DMY TECHNOLOGY GROUP, INC. VI
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The Initial Stockholders agreed to waive their rights to liquidating distributions from the Trust Account with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Initial Stockholders acquire Public Shares in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriters agreed to waive their rights to the deferred underwriting commission (see Note 5) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be only $10.00 ($10.10 per Public Share if the Company elects to extend the time to consummate a Business Combination). In order to protect the amounts held in the Trust Account, the Sponsor agreed to be liable to the Company if and to the extent any claims by a third party (except for the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a letter of intent, confidentiality or other similar agreement or business combination agreement (a “Target”), reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or Target that executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Going Concern Consideration
As of March 31,June 30, 2022, the Company had approximately $288,000$11,000 in cash, approximately $56,000$437,000 of interest income available in the Trust Account to pay for taxes and a working capital deficit of approximately $220,000$589,000 (including tax obligations of approximately $50,000$165,000 that may be paid using investment income earned in Trust Account).
The Company’s liquidity needs prior to the consummation of the Initial Public Offering were satisfied through the payment of $25,000 from the Sponsor to purchase Founder Shares (as defined in Note 4) and a loan under the Note (as defined in Note 4) in the amount of approximately $75,000. The Company fully repaid the Note balance on October 4, 2021. Subsequent to the consummation of the Initial Public Offering, the Company’s 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 the Company’s officers and directors may, but are not obligated to, provide the Company funds as needed under Working Capital Loans (see Note 4). The Working Capital Loans would either be repaid upon consummation of a Business Combination or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.00 per warrant.
As of June 30, 2022 and December 31, 2021, the Company had 0 borrowings under the Working Capital Loans. In July 2022, the Company’s officers provided an aggregate of $140,000 of Working Capital Loans to the Company.
In connection with the Company’s assessment of going concern considerations in accordance with FASB ASC
205-40, “Basis
“Basis of Presentation – Going Concern,” management has determined that the liquidity and mandatory liquidation and subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern. The management plans to consummate a Business Combination prior to the mandatory liquidation date.
7
DMY TECHNOLOGY GROUP, INC. VI
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after April 5, 2023. The management plans to complete a Business Combination prior to the mandatory liquidation date and expects to receive financing to meet its obligations through the time of liquidation; however no financing is currently committed. The unaudited condensed financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.
7
DMY TECHNOLOGY GROUP, INC. VI
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Management continues to evaluate the impact
of
the COVID-19 pandemic on
on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these unaudited condensed financial statements. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy are not determinable as of the date of these unaudited condensed financial statements. The specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these unaudited condensed financial statements.
NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information, Article 8 and Article 10 of
Regulation
S-X. Accordingly,
Accordingly, certain disclosures normally included in financial statements have been condensed or omitted from these unaudited condensed financial statements as they are not required for interim financial statements under GAAP and the rules of the SEC. In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair presentation have been included. Operating results for the three
and six months ended
March 31,June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022 or any future period.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on
Form
10-K for
for the year ended December 31, 2021, as filed with the SEC on March 30, 2022, which contains the Company’s audited financial statements and notes thereto. The financial information as of December 31, 2021, is derived from the audited financial statements presented in the Company’s Annual Report on
Form
10-K for
for the year ended December 31, 2021, as filed with the SEC on March 30, 2022.
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply
8
DMY TECHNOLOGY GROUP, INC. VI
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
to non-emerging growth companies
companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
8
DMY TECHNOLOGY GROUP, INC. VI
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The preparation of the unaudited condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of revenue and expenses during the reporting period.periods.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. One of the more significant accounting estimates included in these unaudited condensed financial statements is the determination of the fair value of the derivative warrant liabilities. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had 0 cash equivalents as of March 31,June 30, 2022 and December 31, 2021.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance Corporation coverage limit of $250,000. As of March 31,June 30, 2022 and December 31, 2021, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
Investments Held in Trust Account
The Company’s portfolio of investments is comprised of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government securities and generally have a readily determinable fair value, or a combination thereof. When the Company’s investments held in the Trust Account are comprised of U.S. government securities, the investments are classified as trading securities. When the Company’s investments held in the Trust Account are comprised of money market funds, the investments are recognized at fair value. Trading securities and investments in money market funds are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities is included in income from investments held in the Trust Account in the accompanying statement of operations. The estimated fair values of investments held in the Trust Account are determined using available market information.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC Topic 820, “Fair Value Measurements,” approximates the carrying amounts represented in the condensed balance sheets, primarily due to their short-term nature.
9
DMY TECHNOLOGY GROUP, INC. VI
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
9
DMY TECHNOLOGY GROUP, INC. VI
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815, “Derivatives and Hedging” (“ASC 815”). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as
equity,
is re-assessed at the
the end of each reporting period. Derivative warrant liabilities are
classified
as non-current liabilities as
as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
The warrants issued in connection with its Initial Public Offering (the “Public Warrants”) and the Private Placement Warrants are derivative warrant liabilities in accordance with ASC 815. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjust the instruments to fair value at each reporting period. The liabilities are
subject
to re-measurement at each
each balance sheet date until exercised, and any change in fair value is recognized in the statement of operations. The fair value of Public Warrants and Private Placement were initially measured at fair value using Black-Scholes option pricing model and Monte-Carlo simulation method. Beginning in November 2021, the fair value of Public Warrants has been measured based on the listed market price of such Public Warrants. The Private Placement Warrants were measured at fair value using a Black Scholes model at
March 31,June 30, 2022 and December 31, 2021.
