☒ | 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 | 85-2533565 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
400 Perimeter Center Terrace Suite 151 Atlanta, Georgia | 30346 | |
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Units, each consisting of one share of Class A common stock and one-half of one redeemable warrant | ALTUU | The Nasdaq Stock Market LLC | ||
Class A common stock, par value $0.0001 per share | ALTU | The Nasdaq Stock Market LLC | ||
Warrants, each whole warrant exercisable for one share of Class A common stock, each at an initial exercise price of $11.50 per share | ALTUW | The Nasdaq Stock Market LLC |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
Altitude Acquisition Corp.
Quarterly Report on
Form
For the Quarter Ended June 30, 2022
2
June 30, 2022 | December 31, 2021 | June 30, 2023 | December 31, 2022 | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Assets: | ||||||||||||||||
Assets | ||||||||||||||||
Current Assets | ||||||||||||||||
Cash | $ | 164,251 | $ | 43,054 | $ | 81,121 | $ | 760 | ||||||||
Prepaid expenses | 99,038 | 187,288 | 35,000 | 815 | ||||||||||||
Total current assets | 263,289 | 230,342 | 116,121 | 1,575 | ||||||||||||
Investments held in Trust Account | 50,642,618 | 300,026,796 | ||||||||||||||
Cash held in Trust Account | 13,612,504 | 16,975,796 | ||||||||||||||
Total assets | $ | 50,905,907 | $ | 300,257,138 | ||||||||||||
Total Assets | $ | 13,728,625 | $ | 16,977,371 | ||||||||||||
Liabilities, Class A common stock subject to possible redemption and Stockholders’ Deficit: | ||||||||||||||||
Current Liabilities | ||||||||||||||||
Accounts payable | $ | 323,166 | $ | 174,803 | $ | 1,198,055 | $ | 511,152 | ||||||||
Income tax payable | 8,780 | 0— | ||||||||||||||
Income taxes payable | 76,481 | 38,180 | ||||||||||||||
Advances from Sponsor | 888,423 | 100,000 | 904,044 | 802,644 | ||||||||||||
Due to related party | 182,089 | 122,089 | ||||||||||||||
Promissory Note –Related Party | 135,000 | — | ||||||||||||||
Due to related party, net | — | 242,089 | ||||||||||||||
Total current liabilities | 1,402,458 | 396,892 | 2,313,580 | 1,594,065 | ||||||||||||
Warrant liability | 2,923,694 | 13,449,283 | 1,311,338 | 1,383,449 | ||||||||||||
Deferred legal fee | 5,135,098 | 3,733,738 | 7,757,957 | 5,352,657 | ||||||||||||
Deferred underwriting fee | 10,500,000 | 10,500,000 | 10,500,000 | 10,500,000 | ||||||||||||
Total liabilities | 19,961,250 | 28,079,913 | 21,882,875 | 18,830,171 | ||||||||||||
Commitments and Contingencies | 0 | 0 | ||||||||||||||
Class A common stock subject to possible redemption, $0.0001 par value, 5,055,051 and 30,000,000 shares subject to possible redemption at redemption value of $10.00 per share at June 30, 2022 and December 31, 2021, respectively | 50,550,510 | 300,000,000 | ||||||||||||||
Class A common stock subject to possible redemption, $0.0001 par value, 1,334,645 and 1,672,102 shares subject to possible redemption at redemption value of $10.00 per share at June 30, 2023 and December 31, 2022, respectively | 13,346,531 | 16,721,020 | ||||||||||||||
Stockholders’ deficit: | ||||||||||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 0 shares issued or outstanding at June 30, 2022 and December 31, 2021 | 0— | 0— | ||||||||||||||
Class A common stock, $0.0001 par value, 280,000,000 shares authorized ; 0 res issued or outstanding at June 30, 2022 and December 31, 2021, respectivelynon-redeemable sha | 0— | 0— | ||||||||||||||
Class B common stock, $0.0001 par value, 20,000,000 shares authorized, 7,500,000 shares issued and outstanding at June 30, 2022 and December 31, 2021 | 750 | 750 | ||||||||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; no shares issued or outstanding at June 30, 2023 and December 31, 2022 | — | — | ||||||||||||||
Class A common stock, $0.0001 par value, 280,000,000 shares authorized; 7,500,000 and 0 shares issued and outstanding at June 30, 2023 and December 31, 2022, excluding 1,334,645 and 1,672,102 shares subject to possible redemption | 750 | — | ||||||||||||||
Class B common stock, $0.0001 par value, 20,000,000 shares authorized, 0 and 7,500,000 shares issued and outstanding at June 30, 2023 and December 31, 2022 | — | 750 | ||||||||||||||
Additional paid-in capital | 0— | 0— | 432,106 | 251,866 | ||||||||||||
Accumulated deficit | (19,606,603 | ) | (27,823,525 | ) | (21,933,637 | ) | (18,826,436 | ) | ||||||||
Total stockholders’ deficit | (19,605,853 | ) | (27,822,775 | ) | (21,500,781 | ) | (18,573,820 | ) | ||||||||
Total liabilities, Class A common stock subject to possible redemption and stockholders’ deficit | $ | 50,905,907 | $ | 300,257,138 | $ | 13,728,625 | $ | 16,977,371 | ||||||||
For the three months ended June 30, 2022 | For the three months ended June 30, 2021 | For the six months ended June 30, 2022 | For the six months ended June 30, 2021 | |||||||||||||
Formation and operating costs | $ | 1,518,182 | $ | 379,837 | $ | 2,446,400 | $ | 846,195 | ||||||||
Loss from operations | (1,518,182 | ) | (379,837 | ) | (2,446,400 | ) | (846,195 | ) | ||||||||
Other income | ||||||||||||||||
Interest income | — | 8 | 1 | 20 | ||||||||||||
Interest income earned on Trust | 304,269 | 6,828 | 311,869 | 13,075 | ||||||||||||
Unrealized gain on change in fair value of warrants | 987,781 | 19,441,877 | 10,525,589 | 13,445,689 | ||||||||||||
Total other income | 1,292,050 | 19,448,713 | 10,837,459 | 13,458,784 | ||||||||||||
Income (loss) before income tax provision | (226,132 | ) | 19,068,876 | 8,391,059 | 12,612,589 | |||||||||||
Income tax provision | (8,780 | ) | — | (8,780 | ) | — | ||||||||||
Net income (loss) | $ | (234,912 | ) | $ | 19,068,876 | $ | 8,382,279 | $ | 12,612,589 | |||||||
