Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 07, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Entity File Number | 001-39936 | |
Entity Registrant Name | DIAMONDHEAD HOLDINGS CORP. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 85-3460766 | |
Entity Address, Address Line One | 250 Park Ave. 7th Floor, | |
Entity Address, City or Town | New York | |
Entity Address State Or Province | NY | |
Entity Address, Postal Zip Code | 10177 | |
City Area Code | 212 | |
Local Phone Number | 572-6260 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | true | |
Entity Central Index Key | 0001830188 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Units, each consisting of one share of Class A common stock, $0.0001 per value and one-fourth of one redeemable warrant | ||
Document and Entity Information | ||
Title of 12(b) Security | Units, each consisting of one share of Class A common stock, $0.0001 per value and one-fourth of one redeemable warrant | |
Trading Symbol | DHHCU | |
Security Exchange Name | NASDAQ | |
Class A common stock | ||
Document and Entity Information | ||
Title of 12(b) Security | Class A common stock, par value $0.0001 per share | |
Trading Symbol | DHHC | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 34,500,000 | |
Warrants, each whole warrant exercisable for one share of Class A common stock, each at an exercise price of $11.50 per share | ||
Document and Entity Information | ||
Title of 12(b) Security | Warrants, each whole warrant exercisable for one share of Class A common stock, each at an exercise price of $11.50 per share | |
Trading Symbol | DHHCW | |
Security Exchange Name | NASDAQ | |
Class B common stock | ||
Document and Entity Information | ||
Entity Common Stock, Shares Outstanding | 8,625,000 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash | $ 10,920 | $ 252,601 |
Prepaid expenses | 137,063 | 240,075 |
Total current assets | 147,983 | 492,676 |
Investments held in Trust Account | 346,615,567 | 345,020,717 |
Total Assets | 346,763,550 | 345,513,393 |
Current liabilities: | ||
Accounts payable | 146,192 | 54,391 |
Accrued expenses | 2,099,500 | 120,000 |
Income tax payable | 352,045 | |
Franchise tax payable | 16,614 | 114,645 |
Total current liabilities | 2,614,351 | 289,036 |
Deferred underwriting commissions | 12,075,000 | |
Derivative warrant liabilities | 3,494,000 | 8,794,330 |
Total liabilities | 6,108,351 | 21,158,366 |
Commitments and Contingencies | ||
Stockholders' Deficit: | ||
Accumulated deficit | (5,431,617) | (20,645,836) |
Total stockholders' deficit | (5,430,754) | (20,644,973) |
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders' Deficit | 346,763,550 | 345,513,393 |
Class A Common Stock Subject to Redemption | ||
Current liabilities: | ||
Class A common stock subject to possible redemption , $0.0001 par value; 34,500,000 shares at $10.031 and $10.000 per share redemption value at September 30, 2022 and December 31, 2021, respectively | 346,085,953 | 345,000,000 |
Class B common stock | ||
Stockholders' Deficit: | ||
Common stock | $ 863 | $ 863 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Preferred stock, par value, (per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Class A common stock | ||
Class A common stock subject to possible redemption, par value, (per share) | $ 0.0001 | $ 0.0001 |
Common shares, par value, (per share) | $ 0.0001 | $ 0.0001 |
Common shares, shares authorized | 300,000,000 | 300,000,000 |
Class A Common Stock Subject to Redemption | ||
Class A common stock subject to possible redemption, par value, (per share) | $ 0.0001 | $ 0.0001 |
Class A common stock subject to possible redemption, outstanding (in shares) | 34,500,000 | 34,500,000 |
Redemption value per share | $ 10.031 | $ 10 |
Class A Common Stock Not Subject to Redemption | ||
Common shares, shares issued | 0 | 0 |
Common shares, shares outstanding | 0 | 0 |
Class B common stock | ||
Common shares, par value, (per share) | $ 0.0001 | $ 0.0001 |
Common shares, shares authorized | 10,000,000 | 10,000,000 |
Common shares, shares issued | 8,625,000 | 8,625,000 |
Common shares, shares outstanding | 8,625,000 | 8,625,000 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
General and administrative expenses | $ 2,102,853 | $ 100,792 | $ 2,546,562 | $ 867,930 |
Franchise tax expense | 49,863 | 49,863 | 147,945 | 147,447 |
Loss from operations | (2,152,716) | (150,655) | (2,694,507) | (1,015,377) |
Change in fair value of derivative warrant liabilities | (2,038,170) | 6,669,920 | 5,300,330 | 3,930,750 |
Financing costs - derivative warrant liabilities | (449,070) | |||
Income from investments held in Trust Account | 1,558,441 | 5,301 | 2,076,393 | 14,175 |
Gain from settlement of deferred underwriting commissions on public warrants | 271,688 | 271,688 | ||
Net (loss) income before income tax expense | (2,360,757) | 6,524,566 | 4,953,904 | 2,480,478 |
Income tax expense | 394,167 | 457,045 | ||
Net (loss) income | $ (2,754,924) | $ 6,524,566 | $ 4,496,859 | $ 2,480,478 |
Class A common stock | ||||
Basic weighted average shares outstanding | 34,500,000 | 34,500,000 | 34,500,000 | 31,087,912 |
Diluted weighted average shares outstanding | 34,500,000 | 34,500,000 | 34,500,000 | 31,087,912 |
Basic net income per share | $ (0.06) | $ 0.15 | $ 0.10 | $ 0.06 |
Diluted net income per share | $ (0.06) | $ 0.15 | $ 0.10 | $ 0.06 |
Class B common stock | ||||
Basic weighted average shares outstanding | 8,625,000 | 8,625,000 | 8,625,000 | 8,513,736 |
Diluted weighted average shares outstanding | 8,625,000 | 8,625,000 | 8,625,000 | 8,625,000 |
Basic net income per share | $ (0.06) | $ 0.15 | $ 0.10 | $ 0.06 |
Diluted net income per share | $ (0.06) | $ 0.15 | $ 0.10 | $ 0.06 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) | Class A Common Stock Subject to Redemption | Class B common stock Common Stock | Additional Paid In Capital | Accumulated Deficit | Total |
Balance at the beginning at Dec. 31, 2020 | $ 863 | $ 24,137 | $ (1,892) | $ 23,108 | |
Balance at the beginning (in shares) at Dec. 31, 2020 | 8,625,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Excess of cash received over fair value of private placement warrants | 3,500,670 | 3,500,670 | |||
Remeasurement accretion of Class A common stock to redemption amount | (3,524,807) | (23,352,185) | (26,876,992) | ||
Net income (loss) | 3,112,761 | 3,112,761 | |||
Balance at the end at Mar. 31, 2021 | $ 863 | (20,241,316) | (20,240,453) | ||
Balance at the end (in shares) at Mar. 31, 2021 | 8,625,000 | ||||
Balance at the beginning at Dec. 31, 2020 | $ 863 | 24,137 | (1,892) | 23,108 | |
Balance at the beginning (in shares) at Dec. 31, 2020 | 8,625,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | 2,480,478 | ||||
Balance at the end at Sep. 30, 2021 | $ 863 | (20,873,599) | (20,872,736) | ||
Balance at the end (in shares) at Sep. 30, 2021 | 8,625,000 | ||||
Balance at the beginning at Mar. 31, 2021 | $ 863 | (20,241,316) | (20,240,453) | ||
Balance at the beginning (in shares) at Mar. 31, 2021 | 8,625,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | (7,156,849) | (7,156,849) | |||
Balance at the end at Jun. 30, 2021 | $ 863 | (27,398,165) | (27,397,302) | ||
Balance at the end (in shares) at Jun. 30, 2021 | 8,625,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | 6,524,566 | 6,524,566 | |||
Balance at the end at Sep. 30, 2021 | $ 863 | (20,873,599) | (20,872,736) | ||
Balance at the end (in shares) at Sep. 30, 2021 | 8,625,000 | ||||
Balance at the beginning at Dec. 31, 2021 | $ 863 | (20,645,836) | (20,644,973) | ||
Balance at the beginning (in shares) at Dec. 31, 2021 | 8,625,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | 3,628,047 | 3,628,047 | |||
Balance at the end at Mar. 31, 2022 | $ 863 | (17,017,789) | (17,016,926) | ||
Balance at the end (in shares) at Mar. 31, 2022 | 8,625,000 | ||||
Balance at the beginning at Dec. 31, 2021 | $ 863 | (20,645,836) | (20,644,973) | ||
Balance at the beginning (in shares) at Dec. 31, 2021 | 8,625,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Extinguishment of deferred underwriting commissions on public shares | 11,800,000 | ||||
Remeasurement accretion of Class A common stock to redemption amount | $ (1,085,953) | ||||
Net income (loss) | 4,496,859 | ||||
Balance at the end at Sep. 30, 2022 | $ 863 | (5,431,617) | (5,430,754) | ||
Balance at the end (in shares) at Sep. 30, 2022 | 8,625,000 | ||||
Balance at the beginning at Mar. 31, 2022 | $ 863 | (17,017,789) | (17,016,926) | ||
Balance at the beginning (in shares) at Mar. 31, 2022 | 8,625,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Remeasurement accretion of Class A common stock to redemption amount | (76,542) | (76,542) | |||
Net income (loss) | 3,623,736 | 3,623,736 | |||
Balance at the end at Jun. 30, 2022 | $ 863 | (13,470,595) | (13,469,732) | ||
Balance at the end (in shares) at Jun. 30, 2022 | 8,625,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Extinguishment of deferred underwriting commissions on public shares | 11,803,313 | 0 | 11,803,313 | ||
Reclass from additional paid in capital to retained earnings | $ (11,803,313) | 11,803,313 | |||
Remeasurement accretion of Class A common stock to redemption amount | (1,009,411) | (1,009,411) | |||
Net income (loss) | (2,754,924) | (2,754,924) | |||
Balance at the end at Sep. 30, 2022 | $ 863 | $ (5,431,617) | $ (5,430,754) | ||
Balance at the end (in shares) at Sep. 30, 2022 | 8,625,000 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Cash Flows from Operating Activities: | |||
Net income | $ 4,496,859 | $ 2,480,478 | |
Adjustments to reconcile net income to net cash used in operating activities: | |||
Change in fair value of derivative warrant liabilities | $ 2,038,170 | (5,300,330) | (3,930,750) |
Financing costs - derivative warrant liabilities | 449,070 | ||
Income from investments held in Trust Account | (1,558,441) | (2,076,393) | (14,175) |
Gain from settlement of deferred underwriting commissions on public warrants | (271,688) | (271,688) | |
Changes in operating assets and liabilities: | |||
Prepaid expenses | 103,013 | (296,330) | |
Accounts payable | 91,801 | 47,392 | |
Accrued expenses | 2,049,500 | (136,250) | |
Franchise tax payable | (98,031) | 100,362 | |
Income tax payable | 352,045 | ||
Net cash used in operating activities | (653,224) | (1,300,203) | |
Cash Flows from Investing Activities | |||
Cash deposited in Trust Account | (345,000,000) | ||
Interest released from Trust Account | 481,543 | ||
Net cash provided by (used in) investing activities | 481,543 | (345,000,000) | |
Cash Flows from Financing Activities: | |||
Repayment of note payable | (130,000) | ||
Proceeds received from initial public offering, gross | 345,000,000 | ||
Proceeds received from private placement | 8,900,000 | ||
Offering costs paid | (70,000) | (7,143,422) | |
Net cash (used in) provided by financing activities | (70,000) | 346,626,578 | |
Net (decrease) increase in cash | (241,681) | 326,375 | |
Cash - beginning of the period | 252,601 | 16,110 | |
Cash - end of the period | $ 10,920 | 10,920 | 342,485 |
Supplemental disclosure of noncash financing activities: | |||
Remeasurement of Class A common stock subject to possible redemption | $ 1,085,953 | ||
Offering costs included in accrued expenses | 70,000 | ||
Deferred underwriting commissions | $ 12,075,000 |
Description of Organization and
Description of Organization and Business Operations | 9 Months Ended |
Sep. 30, 2022 | |
Description of Organization and Business Operations | |