Offering Costs Associated with the Initial Public Offering
Offering costs consisted of legal, accounting, underwriting fees and other costs incurred that were directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to warrant liabilities were expensed as incurred,
presented
as non-operating expenses in
in the statement of operations. Offering costs allocated to the Public Shares were charged against the carrying value of the shares of Class A common stock upon the completion of the Initial Public Offering. The Company classifies deferred underwriting commissions
as non-current liabilities as
as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
10
DMY TECHNOLOGY GROUP, INC. VI
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Class A Common Stock Subject to Possible Redemption
The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in ASC 480. Shares of Class A common stock subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable shares of Class A common stock (including shares of Class A common stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, shares of Class A common stock are classified as stockholders’ equity. Shares of Class A common stock of the Company feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, as of
March 31,June 30, 2022 and December 31, 2021, 24,150,000
shares of Class A common stock subject to possible redemption were presented as temporary equity, outside of the stockholders’ deficit section of the accompanying condensed balance sheets.
10
DMY TECHNOLOGY GROUP, INC. VI
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Under ASC 480, the Company has elected to recognize changes in the redemption value immediately as they occur and adjust the carrying value of the security to equal the redemption value at the end of the reporting period. This method would view the end of the reporting period as if it were also the redemption date of the security. Effective with the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount, which resulted in charges
against
additional paid-in capital (to
(to the extent available) and accumulated deficit.
The Company complies with the accounting and reporting requirements of FASB ASC Topic 740, “Income Taxes” (“ASC 740”), which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the period in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. As of March 31,June 30, 2022 and December 31, 2021, the Company had deferred tax assets of approximately $297,000$344,000 and $87,000, respectively, which are presented net of a full valuation allowance.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must
be
more-likely-than-not to
to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. The Company’s currently taxable income primarily consists of interest income from investments held in the Trust Account. NaN amounts were accrued for the payment of interest and penalties as of
March 31,June 30, 2022 and December 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
Net Income (Loss) per Common Share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has two classes of shares, which are referred to as Class A common stock and Class B common stock. Income and losses are shared pro rata between the two classes of shares. Net income (loss) per share of common stock is calculated by dividing the net income by the weighted average number of common stock outstanding for the respective period. The Company has not considered the effect of the Public Warrants and the Private Placement Warrants to purchase an aggregate of 18,905,000 shares in the calculation of diluted loss per share, since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. Accretion associated with the redeemable Class A common stock is excluded from earnings per share as the redemption value approximates fair value.
The table below presents a reconciliation of the numerator and denominator used to compute basic and diluted net loss per share of common stock for each class of common stock:
| | | | | | | | | |
| | | For the Three Months Ended March 31, 2022 | |
| | | | | | | |
| Basic and diluted net loss per common share: | | | | | | | | |
| | | | | | | | |
| Allocation of net income | | | 8,892,285 | | | | 2,223,071 | |
| | | | | | | | |
| Basic and diluted weighted average common shares outstanding | | | 24,150,000 | | | | 6,037,500 | |
| | | | | | | | | |
| Basic and diluted net income per common share | | $ | 0.37 | | | $ | 0.37 | |
| | | | | | | | | |
11
DMY TECHNOLOGY GROUP, INC. VI
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | | | | | | April 16, 2021 (inception) | |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Basic and diluted net income (loss) per common share: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Allocation of net income (loss) | | $ | 5,000,068 | | | $ | 1,250,017 | | | $ | 13,892,353 | | | $ | 3,473,088 | | | $ | — | | | $ | (9,410) | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Basic and diluted weighted average common shares outstanding | | | 24,150,000 | | | | 6,037,500 | | | | 24,150,000 | | | | 6,037,500 | | | | — | | | | 5,250,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic and diluted net income (loss) per common share | | $ | 0.21 | | | $ | 0.21 | | | $ | 0.58 | | | $ | 0.58 | | | $ | — | | | $ | (0.00) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
On October 5, 2021, the Company consummated its Initial Public Offering of 24,150,000 Units, including 3,150,000 Over-Allotment Units, at $10.00 per Unit, generating gross proceeds of $241.5 million, and incurring offering costs of approximately $14.0 million, of which approximately $8.5 million and approximately $440,000 was for deferred underwriting commissions and offering costs allocated to derivative warrant liabilities, respectively.
Each Unit consists of one share of Class A common
stock,
and one-half of one
one redeemable warrant (each, a “Public Warrant”). Each Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 6).
NOTE 4. RELATED PARTY TRANSACTIONS
On April 27, 2021, the Sponsor purchased 7,187,500 shares of the Company’s Class B common stock, par value $0.0001 per share, (the “Founder Shares”) for an aggregate purchase price of $25,000. Shares and the associated amounts have been retroactively restated to reflect: (i) the surrender of 2,156,250 shares of Class B common stock for no consideration on September 24, 2021; and (ii) the 1:1.2 stock split on October 4, 2021, resulting in an aggregate of 6,037,500 shares of Class B common stock outstanding. The Initial Stockholders agreed to forfeit up to 787,500 Founder Shares to the extent that the over-allotment option was not exercised in full by the underwriters, so that the Founder Shares would represent 20% of the Company’s issued and outstanding shares after the Initial Public Offering. The underwriters exercised their over-allotment option in full on October 5, 2021; thus, these 787,500 Founder Shares were no longer subject to forfeiture.