Basic and diluted weighted average shares outstanding, Class A common stock | 25,339,955 | 30,000,000 | 27,657,104 | 30,000,000 | ||||||||||||
Basic and diluted net income (loss) per share, Class A common stock | $ | (0.01 | ) | $ | 0.51 | $ | 0.24 | $ | 0.34 | |||||||
Basic and diluted weighted average shares outstanding, Class B common stock | 7,500,000 | 7,500,000 | 7,500,000 | 7,500,000 | ||||||||||||
Basic and diluted net income (loss) per share, Class B common stock | $ | (0.01 | ) | $ | 0.51 | $ | 0.24 | $ | 0.34 | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Formation and operating costs | $ | 1,799,105 | $ | 1,518,182 | $ | 3,418,295 | $ | 2,446,400 | ||||||||
Loss from operations | (1,799,105 | ) | (1,518,182 | ) | (3,418,295 | ) | (2,446,400 | ) | ||||||||
Other income: | ||||||||||||||||
Interest income | 18 | — | 38 | 1 | ||||||||||||
Interest income earned on Trust | 277,246 | 304,269 | 277,246 | 311,869 | ||||||||||||
Unrealized (loss) gain on change in fair value of warrants | (98,324 | ) | 987,781 | 72,111 | 10,525,589 | |||||||||||
Total other income | 178,940 | 1,292,050 | 349,395 | 10,837,459 | ||||||||||||
(Loss) Income before income tax provision | (1,620,165 | ) | (226,132 | ) | (3,068,900 | ) | 8,391,059 | |||||||||
Income tax provision | (38,301 | ) | (8,780 | ) | (38,301 | ) | (8,780 | ) | ||||||||
Net (loss) income | $ | (1,658,466 | ) | $ | (234,912 | ) | $ | (3,107,201 | ) | $ | 8,382,279 | |||||
Basic and diluted weighted average shares outstanding, Class A common stock | 1,877,359 | 25,339,955 | 5,007,342 | 27,657,104 | ||||||||||||
Basic and diluted net (loss) income per share, Class A common stock | $ | (0.68 | ) | $ | (0.01 | ) | $ | (0.35 | ) | $ | 0.24 | |||||
Basic and diluted weighted average shares outstanding, Class B common stock | 576,923 | 7,500,000 | 3,977,901 | 7,500,000 | ||||||||||||
Basic and diluted net (loss) income per share, Class B common stock | $ | (0.68 | ) | $ | (0.01 | ) | $ | (0.35 | ) | $ | 0.24 | |||||
Class A Common Stock | Class B Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Deficit | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance as of December 31, 2022 | — | $ | — | 7,500,000 | $ | 750 | $ | 251,866 | $ | (18,826,436 | ) | $ | (18,573,820 | ) | ||||||||||||||
Sponsor administrative agreement waiver | — | — | — | — | 242,089 | — | 242,089 | |||||||||||||||||||||
Net loss | — | — | — | — | — | (1,448,735 | ) | (1,448,735 | ) | |||||||||||||||||||
Balance as of March 31, 2023 (unaudited) | — | $ | — | 7,500,000 | $ | 750 | $ | 493,955 | $ | (20,275,171 | ) | $ | (19,780,466 | ) | ||||||||||||||
Conversion of Common Stock to Class A Common Stock | 7,500,000 | 750 | (7,500,000 | ) | (750 | ) | — | — | — | |||||||||||||||||||
Accretion of Class A common stock to redemption value | — | — | — | — | (61,849 | ) | — | (61,849 | ) | |||||||||||||||||||
Net loss | — | — | — | — | — | (1,658,466 | ) | (1,658,466 | ) | |||||||||||||||||||
Balance as of June 30, 2023 (unaudited) | 7,500,000 | $ | 750 | — | $ | — | $ | 432,106 | $ | (21,933,637 | ) | $ | (21,500,781 | ) | ||||||||||||||
Class A Common Stock | Class B Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Deficit | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance as of December 31, 2021 | — | $ | — | 7,500,000 | $ | 750 | $ | — | $ | (27,823,525 | ) | $ | (27,822,775 | ) | ||||||||||||||
Net income | — | — | — | — | — | 8,617,191 | 8,617,191 | |||||||||||||||||||||
Balance as of March 31, 2022 (unaudited) | — | $ | — | 7,500,000 | $ | 750 | $ | — | $ | (19,206,334 | ) | $ | (19,205,584 | ) | ||||||||||||||
Net loss | — | — | — | — | — | (234,912 | ) | (234,912 | ) | |||||||||||||||||||
Accretion of Class A common stock to redemption value | — | — | — | — | — | (165,357 | ) | (165,357 | ) | |||||||||||||||||||
Balance as of June 30, 2022 (unaudited) | — | $ | — | 7,500,000 | $ | 750 | $ | — | $ | (19,606,603 | ) | $ | (19,605,853 | ) | ||||||||||||||
Class A Common Stock | Class B Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Deficit | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance as of December 31, 2020 | — | $ | — | 7,500,000 | $ | 750 | $ | — | $ | (43,049,354 | ) | $ | (43,048,604 | ) | ||||||||||||||
Net loss | — | — | — | — | — | (6,456,287 | ) | (6,456,287 | ) | |||||||||||||||||||
Balance as of March 31, 2021 (unaudited) | — | $ | — | 7,500,000 | $ | 750 | $ | — | $ | (49,505,641 | ) | $ | (49,504,891 | ) | ||||||||||||||
Net income | — | — | — | — | — | 19,068,876 | 19,068,876 | |||||||||||||||||||||
Balance as of June 30, 2021 (unaudited) | — | $ | — | 7,500,000 | $ | 750 | $ | — | $ | (30,436,765 | ) | $ | (30,436,015 | ) | ||||||||||||||
For the Six Months Ended June 30, | ||||||||||||||||
2023 | 2022 | |||||||||||||||
For the six months ended June 30, 2022 | For the six months ended June 30, 2021 | |||||||||||||||
Cash Flows from Operating Activities: | ||||||||||||||||
Net income | $ | 8,382,279 | $ | 12,612,589 | ||||||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||||||||||
Net (loss) income | $ | (3,107,201 | ) | $ | 8,382,279 | |||||||||||
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||||||||||
Interest income earned on Trust | (311,869 | ) | (13,075 | ) | (277,246 | ) | (311,869 | ) | ||||||||
Unrealized gain on change in fair value of warrants | (10,525,589 | ) | (13,445,689 | ) | (72,111 | ) | (10,525,589 | ) | ||||||||
Changes in current assets and current liabilities: | ||||||||||||||||
Prepaid expenses | 88,250 | 220,835 | (34,185 | ) | 88,250 | |||||||||||
Due to related party | 60,000 | 59,205 | ||||||||||||||
Due to related party, net | — | 60,000 | ||||||||||||||
Deferred legal fee | 1,401,360 | — | 2,405,300 | 1,401,360 | ||||||||||||