Description of Organization and Business Operations | Note 1 - Description of Organization and Business Operations DiamondHead Holdings Corp. (the “Company” or “DHHC”) is a blank check company incorporated in Delaware on October 7, 2020. The Company was formed 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 “Business Combination”). The Company is not limited to a particular industry or sector for purposes of consummating a Business Combination. The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. As of September 30, 2022, the Company had not commenced any operations. All activity from the Company’s inception to September 30, 2022 relates to the Company’s formation and the Initial Public Offering (the “Initial Public Offering”) and since the closing of the Initial Public Offering (as described below), the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income on investments held in trust from the proceeds of its Initial Public Offering and Private Placement described below, and from changes in the fair value of its derivative warrant liability. On September 10, 2022, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”) with Hestia Merger Sub, Inc., a South Carolina corporation and wholly-owned subsidiary of DHHC (“Merger Sub”), and Great Southern Homes, Inc., a South Carolina corporation (“GSH”), pursuant to which the Company expects to effect a business combination with GSH through the merger of Merger Sub with and into GSH (the “ Merger Transactions The Company’s sponsor is DHP SPAC-II Sponsor LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for the Company’s Initial Public Offering was declared effective on January 25, 2021. On January 28, 2021, the Company consummated its Initial Public Offering of 34,500,000 units (the “Units” and, with respect to the Class A common stock included in the Units being offered, the “Public Shares”), including 4,500,000 additional Units to cover over-allotments (the “Over-Allotment Units”), at $10.00 per Unit, generating gross proceeds of $345.0 million, and incurring offering costs of approximately $19.6 million, including approximately $12.1 million in deferred underwriting commissions (Note 6). On August 10, 2022, the underwriter from the Initial Public Offering resigned from its role in any Business Combination and waived its entitlement to the deferred underwriting commissions in the amount of $12.1 million. Simultaneously with the closing of the Initial Public Offering, the Company consummated the private placement (“Private Placement”) of 5,933,333 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant to our Sponsor and to certain qualified institutional buyers or institutional accredited investors, including certain funds and accounts managed by subsidiaries of BlackRock, Inc. and Millennium Management LLC (each, an “Anchor Investor”), generating proceeds of $8.9 million (Note 4). Upon the closing of the Initial Public Offering and the Private Placement, $345.0 million ($10.00 per Unit) of the net proceeds of the Initial Public Offering and certain of the proceeds of the Private Placement were placed in a trust account (“Trust Account”), located in the United States and 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 any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of 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 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 a Business Combination with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on interest earned on the Trust Account) at the time of the agreement to enter into a Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding 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 its holders of the outstanding 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 in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). The per-share amount to be distributed to Public Stockholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriter (as discussed in Note 6). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Public Shares subject to redemption have been recorded at redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”). The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Certificate of Incorporation (the “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 transactions is required by law, 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. If the Company seeks stockholder approval in connection with a Business Combination, the Company’s Sponsor, officers and directors agreed to vote their Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. 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 of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the 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 Sponsor agreed (a) to waive its redemption rights with respect to any Founder Shares and Public Shares held by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Certificate of Incorporation that would affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the Public Stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment. The Company will have 24 months from the closing of the Initial Public Offering, or January 28, 2023, to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within 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 The Sponsor agreed to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor or any of its affiliates acquire Public Shares after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriter agreed to waive its right to its deferred underwriting commission (see Note 6) 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 other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00). In order to protect the amounts held in the Trust Account, the Sponsor agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per Public Share or (ii) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets. This liability will not apply with respect to any claims (i) by a third party who executed a waiver of any and all rights to seek access to the trust account or (ii) under our indemnity of the underwriter of this offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. Marcum LLP, the Company’s independent registered public accounting firm, will not execute agreements with the Company waiving claims to the monies held in the Trust Account. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 2 — Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and Article 10 of Regulation S-X. Accordingly, certain disclosures included in the annual consolidated financial statements have been condensed or omitted from these consolidated financial statements as they are not required for interim consolidated 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 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 read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on April 13, 2022, which contains the audited consolidated financial statements and notes thereto. The financial information as of December 31, 2021, is derived from the audited consolidated financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on April 13, 2022. Liquidity and Going Concern As of September 30, 2022, the Company had approximately $11,000 in cash and a working capital deficit of approximately $2.1 million (not taking into account tax obligations of approximately $369,000 that may be paid using investment income earned in Trust Account). The Company’s liquidity needs have been satisfied through a contribution of $25,000 from Sponsor to cover for certain offering costs in exchange for the issuance of the Founder Shares, a loan of up to $300,000 from the Sponsor pursuant to the Promissory Note (see Note 5), and the proceeds from the consummation of the Private Placement not held in the Trust Account. The Promissory Note was repaid on February 1, 2021. 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, provide the Company Working Capital Loans up to $1,500,000 (see Note 5). As of September 30, 2022 and December 31, 2021, there were no amounts outstanding under any Working Capital Loan. In connection with management’s assessment of going concern considerations in accordance with FASB ASC Topic 205-40, “Presentation of Consolidated Financial Statements-Going Concern,” management has determined that the existing liquidity condition, mandatory liquidation and subsequent dissolution raise substantial doubt about its ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate on or after January 28, 2023. Risks and Uncertainties Various social and political circumstances in the United States and around the world (including wars and other forms of conflict, including rising trade tensions between the United States and China, and other uncertainties regarding actual and potential shifts in the United States and foreign, trade, economic and other policies with other countries, terrorist acts, security operations and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health epidemics), may also contribute to increased market volatility and economic uncertainties or deterioration in the United States and worldwide. Specifically, the rising conflict between Russia and Ukraine, and resulting market volatility could adversely affect the Company’s ability to complete a business combination. In response to the conflict between Russia and Ukraine, the United States and other countries have imposed sanctions or other restrictive actions against Russia. Any of the above factors, including sanctions, export controls, tariffs, trade wars and other governmental actions, could have a material adverse effect on the Company’s ability to complete a business combination and the value of the Company’s securities. 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. Management continues to evaluate the impact of these types of risks and has concluded that while it is reasonably possible that these risks and uncertainties 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. 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 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 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 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 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 because of the potential differences in accounting standards used. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. 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 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. 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. As of September 30, 2022 and December 31, 2021, the Company had no cash equivalents held outside the Trust Account. Investments Held in Trust Account The Company’s portfolio of investments is comprised of 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 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 on 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 investments held in Trust Account in the accompanying condensed consolidated statements of operations. The estimated fair values of investments held in the Trust Account are determined using quoted market prices. 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 and investments held in the Trust Account. As of September 30, 2022 and December 31, 2021, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities which qualify as financial instruments under the FASB ASC Topic 820, “Fair Value Measurement,” equal or approximate the carrying amounts represented in the condensed consolidated balance sheets. 