The Initial Stockholders agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (i) one year after the completion of the initial Business Combination and (ii) the date following the completion of the initial Business Combination on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of the stockholders having the right to exchange their common stock for cash, securities or other property. Notwithstanding the foregoing, if the closing price of Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days
within
any 30-trading day period
period commencing at least 150 days after the initial Business Combination, the Founder Shares will be released from the lockup.
12
DMY TECHNOLOGY GROUP, INC. VI
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Private Placement Warrants
Simultaneously with the closing of the Initial Public Offering, the Company consummated the Private Placement of 6,830,000 warrants Private Placement Warrants, at a price of $1.00 per Private Placement Warrant to the Sponsor, generating proceeds of approximately $6.8 million.
Each Private Placement Warrant is exercisable for one whole share of Class A common stock at a price of $11.50
per share. A portion of the proceeds from the sale of the Private Placement Warrants to the Sponsor was added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless. Except as set forth below, the Private Placement Warrants will be
non-redeemable
for cash and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees.
12
DMY TECHNOLOGY GROUP, INC. VI
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The Sponsor and the Company’s officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants until 30 days after the completion of the initial Business Combination.
The Company advanced $60,000
to the Sponsor on October 2, 2021 and recorded such amount in due from related party in the accompanying condensed balance sheets. The Sponsor fully repaid this amount on October 11, 2021. As a result, the advances are
0 longer available as of
March 31,June 30, 2022 and December 31, 2021.
On April 16, 2021, the Sponsor agreed to loan the Company an aggregate of up to $200,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the “Note”). This
loan
was non-interest bearing and
and payable upon the completion of the Initial Public Offering. The Company borrowed approximately $75,000 under the Note and repaid the Note in full on October 4, 2021. As a result, the Note is 0 longer available as of
March 31,June 30, 2022 and December 31, 2021.
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 the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. As of
March 31,June 30, 2022 and December 31, 2021, the Company had 0 borrowings under the Working Capital Loans.
In July 2022, the Company’s officers provided an aggregate of $140,000 of Working Capital Loans to the Company. As described in Note 1, if the Company extends the time it has to consummate the initial Business Combination to 21 months from the closing of the Initial Public Offering, the Sponsor and its affiliates or designees may, but are not obligated to, loan the Company an amount of $0.10 per share of Class A common stock, or approximately $2.4 million in the aggregate (the “Extension Loan”) to deposit in Trust Account. The Extension Loan
will
be non-interest bearing and
and payable upon the consummation of the initial Business Combination. If the Company completes its initial Business Combination, it would repay such loaned amounts out of the proceeds of the Trust Account released to the Company. Up to $2,415,000 of such Extension Loan may be converted into warrants of the post Business Combination entity, identical to the Private Placement Warrants, at a price of $1.00 per warrant at the option of the lender. If the Company does not complete a Business Combination, it will not repay such loans. As of
March 31,June 30, 2022 and December 31, 2021, the Company had 0 borrowings under the Extension Loans.
13
DMY TECHNOLOGY GROUP, INC. VI
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Administrative Services Agreement
On October 5, 2021, the Company entered into an agreement with the Sponsor, pursuant to which it agreed to pay the Sponsor $10,000
per month for office space, administrative and support services. Upon completion of a Business Combination or its liquidation, the Company will cease paying these monthly fees. The Company recorded $30,000 and $60,000 in connection with such fees during the three and six months ended June 30, 2022, respectively, in the accompanying condensed statements of operations. The Company prepaid such fees in full and as of March 31,June 30, 2022 and December 31, 2021, the Company had an unused balance of $120,000o
and $150,000 in prepaid expenses recorded in the accompanying condensed balance sheets, respectively.
The Sponsor, its executive officers and directors, or any of their respective affiliates will be reimbursed
forfor any out-of-pocket expenses incurred
incurred in connection with activities on the Company’s behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. The Company’s audit committee will review on a quarterly basis all payments that are made to the Sponsor, the Sponsor’s executive officers or directors, or the Company’s executive officers or directors or their affiliates.
13
DMY TECHNOLOGY GROUP, INC. VI
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 5. COMMITMENTS AND CONTINGENCIES
Registration and Stockholder Rights
The holders of Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any shares of common stock issuable upon the exercise of the Private Placement Warrants), or warrants that may be issued upon conversion of the Working Capital Loans and loan made to extend our time period of consummating an initial Business Combination, are entitled to registration rights pursuant to a registration and stockholder rights agreement signed upon the consummation of the Initial Public Offering. These holders are entitled to certain demand and “piggyback” registration rights. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
The underwriters were entitled to an underwriting discount of $0.20 per unit, or approximately $4.8 million in the aggregate, paid upon the closing of the Initial Public Offering. An additional fee of $0.35 per unit, or approximately $8.5 million in the aggregate will be payable to certain of the underwriters for deferred underwriting commissions. The deferred fee will become payable to certain of the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
As of March 31,June 30, 2022 and December 31, 2021, the Company has 12,075,000 and 6,830,000 Public Warrants and Private Placement Warrants, respectively, outstanding.
