| ORGANIZATION AND BUSINESS OPERATIONS | NOTE
1 — ORGANIZATION AND BUSINESS OPERATIONS OmniLit
Acquisition Corp. (the “Company”) was incorporated in Delaware for the purpose of effecting a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses (the “Business Combination”).
The Company is an early stage and “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933,
as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”)
and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. The
Company has selected December 31 as its fiscal year end. As
of September 30, 2021, the Company had not yet commenced any operations. All activity through September 30, 2021, relates to the Company’s
formation and the Initial Public Offering (as defined below). The Company will not generate any operating revenues until after completion
of its Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and
cash equivalents from the net proceeds derived from the Initial Public Offering. The
registration statements for the Initial Public Offering (the “Registration Statement”) were declared effective by
the U.S. Securities and Exchange Commission (the “SEC”) on November 8, 2021. On November 12, 2021, the Company completed
its initial public offering (the “Initial Public Offering” or “IPO”) of 14,375,000
units (“Units”), including the issuance
of 1,875,000
Units as a result of the underwriters’
exercise in full of their over-allotment option at an offering price of $ 10.00
per Unit, generating gross proceeds of $ 143,750,000
which is discussed in Note 3. Each Unit consists
of one share of Class A common stock, and one-half of a redeemable warrant, with each whole warrant entitling the holder to purchase
one share of Class A common stock at a price of $ 11.50 Simultaneously
with the closing of the IPO, the Company consummated a private placement (the “Private Placement”) of 6,201,750
warrants to OmniLit Sponsor LLC, a Delaware limited
liability company and the Company’s sponsor (the “Sponsor”), 575,000
warrants to Imperial Capital, LLC, a Delaware
limited liability company (“Imperial Capital”), and 143,750
warrants to I-Bankers Securities, Inc., a Texas
corporation (“I- Bankers”), (together, the “Private Placement Warrants”), each at a price of $ 1.00
per Private Placement Warrant, generating total
proceeds of $ 6,920,500 ,
which is described in Note 4. The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering
and the Private Placement Warrants, although substantially all of the net proceeds are intended to be generally applied toward consummating
the Business Combination. Transaction costs amounted to $ 8,222,150 ,
consisting of $ 2,875,000 of
underwriting discount, $ 5,031,250
of deferred underwriting discount, and $ 315,900
of other offering costs. In addition, $ 1,579,046
of cash was held outside of the Trust Account
(as defined below) and is available for working capital purposes. The
Company’s 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 (net of taxes payable) at the time of the signing of an agreement to enter
into the Business Combination. However, the Company will only complete the 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 of 1940, as amended (the “Investment
Company Act”). There is no assurance that the Company will be able to successfully effect the Business Combination. Upon
the closing of the Initial Public Offering, a total of $ 146,625,000
($ 10.20
per Unit) of the net proceeds from the IPO and
the Private Placement was deposited in a trust account (“Trust Account”) and invested in U.S. government securities, within
the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 180 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. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to
pay its franchise and income tax obligations (less up to $100,000 of interest to pay dissolution expenses), the proceeds from the
Initial Public Offering and the sale of the Private Placement Warrants will not be released from the Trust Account until the earliest
of: (a) the completion of the Business Combination; (b) the redemption of any public shares properly submitted in connection with a stockholder
vote to amend the Company’s certificate of incorporation; and (c) the redemption of the Company’s public shares if the Company
is unable to complete the Business Combination within 15 months from the closing of the Initial Public Offering (or up to 21 months
from the closing of the Initial Public Offering, if the Company extend the period of time to consummate a business combination,
as described in more detail in our final prospectus filed with the SEC on November 10, 2021 (the “Prospectus”)),
subject to applicable law. The proceeds deposited in the Trust Account could become subject to the claims of the Company’s
creditors, if any, which could have priority over the claims of the Company’s public stockholders. The
Company will provide its public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion
of the Business Combination either: (i) in connection with a stockholder meeting called to approve the Business Combination; or (ii)
by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a proposed Business Combination
or conduct a tender offer will be made by the Company, solely in its discretion. The stockholders will be entitled to redeem their shares
for a pro rata portion of the amount then on deposit in the Trust Account (initially approximately $10.20 per share, plus any pro rata
interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). All
of the public shares contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s
liquidation, if there is a shareholder vote or tender offer in connection with the Business Combination and in connection with
certain amendments to the Company’s amended and restated memorandum and articles of association. In
accordance with SEC and its guidance on redeemable equity instruments, which has been codified in Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification (“ASC”) Topic 480-10-S99, redemption provisions not solely within
the control of a company require shares of Class A common stock subject to redemption to be classified outside of permanent equity.