Income tax payable | 8,780 | — | ||||||||||||||
Income taxes payable | 38,301 | 8,780 | ||||||||||||||
Advances from Sponsor | 788,423 | — | 101,400 | 788,423 | ||||||||||||
Accounts payable and accrued expenses | 148,363 | 9,440 | 686,903 | 148,363 | ||||||||||||
Net cash provided by (used in) operating activities | 39,997 | (556,695 | ) | |||||||||||||
Net cash (used in) provided by operating activities | (258,839 | ) | 39,997 | |||||||||||||
Cash Flows from Financing Activities: | ||||||||||||||||
Funds withdrawn from Trust Account | 81,200 | — | ||||||||||||||
Cash Flows from Investing Activities: | ||||||||||||||||
Reimbursement of franchise tax payment | 204,200 | — | ||||||||||||||
Cash withdrawn from Trust Account in connection with redemption | 3,436,338 | — | ||||||||||||||
Net cash provided by investing activities | 81,200 | — | 3,640,538 | — | ||||||||||||
Cash Flows from Financing Activities: | ||||||||||||||||
Proceeds from issuance of promissory note to related party | 135,000 | — | ||||||||||||||
Funds withdrawn from Trust Account | — | 81,200 | ||||||||||||||
Redemption of Class A common stock | (3,436,338 | ) | — | |||||||||||||
Net cash provided by financing activities | (3,301,338 | ) | 81,200 | |||||||||||||
Net Change in Cash | 121,197 | (556,695 | ) | 80,361 | 121,197 | |||||||||||
Cash-Beginning | 43,054 | 764,329 | 760 | 43,054 | ||||||||||||
Cash-Ending | $ | 164,251 | $ | 207,634 | $ | 81,121 | $ | 164,251 | ||||||||
Supplemental Disclosure of Non-cash Financing Activities: | ||||||||||||||||
Waiver of amounts due to related party under the Administrative Support Agreement | $ | 242,089 | $ | — | ||||||||||||
Payment from Trust Account in connection with redemption of shares | $ | 249,614,847 | $ | — | $ | — | $ | 249,614,847 | ||||||||
For the three months ended June 30, 2023 | For the three months ended June 30, 2022 | |||||||||||||||
Class A Common Stock | Class B Common Stock | Class A Common Stock | Class B Common Stock | |||||||||||||
Basic and diluted net loss per share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net loss | $ | (1,268,614 | ) | $ | (389,852 | ) | $ | (181,263 | ) | $ | (53,649 | ) | ||||
Denominator: | ||||||||||||||||
Weighted-average shares outstanding | 1,877,359 | 576,923 | 25,339,955 | 7,500,000 | ||||||||||||
Basic and diluted net loss per share | $ | (0.68 | ) | $ | (0.68 | ) | $ | (0.01 | ) | $ | (0.01 | ) |
For the six months ended June 30, 2023 | For the six months ended June 30, 2022 | |||||||||||||||
Class A Common Stock | Class B Common Stock | Class A Common Stock | Class B Common Stock | |||||||||||||
Basic and diluted net (loss) income per share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net (loss) income | $ | (1,731,597 | ) | $ | (1,375,604 | ) | $ | 6,594,103 | $ | 1,788,176 | ||||||
Denominator: | ||||||||||||||||
Weighted-average shares outstanding | 5,007,342 | 3,977,901 | 27,657,104 | 7,500,000 | ||||||||||||
Basic and diluted net (loss) income per share | $ | (0.35 | ) | $ | (0.35 | ) | $ | 0.24 | $ | 0.24 |
For the three months ended June 30, 2022 | For the three months ended June 30, 2021 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net income (loss) per share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income (loss) | $ | (181,263 | ) | $ | (53,649 | ) | $ | 15,255,101 | $ | 3,813,775 | ||||||
Denominator: | ||||||||||||||||
Weighted-average shares outstanding | 25,339,955 | 7,500,000 | 30,000,000 | 7,500,000 | ||||||||||||
Basic and diluted net income (loss) per share | $ | (0.01 | ) | $ | (0.01 | ) | $ | 0.51 | $ | 0.51 |
For the six months ended June 30, 2022 | For the six months ended June 30, 2021 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net income per share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income | $ | 6,594,103 | $ | 1,788,176 | $ | 10,090,071 | $ | 2,522,518 | ||||||||
Denominator: | ||||||||||||||||
Weighted-average shares outstanding | 27,657,104 | 7,500,000 | 30,000,000 | 7,500,000 | ||||||||||||
Basic and diluted net income per share | $ | 0.24 | $ | 0.24 | $ | 0.34 | $ | 0.34 |
Gross proceeds from IPO | $ | 300,000,000 | $ | 300,000,000 | ||||
Less: | ||||||||
Proceeds allocated to Public Warrants | (19,987,400 | ) | (19,987,400 | ) | ||||
Common stock issuance costs | (15,968,970 | ) | (15,968,970 | ) | ||||
Payment from Trust Account in connection with redemption of shares | (249,614,847 | ) | (283,624,535 | ) | ||||
Plus: | ||||||||
Accretion of carrying value to redemption value | 36,121,727 | 36,301,925 | ||||||
Class A common stock subject to possible redemption | $ | 50,550,510 | ||||||
Class A common stock subject to possible redemption, December 31, 2022 | 16,721,020 | |||||||
Plus: | ||||||||
Accretion of carrying value to redemption value | 61,849 | |||||||
Less: | ||||||||
Redemption | (3,436,338 | ) | ||||||
Class A common stock subject to possible redemption, June 30, 2023 | $ | 13,346,531 | ||||||
Gross proceeds from IPO | $ | 300,000,000 | ||
Less: | ||||
Proceeds allocated to Public Warrants | (19,987,400 | ) | ||
Common stock issuance costs | (15,968,970 | ) | ||
Plus: | ||||
Accretion of carrying value to redemption value | 35,956,370 | |||
Class A common stock subject to possible redemption | $ | 300,000,000 | ||
June 30, 2022 | Quoted Prices In Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
Mutual Funds held in Trust Account | $ | 50,642,618 | $ | 50,642,618 | $ | — | $ | — | ||||||||
$ | 50,642,618 | $ | 50,642,618 | $ | — | $ | — | |||||||||
Liabilities: | ||||||||||||||||
Warrant Liability - Public Warrants | $ | 1,873,500 | $ | 1,873,500 | $ | — | $ | — | ||||||||