Public Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the Units and only whole Public Warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company has an effective registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the Public Warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their Public Warrants on a cashless basis and such cashless exercise is exempt from registration under the Securities Act). The Company agreed that as soon as practicable, but in no event later than 15 business days after the closing of the initial Business Combination, the Company will use its best efforts to file with the SEC and have an effective registration statement covering the shares of Class A common stock issuable upon exercise of the warrants and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed. If a registration statement covering the Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an
14
DMY TECHNOLOGY GROUP, INC. VI
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Company’s shares of Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elect, it will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, it will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
The warrants have an exercise price of $11.50 per share, subject to adjustments, and will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation. In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the
14
DMY TECHNOLOGY GROUP, INC. VI
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of Class A common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants and the shares of Class A common stock issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until the completion of a Business Combination, subject to certain limited exceptions. Additionally, except as set forth below, the Private Placement Warrants
will
be non-redeemable so long
long as they are held by the Sponsor or their permitted transferees. If the Private Placement Warrants are held by someone other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
Redemption of warrants when the price per share of Class
A common stock equals or exceeds $18.00
. Once the warrants become exercisable, the Company may redeem the outstanding warrants for cash:
in whole and not in part;
at a price of
$0.01 $0.01
per warrant;
upon a minimum of 30 days’ prior written notice of redemption, referred to
as
the 30-day
redemption period; and
if, and only if, the closing price of the Class A common stock equals or exceeds $18.00 per share (as adjusted) for any 20 trading days
within
a 30-trading day period
period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
Redemption of warrants when the price per share of Class
A common stock equals or exceeds $10.00.
Once the warrants become exercisable, the Company may redeem the outstanding warrants:
in whole and not in part;
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to an agreed table based on the redemption date and the “fair market value” of Class A common stock; and
15
DMY TECHNOLOGY GROUP, INC. VI
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
if, and only if, the closing price of Class A common stock equals or exceeds $10.00 per Public Share (as adjusted) for any 20 trading days
within
the 30-tradingday30-trading
day period ending three trading days before the Company sends notice of redemption to the warrant holders.
The “fair market value” of Class A common stock shall mean the volume weighted average price of Class A common stock during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.361 shares of Class A common stock per warrant (subject to adjustment).
15
DMY TECHNOLOGY GROUP, INC. VI
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
NOTE 7. CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION
The Company’s Class A common stock feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of future events. The Company is authorized to issue 380,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of the Company’s Class A common stock are entitled to one vote for each share. As of March 31,June 30, 2022 and December 31, 2021, there were 24,150,000 shares of Class A common stock outstanding, which were all subject to possible redemption and classified outside of permanent equity in the accompanying condensed balance sheets.
As of March 31,June 30, 2022 and December 31, 2021, the Class A common stock subject to possible redemption reflected on the condensed balance sheets is reconciled on the following table:
| | Gross proceeds | | $ | 241,500,000 | | | $ | 241,500,000 | |
| Less: | | | | |
| Fair value of Public Warrants at issuance | | | (7,365,750 | ) | | | (7,365,750 | ) |
| Class A shares issuance costs | | | (13,596,547 | ) | | | (13,596,547 | ) |
| Plus: | | | | |
| Accretion of carrying value to redemption value | | | 20,962,297 | | | | 20,962,297 | |
Class A common stock subject to possible redemption | | | | | |
| | | | | |
Class A common stock subject to possible redemption - December 31, 2021 | | | | | |
| Plus: | | | |
| Increase in redemption value of Class A ordinary shares subject to redemption | | | | 172,137 | |
| | | | | |
Class A common stock subject to possible redemption - June 30, 2022 | | | | | |
| | | | | |
NOTE 8. STOCKHOLDERS’ DEFICIT
—The Company is authorized to issue 1,000,000 shares of preferred stock, par value $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of
March 31,June 30, 2022 and December 31, 2021, there were 0 shares of preferred stock issued or outstanding.
—The Company is authorized to issue 380,000,000 shares of Class A common stock with a par value of $0.0001 per share. As of
March 31,June 30, 2022 and December 31, 2021, there were 24,150,000 shares of Class A common stock issued and outstanding, all of which were subject to possible redemption and were classified outside of permanent
equity on the condensed balance sheets (see Note 7).
—The Company is authorized to issue 20,000,000 shares of Class B common stock with a par value of $0.0001 per share. As of
March 31,June 30, 2022 and December 31, 2021, there were 6,037,500 shares of Class B common stock issued and outstanding.
16
DMY TECHNOLOGY GROUP, INC. VI
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Common stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Holders of Class B common stock will have the right to elect all of the Company’s directors prior to the consummation of the initial Business Combination. On any other matter submitted to a vote of the Company’s stockholders, holders of Class B common stock and holders of Class A common stock will vote together as a single class, except as required by applicable law or stock exchange rule.
