Summary of Significant Accounting Policies | Note 2 — Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q S-X 10-K 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 Start-ups non-binding 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) 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 Use of Estimates The preparation of unaudited condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. 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 insurance coverage of $250,000. As of June 30, 2022, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. 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 had no cash equivalents as of June 30, 2022 or December 31, 2021. Marketable Securities and Cash Equivalents Held in Trust Account As of June 30, 2022, the Company’s portfolio of marketable securities held in the Trust Account was comprised of investments in U.S. government securities, classified as held to maturity securities and presented on the unaudited condensed balance sheet at amortized cost. The difference between the purchase prices of the U.S. government securities and the maturity value is accreted to interest income from the date of the purchase to the maturity date using the effective interest method. The U.S. government securities were purchased on February 11, 2022 with proceeds coming from the money market mutual fund which matured and reinvested on May 11, 2022. During the three and six months ended June 30, 2022, $24 and $1,028, respectively, of dividend income was earned on the previously held money market mutual funds and $395,459 was accreted to marketable securities held in Trust Account and recorded as interest income in the condensed statement of operations. Additionally, the Company had cash equivalents held in the Trust Account comprised of money market mutual funds, classified as trading securities and presented on the condensed balance sheets at fair value at the end of each reporting period with immaterial interest income recorded for the three and six months ended June 30, 2022. As of December 31, 2021, the Company’s portfolio of marketable securities held in the Trust Account was comprised of money market mutual funds, classified as trading securities and recorded at fair value. Gains and losses resulting from the change in fair value of trading securities are included in the accompanying condensed statement of operations, to which there were none during the three and six months ended June 30, 2021. During the three and six months ended June 30, 2021, $7,386 of dividend income was recorded. Interest income from securities is recorded on the accrual basis and dividends from securities are recorded on the ex-dividend As of June 30, 2022, the marketable securities held in the Trust Account amortized cost and fair value were $175,246,646 and $175,037,803, respectively. The face value of the securities is $175,625,000. As of June 30, 2022, cash As of December 31, 2021, the marketable securities held in the Trust Account was $175,013,336. Offering Costs associated with the Initial Public Offering The Company complies with the requirements of the FASB ASC 340-10-S99-1 Shares of Class A Common Stock Subject to Possible Redemption The Company accounts for its shares of Class A Common Stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” The Company’s shares of Class A Common Stock feature certain redemption rights that is considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, shares of Class A Common Stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s condensed balance sheet. Derivative Financial Instruments Simultaneously with the closing of the IPO, the Sponsor purchased an aggregate of 4,875,000 Private Placement Warrants at a price of $1.00 per whole Warrant ($4,875,000 in the aggregate) in the Private Placement. Each whole Private Placement Warrant is exercisable for one whole share of the Company’s Class A common stock at a price of $11.50 per share, as discussed in Note 4. Pursuant to the IPO, the Company issued 17,500,000 units at a price of $10.00 per unit for a total of $175,000,000 (the “Units”). Each Unit consists of one Public Share, and one-half The Private Placement Warrants and the shares of common stock issuable upon the exercise of the Private Placement Warrants are not transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable The Company evaluated the Public Warrants, Private Placement Warrants and Working Capital Loan conversion option (collectively, the “Instruments”) in accordance with the guidance contained in ASC 815-40, Because not all of the Company’s shareholders need to participate in such tender offer or exchange to trigger the potential cash settlement and the Company does not control the occurrence of such an event, the Company concluded that the Public Warrants and Private Placement Warrants do not meet the conditions to be classified in equity. Since the Public Warrants and Private Placement Warrants meet the definition of a derivative under ASC 815, the Company recorded these warrants as liabilities on the condensed balance sheet at its initial fair value, with subsequent changes in their respective fair values recognized in the condensed statement of operations at each reporting date. The conversion feature within the Working Capital Loan gives the Sponsor an option to convert the loan to warrants to purchase shares of the Company’s Class A common stock. This bifurcated feature is assessed at the end of each reporting period to conclude whether additional liability should be recorded. The Instruments are subjected to re-measurement $600,000 was drawn down under the Working Capital Loan as of June 30, 2022. Net (loss) Income Per Common Share Net (loss) income per common share is computed by dividing net (loss) income by the weighted-average number of shares of common stock outstanding during the period, excluding shares of common stock forfeited. The Company has not considered both effects of the conversion of the Working Capital Loan warrants to Class A common shares upon merger and the warrants sold in the Initial Public Offering and private placement to purchase an aggregate of 13,625,000 shares, in the calculation of diluted net (loss) income per share, since the exercise of the conversion option and warrants are contingent upon the occurrence of future events and the inclusion of such conversion option and warrants would be anti-dilutive. The Company’s condensed statement of operations includes a presentation of net (loss) income per share for common shares subject to possible redemption in a manner similar to the two-class Non-redeemable The following tables reflect the calculation of basic and diluted net (loss) income per common share (in dollars, except per share amounts): For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 Class A Class B Class A Class B Class A Class B Class A Class B Basic and diluted net (loss) Numerator Allocation of net (loss) income $ (57,196) $ (14,299) $ 1,492,418 $ 373,105 $ 3,144,176 $ 786,044 $ 995,976 $ 443,179 Denominator Basic and diluted weighted 17,500,000 4,375,000 17,500,000 4,375,000 17,500,000 4,375,000 10,055,249 4,474,275 Basic and diluted net income $ (0.00) $ (0.00) $ 0.09 $ 0.09 $ 0.18 $ 0.18 $ 0.10 $ 0.10 Income Taxes The Company accounts for income taxes under ASC 740, Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. The effective tax rate differs from the statutory tax rate of 21% for the six and three months ended June 30, 2022 and 2021, primarily due to changes in fair value of the warrant liability, which are not currently recognized in taxable income, non-deductible start-up costs, and the 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 effective tax rate for the Company is estimated and may change due to the potential impact of the Company’s change in fair value of warrants (or any other change in fair value of a complex financial instrument), the timing of any potential business combination expenses and the actual interest income that will be recognized during the year. The Company follows the guidance contained in ASC 740-270-25-3 whereby a reasonable estimate of the income tax provision or benefit is reported in the interim period. The Company believes its calculation to be a reliable estimate and allows it to properly take into account the usual elements that can impact its annualized book income and its impact on the effective tax rate. As such, the Company is computing its taxable income or loss and associated income tax provision or benefit based on actual results through June 30, 2022. 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. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has identified the United States as its only “major” tax jurisdiction. The Company is subject to income tax examinations by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. The Company was formed on December 29, 2020 and expects to file U.S. federal and various state income tax returns. All tax periods since inception remain open to examination by the taxing jurisdictions to which the Company is subject. 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. 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 June 30, 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company’s deferred tax assets were fully offset by valuation allowance as of June 30, 2022 and December 31, 2021. The Company had an income tax liability of $31,501 and $0 as of June 30, 2022 and December 31, 2021, respectively. Recent Accounting Pronouncements In August 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-06, 470-20) 815-40): 2020-06”), The new standard will become effective for the Company beginning January 1, 2024, using either a modified retrospective or a fully retrospective method of transition and early adoption is permitted. Management is currently evaluating the impact of the new standard on the Company’s unaudited condensed financial statements. The Company’s management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements. |