Warrant Liability - Private Placement Warrants | $ | 1,050,194 | $ | — | $ | — | $ | 1,050,194 | ||||||||
$ | 2,923,694 | $ | 1,873,500 | $ | — | $ | 1,050,194 | |||||||||
December 31, 2021 | Quoted Prices In Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
Mutual Funds held in Trust Account | $ | 300,026,796 | $ | 300,026,796 | $ | — | $ | — | ||||||||
$ | 300,026,796 | $ | 300,026,796 | $ | — | $ | — | |||||||||
Liabilities: | ||||||||||||||||
Warrant Liability - Public Warrants | $ | 8,626,500 | $ | 8,626,500 | $ | — | $ | — | ||||||||
Warrant Liability - Private Placement Warrants | $ | 4,822,783 | $ | — | $ | — | $ | 4,822,783 | ||||||||
$ | 13,449,283 | $ | 8,626,500 | $ | — | $ | 4,822,783 | |||||||||
Input | June 30, 2022 | |||
Expected term (years) | 5.32 | |||
Expected volatility | 13.8 | % | ||
Risk-free interest rate | 3.02 | % | ||
Fair value of the common stock price | $ | 9.91 | ||
Exercise price | $ | 11.50 |
Input | December 31, 2021 | |||
Expected term (years) | 5.37 | |||
Expected volatility | 12.4 | % | ||
Risk-free interest rate | 1.29 | % | ||
Fair value of the common stock price | $ | 9.90 | ||
Exercise price | $ | 11.50 |
Warrant Liability | ||||
Fair value as of December 31, 2021 | $ | 4,822,783 | ||
Change in fair value | (3,428,308 | ) | ||
Fair value as of March 31, 2022 | 1,394,475 | |||
Change in fair value | (344,281 | ) | ||
Fair value as of June 30, 2022 | $ | 1,050,194 | ||
Warrant Liability | ||||
Fair value as of December 31, 2020 | $ | 33,807,463 | ||
Transfer out of Level 3 to Level 1 | (25,500,000 | ) | ||
Change in fair value | 5,996,188 | |||
Fair value as of March 31, 2021 | 14,303,651 | |||
Change in fair value | (6,657,377 | ) | ||
Fair value as of June 30, 2021 | $ | 7,646,274 | ||
June 30, 2023 | Quoted Prices In Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
Liabilities: | ||||||||||||||||
Warrant Liability—Public Warrants | $ | 825,000 | $ | 825,000 | $ | — | $ | — | ||||||||
Warrant Liability—Private Placement Warrants | 486,338 | — | — | 486,338 | ||||||||||||
$ | 1,311,338 | $ | 825,000 | $ | — | $ | 486,338 | |||||||||
December 31, 2022 | Quoted Prices In Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
Liabilities: | ||||||||||||||||
Warrant Liability—Public Warrants | $ | 877,500 | $ | 877,500 | $ | — | $ | — | ||||||||
Warrant Liability—Private Placement Warrants | $ | 505,949 | — | — | 505,949 | |||||||||||
$ | 1,383,449 | $ | 877,500 | $ | — | $ | 505,949 | |||||||||
Input | June 30, 2023 | |||
Expected term (years) | 0.96 | |||
Expected volatility | 7.7 | % | ||
Risk-free interest rate | 5.40 | % | ||
Exercise price | $ | 11.50 | ||
Fair value of the common stock price | $ | 10.05 |
Input | December 31, 2022 | |||
Expected term (years) | 1.15 | |||
Expected volatility | 7.9 | % | ||
Risk-free interest rate | 4.68 | % | ||
Exercise price | $ | 11.50 | ||
Fair value of the common stock price | $ | 9.92 |
Warrant Liability | ||||
Fair value as of December 31, 2022 | $ | 505,949 | ||
Change in fair value | (60,935 | ) | ||
Fair value as of March 31, 2023 | $ | 445,014 | ||
Change in fair value | 41,324 | |||
Fair value as of June 30, 2023 | $ | 486,338 | ||
Warrant Liability | ||||
Fair value as of December 31, 2021 | $ | 4,822,783 | ||
Change in fair value | (3,428,308 | ) | ||
Fair value as of March 31, 2022 | 1,394,475 | |||
Change in fair value | (344,281 | ) | ||
Fair value as of June 30, 2022 | $ | 1,050,194 | ||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
References to “we”, “us”, “our” or the “Company” are to Altitude Acquisition Corp., except where the context requires otherwise. The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this report.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form
Overview
We are a blank check company incorporated on August 12, 2020 as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similarbusiness combination. On April 23, 2023, the Company, entered into a business combination agreement (the “Business Combination Agreement”) by and among the Company, Altitude Merger Sub I, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Altitude (“Merger Sub I”), Altitude Merger Sub II, LLC a Delaware limited liability company and a direct wholly owned subsidiary of Altitude (“Merger Sub II”) Picard Medical, Inc., a Delaware corporation (“Picard”) and Hunniwell Picard I, LLC, solely in its capacity as the representative, agent and attorney-in-fact of the security holders of Picard. We intend to consummate a business combination with onePicard before the end of the Combination Period, but we are not able to assure you whether we will complete a business combination with the Picard or more businesses (a “Business Combination”).with any other target business. We also have neither engaged in any operations nor generated any revenue to date. Based on our business activities, the Company is a “shell company” as defined under the Exchange Act because we have no operations and nominal assets consisting almost entirely of cash.
On December 11, 2020, we consummated our initial public offering (“IPO”) on December 11, 2020 and are currently in the process of locating suitable targets for our Business Combination. We intend to use the cash proceeds from our IPO and the Private Placement described below as well as additional issuances, if any, of our capital stock, debt or a combination of cash, stock and debt to complete the Business Combination.
A total of $300,000,000, comprised of $292,000,000 of the proceeds from the IPO (which amount includes $10,500,000 of the underwriters’ deferred discount) and $8,000,000 (the “Private Placement”of the proceeds of the sale of the Private Placement Warrants, was placed in a U.S.-based trust account (“Trust Account”).