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. ● Level 1, defined as observable inputs such as quoted prices 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, 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. Derivative Warrant Liabilities The Company does not use derivative instruments to hedge its exposures to cash flow, market or foreign currency risks. Management evaluates all of the Company’s financial instruments, including issued warrants to purchase its Class A common stock, 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 until they are exercised. Their re-measurement to fair value is recognized in the Company’s condensed consolidated statements of operations. The fair value of the Public Warrants issued in connection with the Initial Public Offering were initially measured at fair value using a Monte Carlo simulation model, and the Private Placement Warrants have been measured at fair value using a modified Black-Scholes model. As of September 30, 2022 and December 31, 2021, the value of the Public Warrants is measured based on the listed market price of such warrants since being separately listed and traded. The determination of the fair value of the warrant liabilities may be subject to change as more current information becomes available and accordingly the actual results could differ significantly. 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. 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 are 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 warrant liabilities are expensed as incurred, presented as non-operating expenses in the condensed consolidated statements of operations. Offering costs associated with the Class A common stock were charged against the carrying value of the Class A common stock 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 a liability instrument 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) are classified as temporary equity. At all other times, Class A 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 the occurrence of uncertain future events. Accordingly, as of September 30, 2022 and December 31, 2021, 34,500,000 shares of Class A common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders’ equity (deficit) section of the Company’s condensed consolidated balance sheets. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of the Class A common stock subject to possible redemption to equal the redemption value at the end of each reporting period. This method would view the end of the reporting period as if it were also the redemption date for the security. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount, which resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit. Subsequently, the Company recognizes changes in redemption value in the accompanying unaudited condensed consolidated statements of changes in stockholders’ deficit. Income Taxes The Company follows the asset and liability method of accounting for income taxes under FASB ASC Topic 740, “Income Taxes” (“ASC 740”). Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the consolidated financial statements 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. ASC 740 prescribes a recognition threshold and a measurement attribute for the consolidated 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 September 30, 2022 and December 31, 2021. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. 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. Our effective tax rate was (16.7)% and 9.2% for the three and nine months ended September 30, 2022, respectively, and 0.00% for the three and nine months ended September 30, 2021. The effective tax rate differs from the statutory tax rate of 21% for the three and nine months ended September 30, 2022 due to the reversal of the valuation allowance on the deferred tax assets, the non-taxable nature of the gain from settlement of deferred underwriter commissions and of the change in fair value of derivative warrant liabilities and the non-deductibility of general and administrative expenses, which are considered start-up costs for tax purposes. The effective tax rate differs from the statutory tax rate of 21% for the three and nine months ended September 30, 2021 due to a full valuation allowance on the deferred tax assets. While ASC 740 identifies usage of an effective annual tax rate for purposes of an interim provision, it allows for estimating individual elements in the current period if they are significant, unusual or infrequent. The Company is computing its taxable income (loss) and associated income tax provision based on actual results through September 30, 2022. 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 B common stock. Income and losses are shared pro rata between the two classes of shares. Net (loss) income per common stock is calculated by dividing the net loss) (income by the weighted average shares of common stock outstanding for the respective period. The calculation of diluted net loss) income per common stock does not consider the effect of the warrants issued in connection with the Initial Public Offering and the Private Placement to purchase an aggregate of 14,558,333 shares of common stock in the calculation of diluted income per share, because their exercise is contingent upon future events. Accretion associated with the redeemable Class A common stock is excluded from earnings per share as the redemption value approximates fair value. The following table reflects presents 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 For the Three Months Ended September 30, 2022 September 30, 2021 Class A Class B Class A Class B Basic and diluted net (loss) income per common stock: Numerator: Allocation of net (loss) income - Basic and diluted $ (2,203,939) $ (550,985) $ 5,219,653 $ 1,304,913 Denominator: Basic and diluted weighted average common stock outstanding 34,500,000 8,625,000 34,500,000 8,625,000 Basic and diluted net (loss) income per common stock $ (0.06) $ (0.06) $ 0.15 $ 0.15 For the Nine Months Ended For the Nine Months Ended September 30, 2022 September 30, 2021 Class A Class B Class A Class B Basic and diluted net income per common stock: Numerator: Allocation of net income - Basic and diluted $ 3,597,487 $ 899,372 $ 1,947,214 $ 533,264 Denominator: Basic weighted average common stock outstanding 34,500,000 8,625,000 31,087,912 8,513,736 Diluted weighted average common stock outstanding 34,500,000 8,625,000 31,087,912 8,625,000 Basic and diluted net income per common stock $ 0.10 $ 0.10 $ 0.06 $ 0.06 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 condensed consolidated financial statements. |
Initial Public Offering
Initial Public Offering | 9 Months Ended |
Sep. 30, 2022 | |
Initial Public Offering. | |
Initial Public Offering | Note 3 — On January 28, 2021, the Company consummated its Initial Public Offering of 34,500,000 Units, including 4,500,000 Over-Allotment Units, at $10.00 per Unit, generating gross proceeds of $345.0 million, and incurring offering costs of approximately $19.6 million, of which approximately $12.1 million was included in deferred underwriting commissions. On August 10, 2022, the underwriter from the Initial Public Offering resigned from its role in any Business Combination and waived its entitlement to the deferred underwriting commissions in the amount of $12.1 million. Each Unit consists of one share of Class A common stock and one |
Private Placement
Private Placement | 9 Months Ended |
Sep. 30, 2022 | |
Private Placement. | |
Private Placement | Note 4 — Simultaneously with the closing of the Initial Public Offering, the Company consummated the Private Placement of 5,933,333 Private Placement Warrants at a price of $1.50 per Private Placement Warrant to the Sponsor and the Anchor Investors, generating proceeds of $8.9 million. Each Private Placement Warrant will be exercisable to purchase one share of Class A common stock at a price of $11.50 per share. A portion of the proceeds from the Private Placement Warrants 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 proceeds of the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Private Placement Warrants will expire worthless. There will be no redemption rights or liquidating distributions from the Trust Account with respect to the Placement Warrants. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions | |
Related Party Transactions | Note 5 — Founder Shares On October 21, 2020, the Sponsor paid $25,000 on behalf of the Company to cover certain offering costs in exchange for issuance of 8,625,000 shares of the Company’s Class B common stock (the “Founder Shares”). Additionally, upon consummation of the Business Combination, the Sponsor has agreed to transfer an aggregate of 1,250,625 Founder Shares to the Anchor Investors for the same price originally paid for such shares. The Founder Shares will automatically convert into Class A common stock upon consummation of a Business Combination on a one-for-one basis, subject to certain adjustments, as described in Note 8. The Founder Shares included an aggregate of up 1,125,000 shares subject to forfeiture to the extent that the underwriter’s option to purchase additional units was not exercised in full, so that the Sponsor would own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Initial Public Offering. On January 28, 2021, the underwriter fully exercised the over-allotment option; thus, these 1,125,000 Founder Shares were no longer subject to forfeiture. The Sponsor and the Anchor Investors agreed, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination or (B) subsequent to a Business Combination, (x) 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 period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Promissory Note — Related Party On October 21, 2020, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering (the “Promissory Note”). The Promissory Note was non-interest bearing and due upon the completion of the Initial Public Offering. On February 1, 2021, the Company repaid the Promissory Note in full. Subsequent to repayment, the facility is no longer available to the Company. Related Party Loans 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 Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would 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 Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.50 per warrant. The warrants would be identical to the Private Placement Warrants. As of September 30, 2022 and December 31, 2021, the Company had no borrowings under the Working Capital Loans. Administrative Support Agreement The Company agreed, commencing on the effective date of the Initial Public Offering through the earlier of the Company’s consummation of a Business Combination and its liquidation, to pay the Sponsor a total of $10,000 per month for office space, utilities, secretarial and administrative support. The Sponsor has not received any reimbursement of these fees through September 30, 2022. Sponsor Support Agreement In connection with the execution of the Business Combination Agreement, the Sponsor entered into a sponsor support agreement (the “ Sponsor Support Agreement Sponsor Shares The Sponsor has also agreed, subject to certain exceptions, not to transfer approximately 2.1 million Sponsor Earnout Shares (as defined in the Sponsor Support Agreement) until such shares are released under the Sponsor Support Agreement. Pursuant to the Sponsor Support Agreement, Sponsor Earnout Shares will be released in three tranches upon the occurrence of the following milestones during the period commencing on the 90th day following the date (the “ Closing Date Closing VWAP Price Triggering Event I Triggering Event II Triggering Event III Earn-Out Milestones The Sponsor has also agreed that in the event that Closing DHHC Cash (as defined in the Business Combination Agreement) is less than $100,000,000, up to 1.0 million Sponsor Shares will be Sponsor Earnout Shares, subject to the same release conditions set forth in the preceding paragraph. In addition, members of the Sponsor have made a commitment to purchase and not redeem an aggregate of 2.5 million Public Shares. The Sponsor has also agreed, pursuant to the terms of the Sponsor Support Agreement, to forfeit approximately 1.8 million Sponsor Shares and approximately 50% of its Private Placement Warrants. Financing Commitment Letter In connection with the execution of the Business Combination Agreement, we entered into a financing commitment letter (the “ Financing Commitment Letter Investors In the event an Investor fails to make the committed purchase, the defaulting investor will automatically forfeit 1,250,000 DHHC Class B Common Shares it is entitled to receive in connection with the Closing for the benefit of the non-defaulting Investor or its designated controlled affiliates. