Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 18, 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 | 001-40386 | |
Entity Registrant Name | Data Knights Acquisition Corp. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 86-2076743 | |
Entity Address, Address Line One | Unit G6, Frome Business Park, Manor Road | |
Entity Address, City or Town | Frome | |
Entity Address, Country | GB | |
Entity Address, Postal Zip Code | BA11 4FN | |
City Area Code | 011 | |
Local Phone Number | 44 203 833 4000 | |
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 | 0001849380 | |
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 and one Redeemable Warrant | ||
Document and Entity Information | ||
Title of 12(b) Security | Units, each consisting of one share of Class A Common Stock and one Redeemable Warrant | |
Trading Symbol | DKDCU | |
Security Exchange Name | NASDAQ | |
Class A Common Stock | ||
Document and Entity Information | ||
Title of 12(b) Security | Class A Common Stock, $0.0001 par value per share | |
Trading Symbol | DKDC | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 12,085,175 | |
Redeemable Warrants, each exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share | ||
Document and Entity Information | ||
Title of 12(b) Security | Redeemable Warrants, each exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share | |
Trading Symbol | DKDCW | |
Security Exchange Name | NASDAQ | |
Class B Common Stock | ||
Document and Entity Information | ||
Entity Common Stock, Shares Outstanding | 2,875,000 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash | $ 234,923 | $ 453,151 |
Prepaid expense | 0 | 21,215 |
Prepaid insurance | 0 | 61,846 |
Total Current Assets | 234,923 | 536,212 |
Investments held in Trust Account | 120,133,869 | 117,320,973 |
Total assets | 120,368,792 | 117,857,185 |
Current Liabilities | ||
Accrued expense | 1,285,086 | 125,972 |
Amount due to relate parties | 11,500 | |
Income tax payable | 106,724 | |
Franchise tax payable | 50,000 | 164,008 |
Total Current Liabilities | 1,453,310 | 289,980 |
Warrant liabilities | 607,775 | 4,851,668 |
Deferred underwriter fee payable | 4,025,000 | 4,025,000 |
Working capital loan | 300,000 | |
Extension loans | 2,300,000 | 0 |
Total liabilities | 8,686,085 | 9,166,648 |
Commitments and Contingencies | ||
Stockholders' Deficit | ||
Preferred shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding | ||
Additional paid-in capital | 0 | 0 |
Accumulated deficit | (8,451,509) | (8,609,810) |
Total Stockholders' Deficit | (8,451,162) | (8,609,463) |
Total Liabilities and Stockholders' Deficit | 120,368,792 | 117,857,185 |
Class A Common Stock | ||
Stockholders' Deficit | ||
Common stock | 59 | 59 |
Class A Common Stock subject to possible redemption | ||
Current Liabilities | ||
Class A Common Stock subject to possible redemption; 11,500,000 shares at redemption value of $10.40 and $10.20 as of September 30, 2022 and December 31, 2021, respectively | 120,133,869 | 117,300,000 |
Class B Common Stock | ||
Stockholders' Deficit | ||
Common stock | $ 288 | $ 288 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Preferred shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred shares, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred shares, shares issued (in shares) | 0 | 0 |
Preferred shares, shares outstanding (in shares) | 0 | 0 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common Stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Class A Common Stock subject to possible redemption | ||
Common share at redemption value (per share) | $ 10.40 | $ 10.20 |
Common Stock, subject to possible redemption (in shares) | 11,500,000 | 11,500,000 |
Class A Common Stock Not subject to possible redemption | ||
Common Stock, shares issued (in shares) | 585,275 | 585,275 |
Common Stock, shares outstanding | 585,275 | 585,275 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common Stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Common Stock, shares issued (in shares) | 2,875,000 | 2,875,000 |
Common Stock, shares outstanding | 2,875,000 | 2,875,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 8 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2022 | |
Formation and operating costs | $ 467,223 | $ 98,724 | $ 170,064 | $ 1,771,902 |
Franchise tax expense | 52,802 | 152,802 | ||
Loss from operation costs | (520,025) | (98,724) | (170,064) | (1,924,704) |
Other income (expense): | ||||
Realized and unrealized gain | 587,303 | 2,897 | 3,691 | 779,706 |
Change in fair value of warrant liabilities | (113,829) | 1,388,792 | 6,391,703 | 4,243,893 |
Non-operating expense | (625,059) | |||
Net income (loss) before provision for income taxes | (46,551) | 1,292,965 | 5,600,271 | 3,098,895 |
Provision for income taxes | (106,724) | (106,724) | ||
Net income (loss) | (153,275) | 1,292,965 | 5,600,271 | 2,992,171 |
Class A Common Stock Subject to Redemption | ||||
Other income (expense): | ||||
Net income (loss) | $ (117,823) | $ 993,905 | $ 3,831,255 | $ 2,300,089 |
Weighted average shares outstanding, Basic | 11,500,000 | 11,500,000 | 6,997,872 | 11,500,000 |
Weighted average shares outstanding, Diluted | 11,500,000 | 11,500,000 | 6,997,872 | 11,500,000 |
Basic net income per common stock | $ 0.01 | $ 0.09 | $ 0.55 | $ 0.20 |
Diluted net income per common stock | $ 0.01 | $ 0.09 | $ 0.55 | $ 0.20 |
Class A and Class B non-redeemable common stock | ||||
Other income (expense): | ||||
Net income (loss) | $ (35,452) | $ 299,060 | $ 1,769,016 | $ 692,082 |
Weighted average shares outstanding, Basic | 3,460,275 | 3,460,275 | 3,231,146 | 3,460,275 |
Weighted average shares outstanding, Diluted | 3,460,275 | 3,460,275 | 3,231,146 | 3,460,275 |
Basic net income per common stock | $ 0.01 | $ 0.09 | $ 0.55 | $ 0.20 |
Diluted net income per common stock | $ 0.01 | $ 0.09 | $ 0.55 | $ 0.20 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | Class A Common Stock Not subject to possible redemption Common Stock | Class B Common Stock Common Stock | Additional Paid in Capital | Accumulated Deficit | Total |
Balance at the beginning at Feb. 07, 2021 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Balance at the beginning (in shares) at Feb. 07, 2021 | 0 | 0 | |||
Increase Decrease In Stockholders Equity | |||||
Issuance of Class B Common Stock to Sponsor | $ 0 | $ 288 | 24,712 | 0 | 25,000 |
Issuance of Class B Common Stock to Sponsor (in shares) | 0 | 2,875,000 | |||
Sale of units in Initial Public Offering, net of offering costs | $ 1,209 | $ 0 | 118,730,487 | 0 | 118,731,696 |
Sale of units in Initial Public Offering, net of offering costs (in shares) | 12,085,275 | ||||
Deferred underwriting commission | $ 0 | 0 | (4,025,000) | 0 | (4,025,000) |
Initial fair value of warrant liability | 0 | 0 | (11,176,949) | 0 | (11,176,949) |
Subsequent shares subject to possible redemption | $ (1,150) | 0 | (103,553,250) | (13,745,600) | (117,300,000) |
Subsequent shares subject to possible redemption (in shares) | (11,500,000) | ||||
Net income | $ 0 | 0 | 0 | 4,307,307 | 4,307,307 |
Balance at the end at Jun. 30, 2021 | $ 59 | $ 288 | 0 | (9,438,293) | (9,437,946) |
Balance at the end (in shares) at Jun. 30, 2021 | 585,275 | 2,875,000 | |||
Balance at the beginning at Feb. 07, 2021 | $ 0 | $ 0 | 0 | 0 | 0 |
Balance at the beginning (in shares) at Feb. 07, 2021 | 0 | 0 | |||
Increase Decrease In Stockholders Equity | |||||
Net income | 5,600,271 | ||||
Balance at the end at Sep. 30, 2021 | $ 59 | $ 288 | 0 | (8,145,328) | (8,142,981) |
Balance at the end (in shares) at Sep. 30, 2021 | 585,275 | 2,875,000 | |||
Balance at the beginning at Feb. 07, 2021 | $ 0 | $ 0 | 0 | 0 | 0 |
Balance at the beginning (in shares) at Feb. 07, 2021 | 0 | 0 | |||
Balance at the end at Dec. 31, 2021 | $ 59 | $ 288 | 0 | (8,609,810) | (8,609,463) |
Balance at the end (in shares) at Dec. 31, 2021 | 585,275 | 2,875,000 | |||
Balance at the beginning at Jun. 30, 2021 | $ 59 | $ 288 | 0 | (9,438,293) | (9,437,946) |
Balance at the beginning (in shares) at Jun. 30, 2021 | 585,275 | 2,875,000 | |||
Increase Decrease In Stockholders Equity | |||||
Net income | $ 0 | $ 0 | 0 | 1,292,965 | 1,292,965 |
Balance at the end at Sep. 30, 2021 | $ 59 | $ 288 | 0 | (8,145,328) | (8,142,981) |
Balance at the end (in shares) at Sep. 30, 2021 | 585,275 | 2,875,000 | |||
Balance at the beginning at Dec. 31, 2021 | $ 59 | $ 288 | 0 | (8,609,810) | (8,609,463) |
Balance at the beginning (in shares) at Dec. 31, 2021 | 585,275 | 2,875,000 | |||
Increase Decrease In Stockholders Equity | |||||
Re-measurement of carrying value of Class A redeemable stock to redemption value | 0 | (1,150,000) | (1,150,000) | ||
Net income | 0 | 3,145,445 | 3,145,445 | ||
Balance at the end at Jun. 30, 2022 | $ 59 | $ 288 | 0 | (6,614,365) | (6,614,018) |
Balance at the end (in shares) at Jun. 30, 2022 | 585,275 | 2,875,000 | |||
Balance at the beginning at Dec. 31, 2021 | $ 59 | $ 288 | 0 | (8,609,810) | (8,609,463) |
Balance at the beginning (in shares) at Dec. 31, 2021 | 585,275 | 2,875,000 | |||
Increase Decrease In Stockholders Equity | |||||
Net income | 2,992,171 | ||||
Balance at the end at Sep. 30, 2022 | $ 59 | $ 288 | 0 | (8,451,509) | (8,451,162) |
Balance at the end (in shares) at Sep. 30, 2022 | 585,275 | 2,875,000 | |||
Balance at the beginning at Jun. 30, 2022 | $ 59 | $ 288 | 0 | (6,614,365) | (6,614,018) |
Balance at the beginning (in shares) at Jun. 30, 2022 | 585,275 | 2,875,000 | |||
Increase Decrease In Stockholders Equity | |||||
Re-measurement of carrying value of Class A redeemable stock to redemption value | 0 | (1,150,000) | (1,150,000) | ||
Accretion of Class A common stocks at redemption value | 0 | (533,869) | (533,869) | ||
Net income | 0 | (153,275) | (153,275) | ||
Balance at the end at Sep. 30, 2022 | $ 59 | $ 288 | $ 0 | $ (8,451,509) | $ (8,451,162) |
Balance at the end (in shares) at Sep. 30, 2022 | 585,275 | 2,875,000 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) | 8 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2022 | |
Cash flow from operating activities: | ||
Net income | $ 5,600,271 | $ 2,992,171 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Offering costs allocated to warrant liabilities | 625,059 | |
Realized and unrealized gain | (3,691) | (779,706) |
Change in fair value of warrant liability | (6,391,703) | (4,243,893) |
Changes in operating assets and liabilities: | ||
Prepaid expense | (144,000) | 83,061 |
Accrued expense | 16,132 | 1,159,114 |
Franchise tax payable | (114,008) | |
Income tax payable | 106,724 | |
Net cash used in operating activities | (297,932) | (796,537) |
Cash flow from investing activities: | ||
Investment of cash in Trust Account | (117,300,000) | (2,300,000) |
Interest withdraw from Trust Account | 266,809 | |
Net cash used by investing activities | (117,300,000) | (2,033,191) |
Cash flow from financing activities: | ||
Proceeds from issuance of Class B common stock | 25,000 | |
Proceeds from sale of Units, net of underwriting discount paid | 112,700,000 | |
Proceeds from sale of Private units | 5,852,750 | |
Payment of offering costs | (446,112) | |
Proceeds from working capital loan | 300,000 | |
Amount due to related parties | 11,500 | |
Proceeds from extension loans | 2,300,000 | |
Net cash provided by financing activities | 118,131,638 | 2,611,500 |
Net change in cash | 533,706 | (218,228) |
Cash at the beginning of the period | 453,151 | |
