| Summary of Significant Accounting Policies | Note
2 — Summary of Significant Accounting Policies Basis
of Presentation The
accompanying unaudited condensed financial statements have been prepared in accordance with GAAP for interim financial information and
in accordance with the instructions to Form 10-Q and Article 10 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 Annual Report on Form 10-K
for the year ended December 31, 2021 as originally filed with the SEC on April 15, 2022, and on Form 10-K/A as filed with the SEC on
June 13, 2022, which contains the audited financial statements and notes thereto. The interim results for the three and nine months ended
September 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any future
interim periods. Emerging
Growth Company Status The
Company is an “emerging growth company”, as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act,
and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that
are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation
requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in
its periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote
on executive compensation and stockholder approval of any golden parachute payments not previously approved. In
addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended
transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In
other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would
otherwise apply to private companies. The Company intends to take advantage of the benefits of this extended transition period. Use
of Estimates The
preparation of the 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. 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. Accordingly, the actual results could differ
significantly from those estimates. Cash
and Cash Equivalents The Company considers all
short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company has $538,622
and $1,046,646 in cash as of September 30, 2022 and December 31, 2021, respectively. The Company did not have any cash equivalents
as of September 30, 2022 and December 31, 2021. Investments
Held in Trust Account As
of September 30, 2022 and December 31, 2021, the assets held in the Trust Account were held in U.S. Treasury Bills with a maturity of
185 days or less. During the nine months ended September 30, 2022, and year ended December 31, 2021, the Company did not withdraw any
of the interest income from the Trust Account to pay its tax obligations. The
Company classifies its United States Treasury securities as held-to-maturity in accordance with FASB ASC Topic 320 “Investments
- Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to
hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost and adjusted for the amortization or accretion
of premiums or discounts. A
decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment
that reduces the carrying costs to such securities’ fair value. The impairment is charged to earnings and a new cost basis for
the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability
and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment
is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the
severity and the duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the
general market condition in the geographic area or industry in which the investee operates. Premiums
and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest
method. Such amortization and accretion are included in the “interest income” line item in the statements of operations.
Interest income is recognized when earned. Offering
Costs The
Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A – “Expenses of Offering.”
Offering costs consist of underwriter, accounting, filing and legal expenses incurred through the balance sheet date that are directly
related to the IPO and were charged to temporary equity and stockholders’ (deficit) equity based on the underlying instruments’
relative fair value upon the completion of the IPO. If the IPO had proved to be unsuccessful, these deferred costs, as well as additional
expenses to be incurred, would have been charged to operations. Fair
Value of Financial Instruments The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair
Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet, primarily due to its short-term
nature. Fair
Value Measurement 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). The Company’s financial
instruments are classified as either Level 1, Level 2 or Level 3. 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. The
carrying value, excluding gross unrealized holding gain (loss) and fair value of held to maturity securities on September 30, 2022 and
December 31, 2021 are classified as Level 1 and are as follows:
Carrying Gross Gross Fair Value
U.S. Treasury Securities $ 159,137,128 $ — $ 6,981 $ 159,130,149
Carrying Gross Gross Fair Value
U.S. Treasury Securities $ 158,108,357 $ 1,846 $ — $ 158,110,203 Common
Stock Subject to Possible Redemption The Company accounts for its
shares of common stock subject to possible redemption in accordance with guidance in ASC Topic 480 “Distinguishing Liabilities
from Equity.” Shares of common stock subject to mandatory redemption (if any) are classified as a liability instrument and are
measured at fair value. Conditionally redeemable shares of common stock (including shares that feature redemption rights that are either
within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s
control) are classified as temporary equity. At all other times, shares of common stock are classified as stockholders’ (deficit)
equity. The Company’s shares of common stock sold in the IPO feature certain redemption rights that are considered to be outside
of the Company’s control and subject to the occurrence of uncertain future events. The
Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of shares of redeemable common