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 6 - Commitments and Contingencies Registration Rights The holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) were entitled to registration rights pursuant to a registration rights agreement signed upon the effective date of Initial Public Offering, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to Class A common stock). The holders of the majority 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 have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Amended and Restated Registration Rights Agreement The Business Combination Agreement contemplates that, upon completion of the Merger, the Company (which expects to be named United Homes Group, Inc. at that time), the Sponsor, certain securityholders of the Company and certain former stockholders of GSH will enter into an Amended and Restated Registration Rights Agreement (the “ A&R Registration Rights Agreement Further, each securityholder party to the A&R Registration Rights Agreements agrees not to transfer any of their registerable securities subject to lock-up transfer restrictions (as described in the A&R Registration Rights Agreement) until the end of the applicable Lock-Up Period (as defined in the A&R Registration Rights Agreement) subject to certain customary exceptions described therein. Underwriting Agreement The Company granted the underwriter a 45-day option from the date of Initial Public Offering to purchase up to 4,500,000 additional Units at the Initial Public Offering price less the underwriting discounts and commissions. On January 28, 2021, the underwriter fully exercised the over-allotment option. The underwriter was entitled to a cash underwriting discount of $0.20 per Unit, or $6.9 million in the aggregate, paid upon the closing of the Initial Public Offering. In addition, the underwriter was entitled to a deferred fee of $0.35 per Unit, or approximately $12.1 million in the aggregate. Effective as of August 10, 2022, the underwriter from the Initial Public Offering resigned and withdrew from its role in any Business Combination and waived its entitlement to the deferred underwriting commissions in the amount of approximately $12.1 million. The Company recognized approximately $11.8 million of the commissions waiver as a reduction to additional paid-in capital in the condensed consolidated statements of changes in stockholders’ deficit for the three and nine months ended September 30, 2022, as this portion represents an extinguishment of deferred underwriting commissions on public shares which was originally recognized in accumulated deficit. The remaining balance of approximately $272,000 is recognized as a gain from settlement of deferred underwriting commissions on public warrants in the condensed consolidated statements of operations, which represents the original amount expensed in the Company’s initial public offering. |
Derivative Warrant Liabilities
Derivative Warrant Liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Warrant Liabilities | |
Derivative Warrant Liabilities | Note 7 — As of September 30, 2022 and December 31, 2021, the Company had an aggregate of 14,558,333 warrants outstanding, comprised of 8,625,000 Public Warrants and 5,933,333 Private Placement Warrants. Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole 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. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation. The Company will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the shares of Class A common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue any shares of Class A common stock upon exercise of a warrant unless Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. The Company agreed that as soon as practicable, but in no event later than 15 business days, after the closing of a Business Combination, the Company will use its best efforts to file, and within 60 business days following a Business Combination to have declared effective, a registration statement for the registration, under the Securities Act, of the shares of Class A common stock issuable upon exercise of the warrants. The Company will use its reasonable best efforts to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if the Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but will be required to use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. Redemptions of Warrants When the Price Per Share of Class A Common Stock Equals or Exceeds $18.00 — ● in whole and not in part; ● at a price of $0.01 per warrant; ● upon not less than 30 days ’ prior written notice of redemption to each warrant holder; and ● if, and only if, closing price of the Company’s Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30- trading day period ending three business days before the Company sends the notice of redemption to each warrant holder. If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of Warrants When the Price per Share of Class A Common Stock Equals or Exceeds $10.00 — ● 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, but only on a cashless basis, prior to redemption and receive that number of shares to be determined by reference to the table below, based on the redemption date and the “fair market value” of our Class A common stock except as otherwise described below; ● if, and only if, the closing price of our Class A common stock equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, reclassifications, recapitalizations and the like) for any 20 trading days within the 30 -trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders; and ● if the closing price of the Class A common stock for any 20 trading days within a 30 -trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, reclassifications, recapitalizations and the like), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above. If the Company calls the Public Warrants for redemption for cash, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis”, as described in the warrant agreement. The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the 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. In addition, if the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at a Newly Issued 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 Company’s board of directors, and in the case of any such issuance to our initial stockholders or their respective affiliates, without taking into account any Founder Shares held by them, as applicable, prior to such issuance), 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 will be identical to the Public Warrants underlying the Units being sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A common stock issuable upon the 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 exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees (except as set forth under “Redemption of Warrants when the Price per Share of Class A Common Stock Equals or Exceeds $10.00”). If the Private Placement Warrants are held by someone other than the initial purchasers 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. |
Class A Common Stock Subject to
Class A Common Stock Subject to Possible Redemption | 9 Months Ended |
Sep. 30, 2022 | |
Class A Common Stock Subject to Possible Redemption | |
Class A Common Stock Subject to Possible Redemption | Note 8—Class A Common Stock Subject to Possible Redemption 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 the occurrence of future events. The Company is authorized to issue 300,000,000 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 September 30, 2022 and December 31, 2021, there were 34,500,000 shares of Class A common stock outstanding, which were all subject to possible redemption and are classified as temporary equity and presented outside of permanent equity in the condensed consolidated balance sheets. The Class A common stock subject to possible redemption reflected on the condensed consolidated balance sheets is reconciled on the following table as of September 30, 2022 and December 31, 2021: Gross Proceeds $ 345,000,000 Less: Proceeds allocated to Public Warrants (7,762,500) Class A common stock issuance costs (19,114,492) Plus: Accretion of carrying value to redemption value 26,876,992 Class A common stock subject to possible redemption at December 31, 2021 345,000,000 Increase in redemption value of Class A common stock subject to redemption 1,085,953 Class A common stock subject to possible redemption at September 30, 2022 $ 346,085,953 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity (Deficit) | |
Stockholders' Equity (Deficit) | Note 9— Stockholders’ Equity (Deficit) Preferred Stock — Class A Common Stock — 2021, there were 34,500,000 shares of Class A common stock issued and outstanding, all subject to possible redemption and classified as temporary equity. Class B Common Stock — Holders of Class A common stock and Class B common stock will vote together as a single class on all matters submitted to a vote of stockholders, except as required by law. The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of a Business Combination on a one-for-one basis, subject to adjustment. 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 offered in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which shares of Class B 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 B common stock agree to waive such 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 B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all 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 a Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in a Business Combination). Holders of Founder Shares may also elect to convert their shares of Class B common stock into an equal number of shares of Class A common stock, subject to adjustment as provided above, at any time. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Measurements | |
