Restatement of Previously Issued Financial Statements | Note 2. Restatement of Previously Issued Financial Statements Subsequent to the initial issuance of the Company’s 2022 financial statements on April 7, 2023, management concluded that the previously issued audited financial statements for the year ended December 31, 2022 should be restated to correct the Consolidated Statements of Changes in Stockholders’ Deficit as the wrong net income was included in the statement. This clerical error had no impact on the Company’s cash position, revenues, or liquidity. The errors have been corrected by restating each of the affected financial statement line items for the period. Statement of Changes in Stockholders’ Deficit: The tables below present the effect of the financial statement adjustment related to the restatement discussed above of the Company’s previously reported accumulated deficit and total stockholder’s deficit within the statement of changes in stockholders’ deficit for the year ended December 31, 2022: For the year ended December 31, 2022 As Restatement As Restated Accumulated Deficit: Balance – December 31, 2021 $ (14,309,985 ) $ - $ (14,309,985 ) Net Income 3,937,702 2,624,373 6,562,075 Adjustment for accretion of Class A common stock subject to possible redemption amounts – accumulated deficit 5,749,511 - 5,749,511 Balance – December 31, 2022 $ (4,622,772 ) $ 2,624,373 $ (1,998,399 ) For the year ended December 31, 2022 As Restatement As Restated Total Stockholders’ Deficit: Balance – December 31, 2021 $ (14,309,554 ) $ - $ (14,309,554 ) Net Income 3,937,702 2,624,373 6,562,075 Adjustment for accretion of Class A common stock subject to possible redemption amounts – accumulated deficit 5,749,511 - 5,749,511 Balance – December 31, 2022 $ (4,622,341 ) $ 2,624,373 $ (1,997,968 ) Note 2A. Restatement of Previously Issued Financial Statements as of April 7, 2023 The Company had recognized a liability upon closing of their initial public offering in December 2020 for a portion of the underwriter’s commissions which was contingently payable upon closing of a future business combination, with the offsetting entry resulting in an initial discount to the securities sold in the initial public offering. On June 14, 2022, Cantor Fitzgerald & Co. irrevocably waived its rights to the deferred underwriting commissions due under the underwriting agreement. The Company recognized the waiver as an extinguishment, with a resulting non-operating gain recognized in its statements of operations reported in the Company’s Form 10-Qs for the quarterly periods ended June 30, 2022 and September 30, 2022 (the “Affected Quarterly Periods”). Upon subsequent review and analysis, management concluded that the Company should have recognized the portion allocated to Public Shares as an adjustment to the carrying value of the Class A common stock subject to possible redemption and the remaining balance as a gain from extinguishment of deferred underwriting commissions allocated to derivative warrant liabilities. Therefore, the Company’s management and the Audit Committee of the Company’s Board of Directors (the “Audit Committee”) concluded that the Company’s Affected Quarterly Periods should no longer be relied upon and that it is appropriate to restate them. As such, the Company will restate its financial statements in this Form 10-K/A. The previously presented Affected Quarterly Period should no longer be relied upon. Impact of the Restatement The impact of the restatement on the statements of operations, statements of changes in stockholders’ deficit and statements of cash flows for the affected period is presented below. The restatement had no impact on net cash flows from operating, investing or financing activities. Statement of Operations: The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported statements of operations for the three and six months ended June 30, 2022: For the Three Months Ended June 30, 2022 (unaudited) As Previously Restatement As Restated Total operating expenses $ (1,120,935 ) $ - $ (1,120,935 ) Other income (expenses): Change in fair value of derivative warrant liabilities 2,290,750 - 2,290,750 Gain from extinguishment of deferred underwriting commissions allocated to derivative warrant liabilities 6,037,500 (5,749,511 ) 287,989 Interest earned on operating account 1 - 1 Income from investments held in Trust Account 166,440 - 166,440 Income before income tax expense 7,373,756 (5,749,511 ) 1,624,245 Income tax expense 6,535 - 6,535 Net income $ 7,367,221 $ (5,749,511 ) $ 1,617,710 Weighted average shares outstanding of Class A common stock, basic and diluted 15,484,292 - 15,484,292 Basic and diluted net income per share, Class A common stock $ 0.37 $ (0.29 ) $ 0.08 Weighted average shares outstanding of Class B common stock, basic and diluted 4,312,500 - 4,312,500 Basic and diluted net income per share, Class B common stock $ 0.37 $ (0.29 ) $ 0.08 For the Six Months Ended June 30, 2022 (unaudited) As Previously Restatement As Restated Total operating expenses $ (1,554,619 ) $ - $ (1,554,619 ) Other income (expenses): Change in fair value of derivative warrant liabilities 5,929,000 - 5,929,000 Gain from extinguishment of deferred underwriting commissions allocated to derivative warrant liabilities 6,037,500 (5,749,511 ) 287,989 Interest earned on operating account 