Cash at the end of the period | 533,706 | 234,923 |
Supplemental disclosure of non-cash financing activities: | ||
Initial classification of Class A common stock subject to possible redemption | 117,300,000 | |
Change in value of common stock subject to possible redemption | $ 2,833,869 | |
Deferred underwriting fee payable | 4,025,000 | |
Initial Classification of Warrant Liability | $ 11,176,949 |
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 Data Knights Acquisition Corp. (the “Company”) is a blank check company incorporated in Delaware on February 8, 2021. The Company was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses (the “Business Combination”). The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. On April 22, 2022, Data Knights Merger Sub, Inc. (“Merger Sub”), a Delaware corporation and a wholly-owned subsidiary of Data Knights Acquisition Corp., was formed. As of September 30, 2022, the Company had not yet commenced any operations. All activity for the period February 8, 2021 (inception) through 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, the Company has entered into a merger agreement (as described below), and continued a search for a Business Combination candidate. The Company has selected December 31 as its fiscal year end. The registration statement for the Company’s Initial Public Offering was declared effective on May 6, 2021. On May 11, 2021, the Company consummated the Initial Public Offering of 11,500,000 units (“Units” and, with respect to the shares of Class A Common Stock included in the Units offered, the “Public Shares”), generating gross proceeds of $115,000,000, which is described in Note 3. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 585,275 private placement units (the “Private Placement Units”) at a price of $10.00 per unit in a private placement to the Sponsor, generating gross proceeds of $5,852,750, which is described in Note 4. Following the closing of the Initial Public Offering on May 11, 2021, an amount of $117,300,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the Private Placement Units was placed in a trust account (“Trust Account”) which may be invested 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 meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the Trust Account to the Company’s stockholders, as described below. Transaction costs of the Initial Public Offering amounted to $6,771,112, of which $2,300,000 was for underwriting fees paid at the time of the IPO, $4,025,000 was for deferred underwriting commissions, and $446,112 was for other offering costs. Following the closing of the Initial Public Offering $959,560 of cash was held outside of the Trust Account available for working capital purposes. As of September 30, 2022, we have available to us $234,923 of cash on our balance sheet and working capital deficit of $1,218,387. 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 the Private Placement Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. NASDAQ rules provide that the Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (as defined below) (less any deferred underwriting commissions and taxes payable on interest earned on the Trust Account) at the time of the signing of a definitive agreement to enter a Business Combination. The Company will only complete a Business Combination if the post-Business Combination 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. There is no assurance that the Company will be able to successfully effect a Business Combination. Note 1 — Description of Organization and Business Operations (Continued) On April 25, 2022, the Company, Data Knights Merger Sub, Inc., a Delaware corporation (“Merger Sub”), and Data Knights, LLC, the Company’s sponsor (the “Sponsor”), entered into a definitive Agreement and Plan of Merger (the “Merger Agreement”) with OneMedNet Corporation, Inc., a Delaware corporation (the “Target”, and together with the Company and Merger Sub, the “Parties”) and Paul Casey, as seller representative (“Casey”). Pursuant to the Merger Agreement, upon the closing (the “Closing”) of the Business Combination, the Parties will effect the merger of Merger Sub with and into the Target, with the Target continuing as the surviving entity (the “Merger”), as a result of which all of the issued and outstanding capital stock of the Target shall be exchanged shares of the Class A Common Stock of the Company upon the terms set forth in the Merger Agreement. On May 5, 2022, the Company extended the date by which the Company has to consummate a business combination from May 11, 2022 to August 11, 2022 (the “ First Extension On August 10, 2022, the Company extended the date by which the Company has to consummate a business combination from August 11, 2022 to November 11, 2022 (the “ Second Extension In connection with the proposed Business Combination with the Target, the Company will provide its public stockholders with the opportunity to redeem all or a portion of their Class A Common Stock upon the completion of such Business Combination in connection with a stockholder meeting called to approve such Business Combination. In the event the proposed Business Combination with the Target is not consummated, in connection with an alternative proposed initial business combination, the Company will provide its 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. In connection with a proposed Business Combination, the Company may seek stockholder approval of a Business Combination at a meeting called for such purpose at which stockholders may seek to redeem their shares, regardless of whether they vote for or against a Business Combination. The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 either immediately prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination. Note 1 — Description of Organization and Business Operations (Continued) The Company will have until December 11, 2022 to consummate a business combination. As discussed above, the Company filed a definitive proxy statement with the SEC on October 27, 2022 in connection with the Company’s solicitation of proxies for the vote by the stockholders of the Company at the Special Meeting. The Company’s stockholders approved the Extension Amendment and the Trust Amendment that allowed the Company to extend the deadline by which it must complete its initial business combination by up to nine one-month periods from November 11, 2022. In connection with each such extension, Data Knights, LLC, the Company’s sponsor, caused $0.045 per outstanding share of the Company's Class A Common Stock, or approximately $122,920, to be deposited in the Trust Account in connection with the exercise of the first monthly extension of the Extended Date to December 11, 2022. If the Company is unable to complete a Business Combination by December 11, 2022, or as extended by the Company’s stockholders as described above(the “Combination Period”), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Company’s board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations under Delaware law to provide for claims of creditors and the requirements of applicable law. The underwriter has agreed to waive its rights to the deferred underwriting commission 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 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). There will be no redemption rights or liquidating distributions with respect to the Founder Shares (as defined below) or the shares of Class A Common Stock and the warrants that are included as components of the Private Placement Units. Such warrants will expire worthless if the Company fails to complete a Business Combination within the 18-month time period. The Sponsor has agreed that it will 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 entered into a written letter of intent, confidentiality or similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.20 per Public Share (or $10.445 per Public Share including the Extension deposits) and (ii) the actual amount per Public Share held in the Trust Account as of the day of liquidation of the Trust Account, if less than $10.20 per share (or $10.445 per share including the Extension deposits) due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriter of Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believe that the Sponsor’s only assets are securities of the Company. Therefore, the Company cannot assure its stockholders that the Sponsor would be able to satisfy those obligations. None of the Company’s officers or directors will indemnify the Company for claims by third parties including, without limitation, claims by vendors and prospective target businesses. 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. Liquidity As of September 30, 2022, the Company had $234,923 in cash and working capital deficit of $1,218,387. Note 1 — Description of Organization and Business Operations (Continued) The Company’s liquidity needs prior to the consummation of its IPO were satisfied through the proceeds of $25,000 from the sale of the Founder Shares and proceed from the promissory note from sponsor of $78,925, which was repaid upon closure of the IPO. Subsequent to the IPO, the Company’s liquidity will be satisfied through a portion of the net proceeds from IPO held outside of the Trust Account. As of September 30, 2022, we had investments of $120,133,869 held in the Trust Account. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less taxes paid and deferred underwriting commissions) to complete our initial business combination. We may withdraw interest to pay taxes. During the nine and three months ended September 30, 2022, we withdrawed $266,810 interest earned on the Trust Account to pay DE Franchise tax. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies. The accompanying financial statements have been prepared in conformity with U.S. GAAP, which contemplates the continuation of the Company as a going concern and the realization of assets and the satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Further, we have incurred and expect to continue to incur significant costs in pursuit of our financing and acquisition plans. Management plans to address this uncertainty during the period leading up to the business combination, however this cannot be guaranteed. Originally, the Company will have until May 11, 2022 to consummate a Business Combination. On May 5, 2022, the Company extended the date by which the Company has to consummate a business combination from May 11, 2022 to August 11, 2022 (the “1 st Extension nd Extension nd In order to fund working capital deficiencies or finance transaction costs in connection with our initial Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial Business Combination, we would repay such loaned amounts. In the event that our initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Accounts to repay such loaned amounts but no proceeds from our Trust Accounts would be used for such repayment. Up to $1,500,000 of such loans may be convertible into units identical to the Placement Units, at a price of $10.00 per unit at the option of the lender. Note 1 — Description of Organization and Business Operations (Continued) Risks and Uncertainties Management is currently evaluating 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 financial statement. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Additionally, as a result of the military action commenced in February 2022 by the Russian Federation and Belarus in the country of Ukraine and related economic sanctions, the Company’s ability to consummate a Business Combination, including the proposed Business Combination with the Target, or the operations of a target business with which the Company ultimately consummates a Business Combination, including the Target, may be materially and adversely affected. Further, the Company’s ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by these events, including as a result of increased market volatility, or decreased market liquidity in third-party financing being unavailable on terms acceptable to the Company or at all. The impact of this action and related sanctions on the world economy and the specific impact on the Company’s financial position, results of operations and/or ability to consummate a Business Combination are not yet determinable. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2 — Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. 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 independent registered public accounting firm 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 condensed consolidated 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 balance sheet 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 condensed consolidated financial statements and the reported amounts of revenues and 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 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 highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value. The Company had $234,923 and $453,151 in cash and no cash equivalents as of September 30, 2022 and December 31, 2021. Note 2 — Summary of Significant Accounting Policies (Continued) Trust Account Upon the closing of the Initial Public Offering and the Private Placement, $117,300,000 ($10.00 per Unit) of the net proceeds of the Initial Public Offering and certain of the proceeds of the Private Placement was held in a trust account (“Trust Account”) located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act 1940, as amended (the “Investment Company Act”), which will be invested only in direct U.S. government treasury obligations, 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. Offering Costs Associated with the Initial Public Offering Offering costs consisted of legal, accounting, underwriting fees and other costs incurred 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 offering costs allocated to warrants in the condensed consolidated statements of operations. Offering costs associated with the Public Shares were charged to stockholders’ equity upon the completion of the Initial Public Offering. Class A Common Stock Subject to Possible Redemption The Company accounts for its shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Shares subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable shares of common stock (including shares of 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, shares are classified as stockholders’ equity. The Company’s shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. On September 30, 2022, there were 585,275 shares of Class A Common Stock issued If it is probable that the equity instrument will become redeemable, the Company has the option to either accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately. The accretion or remeasurement is treated as a deemed dividend (i.e., a reduction to retained earnings, or in absence of retained earnings, additional paid-in capital). Note 2 — Summary of Significant Accounting Policies (Continued) The Class A Common Stock reflected on the condensed consolidated balance sheet are reconciled in the following table: For the Period from For Nine February 8, 2021 Months ended (inception) September 30, through 2022 December 31, 2021 Contingently redeemable Class A Common Stock – $ 117,300,000 $ — Gross Proceeds — 115,000,000 Less: Proceeds allocated to public warrants and private warrants — (10,614,500) Issuance costs related to Class A Common Stock — (6,146,054) Plus: Re-measurement of carrying value to redemption value 2,833,869 19,060,554 Contingently redeemable Class A Common Stock - 120,133,869 117,300,000 Net Income (Loss) Per Share Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common stock shares outstanding for the period. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the Initial Public Offering and warrants issued as components of the Private Placement Units (the “Placement Warrants”) since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. The Company applies the two-class method in calculating earnings per share. The contractual formula utilized to calculate the redemption amount approximates fair value. The Class feature to redeem at fair value means that there is effectively only one class of stock. Changes in fair value are not considered a dividend of the purposes of the numerator in the earnings per share calculation. Net income per common share is computed by dividing the pro rata net loss between the redeemable shares and the non-redeemable shares by the weighted average number of common shares outstanding for each of the periods. The calculation of diluted income per common stock does not consider the effect of the warrants issued in connection with the IPO since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. The warrants are exercisable for 11,500,000 shares of common stock in the aggregate. Note 2 — Summary of Significant Accounting Policies (Continued) The following table reflects the calculation of basic and diluted net income per common share: For the Nine months Period from Three Months Ended Ended February 8, 2021 September 30, September 30, (inception) Through 2022 2021 2022 September 30, 2021 Redeemable Class A Common Stock subject to possible redemption Numerator: earnings allocable to redeemable Class A Common Stock subject to possible redemption $ (117,823) $ 993,905 $ 2,300,089 $ 3,831,255 Denominator: weighted average number of redeemable Class A Common Stock 11,500,000 11,500,000 11,500,000 6,997,872 Basic and diluted net income per redeemable Class A Common Stock $ 0.01 $ 0.09 $ 0.20 $ 0.55 Non-redeemable Class A and Class B common stock Numerator: net income (loss) allocable to non-redeemable Class A and Class B common stock $ (35,452) $ 299,060 $ 692,082 $ 1,769,016 Denominator: weighted average number of non-redeemable Class A and Class B common stock Non-redeemable Class A private placement and Class B common shares, basic and diluted 3,460,275 3,460,275 3,460,275 3,231,146 Basic and diluted net income per non-redeemable Class and Class B common stock $ 0.01 $ 0.09 $ 0.20 $ 0.55 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 Depository Insurance Corporation coverage limit of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. Fair value of financial instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature, except warrant liabilities (See Note 9). 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 ASC Topic 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the condensed consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in 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. Note 2 — Summary of Significant Accounting Policies (Continued) Income Taxes The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC Topic 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’s management determined that the United States is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 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 is subject to income tax examinations by major taxing authorities since inception. The Company’s effective tax rate for the three and nine months ended September 30, 2022, was -220.93% and 3.44%, respectively, and for the three months ended September 30, 2021, and for the period from February 8, 2021 (inception) through September 30, 2021 was 0.00%. The Company’s effective tax rate differs from the statutory income tax rate of 21% primarily due to the recognition of gains or losses from the change in the fair value of warrant liabilities, which are not recognized for tax purposes, and recording a full valuation allowance on deferred tax assets. The Company has historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full fiscal year to income or loss for the reporting period. The Company has used a discrete effective tax rate method to calculate taxes for the three and nine months ended September 30, 2022. The Company believes that, at this time, the use of the discrete method for the three and nine months ended September 30, 2022 is more appropriate than the estimated annual effective tax rate method as the estimated annual effective tax rate method is not reliable due to a high degree of uncertainty in estimating annual pretax earnings. On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into law. The IR Act provides for, among other measures, a new 1% U.S. federal excise tax on certain repurchases (including redemptions) of stock by publicly traded domestic (i.e., U.S.) corporations. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from whom the shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased. For purposes of calculating the excise tax, however, 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 Department”) has been given authority to provide regulations and other guidance to carry out, and prevent the abuse or avoidance of, the excise tax. The IR Act applies only to repurchases that occur after December 31, 2022. Any redemption or other repurchase effected by us that occurs after December 31, 2022, in connection with a Business Combination or otherwise, may be subject to this excise tax. Whether and to what extent we would be subject to the excise tax in connection with a Business Combination will depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, (ii) the nature and amount of any PIPE financing or other equity issuances in connection with the Business Combination (or any other equity issuances within the same taxable year of the Business Combination) and (iii) the content of any regulations and other guidance issued by the Treasury Department and/or the Internal Revenue Service. In addition, because the excise tax would be payable by us and not by the redeeming holder, it could cause a reduction in the value of our stock. The foregoing could cause a reduction in the cash available on hand to complete a business Combination in the required time and redeem 100% of our public shares in accordance with our amended and restated certificate of incorporation) could be subject to the excise tax, in which case the amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced. Note 2 — Summary of Significant Accounting Policies (Continued) Recently Issued Accounting Standards In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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. ASU2020-06 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 for fiscal years beginning after December 15, 2023 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 other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s condensed consolidated financial statements. |
Public Offering
Public Offering | 9 Months Ended |
Sep. 30, 2022 | |
Public Offering | |
