common stock, $0.0001 par value; 200,000,000 shares authorized; 0 non-redeemable shares issued and outstanding as of March 31, 2022 and December 31, 2021 | 0 | 0 | ||||||||||||||
Class F common stock, $0.0001 par value; 20,000,000 shares authorized; 10,000,000 shares issued and outstanding as of March 31, 2022 and December 31, 2021 | 1,000 | 1,000 | ||||||||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding as of September 30, 2022 and December 31, 2021 | — | — | ||||||||||||||
Class A common stock, $0.0001 par value; 200,000,000 shares authorized; no non-redeemable shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively (excluding 40,000,000 shares subject to possible redemption) | — | — | ||||||||||||||
Class F common stock, $0.0001 par value; 20,000,000 shares authorized; 10,000,000 shares issued and outstanding as of September 30, 2022 and December 31, 2021 | 1,000 | 1,000 | ||||||||||||||
Additional paid-in capital | 0 | 0 | — | — | ||||||||||||
Accumulated deficit | (21,493,307 | ) | (27,942,377 | ) | (19,953,370 | ) | (27,942,377 | ) | ||||||||
Total stockholders’ deficit | (21,492,307 | ) | (27,941,377 | ) | (19,952,370 | ) | (27,941,377 | ) | ||||||||
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit | $ | 400,960,724 | $ | 400,177,829 | $ | 402,767,869 | $ | 400,177,829 | ||||||||
For The Three Months Ended March 31, | For The Three Months Ended September 30, | For The Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
General and administrative expenses | $ | 74,233 | $ | 273,069 | $ | 1,676,761 | $ | 161,058 | $ | 1,835,743 | $ | 3,337,532 | ||||||||||||
General and administrative expenses - related party | 20,500 | 14,000 | ||||||||||||||||||||||
General and administrative expenses—related party | 21,000 | 22,000 | 62,500 | 57,000 | ||||||||||||||||||||
Franchise tax expenses | 88,844 | 97,996 | 50,000 | 59,808 | 188,844 | 207,119 | ||||||||||||||||||
Loss from operations | (183,577 | ) | (385,065 | ) | (1,747,761 | ) | (242,866 | ) | (2,087,087 | ) | (3,601,651 | ) | ||||||||||||
Offering costs associated with derivative warrant liabilities | 0 | (1,413,340 | ) | — | — | — | (1,413,340 | ) | ||||||||||||||||
Change in fair value of derivative warrant liabilities | 6,600,000 | 12,866,660 | 600,000 | 4,933,340 | 9,600,000 | 20,800,000 | ||||||||||||||||||
Income from investments held in Trust Account | 32,647 | 3,874 | 1,808,010 | 6,145 | 2,408,800 | 16,098 | ||||||||||||||||||
Earnings before income taxes | 6,449,070 | 11,072,129 | ||||||||||||||||||||||
Net income before income taxes | 660,249 | 4,696,619 | 9,921,713 | 15,801,107 | ||||||||||||||||||||
Income tax expense | 0 | 0 | (369,182 | ) | — | (426,868 | ) | — | ||||||||||||||||
Net income | $ | 6,449,070 | $ | 11,072,129 | $ | 291,067 | $ | 4,696,619 | $ | 9,494,845 | $ | 15,801,107 | ||||||||||||
Weighted average shares outstanding of Class A common stock, basic and diluted | 40,000,000 | 26,222,222 | ||||||||||||||||||||||
Weighted average shares outstanding of Class A common stock | 40,000,000 | 40,000,000 | 40,000,000 | 35,457,875 | ||||||||||||||||||||
Basic and diluted net income per share, Class A common stock | $ | 0.13 | $ | 0.31 | $ | 0.01 | $ | 0.09 | $ | 0.19 | $ | 0.35 | ||||||||||||
Weighted average shares outstanding of Class F common stock, basic | 10,000,000 | 9,569,444 | 10,000,000 | 10,000,000 | 10,000,000 | 9,858,059 | ||||||||||||||||||
Basic net income per share, Class F common stock | $ | 0.13 | $ | 0.31 | $ | 0.01 | $ | 0.09 | $ | 0.19 | $ | 0.35 | ||||||||||||
Weighted average shares outstanding of Class F common stock, diluted | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||||||||||
