SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM
10-Q
 
 
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SeptemberJune 30, 20222023
OR
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
                    
to
                    
 
 
TLG Acquisition One Corp.Electriq Power Holdings, Inc.
(Exact name of registrant as specified in its charter)
 
 
 
Delaware
 
001-39948
 
85-3310839
(State or other jurisdiction of
incorporation or organization)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
515625 North Flagler Drive, Suite 5201003
West Palm Beach,FL
 
33401
(Address Of Principal Executive Offices)
 
(Zip Code)
(561)(833)
945-8340462-2883
Registrant’s telephone number, including area code
Not Applicable
TLG Acquisition One Corp.
515 North Flagler Drive, Suite 520
West Palm Beach, FL
(Former name or former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Trading
Symbol(s)
 
Name of each exchange
on which registered
Units, each consisting of one Class A common share, $0.0001 par value, and
one-third
of one redeemable warrant
TLGA.U
NYSE
Class A common shares included as part of the unitsstock, par value $0.0001 per share
 
TLGAELIQ
 
NYSENew York Stock Exchange
Redeemable warrants included as partWarrants, each exercisable for one share of the unitsClass A common stock at an exercise price of $6.57 per share
 
TLGAELIQ WS
 
NYSE American LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T
(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule
12b-2
of the Exchange Act.
 
Large accelerated filer   Accelerated filer 
Non-accelerated
filer
   Smaller reporting company 
Emerging growth company
    
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2
of the Exchange Act).    Yes      No  
As of NovemberAugust 9, 2023, 38,120,937
14
, 2022, 40,000,000 shares of
Class A common stock, par value $0.0001 per share, and 10,000,000 shares of Class F common stock, par value $0.0001 per share, were issued and outstanding.outstanding
.
 
 
 


ELECTRIQ POWER HOLDINGS, INC.

(F/K/A TLG ACQUISITION ONE CORP.)

Form 10-Q

For the Quarter Ended SeptemberJune 30, 2022

Table of Contents2023

 

     Page 
PART I. FINANCIAL INFORMATION  
Item 1. 

Condensed Consolidated Financial Statements

   1 
 

Condensed Consolidated Balance Sheets as of SeptemberJune 30, 20222023 (Unaudited) and December 31, 20212022

   1 
 

Unaudited Condensed Consolidated Statements of Operations for the Three and NineSix Months Ended SeptemberJune 30, 20222023 and 20212022

   2 
 

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the Three and NineSix Months Ended SeptemberJune 30, 20222023 and 20212022

   3 
 

Unaudited Condensed Consolidated Statements of Cash Flows for the NineSix Months Ended SeptemberJune 30, 20222023 and 20212022

   4 
 

Notes to Unaudited Condensed Consolidated Financial Statements

   5 
Item 2. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

   22 
Item 3. 

Quantitative and Qualitative Disclosures About Market Risk

   2627 
Item 4. 

Controls and Procedures

   2627 
PART II. OTHER INFORMATION  
Item 1. 

Legal Proceedings

   2728 
Item 1A. 

Risk Factors

   2728 
Item 2. 

Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities

   2728 
Item 3. 

Defaults Upon Senior Securities

   28 
Item 4. 

Mine Safety Disclosures

   28 
Item 5. 

Other Information

   28 
Item 6. 

Exhibits

   2829 
 

Signature

   3031 

 


PART I. FINANCIAL INFORMATION
Item 1.
Condensed Consolidated Financial Statements
Item 1. Condensed Consolidated Financial Statements
ELECTRIQ POWER HOLDINGS, INC.
(F/K/A TLG ACQUISITION ONE CORP.)
CONDENSED CONSOLIDATED BALANCE SHEETS
 
   
September 30, 2022
  
December 31, 2021
 
Assets:
         
Current assets:
         
Cash
  $242,304  $48,491 
Prepaid expenses
   413,132   105,654 
   
 
 
  
 
 
 
Total current assets
   655,436   154,145 
Investments held in Trust Account
   402,112,433   400,023,684 
   
 
 
  
 
 
 
Total Assets
  
$
402,767,869
 
 
$
400,177,829
 
   
 
 
  
 
 
 
Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit:
         
Current liabilities:
         
Accounts payable
  $167,288  $48,917 
Accrued expenses
   2,770,245   2,428,864 
Working capital loan—related party
   2,820,000   920,000 
Income tax payable
   426,868   —   
Franchise tax payable
   30,000   121,425 
   
 
 
  
 
 
 
Total current liabilities
   6,214,401   3,519,206 
Derivative warrant liabilities
   1,000,000   10,600,000 
Deferred underwriting commissions
   14,000,000   14,000,000 
   
 
 
  
 
 
 
Total Liabilities
   21,214,401   28,119,206 
   
Commitments and Contingencies
       
   
Class A common stock subject to possible redemption, $0.0001 par value; 40,000,000 shares at redemption value of approximately $10.04 and $10.00 per share as of September 30, 2022 and December 31, 2021
   401,505,838   400,000,000 
   
Stockholders’ Deficit:
         
   
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding as of September 30, 2022 and December 31, 2021
   —     —   
Class A common stock, $0.0001 par value; 200,000,000 shares authorized; no
non-redeemable
shares issued and outstanding as of September 30, 2022 and December 31, 2021
,
 respectively 
(excluding 40,000,000 shares subject to possible redemption)
   —     —   
Class F common stock, $0.0001 par value; 20,000,000 shares authorized; 10,000,000 shares issued and outstanding as of September 30, 2022 and December 31, 2021
   1,000   1,000 
Additional
paid-in
capital
   —     —   
Accumulated deficit
   (19,953,370  (27,942,377
   
 
 
  
 
 
 
Total stockholders’ deficit
   (19,952,370  (27,941,377
   
 
 
  
 
 
 
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit
  
$
402,767,869
 
 
$
400,177,829
 
   
 
 
  
 
 
 
   
June 30,

2023
  
December 31,
2022
 
   
(Unaudited)
    
Assets:
   
Current assets:
   
Cash
  $105,457  $19,750 
Prepaid expenses
   112,099   108,156 
   
 
 
  
 
 
 
Total current assets
   217,556   127,906 
Cash and investments held in Trust Account
   85,098,433   80,945,242 
   
 
 
  
 
 
 
Total Assets
  
$
85,315,989
 
 
$
81,073,148
 
   
 
 
  
 
 
 
Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit:
         
Current liabilities:
         
Accounts payable
  $246,388  $276,917 
Accrued expenses
   6,326,892   4,472,261 
Working capital loan- related party   5,408,857   2,330,370 
Income tax payable
   1,556,523   1,055,680 
Franchise tax payable
   20,050   50 
   
 
 
  
 
 
 
Total current liabilities
   13,558,710   8,135,278 
Derivative warrant liabilities
   800,000   800,000 
Deferred underwriting commissions
   —     14,000,000 
   
 
 
  
 
 
 
Total Liabilities
   14,358,710   22,935,278 
Commitments and Contingencies
       
Class A common stock subject to possible redemption, $0.0001 par value; 7,948,405 shares at redemption value of
approximately $10.50 and $10.03 per share as of June 30, 2023 and December 31, 2022, respectively
   83,461,641   79,739,786 
Stockholders’ Deficit:
         
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding as of June 30, 2023 and
December 31, 2022
   —     —   
Class A common stock, $0.0001 par value; 200,000,000 shares authorized; no
non-redeemable
shares issued and
outstanding as of June 30, 2023 and December 31, 2022 (excluding 7,948,405 shares subject to possible
 
redemption)
   —     —   
Class F common stock, $0.0001 par value; 20,000,000 shares authorized; 5,000,000 and 10,000,000 shares issued and
outstanding as of June 30, 2023 and December 31, 2022, respectively
   500   1,000 
Additional
paid-in
capital
   —     —   
Accumulated deficit
   (12,504,862  (21,602,916
   
 
 
  
 
 
 
Total stockholders’ deficit
   (12,504,362  (21,601,916
   
 
 
  
 
 
 
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit
  
$
85,315,989
 
 
$
81,073,148
 
   
 
 
  
 
 
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 
1

Table of Contents
ELECTRIQ POWER HOLDINGS, INC.
(F/K/A TLG ACQUISITION ONE CORP.)
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
   
For The Three Months Ended September 30,
  
For The Nine Months Ended September 30,
 
   
        2022        
  
        2021        
  
        2022        
  
        2021        
 
General and administrative expenses
  $1,676,761  $161,058  $1,835,743  $3,337,532 
General and administrative expenses—related party
   21,000   22,000   62,500   57,000 
Franchise tax expenses
   50,000   59,808   188,844   207,119 
   
 
 
  
 
 
  
 
 
  
 
 
 
Loss from operations
   (1,747,761  (242,866  (2,087,087  (3,601,651
Offering costs associated with derivative warrant liabilities
   —     —     —     (1,413,340
Change in fair value of derivative warrant liabilities
   600,000   4,933,340   9,600,000   20,800,000 
Income from investments held in Trust Account
   1,808,010   6,145   2,408,800   16,098 
   
 
 
  
 
 
  
 
 
  
 
 
 
Net income before income taxes
   660,249   4,696,619   9,921,713   15,801,107 
Income tax expense
   (369,182  —     (426,868  —   
   
 
 
  
 
 
  
 
 
  
 
 
 
Net income
  $291,067  $4,696,619  $9,494,845  $15,801,107 
   
 
 
  
 
 
  
 
 
  
 
 
 
Weighted average shares outstanding of Class A common stock
   40,000,000   40,000,000   40,000,000   35,457,875 
   
 
 
  
 
 
  
 
 
  
 
 
 
Basic and diluted net income per share, Class A common stock
  $0.01  $0.09  $0.19  $0.35 
   
 
 
  
 
 
  
 
 
  
 
 
 
Weighted average shares outstanding of Class F common stock, basic
   10,000,000   10,000,000   10,000,000   9,858,059 
   
 
 
  
 
 
  
 
 
  
 
 
 
Basic net income per share, Class F common stock
  $0.01  $0.09  $0.19  $0.35 
   
 
 
  
 
 
  
 
 
  
 
 
 
Weighted average shares outstanding of Class F common stock, diluted
   10,000,000   10,000,000   10,000,000   10,000,000 
   
 
 
  
 
 
  
 
 
  
 
 
 
Diluted net income per share, Class F common stock
  $0.01  $0.09  $0.19  $0.35 
   
 
 
  
 
 
  
 
 
  
 
 
 
   
For the Three Months Ended

June 30,
  
For the Six Months Ended

June 30,
 
   
2023
  
2022
  
2023
  
2022
 
General and administrative expenses
  $1,666,324  $84,749  $3,051,026  $158,982 
General and administrative expenses - related party
   21,000   21,000   42,000   41,500 
Franchise tax expenses
   50,000   50,000   100,000   138,844 
   
 
 
  
 
 
  
 
 
  
 
 
 
Loss from operations
  
 
(1,737,324
)
 
 
 
(155,749
 
 
(3,193,026
)
 
 
 
(339,326
Gain on forgiveness of deferred underwriting fee payable   1,113,200   —     1,113,200   —   
Change in fair value of working capital loan - related party
   428,594   —     886,513   —   
Change in fair value of derivative warrant liabilities
   600,000   2,400,000      9,000,000 
Income from cash and investments held in Trust Account
   759,391   568,143   1,371,765   600,790 
   
 
 
  
 
 
  
 
 
  
 
 
 
Net income (loss) before income taxes
   1,163,861   2,812,394   178,452   9,261,464 
Income tax expense
   (382,744  (57,686  (500,843  (57,686
   
 
 
  
 
 
  
 
 
  
 
 
 
Net income (loss)
  
$
781,117
 
 
$
2,754,708
 
 
$
 (322,391
 
$
9,203,778
 
   
 
 
  
 
 
  
 
 
  
 
 
 
Weighted average shares outstanding of Class A common stock
   7,948,405   40,000,000   7,948,405   40,000,000 
   
 
 
  
 
 
  
 
 
  
 
 
 
Basic and diluted net income (loss) per share, Class A common stock
  $0.06  $0.06  $(0.02 $0.18 
   
 
 
  
 
 
  
 
 
  
 
 
 
Weighted average shares outstanding of Class F common stock, basic
   5,000,000   10,000,000   5,801,105   10,000,000 
   
 
 
  
 
 
  
 
 
  
 
 
 