Fair Value Measurements | Note 10—Fair Value Measurements The following tables presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy: Fair Value Measured as of September 30, 2022 Level 1 Level 2 Level 3 Total Assets: Investments held in Trust Account - Money Market Funds $ 346,615,567 $ — $ — $ 346,615,567 Liabilities: Derivative public warrant liabilities $ 2,070,000 $ — $ — $ 2,070,000 Derivative private warrant liabilities $ — $ — $ 1,424,000 $ 1,424,000 Fair Value Measured as of December 31, 2021 Level 1 Level 2 Level 3 Total Assets: Investments held in Trust Account - Money Market Funds $ 345,020,717 $ — $ — $ 345,020,717 Liabilities: Derivative public warrant liabilities $ 5,175,000 $ — $ — $ 5,175,000 Derivative private warrant liabilities $ — $ — $ 3,619,330 $ 3,619,330 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 measurement in March 2021, when the Public Warrants were separately listed and traded in an active market. Level 1 assets include investments in mutual funds invested in government securities. The Company uses inputs such as actual trade data, benchmark yields, quoted market prices from dealers or brokers, and other similar sources to determine the fair value of its investments. Prior to being publicly traded, the fair value of the Public Warrants issued in connection with the Initial Public Offering were measured at fair value using a Monte Carlo simulation model, and the Private Placement Warrants have been measured at fair value using a modified Black-Scholes model. As of September 30, 2022 and December 31, 2021, the value of the Public Warrants was measured based on the trading price since being separately listed and traded. For the three months ended September 30, 2022 and 2021, the Company recognized a gain/(loss) of approximately ($2.0 million) and $6.7 million, respectively, resulting from a decrease/(increase) in the fair value of derivative liabilities and is presented as change in fair value of derivative warrant liabilities on the accompanying condensed consolidated statements of operations. For the nine months ended September 30, 2022 and 2021, the Company recognized a gain/(loss) of approximately $5.3 million and $3.9 million, respectively, resulting from a decrease/(increase) in the fair value of derivative liabilities and is presented as change in fair value of derivative warrant liabilities on the accompanying condensed consolidated statements of operations. The estimated fair value of the Private Placement Warrants, and the Public Warrants prior to being separately listed and traded, is determined using Level 3 inputs. Inherent in a Monte Carlo simulation and a Black-Scholes model 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 stock based on the historical volatility of an index of companies that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield 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 following table provides quantitative information regarding Level 3 fair value measurements inputs as of September 30, 2022 and December 31, 2021: As of September 30, 2022 As of December 31, 2021 Exercise price $ 11.50 $ 11.50 Stock Price $ 9.85 $ 9.74 Option term (in years) 5.09 4.82 Volatility 40 % 12 % Risk-free interest rate 4.1 % 1.3 % The change in the fair value of the derivative warrant liabilities measured utilizing Level 3 inputs is summarized as follows: Derivative warrant liabilities at December 31, 2020 - Level 3 $ — Issuance of Derivative Warrants - Level 3 13,161,830 Transfer of Public Warrants to Level 1 (7,762,500) Change in fair value of derivative warrant liabilities - Level 3 (1,661,330) Derivative warrant liabilities at March 31, 2021 - Level 3 $ 3,738,000 Change in fair value of derivative warrant liabilities - Level 3 2,848,000 Derivative warrant liabilities at June 30, 2021 - Level 3 $ 6,586,000 Change in fair value of derivative warrant liabilities - Level 3 (2,788,670) Derivative warrant liabilities at September 30, 2021 - Level 3 $ 3,797,330 Derivative warrant liabilities at December 31, 2021 - Level 3 $ 3,619,330 Change in fair value of derivative warrant liabilities - Level 3 (1,542,660) Derivative warrant liabilities at March 31, 2022 - Level 3 2,076,670 Change in fair value of derivative warrant liabilities - Level 3 (1,483,340) Derivative warrant liabilities at June 30, 2022 - Level 3 593,330 Change in fair value of derivative warrant liabilities - Level 3 830,670 Derivative warrant liabilities at September 30, 2022 - Level 3 $ 1,424,000 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events | |
Subsequent Events | Note 11 - Subsequent Events The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed consolidated financial statements were issued. Based upon this review, the Company did not identify any subsequent events, other than described below, that would have required adjustment or disclosure in the condensed consolidated financial statements. On October 18, 2022, as approved by the unanimous consent of the Board, the Company executed, for general corporate purposes, (i) a promissory note in the principal amount of up to $200,000, bearing an interest of 10%, payable to David T. Hamamoto, in his personal capacity, or his registered assigns or successors in interest and (ii) a promissory note in the principal amount of up to $200,000, bearing an interest of 10%, payable to Antara Capital Total Return SPAC Master Fund LP, a Cayman Islands exempted limited partnership, or its registered assigns or successors in interest. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and Article 10 of Regulation S-X. Accordingly, certain disclosures included in the annual consolidated financial statements have been condensed or omitted from these consolidated financial statements as they are not required for interim consolidated 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 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 read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on April 13, 2022, which contains the audited consolidated financial statements and notes thereto. The financial information as of December 31, 2021, is derived from the audited consolidated financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on April 13, 2022. |
Liquidity and Going Concern | Liquidity and Going Concern As of September 30, 2022, the Company had approximately $11,000 in cash and a working capital deficit of approximately $2.1 million (not taking into account tax obligations of approximately $369,000 that may be paid using investment income earned in Trust Account). The Company’s liquidity needs have been satisfied through a contribution of $25,000 from Sponsor to cover for certain offering costs in exchange for the issuance of the Founder Shares, a loan of up to $300,000 from the Sponsor pursuant to the Promissory Note (see Note 5), and the proceeds from the consummation of the Private Placement not held in the Trust Account. The Promissory Note was repaid on February 1, 2021. 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, provide the Company Working Capital Loans up to $1,500,000 (see Note 5). As of September 30, 2022 and December 31, 2021, there were no amounts outstanding under any Working Capital Loan. In connection with management’s assessment of going concern considerations in accordance with FASB ASC Topic 205-40, “Presentation of Consolidated Financial Statements-Going Concern,” management has determined that the existing liquidity condition, mandatory liquidation and subsequent dissolution raise substantial doubt about its ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate on or after January 28, 2023. |
Risks and Uncertainties | Risks and Uncertainties Various social and political circumstances in the United States and around the world (including wars and other forms of conflict, including rising trade tensions between the United States and China, and other uncertainties regarding actual and potential shifts in the United States and foreign, trade, economic and other policies with other countries, terrorist acts, security operations and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health epidemics), may also contribute to increased market volatility and economic uncertainties or deterioration in the United States and worldwide. Specifically, the rising conflict between Russia and Ukraine, and resulting market volatility could adversely affect the Company’s ability to complete a business combination. In response to the conflict between Russia and Ukraine, the United States and other countries have imposed sanctions or other restrictive actions against Russia. Any of the above factors, including sanctions, export controls, tariffs, trade wars and other governmental actions, could have a material adverse effect on the Company’s ability to complete a business combination and the value of the Company’s securities. 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. Management continues to evaluate the impact of these types of risks and has concluded that while it is reasonably possible that these risks and uncertainties 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. |
Emerging Growth Company | 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 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 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 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 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 because of the potential differences in accounting standards used. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. 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 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. |
Cash and Cash Equivalents | 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. As of September 30, 2022 and December 31, 2021, the Company had no cash equivalents held outside the Trust Account. |
Investments Held in Trust Account | Investments Held in Trust Account The Company’s portfolio of investments is comprised of 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 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 on 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 investments held in Trust Account in the accompanying condensed consolidated statements of operations. The estimated fair values of investments held in the Trust Account are determined using quoted market prices. |
Concentration of Credit Risk | 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 and investments held in the Trust Account. As of September 30, 2022 and December 31, 2021, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities which qualify as financial instruments under the FASB ASC Topic 820, “Fair Value Measurement,” equal or approximate the carrying amounts represented in the condensed consolidated balance sheets. |
Fair Value Measurements | 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. ● Level 1, defined as observable inputs such as quoted prices 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, 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. |
Derivative Warrant Liabilities | Derivative Warrant Liabilities The Company does not use derivative instruments to hedge its exposures to cash flow, market or foreign currency risks. Management evaluates all of the Company’s financial instruments, including issued warrants to purchase its Class A common stock, 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 until they are exercised. Their re-measurement to fair value is recognized in the Company’s condensed consolidated statements of operations. The fair value of the Public Warrants issued in connection with the Initial Public Offering were initially measured at fair value using a Monte Carlo simulation model, and the Private Placement Warrants have been measured at fair value using a modified Black-Scholes model. As of September 30, 2022 and December 31, 2021, the value of the Public Warrants is measured based on the listed market price of such warrants since being separately listed and traded. The determination of the fair value of the warrant liabilities may be subject to change as more current information becomes available and accordingly the actual results could differ significantly. 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. |