Given that the public shares were issued with other freestanding instruments (i.e., public warrants), the initial carrying
value of shares of Class A common stock classified as temporary equity will be the allocated proceeds determined in accordance
with FASB ASC 470-20. The public shares are subject to FASB ASC 480-10-S99. If it is probable that the equity instrument will become
redeemable, the Company has the option to either (i) 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 (ii) 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 this change immediately. The
Company has 15 months from the closing of the Initial Public Offering (or up to 21 months from the closing of the Initial Public
Offering, if the Company extends the period of time to consummate a business combination, as described in more detail in the Prospectus)
to consummate the Business Combination (the “Combination Period”). However, if the Company is unable to complete the
Business Combination within the Combination Period, the Company will redeem 100% of the outstanding public shares for a pro rata portion
of the funds held in the Trust Account, 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 its franchise and income taxes obligations and
less up to $ 100,000 of
interest to pay dissolution expenses, divided by the number of then outstanding public shares, subject to applicable law and as further
described in the Registration Statement of which the Prospectus forms a part, and then seek to dissolve and liquidate. The
Sponsor, officers, and directors have agreed: (i) to waive their redemption rights with respect to their Founder Shares (as defined
in Note 5) and public shares in connection with the completion of the Business Combination; (ii) to waive their redemption rights
with respect to their Founder Shares and public shares in connection with a stockholder vote to approve an amendment to the Company’s
certificate of incorporation; and (iii) to waive their rights to liquidating distributions from the Trust Account with respect to their
Founder Shares if the Company fails to complete the Business Combination within the Combination Period, as more fully set out
in the Registration Statement and Prospectus. In addition, the Company’s Sponsor has agreed to vote any Founder Shares held by
them and any public shares purchased during or after the IPO (including in open market and privately negotiated transactions) in favor
of the Business Combination. 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; and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account,
if less than $10.20 per share 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 the 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 underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. However, the Company
has not asked its Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether its 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 that its Sponsor would be able to satisfy those obligations. Going
Concern Consideration As
of September 30, 2021, the Company had $ 528,900 158,095 The
Company’s liquidity needs through September 30, 2021 were satisfied through the cash contribution of $ 25,000
from the Sponsor to purchase Founder Shares,
and Advances and a Loan from the Sponsor of $ 363,995
and $ 300,000 ,
respectively (as defined in Note 5). The Company repaid the Loan and the Advances in full on November 24, 2021. Subsequent
to the consummation of the IPO, the Company’s liquidity has been satisfied through the net proceeds from the consummation of the
IPO and the Private Placement held outside of the Trust Account. In addition, in order to finance transaction costs in connection with
a Business Combination, the Sponsor, an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are
not obligated to, provide the Company Working Capital Loans (as defined in Note 5). As of September 30, 2021, there was no amount
outstanding for Working Capital Loans. Based
on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity to meet its needs
through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, the Company will
be using the funds held outside of the Trust Account for paying existing accounts payable, identifying and evaluating prospective Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting
the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination. Risks
and Uncertainties Management
is currently evaluating the impact of the COVID-19 pandemic on the industry 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, or search for a target company,
the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty. |