stock to equal the redemption value at the end of each reporting period. Such changes are reflected in additional paid-in capital, or
in the absence of additional capital, in accumulated deficit. All
of the 15,500,000 common stock sold as part of the Units in the IPO contain a redemption feature which allows for the redemption
of such Public Shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer in connection
with the Business Combination and in connection with certain amendments to the Company’s second amended and restated certificate
of incorporation. In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in
ASC 480-10-S99, redemption provisions not solely within the control of the Company require common stock subject to redemption to be classified
outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity
instruments, are excluded from the provisions of ASC 480. Accordingly, as of September 30, 2022 and December 31, 2021, all shares of
common stock subject to possible redemption is presented as temporary equity, outside of the stockholders’ deficit equity section
of the Company’s balance sheets. The
common stock subject to possible redemption reflected on the balance sheets as of September 30, 2022 and December 31, 2021 is reconciled
in the following table:
Gross Proceeds $ 155,000,000
Less:
Fair Value of public warrants (6,062,414 )
Common stock issuance costs (10,936,100 )
Plus:
Remeasurement of carrying value to redemption value 20,098,514
Common stock subject to possible redemption (December 31, 2021) $ 158,100,000
Plus:
Remeasurement of carrying value to redemption value 728,453
Common stock subject to possible redemption (September 30, 2022) $ 158,828,453 Net
Income (Loss) Per Common Stock The
Company applies the two-class method in calculating earnings per share, with one class being the redeemable shares and one class being
the non-redeemable shares. The contractual formula utilized to calculate the redemption amount approximates fair value. Changes in fair
value are not considered a dividend for the purposes of the numerator in the earnings per share calculation. Net income (loss) per common
stock is computed by dividing the pro rata net income (loss) between the redeemable common stock and the non-redeemable common stock
by the weighted average number of shares of common stock outstanding for each of the periods. The calculation of diluted income (loss)
per share of common stock does not consider the effect of the warrants issued in connection with the IPO since the exercise of the warrants
is contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. Reconciliation
of Net Income (Loss) per Common Stock The
Company’s net income (loss) is adjusted for the portion of net income (loss) that is allocable to each class of common stock. The
allocable net income (loss) is calculated by multiplying net income (loss) by the ratio of weighted average number of shares outstanding
attributable to common stock to the total weighted average number of shares outstanding for the period. Accordingly, basic and diluted
income (loss) per common stock is calculated as follows:
For the three months ended September 30, For the nine months ended September 30,
2022 2021 2022 2021
Redeemable Common Stock
Net loss allocable to redeemable common stock $ (45,347 ) $ — $ (278,683 ) $ —
Basic and diluted weighted average shares outstanding, redeemable common stock 15,500,000 — 15,500,000 —
Basic and diluted net loss per common stock $ (0.00 ) $ — $ (0.02 ) $ —
Non-Redeemable Common Stock
Net loss allocable to non-redeemable common stock $ (18,345 ) $ (1,446 ) $ (112,743 ) $ (9,030 )
Basic and diluted weighted average shares outstanding, non-redeemable common stock 6,270,600 4,829,865 6,270,600 4,931,245
Basic and diluted net loss per common stock $ (0.00 ) $ 0.00 $ (0.02 ) $ 0.00 Concentration
of Credit Risk Financial
instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution,
including funds held in Trust on behalf of the Company, which, at times, may exceed the Federal Deposit Insurance Company coverage of
$250,000. The Company has not experienced losses on this account. Income
Taxes The Company accounts for income
taxes under ASC 740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities
for both the expected impact of differences between the unaudited condensed financial statements 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, 2022 and December 31, 2021, the Company’s deferred tax asset had a full valuation allowance recorded against it. Our effective
tax rate was (186.01)% and 0.00% for the three months ended September 30, 2022 and 2021, respectively, and 56.40% and 0.00% for the nine
months ended September 30, 2022 and 2021, respectively. The effective tax rate differs from the statutory tax rate of 21% for the three
and nine months ended September 30, 2022 and 2021, due to changes in fair value in warrant liability and the valuation allowance on the
deferred tax assets. 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. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim
period, disclosure and transition. 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, 2022 and December 31, 2021. The Company is currently
not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The
Company has identified the United States as its only “major” tax jurisdiction. The Company is subject to income taxation
by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus
of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect
that the total amount of unrecognized tax benefits will materially change over the next twelve months. Recent
Accounting Pronouncements The
Company’s management does not believe that there any recently issued, but not effective, accounting standards, which, if currently
adopted, would have a material effect on the Company’s financial statements. |