On December 5, 2022, in order to mitigate the risk of being deemed an unregistered investment company, we instructed CST to liquidate the securities held in the Trust Account and instead hold all funds in the Trust Account in an interest-bearing bank deposit account. As a result, following such change, we will likely receive minimal, if any, interest, on the funds held in the Trust Account.
As of June 30, 2023 and December 31, 2022, there was $13,612,504 and $16,975,796 in cash held in the Trust Account. The Trust Account is held in an interest-bearing bank deposit account and the income earned on the deposit account is also for the benefit of our public stockholders.
On June 10, 2022, the Company’s stockholders approved an amendment to the Company’s Amended and Restated Certificate of IncorporationCharter to extend the Combination Period from June 11, 2022 to October 11, 2022. In connection with the amendment to the Company’s Amended and Restated Certificate of Incorporation,Charter, stockholders holding an aggregate of 24,944,949 shares of our Class A common stockPublic Shares exercised their right to redeem their shares for approximately $10.01 per share of the funds held in ourthe Trust Account (as defined below), or a total amount of $249,614,847. Following such redemptions, there were 5,055,051 public shares outstanding and an aggregate of approximately $50.6 million of cash held in the Company’s Trust Account.
In connection with the June Non-Redemption Agreements, Gary Teplis, the Chief Executive Officer of the Company, agreed to pay to each June Non-Redeeming Stockholder $0.033 per share in cash per month through October 11, 2022, and as a result Mr. Teplis paid a total of $184,929 to the June Non-Redeeming Stockholders.
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On October 6, 2022, the Company’s stockholders approved a second amendment to the Charter to extend the Combination Period from October 11, 2022 to April 11, 2023. In connection with the amendment to the Charter, stockholders holding an aggregate of 3,382,949 Public Shares exercised their right to redeem their shares for approximately $10.05 per share of the funds held in the Trust Account totaling $34,009,688.
Prior to the October special meeting, on October 5, 2022, we entered into a non-redemption agreement (“October Non-Redemption
In connection with the October Non-Redemption Agreement, Mr. Teplis agreed to pay to each
On April 7, 2023, the Company’s stockholders approved a third amendment to the Company’s Charter to give the Company’s board of directors (“Board”) the right to extend the Combination Period, without further stockholder vote, monthly, up to eight times for an additional one month each time, from April 11, 2023 up to December 8, 2020 between11, 2023 (each, a “Monthly Extension”). Additionally, the Company’s stockholders approved amendments to the Charter to provide for a the right of a holder of Class B common stock of the Company, and Continental Stock Transfer & Trust Companypar value $0.001 per share (“CST”Class B common stock”), to convert its shares of Class B common stock into shares of Class A common stock of the trusteeCompany, par value $0.001 per share (“Class A common stock”), on a one-to-one basis at any time and from time to time at the election of the holder, and to remove (a) the limitation that the Company will not consummate a Business Combination if it would cause the Company’s net tangible assets to be less than $5,000,0001 following such redemptions and (b) the limitation that the Company will not redeem Public Shares that would cause the Company’s net tangible assets to be less than $5,000,001 following such redemptions. The Company’s stockholders also re-elected Hilton Sturisky as a Class I director for a three year term. In connection with the extension of the Combination Period, stockholders holding an aggregate of 337,457 Public Shares exercised their right to redeem their shares for approximately $10.08 per share of the funds held in the Trust Account, the Company issued a request to CST to withdraw $81,200 of interest income fromleaving approximately $13,460,674 in cash in the Trust Account forafter satisfaction of such redemptions.
The Board has exercised five of its Monthly Extensions, on each of May 9, 2023, June 6, 2023, July 6, 2023, and August 3, 2023. Accordingly, the payment of the Company’s taxes.
Our management has broad discretion with respect to the specific application of the net proceeds of the IPO and the private placement,Private Placement, although substantially all of the net proceeds are intended to be applied generally towards consummating a business combination.
On April 7, 2023, pursuant to the terms of the Charter, Altitude Acquisition Holdco LLC (“Sponsor”), the holder of an aggregate of 7,500,000 shares of Class B common stock, elected to convert each outstanding share of Class B common stock held by it on a one-for-one basis into shares of Class A common stock, with immediate effect. Following such conversion, as of April 7, 2023, the Company had an aggregate of 8,834,645 shares of Class A common stock issued and outstanding and 0 shares of Class B common stock issued and outstanding.
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Business Combination.Combination Agreement
On April 23, 2023, the Company, entered the Business Combination Agreement. The Business Combination Agreement provides, among other things, that on the terms and subject to the conditions set forth therein, Merger Sub I will merge with and into Picard (the “First Merger”), with Picard surviving as a wholly-owned subsidiary of the Company (the “Surviving Corporation”). Immediately following the First Merger and as part of the same overall transaction as the First Merger, the Surviving Corporation will merge with and Merger Sub II, with Merger Sub II surviving as the surviving entity (the “Surviving Entity”, and such merger, the “Second Merger” and, together with the First Merger, the “Mergers”). Upon the closing of the Mergers (the “Closing”), it is anticipated that the Company will change its name to “Picard Medical Holdings, Inc.” and is referred to herein as “New Picard” as of the time following such change of name. The date on which the Closing actually occurs is hereinafter referred to as the “Closing Date.”
Prior to the First Merger, each issued and outstanding share of Picard’s preferred stock, par value $0.0001 per share (“Picard Preferred Stock”), will automatically convert into one (1) share of common stock of Picard, par value $0.001 per share (“Picard Common Stock”). Each of Picard’s convertible notes that are outstanding prior to the First Merger, if any, will convert prior to the First Merger into shares of Picard Common Stock in accordance with the terms of such convertible notes. Each share of Picard Common Stock held by a Picard securityholder immediately prior to the First Effective Time (including shares issued upon conversion of Picard Preferred Stock and convertible notes, but not including dissenting shares) will be automatically cancelled and converted into the right to receive a pro rata portion of an aggregate of 48,000,000 shares of common stock of New Picard, par value $0.001 per share (“New Picard Common Stock”), and an aggregate of 6,500,000 warrants to purchase shares of New Picard Common Stock at an initial exercise price of $11.50 per share (“New Picard Warrants”), plus up to an additional 6,500,000 New Picard Warrants if certain earnout conditions are satisfied (the “Earnout Warrants”). Each of Picard’s options that are outstanding and unexercised prior to the First Merger will be assumed by New Picard and converted into a New Picard option with the same terms and conditions. Each of Picard’s warrants that are outstanding and unexercised prior to the First Merger, whether or not then vested or exercisable, will be assumed by New Picard and will be converted into a warrant to acquire shares of New Picard Common Stock and will be subject to the same terms and conditions that applied to the Picard warrant immediately prior to the First Merger.