Basic and diluted net income (loss) per share, Class F common stock
  $0.06  $0.06  $(0.02 $0.18 
   
 
 
  
 
 
  
 
 
  
 
 
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 
2

ELECTRIQ POWER HOLDINGS, INC.
(F/K/A TLG ACQUISITION ONE CORP.)
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE THREE AND NINESIX MONTHS ENDED SEPTEMBERJUNE 30, 2023
   
Common Stock
  
Additional Paid-In

Capital
  
Accumulated
Deficit
  
Total
Stockholders’
Deficit
 
   
Class A
   
Class F
          
   
Shares
   
Amount
   
Shares
  
Amount
          
Balance - December 31, 2022
  
 
—  
 
  
$
—  
   
 
10,000,000
 
 
$
1,000
 
 
$
—  
 
 
$
(21,602,916
 
$
(21,601,916
Increase in redemption value of Class A common stock subject to possible redemption
   —      —      —     —     (500  (1,874,487  (1,874,987
Forfeiture of Class F shares
             (5,000,000  (500  500         
Net loss
   —      —      —     —     —     (1,103,508  (1,103,508
   
 
 
   
 
 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Balance - March 31, 2023 (unaudited)
  
 
—  
 
  
$
—  
   
 
5,000,000
 
 
$
500
 
 
$
—  
 
 
$
(24,580,911
 
$
(24,580,411
Increase in redemption value of Class A common stock subject to possible redemption
   —      —      —     —     —     11,294,932   11,294,932 
Net income
   —      —      —     —     —     781,117   781,117 
   
 
 
   
 
 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Balance - June 30, 2023 (unaudited)
  
 
—  
 
  
$
—  
   
 
5,000,000
 
 
$
500
 
 
$
—  
 
 
$
 (12,504,862
 
$
 (12,504,362
   
 
 
   
 
 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022
 
                             
   
Common Stock
   
Additional Paid-In

Capital
  
Accumulated

Deficit
  
Total

Stockholders’

Deficit
 
   
Class A
   
Class F
 
   
Shares
   
Amount
   
Shares
   
Amount
 
Balance—December 31, 2021
  
 
—  
 
  
$
—  
 
  
 
10,000,000
 
  
$
1,000
 
  
$
—  
 
 
$
(27,942,377
 
$
(27,941,377
Net income
   —      —      —      —      —     6,449,070   6,449,070 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
  
 
 
  
 
 
 
Balance—March 31, 2022 (unaudited)
  
 
—  
 
  
 
—  
 
  
 
10,000,000
 
  
 
1,000
 
  
 
—  
 
 
 
(21,493,307
 
 
(21,492,307
Increase in redemption value of Class A common stock subject to possible redemption
   —      —      —      —      —     (117,010  (117,010
Net income
   —      —      —      —      —     2,754,708   2,754,708 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
  
 
 
  
 
 
 
Balance—June 30, 2022 (unaudited)
  
 
—  
 
  
 
—  
 
  
 
10,000,000
 
  
 
1,000
 
  
 
—  
 
 
 
(18,855,609
 
 
(18,854,609
Increase in redemption value of Class A common stock subject to possible redemption
   —      —      —      —      —     (1,388,828  (1,388,828
Net income
   —      —      —      —      —     291,067   291,067 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
  
 
 
  
 
 
 
Balance—September 30, 2022 (unaudited)
  
 
—  
 
  
$
—  
 
  
 
10,000,000
 
  
$
1,000
 
  
$
—  
 
 
$
(19,953,370
 
$
(19,952,370
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
  
 
 
  
 
 
 
 
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021
 
 
   
Common Stock
   
Additional
Paid-In

Capital
  
Accumulated

Deficit
  
Total

Stockholders’

Deficit
 
   
Class A
   
Class F
 
   
Shares
   
Amount
   
Shares
   
Amount
 
Balance—January 1, 2021
  
 
—  
 
  
$
—  
 
  
 
10,000,000
 
  
$
1,000
 
  
$
24,000
 
 
$
(3,329
 
$
21,671
 
Accretion of Class A common stock subject to possible redemption amount
   —      —      —      —      (24,000  (45,861,780  (45,885,780
Net income
   —      —      —      —      —     11,072,129   11,072,129 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
  
 
 
  
 
 
 
Balance—March 31, 2021 (unaudited)
  
 
—  
 
  
 
—  
 
  
 
10,000,000
 
  
 
1,000
 
  
 
—  
 
 
 
(34,792,980
 
 
(34,791,980
Net income
   —      —      —      —      —     32,359   32,359 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
  
 
 
  
 
 
 
Balance—June 30, 2021 (unaudited)
  
 
—  
 
  
 
—  
 
  
 
10,000,000
 
  
 
1,000
 
  
 
—  
 
 
 
(34,760,621
 
 
(34,759,621
Net income
   —      —      —      —      —     4,696,619   4,696,619 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
  
 
 
  
 
 
 
Balance—September 30, 2021 (unaudited)
  
 
—  
 
  
$
—  
 
  
 
10,000,000
 
  
$
1,000
 
  
$
—  
 
 
$
(30,064,002
 
$
(30,063,002
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
  
 
 
  
 
 
 
   
Common Stock
          
Total
 
   
Class A
   
Class F
   
Additional Paid-In
   
Accumulated
  
Stockholders’
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Capital
   
Deficit
  
Deficit
 
Balance - December 31, 2021
  
 
—  
 
  
$
—  
   
 
10,000,000
 
  
$
1,000
 
  
$
—  
   
$
(27,942,377
 
$
(27,941,377
Net income
   —      —      —      —      —      6,449,070   6,449,070 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
  
 
 
 
Balance - March 31, 2022 (unaudited)
  
 
—  
 
  
 
—  
 
  
 
10,000,000
 
  
 
1,000
 
  
 
—  
 
  
 
(21,493,307
 
 
(21,492,307
Increase in redemption value of Class A common stock subject to possible redemption
   —      —      —      —      —      (117,010  (117,010
Net income
   —      —      —      —      —      2,754,708   2,754,708 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
  
 
 
 
Balance - June 30, 2022 (unaudited)
  
 
—  
 
  
$
—  
   
 
10,000,000
 
  
$
1,000
 
  
$
—  
   
$
(18,855,609
 
$
(18,854,609
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
  
 
 
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 
3

ELECTRIQ POWER HOLDINGS, INC.
(F/K/A TLG ACQUISITION ONE CORP.)
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
   
For The Nine Months Ended September 30,
 
   
2022
  
2021
 
Cash Flows from Operating Activities:
         
Net income
  $9,494,845  $15,801,107 
Adjustments to reconcile net income to net cash used in operating activities:
         
General and administrative expenses paid by related party under note payable
   —     1,530 
Offering costs allocated to derivative warrant liabilities
   —     1,413,340 
Change in fair value of derivative warrant liabilities
   (9,600,000  (20,800,000
Income from investments held in Trust Account
   (2,408,800  (16,098
Changes in operating assets and liabilities:
         
Prepaid expenses
   (307,478  (365,391
Accounts payable
   118,371   270,064 
Accrued expenses
   341,382   1,675,330 
Income tax payable
   426,868   —   
Franchise tax payable
   (91,425  147,448 
   
 
 
  
 
 
 
Net cash used in operating activities
   (2,026,237  (1,872,670
   
 
 
  
 
 
 
Cash Flows from Investing Activities
         
Investment income released from Trust Account to pay for taxes
   320,050   —   
Cash deposited in Trust Account
   —     (400,000,000
   
 
 
  
 
 
 
Net cash provided by (used in) investing activities
   320,050   (400,000,000
   
 
 
  
 
 
 
Cash Flows from Financing Activities:
         
Repayment of note payable to related party
   —     (192,312
Proceeds received from initial public offering, gross
   —     400,000,000 
Proceeds received from private placement
   —     10,000,000 
Working Capital Loan—related party
   1,900,000   570,000 
Offering costs paid
   —     (8,467,900
   
 
 
  
 
 
 
Net cash provided by financing activities
   1,900,000   401,909,788 
   
 
 
  
 
 
 
Net change in cash
   193,813   37,118 
   
Cash—beginning of the period
   48,491   500 
   
 
 
  
 
 
 
Cash—end of the period
  
$
242,304
 
 
$
37,618
 
   
 
 
  
 
 
 
Supplemental disclosure of noncash activities:
         
Deferred offering costs included in accrued expenses
  $—    $85,000 
Deferred offering costs paid by related party under promissory note
  $—    $51,890 
Accounts payable paid through promissory note
  $—    $750 
Deferred underwriting commissions in connection with the initial public offering
  $—    $14,000,000 
   
For The Six Months Ended
June 30,
 
   
2023
  
2022
 
Cash Flows from Operating Activities:
   
Net (loss) income
  $ (322,391 $9,203,778 
Adjustments to reconcile net (loss) income to net cash used in operating activities:
         
Change in fair value of derivative warrant liabilities
   —     (9,000,000
Gain on forgiveness of deferred underwriting fee payable   (1,113,200  —   
Change in fair value of working capital loan - related party
   (886,513  —   
Income from investments held in Trust Account
   (1,371,765  (600,790
Changes in operating assets and liabilities:
         
Prepaid expenses
   (3,943  (604,006
Accounts payable
   (30,529  (44,404
Accrued expenses
   2,109,631   (810,222
Income tax payable
   500,843   57,686 
Franchise tax payable
   20,000   (101,425
   
 
 
  
 
 
 
Net cash used in operating activities
  
 
(1,097,867
 
 
(1,899,383
   
 
 
  
 
 
 
Cash Flows from Investing Activities
         
Investment income released from Trust Account to pay for taxes
   80,000   —   
Cash deposited in Trust Account
   (2,861,426  —   
   
 
 
  
 
 
 
Net cash used in investing activities
  
 
(2,781,426
 
 
—  
 
   
 
 
  
 
 
 
Cash Flows from Financing Activities:
         
Proceeds received from working capital loan- related party   3,965,000   1,900,000 
   
 
 
  
 
 
 
Net cash provided by financing activities
  
 
3,965,000
 
 
 
1,900,000
 
   
 
 
  
 
 
 
Net change in cash
  
 
85,707
 
 
 
617
 
Cash - beginning of the period
   19,750   48,491 
   
 
 
  
 
 
 
Cash - end of the period
  
$
105,457
 
 
$
49,108
 
   
 
 
  
 
 
 
Supplemental Disclosure of Non-cash Financing Activities:
         
Forgiveness of deferred underwriting fee payable allocated to Class A common stock  $13,141,800  $—   
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 
4

