| SIGNIFICANT ACCOUNTING POLICIES | NOTE
2. 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 and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures
normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and
regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary
for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying
unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a
fair presentation of the financial position, operating results and cash flows for the periods presented. The
accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K
for the period ended December 31, 2022, as filed with the SEC on March 17, 2023. The interim results for the three and six months ended
June 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any future periods. Emerging
Growth Company Status 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 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 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 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 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. Use
of Estimates The
preparation of the 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 financial
statements and the reported amounts of 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 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 As
of June 30, 2023 and December 31, 2022, the Company had $213,035 and $557,193 in cash, respectively. 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 June 30, 2023 and December 31, 2022. Investments
Held in Trust Account As
of June 30, 2023 and December 31, 2022, the Company had $420,376,676 and $413,569,723 in investments held in the Trust Account which
were invested in BLF Treasury Trust Fund. Net proceeds of the sale of the Units in the Initial Public Offering and the
sale of the Private Placement Units were placed in the Trust Account which is invested in United States “government securities”
within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting
certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury
obligations. The Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented
on the 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 interest income earned on investments held in trust account in the accompanying unaudited condensed
statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information. Offering
Costs The
Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses
of Offering”. Offering costs consist of legal, accounting, underwriting fees and other costs incurred through the Initial Public
Offering date that are directly related to the Initial Public Offering. Offering costs directly attributable to the issuance of an equity
contract to be classified in equity are recorded as a reduction of equity. Offering costs for equity contracts that are classified as
assets and liabilities are expensed immediately. As of June 30, 2023 and December 31, 2022, the Company incurred offering costs amounting
to $24,712,590, consisting of $7,000,000 of underwriting fees, $17,150,000 of deferred underwriting fees, $6,860,000 of deferred advisory
fees, and $3,362,590 of other offering costs offset by a $9,660,000 reimbursement for the financial advisory fee. These offering costs
were allocated between components of temporary and permanent equity based on the relative fair value of these components. Net
Income (Loss) Per Common Stock The
Company has two classes of shares, 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 Company has not considered the effect of the warrants sold in the Initial Public Offering
and the Private Placement to purchase an aggregate of 21,014,375 shares of its Class A common stock in the calculation of diluted net
income (loss) per share, since their exercise is contingent upon future events. As a result, diluted net income (loss) per share is the
same as basic net income (loss) per share. The table below presents a reconciliation of the numerator and denominator used to compute
basic and diluted net income (loss) per share for each class of common stock:
Three Months Ended Six Months Ended
2023 2022 2023 2022
Class A Class B Class A Class B Class A Class B Class A Class B
Basic and diluted net income (loss) per share
Numerator:
Allocation of net income (loss) $ 2,512,844 $ 837,615 $ (332,960 ) $ (110,986 ) $ 4,662,315 $ 1,554,105 $ (890,467 ) $ (296,822 )
Denominator:
Basic and diluted weighted average shares outstanding 42,028,750 14,009,583 42,028,750 14,009,583 42,028,750 14,009,583 42,028,750 14,009,583
Basic and diluted net income (loss) per share $ 0.06 $ 0.06 $ (0.01 ) $ (0.01 ) $ 0.11 $ 0.11 $ (0.02 ) $ (0.02 ) 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 Topic 480, “Distinguishing
Liabilities from Equity.” Class A common stock subject to mandatory redemption is classified as a liability instrument and is measured
at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are 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
in temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Class A common
stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of
uncertain future events. Accordingly, at June 30, 2023 and December 31, 2022, 40,250,000 shares of Class A common stock are presented
at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s condensed balance
sheets. The
Company recognizes changes in redemption value immediately as they occur. 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 value. The change in the carrying value of redeemable common stock resulted
in charges against additional paid-in capital and accumulated deficit. Fair
Value of Financial Instruments The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair
Value Measurements and Disclosures,” approximates the carrying amounts represented in the condensed balance sheets, 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). The Company’s financial
instruments are classified as either Level 1, Level 2 or Level 3. These tiers include:
● Level 1,
defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
● Level 2,
defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices
for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
● Level 3,
defined as unobservable inputs for 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. Warrant
Classification The
Company accounts for the warrants issued in connection with the Initial Public Offering and the private placement in accordance with
the guidance contained in ASC 815-40 under which the warrants meet the criteria for equity treatment and are recorded as equity. Income
Taxes The
Company accounts for income taxes under ASC 740, “Income Taxes.” ASC 740 requires the recognition of deferred tax assets
and liabilities for both the expected impact of differences between the unaudited condensed financial statements and tax basis of assets
and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally
requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not
be realized. ASC 740-270-25-2 requires that an annual effective tax rate be determined, and such annual effective rate be applied to
year to date income in interim periods under ASC 740-270-30-5. As of June 30, 2023 and December 31, 2022, the Company’s deferred
tax asset had a full valuation allowance recorded against it. The Company’s effective tax rate was (23.56%) and 29.86% for the
three months ended June 30, 2023 and 2022, respectively, and (23.82%) and 9.41% for the six months ended June 30, 2023 and 2022, respectively.
The effective tax rate differs from the statutory tax rate of 21% for the three months ended June 30, 2023 and 2022, due
to the valuation allowance on the deferred tax assets. ASC
740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes
a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected
to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination
by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim
period, disclosure and transition. The
Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized
tax benefits and no amounts accrued for interest and penalties as of June 30, 2023 and December 31, 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 taxation
by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus
of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect
that the total amount of unrecognized tax benefits will materially change over the next twelve months. Concentration
of Credit Risk Financial
instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution
which, at times may exceed the Federal Deposit Insurance Corporation coverage limits of $250,000. Any loss incurred or a lack of access
to such funds could have a significant adverse impact on the Company’s financial condition. As of June 30, 2023 and December 31,
2022, the Company has not experienced losses on this account and management believes the Company is not exposed to significant risks
on such account. Recent
Accounting Pronouncements In
August 2020, the FASB issued ASU No. 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): Accounting for Convertible Instruments and Contracts in an
Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major
separation models required under current GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts
to qualify for the derivative scope exception, and it also simplifies the diluted earnings per share calculation in certain areas. ASU
2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early
adoption permitted. 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 other recently issued, but not effective, accounting standards, if currently adopted, would have a material
effect on the Company’s unaudited condensed financial statements. 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, and/or search for a target company, the
specific impact is not readily determinable as of the date of the unaudited condensed financial statements. The unaudited condensed financial
statements do not include any adjustments that might result from the outcome of this uncertainty. In February 2022, the Russian Federation and Belarus commenced a military
action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic
sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy is
not determinable as of the date of these unaudited condensed financial statements, and the specific impact on the Company’s financial
condition, results of operations, and cash flows is also not determinable as of the date of these unaudited condensed financial statements. 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 inhibit the Company’s ability to complete a Business Combination. |