Public Offering | Note 3 —Public Offering Pursuant to the Initial Public Offering, the Company sold 11,500,000 Units at a purchase price of $10.00 per Unit. Each Unit consists of one share of the Company’s Class A Common Stock, $0.0001 par value, and one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of Class A Common Stock at an exercise price of $11.50 per whole share (see Note 7). |
Private Placement
Private Placement | 9 Months Ended |
Sep. 30, 2022 | |
Private Placement | |
Private Placement | Note 4 — Private Placement Simultaneously with the Initial Public Offering, the Sponsor purchased an aggregate of 585,275 Private Placement Units at a price of $10.00 per Private Placement Unit for an aggregate purchase price of $5,852,750. The Private Placement Units are identical to the Units, except that (a) the Private Placement Units and their component securities will not be transferable, assignable or saleable until the consummation of the Company’s initial business combination except to permitted transferees and (b) the Placement Warrants, so long as they are held by the Sponsor or its permitted transferees, (i) may be exercised by the holders on a cashless basis and (ii) will be entitled to registration rights. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions | |
Related Party Transactions | Note 5 — Related Party Transactions Founder Shares On February 25, 2021, the Company issued an aggregate of 2,875,000 shares of Class B common stock (the “Founder Shares”) to the Sponsor for an aggregate purchase price of $25,000. On February 25, 2021, the Sponsor transferred 15,000 shares to the Company’s Chief Executive Officer, 15,000 shares to the Company’s Chief Financial Officer and 5,000 shares to two of the Company’s independent directors. Following the determination of the Company’s third independent director, on March 23, 2021, the Sponsor transferred 5,000 shares to such independent director. The Founder Shares which the Sponsor and its permitted transferees will collectively own, on an as-converted basis, represent 20% of the Company’s issued and outstanding shares after the Initial Public Offering. Note 5 — Related Party Transactions (Continued) The Sponsor has agreed not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) Nine months after the completion of a Business Combination or (B) the date on which the Company completes a liquidation, merger, capital stock exchange or similar transaction that results in the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the last reported sale price of the Company’s 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 the Business Combination, the Founder Shares will be released from the lock-up. Promissory Note — Related Party On February 8, 2021, the Sponsor committed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the “Note”). The Note was non-interest bearing and was payable on the earlier of July 31, 2021 or the completion of the Initial Public Offering. On June 1, 2021, the $78,925 outstanding under the promissory note was repaid in full. On September 30, 2022 and December 31, 2021, there is no amount outstanding under the promissory note. Related Party Loans In order to finance transaction costs in connection with a Business Combination, the Company’s Sponsor, an affiliate of the Sponsor, or the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of notes may be converted upon consummation of a Business Combination into units at a price of $10.00 per unit. The Units will be identical to the Private Placement Units. 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. As of September 30, 2022, the Company has $300,000 working capital loans outstanding. Note 5 — Related Party Transactions (Continued) The Company’s second amended and restated certificate of incorporation provides that, if the Company anticipates that it may not be able to consummate a Business Combination within 12 months from the closing of the Company’s initial public offering, the Company may, by resolution of the Company’s board if requested by the Sponsor, extend the period of time to consummate a Business Combination up to two times, each by an additional three months (for a total of up to 18 months to complete a Business Combination), subject to the Sponsor depositing additional funds into the Trust Account as set out below. Pursuant to the terms of the Company’s second amended and restated certificate of incorporation and the trust agreement entered into between the Company and Continental Stock Transfer & Trust Company, in order for the time available for the Company to consummate the initial Business Combination to be extended, the Sponsor or its affiliates or designees, upon five business days advance notice prior to the applicable deadline, must deposit into the Trust Account $1,150,000 since the underwriters’ over-allotment option is exercised in full ($0.10 per unit), on or prior to the date of the applicable deadline, for each of the available three month extensions, providing a total possible Business Combination period of 18 months at a total payment value of $2,300,000 since the underwriters’ over-allotment option is exercised in full ($0.10 per unit) (the “Extension Loans”). Any such payments would be made in the form of non-interest-bearing loans. If the Company completes its initial Business Combination, the Company will, at the option of the Sponsor, repay the Extension Loans out of the proceeds of the Trust Account released to the Company or convert a portion or all of the total loan amount into units at a price of $10.00 per unit, which units will be identical to the Private Placement Units. If the Company does not complete a Business Combination, the Company will repay such loans only from funds held outside of the Trust Account. Furthermore, the letter agreement among the Company and the Company’s officers, directors, and the Sponsor contains a provision pursuant to which the Sponsor will agree to waive its right to be repaid for such loans to the extent there is insufficient funds held outside of the Trust Account in the event that the Company does not complete a Business Combination. The Sponsor and its affiliates or designees are not obligated to fund the Trust Account to extend the time for the Company to complete the initial Business Combination. The public stockholders will not be afforded an opportunity to vote on the extension of time to consummate an initial Business Combination from 12 months to 18 months described above or redeem their shares in connection with such extensions. Pursuant to the foregoing, on May 5, 2022, the Company extended the date by which the Company had to consummate a business combination from May 11, 2022 to August 11, 2022. On August 10, 2022, the Company extended the date by which the Company had to consummate a business combination from August 11, 2022 to November 11, 2022. As described in Note 1, the Company filed a definitive proxy statement with the SEC on October 27, 2022 in connection with the Company’s solicitation of proxies for the vote by the stockholders of the Company at the Special Meeting. The Stockholers of the Compnay approved the Extension Amendment and the Trust Amendment to allow the Company to extend the deadline by which it must complete its initial business combination by up to nine one-month periods from November 11, 2022. In connection with each such extension, Data Knights, LLC, the Company’s sponsor, caused $0.045 per outstanding share of the Company’s Class A Common Stock, or approximately $122,920, to be deposited in the Trust Account in connection with the exercise of the first monthly extension of the Extended Date to December 11, 2022. In connection with each such extension, the Company will have until December 11, 2022 to consummate a Business Combination, as noted above. Administrative Support Agreement Commencing on the date of the Initial Public Offering and until completion of the Company’s Business Combination or liquidation, the Company may reimburse Luminous Capital Inc., an affiliate of the Sponsor, up to an amount of $10,000 per month for office space, secretarial and administrative support. For the three months and nine months ended September 30, 2022, $30,000 and $90,000 support fees were incurred, respectively. For the period from February 8, 2021 (inception) through September 30, 2021, $50,000 support fees were incurred. For the three months ended September 30, 2021, $30,000 support fees were incurred. |
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 Pursuant to a registration rights agreement entered into on May 6, 2021, the holders of the Founder Shares, Private Placement Units (including the securities contained therein), the units (including the securities contained therein) that may be issued upon conversion of the Working Capital Loans, and any shares of Class A common stock issuable upon the exercise of the Placement Warrants and any shares of Class A common stock, warrants (and underlying Class A common stock) that may be issued upon conversion of the units issued as part of the working capital loans and Class A common stock issuable upon conversion of the founder shares are entitled to registration rights. The holders of a majority of these securities are 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. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Underwriters Agreement The Company granted the underwriter a 45-day option to purchase up to 1,500,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions. The aforementioned option was exercised in full on May 11, 2021, simultaneous with the Initial Public Offering. The underwriter was paid a cash underwriting discount of two percent (2.00%) of the gross proceeds of the Initial Public Offering, or $2,300,000. In addition, the underwriter is entitled to a deferred fee of three and a half percent (3.50%) of the gross proceeds of the Initial Public Offering, or $4,025,000. The deferred fee was placed in the Trust Account and will be paid in cash upon the closing of a Business Combination, subject to the terms of the underwriting agreement. Right of First Refusal For a period beginning on May 7, 2021 and ending 12 months from the closing of a business combination, we have granted the underwriters a right of first refusal to act as lead-left book running manager and lead left manager for any and all future private or public equity, convertible and debt offerings during such period. In accordance with FINRA Rule 5110(f)(2)(E)(i), such right of first refusal shall not have a duration of more than three years from the effective date of our Registration Statement. |
Warrant Liability
Warrant Liability | 9 Months Ended |
Sep. 30, 2022 | |
Warrant Liability. | |