TLG Acquisition One Corp.
ELECTRIQ POWER HOLDINGS, INC.
(F/K/A TLG ACQUISITION ONE CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
September
June 30, 20222023
Note
1-Description
1 — Description of Organization and Business Operations
Electriq Power Holdings, Inc. (formerly known as TLG Acquisition One Corp. (the“TLG” prior to July 31, 2023, the “Closing Date,” and on and after the Closing Date, the “Company”) iswas a blank check company incorporated in Delaware on October 2, 2020, for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the(a “Business Combination”). The Company iswas not limited to a particular industry or sector for purposes of consummating a Business Combination. The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated with emerging growth companies.
Business Combination
On the Closing Date, the Company consummated the previously announced merger (the “Business Combination”) pursuant to certain Agreement and Plan of Merger, dated November 13, 202
2
 (as amended by the First Amendment to Merger Agreement dated December 23, 2022, the Second Amendment to Merger Agreement dated March 22, 2023, and the Third Amendment to Merger Agreement dated June 8, 2023), among the Company, Eagle Merger Corp., a Delaware corporation and wholly-owned subsidiary of TLG, and Electriq Power, Inc. (“Electriq”).
In connection with TLG’s special meeting of stockholders in lieu of the 2023 annual meeting of stockholders held to, among other things, approve the Business Combination, holders of TLG’s Class A common stock, par value $0.0001 per share
(“TLG
common stock”), had the right to elect to redeem all or a portion of their TLG common stock for a per share price calculated in accordance with Amended and Restated Certificate of Incorporation of TLG. As previously disclosed on July 26, 2023, holders of approximately 97.3% or 7,736,608 shares of TLG common stock had validly elected to redeem their shares of TLG common stock for a pro rata portion of the trust account holding the proceeds from TLG’s initial public offering and the sale of private placement warrants, or approximately $10.63 per share and $82.2 million in the aggregate as of July 25, 2023.
Business Prior to the Business Combination
As of SeptemberJune 30, 2022,2023, the Company had not commenced any operations. All activity for the period from October 2, 2020 (inception) through SeptemberJune 30, 20222023, relates to the Company’s formation and the initial public offering (the “Initial Public Offering”) described below and, after the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generateswill generate
non-operating
income in the form of interest income on investments from the proceeds derived from the Initial Public Offering.
The Company’s sponsor is
was
TLG Acquisition Founder LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for the Company’s Initial Public Offering was declared effective on January 27, 2021. On February 1, 2021, the Company consummated its Initial Public Offering of 40,000,000 units (the “Units” and, with respect to the Class A common stock included in the Units being offered, the “Public Shares”), including 5,000,000 additional Units to cover over-allotments (the “Over-Allotment Units”), at $10.00 per Unit, generating gross proceeds of $400.0 million, and incurring offering costs of approximately $22.7 million, of which $14.0 million was for deferred underwriting commissions (See Note(Note 5).
Simultaneously with the closing of the Initial Public Offering, the Company consummated the private placement (“Private Placement”) of 4,666,667 and 2,000,000 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) to
the Sponsor and RBC Capital Markets, LLC (“RBC”), in its capacity as a purchaser of Private Placement Warrants, (“RBC”)respectively
, respectively, at a price of $1.50 per Private Placement Warrant, generating total proceeds of $10.0 million (See Note(Note 4).
Upon the closing of the Initial Public Offering and the Private Placement, $400.0 million ($10.00 per Unit) of the net proceeds of the Initial Public Offering and certain of the proceeds of the Private Placement was placed in a
trust account (“
Trust Account
Account”),
and invested only in 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 in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule
2a-7Rule2a-7
under the Investment Company Act of 1940, as amended (the “Investment Company Act”), 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.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (net of amounts disbursed to management for working capital purposes, if any, and excluding the amount of any deferred underwriting discount held in trust) at the time of the agreement to enter into the initial Business Combination. However, the Company will only complete a Business Combination if the post-business combination company owns or acquires 50% or more of the voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act.
The Company will provide the holders of the Public Shares (the “Public Stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then held in the Trust Account (initially anticipated to be $10.00 per Public Share).
Company.
 
5

TLG Acquisition One Corp.
ELECTRIQ POWER HOLDINGS, INC.
(F/K/A TLG ACQUISITION ONE CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
September
June 30, 20222023
 
The
per-share
Trust Account Redemptions and Extension of Combination
Peri
amount to be distributed to Public Stockholders who redeem their Public Shares will not be reduced by the deferred underwriting commissionsod
On December 19, 2022, the Company will payheld a special meeting of stockholders
at
which such stockholders approved the proposal to the underwriters (as discussed in Note 5). These Public Shares will be recorded at a redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”). The Company will proceed with a Business Combination if a majority of the shares voted are voted in favor of the Business Combination. The Company will not redeem the Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its amended and restated certificate of incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law or stock exchange listing requirements, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each Public Stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction. If the Company seeks stockholder approval in connection with a Business Combination, the Initial Stockholders (as defined below) agreed to vote their Founder Shares (as defined below in Note 4) and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination. RBC has also agreed to vote any Public Shares purchased after the Initial Public Offering for which it has voting control in favor of a Business Combination. In addition, the Initial Stockholders agreed to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of a Business Combination. The Amended and Restated Certificate of Incorporation provides that a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company.
The holders of the Founder Shares (as defined in Note 4) (the “Initial Stockholders”) agreed not to propose an amendment toamend the Amended and Restated Certificate of Incorporation giving the Company the right to modifyextend the substancebusiness combination deadline on a monthly basis up to six times from February 1, 2023 to August 1, 2023, by depositing into the Trust Account the lesser of (i) an aggregate of $600,000 or timing(ii) $0.06
for each issued and outstanding Public Share that has not been redeemed for each
one-month
extension (the “Extension”). On each of January 30, 2023, February 24, 2023, March 29, 2023, May 1, 2023, May 31, 2023 and June 30, 2023 the Company’s obligationCompany deposited $
476,904
into the Trust Account in order to redeem 100%extend the business combination deadline to March 1, 2023, April 1, 2023, May 1, 2023, June 1, 2023, July 1, 2023 and August 1, 2023 respectively.
In connection with such vote, the holders of thean aggregate of 32,051,595 Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or with respect to any other material provisions relating to stockholders’ rights or
pre-initial
Business Combination activity, unless the Company provides the Public Stockholders with the opportunityexercised their right to redeem their Public Sharesshares for an aggregate of approximately $324.4 million in conjunction with any such amendment. If the Company is unable to complete a Business Combination within 24 months from the closing of the Initial Public Offering, or February 1, 2023, (
as such period may be extended pursuant to a stockholder vote,
the “Combination Period”), the Company will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, subject to lawfully available funds therefor, redeem 100% of the Public Shares, at a
per-share
price, payable in cash equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its taxes (less 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); and (iii) as promptly as reasonably possible following such redemption, subject to theAccount. Additionally, upon shareholder approval of the remaining stockholders andExtension, the boardSponsors agreed that they would forfeit for no consideration 5,000,000 shares of directors
Class F common stock in connection with the Extension, which shares of the Company (the “Board”),
 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.
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, theyClass F common stock 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.cancelled (the “Forfeiture”). 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 otherForfeiture occurred on January 30, 2023.

 
6

TLG Acquisition One Corp.
ELECTRIQ POWER HOLDINGS, INC.
(F/K/A TLG ACQUISITION ONE CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
September
June 30, 20222023
funds held in
Registration Rights Agreement
The Merger Agreement contemplates that, at the Trust Account that will be available to fundClosing, 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. In order to protect the amounts held in the Trust Account,Company, the Sponsor, agreedcertain of its affiliates, RBC and certain former stockholders of Electriq will enter into an amended and restated registration rights agreement (the “Registration Rights Agreement”), pursuant to be liable towhich, among other things, the Company if andwill agree to the extent any claims by a third party (exceptregister for the Company’s independent registered public accounting firm) for services rendered or products soldresale, pursuant 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) not will it apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilitiesRule 415 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, certain shares of creditors by endeavoring to have all vendors, service providers (except for the Company’s independent registered public accounting firm), prospective target businessesClass A common stock that are held by, or issuable pursuant to other entities with whichsecurities held by, the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in orparties thereto from time to monies held in the Trust Account.
Note
2-Basis
of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
time.
The accompanying condensed consolidated financial statements
If the transactions contemplated by the Merger Agreement are completed (the “Transactions”), Electriq will survive such merger as a wholly owned subsidiary of the Company have been prepared in accordance with accounting principles generally accepted in(the “Merger”). As a result of the United StatesMerger, and upon consummation of America (“GAAP”) for interim financial information and Article 8 of Regulation
S-X.
Accordingly, certain disclosures included in the annual financial statements have been condensed or omitted from these condensed
consolidated
financial statements as they are not required for interim financial statements under GAAPMerger and the rulesother Transactions contemplated by the Merger Agreement (together with the Merger, the “Proposed Business Combination”), the separate corporate existence of Electriq will cease and the holders of Electriq common stock, preferred stock, options and warrants will become equityholders of the 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 nine months ended September 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 consolidated financial statements should be readCompany, which will change its name to “Electriq Power Holdings, Inc.” in conjunctionconnection with the Company’s Annual ReportProposed Business Combination.
For additional information regarding the Merger Agreement and the Transactions described therein, see the Current Reports on Form
10-K8-K
for the year ended December 31, 2021, as filed with the SEC on March 25, 2022, which contains the 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 the year ended December 31, 2021.
Principles of Consolidation
The consolidated financial statements ofby the Company include its wholly-owned subsidiary, Eagle Merger Corp., that was formed in connection with a potential Business Combination. All inter-company accountson November 14, 2022, December 23, 2022, March 23, 2023, June 14, 2023, July 24, 2023 and transactions are eliminated in consolidation.August 4, 2023..
Liquidity and Going Concern
As of SeptemberJune 30, 2022,2023, the Company had approximately $242,000$105,457 in its operating bank account and a working capital deficit of approximately $5.1$11.8 million,
(excluding income and franchise taxes).
not including taxes payable of approximately $1.4 million.
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 on behalf of the Company to cover certain offering costs in exchange for issuance of Founder Shares (as defined in Note 4), and a loan from the Sponsor of approximately $192,000 under the Note (as defined in Note 4). The Company repaid the Note in full upon consummation of the Private Placement.
7

TLG Acquisition One Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
September 30, 2022
Subsequent from 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, and Working Capital Loan from affiliates. 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 Working Capital Loan (as defined in Note 4) as may be required. The Company has drawn approximately $2.8$7.0 million and $0.9$3.0 million under such loans as of SeptemberJune 30, 20222023 and December 31, 2021,2022, respectively.
In
7

ELECTRIQ POWER HOLDINGS, INC.
(F/K/A TLG ACQUISITION ONE CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2023
On July 31, 2023, the Company completed a Business Combination with Electriq and closed the related financing agreements in connection with the Company’s assessment of going concern considerations in accordance with FASB ASC Topic
205-40,
“Presentation of Financial Statements-Going Concern,”therewith. As a result, management has determinedbelieves that the Company will have sufficient liquidity condition,to fund its operations through one year from the mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amountsdate of assets or liabilities should the Company be required to liquidate after February 1, 2023
this filing.
(as such period may be extended pursuant to a stockholder vote).
T
Note 2 — Basis of Presentation and Summary of Significant Accounting Policies
he
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements do not include any adjustment that might be necessary ifof the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and Article 8 of Regulation
S-X.
Accordingly, certain disclosures included in the annual financial statements have been condensed or omitted from these unaudited condensed consolidated 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 June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 or any future period.
The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form
10-K
for the year ended December 31, 2022, as filed with the SEC on March 20, 2023, which contains the audited financial statements and notes thereto. The financial information as of December 31, 2022, is unable to continue asderived from the audited financial statements presented in the Company’s Annual Report on Form
10-K
for the year ended December 31, 2022.
Principles of Consolidation
The consolidated financial statements of the Company include its wholly-owned subsidiary, Eagle Merger Corp., that was formed in connection with a going concern. The Company intends to complete apotential Business Combination before the mandatory liquidation date.Combination. All inter-company accounts and transactions are eliminated in consolidation.
Emerging Growth Company
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 independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, 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 stockholder approval of any golden parachute payments not previously approved.
Further, SectionFurthe
r, S
ection 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 to
non-emerging
growth companies but any such an 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 unaudited condensed consolidated financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
8

ELECTRIQ POWER HOLDINGS, INC.
(F/K/A TLG ACQUISITION ONE CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2023
Use of Estimates
The preparation of 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 consolidated financial statements and the reported amounts of income 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 unaudited condensed consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Concentration of Credit Risk
Financial instruments that potentially subjectThe Company has significant cash balances at financial institutions which throughout the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, mayyear regularly exceed the Federal Deposit Insurance Corporation coveragefederally insured limit of $250,000. AsAny loss incurred or a lack of September 30, 2022access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and December 31, 2021, the Company had not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.cash flows.
8

TLG Acquisition One Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
September 30, 2022
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 no cash equivalents as of SeptemberJune 30, 20222023 and December 31, 2021,2022, held outside of the Trust Account.
Investments Held in Trust Account
ThePrior to December 28, 2022, the Company’s portfolio of investments held in the Trust Account iswas comprised of U.S.
Treasury
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 onin the condensed consolidated 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 are included in income from cash and investments held in Trust Account in the accompanying unaudited condensed consolidated statements 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 FASB ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the condensed consolidated balance sheets, primarily due to their short-term nature, except for the derivative warrant liabilities (see Note 9).
9

ELECTRIQ POWER HOLDINGS, INC.
(F/K/A TLG ACQUISITION ONE CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2023
Fair Value Measurements
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:
 
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, circumstanc
es,
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.
Derivat
iv
9