The Earnout Warrants will be held in escrow following the Closing and will be released to the Picard securityholders if, at any time during the five (5) year period following the Closing, the dollar volume-weighted average price (“VWAP”) of New Picard Common Stock for any 20 trading days within any 30 trading day period is greater than $12.50.
At the Closing, New Picard will issue 100,000 shares of New Picard Common Stock and 30,000 New Picard Warrants to certain service providers of the Company.
The Board of the Company has unanimously approved and declared advisable the Business Combination Agreement and the Mergers and resolved to recommend approval of the Business Combination Agreement and related matters by the Company’s stockholders. The Closing is expected to occur in the second half of 2023, following the receipt of required approval by the stockholders of the Company and Picard, required regulatory approvals, and the fulfilment of other conditions set forth in the Business Combination Agreement.
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Sponsor Support Agreement
In connection with the execution of the Business Combination Agreement, on April 23, 2023, the Sponsor entered into a support agreement with the Company and Picard (the “Sponsor Support Agreement”). Under the Sponsor Support Agreement, Sponsor agreed to vote, at any meeting of the stockholders of the Company, and in any action by written consent of the stockholders of the Company, all of the common stock of the Company held by the Sponsor in favor of the Mergers and other related actions. The Sponsor Support Agreement prohibits the Sponsor from, among other things, selling, assigning or transferring or redeeming any shares of Class A common stock held by it. In addition, the Sponsor Support Agreement provides that the Sponsor will, in connection with the Closing (x) forfeit up to 4,500,000 shares of Class A common stock held by the Sponsor immediately prior to the Closing, with such number of forfeited shares to be reduced by 20,000 shares for each $1,000,000 by which the proceeds of the Closing Offering (as defined in the Business Combination Agreement) plus the funds remaining in the Trust Account (after giving effect to redemptions and any financial incentives or discounts given to incentivize non-redemption and the repayment of any outstanding debt to the Sponsor) together with the proceeds from any Picard Financing (as defined in the Business Combination Agreement), exceeds $38,000,000, (y) forfeit 6,500,000 Private Placement Warrants held by Sponsor immediately prior to the Closing, and (z) deposit with CST, acting as escrow agent, 1,250,000 shares of Class A common stock (the “Sponsor Earnout Shares”) and 1,000,000 Private Placement Warrants (the “Sponsor Earnout Warrants” and together with the Sponsor Earnout Shares, the “Sponsor Earnout Securities”). The Sponsor Earnout Securities will be released to the Sponsor upon achievement of the following milestones at any time during the five year period following the Closing: (i) 500,000 Sponsor Earnout Shares will be released if the VWAP of New Picard Common Stock is equal to or greater than $12.50 for any 20 trading days within any 30 trading day period, (ii) 250,000 Sponsor Earnout Shares and 1,000,000 Earnout Warrants will be released upon the closing of the acquisition by the Company or New Picard, as applicable, of at least 10,000,000 Company Warrants or New Picard Warrants, as applicable, from public investors, and (iii) 750,000 Sponsor Earnout Shares will be released upon the release of the Sponsor Earnout Shares and Sponsor Earnout Warrants pursuant to both (i) and (ii) of this paragraph. Any Sponsor Earnout Securities that have not been released from escrow on the date that is five years after the Closing will be forfeited.
Picard Support Agreements
In connection with the execution of the Business Combination Agreement, on April 23, 2023, certain Picard stockholders holding an aggregate of approximately 90% of the outstanding Picard equity, on an as-converted to Picard Common Stock basis, and 100% of the outstanding Picard Preferred Stock (together, the “Picard Supporting Stockholders”) entered into support agreements with the Company and Picard (the “Picard Support Agreements”). Under the Picard Support Agreements, each Picard Supporting Stockholder has executed and delivered a written consent with respect to the outstanding shares of Picard Common Stock and Picard Preferred Stock held by such Picard Supporting Stockholder (the “Subject Picard Shares”) approving the Business Combination Agreement and the transactions contemplated thereby. In addition to the foregoing, each Picard Supporting Stockholder agreed that at any meeting of the holders of Picard capital stock, each such Picard Supporting Stockholder will appear at the meeting, in person or by proxy, and cause its Subject Picard Shares to be voted (i) to approve and adopt the Business Combination Agreement and the transactions contemplated thereby, including the Mergers; (ii) against any (A) any merger, consolidation, share exchange, business combination or other similar transaction or (B) any sale, lease, exchange, transfer or other disposition of all or a material portion of the assets of Picard (a “Alternative Proposal”); and (iii) against any amendment of the certificate of incorporation, or bylaws of Picard or proposal or transaction that would impede or frustrate the provisions of the Picard Support Agreements, the Business Combination Agreement or the transactions contemplated thereby. In addition, the Picard Support Agreements prohibit the Picard Supporting Stockholders from, among other things, (i) transferring any of the Subject Picard Shares; (ii) entering into (a) any option, warrant, purchase right, or other contact that would require the Picard Support Stockholders to transfer the Subject Picard Shares, or (b) any voting trust, proxy or other contract with respect to the voting or transfer of the Subject Picard Shares; or (iii) or taking any action in furtherance of the forgoing.
The Picard Support Agreement provides that the Picard Supporting Stockholders will not directly or indirectly, (i) solicit, initiate or knowingly encourage or facilitate any inquiry, proposal, or offer which constitutes, or could reasonably be expected to lead to, an Alternative Proposal in their capacity as such, (ii) participate in any discussions or negotiations regarding, or furnish or receive any nonpublic information relating to the Picard or its subsidiaries, in connection with any Alternative Proposal, (iii) approve or recommend, or make any public statement approving or recommending an Alternative Proposal, (iv) enter into any letter of intent, merger agreement or similar agreement providing for an Alternative Proposal, (v) make, or in any manner participate in a “solicitation” (as such term is used in the rules of the SEC) of proxies or powers of attorney or similar rights to vote, or seek to advise or influence with respect to voting of the Picard capital stock intending to facilitate any Alternative Proposal or cause any holder of shares of Picard capital stock not to vote to adopt the Business Combination Agreement and approve the Mergers and the other transactions contemplated thereby, (vi) become a member of a “group” (as such term is defined in Section 13(d) of the Exchange Act) with respect to any voting securities of Picard that takes any action in support of an Alternative Proposal or (vii) otherwise resolve or agree to do any of the foregoing.