Warrant Liability | Note 7 – Warrant Liability 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 30 days after the completion of a Business Combination and 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 covering the issuance of the shares of Class A common issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of Class A common stock is available, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. Note 7 – Warrant Liability (Continued) The Company has agreed that as soon as practicable, but in no event later than 20 60 Redemption of warrants when the price per Class A Common Stock equals or exceeds $18.00. Once the warrants become exercisable, the Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $0.01 per Public Warrant; ● upon not less than 30 days ’ prior written notice of redemption to each warrant holder; and ● if, and only if, the reported last sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like and certain issuances of Class A common stock and equity-linked securities) for any 20 trading days within a 30 -trading day period commencing no earlier than the date the warrants become exercisable and ending on the third business day before the date on which the Company sends the notice of redemption to the warrant holders. 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. Note 7 – Warrant Liability(Continued) If the Company calls the Public Warrants for redemption, 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 Window 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.The Placement Warrants were identical to the Public Warrants underlying the Units being sold in the Proposed Public Offering, except that the Placement Warrants and the Class A common stock issuable upon the exercise of the 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 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. If the Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A 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 the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination on the date of the consummation of such initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20 The Placement Warrants will be identical to the Public Warrants underlying the Units being sold in the Proposed Public Offering, except that the Placement Warrants and the Class A common stock issuable upon the exercise of the Placement Warrants will not be transferable, assignable or salable until 30 At September 30, 2022, the Company accounted for the aggregate 12,085,275 warrants issued in connection with the Initial Public Offering (the 11,500,000 Public Warrants and the 585,275 Placement Warrants) in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Accordingly, the Company will classify each warrant as a liability at its fair value, with the change in fair value recognized in the Company’s statement of operations. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity | |
Stockholders' Equity | Note 8 – Stockholders’ Equity Preferred Stock Class A Common Stock Class B Common Stock — Holders of Class A Common Stock and Class B common stock will vote together as a single class on all other 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 the Business Combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like. 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, and any private placement-equivalent units and its underlying securities issued to the Sponsor or its affiliates upon conversion of loans made to the Company). The Company may issue additional common stock or preferred stock to complete its Business Combination or under an employee incentive plan after completion of its Business Combination. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Measurements | |
Fair Value Measurements | Note 9 – Fair Value Measurements The following table presents information about the Company’s assets and derivative warrant liabilities that are measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value: September 30, 2022 Quoted Prices in Significant Other Significant Other Active Markets Observable Inputs Unobservable Inputs Description (Level 1) (Level 2) (Level 3) Asset: Investments held in Trust Account $ 120,133,869 $ — $ — Warrant Liabilities: Public Warrants $ 575,000 $ — $ — Private Placement Warrants $ — $ — $ 32,775 Note 9 – Fair Value Measurements (Continued) December 31, 2021 Quoted Prices in Significant Other Significant Other Active Markets Observable Inputs Unobservable Inputs Description (Level 1) (Level 2) (Level 3) Asset: Investments held in Trust Account $ 117,320,973 $ — $ — Warrant Liabilities: Public Warrants $ 4,600,000 $ — $ — Private Placement Warrants $ — $ — $ 251,668 The Warrants are measured at fair value on a recurring basis. The Public Warrants were valued initially and at each reporting period that the warrants were not actively traded, using a Monte Carlo simulation. As of September 30, 2022 and December 31, 2021, the Public Warrants were valued using the instrument’s publicly listed trading price, which is considered to be a Level 1 measurement due to the use of an observable market quote in an active market. Private Placement Warrants were valued using a Monte Carlo valuation model using level 3 inputs at initial valuation and as of September 30, 2022 and December 31, 2021. At September 30, 2022 and December 31, 2021, assets held in the Trust Account were comprised of $120,133,869 and $117,320,973 in cash and U.S. Treasury Securities, respectively. 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 and are considered Level 1 assets. The Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities in the accompanying condensed consolidated balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within the statement of operations. The accounting treatment of derivative financial instruments requires that the Company record a derivative liability upon the closing of the Initial Public Offering. Accordingly, the Company classified each warrant as a liability at its fair value and the warrants were allocated a portion of the proceeds from the issuance of the Units equal to its fair value determined by the Monte Carlo simulation. This liability is subject to remeasurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification. The Company utilized a Monte Carlo simulation to estimate the fair value of the Public warrants at each reporting period for its warrants that are not actively traded. Inherent in a Monte Carlo simulation 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 historical volatility of select peer 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 curve 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. On June 22, 2021, the Public Warrants surpassed the threshold waiting period to be publicly traded. Once publicly traded, the observable input qualifies the liability for treatment as a Level 1 liability. As such, as of September 30, 2022 and December 31, 2021, the Company classified the Public Warrants as Level 1. Note 9 – Fair Value Measurements (Continued) The estimated fair value of the Private Placement Warrants is determined using Level 3 inputs. Inherent in a Monte Carlo model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its warrants based on implied volatility from the Company’s traded warrants and from historical volatility of select peer company’s common stock that matches the expected remaining life of the Warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve 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. Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs. During the Nine months ended September 30, 2022 and for the period from February 8, 2021 (inception) through September 30, 2021 there were no transfers between levels. The following table provides quantitative information regarding Level 3 fair value measurements inputs as their measurement dates: September 30, 2022 December 31, 2021 (Private Warrants) (Private Warrants) Exercise price $ 11.50 $ 11.50 Share price $ 10.36 $ 10.10 Expected term (years) 5.11 5.36 Probability of Acquisition 5.0 % 100.0 % Volatility 5.4 % 7.4 % Risk-free rate 3.97 % 1.28 % Dividend yield (per share) 0.00 % 0.00 % The change in the fair value of the derivative warrant liabilities for the period from December 31, 2021 through September 30, 2022 is summarized as follows: Private Placement Public Warrant Warrant Liability Fair value as of December 31, 2021 $ 251,668 $ 4,600,000 $ 4,851,668 Change in valuation inputs or other assumptions (1) (218,893) (4,025,000) (4,243,893) Fair value as of September 30, 2022 $ 32,775 $ 575,000 $ 607,775 (1) Changes in valuation inputs or other assumptions are recognized in change in fair value of warrant liability in the statement of operations . |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events | |
Subsequent Events | Note 10 – Subsequent Events In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after September 30, 2022, up to November 18, 2022, the date the Company issued the audited financial statements. Based upon this review, the Company identifed the following subsequent events:. - On November 11, 2022, the Company held a Special Meeting of its stockholders. The Stockholders of the Company approved the First Amendment to the Second Amended and Restated Certificate of Incorporation (the “Extension Amendment”). The Company has the right to extend the date by which the Company must (i) consummate a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving the Company and one or more businesses (a “business combination”), (ii) cease its operations if it fails to complete such business combination, and (iii) redeem or repurchase 100% of the Company’s Class A common stock included as part of the units sold in the Company’s initial public offering that was closed on May 11, 2021 (the “IPO”) from November 11, 2022 (the “Termination Date”) up to nine ( 9 ) one-month extensions to August 11, 2023 (the “Extension Amendment Proposal”). - At the Special Meeting held on November 11, 2022, the Stockholders also approved of Trust Amendment Proposal, pursuant to which the Investment Management Trust Agreement (the “Trust Agreement”), dated May 11, 2021, by and between the Company and Continental Stock Transfer & Trust Company, as trustee (“Continental”), was amended to extend the date on which Continental must liquidate the Trust Account (the “Trust Account”) established in connection with the IPO if the Company has not completed its initial business combination, from November 11, 2022 to August 11, 2023 (or such earlier date after November 11, 2022, as determined by the Data Knights Board). - In connection with the voting on the Extension Amendment Proposal and the Trust Amendment Proposal at the special meeting, holders of 8,768,456 shares of Class A Common Stock exercised their right to redeem those shares for cash at an approximate price of $10.42 per share, for an aggregate of approximately $91.4 million. Following the payment of the redemptions, the Trust Account had a balance of approximately $28.5 million. - In connection with approval of the Extension Amendment Proposal and the Trust Amendment Proposal, Data Knights, LLC, the Company’s sponsor, caused $0.045 per outstanding share of the Company’s Class A Common Stock, giving effect to the redemptions disclosed above, or approximately $122,920 , to be deposited in the Trust Account in connection with the exercise of the first monthly extension of the Extended Date to December 11, 2022. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. |
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 independent registered public accounting firm 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 condensed consolidated 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 | Use of Estimates The preparation of the balance sheet 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 condensed consolidated financial statements and the reported amounts of revenues and 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 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 highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value. The Company had $234,923 and $453,151 in cash and no cash equivalents as of September 30, 2022 and December 31, 2021. |