Diluted net income per share, Class F common stock | $ | 0.13 | $ | 0.31 | $ | 0.01 | $ | 0.09 | $ | 0.19 | $ | 0.35 | ||||||||||||
Common Stock | Additional | Total | ||||||||||||||||||||||||||
Class A | Class F | Paid-In | Accumulated | Stockholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
Balance - December 31, 2021 | 0 | $ | 0 | 10,000,000 | $ | 1,000 | $ | 0 | $ | (27,942,377 | ) | $ | (27,941,377 | ) | ||||||||||||||
Net income | — | — | — | — | 0 | 6,449,070 | 6,449,070 | |||||||||||||||||||||
Balance - March 31, 2022 (unaudited) | 0 | $ | 0 | 10,000,000 | $ | 1,000 | $ | 0 | $ | (21,493,307 | ) | $ | (21,492,307 | ) | ||||||||||||||
Common Stock | Additional | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Deficit | ||||||||||||||||||||||||||||||||||||||||||||||||||
Class A | Class F | Paid-In | Accumulated | Stockholders’ | Class A | Class F | ||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||
Balance - January 1, 2021 | 0 | $ | 0 | 10,000,000 | $ | 1,000 | $ | 24,000 | $ | (3,329 | ) | $ | 21,671 | |||||||||||||||||||||||||||||||||||||||||||
Balance—December 31, 2021 | — | $ | — | 10,000,000 | $ | 1,000 | $ | — | $ | (27,942,377 | ) | $ | (27,941,377 | ) | ||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 6,449,070 | 6,449,070 | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance—March 31, 2022 (unaudited) | — | — | 10,000,000 | 1,000 | — | (21,493,307 | ) | (21,492,307 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Increase in redemption value of Class A common stock subject to possible redemption | — | — | — | — | — | (117,010 | ) | (117,010 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 2,754,708 | 2,754,708 | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance—June 30, 2022 (unaudited) | — | — | 10,000,000 | 1,000 | — | (18,855,609 | ) | (18,854,609 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Increase in redemption value of Class A common stock subject to possible redemption | — | — | — | — | — | (1,388,828 | ) | (1,388,828 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 291,067 | 291,067 | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance—September 30, 2022 (unaudited) | — | $ | — | 10,000,000 | $ | 1,000 | $ | — | $ | (19,953,370 | ) | $ | (19,952,370 | ) | ||||||||||||||||||||||||||||||||||||||||||
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 | FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Deficit | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A | Class F | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance—January 1, 2021 | — | $ | — | 10,000,000 | $ | 1,000 | $ | 24,000 | $ | (3,329 | ) | $ | 21,671 | |||||||||||||||||||||||||||||||||||||||||||
Accretion of Class A common stock subject to possible redemption amount | — | — | — | — | (24,000 | ) | (45,861,780 | ) | (45,885,780 | ) | — | — | — | — | (24,000 | ) | (45,861,780 | ) | (45,885,780 | ) | ||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | 0 | 11,072,129 | 11,072,129 | — | — | — | — | — | 11,072,129 | 11,072,129 | ||||||||||||||||||||||||||||||||||||||||||
Balance - March 31, 2021 (unaudited) | 0 | $ | 0 | 10,000,000 | $ | 1,000 | $ | 0 | $ | (34,792,980 | ) | $ | (34,791,980 | ) | ||||||||||||||||||||||||||||||||||||||||||
Balance—March 31, 2021 (unaudited) | — | — | 10,000,000 | 1,000 | — | (34,792,980 | ) | (34,791,980 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 32,359 | 32,359 | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance—June 30, 2021 (unaudited) | — | — | 10,000,000 | 1,000 | — | (34,760,621 | ) | (34,759,621 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 4,696,619 | 4,696,619 | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance—September 30, 2021 (unaudited) | — | $ | — | 10,000,000 | $ | 1,000 | $ | — | $ | (30,064,002 | ) | $ | (30,063,002 | ) | ||||||||||||||||||||||||||||||||||||||||||