Offering Costs Associated with the Initial Public Offering | 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 are 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 warrant liabilities are expensed as incurred, presented as non-operating expenses in the condensed consolidated statements of operations. Offering costs associated with the Class A common stock were charged against the carrying value of the Class A common stock 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 | 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 a liability instrument 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) are classified as temporary equity. At all other times, Class A 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 the occurrence of uncertain future events. Accordingly, as of September 30, 2022 and December 31, 2021, 34,500,000 shares of Class A common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders’ equity (deficit) section of the Company’s condensed consolidated balance sheets. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of the Class A common stock subject to possible redemption to equal the redemption value at the end of each reporting period. This method would view the end of the reporting period as if it were also the redemption date for the security. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount, which resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit. Subsequently, the Company recognizes changes in redemption value in the accompanying unaudited condensed consolidated statements of changes in stockholders’ deficit. |
Income Taxes | Income Taxes The Company follows the asset and liability method of accounting for income taxes under FASB ASC Topic 740, “Income Taxes” (“ASC 740”). Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the consolidated financial statements 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. ASC 740 prescribes a recognition threshold and a measurement attribute for the consolidated 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 September 30, 2022 and December 31, 2021. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. 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. Our effective tax rate was (16.7)% and 9.2% for the three and nine months ended September 30, 2022, respectively, and 0.00% for the three and nine months ended September 30, 2021. The effective tax rate differs from the statutory tax rate of 21% for the three and nine months ended September 30, 2022 due to the reversal of the valuation allowance on the deferred tax assets, the non-taxable nature of the gain from settlement of deferred underwriter commissions and of the change in fair value of derivative warrant liabilities and the non-deductibility of general and administrative expenses, which are considered start-up costs for tax purposes. The effective tax rate differs from the statutory tax rate of 21% for the three and nine months ended September 30, 2021 due to a full valuation allowance on the deferred tax assets. While ASC 740 identifies usage of an effective annual tax rate for purposes of an interim provision, it allows for estimating individual elements in the current period if they are significant, unusual or infrequent. The Company is computing its taxable income (loss) and associated income tax provision based on actual results through September 30, 2022. |
Net (Loss) Income Per Share of Common Stock | 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 B common stock. Income and losses are shared pro rata between the two classes of shares. Net (loss) income per common stock is calculated by dividing the net loss) (income by the weighted average shares of common stock outstanding for the respective period. The calculation of diluted net loss) income per common stock does not consider the effect of the warrants issued in connection with the Initial Public Offering and the Private Placement to purchase an aggregate of 14,558,333 shares of common stock in the calculation of diluted income per share, because their exercise is contingent upon future events. Accretion associated with the redeemable Class A common stock is excluded from earnings per share as the redemption value approximates fair value. The following table reflects presents 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 For the Three Months Ended September 30, 2022 September 30, 2021 Class A Class B Class A Class B Basic and diluted net (loss) income per common stock: Numerator: Allocation of net (loss) income - Basic and diluted $ (2,203,939) $ (550,985) $ 5,219,653 $ 1,304,913 Denominator: Basic and diluted weighted average common stock outstanding 34,500,000 8,625,000 34,500,000 8,625,000 Basic and diluted net (loss) income per common stock $ (0.06) $ (0.06) $ 0.15 $ 0.15 For the Nine Months Ended For the Nine Months Ended September 30, 2022 September 30, 2021 Class A Class B Class A Class B Basic and diluted net income per common stock: Numerator: Allocation of net income - Basic and diluted $ 3,597,487 $ 899,372 $ 1,947,214 $ 533,264 Denominator: Basic weighted average common stock outstanding 34,500,000 8,625,000 31,087,912 8,513,736 Diluted weighted average common stock outstanding 34,500,000 8,625,000 31,087,912 8,625,000 Basic and diluted net income per common stock $ 0.10 $ 0.10 $ 0.06 $ 0.06 |
Recent Accounting Pronouncements | 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 condensed consolidated financial statements. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Schedule of reconciliation of net income per share of common stock | For the Three Months Ended For the Three Months Ended September 30, 2022 September 30, 2021 Class A Class B Class A Class B Basic and diluted net (loss) income per common stock: Numerator: Allocation of net (loss) income - Basic and diluted $ (2,203,939) $ (550,985) $ 5,219,653 $ 1,304,913 Denominator: Basic and diluted weighted average common stock outstanding 34,500,000 8,625,000 34,500,000 8,625,000 Basic and diluted net (loss) income per common stock $ (0.06) $ (0.06) $ 0.15 $ 0.15 For the Nine Months Ended For the Nine Months Ended September 30, 2022 September 30, 2021 Class A Class B Class A Class B Basic and diluted net income per common stock: Numerator: Allocation of net income - Basic and diluted $ 3,597,487 $ 899,372 $ 1,947,214 $ 533,264 Denominator: Basic weighted average common stock outstanding 34,500,000 8,625,000 31,087,912 8,513,736 Diluted weighted average common stock outstanding 34,500,000 8,625,000 31,087,912 8,625,000 Basic and diluted net income per common stock $ 0.10 $ 0.10 $ 0.06 $ 0.06 |
Class A Common Stock Subject _2
Class A Common Stock Subject to Possible Redemption (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Class A Common Stock Subject to Possible Redemption | |
Schedule of Class A ordinary shares subject to possible redemption reflected on the condensed balance sheet | Gross Proceeds $ 345,000,000 Less: Proceeds allocated to Public Warrants (7,762,500) Class A common stock issuance costs (19,114,492) Plus: Accretion of carrying value to redemption value 26,876,992 Class A common stock subject to possible redemption at December 31, 2021 345,000,000 Increase in redemption value of Class A common stock subject to redemption 1,085,953 Class A common stock subject to possible redemption at September 30, 2022 $ 346,085,953 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Measurements | |
Schedule of company's assets that are measured at fair value on a recurring basis | Fair Value Measured as of September 30, 2022 Level 1 Level 2 Level 3 Total Assets: Investments held in Trust Account - Money Market Funds $ 346,615,567 $ — $ — $ 346,615,567 Liabilities: Derivative public warrant liabilities $ 2,070,000 $ — $ — $ 2,070,000 Derivative private warrant liabilities $ — $ — $ 1,424,000 $ 1,424,000 Fair Value Measured as of December 31, 2021 Level 1 Level 2 Level 3 Total Assets: Investments held in Trust Account - Money Market Funds $ 345,020,717 $ — $ — $ 345,020,717 Liabilities: Derivative public warrant liabilities $ 5,175,000 $ — $ — $ 5,175,000 Derivative private warrant liabilities $ — $ — $ 3,619,330 $ 3,619,330 |
Schedule of quantitative information regarding Level 3 fair value measurements inputs | As of September 30, 2022 As of December 31, 2021 Exercise price $ 11.50 $ 11.50 Stock Price $ 9.85 $ 9.74 Option term (in years) 5.09 4.82 Volatility 40 % 12 % Risk-free interest rate 4.1 % 1.3 % |
Schedule of change in the fair value of the warrant liabilities | Derivative warrant liabilities at December 31, 2020 - Level 3 $ — Issuance of Derivative Warrants - Level 3 13,161,830 Transfer of Public Warrants to Level 1 (7,762,500) Change in fair value of derivative warrant liabilities - Level 3 (1,661,330) Derivative warrant liabilities at March 31, 2021 - Level 3 $ 3,738,000 Change in fair value of derivative warrant liabilities - Level 3 2,848,000 Derivative warrant liabilities at June 30, 2021 - Level 3 $ 6,586,000 Change in fair value of derivative warrant liabilities - Level 3 (2,788,670) Derivative warrant liabilities at September 30, 2021 - Level 3 $ 3,797,330 Derivative warrant liabilities at December 31, 2021 - Level 3 $ 3,619,330 Change in fair value of derivative warrant liabilities - Level 3 (1,542,660) Derivative warrant liabilities at March 31, 2022 - Level 3 2,076,670 Change in fair value of derivative warrant liabilities - Level 3 (1,483,340) Derivative warrant liabilities at June 30, 2022 - Level 3 593,330 Change in fair value of derivative warrant liabilities - Level 3 830,670 Derivative warrant liabilities at September 30, 2022 - Level 3 $ 1,424,000 |
Description of Organization a_2
Description of Organization and Business Operations (Details) | 9 Months Ended | |||||
Aug. 10, 2022 USD ($) | Jan. 28, 2021 USD ($) $ / shares shares | Oct. 07, 2020 item | Sep. 30, 2022 USD ($) M $ / shares shares | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Description of Organization and Business Operations | ||||||
Condition for future business combination number of businesses minimum | item | 1 | |||||
Sale of Units, net of underwriting discounts (in shares) | shares | 4,500,000 | |||||
Proceeds received from initial public offering, gross | $ 345,000,000 | |||||
Deferred underwriting commissions | $ 12,100,000 | $ 12,075,000 | ||||
Deferred underwriting commissions waived | $ 12,100,000 | |||||
Sale of Private Placement Warrants (in shares) | shares | 14,558,333 | |||||
Investment of cash into Trust Account | $ 345,000,000 | |||||
Maturity term of U.S. government securities | 185 days | |||||
Condition for future business combination use of proceeds percentage | 80 | |||||
Condition for future business combination threshold Percentage Ownership | 50 | |||||
Redemption price per unit | $ / shares | $ 10 | |||||
Condition for future business combination threshold Net Tangible Assets | $ 5,000,001 | |||||
Threshold percentage of public shares subject to redemption without company's prior written consent | 15% | |||||