Trust Account | Trust Account Upon the closing of the Initial Public Offering and the Private Placement, $117,300,000 ($10.00 per Unit) of the net proceeds of the Initial Public Offering and certain of the proceeds of the Private Placement was held in a trust account (“Trust Account”) located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act 1940, as amended (the “Investment Company Act”), which will be invested only in direct U.S. government treasury obligations, 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. |
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 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 offering costs allocated to warrants in the condensed consolidated statements of operations. Offering costs associated with the Public Shares were charged to stockholders’ equity upon the completion of the Initial Public Offering. |
Class A Common Stock Subject to Possible Redemption | Class A Common Stock Subject to Possible Redemption The Company accounts for its shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Shares subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable shares of common stock (including shares of 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, shares are classified as stockholders’ equity. The Company’s shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. On September 30, 2022, there were 585,275 shares of Class A Common Stock issued If it is probable that the equity instrument will become redeemable, the Company has the option to either accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately. The accretion or remeasurement is treated as a deemed dividend (i.e., a reduction to retained earnings, or in absence of retained earnings, additional paid-in capital). Note 2 — Summary of Significant Accounting Policies (Continued) The Class A Common Stock reflected on the condensed consolidated balance sheet are reconciled in the following table: For the Period from For Nine February 8, 2021 Months ended (inception) September 30, through 2022 December 31, 2021 Contingently redeemable Class A Common Stock – $ 117,300,000 $ — Gross Proceeds — 115,000,000 Less: Proceeds allocated to public warrants and private warrants — (10,614,500) Issuance costs related to Class A Common Stock — (6,146,054) Plus: Re-measurement of carrying value to redemption value 2,833,869 19,060,554 Contingently redeemable Class A Common Stock - 120,133,869 117,300,000 |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common stock shares outstanding for the period. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the Initial Public Offering and warrants issued as components of the Private Placement Units (the “Placement Warrants”) since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. The Company applies the two-class method in calculating earnings per share. The contractual formula utilized to calculate the redemption amount approximates fair value. The Class feature to redeem at fair value means that there is effectively only one class of stock. Changes in fair value are not considered a dividend of the purposes of the numerator in the earnings per share calculation. Net income per common share is computed by dividing the pro rata net loss between the redeemable shares and the non-redeemable shares by the weighted average number of common shares outstanding for each of the periods. The calculation of diluted income per common stock does not consider the effect of the warrants issued in connection with the IPO since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. The warrants are exercisable for 11,500,000 shares of common stock in the aggregate. Note 2 — Summary of Significant Accounting Policies (Continued) The following table reflects the calculation of basic and diluted net income per common share: For the Nine months Period from Three Months Ended Ended February 8, 2021 September 30, September 30, (inception) Through 2022 2021 2022 September 30, 2021 Redeemable Class A Common Stock subject to possible redemption Numerator: earnings allocable to redeemable Class A Common Stock subject to possible redemption $ (117,823) $ 993,905 $ 2,300,089 $ 3,831,255 Denominator: weighted average number of redeemable Class A Common Stock 11,500,000 11,500,000 11,500,000 6,997,872 Basic and diluted net income per redeemable Class A Common Stock $ 0.01 $ 0.09 $ 0.20 $ 0.55 Non-redeemable Class A and Class B common stock Numerator: net income (loss) allocable to non-redeemable Class A and Class B common stock $ (35,452) $ 299,060 $ 692,082 $ 1,769,016 Denominator: weighted average number of non-redeemable Class A and Class B common stock Non-redeemable Class A private placement and Class B common shares, basic and diluted 3,460,275 3,460,275 3,460,275 3,231,146 Basic and diluted net income per non-redeemable Class and Class B common stock $ 0.01 $ 0.09 $ 0.20 $ 0.55 |
Concentration of Credit Risk | 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 Depository Insurance Corporation coverage limit of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. |
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 ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature, except warrant liabilities (See Note 9). |
Derivative Financial Instruments | 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 ASC Topic 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the condensed consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in 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. |
Income Taxes | Income Taxes The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC Topic 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’s management determined that the United States is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 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 is subject to income tax examinations by major taxing authorities since inception. The Company’s effective tax rate for the three and nine months ended September 30, 2022, was -220.93% and 3.44%, respectively, and for the three months ended September 30, 2021, and for the period from February 8, 2021 (inception) through September 30, 2021 was 0.00%. The Company’s effective tax rate differs from the statutory income tax rate of 21% primarily due to the recognition of gains or losses from the change in the fair value of warrant liabilities, which are not recognized for tax purposes, and recording a full valuation allowance on deferred tax assets. The Company has historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full fiscal year to income or loss for the reporting period. The Company has used a discrete effective tax rate method to calculate taxes for the three and nine months ended September 30, 2022. The Company believes that, at this time, the use of the discrete method for the three and nine months ended September 30, 2022 is more appropriate than the estimated annual effective tax rate method as the estimated annual effective tax rate method is not reliable due to a high degree of uncertainty in estimating annual pretax earnings. On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into law. The IR Act provides for, among other measures, a new 1% U.S. federal excise tax on certain repurchases (including redemptions) of stock by publicly traded domestic (i.e., U.S.) corporations. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from whom the shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased. For purposes of calculating the excise tax, however, 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 Department”) has been given authority to provide regulations and other guidance to carry out, and prevent the abuse or avoidance of, the excise tax. The IR Act applies only to repurchases that occur after December 31, 2022. Any redemption or other repurchase effected by us that occurs after December 31, 2022, in connection with a Business Combination or otherwise, may be subject to this excise tax. Whether and to what extent we would be subject to the excise tax in connection with a Business Combination will depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, (ii) the nature and amount of any PIPE financing or other equity issuances in connection with the Business Combination (or any other equity issuances within the same taxable year of the Business Combination) and (iii) the content of any regulations and other guidance issued by the Treasury Department and/or the Internal Revenue Service. In addition, because the excise tax would be payable by us and not by the redeeming holder, it could cause a reduction in the value of our stock. The foregoing could cause a reduction in the cash available on hand to complete a business Combination in the required time and redeem 100% of our public shares in accordance with our amended and restated certificate of incorporation) could be subject to the excise tax, in which case the amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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. ASU2020-06 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 for fiscal years beginning after December 15, 2023 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 other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s condensed consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting Policies | |
Schedule of Class A Common Stock reflected on the condensed consolidated balance sheet are reconciled | For the Period from For Nine February 8, 2021 Months ended (inception) September 30, through 2022 December 31, 2021 Contingently redeemable Class A Common Stock – $ 117,300,000 $ — Gross Proceeds — 115,000,000 Less: Proceeds allocated to public warrants and private warrants — (10,614,500) Issuance costs related to Class A Common Stock — (6,146,054) Plus: Re-measurement of carrying value to redemption value 2,833,869 19,060,554 Contingently redeemable Class A Common Stock - 120,133,869 117,300,000 |
Schedule of basic and diluted net income per common share | For the Nine months Period from Three Months Ended Ended February 8, 2021 September 30, September 30, (inception) Through 2022 2021 2022 September 30, 2021 Redeemable Class A Common Stock subject to possible redemption Numerator: earnings allocable to redeemable Class A Common Stock subject to possible redemption $ (117,823) $ 993,905 $ 2,300,089 $ 3,831,255 Denominator: weighted average number of redeemable Class A Common Stock 11,500,000 11,500,000 11,500,000 6,997,872 Basic and diluted net income per redeemable Class A Common Stock $ 0.01 $ 0.09 $ 0.20 $ 0.55 Non-redeemable Class A and Class B common stock Numerator: net income (loss) allocable to non-redeemable Class A and Class B common stock $ (35,452) $ 299,060 $ 692,082 $ 1,769,016 Denominator: weighted average number of non-redeemable Class A and Class B common stock Non-redeemable Class A private placement and Class B common shares, basic and diluted 3,460,275 3,460,275 3,460,275 3,231,146 Basic and diluted net income per non-redeemable Class and Class B common stock $ 0.01 $ 0.09 $ 0.20 $ 0.55 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Measurements | |