TLG Acquisition One Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
September 30, 2022
Derivativee Warrant Liabilities
The Company does not use derivative instruments to hedge exposures to cash flow,cashflow, 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 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 end of each reporting period.
The warrants issued in connection with the Initial Public Offering (the “Public Warrants”) and the Private Placement Warrants are recognized as derivative liabilities in accordance with ASC 815. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are subject to
re-measurement
at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s unaudited condensed consolidated statements of operations. The initial fair values of the Public Warrants and Private Placement Warrants have each been measured at fair value using a modified Black-Scholes option pricing model. The fair value of the Public Warrants and Private Placement Warrants have subsequently been determined using listed prices in an active market for such warrants. Derivative warrant liabilities are classified as
non-current
liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
Working Capital Loan-Related Party
The Company has elected the fair value option to account for borrowings under the Working Capital Loan with its affiliates that are subject to conversion, as defined and more fully described in Note 4. As a result of applying the fair value option, the Company records each convertible tranche, when drawn, at fair value with a gain or loss recognized at issuance, and subsequent changes in fair value are recorded as change in the fair value of Working Capital Loan-related party on the
unaudited
condensed consolidated statements of operations. The fair value is based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own estimates about the assumptions a market participant would use in pricing the liability.
10

ELECTRIQ POWER HOLDINGS, INC.
(F/K/A TLG ACQUISITION ONE CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2023
Offering Costs Associated with the Initial Public Offering
Offering costs consisted of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering 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 associated with derivative warrant liabilities were expensed as incurred and presented as
non-operating
expenses in the unaudited condensed consolidated statements of operations. Offering costs associated with the Class A common stock issued were charged against the carrying value of the Class A common stock subject to possible redemption upon the completion of the Initial Public Offering. The Company classifies deferred underwriting commissions as
non-current
liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
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. Class A common stock subject to mandatory redemption (if any) is classified as liability instruments and is measured at fair value. Conditionally redeemable Class A common stock (including Class A common stock that features 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) is classified as temporary equity. At all other times, Class A common stock is classified as stockholders’ equity. The Company’s Class A common stock features 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 SeptemberJune 30, 20222023 and December 31, 2021, 40,000,0002022, 7,948,405 shares of Class A common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s condensed consolidated balance sheets.
10

TLG Acquisition One Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
September 30, 2022
Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount. Subsequent changes result from income and losses on investments held in the Trust Account that would be distributed to the Class A ordinary shareholders upon redemption. The change in the carrying value of redeemable shares of Class A common stock resultsresulted in charges against additional
paid-in
capital and accumulated deficit.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes” (“ASC 740”). Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. As of SeptemberJune 30, 20222023 and December 31, 2021,2022, the Company had gross deferred tax assets ofaggregating approximately $427,000,$297,000 and $349,000, which are subject to a full valuation allowance.allowance, respectively.
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 be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of SeptemberJune 30, 20222023 and December 31, 2021.2022.
The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties as of SeptemberJune 30, 20222023 and December 31, 2021.2022.
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.
11

ELECTRIQ POWER HOLDINGS, INC.
(F/K/A TLG ACQUISITION ONE CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2023
Net (Loss) Income Per Share of Common Stock
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 F common stock. Income and losses are shared pro rata between the two classes of shares. Net (loss) income per common share is calculated by dividing the net (loss) income by the weighted average shares of common stock outstanding for the respective period. This presentation assumes a business combination as the most likely outcome.
The calculation of diluted net (loss) income does not consider the effect of the warrants underlying the Units sold in the Initial Public Offering (including the consummation of the Over-allotment)
o
ver-allotment) and the private placement warrants to purchase an aggregate of 20,000,000 shares
of Class A common stock in the calculation of diluted (loss) income per share because their inclusion would be anti-dilutive under the treasury stock method. As a result, diluted net income (loss) per share is the same as basic net (loss) income per share for the three and ninesix months ended SeptemberJune 30, 20222023 and 2021.2022. Accretion associated with the redeemable Class A common stock is excluded from earnings per share as the redemption value approximates fair value.
11

TLG Acquisition One Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
September 30, 2022
The tables below present a reconciliation of the numerator and denominator used to compute basic and diluted net (loss) income per share for each class of common stock:
 
   
For The Three Months Ended September 30,
 
   
2022
   
2021
 
   
Class A
   
Class F
   
Class A
   
Class F
 
Basic and diluted net income per common stock:
                    
Numerator:
                    
Allocation of net income, basic
  $232,854   $58,213   $3,757,295   $939,324 
Allocation of net income, diluted
   232,854    58,213    3,757,295    939,324 
Denominator:
                    
Basic weighted average common stock outstanding
   40,000,000    10,000,000    40,000,000    10,000,000 
Diluted weighted average common stock outstanding
   40,000,000    10,000,000    40,000,000    10,000,000 
   
 
 
   
 
 
   
 
 
   
 
 
 
Basic net income per common stock
  $0.01   $0.01   $0.09   $0.09 
   
 
 
   
 
 
   
 
 
   
 
 
 
Diluted net income per common stock
  $0.01   $0.01   $0.09   $0.09 
   
 
 
   
 
 
   
 
 
   
 
 
 
  
   
For The Nine Months Ended September 30,
 
   
2022
   
2021
 
   
Class A
   
Class F
   
Class A
   
Class F
 
Basic and diluted net income per common stock:
                    
Numerator:
                    
Allocation of net income, basic
  $7,595,876   $1,898,969   $12,363,724   $3,437,383 
Allocation of net income, diluted
   7,595,876    1,898,969    12,325,118    3,475,989 
Denominator:
                    
Basic weighted average common stock outstanding
   40,000,000    10,000,000    35,457,875    9,858,059 
Diluted weighted average common stock outstanding
   40,000,000    10,000,000    35,457,875    10,000,000 
   
 
 
   
 
 
   
 
 
   
 
 
 
Basic net income per common stock
  $0.19   $0.19   $0.35   $0.35 
   
 
 
   
 
 
   
 
 
   
 
 
 
Diluted net income per common stock
  $0.19   $0.19   $0.35   $0.35 
   
 
 
   
 
 
   
 
 
   
 
 
 
   
For the Three Months Ended
June 30,
 
   
2023
   
2022
 
   
Class A
   
Class F
   
Class A
   
Class F
 
Basic and diluted net income per common stock:
                    
Numerator:
                    
Allocation of net income, basic and diluted
  $479,490   $301,627   $2,203,766   $550,942 
Denominator:
                    
Basic and diluted weighted average common stock outstanding
   7,948,405    5,000,000    40,000,000    10,000,000 
   
 
 
   
 
 
   
 
 
   
 
 
 
Basic and diluted net income per common stock
  $0.06   $0.06   $0.06   $0.06 
   
 
 
   
 
 
   
 
 
   
 
 
 
                                                                         
   
For the Six Months Ended
June 30,
 
   
2023
   
2022
 
   
Class A
   
Class F
   
Class A
   
Class F
 
Basic and diluted net (loss) income per common stock:
                    
Numerator:
                    
Allocation of net (loss) income, basic and diluted
  $(186,370)
 
  $(136,021)
 
  $7,363,022   $1,840,756 
Denominator:
                    
Basic and diluted weighted average common stock outstanding
   7,948,405    5,801,105    40,000,000    10,000,000 
   
 
 
   
 
 
   
 
 
   
 
 
 
Basic and diluted net (loss) income per common stock
  $(0.02)
 
  $(0.02)
 
  $0.18   $0.18 
   
 
 
   
 
 
   
 
 
   
 
 
 
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 consolidated financial statements.
Note
3-Initial
3 — Initial Public Offering
On February 1, 2021, the Company consummated its Initial Public Offering of 40,000,000 Units, including 5,000,000 Over-Allotment Units, at $10.00 per Unit, generating gross proceeds of $400.0 million, and incurring offering costs of approximately $22.7 million, of which $14.0 million was for deferred underwriting commissions.
12

ELECTRIQ POWER HOLDINGS, INC.
(F/K/A TLG ACQUISITION ONE CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2023
Each Unit consists of one share of Class A common stock and
one-third
of one redeemable warrant (each, a “Public Warrant”).Public Warrant. Each whole Public Warrant will entitle the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 8).
Note
4-Related
4 — Related Party Transactions
Founder Shares
On October 13, 2020, the Sponsor paid $25,000 to cover certain
offering
costs of the Company in exchange for 8,625,000 shares of the Company’s Class F common stock, par value $0.0001 per share (the “Founder Shares”). Subsequently, in October 2020, 431,250 Founder Shares were transferred to an affiliate of the Sponsor. In January 2021, the Sponsor transferred 40,000 Founder Shares to each of the independent directors at their original purchase price. On January 27, 2021, the Company effected a stock dividend of 0.15942029 of a share of Class F common stock for each outstanding share of Class F common stock, resulting in an aggregate of 10,000,000 shares of Class F common stock outstanding. The Initial Stockholders agreed to forfeit up to 1,250,000 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 20.0% of the Company’s issued and outstanding shares after the Initial Public Offering. The underwriter exercised its over-allotment option in full on February 1, 2021; thus, these 1,250,000 Founder Shares are no longer subject to forfeiture.
12

TLG Acquisition One Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
September 30, 2022
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: (A) one year after the completion of the initial Business Combination; (B) subsequent to the initial Business Combination, if the last reported sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within
any
30-trading day
day period commencing at least 150 days after the initial Business Combination; and (C) the date following the completion of the initial Business Combination on which the Company completes a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of the Public Stockholders having the right to exchange their shares of common stock for cash, securities or other property.
In connection with the Extension, the Sponsor agreed that it would forfeit for no consideration 5,000,000 shares of Class F common stock in connection with the Extension, which shares of Class F common stock were cancelled. The Forfeiture occurred on January 30, 2023.
Private Placement Warrants
Simultaneously with the closing of the Initial Public Offering, the Company consummated the Private Placement of 4,666,667 and 2,000,000 Private Placement Warrants to the Sponsor and RBC, respectively, at a price of $1.50 per Private Placement Warrant, generating total proceeds of $10.0 million.
Each whole 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. 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, RBC, or their permitted transferees.
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.
Related Party Loans
On October 13, 2020, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the “Note”). This loan was
non-interest
bearing and due upon the completion of the Initial Public Offering. The Company borrowed approximately $192,000 under the Note and repaid the Note in full upon consummation of the Private Placement. As of SeptemberJune 30, 20222023 and December 31, 2021,2022, no further drawdowns are permitted.
13

ELECTRIQ POWER HOLDINGS, INC.
(F/K/A TLG ACQUISITION ONE CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2023
In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor and the Company executed a
non-interest-bearing
promissory note in May 2021, providing the Company the ability to borrow up to $2,000,000 (the “Working Capital Loan”). On March 15, 2022, the Sponsor and the Company amended the Working Capital Loan, providing the Company the ability to borrow up to $5,000,000. On September 29, 2022, the Sponsor and the Company amended the Working Capital Loan, providing the Company the ability to borrow up to $8,000,000. IfOn June 6, 2023, the Company completes a Business Combination,Sponsor and TLG amended and restated the Company will repaySecond A&R Note, providing TLG the Working Capital Loan out of the proceeds of the Trust Account releasedability to the Company. Otherwise, the Working Capital Loan will 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 Loan, but no proceeds held in the Trust Account would be used to repay the Working Capital Loan. The lender may elect to convertborrow up to $1.5$10,000,000. During the three and six months ended June 30, 2023, a total of approximately $2.0 million of such Working Capital Loan into warrants of the post Business Combination entity at a price of $1.50 per warrant. The warrants will be identical to the Private Placement Warrants.were additionally drawn. The Company has drawn approximately $2.8$7.0 million and $0.9$3.0 million under such loans as of SeptemberJune 30, 20222023 and December 31, 2021,2022, respectively. The
During the three months ended June 30, 2023, the Company borrowed $
1,940,000 
against the Working Capital Loan. As of June 30, 2023, the total amount borrowed against the Working Capital Loan has a conversion feature that is considered an embedded derivative, but the value is de minimiswas $
6,985,000 and $3,015,000 was available for up to $1.5 million of the outstanding principal value.withdrawal.
Administrative Services Agreement
The Company entered into an agreement with an affiliate of the Sponsor, pursuant to which the Company agreed to pay a total of $7,000 per month for office space, administrative and support services to such affiliate. Upon completion of the initial Business Combination or the liquidation, the Company will cease paying these monthly fees.
13

