| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation: The financial statements of the Company
are presented in U.S. dollars and has been prepared in conformity with accounting principles generally accepted in the United States of
America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Mandatory Liquidation, Liquidity, Capital Resources and
Going Concern: With approximately $732,000 in cash and approximately $401,000 of working capital at December 31, 2022, the Company
believes, but cannot assure, that it has the resources to continue its operations through October 1, 2023, the date by which it must complete
a Business Combination. However, if the Company cannot complete a Business Combination before October 1, 2023, it could be forced to wind
up its operations and liquidate unless it receives an extension approval from its stockholders. This condition raises substantial doubt
about the Company’s ability to continue as a going concern for a period of time within one year after the date that the financial
statements are issued. The Company’s plan to deal with this uncertainty is to complete a Business Combination prior to October 1,
2023. There is no assurance that the Company’s plan to consummate a Business Combination will be successful or successful within
the required timeframe. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Emerging Growth Company: 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 Securities Exchange Act of 1934, as amended (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 an election to opt out is irrevocable. The Company has
elected not to opt out of such extended transition period which means that when an accounting 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 standards. This may make comparison of the Company’s financial statements
with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the
extended transition period difficult or impossible because of the potential differences in accounting standards used. Net Income or Loss per Share of Common Stock: The Company complies with accounting
and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net income or loss per share of common stock is computed
by dividing net income or loss applicable to common stockholders by the weighted average number of shares of common stock outstanding
during the period plus, to the extent dilutive, the incremental number of shares of common stock to settle Warrants, as calculated using
the treasury stock method. The Company has not considered the
effect of the Warrants sold in the Public Offering and Private Placement to purchase an aggregate of 18,576,712 shares of Class A common
stock in the calculation of diluted income (loss) per share, since their inclusion would be anti-dilutive under the treasury stock method
and are contingent on future events. As a result, diluted income (loss) per share of Class A common stock is the same as basic income
(loss) per share of common stock for the periods presented. The Company has two classes of common
stock, which are referred to as shares of Class A common stock and shares of Class B common stock. Income and losses are shared pro rata
among the two classes of common stock. This assumes completion of a business combination as the most likely outcome. Net income (loss)
per share of common stock is calculated by dividing the net income (loss) by the weighted average number of shares of common stock outstanding
during the respective period. The changes in redemption value that are accreted to Class A common stock subject to redemption (see below)
are representative of fair value and therefore is not factored into the calculation of earnings per share. The following table reflects the net
income per share after allocating income between the shares based on outstanding shares:
Year
ended For the period from
Class A Class B Class A Class B
Numerator:
Basic and diluted net income per share of common stock:
Allocation of income – basic and diluted $ 11,479,000 $ 3,826,000 $ 1,100,000 $ 1,421,000
Denominator:
Basic and diluted weighted average share of common stock: 34,093,000 11,364,000 8,276,000 10,679,000
Basic and diluted net income per share of common stock $ 0.34 $ 0.34 $ 0.13 $ 0.13 The Company considers all highly liquid
instruments with original maturities of three months or less when acquired, to be cash equivalents. The Company had no cash equivalents
at December 31, 2022 or December 31, 2021. 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 Deposit Insurance Corporation coverage of $250,000, and investments held in Trust Account. Any loss incurred or
a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations,
and cash flows. Fair Value of Financial Instruments: The fair value of the Company’s
assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,”
approximates the carrying amounts represented in the balance sheets primarily due to their short-term nature, except for derivative warrant
liabilities (see Note 6). 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. Use of Estimates: The preparation of financial statements
in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of expenses during the reporting period. Making estimates requires management
to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set
of circumstances that existed as of December 31, 2022 and December 31, 2021, 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. Offering Costs: The
Company complies with the requirements of FASB ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (SAB) Topic 5A - “Expenses
of Offering.” Costs incurred in connection with preparation for the Public Offering totaled approximately $19,741,000
including Company costs of approximately $990,000 together with $18,750,000 of underwriters’ discount, have been allocated to
equity instruments ($19,018,000) and derivative warrant liabilities ($722,000), based on their relative values, and charged to
temporary equity or expense (in the case of the portion allocated to derivative warrant liabilities) upon completion of the Public
Offering. Income Taxes: The Company follows the asset and
liability method of accounting for income taxes under FASB ASC, 740, “Income Taxes.” Deferred tax assets and liabilities are
recognized for the estimated future tax consequences attributable to differences between the balance sheet 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. The
Company’s currently taxable income consists of interest income on the Trust Account net of taxes. The Company’s general
and administrative costs are generally considered either start-up or business combination costs and are not currently deductible.