The Class B common stock will automatically convert into shares of Class A common stock concurrently with or immediately following the consummation of the initial Business Combination
onon a one-for-one basis, subject
subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with the initial Business Combination, the number of shares of Class A common stock issuable upon conversion of all Class B common stock will equal, in the aggregate,
on
an as-converted basis, 20% of
of the total number of shares of Class A common stock outstanding after such conversion (after giving effect to any redemptions of shares of Class A common stock by Public Stockholders), including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any
16
DMY TECHNOLOGY GROUP, INC. VI
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding any shares of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in the initial Business Combination and any private placement warrants issued to the Sponsor, officers or directors upon conversion of Working Capital Loans, provided that such conversion of Class B common stock will never occur on a
lessless than one-for-one basis.
basis.NOTE 9. FAIR VALUE MEASUREMENTS
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31,June 30, 2022 and December 31, 2021 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value.
| | | | | | | | | | | | | |
| |
| | |
| | |
| |
| | | | | | | | | | | | |
Investments held in Trust Account—U.S. Treasury Securities (1) | | $ | 241,556,291 | | | $ | 0 | | | $ | 0 | |
| | | | | | | | | | | | |
| Derivative warrant liabilities—Public Warrants | | $ | 8,331,750 | | | $ | 0 | | | $ | 0 | |
| Derivative warrant liabilities—Private Warrants | | $ | 0 | | | $ | 0 | | | $ | 4,712,700 | |
| | | | | | | | | | | | |
| | Quoted Prices in Active
Markets
| | | Significant Other
Observable Inputs
| | | Significant Other
Unobservable Inputs
| |
| | | | | | | | | | | | |
Investments held in Trust Account - U.S. Treasury Securities (1) | | $ | 241,936,983 | | | $ | — | | | $ | — | |
| | | | | | | | | | | | |
| Derivative warrant liabilities - Public Warrants | | $ | 4,347,000 | | | $ | — | | | $ | — | |
| Derivative warrant liabilities - Private Warrants | | $ | — | | | $ | — | | | $ | 2,458,800 | |
| | | | | | | | | | | | | |
| |
| | |
| | |
| |
| | | | | | | | | | | | |
Investments held in Trust Account—U.S. Treasury Securities (1) | | $ | 241,515,226 | | | $ | 0 | | | $ | 0 | |
| | | | | | | | | | | | |
| Derivative warrant liabilities—Public Warrants | | $ | 15,939,000 | | | $ | 0 | | | $ | 0 | |
| Derivative warrant liabilities—Private Warrants | | $ | 0 | | | $ | 0 | | | $ | 9,220,500 | |
| | | | | | | | | | | | |
| |
| | |
| | |
| |
| | | | | | | | | | | | |
Investments held in Trust Account - U.S. Treasury Securities (1) | | $ | 241,515,226 | | | $ | — | | | $ | — | |
| | | | | | | | | | | | |
| Derivative warrant liabilities - Public Warrants | | $ | 15,939,000 | | | $ | — | | | $ | — | |
| Derivative warrant liabilities - Private Warrants | | $ | — | | | $ | — | | | $ | 9,220,500 | |
17
DMY TECHNOLOGY GROUP, INC. VI
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
| Includes $ 123$1,019 and $123 of cash balance held within the Trust Account at March 31,June 30, 2022 and December 31, 2021, respectively. |
Transfers to/from Levels 1, 2, and 3 are recognized at the beginning 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 November 2021, when the Public Warrants were separately listed and traded.
Level 1 assets include investments in money market funds or U.S. Treasury securities. The Company uses inputs such as actual trade data, benchmark yields, quoted market prices from dealers or brokers, and other similar sources to determine the fair value of its investments.
The fair value of the Public Warrants and Private Placement Warrants were initially estimated using Black-Scholes option pricing model and Monte-Carlo simulation method. Beginning in November 2021, the fair value of Public Warrants has been measured based on the listed market price of such Public Warrants. The Private Placement Warrants were measured at fair value using a Black Scholes model at March 31,June 30, 2022 and December 31, 2021.
The estimated fair value of the Private Placement Warrants is determined using Level 3 inputs. Inherent in a Monte Carlo simulation or Black Scholes option pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility for its warrants based on the implied volatilities from traded warrants of select peer companies that matches the expected
17
DMY TECHNOLOGY GROUP, INC. VI
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
term of the warrants. The risk-free interest rate is based on the
U.S.
Treasury zero-coupon yield curve
curve on the issuance date for a maturity similar to the expected remaining term of the warrants. The expected term of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to be zero.
The following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates:
| | | | | | | | |
| | | | | | | |
| Exercise price | | $ | 11.50 | | | $ | 11.50 | |
| Stock price | | $ | 9.87 | | | $ | 9.82 | |
| Volatility | | | 7.7 | % | | | 19.1 | % |
| Expected life (years) | | | 6.01 | | | | 5.25 | |
| Risk-free rate | | | 2.38 | % | | | 1.27 | % |
| Dividend yield | | | 0.0 | % | | | 0.0 | % |
| | | | | | | | |
| | | | | | | |
| Exercise price | | $ | 11.50 | | | $ | 11.50 | |
| Stock price | | $ | 9.78 | | | $ | 9.82 | |
| Volatility | | | 3.4 | % | | | 19.1 | % |
| Expected life (years) | | | 5.76 | | | | 5.25 | |
| Risk-free rate | | | 2.98 | % | | | 1.27 | % |
| Dividend yield | | | 0.0 | % | | | 0.0 | % |
The change in the level 3 fair value of the derivative warrant liabilities for the three months ended March 31,June 30, 2022 is summarized as follows:
| | | | | |
| Balance as of December 31, 2021 - Level 3 | | $ | 9,220,500 | |
| Change in fair value of derivative warrant liabilities - Private Warrants | | | (4,507,800 | ) |
| | | | | |
| Balance as of March 31, 2022 (unaudited) - Level 3 | | $ | 4,712,700 | |
| | | | | |
| | | | |
| Balance as of December 31, 2021 - Level 3 | | $ | 9,220,500 | |
| Change in fair value of derivative warrant liabilities - Private Warrants | | | (4,507,800 | ) |
| | | | | |
| Balance as of March 31, 2022 (unaudited) - Level 3 | | $ | 4,712,700 | |
| Change in fair value of derivative warrant liabilities - Private Warrants | | | (2,253,900 | ) |
| | | | | |
| Balance as of June 30, 2022 (unaudited) - Level 3 | | $ | 2,458,800 | |
| | | | | |
NOTE 10. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred up to the date unaudited condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment to or disclosure in the unaudited condensed financial statements.statements, except as noted below.