TLG Acquisition One Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
September 30, 2022
The
Company incurred $21,000approximately $42,000 and $21,000$20,500 in general and administrative expenses related to the agreement, which is recognized in the accompanying unaudited condensed consolidated statements of operations for the three monthsperiods ended SeptemberJune 30, 20222023 and 2021, respectively. The Company incurred $62,500 and $56,000 in general and administrative expenses related to the agreement, which is recognized in the accompanying condensed consolidated statements of operations for the nine months ended September 30,December 31, 2022, and 2021, respectively. As of SeptemberJune 30, 20222023 and December 2021,31, 2022, there was $0 and $35,000 inno accounts payable related to this agreement, respectively.agreement.
The Sponsor, officers and directors, or any of their respective affiliates, will be reimbursed for any reasonable
out-of-pocket
expenses 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 were made by the Company to the Sponsor, officers, directors or any of their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of reasonable
out-of-pocket
expenses incurred by such persons in connection with activities on the Company’s behalf.
Note
5-Commitments
5 — Commitments and Contingencies
Registration Rights
The holders of Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of the Working Capital Loan, if any, had registration rights to require the Company to register a sale of any of the Company’s securities held by them (in the case of the Founder Shares, only after conversion to Class A common stock) pursuant to a registration rights agreement signed upon the consummation of the Initial Public Offering. The holders of these securities were entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders had certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination. Notwithstanding the foregoing, RBC may not exercise its demand and “piggyback” registration rights after five and seven years, respectively, after the effective date of the registration statement. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
14

ELECTRIQ POWER HOLDINGS, INC.
(F/K/A TLG ACQUISITION ONE CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2023
Underwriting Agreement
The Company granted the underwriters
a
45-day option
option from the date of Initial Public Offering to purchase up to 5,000,000 additional Units to cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions. The underwriter exercised its over-allotment option in full on February 1, 2021.
The underwriters were entitled to an underwriting discount of $0.20 per Unit, or $8.0 million in the aggregate, paid upon the closing of the Initial Public Offering. In addition, the underwriters were entitled to a deferred fee of $0.35 per Unit, or $14.0 million in the aggregate. TheEffective as of May 10, 2023, RBC, the sole underwriter of the Initial Public Offering, waived its entitlement to the deferred underwriting fee will becomeof $14.0 million.
In
connection with the waiving of the deferred underwriting fee, the Company reduced the deferred underwriting fee payable on the unaudited condensed consolidated
balance sheets by $14,000,000, as a result $
858,200 and $255,000
is reflected on the Company’s unaudited condensed consolidated statement of operations for the amounts allocated in connection with the Company’s warrants at the Initial Public Offering and accrued expenses related to the underwriters, fromrespectively. Additionally, $13,141,800 was charged to accumulated deficit for the amounts held inportion allocated to Class A ordinary shares at the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.Initial Public Offering.
Consulting Fees
The Company has agreements with third party consultants to provide certain advisory services to the Company relating to the identification of and negotiations with potential
T
argets, Targets, assistance with due diligence, marketing, financial analyses and investor relations, pursuant to which the consultants have agreed to defer their fees and have payment of such fees to be solely contingent on the Company closing an initial Business Combination. As of SeptemberJune 30, 20222023 and December 31, 2021,2022, the Company has incurred approximately $284,000$1,620,000 and $0$949,000 in contingent fees pursuant to these agreements. The Company will recognize an expense for these services when the performance trigger is considered probable, which in this case will occur upon the closing of an initial Business Combination.
14

TLG Acquisition One Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
September 30, 2022

Risks and Uncertainties
Management continues to evaluate the impact of the
COVID-19
pandemic 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 consolidated financial statements. The unaudited condensed consolidated 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 is not determinable as of the date of these unaudited condensed consolidated 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 consolidated financial statements.
On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. Any share redemption or other share repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise will
depend
on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Business Combination and in the Company’s ability to complete a Business Combination.
15

ELECTRIQ POWER HOLDINGS, INC.
(F/K/A TLG ACQUISITION ONE CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2023
Note
6-Class
6 — Class A Common Stock Subject to Possible Redemption
The Company’s Class A common stock features 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 200,000,000 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 SeptemberJune 30, 20222023 and December 31, 2021,2022, there were 40,000,0007,948,405 shares of Class A common stock outstanding, all of which were subject to possible redemption.
TheAs of June 30, 2023 and December 31, 2022, the Class A common stock issued in the Initial Public Offering and issued as part of the Over-Allotment Units is recognized in Class A common stock subject to possible redemption as follows:
 
Gross proceeds from Initial Public Offering
  $400,000,000   $400,000,000 
Less:
      
Fair value of Public Warrants at issuance
   (24,533,330   (24,533,330
Offering costs allocated to Class A common stock subject to possible redemption
   (21,284,250   (21,284,250
Plus:
      
Accretion on Class A common stock subject to possible redemption amount
   45,817,580 
  
 
 
Class A common stock subject to possible redemption, as of December 31, 2021
  
 
400,000,000
 
  
 
 
Plus:   
Accretion on Class A common stock subject to possible redemption amount   4,101,927 
Less:   
Redemption of Class A common stock subject to possible redemption amount   (324,362,141
 
 
 
Class A common stock subject to possible redemption, as of December 31, 2022
  
 
79,739,786
 
 
 
 
Plus:   
Accretion on Class A common stock subject to possible redemption amount   1,874,987 
 
 
 
Class A common stock subject to possible redemption, as of March 31, 2023
  
 
81,614,773
 
 
 
 
Plus:   
Waiver of Class A share issuance costs   13,141,800 
Less:   
Accretion on Class A common stock subject to possible redemption amount   (11,294,932
 
 
 
Class A common stock subject to possible redemption, as of June 30, 2023
  
$
83,461,641
 
  
 
 
15

TLG Acquisition One Corp.Note 7 — Stockholders’ Deficit
Notes to Unaudited Condensed Consolidated Financial Statements
September 30, 2022
Accretion on Class A common stock subject to possible redemption amount
   45,817,580 
   
 
 
 
Class A common stock subject to possible redemption as of December 31, 2021
   400,000,000 
Increase in redemption value of Class A common stock subject to possible redemption
   1,505,838 
   
 
 
 
Class A common stock subject to possible redemption as of September 30, 2022
  $401,505,838 
   
 
 
 
Note
7-Stockholders’
Deficit
Preferred Stock
-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.
As of SeptemberJune 30, 20222023 and December 31, 2021,2022, there were no shares of preferred stock issued or outstanding.
Class
 A Common Stock
-The Company is authorized to issue 200,000,000 shares of Class A common stock with a par value of $0.0001 per share. As of SeptemberJune 30, 20222023 and December 31, 2021,2022, there were 40,000,0007,948,405 shares of Class A common stock issued and outstanding. All shares subject to possible redemption have been classified as temporary equity (see Note 6).
Class
 F Common Stock
-The Company is authorized to issue 20,000,000 shares of Class F common stock with a par value of $0.0001 per share. As of SeptemberJune 30, 20222023 and December 31, 2021,2022, there were 5,000,000 and 10,000,000 shares of Class F common stock outstanding, after giving retrospective application of the stock dividend as discussed in Note 4.4, retrospectively. Of the 10,000,000 shares of Class F common stock initially issued,
up
to 1,250,000 shares of Class F common stock were subject to forfeiture to the extent that the underwriters’ over-allotment option was not exercised in full or in part, so that the Initial Stockholders would collectively own 20% of the Company’s issued and outstanding common stock after the Initial Public Offering. The underwriter exercised its over-allotment option in full on February 1, 2021; thus, these 1,250,000 shares of Class F common stock are no longer subject to forfeiture. On January 30, 2023, in connection with the Extension, the Sponsors agreed that they would forfeit for no consideration 5,000,000 shares of Class F common stock in connection with the Extension, which shares of Class F common stock will be cancelled. The Forfeiture occurred.
16

ELECTRIQ POWER HOLDINGS, INC.
(F/K/A TLG ACQUISITION ONE CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2023
The Amended and Restated Certificate of Incorporation provides that, prior to the initial Business Combination, only holders of the Founder Shares will have the right to vote on the election of directors. Holders of the Public Shares will not be entitled to vote on the election of directors during such time. These provisions of the Amended and Restated Certificate of Incorporation may only be amended if approved by holders of at least 90% of the outstanding common stock entitled to vote thereon. With respect to any other matter submitted to a vote of the stockholders, including any vote in connection with the initial Business Combination, except as required by applicable law or the applicable rules of the
New York Stock Exchange
then in effect, holders of the Founder Shares and holders of the Public Shares will vote together as a single class, with each share entitling the holder to one vote.
The Class F common stock will automatically convert into Class A common stock at the time of the initial Business Combination, or earlier at the option of the holder, on a
one-for-one
basis, 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 excess of the amounts issued in the Initial Public Offering and related to the closing of the initial Business Combination, the ratio at which shares of Class F common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class F common stock agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class F common stock will equal, in the aggregate, on an
as-converted
basis, 20% of the sum of the total number of shares of common stock outstanding upon the completion of the Initial Public Offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with the initial Business Combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial Business Combination.
16

TLG Acquisition One Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
September 30, 2022
Note
8-Warrants 8 — Warrants
As of SeptemberJune 30, 20222023 and December 31, 2021,2022, the Company had an aggregate of 20,000,000 warrants outstanding, comprised of 13,333,333 Public Warrants and 6,666,667 Private Warrants. Warrants outstanding, respectively.
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 20 business days after the closing of the initial Business Combination, it will use its commercially reasonable efforts to file with the SEC and have an effective registration statement covering the shares of the Class A common stock issuable upon exercise of the warrants and to maintain a current prospectus relating to those shares of the Class A common stock until the warrants expire or are redeemed. If a registration statement covering the shares of 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 effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption.
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 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 common stock (with such issue price or effective issue price to be determined in good faith by the
Board,
, and in
17

ELECTRIQ POWER HOLDINGS, INC.
(F/K/A TLG ACQUISITION ONE CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2023
the case of any such issuance to the initial stockholders or their respective affiliates, without taking into account any Founder Shares held by them, as applicable, prior to such issuance) (the “Newly Issued Price”), the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of 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 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be
non-redeemable
so long as they are held by the Sponsor, RBC or their permitted transferees. If the Private Placement Warrants are held by someone other than the Sponsor, RBC or their 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 for cash:
Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described herein with respect to the Private Placement Warrants):
 
in whole and not in part;
 
at a price of $0.01 per warrant;
 
upon a minimum of 30 days’ prior written notice of redemption; and
 
if, and only if, the last reported sale price of Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within
a
30-trading day
day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
The Company will not redeem the warrants as described above unless an effective registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares of Class A common stock is available throughout the
30-day
redemption period. Any such exercise would not be on a “cashless” basis and would require the exercising holder to pay the exercise price for each warrant being exercised.
17

TLG Acquisition One Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
September 30, 2022
If the Company calls the warrants for redemption as described above, the management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.”
Redemption of warrants for Class A common stock:
Commencing ninety days after 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;
 
if, and only if, the last reported sale price of Class A common stock equals or exceeds $10.00 per share (as adjusted per stock splits, stock dividends, reorganizations, recapitalizations and the like) on the trading day prior to the date on which the Company send the notice of redemption to the warrant holders;
 
if, and only if, the Private Placement Warrants are also concurrently exchanged at the same price (equal to a number of shares of Class A common stock) as the outstanding Public Warrants, as described above; and
 
if, and only if, there is an effective registration statement covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants and a current prospectus relating thereto available throughout
the
30-day period
period after written notice of redemption is given.
The “fair market value” of Class A common stock for the above purpose shall mean the average last reported sale price of Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants.
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.
18

ELECTRIQ POWER HOLDINGS, INC.
(F/K/A TLG ACQUISITION ONE CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2023
Note
9-Fair
9 — Fair Value Measurements
The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis
as
of SeptemberJune 30, 20222023 and December 31, 20212022 and indicate the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value.
SeptemberJune 30, 2022:2023:

Description
  
Quoted
Prices
in Active
Markets
(Level 1)
   
Significant
Other
Observable
Inputs
(Level 2)
   
Significant
Other
Unobservable
Inputs
(Level 3)
 
Liabilities:
      
Derivative warrant liabilities – Public warrants  $   $533,330   $—   
Derivative warrant liabilities – Private placement warrants  $—     $266,670   $—   
Working capital loan – related party  $—     $—     $5,408,857 
Description
  
Quoted Prices
in Active
Markets
(Level 1)
   
Significant
Other
Observable
Inputs
(Level 2)
   
Significant
Other
Unobservable
Inputs
(Level 3)
 
Assets:
               