Further, warrant costs and income from change in fair value of derivative warrant liabilities may not be deductible or includible in
taxable income. During the year ended December 31, 2022 and period from January 22, 2021 (inception) to December 31, 2021 the
Company recorded income tax expense of approximately $920,000 and $0, respectively. This occurs because, in 2022, there is
substantial taxable interest income earned on the Trust Account which was partially offset by deductible franchise taxes, so there
was income for tax purposes in 2022. In 2021 interest income was minimal and fully offset by deductible franchise taxes. The
Company’s effective tax rate for the year ended December 31, 2022 and for the period from January 22, 2021 (inception) to
December 31, 2021 was approximately 6% and 0%, respectively, which differs from the expected income tax rate primarily due to
substantial income reported from warrant fair value adjustments which is not taxable, offset partially by the start-up costs
(discussed above) which are not currently deductible and business combination costs which may not be deductible or taxable. At
December 31, 2022 and December 31, 2021, the Company has a deferred tax asset of approximately $500,000 and $80,000, respectively,
primarily related to start-up costs. Management has determined that a full valuation allowance of the deferred tax asset is
appropriate at this time. FASB
ASC 740 prescribes a recognition threshold and a measurement attribute for the 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 December
31, 2022 or December 31, 2021. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income
tax expense. No amounts were accrued for the payment of interest and penalties at December 31, 2022 or December 31, 2021. The
Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation
from its position. The Company is subject to income tax examinations by major taxing authorities since inception. Redeemable Common Stock: As
discussed in Note 4, all of the 34,092,954 public shares sold as part of Units in the Public Offering contain a redemption feature
which allows for the redemption of public shares if the Company holds a stockholder vote or there is a tender offer for shares in
connection with a Business Combination. In accordance with FASB ASC 480, redemption provisions not solely within the control of the
Company require the security to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption
and liquidation of all of the entity’s equity instruments, are excluded from the provisions of FASB ASC 480. Although the
Company did not specify a maximum redemption threshold, its charter provides that in no event will it redeem its public shares in an
amount that would cause its net tangible assets ( i.e. While redemptions cannot cause the
Company’s net tangible assets to fall below $5,000,000, all shares of Class A common stock are redeemable and classified as such
on the Company’s balance sheet until such time as a redemption event takes place. The value of Class A common stock that may be
redeemed is equal to $10.00 per share (which is the assumed redemption price) multiplied by 34,092,954 shares of Class A common stock. The Company recognizes changes immediately
as they occur and adjusts the carrying value of the securities at the end of each reporting period. Increases or decreases in the carrying
amount of redeemable Class A common stock are affected by adjustments to additional paid-in capital. Accordingly, at December 31, 2022
and December 31, 2021, all of the 34,092,954 public shares were classified outside of permanent equity. Class A common stock subject to
redemption consist of:
Gross proceeds of Public Offering $ 340,930,000
Less: Proceeds allocated to Public Warrants (11,935,000 )
Offering costs (19,018,000 )
Plus: Accretion of carrying value to redemption value at inception 30,953,000
Subtotal at date of Public Offering and December 31, 2021 340,930,000
Plus: Accretion of carrying value to redemption value subsequent December 31, 2021 3,468,000
Class A common stock subject to redemption at December 31, 2022 $ 344,398,000 Derivative warrant liabilities 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 FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging
(“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 shares, among other conditions for equity classification.
This assessment, which requires the use of professional judgment, 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 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. Changes in the estimated fair value of the Warrants are recognized as a non-cash gain or loss
on the statements of operations. Costs associated with issuing the Warrants accounted for as liabilities are charged to operations when
the Warrants are issued. The fair value of the Warrants was initially estimated using a binomial lattice simulation approach, it was subsequently
based upon, or derived from, the trading price of our warrants issued initially as part of the units offered in our initial public offering
(the “Public Warrants”) but now trade separately in an active, open market. Recent Accounting Pronouncements: Management does not believe that any
recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s
financial statements. Subsequent Events: Management has evaluated subsequent
events and transactions occurring after the balance sheet date, December 31, 2022, up to the date the financial statements were issued.
The Company has concluded that all such events and transactions that would require adjustment or disclosure in the financial statements
have been recognized or disclosed. |
