| SIGNIFICANT ACCOUNTING POLICIES | NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES Basis
of Presentation The
accompanying unaudited condensed financial statements are presented in U.S. dollars in conformity with GAAP for financial information
and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required
by GAAP. In the opinion of management, the accompanying unaudited condensed financial statements reflect all adjustments, which include
only normal recurring adjustments necessary for the fair presentation of the financial statements for the periods presented. Operating
results for the period for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may
be expected through December 31, 2022. The
accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto
included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on April 14, 2022. Emerging
Growth Company Status The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and
it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are
not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of
Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy
statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval
of any golden parachute payments not previously approved. Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of
such extended transition period which means that when a standard is issued or revised and it has different application dates for public
or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies
adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company that
is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult
or impossible because of the potential differences in accounting standards used. Use
of Estimates The
preparation of the accompanying unaudited condensed financial statements in conformity with GAAP requires 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 accompanying unaudited condensed financial statements. Making estimates requires management to exercise significant judgement.
It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at
the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one
or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Cash
and Cash Equivalents The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company did not have any cash equivalents as of September 30, 2022 and December 31, 2021. Cash
and Securities Held in Trust Account Investment
held in Trust Account consist of United States Treasury securities. The Company classifies its United States Treasury securities as held-to-maturity
in accordance with FASB ASC Topic 320, “Investments - Debt and Equity Securities” (“ASC 320”). Held-to-maturity
securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities
are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts. A
decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment
that reduces the carrying costs to such securities’ fair value. The impairment is charged to earnings and a new cost basis for
the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability
and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment
is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the
severity and the duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the
general market condition in the geographic area or industry the investee operates in. Premiums
and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest
method. Such amortization and accretion are included in the “Trust interest income” line item in the statements of operations.
Trust interest income is recognized when earned. Fair
Value of Financial Instruments The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC Topic 820, “Fair
Value Measurements and Disclosures” (“ASC 820”), approximates the carrying amounts represented in the condensed balance
sheets, primarily due to its short-term nature. Fair
Value Measurements The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, approximates the carrying
amounts represented in the accompanying balance sheet, primarily due to their short-term nature. “Fair value” is defined
as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market
participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring
fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities
(Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
● Level 1,
defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
● Level 2,
defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices
for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
● Level 3,
defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions,
such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. In
some circumstances, 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. The
fair value of the Company’s certain assets and liabilities, which qualify as financial instruments under ASC 820, approximates
the carrying amounts represented in the balance sheet. The fair values of cash and cash equivalents, prepaid expenses, accounts payable
and accrued expenses are estimated to approximate the carrying values as of September 30, 2022 and December 31, 2021 due to the short
maturities of such instruments. The
Company’s warrant liability for the Private Placement Warrants is based on a valuation model utilizing management judgment and
pricing inputs from observable and unobservable markets with less volume and transaction frequency than active markets. Significant deviations
from these estimates and inputs could result in a material change in fair value. The fair value of the warrant liability is classified
as Level 3. See Note 6 for additional information on assets and liabilities measured at fair value. Concentration
of Credit Risk Financial
instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution,
which, at times, may exceed the Federal Deposit Insurance Corporation coverage limit of $250,000. As of September 30, 2022 and December
31, 2021, the Company has not experienced losses on this account and management believes the Company is not exposed to significant risks
on such account. Common
Stock Subject to Possible Redemption The
Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC 480. Common stock subject
to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable common
stock (including common stock that feature redemption rights that are either within the control of the holder or subject to redemption
upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other
times, common stock is classified as stockholders’ deficit. The Company’s 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,
common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’
deficit section of the Company’s balance sheets. The
Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to
equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock
are affected by charges against additional paid in capital and accumulated deficit. Net
Income Per Share of Common Stock The
Company has two classes of common stock, which are referred to as “Class A common stock” and “Class B common stock.”