Obligation to redeem Public Shares if entity does not complete a Business Combination (as a percent) | 100% | |||||
Months to complete acquisition | M | 24 | |||||
Redemption period upon closure | 10 days | |||||
Maximum allowed dissolution expenses | $ 100,000 | |||||
Private Placement Warrants | ||||||
Description of Organization and Business Operations | ||||||
Sale of Private Placement Warrants (in shares) | shares | 5,933,333 | |||||
Initial Public Offering | ||||||
Description of Organization and Business Operations | ||||||
Sale of Units, net of underwriting discounts (in shares) | shares | 34,500,000 | |||||
Purchase price, per unit | $ / shares | $ 10 | |||||
Proceeds received from initial public offering, gross | $ 345,000,000 | |||||
Offering costs incurred | 19,600,000 | |||||
Deferred underwriting commissions | 12,100,000 | |||||
Deferred underwriting commissions waived | $ 12,100,000 | |||||
Investment of cash into Trust Account | $ 345,000,000 | |||||
Private Placement | Private Placement Warrants | ||||||
Description of Organization and Business Operations | ||||||
Sale of Private Placement Warrants (in shares) | shares | 5,933,333 | |||||
Price of warrant | $ / shares | $ 1.50 | |||||
Proceeds from sale of Private Placement Warrants | $ 8,900,000 | |||||
Over-allotment option | ||||||
Description of Organization and Business Operations | ||||||
Sale of Units, net of underwriting discounts (in shares) | shares | 4,500,000 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Basis of Presentation and Summary of Significant Accounting Policies | |||||
Cash | $ 11,000 | $ 11,000 | |||
Working capital | 2,100,000 | 2,100,000 | |||
Tax obligations that may be paid using investment income earned in Trust Account | 369,000 | 369,000 | |||
Working capital loans outstanding | 0 | 0 | $ 0 | ||
Cash equivalents | 0 | $ 0 | 0 | ||
Maturity term of U.S. government securities | 185 days | ||||
Federal Depository Insurance Coverage | 250,000 | $ 250,000 | |||
Unrecognized tax benefits | $ 0 | $ 0 | $ 0 | ||
Effective tax rate | 16.70% | 0% | 9.20% | 0% | |
Statutory Federal income tax rate | 21% | 21% | 21% | 21% | |
Sponsor | |||||
Basis of Presentation and Summary of Significant Accounting Policies | |||||
Consideration received | $ 25,000 | ||||
Maximum borrowing capacity of related party promissory note | $ 300,000 | 300,000 | |||
Working capital loan | $ 1,500,000 | $ 1,500,000 | |||
Class A Common Stock Subject to Redemption | |||||
Basis of Presentation and Summary of Significant Accounting Policies | |||||
Class A ordinary shares, temporary equity | 34,500,000 | 34,500,000 | 34,500,000 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Net Income Per Share of Common Stock (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Basis of Presentation and Summary of Significant Accounting Policies | ||||
Number of shares excluded calculation of diluted net income (loss) because their inclusion would be anti-dilutive | 14,558,333 | |||
Class A common stock | ||||
Numerator: | ||||
Allocation of net income - basic | $ (2,203,939) | $ 5,219,653 | $ 3,597,487 | $ 1,947,214 |
Allocation of net income - diluted | $ (2,203,939) | $ 5,219,653 | $ 3,597,487 | $ 1,947,214 |
Denominator: | ||||
Basic weighted average common stock outstanding | 34,500,000 | 34,500,000 | 34,500,000 | 31,087,912 |
Diluted weighted average common stock outstanding | 34,500,000 | 34,500,000 | 34,500,000 | 31,087,912 |
Basic and diluted net income (loss) | $ (0.06) | $ 0.15 | $ 0.10 | $ 0.06 |
Basic and diluted net income (loss) | $ (0.06) | $ 0.15 | $ 0.10 | $ 0.06 |
Class B common stock | ||||
Numerator: | ||||
Allocation of net income - basic | $ (550,985) | $ 1,304,913 | $ 899,372 | $ 533,264 |
Allocation of net income - diluted | $ (550,985) | $ 1,304,913 | $ 899,372 | $ 533,264 |
Denominator: | ||||
Basic weighted average common stock outstanding | 8,625,000 | 8,625,000 | 8,625,000 | 8,513,736 |
Diluted weighted average common stock outstanding | 8,625,000 | 8,625,000 | 8,625,000 | 8,625,000 |
Basic and diluted net income (loss) | $ (0.06) | $ 0.15 | $ 0.10 | $ 0.06 |
Basic and diluted net income (loss) | $ (0.06) | $ 0.15 | $ 0.10 | $ 0.06 |
Initial Public Offering (Detail
Initial Public Offering (Details) - USD ($) | 9 Months Ended | ||||
Aug. 10, 2022 | Jan. 28, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Initial Public Offering | |||||
Number of units sold | 4,500,000 | ||||
Proceeds received from initial public offering, gross | $ 345,000,000 | ||||
Deferred underwriting commissions | $ 12,100,000 | $ 12,075,000 | |||
Deferred underwriting commissions waived | $ 12,100,000 | ||||
Class A common stock | |||||
Initial Public Offering | |||||
Number of class A common stock in a unit | 1 | ||||
Public Warrants | |||||
Initial Public Offering | |||||
Number of warrants in a unit | 0.25 | ||||
Public Warrants | Class A common stock | |||||
Initial Public Offering | |||||
Number of shares issuable per warrant | 1 | ||||
Exercise price of warrants | $ 11.50 | ||||
Initial Public Offering | |||||
Initial Public Offering | |||||
Number of units sold | 34,500,000 | ||||
Purchase price | $ 10 | ||||
Proceeds received from initial public offering, gross | $ 345,000,000 | ||||
Offering costs incurred | 19,600,000 | ||||
Deferred underwriting commissions | $ 12,100,000 | ||||
Deferred underwriting commissions waived | $ 12,100,000 | ||||
Over-allotment option | |||||
Initial Public Offering | |||||
Number of units sold | 4,500,000 |
Private Placement (Details)
Private Placement (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 28, 2021 | Sep. 30, 2022 |
Private placement | ||
Number of warrants to purchase shares issued | 14,558,333 | |
Private Placement Warrants | ||
Private placement | ||
Number of warrants to purchase shares issued | 5,933,333 | |
Private Placement Warrants | Class A common stock | ||
Private placement | ||
Number of shares per warrant | 1 | |
Exercise price of warrant | $ 11.50 | |
Private Placement | Private Placement Warrants | ||
Private placement | ||
Number of warrants to purchase shares issued | 5,933,333 | |
Price of warrants | $ 1.50 | |
Aggregate purchase price | $ 8.9 |
Related Party Transactions - Fo
Related Party Transactions - Founder Shares (Details) | 9 Months Ended | |||
Jan. 28, 2021 shares | Oct. 21, 2020 USD ($) D $ / shares shares | Sep. 30, 2022 USD ($) shares | Dec. 31, 2021 shares | |
Class B common stock | ||||
Related Party Transactions | ||||
Shares subject to forfeiture | 1,125,000 | 1,125,000 | ||
Sponsor | ||||
Related Party Transactions | ||||
Consideration received | $ | $ 25,000 | |||
Founder Shares | Class A common stock | ||||
Related Party Transactions | ||||
Share exchange ratio | 1 | |||
Founder Shares | Class B common stock | ||||
Related Party Transactions | ||||
Number of shares not subject to forfeiture | 1,125,000 | |||
Founder Shares | Sponsor | Class B common stock | ||||
Related Party Transactions | ||||
Consideration received | $ | $ 25,000 | |||
Issuance of Class B common stock to Sponsor (in Shares) | 8,625,000 | |||
Shares subject to forfeiture | 1,125,000 | |||
Percentage of issued and outstanding shares after the Initial Public Offering collectively held by initial stockholders | 20% | |||
Number of shares not subject to forfeiture | 1,125,000 | |||
Restrictions on transfer period of time after business combination completion | 1 year | |||
Stock price trigger to transfer, assign or sell any shares or warrants of the company, after the completion of the initial business combination (in dollars per share) | $ / shares | $ 12 | |||
Threshold trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | D | 20 | |||
Threshold consecutive trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | D | 30 | |||
Threshold period after the business combination in which the 20 trading days within any 30 trading day period commences | 150 days | |||
Founder Shares | Anchor Investors | Class B common stock | ||||
Related Party Transactions | ||||
Issuance of Class B common stock to Sponsor (in Shares) | 1,250,625 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) | 9 Months Ended | ||
Sep. 30, 2022 USD ($) tranche D $ / shares shares | Dec. 31, 2021 USD ($) | Oct. 21, 2020 USD ($) | |
Related Party Transactions | |||
Borrowing under Working Capital Loans | $ | $ 0 | $ 0 | |
Promissory Note with Related Party | |||
Related Party Transactions | |||
Maximum borrowing capacity of related party promissory note | $ | $ 300,000 | ||
Administrative Support Agreement | |||
Related Party Transactions | |||
Expenses per month | $ | 10,000 | ||
Related Party Loans | Working capital loans warrant | |||
Related Party Transactions | |||
Loan conversion agreement warrant | $ | $ 1,500,000 | ||
Price of warrant | $ / shares | $ 1.50 | ||
Borrowing under Working Capital Loans | $ | $ 0 | $ 0 | |
Sponsor Support Agreement | |||
Related Party Transactions | |||
Number of Sponsor Earn Out Shares that the Sponsor has agreed not to transfer | 2,100,000 | ||
Number of tranches for issuance of Earn Out Shares | tranche | 3 | ||
Earn-Out milestones, number of trading days for VWAP trigger | D | 20 | ||
Earn-Out milestones, Number of consecutive trading days for VWAP trigger | D | 30 | ||
Threshold closing balance of Cash to trigger conversion of Sponsor shares to Sponsor Earn Out Shares | $ | $ 100,000,000 | ||
Maximum number of Sponsor shares that will be converted to Sponsor Earn Out shares | 1,000,000 | ||
Aggregate shares committed by the holder to purchase and not redeem | 2,500,000 | ||
Number of Sponsor Shares agreed to be forfeited | 1,800,000 | ||
Percentage of Private Placement Warrants agreed to be forfeited by Sponsor | 50% | ||
Sponsor Support Agreement | Triggering Event I | |||
Related Party Transactions | |||
Number of earn out shares issued in each Earn-Out milestone | 7,500,000 | ||
Threshold VWAP Price for Earn-Out milestones | $ / shares | $ 12.50 | ||
Sponsor Support Agreement | Triggering Event II | |||
Related Party Transactions | |||
Number of earn out shares issued in each Earn-Out milestone | 7,500,000 | ||
Threshold VWAP Price for Earn-Out milestones | $ / shares | $ 15 | ||
Sponsor Support Agreement | Triggering Event III | |||
Related Party Transactions | |||
Number of earn out shares issued in each Earn-Out milestone | 5,000,000 | ||
Threshold VWAP Price for Earn-Out milestones | $ / shares | $ 17.50 | ||
Financing Commitment Letter | Class A common stock | |||
Related Party Transactions | |||
Number of Sponsor Shares agreed to be forfeited | 2,500,000 | ||
Aggregate maximum shares committed by the holder to purchase and beneficially own, no later than five business days prior to the special meeting of stockholders | 1,250,000 | ||
Specified period prior to special meeting of stockholders before which the aggregate maximum shares are committed to be purchased and beneficially owned | 5 days | ||
Financing Commitment Letter | Class B common stock | |||
Related Party Transactions | |||
Number of shares automatically forfeited, in the event an Investor fails to make the committed purchase | 1,250,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 3 Months Ended | 9 Months Ended | |||
Aug. 10, 2022 USD ($) | Jan. 28, 2021 USD ($) $ / shares shares | Sep. 30, 2022 USD ($) item | Sep. 30, 2022 USD ($) Transaction item | Dec. 31, 2021 USD ($) | |
Commitments and Contingencies | |||||
Maximum number of demands for registration of securities | item | 3 | 3 | |||