Picard’s Supporting Stockholders each also irrevocably waived, and agreed not to exercise or assert, any dissenters’ or appraisal rights under Delaware law in connection with the Mergers and the Business Combination Agreement.
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Other Agreements
The Business Combination Agreement contemplates the execution of various additional agreements and instruments, on or before the Closing, including, among others, the agreements described below.
Registration Rights Agreement
In connection with the Closing, the Company, Picard, and certain of their respective stockholders will enter into an amended and restated registration rights agreement (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, New Picard will be required to register for resale securities held by the stockholders party thereto. In addition, the holders will have certain demand and “piggyback” registration rights. New Picard will bear the expenses incurred in connection with the filing of any registration statements pursuant to the Registration Rights Agreement.
Lock-Up Agreement
In connection with the Closing, the Company and certain record and/or beneficial owner of equity securities of Picard (“Holders”) will enter into a lock-up agreement (the “Lock-Up Agreement”). Pursuant to the Lock-Up Agreement, the Holders will agree, subject to customary exceptions, not to transfer (a) any shares of New Picard Common Stock received by them as consideration in the Mergers (the “Lock-Up Shares”) for the period ending on the earliest of (x) the date this is one (1) year following the Closing Date, (y) the date on which the closing price of shares of New Picard Common Stock on Nasdaq equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for twenty (20) of any thirty (30) consecutive trading days commencing at least 150 days after the Closing, and (z) the date on which New Picard completes a liquidation, merger, capital stock exchange, reorganization or similar transaction that results in all of New Picard’s stockholders having the right to exchange their shares of New Picard Common Stock for cash, securities or other property and (b) any warrants of received as consideration in the Mergers (including the Earnout Warrants) for a period of 30 days after Closing.
Nasdaq Deficiency Notice
On January 9, 2023, the Company received a deficiency notice from Nasdaq indicating that the Company failed to hold an annual meeting of stockholders within 12 months after its fiscal year ended December 31, 2021, as required by Nasdaq Listing Rule 5620(a). The Company submitted a plan to regain compliance and Nasdaq granted the Company until April 11, 2023, its then-current liquidation date, to regain compliance. The Company held its Annual Meeting on April 7, 2023 and accordingly regained compliance with Nasdaq Listing Rule 5620(a).
Results of Operations
As of June 30, 2022,2023, we have not commenced any operations. All activity for the period from August 12, 2020 (inception) through June 30, 20222023, relates to our formation and IPO, and, since the completion of the IPO, our searchingsearch for a target to consummate a business combination, including the negotiation of the Business Combination.Combination Agreement with Picard. We will not generate any operating revenues until after the completion of a Business Combination,business combination, at the earliest. We generate
For the three months ended June 30, 2023, we had a net loss of $1,658,466 which included operating costs of $1,799,105, unrealized loss on change in fair value of warrants of $98,324 and provision for income taxes $38,301, offset by interest income earned on the operating bank account of $18 and interest income earned on the proceeds in the Trust Account of $277,246.
For the six months ended June 30, 2023, we had a net loss of $3,107,201 which included operating costs of $3,418,295 and provision for income taxes $38,301, partially offset by unrealized gain on change in fair value of warrants of $72,111, interest income earned on the proceeds in the Trust Account of $277,246 and interest income earned on the operating bank account of $38.
For the three months ended June 30, 2022, we had a net loss of $234,912 which included operating costs of $1,518,182 and income tax provision of $8,780, partially offset by unrealized gain on change in fair value of warrants of $987,781 and interest income earned on the proceeds in the Trust Account of $304,269.
For the six months ended June 30, 2022, we had a net income of $8,382,279 which included unrealized gain on change in fair value of warrants of $10,525,589, interest income earned on the proceeds in the Trust Account of $311,869 and interest income earned on the operating bank account of $1, partially offset by operating costs of $2,446,400 and income tax provision of $8,780.
Liquidity and Capital Resources
As of June 30, 2023, we had cash outside our Trust Account of $81,121 available for working capital needs. All remaining cash was held in the Trust Account and is generally unavailable for our use prior to an initial business combination.
On December 11, 2020, we consummated the IPO of 30,000,000 Units, at $10.00 per Unit, generating gross proceeds of $300,000,000.
Simultaneously with the closing of the IPO, we consummated the sale of 8,000,000 Private Placement Warrants, at a price of $1.00 per Private Placement Warrant, generating gross proceeds of $8,000,000.
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In connection with the IPO, the underwriters were granted a 45-day option from the date of the prospectus to purchase up to 3,915,000 additional Units to cover over-allotments, if any. On December 11, 2020, the underwriters partially exercised their over-allotment option and purchased an additional 3,900,000 Units. The unexercised portion of the over-allotment option was forfeited.
Following our IPO and the sale of the Private Placement Warrants, a total of $300,000,000 ($10.00 per Unit) was placed in the Trust Account. We incurred $17,107,057 in IPO related costs, including $6,000,000 of underwriting fees, $10,500,000 of deferred underwriting discount and $607,057 of other costs.
As of June 30, 2023, we had investments held in the Trust Account of $13,612,504 (including approximately $756,498 of interest available). Interest income on the balance in the Trust Account may be used by us to pay taxes.
For the threesix months ended June 30, 2021, we had a net income2023, cash used by operating activities was $258,839. Net loss of $19,068,876 which included$3,107,201 was impacted by unrealized gain on change in fair value of warrants of $19,441,877,$72,111, interest income earned on the proceeds in the Trust Account of $6,828$277,246 and interest income earned on thechanges in operating bank accountassets and liabilities, which provided $3,197,719 of $8, partially offset bycash for operating costs of $379,837.
For the six months ended June 30, 2022, cash provided by operating activities was $39,997. Net income of $8,382,279 was impacted by interest income earned on Trust of $311,869, unrealized gain on change in fair value of warrants of $10,525,589, and changes in operating assets and liabilities, which provided $2,495,176 of cash for operating activities.