For The Three Months Ended March 31, | For The Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Cash Flows from Operating Activities: | ||||||||||||||||
Net income | $ | 6,449,070 | $ | 11,072,129 | $ | 9,494,845 | $ | 15,801,107 | ||||||||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||||||||||||
General and administrative expenses paid by related party under note payable | 0 | 1,530 | — | 1,530 | ||||||||||||
Offering costs allocated to derivative warrant liabilities | 0 | 1,413,340 | — | 1,413,340 | ||||||||||||
Change in fair value of derivative warrant liabilities | (6,600,000 | ) | (12,866,660 | ) | (9,600,000 | ) | (20,800,000 | ) | ||||||||
Income from investments held in Trust Account | (32,647 | ) | (3,874 | ) | (2,408,800 | ) | (16,098 | ) | ||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Prepaid expenses | (727,272 | ) | (785,836 | ) | (307,478 | ) | (365,391 | ) | ||||||||
Accounts payable | 45,218 | 18,000 | 118,371 | 270,064 | ||||||||||||
Accrued expenses | (439,967 | ) | 21,250 | 341,382 | 1,675,330 | |||||||||||
Income tax payable | 426,868 | — | ||||||||||||||
Franchise tax payable | (71,425 | ) | 48,270 | (91,425 | ) | 147,448 | ||||||||||
Net cash used in operating activities | (1,377,023 | ) | (1,081,851 | ) | (2,026,237 | ) | (1,872,670 | ) | ||||||||
Cash Flows from Investing Activities | ||||||||||||||||
Investment income released from Trust Account to pay for taxes | 320,050 | — | ||||||||||||||
Cash deposited in Trust Account | 0 | (400,000,000 | ) | — | (400,000,000 | ) | ||||||||||
Net cash used in investing activities | 0 | (400,000,000 | ) | |||||||||||||
Net cash provided by (used in) investing activities | 320,050 | (400,000,000 | ) | |||||||||||||
Cash Flows from Financing Activities: | ||||||||||||||||
Repayment of note payable to related party | 0 | (192,312 | ) | — | (192,312 | ) | ||||||||||
Proceeds received from initial public offering, gross | 0 | 400,000,000 | — | 400,000,000 | ||||||||||||
Proceeds received from private placement | 0 | 10,000,000 | — | 10,000,000 | ||||||||||||
Working Capital Loan - related party | 1,400,000 | 0 | ||||||||||||||
Working Capital Loan—related party | 1,900,000 | 570,000 | ||||||||||||||
Offering costs paid | 0 | (8,467,900 | ) | — | (8,467,900 | ) | ||||||||||
Net cash provided by financing activities | 1,400,000 | 401,339,788 | 1,900,000 | 401,909,788 | ||||||||||||
Net change in cash | 22,977 | 257,937 | 193,813 | 37,118 | ||||||||||||
Cash - beginning of the period | 48,491 | 500 | ||||||||||||||
Cash - end of the period | $ | 71,468 | $ | 258,437 | ||||||||||||
Cash—beginning of the period | 48,491 | 500 | ||||||||||||||
Cash—end of the period | $ | 242,304 | $ | 37,618 | ||||||||||||
Supplemental disclosure of noncash activities: | ||||||||||||||||
Deferred offering costs included in accrued expenses | $ | 0 | $ | 85,000 | $ | — | $ | 85,000 | ||||||||
Deferred offering costs paid by related party under promissory note | $ | 0 | $ | 51,890 | $ | — | $ | 51,890 | ||||||||
Accounts payable paid through promissory note | $ | 0 | $ | 750 | $ | — | $ | 750 | ||||||||
Deferred underwriting commissions in connection with the initial public offering | $ | 0 | $ | 14,000,000 | $ | — | $ | 14,000,000 |
For The Three Months Ended March 31, 2022 | ||||||||
Class A | Class F | |||||||
Basic and diluted net income per common stock: | ||||||||