In July 2022, the Company’s officers provided an aggregate of $140,000 of Working Capital Loans to the Company.
18
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
References to the “Company,” “our,” “us” or “we” refer to dMY Technology Group, Inc. VI. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed 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 10-Q includes forward-looking statements within
within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. 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 final prospectus for its Initial Public Offering filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by 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.
Our company, dMY Technology Group, Inc. VI (previously known as TdMY Technology Group, Inc.) is a blank check company incorporated in Delaware on April 16, 2021. We were formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We are an emerging growth company and, as such, we are subject to all of the risks associated with emerging growth companies.
As of
March 31,June 30, 2022, we had not commenced any operations. All activity for the period from April 16, 2021 (inception) through
March 31,June 30, 2022 relates to our formation and our initial public offering, described below. We will not generate any operating revenues until after the completion of the initial business combination, at the earliest. We
will
generate non-operating income in
in the form investment income from the Trust Account.
Our sponsor is dMY Sponsor VI, LLC, a Delaware limited liability company. The registration statement for our initial public offering was declared effective on September 30, 2021. On October 5, 2021, we consummated our initial public offering of 24,150,000 units, including 3,150,000 additional units to cover over-allotments, at $10.00 per unit, generating gross proceeds of $241.5 million, and incurring offering costs of approximately $15.0 million, of which approximately $8.5 million and approximately $440,000 was for deferred underwriting commissions and offering costs allocated to derivate warrant liabilities, respectively.
Simultaneously with the closing of our initial public offering, we consummated the private placement of 6,830,000 warrants, at a price of $1.00 per private placement warrant to the sponsor, generating proceeds of approximately $6.8 million.
Upon the closing of our initial public offering and the private placement, $241.5 million ($10.00 per unit) of the net proceeds of our initial public offering and certain of the proceeds of the private placement was placed in a Trust Account located in the United States with American Stock Transfer & Trust Company acting as trustee, and invested only in U.S. “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act, having a maturity of 185 days or less or in money market funds meeting certain conditions
under
Rule 2a-7 promulgated under
under the Investment Company Act which invest only in direct U.S. government treasury obligations, as determined by the Company, until the earlier of: (i) the completion of a business combination and (ii) the distribution of the Trust Account as described below.
Our management has broad discretion with respect to the specific application of the net proceeds of our initial public offering and the sale of 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 and excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of the agreement to enter into the initial business combination. However, we will only complete a business combination if the post-transaction 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.
We will have 18 months from the closing of our initial public offering, to consummate an initial business combination. However, if we anticipate that we may not be able to consummate an initial business combination within 18 months, we may, but are not obligated to, extend the period of time to consummate a business combination once by an additional three months (for a total of 21 months to complete an initial business combination), provided that, the only way to extend the time available for us to consummate the initial business combination is for our sponsor or its affiliates or designees, upon five days’ advance notice prior to the deadline, to deposit into the Trust Account an amount of $0.10 per share of Class A common stock, or approximately $2.4 million in the aggregate, on or prior to the date of the applicable deadline. Any such payments would be made in the form of a loan. Public Stockholders will not be offered the opportunity to vote on or redeem their shares in connection with any such extension.
If we are unable to complete a business combination within 18 months from the closing of our initial public offering, or April 5, 2023, or 21 months from the closing of our initial public offering, or July 5, 2023, if extended (the “combination period”), we will (i) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the initial business combination, including interest (net of amounts withdrawn to fund working capital requirements, and/or to pay for our tax obligations (“permitted withdrawals”) and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
Going Concern Consideration
As of March 31,June 30, 2022, we had approximately $288,000$11,000 in cash, approximately $56,000$437,000 of interest income available in the Trust Account to pay for taxes and a working capital deficit of approximately $220,000$337,000 (including tax obligations of approximately $55,000$165,000 that may be paid using investment income earned in Trust Account).
Our liquidity needs prior to the consummation of our initial public offering were satisfied through the payment of $25,000 from our sponsor to purchase the founder Shares and a loan under a promissory note with our sponsor (the “note”) in the amount of approximately $75,000. We fully repaid the note balance on October 4, 2021. Subsequent to the consummation of our initial public offering, our liquidity has been satisfied through the net proceeds from the consummation of our 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, our sponsor or an affiliate of the sponsor, or certain of our officers and directors may, but are not obligated to, provide us funds as needed under working capital loans. The working capital loans would either be repaid upon consummation of a business combination or, at the lender’s discretion, up to $1.5 million of such working capital loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant. As of June 30, 2022 and December 31, 2021, we had no borrowings under the Working Capital Loans. In July 2022, our officers provided an aggregate of $140,000 of Working Capital Loans to us.