Granted term | 45 days | ||||
Sale of Units, net of underwriting discounts (in shares) | shares | 4,500,000 | ||||
Underwriting cash discount per unit | $ / shares | $ 0.20 | ||||
Underwriter cash discount | $ 6,900,000 | ||||
Deferred fee per unit | $ / shares | $ 0.35 | ||||
Deferred underwriting commissions | $ 12,100,000 | $ 12,075,000 | |||
Deferred underwriting commissions waived | $ 12,100,000 | ||||
Extinguishment of deferred underwriting commissions on public shares | $ 11,803,313 | $ 11,800,000 | |||
Gain from settlement of deferred underwriting commissions on public warrants | $ 271,688 | $ 271,688 | |||
Amended and Restated Registration Rights Agreement | |||||
Commitments and Contingencies | |||||
Number of days within Closing, a shelf registration statement is agreed to be filed | 45 days | ||||
Number of times that the legacy stockholders may request to sell all or any portion of their registrable securities in an underwritten offering pursuant to business combination | Transaction | 2 | ||||
Specified period within which the legacy stockholders may request to sell all or any portion of their registrable securities in an underwritten offering pursuant to business combination | 12 months | ||||
Threshold total offering price considered for legacy stockholder's request to sell all or any portion of their registrable securities in an underwritten offering pursuant to business combination | $ 10,000,000 |
Derivative Warrant Liabilities
Derivative Warrant Liabilities (Details) | 9 Months Ended |
Sep. 30, 2022 D $ / shares shares | |
Derivative Warrant Liabilities | |
Number of warrants to purchase shares issued | shares | 14,558,333 |
Threshold period for not to transfer, assign or sell any of their shares or warrants after the completion of the initial business combination | 30 days |
Public Warrants | |
Derivative Warrant Liabilities | |
Number of warrants to purchase shares issued | shares | 8,625,000 |
Public Warrants exercisable term from the closing of the initial public offering | 12 months |
Public Warrants expiration term | 5 years |
Threshold period for filling registration statement after business combination | 15 days |
Maximum threshold period for registration statement to become effective after business combination | 60 days |
Stock price trigger for redemption of public warrants (in dollars per share) | $ 10 |
Minimum threshold written notice period for redemption of public warrants | 30 days |
Share price | $ 9.20 |
Adjustment of exercise price of warrants based on market value and newly issued price (as a percent) | 115% |
Private Placement Warrants | |
Derivative Warrant Liabilities | |
Number of warrants to purchase shares issued | shares | 5,933,333 |
Redemption of Warrants When the Price per Class A Ordinary Share Equals or Exceeds $18.00 | Public Warrants | |
Derivative Warrant Liabilities | |
Stock price trigger for redemption of public warrants (in dollars per share) | $ 18 |
Redemption price per public warrant (in dollars per share) | $ 0.01 |
Redemption period | 30 days |
Threshold trading days for redemption of public warrants | D | 20 |
Threshold consecutive trading days for redemption of public warrants | D | 30 |
Threshold number of business days before sending notice of redemption to warrant holders | D | 3 |
Redemption of Warrants When the Price per Class A Ordinary Share Equals or Exceeds $10.00 | Public Warrants | |
Derivative Warrant Liabilities | |
Stock price trigger for redemption of public warrants (in dollars per share) | $ 10 |
Redemption price per public warrant (in dollars per share) | $ 0.10 |
Redemption period | 30 days |
Threshold trading days for redemption of public warrants | D | 20 |
Threshold consecutive trading days for redemption of public warrants | D | 30 |
Class A Common Stock Subject _3
Class A Common Stock Subject to Possible Redemption (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 USD ($) Vote $ / shares shares | Jun. 30, 2022 USD ($) | Mar. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) Vote $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | |
Class A Common Stock Subject to Possible Redemption | |||||
Increase in redemption value of Class A common stock subject to redemption | $ 1,009,411 | $ 76,542 | $ 26,876,992 | ||
Class A Common Stock Subject to Redemption | |||||
Class A Common Stock Subject to Possible Redemption | |||||
Number of votes per share | Vote | 1 | 1 | |||
Class A common stock subject to possible redemption, par value, (per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Class A common stock subject to possible redemption, authorized (in shares) | shares | 300,000,000 | 300,000,000 | |||
Class A common stock subject to possible redemption, outstanding (in shares) | shares | 34,500,000 | 34,500,000 | 34,500,000 | ||
Gross Proceeds | $ 345,000,000 | ||||
Proceeds allocated to Public Warrants | (7,762,500) | ||||
Class A common stock issuance costs | (19,114,492) | ||||
Accretion of carrying value to redemption value | 26,876,992 | ||||
Increase in redemption value of Class A common stock subject to redemption | $ 1,085,953 | ||||
Class A common stock subject to possible redemption | $ 346,085,953 | $ 346,085,953 | $ 345,000,000 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) - Preferred Stock Shares (Details) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Stockholders' Equity (Deficit) | ||
Preferred shares, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value, (per share) | $ 0.0001 | $ 0.0001 |
Preferred shares, shares issued | 0 | 0 |
Preferred shares, shares outstanding | 0 | 0 |
Stockholders' Equity (Deficit_2
Stockholders' Equity (Deficit) - Common Stock Shares (Details) | 9 Months Ended | |||
Jan. 28, 2021 shares | Sep. 30, 2022 Vote $ / shares shares | Dec. 31, 2021 $ / shares shares | Oct. 21, 2020 shares | |
Class A common stock | ||||
Stockholders' Equity (Deficit) | ||||
Common shares, shares authorized (in shares) | 300,000,000 | 300,000,000 | ||
Common shares, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Common shares, votes per share | Vote | 1 | |||
Class A common stock subject to possible redemption, par value, (per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Class A common stock subject to possible redemption, authorized (in shares) | 300,000,000 | 300,000,000 | ||
Class A common stock | Founder Shares | ||||
Stockholders' Equity (Deficit) | ||||
Share exchange ratio | 1 | |||
Class A Common Stock Subject to Redemption | ||||
Stockholders' Equity (Deficit) | ||||
Common shares, votes per share | Vote | 1 | |||
Class A common stock subject to possible redemption, par value, (per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Class A common stock subject to possible redemption, authorized (in shares) | 300,000,000 | |||
Class A common stock subject to possible redemption, issued (in shares) | 34,500,000 | 34,500,000 | ||
Class A common stock subject to possible redemption, outstanding (in shares) | 34,500,000 | 34,500,000 | ||
Class B common stock | ||||
Stockholders' Equity (Deficit) | ||||
Common shares, shares authorized (in shares) | 10,000,000 | 10,000,000 | ||
Common shares, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Common shares, votes per share | Vote | 1 | |||
Common shares, shares issued (in shares) | 8,625,000 | 8,625,000 | ||
Common shares, shares outstanding | 8,625,000 | 8,625,000 | ||
Shares subject to forfeiture | 1,125,000 | 1,125,000 | ||
Ratio to be applied to the stock in the conversion | 20 | |||
Class B common stock | Founder Shares | ||||
Stockholders' Equity (Deficit) | ||||
Number of shares not subject to forfeiture | 1,125,000 | |||
Class B common stock | Sponsor | ||||
Stockholders' Equity (Deficit) | ||||
Adjustment one of redemption price of stock based on market value and newly issued price (as a percent) | 20% | |||
Class B common stock | Sponsor | Founder Shares | ||||
Stockholders' Equity (Deficit) | ||||
Shares subject to forfeiture | 1,125,000 | |||
Number of shares not subject to forfeiture | 1,125,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Assets: | ||
Cash | $ 10,920 | $ 252,601 |
Investments held in Trust Account - Money Market Funds | 346,615,567 | 345,020,717 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Warranty liability | 3,494,000 | 8,794,330 |
Recurring | ||
Assets: | ||
Investments held in Trust Account - Money Market Funds | 346,615,567 | 345,020,717 |
Recurring | Public Warrants | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Warranty liability | 2,070,000 | 5,175,000 |
Recurring | Private Placement Warrants | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Warranty liability | 1,424,000 | 3,619,330 |
Level 1 | Recurring | ||
Assets: | ||
Investments held in Trust Account - Money Market Funds | 346,615,567 | 345,020,717 |
Level 1 | Recurring | Public Warrants | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Warranty liability | 2,070,000 | 5,175,000 |
Level 3 | Recurring | Private Placement Warrants | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Warranty liability | $ 1,424,000 | $ 3,619,330 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 Fair Value Measurements Inputs (Details) - Level 3 | Sep. 30, 2022 $ / shares Y | Dec. 31, 2021 Y $ / shares |
Dividend rate | ||
Fair Value Measurements | ||
Derivative liability, measurement input | 0 | |
Exercise price | ||
Fair Value Measurements | ||
Derivative liability, measurement input | 11.50 | 11.50 |
Stock Price | ||
Fair Value Measurements | ||
Derivative liability, measurement input | 9.85 | 9.74 |
Option term (in years) | ||
Fair Value Measurements | ||
Derivative liability, measurement input | Y | 5.09 | 4.82 |
Volatility | ||
Fair Value Measurements | ||
Derivative liability, measurement input | 0.40 | 0.12 |
Risk-free interest rate | ||
Fair Value Measurements | ||
Derivative liability, measurement input | 0.041 | 0.013 |
Fair Value Measurements - Chang
Fair Value Measurements - Change in the Fair Value of the Warrant Liabilities (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Gain/(loss) resulting from a decrease/(increase) in the fair value of derivative liabilities | $ (2,000,000) | $ 6,700,000 | $ 5,300,000 | $ 3,900,000 | ||||
Level 1 | Public Warrants | ||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Transfer of Public Warrants to Level 1 | $ (7,762,500) | |||||||
Level 3 | ||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Derivative warrant liabilities at beginning of period | 593,330 | $ 2,076,670 | $ 3,619,330 | 6,586,000 | $ 3,738,000 | 3,619,330 | ||
Issuance of Derivative Warrants | 13,161,830 | |||||||
Change in fair value of derivative warrant liabilities | 830,670 | (1,483,340) | (1,542,660) | (2,788,670) | 2,848,000 | $ (1,661,330) | ||
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Fair Value Adjustment of Warrants | |||||||
Derivative warrant liabilities at end of period | $ 1,424,000 | $ 593,330 | $ 2,076,670 | $ 3,797,330 | $ 6,586,000 | $ 3,738,000 | $ 1,424,000 | $ 3,797,330 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent event | Oct. 18, 2022 USD ($) |
David T. Hamamoto | |
Subsequent Events | |
Interest rate (as a percent) | 10% |
Antara Capital Total Return SPAC Master Fund LP | |
Subsequent Events | |
Interest rate (as a percent) | 10% |
Maximum | David T. Hamamoto | |
Subsequent Events | |
Principal amount of promissory note | $ 200,000 |
Maximum | Antara Capital Total Return SPAC Master Fund LP | |
Subsequent Events | |
Principal amount of promissory note | $ 200,000 |