Numerator: | ||||||||
Allocation of net income | $ | 5,159,256 | $ | 1,289,814 | ||||
Denominator: | ||||||||
Basic and diluted weighted average common stock outstanding | 40,000,000 | 10,000,000 | ||||||
Basic and diluted net income per common stock | $ | 0.13 | $ | 0.13 | ||||
For The Three Months Ended September 30, | ||||||||||||||||||||||||
For The Three Months Ended March 31, 2021 | 2022 | 2021 | ||||||||||||||||||||||
Class A | Class F | Class A | Class F | Class A | Class F | |||||||||||||||||||
Basic and diluted net income per common stock: | ||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||
Allocation of net income, basic | $ | 8,111,828 | $ | 2,960,302 | $ | 232,854 | $ | 58,213 | $ | 3,757,295 | $ | 939,324 | ||||||||||||
Allocation of net income, diluted | 8,015,407 | 3,056,723 | 232,854 | 58,213 | 3,757,295 | 939,324 | ||||||||||||||||||
Denominator: | ||||||||||||||||||||||||
Basic weighted average common stock outstanding | 26,222,222 | 9,569,444 | 40,000,000 | 10,000,000 | 40,000,000 | 10,000,000 | ||||||||||||||||||
Diluted weighted average common stock outstanding | 26,222,222 | 10,000,000 | 40,000,000 | 10,000,000 | 40,000,000 | 10,000,000 | ||||||||||||||||||
Basic net income per common stock | $ | 0.31 | $ | 0.31 | $ | 0.01 | $ | 0.01 | $ | 0.09 | $ | 0.09 | ||||||||||||
Diluted net income per common stock | $ | 0.31 | $ | 0.31 | $ | 0.01 | $ | 0.01 | $ | 0.09 | $ | 0.09 | ||||||||||||
For The Nine Months Ended September 30, | ||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||
Class A | Class F | Class A | Class F | |||||||||||||||||||||
Basic and diluted net income per common stock: | ||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||
Allocation of net income, basic | $ | 7,595,876 | $ | 1,898,969 | $ | 12,363,724 | $ | 3,437,383 | ||||||||||||||||
Allocation of net income, diluted | 7,595,876 | 1,898,969 | 12,325,118 | 3,475,989 | ||||||||||||||||||||
Denominator: | ||||||||||||||||||||||||
Basic weighted average common stock outstanding | 40,000,000 | 10,000,000 | 35,457,875 | 9,858,059 | ||||||||||||||||||||
Diluted weighted average common stock outstanding | 40,000,000 | 10,000,000 | 35,457,875 | 10,000,000 | ||||||||||||||||||||
Basic net income per common stock | $ | 0.19 | $ | 0.19 | $ | 0.35 | $ | 0.35 | ||||||||||||||||
Diluted net income per common stock | $ | 0.19 | $ | 0.19 | $ | 0.35 | $ | 0.35 | ||||||||||||||||
Gross proceeds from Initial Public Offering | $ | 400,000,000 | $ | 400,000,000 | ||||
Less: | ||||||||
Fair value of Public Warrants at issuance | (24,533,330 | ) | (24,533,330 | ) | ||||
Offering costs allocated to Class A common stock subject to possible redemption | (21,284,250 | ) | (21,284,250 | ) | ||||
Plus: | ||||||||
Accretion on Class A common stock subject to possible redemption amount | 45,817,580 | |||||||
Class A common stock subject to possible redemption | $ | 400,000,000 | ||||||
Accretion on Class A common stock subject to possible redemption amount | 45,817,580 | |||
Class A common stock subject to possible redemption as of December 31, 2021 | 400,000,000 | |||
Increase in redemption value of Class A common stock subject to possible redemption | 1,505,838 | |||
Class A common stock subject to possible redemption as of September 30, 2022 | $ | 401,505,838 | ||
Significant Other | Significant Other | |||||||||||
Quoted Prices in Active Markets | Observable Inputs | Unobservable Inputs | ||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | |||||||||
Assets: | ||||||||||||
Investments held in Trust Account - Money market fund | $ | 400,056,330 | $ | — | $ | — | ||||||
Liabilities: | ||||||||||||