In connection with our management’s assessment of going concern considerations in accordance with FASB ASC
205-40, “Basis
“Basis of Presentation – Going Concern,” management has determined that the liquidity and mandatory liquidation and subsequent dissolution raise substantial doubt about our ability to continue as a going concern. Our management plans to consummate a Business Combination prior to the mandatory liquidation date. No adjustments have been made to the carrying amounts of assets or liabilities should we be required to liquidate after April 5, 2023. Our management plans to complete a Business Combination prior to the mandatory liquidation date and expects to receive financing to meet its obligations through the time of liquidation; however no financing is currently committed. The unaudited condensed financial statements do not include any adjustment that might be necessary if we are unable to continue as a going concern.
Our management continues to evaluate the impact
of
the COVID-19 pandemic on
on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on our financial position, results of our operations and/or search for a target company, the specific impact is not readily determinable as of the date of these unaudited condensed financial statements. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy are not determinable as of the date of these unaudited condensed financial statements. The specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these unaudited condensed financial statements.
Our entire activity since inception up to
March 31,June 30, 2022 related to our formation, the preparation for our initial public offering, and since the closing of our initial public offering, the search for a prospective initial business combination. We will not generate any operating revenues until after the completion of our initial business combination.
We
generate non-operating income in
in the form of investment income from the Trust Account. We will continue to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. Additionally,
we
recognize non-cash gains and
and losses within other income (expense) related to changes in recurring fair value measurement of our derivative liabilities at each reporting period.
For the three months ended
March 31,June 30, 2022, we had net income of approximately
$11.1$6.3 million, which consisted
of
non-operating gain of
of approximately
$12.1$6.2 million from the change in fair value of the derivative warrant liabilities, approximately
$41,000$381,000 of interest income from investment income, offset by approximately
$976,000$254,000 of general and administrative expenses, approximately
$65,000$50,000 of franchise tax
expense and approximately $65,000 in income tax expense.
For the six months ended June 30, 2022, we had net income of approximately $17.4 million, which consistedof non-operating gain of
approximately $18.3 million from the change in fair value of the derivative warrant liabilities, approximately $422,000 of interest income from investment income, offset by approximately $1.2 million of general and administrative expenses, approximately $100,000 of franchise tax expense and approximately $65,000 in income tax expense. For the period from April 16, 2021 (inception) through June 30, 2021, we had net loss of approximately $9,000, which resulted solely from general and administrative expenses.
Administrative Services Agreement
On October 5, 2021, we entered into an agreement with our sponsor, pursuant to which we agreed to pay our sponsor $10,000 per month for office space, administrative and support services. Upon completion of a business combination or our liquidation, we will cease paying these monthly fees. We recorded $30,000 and $60,000 in connection with such fees during the three and six months ended June 30, 2022, respectively, in the accompanying condensed statements of operations. We prepaid such fees in full and as of March 31,June 30, 2022 and December 31, 2021, we had an unused balance of $120,000$90,000 and $150,000 in prepaid expenses recorded in the accompanying condensed balance sheets, respectively.
Our sponsor, executive officers and directors, or any of their respective affiliates will be reimbursed
forfor any out-of-pocket expenses incurred
incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that are made to our sponsor, executive officers or directors of our sponsor, or our executive officers or directors or their affiliates.
Registration and Stockholder Rights
The holders of Founder Shares, private placement warrants and warrants that may be issued upon conversion of working capital loans (and any shares of common stock issuable upon the exercise of the private placement warrants), or warrants that may be issued upon conversion of the working capital loans and loan made to extend our time period of consummating an initial business combination, are entitled to registration rights pursuant to a registration and stockholder rights agreement signed upon the consummation of our initial public offering. These holders are entitled to certain demand and “piggyback” registration rights. We will bear the expenses incurred in connection with the filing of any such registration statements.
The underwriters were entitled to an underwriting discount of $0.20 per unit, or approximately $4.8 million in the aggregate, paid upon the closing of our initial public offering. An additional fee of $0.35 per unit, or approximately $8.5 million in the aggregate will be payable to certain of the underwriters for deferred underwriting commissions. The deferred fee will become payable to certain of 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 and Estimates
The preparation of unaudited condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements, and the reported amounts of income and expenses during the period reported. Actual results could materially differ from those estimates. We have identified the following as our critical accounting policies:
Derivative Warrant Liabilities
We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity” and FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as
equity,
is re-assessed at the
the end of each reporting period.
We account for the public warrants and private placement warrants as derivative warrant liabilities in accordance with ASC 815. Accordingly, we recognize the warrant instruments as liabilities at fair value and adjust the instruments to fair value at each reporting period. The liabilities are
subject
to re-measurement at each
each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. The fair value of public warrants and private placement were initially measured at fair value using Black-Scholes option pricing model and Monte-Carlo simulation method. Beginning in November 2021, the fair value of public warrants has been measured based on the listed market price of such public warrants. The private placement warrants were measured at fair value using a Black Scholes model at
March 31,June 30, 2022 and December 31, 2021.
Class A Common Stock Subject to Possible Redemption
We account for the Class A common stock subject to possible redemption in accordance with the guidance in ASC 480. Shares of Class A common stock subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable shares of Class A common stock (including shares of Class A common stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified as temporary equity. At all other times, shares of Class A common stock are classified as stockholders’ equity. Our shares of Class A common stock feature certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, as of March 31,June 30, 2022 and December 31, 2021, 24,150,000 shares of Class A common stock subject to possible redemption were presented as temporary equity, outside of the stockholders’ deficit section of the accompanying condensed balance sheets.