Schedule of company's assets and derivative warrant liabilities that are measured at fair value on a recurring basis | September 30, 2022 Quoted Prices in Significant Other Significant Other Active Markets Observable Inputs Unobservable Inputs Description (Level 1) (Level 2) (Level 3) Asset: Investments held in Trust Account $ 120,133,869 $ — $ — Warrant Liabilities: Public Warrants $ 575,000 $ — $ — Private Placement Warrants $ — $ — $ 32,775 December 31, 2021 Quoted Prices in Significant Other Significant Other Active Markets Observable Inputs Unobservable Inputs Description (Level 1) (Level 2) (Level 3) Asset: Investments held in Trust Account $ 117,320,973 $ — $ — Warrant Liabilities: Public Warrants $ 4,600,000 $ — $ — Private Placement Warrants $ — $ — $ 251,668 |
Schedule of quantitative information regarding Level 3 fair value measurements inputs | September 30, 2022 December 31, 2021 (Private Warrants) (Private Warrants) Exercise price $ 11.50 $ 11.50 Share price $ 10.36 $ 10.10 Expected term (years) 5.11 5.36 Probability of Acquisition 5.0 % 100.0 % Volatility 5.4 % 7.4 % Risk-free rate 3.97 % 1.28 % Dividend yield (per share) 0.00 % 0.00 % |
Schedule of change in the fair value of the warrant liabilities | Private Placement Public Warrant Warrant Liability Fair value as of December 31, 2021 $ 251,668 $ 4,600,000 $ 4,851,668 Change in valuation inputs or other assumptions (1) (218,893) (4,025,000) (4,243,893) Fair value as of September 30, 2022 $ 32,775 $ 575,000 $ 607,775 (1) Changes in valuation inputs or other assumptions are recognized in change in fair value of warrant liability in the statement of operations . |
Description of Organization a_2
Description of Organization and Business Operations (Details) | 5 Months Ended | 8 Months Ended | 9 Months Ended | |||||||
Dec. 11, 2022 USD ($) $ / shares | Nov. 11, 2022 item | Aug. 10, 2022 item | May 05, 2022 item | May 11, 2021 USD ($) $ / shares shares | Feb. 08, 2021 item | Jun. 30, 2021 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) item $ / shares shares | Dec. 31, 2021 USD ($) | |
Description of Organization and Business Operations | ||||||||||
Condition for future business combination number of businesses minimum | item | 1 | |||||||||
Payments for investment of cash in Trust Account | $ 117,300,000 | $ 117,300,000 | $ 2,300,000 | |||||||
Price per unit | $ / shares | $ 10 | |||||||||
Deferred underwriting commissions | 4,025,000 | |||||||||
Cash held outside the Trust Account | 234,923 | $ 453,151 | ||||||||
Working capital deficit | $ (1,218,387) | |||||||||
Threshold minimum aggregate fair market value as a percentage of the net assets held in the Trust Account | 80% | |||||||||
Threshold percentage of outstanding voting securities of the target to be acquired by post-transaction company to complete business combination | 50% | |||||||||
Number of three-month extensions for consummation of Initial Business Combination | item | 2 | 2 | 2 | |||||||
Extension period for consummating Initial Business Combination | 3 months | 3 months | 3 months | |||||||
Minimum net tangible asset upon consummation of business combination | $ 5,000,001 | |||||||||
Maximum net interest to pay dissolution expenses | $ 100,000 | |||||||||
Public share price considered | $ / shares | $ 10.20 | |||||||||
Public share price including 1st and 2nd Extension deposits | $ / shares | $ 10.445 | |||||||||
Cash | $ 234,923 | $ 453,151 | ||||||||
Proceeds from sale of founder shares | $ 25,000 | |||||||||
Proceeds from promissory note from sponsor | 300,000 | |||||||||
Withdrawal interest earned on the Trust Account | 266,810 | |||||||||
Convertible loans | $ 1,500,000 | |||||||||
Units per price | $ / shares | $ 10 | |||||||||
Subsequent event | ||||||||||
Description of Organization and Business Operations | ||||||||||
Extension period for consummating Initial Business Combination | 1 month | |||||||||
Maximum number of one-month extension periods for consummation of Initial Business Combination | item | 9 | |||||||||
Additional amount per unit required to be deposited in Trust Account | $ / shares | $ 0.045 | |||||||||
Amount to be deposited in Trust Account in connection with the exercise of the first monthly extension | $ 122,920 | |||||||||
Sponsor | ||||||||||
Description of Organization and Business Operations | ||||||||||
Proceeds from promissory note from sponsor | $ 78,925 | |||||||||
Founder Shares | Sponsor | ||||||||||
Description of Organization and Business Operations | ||||||||||
Proceeds from sale of founder shares | $ 25,000 | |||||||||
Public Warrants | ||||||||||
Description of Organization and Business Operations | ||||||||||
Public share price considered | $ / shares | $ 9.20 | |||||||||
IPO | ||||||||||
Description of Organization and Business Operations | ||||||||||
Sale of units in Initial Public Offering, net of offering costs (in shares) | shares | 11,500,000 | |||||||||
Proceeds from issuance of units | $ 115,000,000 | |||||||||
Payments for investment of cash in Trust Account | $ 959,560 | |||||||||
Price per unit | $ / shares | $ 10 | $ 10 | ||||||||
Transaction Costs | $ 6,771,112 | |||||||||
Underwriting fees | 2,300,000 | |||||||||
Deferred underwriting commissions | 4,025,000 | |||||||||
Other offering costs | $ 446,112 | |||||||||
Private Placement | ||||||||||
Description of Organization and Business Operations | ||||||||||
Number Of Warrants Issued | shares | 585,275 | |||||||||
Price of warrant | $ / shares | $ 10 | $ 10 | ||||||||
Proceeds from sale of Private units | $ 5,852,750 | $ 5,852,750 | ||||||||
Over-Allotment Option | ||||||||||
Description of Organization and Business Operations | ||||||||||
Sale of units in Initial Public Offering, net of offering costs (in shares) | shares | 1,500,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 8 Months Ended | 9 Months Ended | ||||
May 11, 2021 | Mar. 31, 2021 | Feb. 28, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |||||||||
Cash | $ 234,923 | $ 234,923 | $ 453,151 | ||||||
Cash equivalents | 0 | 0 | $ 0 | ||||||
Payments for investment of cash in Trust Account | $ 117,300,000 | $ 117,300,000 | $ 2,300,000 | ||||||
Price per unit | $ 10 | ||||||||
Warrant exercisable | 11,500,000 | ||||||||
Unrecognized tax benefits | 0 | $ 0 | |||||||
Unrecognized tax benefits accrued for interest and penalties | $ 0 | $ 0 | |||||||
Effective tax rate | 0% | 0% | (220.93%) | 0% | 0% | 3.44% | |||
Statutory income tax rate | 21% | ||||||||
Percentage of Public shares to be redeemed | 100 | 100 | |||||||
Class A Common Stock Not subject to possible redemption | |||||||||
Summary of Significant Accounting Policies | |||||||||
Common Stock, shares issued (in shares) | 585,275 | 585,275 | 585,275 | ||||||
Common Stock, shares outstanding | 585,275 | 585,275 | 585,275 | ||||||
Class A Common Stock subject to possible redemption | |||||||||
Summary of Significant Accounting Policies | |||||||||
Common Stock, subject to possible redemption (in shares) | 11,500,000 | 11,500,000 | 11,500,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Common Stock reflected on the condensed consolidated balance sheet (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 11 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |||
Re-measurement of carrying value to redemption value | $ 533,869 | ||
Class A Common Stock Subject to Redemption | |||
Summary of Significant Accounting Policies | |||
Contingently redeemable Class A Common Stock - Opening Balance | $ 117,300,000 | ||
Gross Proceeds | $ 115,000,000 | ||
Proceeds allocated to public warrants and private warrants | (10,614,500) | ||
Issuance costs related to Class A Common Stock | (6,146,054) | ||
Re-measurement of carrying value to redemption value | 2,833,869 | 19,060,554 | |
Contingently redeemable Class A Common Stock - Ending Balance | $ 120,133,869 | $ 120,133,869 | $ 117,300,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Net Income per Common Share (Details) - USD ($) | 3 Months Ended | 5 Months Ended | 6 Months Ended | 8 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | |
Basic and diluted net income per common share | ||||||
Net income (loss) allocable to non-redeemable Class A and Class B common stock | $ (153,275) | $ 1,292,965 | $ 4,307,307 | $ 3,145,445 | $ 5,600,271 | $ 2,992,171 |
Class A Common Stock Subject to Redemption | ||||||
Basic and diluted net income per common share | ||||||
Net income (loss) allocable to non-redeemable Class A and Class B common stock | $ (117,823) | $ 993,905 | $ 3,831,255 | $ 2,300,089 | ||
Weighted average shares outstanding, Basic | 11,500,000 | 11,500,000 | 6,997,872 | 11,500,000 | ||
Weighted average shares outstanding, Diluted | 11,500,000 | 11,500,000 | 6,997,872 | 11,500,000 | ||
Basic net income per common stock | $ 0.01 | $ 0.09 | $ 0.55 | $ 0.20 | ||
Diluted net income per common stock | $ 0.01 | $ 0.09 | $ 0.55 | $ 0.20 | ||
Class A and Class B non-redeemable common stock | ||||||
Basic and diluted net income per common share | ||||||
Net income (loss) allocable to non-redeemable Class A and Class B common stock | $ (35,452) | $ 299,060 | $ 1,769,016 | $ 692,082 | ||
Weighted average shares outstanding, Basic | 3,460,275 | 3,460,275 | 3,231,146 | 3,460,275 | ||
Weighted average shares outstanding, Diluted | 3,460,275 | 3,460,275 | 3,231,146 | 3,460,275 | ||
Basic net income per common stock | $ 0.01 | $ 0.09 | $ 0.55 | $ 0.20 | ||
Diluted net income per common stock | $ 0.01 | $ 0.09 | $ 0.55 | $ 0.20 |
Public Offering (Details)
Public Offering (Details) - $ / shares | May 11, 2021 | Sep. 30, 2022 | Dec. 31, 2021 |
Public Offering | |||
Price per unit | $ 10 | ||
Class A Common Stock | |||
Public Offering | |||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |
IPO | |||
Public Offering | |||
Number of units issued | 11,500,000 | ||
Price per unit | $ 10 | $ 10 | |
IPO | Class A Common Stock | |||
Public Offering | |||
Number of shares in a unit | 1 | ||
Common stock, par value (in dollars per share) | $ 0.0001 | ||
Number of shares issuable per warrant | 1 | ||
IPO | Public Warrants | |||
Public Offering | |||
Number of warrants in a unit | 1 | ||
Exercise price of warrants | $ 11.50 |
Private Placement (Details)
Private Placement (Details) - Private Placement - USD ($) | 9 Months Ended | |
May 11, 2021 | Sep. 30, 2022 | |
Private Placement | ||
Number of warrants to purchase shares issued | 585,275 | |
Price of warrants | $ 10 | $ 10 |
Aggregate purchase price | $ 5,852,750 | $ 5,852,750 |
Related Party Transactions- Fou
Related Party Transactions- Founder Shares (Details) | 5 Months Ended | 9 Months Ended | ||||||
Dec. 11, 2022 USD ($) $ / shares | Nov. 11, 2022 | Aug. 10, 2022 item | May 05, 2022 item | Mar. 23, 2021 shares | Feb. 25, 2021 USD ($) shares | Jun. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) D item $ / shares | |
Related Party Transactions | ||||||||
Proceeds from sale of founder shares | $ | $ 25,000 | |||||||
Period from the closing of the Company's initial public offering to consummate Business Combination | 12 months | |||||||
Number of three-month extensions for consummation of Initial Business Combination | item | 2 | 2 | 2 | |||||
Aggregate period to consummate Business Combination | 18 months | |||||||
Number of business days for advance notice of extension to be given | item | 5 | |||||||
Extension period for consummating Initial Business Combination | 3 months | 3 months | 3 months | |||||
Subsequent event | ||||||||
Related Party Transactions | ||||||||
Extension period for consummating Initial Business Combination | 1 month | |||||||
Additional amount per unit required to be deposited in Trust Account | $ / shares | $ 0.045 | |||||||