Investments held in Trust Account-Money market fund
  $402,112,433   $—     $—   
Liabilities:
               
Derivative warrant liabilities-Public warrants
  $666,670    —      —   
Derivative warrant liabilities-Private placement warrants
  $—     $333,330   $  
Working Capital Loan-related party
  $—     $—     $2,820,000 
18

TLG Acquisition One Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
September 30, 2022
December 31, 2021:2022:

Description
  
Quoted
Prices
in Active
Markets
(Level 1)
   
Significant
Other
Observable
Inputs
(Level 2)
   
Significant
Other
Unobservable
Inputs
(Level 3)
 
Liabilities:
      
Derivative warrant liabilities – Public warrants  $533,330   $   $—   
Derivative warrant liabilities – Private placement warrants  $—     $266,670   $—   
Working capital loan – related party  $—     $—     $2,330,370 
Description
  
Quoted Prices
in Active
Markets
(Level 1)
   
Significant
Other
Observable
Inputs
(Level 2)
   
Significant
Other
Unobservable
Inputs
(Level 3)
 
Assets:
               
Investments held in Trust Account-Money market fund
  $400,023,684   $—     $—   
Liabilities:
               
Derivative warrant liabilities-Public warrants
  $6,933,330    —      —   
Derivative warrant liabilities-Private placement warrants
  $—     $—     $3,666,670 
Working Capital Loan-related party
  $—     $—     $920,000 
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 was transferred from a Level 3 measurement to a Level 1 fair value measurement in March 2021, upon trading of the Public Warrants in an active market. The estimated fair value of the Private Placement Warrants was transferred from a Level 3 to a Level 2 on January 1, 2022, as the key inputs to the valuation model became directly or indirectly observable from the Public Warrants listed price. During the three months ended June 30, 2023 the Public warrants were transferred to a level 2 from a level 1 due to lack of trading activity. There were no other transfers between levels of the hierarchy for the three and ninesix months ended SeptemberJune 30, 20222023 and the year ended December 31, 2021.2022.
Level 1 assets include investments in money market funds that invest solely in U.S. Treasury securities. Level 1 liabilities include Public Warrants which are recognized at fair value based on the listed price in an active market for such warrants.
The fair value of the Public Warrants and Private Placement Warrants was initially measured using a modified Black-Scholes option pricing model. The fair value of the Public Warrants and Private Placement Warrants has subsequently been determined using listed prices in an active market for such warrants.
The estimated fair value of the Private Placement Warrants, prior to being a Level 2 measurement, is determined using Level 3 inputs. Inherent in an option pricing simulation are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common shares based on historical volatility of select peer companies’ common shares that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury
zero-coupon
yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life 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 remaining at zero.
The firstUp to $1.5 million in outstanding principal of the Working Capital Loan may be converted, at the lender’s option, into warrants of the post Business Combination entity at a price of $1.50 per warrant. The warrants will be identical to the Private Placement Warrants. The Company has elected the fair value option to account for the borrowings under the Working Capital Loan that are subject to conversion.Loan. The fair value of the convertible portion of the Working Capital Loanworking capital loan was based on recent transactionsestimated utilizing discounted cash flow techniques and estimated to approximate its principal value as of September 30, 2022 and December 31, 2021. As a result, there were no unobservable inputs that have been internally developed by the Company which need to be disclosed. The embedded conversion was determined to have de minimis value as of December 31, 2021, at each subsequent funding date and at September 30, 2022. The Company valued the embedded conversion option using a Black-Scholes option model assuming the warrants as the underlying. The traded price of the Public Warrants as of each measurement date was used as a proxy for the underlying warrant price.
The time to maturity was estimated based on management’s estimated time to close a Business Combination. The volatility was derived from the traded prices of the Public Warrants. The discounted value of the loan host was considered to approximate its principal value given the expected short time to maturity.is based on observable high yield rates and management’s estimated probability of closing a Business Combination.
 
19

ELECTRIQ POWER HOLDINGS, INC.
(F/K/A TLG Acquisition One Corp.ACQUISITION ONE CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
SeptemberJune 30, 20222023
 
As of June 30, 2023 and December 31, 2022, all funds in the Trust
Accou
nt are held as cash.
The following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates:

 
  
December 31,
2021
   
June 30,
        2023        
 
December 31,
2022
 
Exercise price
  $11.50 
Stock price
  $9.73 
Term (years)
   5 
Working Capital Loan:
     
Warrant price
  $0.04  $0.04 
Volatility
   10.5   0.01  0.01
Risk-free rate
   1.44   3.52  3.99
Discount rate
   13.80  15.76
Probability of Business Combination
   80.00  80.00
Term (years)
   0.25   0.25 
The change in the fair value of Level 3 liabilities for the ninethree and six months ended SeptemberJune 30, 20222023 is summarized as follows:
 
   Derivative
Warrant
Liabilities
   Working
Capital
Loans-
Related Party
 
Level 3 - Instruments January 1, 2021
  $—     $—   
Issuance of Public and Private Placement Warrants
   38,400,000    —   
Transfer of Public Warrants to Level 1
   (24,533,330   —   
Change in fair value of derivative warrant liabilities
   (10,200,000   —   
Working capital loan - related party
   —      920,000 
Level 3 - Instruments at December 31, 2021
   3,666,670    920,000 
Transfer of Private Placement Warrants from Level 3 to Level 2
   (3,666,670   —   
Working capital loan - related party
   —      1,400,000 
   
 
 
   
 
 
 
Level 3 - Instruments at March 31, 2022
   —      2,320,000 
Working capital loan - related party
   —      500,000 
   
 
 
   
 
 
 
Level 3 - Instruments at June 30, 2022
  $—     $2,820,000 
Level 3 - Instruments at September 30, 2022
  $—     $2,820,000 
   
 
 
   
 
 
 
   
Working
Capital
Loans-
Related Party
 
Level 3 - Instruments December 31, 2022
  $2,330,370 
Borrowings of working capital loan – related party   2,025,000 
Change in fair value of working capital loan – related party   (457,919
   
 
 
 
Level 3 - Instruments at March 31, 2023
  $3,897,451 
Borrowings of working capital loan – related party   1,940,000 
Change in fair value of working capital loan – related party   (428,594
   
 
 
 
Level 3 – Instruments at June 30, 2023  $5,408,857 
   
 
 
 
The change in the fair value of Level 3 derivative warrant liabilities for the ninethree and six months ended SeptemberJune 30, 20212022 is summarized as follows:
 
  Derivative
Warrant
Liabilities
   Working Capital
Loans- Related
Party
   Derivative Warrant
Liabilities
   Working Capital Loans-
Related Party
 
Level 3 - Instruments January 1, 2021
  $—     $—   
Level 3 – Instruments January 1, 2021  $—     $—   
Issuance of Public and Private Placement Warrants
   38,400,000    —      38,400,000    —   
Transfer of Public Warrants to Level 1
   (24,533,330   —      (24,533,330   —   
Change in fair value of derivative warrant liabilities
   200,000    —      (10,200,000   —   
Working capital loan – related party   —      920,000 
Level 3 – Instruments at December 31, 2021   3,666,670    920,000 
Transfer of Private Placement Warrants from Level 3 to Level 2
   (3,666,670   —   
Working capital loan – related party   —      1,400,000 
  
 
   
 
   
 
   
 
 
Level 3 - Instruments at March 31, 2021
   14,066,670    —   
Change in fair value of derivative warrant liabilities
   (6,066,670   100,000 
Working capital loan - related party
       100,000 
Level 3 – Instruments at March 31, 2022   —      2,320,000 
Working capital loan – related party   —      500,000 
 
 
 
 
 
 
  
 
   
 
 
Level 3 - Instruments at June 30, 2021
   8,000,000    100,000 
Change in fair value of derivative warrant liabilities
   (1,866,670   470,000 
Level 3 – Instruments at June 30, 2022  $—     $2,820,000 
  
 
   
 
   
 
   
 
 
Level 3 - Instruments at September 30, 2021
  $6,133,330   $570,000 
  
 
   
 
 
20Note 10 — Subsequent Events

TLG Acquisition One Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
September 30, 2022
Note
10-Subsequent
Events
The Company evaluated subsequent events and transactions that occurred after the unaudited condensed consolidated balance sheetsheets date up to the date that the unaudited condensed consolidated financial statements were issued. Based upon this review, other than the below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements.

On July 23, 2023, TLG and Electriq entered into an agreement (the “Forward Purchase Agreement”) with (i) Meteora Special Opportunity Fund I, LP (“MSOF”), Meteora Capital Partners, LP (“MCP”) and Meteora Select Trading Opportunities Master, LP (“MSTO”) (with MSOF, MCP, and MSTO collectively referred to as “Seller”) for an OTC Equity Prepaid Forward Transaction. Pursuant to the terms of the Forward Purchase Agreement, the Seller purchased
3,534,492
 shares of Class A common stock (the “Shares”) from third parties through a broker in the Company’s warrantsopen market. On July 31, 2023,
251,194
 additional Shares were issued to Seller pursuant to the terms of the FPA Funding Amount PIPE Subscription Agreement entered into in connection with its IPO (the “Public Warrants”) was suspended on November 4, 2022, based on “abnormally low” price levels, pursuant to Section 802.01Dthe closing of the New York Stock Exchange (“NYSE”) Listed Company Manual. The NYSE will apply to the SEC to delist the Public Warrants upon completionBusiness Combination.
20

ELECTRIQ POWER HOLDINGS, INC.
Proposed Business Combination(F/K/A TLG ACQUISITION ONE CORP.)
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2023
On November 1
3
, 2022,July 27, 2023, the Company entered intoborrowed $217,000
against the Working Capital Loan. Immediately prior to the closing of the Business Combination, the total amount borrowed against the Working Capital Loan was approximately $
7.2
 million.
On July 25, 2023, TLG held a Merger Agreement (as amended, supplemented or otherwise modified from timespecial meeting of its stockholders (the “Special Meeting”), at which TLG’s stockholders voted to timeapprove the proposals outlined in accordance with its terms, the “Merger Agreement”) with Electriq Power, Inc., a Delaware Corporation (“Electriq”), as disclosed in a Current Report on Form 8-K asfinal prospectus and definitive proxy statement filed by TLG with the SEC byon July 12, 2023 (the “Proxy Statement/Consent Solicitation/Prospectus”), including, among other things, the Company on November 14, 2022.
Ifadoption of the Merger Agreement and approval of the transactions contemplated by the Merger Agreement, areincluding the Business Combination.
On the Closing Date, the Business Combination, including the Merger, was completed (the “Transactions”“Closing”),. In connection with the Closing, the registrant changed its name from TLG Acquisition One Corp. to Electriq will survive such merger as a wholly owned subsidiaryPower Holdings, Inc.
In connection with the Closing, the Sponsor
(i)
relinquished and canceled, for no consideration, an additional 3,270,652 shares of its TLG Class F common stock and all of the Company (the “Merger”). As a result of the Merger, and upon consummation of the Merger and the other Transactions contemplated by the Merger Agreement (together with the Merger, the “Proposed Business Combination”), the separate corporate existence of Electriq will cease and the holders of Electriq common stock, preferred stock, options and4,666,667 private placement warrants will become equityholders of the Company, which will change its name to “Electriq Power Holdings, Inc.”that it received in connection with TLG’s initial public offering and (ii) converted
all of the
working capital loans into approximately 756,635 shares of TLG common stock
,
378,318 shares of TLG preferred stock
 and
1,000,000 warrants with terms identical to the Proposed Business Combination.terms of the Sponsor IPO Private Placement
Warrants.
For additional information regardingOn August 1, 2023, the Merger AgreementCompany’s Class A common stock began trading on the NYSE under the symbol “ELIQ” and the Transactions contemplated therein, seeCompany’s warrants to purchase the Current ReportCompany’s Class A common stock began trading on Form 8-K as filed with the SEC byNYSE American under the Company on November 14, 2022.