Derivative warrant liabilities - Public warrants | $ | 2,666,670 | — | — | ||||||||
Derivative warrant liabilities - Private placement warrants | $ | — | $ | 1,333,330 | $ | |||||||
Working Capital L oan - related party | $ | — | $ | — | $ | 2,320,000 |
Description | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||
Assets: | ||||||||||||
Investments held in Trust Account-Money market fund | $ | 402,112,433 | $ | — | $ | — | ||||||
Liabilities: | ||||||||||||
Derivative warrant liabilities-Public warrants | $ | 666,670 | — | — | ||||||||
Derivative warrant liabilities-Private placement warrants | $ | — | $ | 333,330 | $ | |||||||
Working Capital Loan-related party | $ | — | $ | — | $ | 2,820,000 |
Significant Other | Significant Other | |||||||||||
Quoted Prices in Active Markets | Observable Inputs | Unobservable Inputs | ||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | |||||||||
Assets: | ||||||||||||
Investments held in Trust Account - Money market fund | $ | 400,023,684 | $ | — | $ | — | ||||||
Liabilities: | ||||||||||||
Derivative warrant liabilities—Public warrants | $ | 6,933,330 | — | — | ||||||||
Derivative warrant liabilities - Private placement warrants | $ | — | $ | — | $ | 3,666,670 | ||||||
Working Capital L oan - related party | $ | — | $ | — | $ | 920,000 |
Description | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||
Assets: | ||||||||||||
Investments held in Trust Account-Money market fund | $ | 400,023,684 | $ | — | $ | — | ||||||
Liabilities: | ||||||||||||
Derivative warrant liabilities-Public warrants | $ | 6,933,330 | — | — | ||||||||
Derivative warrant liabilities-Private placement warrants | $ | — | $ | — | $ | 3,666,670 | ||||||
Working Capital Loan-related party | $ | — | $ | — | $ | 920,000 |
December 31, 2021 | ||||
Exercise price | $ | 11.50 | ||
Stock price | $ | 9.73 | ||
Term (yrs) | 5 | |||
Volatility | 10.5 | % | ||
Risk-free rate | 1.44 | % |
Derivative Warrant Liabilities | Working Capital Loan- Related Party | |||||||
Level 3 - Liabilities at December 31, 2021 | $ | 3,666,670 | $ | 920,000 | ||||
Transfer of Private Placement Warrants from Level 3 to Level 2 | (3,666,670 | ) | 0 | |||||
Working Capital Loan - related party | 0 | 1,400,000 | ||||||
Level 3 - Liabilities at March 31, 2022 | $ | 0 | $ | 2,320,000 | ||||
Level 3 - Derivative warrant liabilities at January 1, 2021 | $ | 0 | ||
Issuance of Public and Private Warrants | 34,533,330 | |||
Transfer of Public Warrants to Level 1 | (24,533,330 | ) | ||
Change in fair value of derivative warrant liabilities | 4,066,670 | |||
Level 3 - Derivative warrant liabilities at March 31, 2021 | $ | 14,066,670 | ||
December 31, 2021 | ||||
Exercise price | $ | 11.50 | ||
Stock price | $ | 9.73 | ||
Term (years) | 5 | |||
Volatility | 10.5 | % | ||
Risk-free rate | 1.44 | % |
Derivative Warrant Liabilities | Working Capital Loans- Related Party | |||||||
Level 3 - Instruments January 1, 2021 | $ | — | $ | — | ||||
Issuance of Public and Private Placement Warrants | 38,400,000 | — | ||||||
Transfer of Public Warrants to Level 1 | (24,533,330 | ) | — | |||||
Change in fair value of derivative warrant liabilities | (10,200,000 | ) | — | |||||
Working capital loan - related party | — | 920,000 | ||||||
Level 3 - Instruments at December 31, 2021 | 3,666,670 | 920,000 | ||||||
Transfer of Private Placement Warrants from Level 3 to Level 2 | (3,666,670 | ) | — | |||||
Working capital loan - related party | — | 1,400,000 | ||||||
Level 3 - Instruments at March 31, 2022 | — | 2,320,000 | ||||||
Working capital loan - related party | — | 500,000 | ||||||
Level 3 - Instruments at June 30, 2022 | $ | — | $ | 2,820,000 | ||||