We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (excluding the deferred underwriters’ discount) to complete our initial Business Combination.business combination. We may withdraw interest to pay our taxes and liquidation expenses if we are unsuccessful in completing a Business Combination.business combination. We estimate our annual franchise tax obligations to be $200,000,$185,600, which is the maximum amount of annual franchise taxes payable by us as a Delaware corporation per annum, which we may pay from funds from the IPO held outside of the Trust Account or from interest earned on the funds held in the Trust Account and released to us for this purpose. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust accountTrust Account reduced by our operating expense and franchise taxes. We expect the interest earned on the amount in the trust accountTrust Account will be sufficient to pay our income taxes. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our initial Business Combination,business combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
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On June 2, 2021, we issued an unsecured promissory note to the Sponsor for an aggregate available principal amount of $300,000 to be used for a portion of the expenses of the Business Combination. This loan is
Further, our Sponsor, officers and directors or their respective affiliates may, but are not obligated to, loan us funds as may be required (the “Working Capital Loans”). If we complete a Business Combination, we will repay the Working Capital Loans. In the event that a Business Combination does not close, we 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. Such Working Capital Loans would be evidenced by promissory notes. The notes would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion. As of June 30, 20222023 and December 31, 2021,2022, no Working Capital Loans have been issued.
At June 30, 2023 and December 31, 2022, February 1, 2022, April 25, 2022, May 2, 2022, May 13, 2022, June 3, 2022, June 6, 2022, and June 16, 2022, we received $100,000, $100,000, $250,000, $50,000, $100,000, $20,000, $25,000, $177,423 and $66,000 advances from our Sponsor orthe Company owed its affiliates $904,044 and $802,644 related through advances, respectively, and owed the its sponsor $904,044 and $0 related to a Promissory Note, respectively. Although management expects that it will be used for workingable to raise additional capital purposes, respectively. The advancesto support its planned activities and complete a business combination on or prior to September 11, 2023 (which date may be extended by the Board monthly up to December 11, 2023 in connection with the Monthly Extension), it is uncertain whether it will be able to do so. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a business combination are
Liquidity and Going Concern
As of June 30, 20222023, the Company had cash outside the Trust Account of $81,121 available for working capital needs, and December 31, 2021, wea negative working capital of approximately $1.9 million.
Prior to the completion of the IPO, the Company’s liquidity needs had been satisfied through a payment from the Sponsor of $25,000 for the Founder Shares, the loan under an unsecured promissory note from the Sponsor of $275,000, and advances from the Sponsor of $634,447. Subsequent to the consummation of the IPO and Private Placement, the Company’s liquidity needs have been satisfied through the proceeds from the consummation of the Private Placement not held in the Trust Account and from advances made by the Sponsor and its affiliates.
In addition, in order to finance transaction costs in connection with an initial Business Combination, the Company’s 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 Working Capital Loans (see Note 5). To date, there were no amounts outstanding under any Working Capital Loans.
At June 30, 2023, the Company owed the Sponsor or its affiliates $888,423$904,044 in advances and $100,000$135,000 in promissory notes and as of December 31, 2022, $802,644 related to these advances, respectively.
The Company has incurred and expectexpects to continue to incur significant costs in pursuit of ourits acquisition plans. WeThe Company will need to raise additional capital through loans or additional investments from ourits Sponsor, stockholders, officers, directors, or third parties. OurThe Company’s officers, directors and Sponsor may, but are not obligated to, loan usthe Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet ourthe Company’s working capital needs. Accordingly, wethe Company may not be able to obtain additional financing.
As a result of the above, in connection with ourthe Company’s assessment of going concern considerations in accordance with FASB’s Accounting Standards Update (“ASU”)
The Company’s Sponsor has agreed that it will indemnify and hold harmless the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or similar agreement or Business Combination agreement, 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 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 prospective target business who 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 IPO against certain liabilities, including liabilities under the Securities Act (defined below). However, the Company has not asked its Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether its Sponsor has sufficient funds to satisfy its indemnity obligations and believe that the Company’s Sponsor’s only assets are securities of the Company. Therefore, the Company cannot assure that its Sponsor would be able to satisfy those obligations.
Off-Balance
We did not have any
Contractual Obligations
As of June 30, 2022,2023, we did not have any long-term debt, capital or operating lease obligations.
Critical Accounting Policies
The preparation of condensed consolidated financial statements and related disclosures in conformity with 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 consolidated financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following as our critical accounting policies:
Use of Estimates
The preparation of the condensed consolidated 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.
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 consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. The warrants liabilities are the Company’s most significant estimate. Accordingly, the actual results could differ significantly from those estimates.
Derivative Financial Instruments
We evaluate our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “
FASB ASC
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Class A Common Stock Subject to Possible Redemption
We account for our Class A common stock subject to possible redemption in accordance with the guidance in ASC Topic 480 “
Net (Loss) Income (loss) Per Share of Common Stock
We have two classes of common stock, which are referred to as Class A common stock and Class B common stock. Earnings and losses are shared pro rata between the two classes of common stock. The 23,000,000 shares of Class A common stock potentially issuable upon the exercise of outstanding warrants to purchase Class A common stock were excluded from diluted earnings per share for the three and six months ended June 30, 20222023 and 20212022 because the warrants are contingently exercisable, and the contingencies have not yet been met. As a result, diluted net (loss) income (loss) per share of common stock is the same as basic net (loss) income (loss) per share of common stock for the periods presented.
Recent Accounting Standards
In August 2020, the FASB issued ASU
Management does not believe that any other recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on our condensed consolidated financial statements.
JOBS Act
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 are electinghave elected not to delayopt 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, we, as an emerging growth company, can adopt the adoption of new or revised accounting standards, and as a result, we may not comply withstandard at the time private companies adopt the new or revised standard. This may make comparison of our consolidated 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 on the relevant dates on which adoption of such standards is required for
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined by Rule
Item 4. Controls and Procedures.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2022.2023. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act) were effective.
Changes in Internal Control over Financial Reporting
During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors.
There are certain risks and uncertainties in our business that could cause our actual results to differ materially from those anticipated. A detailed discussion of our risk factors was included in this Quarterly Report are anyPart I, Item 1A, “Risk Factors” of the risks described in our Annual Report on Form
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
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Item 6. Exhibits.
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form
Exhibit Index
+ | Certain exhibits and schedules to this Exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted exhibit or schedule to the SEC upon its request. |
* | Filed herewith |
** | Furnished herewith |
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SIGNATURES
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.
ALTITUDE ACQUISITION CORP. | ||||||
Date: August | By: | /s/Gary Teplis | ||||
Name: Gary Teplis | ||||||
Title: Chief Executive Officer | ||||||
(Principal Executive Officer) | ||||||
Date: August | By: | /s/ Farris Griggs | ||||
Name: Farris Griggs | ||||||
Title: Chief Financial Officer | ||||||
(Principal Financial and Accounting Officer) |
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