Amount to be deposited in Trust Account in connection with the exercise of the first monthly extension | $ | $ 122,920 | |||||||
Founder Shares | Sponsor | ||||||||
Related Party Transactions | ||||||||
Proceeds from sale of founder shares | $ | $ 25,000 | |||||||
Founder Shares | Sponsor | Class B Common Stock | ||||||||
Related Party Transactions | ||||||||
Number of shares issued | 2,875,000 | |||||||
Proceeds from sale of founder shares | $ | $ 25,000 | |||||||
Percentage of issued and outstanding shares after the Initial Public Offering collectively held by initial stockholders | 20% | |||||||
Restrictions on transfer period of time after business combination completion | 9 months | |||||||
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 | Chief Executive Officer | Class B Common Stock | ||||||||
Related Party Transactions | ||||||||
Number of shares transferred | 15,000 | |||||||
Founder Shares | Chief Financial Officer | Class B Common Stock | ||||||||
Related Party Transactions | ||||||||
Number of shares transferred | 15,000 | |||||||
Founder Shares | Two Independent Director | Class B Common Stock | ||||||||
Related Party Transactions | ||||||||
Number of shares transferred | 5,000 | |||||||
Founder Shares | Third Independent Director | Class B Common Stock | ||||||||
Related Party Transactions | ||||||||
Number of shares transferred | 5,000 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | 3 Months Ended | 8 Months Ended | 9 Months Ended | ||||
Jun. 01, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | Feb. 08, 2021 | |
Working capital loans warrant | |||||||
Related Party Transactions | |||||||
Common Stock, shares outstanding | 300,000 | 300,000 | |||||
Promissory Note with Related Party | |||||||
Related Party Transactions | |||||||
Maximum borrowing capacity of related party promissory note | $ 300,000 | ||||||
Outstanding balance of related party note | $ 0 | $ 0 | $ 0 | ||||
Outstanding of promissory note - related party | $ 78,925 | ||||||
Administrative Support Agreement | |||||||
Related Party Transactions | |||||||
Expenses per month | 10,000 | ||||||
Administrative Support Agreement | ARC Group Ltd | |||||||
Related Party Transactions | |||||||
Expenses incurred and paid | $ 30,000 | $ 30,000 | $ 50,000 | 90,000 | |||
Related Party Loans | |||||||
Related Party Transactions | |||||||
Related party loans convertible up to consummation of a Business Combination | $ 1,500,000 | ||||||
Sale of stock, price per share | $ 10 | $ 10 | |||||
Related Party Loans | Over-Allotment Option | |||||||
Related Party Transactions | |||||||
Sale of stock, price per share | $ 0.10 | $ 0.10 | |||||
Deposit held in Trust Account | $ 1,150,000 | ||||||
Business combination, total payments | $ 2,300,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) item shares | |
Commitments and Contingencies | |
Maximum number of demands for registration of securities | item | 3 |
Underwriting discount (as a percent) | 2% |
Underwriting discount paid | $ 2,300,000 |
Deferred underwriting fees (as a percent) | 3.50% |
Deferred underwriting fees | $ 4,025,000 |
Over-Allotment Option | |
Commitments and Contingencies | |
Overallotment option period | 45 days |
Number of units issued | shares | 1,500,000 |
Warrant Liability (Details)
Warrant Liability (Details) | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Warrant liability | |
Share price | $ 10.20 |
Warrant | |
Warrant liability | |
Warrants Issued | shares | 12,085,275 |
Placement Warrants | |
Warrant liability | |
Warrants Issued | shares | 585,275 |
Public Warrants | |
Warrant liability | |
Minimum threshold written notice period for redemption of public warrants | 30 days |
Public Warrants expiration term | 5 years |
Maximum threshold period for registration statement to become effective after business combination | 20 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) | $ 18 |
Share price | $ 9.20 |
Percentage of gross proceeds on total equity proceed | 60% |
Trading days determining volume weighted average price | 20 days |
Adjustment of exercise price of warrants based on market value (as a percent) | 115% |
Warrants Issued | shares | 11,500,000 |
Public Warrants | Class A Common Stock | |
Warrant liability | |
Share price | $ 9.20 |
Public Warrants | Redemption of Warrants When the Price per Class A Ordinary Share Equals or Exceeds $18.00 | |
Warrant liability | |
Minimum threshold written notice period for redemption of public warrants | 30 days |
Redemption price per public warrant (in dollars per share) | $ 0.01 |
Stock price trigger for redemption of public warrants (in dollars per share) | $ 18 |
Threshold trading days for redemption of public warrants | 20 days |
Threshold consecutive trading days for redemption of public warrants | 30 days |
Public Warrants | Redemption of Warrants When the Price per Class A Ordinary Share Equals or Exceeds $10.00 | |
Warrant liability | |
Stock price trigger for redemption of public warrants (in dollars per share) | $ 10 |
Adjustment of exercise price of warrants based on market value (as a percent) | 180% |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock Shares (Details) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Stockholders' Equity | ||
Preferred shares authorized | 1,000,000 | 1,000,000 |
Preferred shares, par value, (per share) | $ 0.0001 | $ 0.0001 |
Preferred shares issued | 0 | 0 |
Preferred shares outstanding | 0 | 0 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock Shares (Details) | Mar. 23, 2021 shares | Feb. 25, 2021 shares | Sep. 30, 2022 Vote $ / shares shares | Dec. 31, 2021 Vote $ / shares shares |
Class A Common Stock | ||||
Stockholders' equity | ||||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Common stock, votes per share | Vote | 1 | 1 | ||
Class A Common Stock Subject to Redemption | ||||
Stockholders' equity | ||||
Common Stock, subject to possible redemption (in shares) | 11,500,000 | 11,500,000 | ||
Class A Common Stock Not Subject to Redemption | ||||
Stockholders' equity | ||||
Common stock, shares issued (in shares) | 585,275 | 585,275 | ||
Common stock, shares outstanding (in shares) | 585,275 | 585,275 | ||
Class B Common Stock | ||||
Stockholders' equity | ||||
Common stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Common stock, votes per share | Vote | 1 | 1 | ||
Common stock, shares issued (in shares) | 2,875,000 | 2,875,000 | ||
Common stock, shares outstanding (in shares) | 2,875,000 | 2,875,000 | ||
Initial business combination shares issuable as percent of outstanding share | 20% | |||
Class B Common Stock | Sponsor | Chief Executive Officer | ||||
Stockholders' equity | ||||
Number of shares transferred | 15,000 | |||
Class B Common Stock | Sponsor | Chief Financial Officer | ||||
Stockholders' equity | ||||
Number of shares transferred | 15,000 | |||
Class B Common Stock | Sponsor | Independent Directors | ||||
Stockholders' equity | ||||
Number of shares transferred | 5,000 | 5,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value Measurements | ||
Investments held in Trust Account | $ 120,133,869 | $ 117,320,973 |
Cash | ||
Fair Value Measurements | ||
Investments held in Trust Account | 120,133,869 | 120,133,869 |
U.S. Treasury Securities | ||
Fair Value Measurements | ||
Investments held in Trust Account | 117,320,973 | 117,320,973 |
Level 1 | Recurring | ||
Fair Value Measurements | ||
Investments held in Trust Account | 120,133,869 | 117,320,973 |
Level 1 | Recurring | Public Warrants | ||
Fair Value Measurements | ||
Warrant liabilities | 575,000 | 4,600,000 |
Level 2 | Recurring | ||
Fair Value Measurements | ||
Investments held in Trust Account | 0 | 0 |
Level 2 | Recurring | Public Warrants | ||
Fair Value Measurements | ||
Warrant liabilities | 0 | 0 |
Level 2 | Recurring | Private Placement Warrants | ||
Fair Value Measurements | ||
Warrant liabilities | 0 | 0 |
Level 3 | Recurring | ||
Fair Value Measurements | ||
Investments held in Trust Account | 0 | 0 |
Level 3 | Recurring | Public Warrants | ||
Fair Value Measurements | ||
Warrant liabilities | 0 | 0 |
Level 3 | Recurring | Private Placement Warrants | ||
Fair Value Measurements | ||
Warrant liabilities | $ 32,775 | $ 251,668 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 Fair Value Measurements Inputs (Details) - Private Warrants - Level 3 - Recurring | Sep. 30, 2022 $ / shares | Dec. 31, 2021 $ / shares |
Exercise Price | ||
Fair Value Measurements | ||
Derivative liability, measurement input | 11.50 | 11.50 |
Share Price | ||
Fair Value Measurements | ||
Derivative liability, measurement input | 10.36 | 10.10 |
Expected term (years) | ||
Fair Value Measurements | ||
Derivative liability, measurement input | 5.4 | 7.4 |
Probability of Acquisition | ||
Fair Value Measurements | ||
Derivative liability, measurement input | 5 | 100 |
Volatility | ||
Fair Value Measurements | ||
Derivative liability, measurement input | 5.11 | 5.36 |
Risk-free rate | ||
Fair Value Measurements | ||
Derivative liability, measurement input | 3.97 | 1.28 |
Dividend yield (per share) | ||
Fair Value Measurements | ||
Derivative liability, measurement input | 0 | 0 |
Fair Value Measurements - Chang
Fair Value Measurements - Change in the Fair Value of the Warrant Liabilities (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Public Warrants | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Fair value as of beginning balance | $ 4,600,000 |
Change in valuation inputs or other assumption | (4,025,000) |
Fair value as of Ending balance | 575,000 |
Private Placement Warrants | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Fair value as of beginning balance | 251,668 |
Change in valuation inputs or other assumption | (218,893) |
Fair value as of Ending balance | 32,775 |
Warrant Liability | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Fair value as of beginning balance | 4,851,668 |
Change in valuation inputs or other assumption | (4,243,893) |
Fair value as of Ending balance | $ 607,775 |
Subsequent Events (Details)
Subsequent Events (Details) | 9 Months Ended | ||||
Dec. 11, 2022 USD ($) $ / shares | Nov. 11, 2022 USD ($) item $ / shares shares | Aug. 10, 2022 | May 05, 2022 | Sep. 30, 2022 | |
Subsequent Events | |||||
Extension period for consummating Initial Business Combination | 3 months | 3 months | 3 months | ||
Subsequent Events. | |||||
Subsequent Events | |||||
Percentage of common stock redeemed or repurchased | 100% | ||||
Maximum number of one-month extension periods for consummation of Initial Business Combination | item | 9 | ||||
Extension period for consummating Initial Business Combination | 1 month | ||||
Number of shares for which share holders exercised their right to redeem | shares | 8,768,456 | ||||
Redemption price per share | $ / shares | $ 10.42 | ||||
Aggregate amount of shares redeemed | $ 91,400,000 | ||||
Trust account balance | $ 28,500,000 | ||||
Additional amount per unit required to be deposited in Trust Account | $ / shares | $ 0.045 | ||||
Amount to be deposited in Trust Account in connection with the exercise of the first monthly extension | $ 122,920 | ||||
Subsequent Events. | Sponsor | |||||
Subsequent Events | |||||
Additional amount per unit required to be deposited in Trust Account | $ / shares | $ 0.045 | ||||
Amount to be deposited in Trust Account in connection with the exercise of the first monthly extension | $ 122,920 |