Under ASC 480, we have elected to recognize changes in the redemption value immediately as they occur and adjust the carrying value of the security to equal the redemption value at the end of the reporting period. This method would view the end of the reporting period as if it were also the redemption date of the security. Effective with the closing of our initial public offering, we recognized the accretion from initial book value to redemption amount, which resulted in charges
against
additional paid-in capital (to
(to the extent available) and accumulated deficit.
Net Income (Loss) Per Common Share
We comply with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has two classes of shares, which are referred to as Class A common stock and Class B common stock. Income and losses are shared pro rata between the two classes of shares. Net income (loss) per share of common stock is calculated by dividing the net income by the weighted average number of common stock outstanding for the respective period. We have not considered the effect of the public warrants and the private placement warrants to purchase an aggregate of 18,905,000 shares in the calculation of diluted loss per share, since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. Accretion associated with the redeemable Class A common stock is excluded from earnings per share as the redemption value approximates fair value.
Recent Accounting Pronouncements
Our management do not believe that any recently issued, but not yet effective, accounting standards updates, if currently adopted, would have a material effect on the accompanying unaudited condensed financial statements.
Off-Balance Sheet
Sheet Arrangements and Contractual Obligations
As of
March 31,June 30, 2022, we did not
have
any off-balance sheet arrangements
arrangements as defined in Item 303(a)(4)(ii)
of
Regulation S-K and did
did not have any commitments or contractual obligations.
On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” under the JOBS Act and are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We elected to delay the adoption of new or revised accounting 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 non-emerging growth companies.
companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
As an “emerging growth company”, we are not 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 non-emerging growth public
public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As of
March 31,June 30, 2022, we were not subject to any market or interest rate risk. The net proceeds of the Initial Public Offering, including amounts in the Trust Account, will be invested in U.S. government securities with a maturity of 185 days or less or in money market funds that meet certain conditions
under
Rule 2a-7 under the
the Investment Company Act, that invest only in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.
We have not engaged in any hedging activities since our inception, and we do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer, we conducted an evaluation of the effectiveness, of our disclosure controls and procedures as of
March 31,June 30, 2022, as such term is defined
inin Rules 13a-15(e) and 15d-15(e) under the
the Exchange Act. Based on this evaluation, our Chief Executive Officer has concluded that during the period covered by this report, our disclosure controls and procedures were effective.
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 period specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive 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,June 30, 2022 covered by this Quarterly Report
on
Form 10-Q that has
has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings
Except as set forth below, as of the date of this Quarterly Report on
Form
10-Q, there
there have been no material changes to the risk factors disclosed in our Annual Report on
Form
10-K filed
filed with the SEC on March 30, 2022. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
Changes in laws or regulations, or a failure to comply with any laws or regulations, may adversely affect our business, investments and results of operations.
We are subject to laws and regulations enacted by national, regional and local governments. In particular, we are required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete an initial business combination, and results of operations.
On March 30, 2022, the SEC issued proposed rules relating to, among other items, enhancing disclosures in business combination transactions involving SPACs and private operating companies; amending the financial statement requirements applicable to transactions involving shell companies; effectively limiting the use of projections in SEC filings in connection with proposed business combination transactions; increasing the potential liability of certain participants in proposed business combination transactions; and the extent to which SPACs could become subject to regulation under the Investment Company Act of 1940. These rules, if adopted, whether in the form proposed or in revised form, may materially adversely affect our ability to negotiate and complete our initial business combination and may increase the costs and time related thereto.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
On October 5, 2021, we consummated our Initial Public Offering of 21,125,000 Units, which includes the exercise in full of the underwriters’ option to purchase an additional 3,150,000 Units at $10.00 per Unit. Simultaneously with the consummation of the Initial Public Offering, the Company consummated the sale of 6,830,000 Private Placement Warrants, at a purchase price of $10.00 per Private Placement Warrant, generating aggregate gross proceeds to the Company of $6,830,000.
The Private Placement Warrants were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. The Private Placement Warrants are identical to the Public Warrants sold in the Initial Public Offering, except that (x) the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of our initial Business Combination, subject to certain limited exceptions, (y) as long as the Private Placement Warrants are held by our Sponsor or its permitted transferees, the Private Placement Warrants will not be redeemable by us and (z) the Private Placement Warrants and the Class A shares underlying the Private Placement Warrants are entitled to registration rights.
Of the gross proceeds received from the Initial Public Offering and the sale of Private Placement Warrants, $ 241,500,000 was placed in the Trust Account.
TransactionAccount.Transaction costs of the Initial Public Offering amounted to $14 million consisting of $4.8 million of underwriting discounts and commissions, $8.5 million of deferred underwriting discounts and commissions, and $0.4 million of other offering costs.
For a description of the use of the proceeds generated in our Initial Public Offering, see Part I, Item 2 of this Quarterly Report
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
| * | 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. |
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 thereunto duly authorized on this
16th
15th day of
May,August, 2022.
| | |
DMY TECHNOLOGY GROUP, INC. VI |
| |
| By: | | |
| Name: | | Niccolo de Masi |
| Title: | | Chief Executive Officer |