Extension Proposal
symbol “ELIQ WS.”
The Company intends to seek an extension of the date by which it must consummate a Business Combination as the Board currently believes that there will not be sufficient time before February 1, 2023 to complete a Business Combination. On November 3, 2022, the Company filed a preliminary proxy statement on Schedule 14A with the SEC for the purposes of seeking its stockholder approval to extend the Combination Period from February 1, 2023 to May 1, 2023 (the date that is 27 months from the closing date of the IPO) (the “Amended Date”) and on a monthly basis up to three times from the Amended Date to August 1, 2023 (the date that is 30 months from the closing date of the IPO).
21


Item 2.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

References to the “Company,” “TLG Acquisition One Corp.,” “our,” “us” or “we” refer to Electriq Power Holdings, Inc. (formerly known as TLG Acquisition One Corp.). The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited interim condensed consolidated financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act.Act of 1934, as amended (the “Exchange Act”). 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. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in “Risk Factors,” “Cautionary Note Regarding Forward-Looking Statements,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2021,2022 and our Quarterly ReportsReport on Form 10-Q for the periods endingperiod ended March 31, 2022 and June 30, 20222023 and our other SEC filings. Any of those factors could result in a significant material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.

Overview

We arewere a blank check company incorporated in Delaware on October 2, 2020. We were formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the(a “Business Combination”). We are an emerging growth company and, as such, we are subject to all of the risks associated with emerging growth companies.

Our sponsor iswas TLG Acquisition Founder LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for our Initial Public Offering was declared effective on January 27, 2021. On February 1, 2021, we consummated our Initial Public Offering of 40,000,000 units (the “Units” and, with respect to the Class A common stock included in the Units being offered, the “Public Shares”), including 5,000,000 additional Units to cover over-allotments, (the “Over-Allotment Units”), at $10.00 per Unit, generating gross proceeds of $400.0 million, and incurring offering costs of approximately $22.7 million, of which $14.0 million was for deferred underwriting commissions.

Simultaneously with the closing of the Initial Public Offering, we consummated the private placement (“Private Placement”) of 4,666,667 and 2,000,000 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) to the Sponsor and RBC Capital Markets, LLC (“RBC”), in its capacity as a purchaser of Private Placement Warrants, (“RBC”), respectively, at a price of $1.50 per Private Placement Warrant, generating total proceeds of $10.0 million.

Upon the closing of the Initial Public Offering and the Private Placement, $400.0 million ($10.00 per Unit) of the net proceeds of the Initial Public Offering and certain of the proceeds of the Private Placement waswere placed in a trust account (the “Trust Account”), and will beuntil December 28, 2022, were invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act, as determined by us, until the earlier of: (i) the completionus. On December 28, 2022, we liquidated our portfolio of a Business Combination and (ii) the distribution ofinvestments held in the Trust Account as described below.and converted it into cash held in the Trust Account.

 

22


Our management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that we will be able to complete a Business Combination successfully. We must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (net of amounts disbursed to management for working capital purposes, if any, and excluding the amount of any deferred underwriting discount held in trust) at the time of the agreement to enter into the initial Business Combination. However, we will only complete a Business Combination if the post-business combination company owns or acquires 50% or more of the voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act.

If we are unable to complete a Business Combination within 24 months from the closing of the Initial Public Offering, or February 1, 2023, (as such period may be extended pursuant to a stockholder vote, the “Combination Period”), we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, subject to lawfully available funds therefor, redeem 100% of the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes (less 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); and (iii) 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 our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

Proposed Business Combination

On November 13, 2022, we entered into a Merger Agreement (as amended by that First Amendment to Merger Agreement, dated December 23, 2022, the Second Amendment to Merger Agreement, dated March 22, 2023, the Third Amendment to Merger Agreement dated June 8, 2023 and as it may be further amended, supplemented or otherwise modified from time to time in accordance with its terms, the “Merger Agreement”) with Electriq Power, Inc., a Delaware Corporation (“Electriq”), as disclosed in a Current Report on Form 8-K as filed with the U.S. Securities and Exchange Commission (the “SEC”) by the Company on November 14, 20222022.

IfAs previously reported on the Current Report on Form 8-K filed by TLG with the Securities and Exchange Commission (“SEC”) on July 26, 2023, TLG held a special meeting of its stockholders on July 25, 2023 (the “Special Meeting”), at which holders of 11,365,663 shares of TLG’s Class A Common Stock and Class F Common Stock (together, the “TLG Common Stock”) were present in person or by proxy, constituting a quorum for the transaction of business. Only stockholders of record as of the close of business on June 8, 2023, the record date (the “Record Date”) for the Special Meeting, were entitled to vote at the Special Meeting. As of the Record Date, 12,948,405 shares of TLG Common Stock were outstanding and entitled to vote at the Special Meeting.

At the Special Meeting, TLG’s stockholders voted to approve the proposals outlined in the final prospectus and definitive proxy statement filed by TLG with the SEC on July 12, 2023 (the “Proxy Statement/Consent Solicitation/Prospectus”), including, among other things, the adoption of the Merger Agreement and approval of the transactions contemplated by the Merger Agreement, are completed (the “Transactions”),including the merger of Merger Sub with and into Electriq, will survive such mergerwith Electriq continuing as the surviving corporation and as a wholly ownedwholly-owned subsidiary of TLG, and the Companyissuance of TLG securities as consideration thereunder (the “Merger”). As a result of the Merger, and, upon consummation of the Merger andtogether with the other Transactionstransactions contemplated by the Merger Agreement, (togetherthe “Business Combination”).

On July 31, 2023 (the “Closing Date”), the Business Combination, including the Merger, was completed (the “Closing”). In connection with the Merger,Closing, the “Proposed Business Combination”), the separate corporate existence of Electriq will cease and the holders of Electriq common stock, preferred stock, options and warrants will become equityholders of the Company, which will changeregistrant changed its name from TLG Acquisition One Corp. to
Electriq Power Holdings, Inc.” in connection with the Proposed Business Combination.

For additional information regarding the Merger Agreement and the Transactions contemplated therein, see the Current Report on Form 8-K as filed with the SEC by the Company on November 14, 2022.

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Liquidity and Going Concern

As of SeptemberJune 30, 2022,2023, we had approximately $242,000$105,457 in our operating bank account and a working capital deficit of approximately $5.1 million$11,804,362 (excluding income and franchise taxes).

Our liquidity needs prior to the consummation of the Initial Public Offering were satisfied through the payment of $25,000 from our Sponsor to cover certain of our offering costs in exchange for issuance of Class F common stock, and a loan from our Sponsor of approximately $192,000 under a promissory note. We repaid the promissory note in full upon consummation of the Private Placement. Subsequent to the consummation of the Initial Public Offering, our liquidity has been satisfied through the net proceeds from the consummation of the Initial Public Offering and the Private Placement held outside of the Trust Account. In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of our officers and directors may, but are not obligated to, loan us working capital loans as may be required. The Sponsor and the Company executed a non-interest-bearing promissory note in May 2021, providing the Company the ability to borrow up to $2,000,000 (the “Original Note”). In March 2022, the Sponsor and the Company amended and restated the Original Note, providing the Company the ability to borrow up to $5,000,000. On September 29, 2022, the Sponsor and the Company amended the Working Capital Loan, providing the Company the ability to borrow up to $8,000,000. On June 6, 2023, the Sponsor and TLG amended and restated the Second A&R Note, providing TLG the ability to borrow up to $10,000,000. The Company has drawn approximately $2.8 million$6,985,000 under such loans as of SeptemberJune 30, 2022.2023.

In connection with our assessment of going concern considerations in accordance with FASB ASC Topic 205-40, “Presentation of Financial Statements-Going Concern,” we have determined thatOn July 31, 2023, the liquidity condition, mandatory liquidation and subsequent dissolution raises substantial doubt about our ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should we be required to liquidate after February 1, 2023 (as such period may be extended pursuant to a stockholder vote). The condensed consolidated financial statements do not include any adjustment that might be necessary if we are unable to continue as a going concern.

We intend to seek an extension of the date by which we must consummateCompany completed a Business Combination as our Board currentlywith Electriq Power Holdings, Inc. and closed the related financing agreements in connection therewith. As a result, management believes that therethe Company will not behave sufficient time before February 1, 2023liquidity to complete a Business Combination. On November 3, 2022, we filed a preliminary proxy statement on Schedule 14A with the SEC for the purposes of seeking stockholder approval to extend the Combination Period from February 1, 2023 to May 1, 2023 (the date that is 27 monthsfund its operations through one year from the closing date of the IPO) (the “Amended Date”) and on a monthly basis up to three times from the Amended Date to August 1, 2023 (the date that is 30 months from the closing date of the IPO).this filing.

Management continues to evaluate the impact of the COVID-19 pandemic 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 the unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded

23


U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise

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tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. Any share redemption or other share repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. Whether and to what extent we would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise will depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by us and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Business Combination and in our ability to complete a Business Combination.

Results of Operations

Our entire activity from inception up to SeptemberJune 30, 20222023 was in preparation for our formation and the Initial Public Offering and, after the Initial Public Offering, identifying a target company for a Business Combination. We do not expect to be generating any operating revenues until the closing and completion of our initial Business Combination. For the three months ended June 30, 2023, we had net income of approximately $781,000, which consisted of $759,000 in interest income from investments held in the trust account, gain on forgiveness of deferred underwriting fee payable of $1,113,200 and non-operating expense of approximately $1 million resulting from changes in fair value of derivative warrant liabilities and convertible note, partially offset by approximately $1.7 million in general and administrative expenses, approximately $382,000 in income tax expense and $50,000 in franchise tax expense.

For the three months ended SeptemberJune 30, 2022, we had net income of approximately $291,000,$2.8 million, which consisted of approximately $1.8 million$568,000 in interest income from investments held in the trust account and non-operating income of approximately $600,000$2.4 million resulting from changes in fair value of derivative warrant liabilities, partially offset by approximately $1.7$58,000 in income tax expenses, and approximately $156,000 in general and administrative expenses.

For the six months ended June 30, 2023, we had net loss of approximately $323,000, which consisted of approximately $3 million in general and administrative expenses, $50,000approximately $500,000 in income tax expense and $100,000 in franchise tax expense, offset by approximately $1.4 million in interest income from investments held in the trust account, gain on forgiveness of deferred underwriting fee payable of $1,113,200 and approximately $369,000 in income tax expense.

For the three months ended September 30, 2021, we had net incomenon-operating expense of approximately $4.7 million, due largely to a noncash gain$887,000 resulting from changes in fair value of derivative warrant liabilities of approximately $4.9 million, partially offset by operating expenses of approximately $236,000. Operating expenses consisted of approximately $161,000 in general and administrative expenses, $22,000 in general and administrative expenses with related parties and approximately $60,000 in franchise tax expenses.convertible note.

For the ninesix months ended SeptemberJune 30, 2022, we had net income of approximately $9.5$9.2 million, which consisted of approximately $2.4 million$601,000 in interest income from investments held in the trust account and non-operating income of approximately $9.6$9.0 million resulting from changes in fair value of derivative warrant liabilities, partially offset by approximately $1.9 million$58,000 in income tax expenses, and approximately $339,000 in general and administrative expenses, approximately $189,000 in franchise tax expense and approximately $427,000 in income tax expense.

For the nine months ended September 30, 2021, we had net income of approximately $15.8 million, due largely to a noncash gain resulting from changes in fair value of derivative warrant liabilities of approximately $20.8 million, partially offset by a non-operating expense of approximately $1.4 million related to offering costs for derivative warrant liabilities and operating expenses of approximately $3.6 million. Operating expenses consisted of approximately $3.3 million in general and administrative expenses, $57,000 in general and administrative expenses with related parties and approximately $207,000 in franchise tax expenses.

Contractual Obligations

Administrative Support Agreement

We entered into an agreement with an affiliate of the Sponsor, pursuant to which we agreed to pay a total of $7,000 per month for office space, administrative and support services to such affiliate. Upon completion of the initial

24


Business Combination or the liquidation, we will cease paying these monthly fees. We incurred $21,000 and $21,000 in general and administrative expenses related to the agreement, which is recognized in the accompanying unaudited condensed consolidated statements of operations for the three months ended SeptemberJune 30, 20222023 and 2021,2022, respectively. We incurred $62,500$42,000 and $56,000$41,500 in general and administrative expenses related to the agreement, which is recognized in the accompanying unaudited condensed consolidated statements of operations for the ninesix months ended SeptemberJune 30, 20222023 and 2021, respectively. As of September 30, 2022, and December, 2021, there was $0 and $35,000 in accounts payable related to this agreement, respectively.

The Sponsor, officers and directors, or any of their respective affiliates, will be reimbursed for any reasonable out-of-pocket expenses 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 were made by us to the Sponsor, officers, directors or any of their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of reasonable out-of-pocket expenses incurred by such persons in connection with activities on our behalf.

