| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis
of Presentation The
accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted
in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form
10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements
prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial
reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position,
results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include
all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating
results and cash flows for the periods presented. The
accompanying unaudited condensed financial statements should be read in conjunction with the Company’s prospectus for its Initial
Public Offering as filed with the SEC on March 15, 2021. The interim results for the three and nine months ended September 30, 2021 are
not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future periods. 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,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a 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 election to opt out is irrevocable. The Company has elected not to opt out of
such extended transition period which means that when a standard is issued or revised and it has different application dates for public
or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies
adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which
is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult
or impossible because of the potential differences in accounting standards used. Liquidity As of September 30, 2021, the Company had $1,021,767
in its operating bank account, and working capital of $806,631. The Company’s liquidity needs prior to the Company’s Initial
Public Offering and Private Placement had been satisfied through a capital contribution from the Sponsor in the amount of $25,000 (see
Note 4) for the founder shares, and an unsecured promissory note from the Sponsor of $300,000 (see Note 6). The Company fully repaid the
promissory note to the Sponsor on January 15, 2021. Subsequent to the consummation of the Initial Public Offering and Private Placement,
the Company’s liquidity needs have been satisfied through the proceeds from the consummation of the Private Placement not held in
the Trust Account. In addition, in order to finance transaction costs in connection with a Business Combination, the Company’s
Sponsor, or an affiliate of the Sponsor, or certain Company’s officers and directors may, but are not obligated to, provide the
Company with Working Capital Loans (see Note 6). Based
on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity to meet its needs
through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, the Company will
be using the working capital for identifying and evaluating prospective initial Business Combination candidates, performing due diligence
on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring,
negotiating and consummating the Business Combination. Use
of Estimates The
preparation of the condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of expenses during the reporting period. One of the significant estimates used in
the preparation of these condensed financial statements is the valuation of the Public and Private Placement Warrants. 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 financial statements, which management considered in formulating
its estimate, could change in the near term due to one or more future confirming events. One of the more significant accounting estimates
included in these condensed financial statements is the determination of the fair value of the warrant liabilities. Such estimates may
be subject to change as more current information becomes available and accordingly the actual results could differ significantly from
those estimates. Cash
and Cash Equivalents The
Company considers all short-term investments with an original maturity of nine months or less when purchased to be cash equivalents.
The Company did not have any cash equivalents as of September 30, 2021 and December 31, 2020. Marketable
Securities held in the Trust Account At
September 30, 2021, substantially all of the assets held in the Trust Account were held in Money Market Funds, which are invested primarily
in U.S. Treasury securities. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading
securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the
change in fair value of investments held in Trust Account are included in interest earned on marketable securities held in Trust Account
in the accompanying condensed statements of operations. The estimated fair values of investments held in Trust Account are determined
using available market information. 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 Accounting Standards
Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Class A common stock subject to mandatory
redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including 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, common stock is
classified as stockholders’ equity. The Company’s Class A common stock feature certain redemption rights that are considered
to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, Class A common stock
subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section
of the Company’s balance sheet. The
Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to
equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock
are affected by charges against additional paid in capital and accumulated deficit. Offering
Costs associated with the Initial Public Offering The
Company complies with the requirements of the ASC340-10-S99-1and SEC Staff Accounting Bulletin (“SAB”) Topic 5A—“Expenses
of Offering”. Offering costs consist principally of professional and registration fees incurred through the balance sheet date.
Offering costs are allocated to the separable financial instruments issued in the IPO based on a relative fair value basis compared to
total proceeds received. Offering costs associated with warrant liabilities is expensed, and offering costs associated with the Class A
common stock are charged to the shareholders’ equity. Accordingly, as of September 30, 2021, offering costs in the aggregate of
$14,326,696 have been charged to shareholders’ equity and $233,334 of offering costs associated with warrant and forward purchase
unit issuance cost has been expensed on the Company’s statement of operations. Warrant
Liabilities The
Company accounts for the Warrants in accordance with the guidance contained in ASC 815-40 under which the Warrants do not meet the criteria
for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Warrants as liabilities at their fair
value and adjust the Warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet
date until exercised, and any change in fair value is recognized in the condensed statements of operations. The Private Placement Warrants
and the Public Warrants for periods where no observable traded price was available are valued using a Modified Black-Scholes Option Pricing
Model. For periods subsequent to the detachment of the Public Warrants from the Units, the Public Warrant quoted market price will be
used as the fair value as of each relevant date. Income
Taxes The
Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition
of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets
and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally
requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not
be realized. As of September 30, 2021, the Company had a deferred tax asset of approximately $159,000, which had a full valuation allowance
recorded against it of approximately $159,000. The Company’s deferred tax assets were deemed to be de minimis as of December 31,
2020. ASC
740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes
a recognition threshold and measurement process for financial statement recognition and measurement of a tax position 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. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income
tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2021 and December
31, 2020. 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’s currently taxable income primarily consists of interest income on the Trust Account. The Company’s general and
administrative costs are generally considered start-up costs and are not currently deductible. During the three and nine months ended
September 30, 2021, the Company recorded no income tax expense. The Company’s effective tax rate differs from the statutory tax
rate of 21% for the three and nine months ended September 30, 2021, respectively, due to the valuation allowance recorded on the Company’s
net operating losses and the permanent difference arising from the income recorded due to the change in fair value of the Company’s
warrant liability. Net
income (Loss) per Common Share The Company has two classes of shares, Class A
common stock and Class B common stock. Net income (loss) per common share is computed by dividing net loss, on a pro rata basis, by the
weighted average number of common shares outstanding for the period. Remeasurement associated with the redeemable shares of Class A common
stock is excluded from net loss per common share as the redemption value approximates fair value. The Company has not considered the effect of the
warrants sold in the IPO and Private Placement to purchase 13,000,000 shares of Class A common stock in the calculation of diluted loss
per share, since the exercise of the warrants is contingent upon the occurrence of future events. As of September 30, 2021, the Company
did not have any other dilutive securities or other contracts that could, potentially, be exercised or converted into shares of common
stock and then share in earnings of the Company. As a result, diluted net loss per common share is the same as basic net loss per common
share for the period presented. The following table reflects the calculation
of basic and diluted net income (loss) per common share (in dollars, except per share amounts):The following table reflects the calculation
of basic and diluted net income per common share (in dollars, except per share amounts):
Three Months Ended Nine Months Ended
Class A Class B Class A Class B
Basic and diluted net income per common stock
Numerator:
Allocation of net income, as adjusted $ 1,912,730 $ 478,183 $ 6,622,377 $ 2,376,781
Denominator:
Basic and diluted weighted average stock outstanding 25,000,000 6,250,000 18,131,868 6,507,555
Basic and diluted net income per common stock $ 0.08 $ 0.08 $ 0.37 $ 0.37 Concentration
of Credit Risk Financial
instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution,
which, at times may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account
and management believes the Company is not exposed to significant risks on such account. Fair
Value of Financial Instruments The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value
Measurement,” approximates the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their
short-term nature, except for the Warrants (see Note 9). Recent
Accounting Standards In
August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06,
Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s
Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates
the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies
the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard
also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s
own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for
all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis,
with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 effective January 1, 2021. The adoption of
ASU 2020-06 did not have an impact on the Company’s financial statements. Management
does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material
effect on the Company’s condensed financial statements. |