Level 3 - Instruments at September 30, 2022 | $ | — | $ | 2,820,000 | ||||
Derivative Warrant Liabilities | Working Capital Loans- Related Party | |||||||
Level 3 - Instruments January 1, 2021 | $ | — | $ | — | ||||
Issuance of Public and Private Placement Warrants | 38,400,000 | — | ||||||
Transfer of Public Warrants to Level 1 | (24,533,330 | ) | — | |||||
Change in fair value of derivative warrant liabilities | 200,000 | — | ||||||
Level 3 - Instruments at March 31, 2021 | 14,066,670 | — | ||||||
Change in fair value of derivative warrant liabilities | (6,066,670 | ) | 100,000 | |||||
Working capital loan - related party | — | 100,000 | ||||||
Level 3 - Instruments at June 30, 2021 | 8,000,000 | 100,000 | ||||||
Change in fair value of derivative warrant liabilities | (1,866,670 | ) | 470,000 | |||||
Level 3 - Instruments at September 30, 2021 | $ | 6,133,330 | $ | 570,000 | ||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
References to the “Company,” “TLG Acquisition One Corp.,” “TLG Acquisition,” “our,” “us” or “we” refer to TLG Acquisition One Corp. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited interim condensed consolidated financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form
Overview
We are a blank check company incorporated in Delaware on October 2, 2020. We were formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). We are an emerging growth company and, as such, we are subject to all of the risks associated with emerging growth companies.
Our sponsor is TLG Acquisition Founder LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for our Initial Public Offering was declared effective on January 27, 2021. On February 1, 2021, we consummated our Initial Public Offering of 40,000,000 units (the “Units” and, with respect to the Class A common stock included in the Units being offered, the “Public Shares”), including 5,000,000 additional Units to cover over-allotments (the “Over-Allotment Units”), at $10.00 per Unit, generating gross proceeds of $400.0 million, and incurring offering costs of approximately $22.7 million, of which $14.0 million was for deferred underwriting commissions.
Simultaneously with the closing of the Initial Public Offering, we consummated the private placement (“Private Placement”) of 4,666,667 and 2,000,000 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) to the Sponsor and RBC Capital Markets, LLC, in its capacity as a purchaser of Private Placement Warrants (“RBC”), respectively, at a price of $1.50 per Private Placement Warrant, generating total proceeds of $10.0 million.
Upon the closing of the Initial Public Offering and the Private Placement, $400.0 million ($10.00 per Unit) of the net proceeds of the Initial Public Offering and certain of the proceeds of the Private Placement was placed in a Trust Account,trust account (the “Trust Account”), and will be invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule
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Our management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that we will be able to complete a Business Combination successfully. We must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (net of amounts disbursed to management for working capital purposes, if any, and excluding the amount of any deferred underwriting discount held in trust) at the time of the agreement to enter into the initial Business Combination. However, we will only complete a Business Combination if the post-business combination company owns or acquires 50% or more of the voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act.