3 - 3 Income from investments held in Trust Account 224,219 - 224,219 Income before income tax expense 10,636,103 (5,749,511 ) 4,886,592 Income tax expense 6,535 - 6,535 Net income $ 10,629,568 $ (5,749,511 ) $ 4,880,057 Weighted average shares outstanding of Class A common stock, basic and diluted 16,362,268 - 16,362,268 Basic and diluted net income per share, Class A common stock $ 0.51 $ (0.27 ) $ 0.24 Weighted average shares outstanding of Class B common stock, basic and diluted 4,312,500 - 4,312,500 Basic and diluted net income per share, Class B common stock $ 0.51 $ (0.27 ) $ 0.24 The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported statement of operations for the nine months ended September 30, 2022 (there were no adjustments for the three months ended September 30, 2022): For the Nine Months Ended September 30, 2022 (unaudited) As Previously Restatement As Restated Total operating expenses $ (3,053,747 ) $ - $ (3,053,747 ) Other income (expenses): Change in fair value of derivative warrant liabilities 5,929,000 - 5,929,000 Gain from extinguishment of deferred underwriting commissions allocated to derivative warrant liabilities 6,037,500 (5,749,511 ) 287,989 Interest earned on operating account 4 - 4 Income from investments held in Trust Account 281,713 - 281,713 Income before income tax expense 9,194,470 (5,749,511 ) 3,444,959 Income tax expense 8,022 - 8,022 Net income $ 9,186,448 $ (5,749,511 ) $ 3,436,937 Weighted average shares outstanding of Class A common stock, basic and diluted 11,246,592 - 11,246,592 Basic and diluted net income per share, Class A common stock $ 0.59 $ (0.37 ) $ 0.22 Weighted average shares outstanding of Class B common stock, basic and diluted 4,312,500 - 4,312,500 Basic and diluted net income per share, Class B common stock $ 0.59 $ (0.37 ) $ 0.22 Statement of Changes in Stockholders’ Deficit: The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported accumulated deficit within the statement of changes in stockholders’ deficit for the six months ended June 30, 2022: For the Six Months Ended June 30, 2022 (unaudited) As Previously Restatement As Restated Balance - December 31, 2021 $ (14,309,985 ) - $ (14,309,985 ) Net income 10,629,568 (5,749,511 ) 4,880,057 Adjustment for accretion of Class A common stock subject to possible redemption amount - accumulated deficit - 5,749,511 5,749,511 Balance - June 30, 2022 (unaudited) $ (3,680,417 ) $ - $ (3,680,417 ) The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported accumulated deficit within the statement of changes in stockholders’ deficit for the nine months ended September 30, 2022: For the Nine Months Ended September 30, 2022 As Previously Reported Restatement Adjustment As Restated Balance - December 31, 2021 $ (14,309,985 ) - $ (14,309,985 ) Net income 9,186,448 (5,749,511 ) 3,436,937 Adjustment for accretion of Class A common stock subject to possible redemption amount - accumulated deficit - 5,749,511 5,749,511 Balance - September 30, 2022 (unaudited) $ (5,123,537 ) $ - $ (5,123,537 ) Statement of Cash Flows: The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported statement of cash flows for the six months ended June 30, 2022: For the Six Months Ended June 30, 2022 (unaudited) As Previously Restatement As Restated Net income $ 10,629,568 $ (5,749,511 ) $ 4,880,057 Adjustments to reconcile net income to net cash used in operating activities: Change in fair value of derivative warrant liabilities (5,929,000 ) - (5,929,000 ) Gain from extinguishment of deferred underwriting commissions allocated to derivative warrant liabilities (6,037,500 ) 5,749,511 (287,989 ) Income from investments held in Trust Account (224,219 ) - (224,219 ) Changes in operating assets and liabilities: Prepaid expenses 57,723 - 57,723 Accounts payable 258,731 - 258,731 Accrued expenses 1,041,731 - 1,041,731 Due to related party (29,311 ) - (29,311 ) Franchise tax payable (70,522 ) - (70,522 ) Income tax payable 6,535 - 6,535 Net cash used in operating activities $ (296,264 ) $ - $ (296,264 ) Supplemental disclosure of noncash financing activities: Extinguishment of deferred underwriting commissions allocated to Public Shares $ - $ 5,749,511 $ 5,749,511 The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported statement of cash flows for the nine months ended September 30, 2022: For the Nine Months Ended September 30, 2022 (unaudited) As Previously Restatement As Restated Net income $ 9,186,448 $ (5,749,511 ) $ 3,436,937 Adjustments to reconcile net income to net cash used in operating activities: Change in fair value of derivative warrant liabilities (5,929,000 ) - (5,929,000 ) Gain from extinguishment of deferred underwriting commissions allocated to derivative warrant liabilities (6,037,500 ) 5,749,511 (287,989 ) Income from investments held in Trust Account (281,713 ) - (281,713 ) Changes in operating assets and liabilities: Prepaid expenses 75,099 - 75,099 Accounts payable 1,498,738 - 1,498,738 Accrued expenses 1,227,066 - 1,227,066 Due to related party (29,311 ) - (29,311 ) Franchise tax payable (20,111 ) - (20,111 ) Income tax payable 8,022 - 8,022 Net cash used in operating activities $ (302,262 ) $ - $ (302,262 ) Supplemental disclosure of noncash financing activities: Extinguishment of deferred underwriting commissions allocated to Public Shares $ - $ 5,749,511 $ 5,749,511 |