Earnings and losses are shared pro rata between the two classes of shares. The 14,750,000 potential common stock for outstanding
warrants to purchase the Company’s stock were excluded from diluted earnings per share for the three and nine months ended September
30, 2022 because the warrants are contingently exercisable, and the contingencies have not yet been met. As a result, diluted net income
per common stock is the same as basic net income per common stock for the periods. The table below presents a reconciliation of the numerator
and denominator used to compute basic and diluted net income per share for each class of common stock:
For the three months ended For the nine months ended
2022 2021 2022 2021
Class A Class B Class A Class B Class A Class B Class A Class B
Basic and diluted net income per share:
Numerator:
Allocation of net income $ 1,570,916 392,729 $ 1,391,085 347,771 $ 7,951,436 1,987,859 $ 2,291,177 641,281
Denominator:
Weighted-average shares outstanding 28,750,000 7,187,500 28,750,000 7,187,500 28,750,000 7,187,500 25,274,725 7,074,176
Basic and diluted net income per share $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.28 $ 0.28 $ 0.09 $ 0.09 Offering
Costs Associated with the Initial Public Offering The
Company complies with the requirements of FASB ASC Topic 340-10-S99-1 and SAB Topic 5A, “Expenses of Offering” (“ASC
340-10-S99-1 and SAB 5A”). Offering costs consist principally of professional and registration fees incurred through the balance
sheet date. Offering costs are allocated to the separable financial instruments issued in the IPO based on a relative fair value basis
compared to total proceeds received. Offering costs associated with warrant liabilities is expensed, and offering costs associated with
the Class A common stock were charged to temporary equity upon the completion of the IPO. Derivative
Financial Instruments The
Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded
derivatives in accordance with FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). Derivative instruments
are recorded at fair value on the grant date and re-valued at each reporting date, with changes in fair value reported in the statements
of operations. Derivative assets and liabilities are classified on the balance sheet as current or non-current based on whether or not
net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The Company has determined
the warrants are a derivative instrument. FASB
ASC Topic 470-20, “Debt with Conversion and Other Options” addresses the allocation of proceeds from the issuance of convertible
debt into its equity and debt components. The Company applies this guidance to allocate IPO proceeds from the Units between Class A common
stock and warrants, using the residual method by allocating IPO proceeds first to fair value of the warrants and then the Class A common
stock. Working
Capital Notes The
Company accounts for its Working Capital Notes under FASB ASC Topic 815 “Derivatives and Hedging” (“ASC 815”).
Pursuant to ASC 815-15-25 the election can be at the inception of a financial instrument to account for the instrument under the fair
value option under FASB ASC Topic 825. “Financial Instruments” (“ASC 825”). The Company has made such election
for the Working Capital Notes. Using the fair value option, the Working Capital Notes are required to be recorded at their initial fair
value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the Working Capital Notes
are recognized as a non-cash gain or loss in the condensed statements of operations. Warrants The
Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s
specific terms and applicable authoritative guidance in ASC 480 and ASC 815. The assessment considers whether the warrants are freestanding
financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all
of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common
stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s
control, among other conditions for equity classification. This assessment is conducted at the time of warrant issuance and as of each
subsequent quarterly period end date while the warrants are outstanding. For
issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component
of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all of the criteria for equity
classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet
date thereafter. The Company accounts for the 9,583,333 Public Warrants (Note 3) and 5,166,667 Private Placement
Warrants (Note 4) as liability-classified instruments, which are fair valued at each reporting date. Income
Taxes The
Company accounts for income taxes under FASB ASC Topic 740, “Income Taxes” (“ASC 740”). ASC 740 requires the
recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax
basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC
740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax
assets will not be realized. ASC
740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes
a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected
to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination
by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim
period, disclosure and transition. The
Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized
tax benefits and no amounts accrued for interest and penalties as of September 30, 2022 and December 31, 2021. The Company is currently
not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. Our
effective tax rate from continuing operations was 3.54% and 0.77% for the quarter and nine months ended September 30, 2022, respectively,
and 0.00 For
the nine months ended September 30, 2022 the Company has prepared it's provision on the basis that the Company is seeking and will likely
be receiving approval to liquidate prior to December 31, 2022. Based on this assumption, the Company believes it’s effective tax
rate will be approximately 0.9% for the year ending December 31, 2022. Risks
and Uncertainties Management
continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could
have a negative effect on the Company’s financial position, results of its operations, cash flows and/or search for a target company,
the specific impact is not readily determinable as of the date of the financial statements. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty. The
credit and financial markets have experienced extreme volatility and disruptions due to the current conflict between Ukraine and Russia.
The conflict is expected to have further global economic consequences, including but not limited to the possibility of severely diminished
liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in inflation rates and uncertainty
about economic and political stability. In addition, the United States and other countries have imposed sanctions on Russia, which increases
the risk that Russia, as a retaliatory action, may launch cyberattacks against the United States, its government, infrastructure and
businesses. Any of the foregoing consequences, including those the Company cannot yet predict, may cause the Company’s business,
financial condition, results of operations and the price of the Company’s common stock to be adversely affected. Inflation
Reduction Act of 2022 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
redemption or other 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 would 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. Recent
Accounting Pronouncements In
August 2020, the FASB issued ASU 2020-06, “Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives
and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40)” (“ASU 2020-06”), to simplify accounting
for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash
conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification
of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding
instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance,
including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2024 for
the Company and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021.
The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or
cash flows. Management
does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect
on the Company’s unaudited condensed financial statements. |