If we are unable to complete a Business Combination within 24 months from the closing of the Initial Public Offering, or February 1, 2023, (the(as such period may be extended pursuant to a stockholder vote, the “Combination Period”), we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, subject to lawfully available funds therefor, redeem 100% of the Public Shares, at a
Proposed Business Combination
On November 13, 2022, we entered into a Merger Agreement (as amended, supplemented or otherwise modified from time to time in accordance with its terms, the “Merger Agreement”) with Electriq Power, Inc., a Delaware Corporation (“Electriq”), as disclosed in a Current Report on Form 8-K as filed with the U.S. Securities and Exchange Commission (the “SEC”) by the Company on November 14, 2022
If the transactions contemplated by the Merger Agreement are completed (the “Transactions”), Electriq will survive such merger as a wholly owned subsidiary of the Company (the “Merger”). As a result of the Merger, and upon consummation of the Merger and the other Transactions contemplated by the Merger Agreement (together with the Merger, the “Proposed Business Combination”), the separate corporate existence of Electriq will cease and the holders of Electriq common stock, preferred stock, options and warrants will become equityholders of the Company, which will change its name to
“Electriq Power Holdings, Inc.” in connection with the Proposed Business Combination.
For additional information regarding the Merger Agreement and the Transactions contemplated therein, see the Current Report on Form 8-K as filed with the SEC by the Company on November 14, 2022.
Liquidity and Capital Resources
As of March 31,September 30, 2022, we had approximately $71,000$242,000 in our operating bank account and a working capital deficit of approximately $3.2 million.
Our liquidity needs prior to the consummation of the Initial Public Offering were satisfied through the payment of $25,000 from our Sponsor to cover certain of our offering costs in exchange for issuance of Class F common stock, and a loan from our Sponsor of approximately $192,000 under a promissory note. We repaid the promissory note in full upon consummation of the Private Placement. Subsequent to the consummation of the Initial Public Offering, our liquidity has been satisfied through the net proceeds from the consummation of the Initial Public Offering and the Private Placement held outside of the Trust Account. In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of our officers and directors may, but are not obligated to, loan us working capital loans as may be required. The Sponsor and the Company executed a
In connection with our assessment of going concern considerations in accordance with FASB ASC Topic
We intend to seek an extension of the date by which we must consummate a Business Combination as our Board currently believes that there will not be sufficient time before February 1, 2023 to complete a Business Combination. On November 3, 2022, we filed a preliminary proxy statement on Schedule 14A with the SEC for the purposes of seeking stockholder approval to extend the Combination Period from February 1, 2023 to May 1, 2023 (the date that is 27 months from the closing date of the IPO) (the “Amended Date”) and on a monthly basis up to three times from the Amended Date to August 1, 2023 (the date that is 30 months from the closing date of the IPO).
Management continues to evaluate the impact of the
On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded
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Results of Operations
Our entire activity from inception up to March 31,September 30, 2022 was in preparation for our formation and the Initial Public Offering and, after the Initial Public Offering, identifying a target company for a Business Combination. We do not expect to be generating any operating revenues until the closing and completion of our initial Business Combination.
For the three months ended March 31,September 30, 2022, we had net income of approximately $6.4 million,$291,000, which consisted of approximately $33,000$1.8 million in interest income from investments held in the trust account and
For the three months ended March 31,September 30, 2021, we had net income of approximately $11.1$4.7 million, due largely to a noncash gain resulting from changes in fair value of derivative warrant liabilities of approximately $12.9$4.9 million, partially offset by operating expenses of approximately $236,000. Operating expenses consisted of approximately $161,000 in general and administrative expenses, $22,000 in general and administrative expenses with related parties and approximately $60,000 in franchise tax expenses.
For the nine months ended September 30, 2022, we had net income of approximately $9.5 million, which consisted of approximately $2.4 million in interest income from investments held in the trust account and non-operating income of approximately $9.6 million resulting from changes in fair value of derivative warrant liabilities, partially offset by approximately $1.9 million in general and administrative expenses, approximately $189,000 in franchise tax expense and approximately $427,000 in income tax expense.