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Underwriting Agreement

We granted the underwriters a 45-day option from the date of Initial Public Offering to purchase up to 5,000,000 additional Units to cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions. The underwriter exercised its over-allotment option in full on February 1, 2021.

The underwriters were entitled to an underwriting discount of $0.20 per Unit, or $8.0 million in the aggregate, paid upon the closing of the Initial Public Offering. In addition, the underwriters were entitled to a deferred fee of $0.35 per Unit, or $14.0 million in the aggregate. TheEffective as of May 10, 2023, RBC, the sole underwriter of the Initial Public Offering, waived its entitlement to the deferred underwriting fee will becomeof $14.0 million.

In connection with the waiving of the deferred underwriting fee, the Company reduced the deferred underwriting fee payable on the unaudited condensed consolidated balance sheets by $14,000,000, as a result $858,200 and $255,000 is reflected on the Company’s unaudited condensed consolidated statement of operations for the amounts allocated in connection with the Company’s warrants at the Initial Public Offering and accrued expenses related to the underwriters, fromrespectively. Additionally, $13,141,800 was charged to accumulated deficit for the amounts held inportion allocated to Class A ordinary shares at the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.Initial Public Offering

Critical Accounting PoliciesEstimates

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 FASB ASC Topic 480 “Distinguishing Liabilities from Equity” (“ASC 480”) 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 end of each reporting period.

The preparation of financial statementswarrants issued in connection with the Initial Public Offering (the “Public Warrants”) and the Private Placement Warrants are recognized as derivative liabilities in accordance with accounting principles generally acceptedASC 815. Accordingly, we recognized 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 balance sheet date until exercised, and any change in fair value is recognized in the United StatesCompany’s unaudited consolidated statements of America requires managementoperations. The initial fair value of the Public Warrants and Private Placement Warrants have each been measured at fair value using a modified Black-Scholes option pricing model. The fair value of the Public Warrants and Private Placement Warrants has subsequently been determined using listed prices in an active market for such warrants. Derivative warrant liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. A summary of our significant accounting policies is included in Note 2 to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report. Certain of our accounting policies are considered critical, as these policies are the most important to the depiction of our condensed consolidated financial statements and require significant, difficult or complex judgments, often employing the use of current assets or require the creation of current liabilities. Derivative warrant liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.

Working Capital Loan-Related Party

We have elected the fair value option to account for borrowings under the Working Capital Loan with our affiliates. As a result of applying the fair value option, we recognize each borrowing, when drawn, at fair value with a gain or loss recognized at issuance, and subsequent changes in fair value are recognized as change in the fair value of Working Capital Loan-related party in the consolidated statements of operations. The fair value is based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own estimates about the effects of matters that are inherently uncertain. Such policies are summarizedassumptions a market participant would use in pricing the Management’s Discussion and Analysis of Financial Condition and Results of Operations section in our Annual Report on Form 10-K filed with the SEC on March 25, 2022. There have been no significant changes in the application of our critical accounting policies during the nine months ended September 30, 2022.liability.

Recent Accounting Pronouncements

See Note 2 to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report for a discussion of recent accounting pronouncements.

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Off-Balance Sheet Arrangements

As of SeptemberJune 30, 2022,2023, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

JOBS Act

The Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting

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standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, the unaudited condensed consolidated financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth 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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

Item 4.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended SeptemberJune 30, 2022,2023, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial officer has concluded that during the period covered by this report, our disclosure controls and procedures were effective as of SeptemberJune 30, 2022.2023.

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended SeptemberJune 30, 20222023 covered by this Quarterly Report on Form 10-Q 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.

Item 1. Legal Proceedings.

None.

Item 1A.

Item 1A. Risk Factors.

As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K filed with the SEC on March 25, 202220, 2023 and updated in our Quarterly Report on Form 10-Q filed with the SEC on May 16, 2022, other than as described below.15, 2023. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. Any share redemption or other share repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. Whether and to what extent we would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise will depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by us and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Business Combination and in our ability to complete a Business Combination.

Item 2.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities.

Simultaneously with the closing of the Initial Public Offering, we consummated the Private Placement of 4,666,667 and 2,000,000 Private Placement Warrants to the Sponsor and RBC, respectively, at a price of $1.50 per Private Placement Warrant, generating total proceeds of $10.0 million. Such securities were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.

In connection with the Initial Public Offering, our sponsor had agreed to loan us an aggregate of up to $300,000 pursuant to a promissory note. This loan is non-interest bearing and payable on the consummation of the Initial Public Offering. We borrowed an aggregate of $192,000 under a promissory note. We repaid the promissory note in full upon consummation of the Private Placement.

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Of the gross proceeds received from the Initial Public Offering and the full exercise of the option to purchase additional Shares, $400,000,000 was placed in the Trust Account. TheFrom the closing of the Initial Public Offering until December 28, 2022, the net proceeds of the Initial Public Offering and certain proceeds from the Private Placement arewere invested in U.S. government treasury bills with a maturity of 180185 days or less and in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. On December 28, 2022, we liquidated our portfolio of investments held in the Trust Account and converted it into cash held in the Trust Account.

We paid a total of approximately $8.7 million in underwriting discounts and commissions related to the Initial Public Offering. In addition, the underwriters agreed to defer $14.0 million in underwriting discounts and commissions. Effective as of May 10, 2023, RBC waived its entitlement to the deferred underwriting commissions payable in connection with the Initial Public Offering in the amount of $14.0 million.

Item 3.

Item 3. Defaults upon Senior Securities.

None.

Item 4.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5.

Other Information.

None.Item 5. Other Information.

During the last fiscal quarter, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement.

 

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Item 6.

Item 6. Exhibits.

 

Exhibit

Number

  Description
31.1*  2.1Third Amendment to Merger Agreement, dated as of June 8, 2023, by and among TLG Acquisition One Corp., Eagle Merger Corp. and Electriq Power, Inc (incorporated by reference to Exhibit 2.4 to the Registrant’s Amendment No. 3 to Registration Statement on Form S-4 (File No. 333-268349) filed with the SEC on June 8, 2023).
  3.1Second Amended and Restated Certificate of Incorporation of Electriq Power Holdings, Inc. (incorporated herein by reference to Annex B to the Proxy Statement/Consent Solicitation/Prospectus).
  3.2Amended and Restated Bylaws of Electriq Power Holdings, Inc. (incorporated herein by reference to Annex C to the Proxy Statement/Consent Solicitation/Prospectus).
  4.1Amendment No. 1 to Warrant Agreement, dated July 31, 2023, by and between TLG Acquisition One Corp. and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K (File No. 333-268349) filed with the SEC on August 4, 2023).
10.1Form of Second Amendment to First Lock-up Agreement (incorporated by reference to Exhibit 10.17 to the Registrant’s Amendment No. 3 to Registration Statement on Form S-4 (File No. 333-268349) filed with the SEC on June 8, 2023).
10.2Form of Second Lock-up Agreement (incorporated by reference to Exhibit 10.18 to the Registrant’s Amendment No. 3 to Registration Statement on Form S-4 (File No. 333-268349) filed with the SEC on June 8, 2023).
10.3First Amendment to Sponsor Agreement, dated as of June 8, 2023, by and among TLG Acquisition One Corp., TLG Acquisition Founder LLC, Electriq Power, Inc. and the other parties thereto (incorporated by reference to Exhibit 10.11 to the Registrant’s Amendment No. 3 to Registration Statement on Form S-4 (File No. 333-268349) filed with the SEC on June 8, 2023).
10.4Form of Registration Rights Agreement, by and among New Electriq, Sponsor and certain of its affiliates, RBC and certain former stockholders of Electriq (incorporated by reference to Exhibit 10.13 to the Registrant’s Amendment No. 3 to Registration Statement on Form S-4 (File No. 333-268349) filed with the SEC on June 8, 2023).
10.5Securities Purchase Agreement, dated as of June 8, 2023, by and between Electriq Power, Inc. and John Michael Lawrie (incorporated by reference to Exhibit 10.22 to the Registrant’s Amendment No. 3 to Registration Statement on Form S-4 (File No. 333-268349) filed with the SEC on June 8, 2023).
10.6Securities Purchase Agreement, dated as of June 8, 2023, by and between Electriq Power, Inc. and O’Shanter Development Company Limited (incorporated by reference to Exhibit 10.23 to the Registrant’s Amendment No. 3 to Registration Statement on Form S-4 (File No. 333-268349) filed with the SEC on June 8, 2023).
10.7Form of Securities Purchase Agreement, dated as of June 8, 2023, by and between Electriq Power, Inc. and certain investors (incorporated by reference to Exhibit 10.24 to the Registrant’s Amendment No. 3 to Registration Statement on Form S-4 (File No. 333-268349) filed with the SEC on June 8, 2023).
10.8Form of Securities Purchase Agreement, dated as of June 8, 2023, by and between TLG Acquisition One Corp. and certain investors (incorporated by reference to Exhibit 10.25 to the Registrant’s Amendment No. 3 to Registration Statement on Form S-4 (File No. 333-268349) filed with the SEC on June 8, 2023).
10.9Securities Purchase Agreement, dated as of June 8, 2023, by and between TLG Acquisition One Corp. and John Michael Lawrie (incorporated by reference to Exhibit 10.26 to the Registrant’s Amendment No. 3 to Registration Statement on Form S-4 (File No. 333-268349) filed with the SEC on June 8, 2023).
10.10Electriq Power, Inc. Notes Conversion Agreement, dated as of June 8, 2023, by and between Electriq Power, Inc., TLG Acquisition One Corp. and John Michael Lawrie (incorporated by reference to Exhibit 10.27 to the Registrant’s Amendment No. 3 to Registration Statement on Form S-4 (File No. 333-268349) filed with the SEC on June 8, 2023).
10.11Form of Notes Conversion Agreement, dated as of June 8, 2023 (incorporated by reference to Exhibit 10.28 to the Registrant’s Amendment No. 3 to Registration Statement on Form S-4 (File No. 333-268349) filed with the SEC on June 8, 2023).
10.12Securities Purchase Agreement, dated as of June 8, 2023, by and between Electriq Power, Inc. and John Michael Lawrie (incorporated by reference to Exhibit 10.29 to the Registrant’s Amendment No. 3 to Registration Statement on Form S-4 (File No. 333-268349) filed with the SEC on June 8, 2023).
10.13Securities Purchase Agreement, dated as of June 8, 2023, by and between Electriq Power, Inc. and Jonathan Krehm (incorporated by reference to Exhibit 10.30 to the Registrant’s Amendment No. 3 to Registration Statement on Form S-4 (File No. 333-268349) filed with the SEC on June 8, 2023).
10.14Securities Purchase Agreement, dated as of June 8, 2023, by and between Electriq Power, Inc. and O’Shanter Development Company Ltd. (incorporated by reference to Exhibit 10.31 to the Registrant’s Amendment No. 3 to Registration Statement on Form S-4 (File No. 333-268349) filed with the SEC on June 8, 2023).
Second Amended and Restated Certificate of Incorporation of Electriq Power Holdings, Inc. (incorporated herein by reference to Annex B to the Proxy
Statement/Consent Solicitation/Prospectus).

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10.15Securities Purchase Agreement, dated as of June 8, 2023, by and between Electriq Power, Inc. and 1961823 Ontario Inc. (incorporated by reference to Exhibit 10.32 to the Registrant’s Amendment No. 3 to Registration Statement on Form S-4 (File No. 333-268349) filed with the SEC on June 8, 2023).
10.16
Letter agreement, dated June 28, 2023, by and between TLG Acquisition One Corp. and Meteora Capital, LLC (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K (File No. 001-39948) filed with the SEC on August 4, 2023).
31.1  Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*31.2  Certification of Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*  Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*  Certification of Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS  Inline XBRL Instance Document-the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH  Inline XBRL Taxonomy Extension Schema Document
101.CAL  Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF  Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB  Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE  Inline XBRL Taxonomy Extension Presentation Linkbase Document

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104  Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

 

*

These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: November 14, 2022August 10, 2023 TLG ACQUISITION ONE CORP.

ELECTRIQ POWER HOLDINGS, INC.

 By: 

/s/ John Michael LawrieFrank Magnotti

 Name John Michael Lawrie

Frank Magnotti

 Title: 

Chief Executive Officer

(Principal Executive Officer)

 

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