For the nine months ended September 30, 2021, we had net income of approximately $15.8 million, due largely to a
Contractual Obligations
Administrative Support Agreement
We entered into an agreement with an affiliate of the Sponsor, pursuant to which we agreed to pay a total of $7,000 per month for office space, administrative and support services to such affiliate. Upon completion of the initial
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Business Combination or the liquidation, we will cease paying these monthly fees. We incurred approximately $20,500$21,000 and $14,000$21,000 in general and administrative expenses related to the agreement, which is recognized in the accompanying unaudited condensed consolidated statements of operations infor the three months ended March 31,September 30, 2022 and 2021, respectively,respectively. We incurred $62,500 and $56,000 in general and administrative expenses related to the administrative support agreement.
The Sponsor, officers and directors, or any of their respective affiliates, will be reimbursed for any reasonable
Underwriting Agreement
We granted the underwriters a
The underwriters were entitled to an underwriting discount of $0.20 per Unit, or $8.0 million in the aggregate, paid upon the closing of the Initial Public Offering. In addition, the underwriters were entitled to a deferred fee of $0.35 per Unit, or $14.0 million in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.
Critical Accounting Policies
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. A summary of our significant accounting policies is included in Note 2 to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report. Certain of our accounting policies are considered critical, as these policies are the most important to the depiction of our condensed consolidated financial statements and require significant, difficult or complex judgments, often employing the use of estimates about the effects of matters that are inherently uncertain. Such policies are summarized in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section in our Annual Report on Form
Recent Accounting Pronouncements
See Note 2 to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report for a discussion of recent accounting pronouncements.
Off-Balance
As of March 31,September 30, 2022, we did not have any
JOBS Act
The Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting
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standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for
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, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
We are a smaller reporting company as defined by Rule
Item 4. | Controls and Procedures |
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of March 31,the end of the fiscal quarter ended September 30, 2022, as such term is defined in Rules
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended March 31,September 30, 2022 covered by this Quarterly Report on Form
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PART
Item 1. | Legal Proceedings. |
None.
Item 1A. | Risk Factors. |
As of the date of this Quarterly Report on Form
On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. Any share redemption or other share repurchase that occurs after December 31, 2022, in lawsconnection with a Business Combination, extension vote or regulations, or a failure to comply with any laws or regulations,otherwise, may adversely affect our business, investments and results of operations.
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities. |
Simultaneously with the closing of the Initial Public Offering, we consummated the Private Placement of 4,666,667 and 2,000,000 Private Placement Warrants to the Sponsor and RBC, respectively, at a price of $1.50 per Private Placement Warrant, generating total proceeds of $10.0 million. Such securities were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
In connection with the Initial Public Offering, our sponsor had agreed to loan us an aggregate of up to $300,000 pursuant to a promissory note. This loan is
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Of the gross proceeds received from the Initial Public Offering and the full exercise of the option to purchase additional Shares, $400,000,000 was placed in the Trust Account. The net proceeds of the Initial Public Offering and certain proceeds from the Private Placement are invested in U.S. government treasury bills with a maturity of 180 days or less and in money market funds meeting certain conditions under Rule
We paid a total of approximately $8.7 million in underwriting discounts and commissions related to the Initial Public Offering. In addition, the underwriters agreed to defer $14.0 million in underwriting discounts and commissions.
Item 3. | Defaults upon Senior Securities. |
None.
Item 4. | Mine Safety Disclosures. |
Not applicable.
Item 5. | Other Information. |
None.
Item 6. | Exhibits. |
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104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* | 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. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: | TLG ACQUISITION ONE CORP. | |||||||
By: | /s/ John Michael Lawrie | |||||||
John Michael Lawrie | ||||||||
Title: | Chief Executive Officer (Principal Executive Officer) |
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