Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | May 22, 2023 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2023 | |
Entity File Number | 001-41103 | |
Entity Registrant Name | ROC Energy Acquisition Corp. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 87-2488708 | |
Entity Address, Address Line One | 16400 Dallas Parkway | |
Entity Address, City or Town | Dallas | |
Entity Address State Or Province | TX | |
Entity Address, Postal Zip Code | 75248 | |
City Area Code | 972 | |
Local Phone Number | 392-6180 | |
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 Common Stock, Shares Outstanding | 26,851,000 | |
Entity Central Index Key | 0001884516 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Units, each consisting of one share of Common Stock, and one Right to receive one-tenth of one share of Common Stock | ||
Document and Entity Information | ||
Title of 12(b) Security | Units, each consisting of one share of Common Stock, and one Right to receive one-tenth of one share of Common Stock | |
Trading Symbol | ROCAU | |
Security Exchange Name | NASDAQ | |
Common Stock, $0.0001 par value per share | ||
Document and Entity Information | ||
Title of 12(b) Security | Common Stock, $0.0001 par value per share | |
Trading Symbol | ROC | |
Security Exchange Name | NASDAQ | |
Rights, each exchangeable into one-tenth of one share of Common Stock | ||
Document and Entity Information | ||
Title of 12(b) Security | Rights, each exchangeable into one-tenth of one share of Common Stock | |
Trading Symbol | ROCAR | |
Security Exchange Name | NASDAQ |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash | $ 7,481 | $ 207,915 |
Prepaid insurance | 127,368 | 170,503 |
Prepaid income taxes | 4,527 | |
Total Current Assets | 134,849 | 382,945 |
Cash and marketable securities held in Trust Account | 217,776,175 | 213,475,172 |
TOTAL ASSETS | 217,911,024 | 213,858,117 |
Current liabilities | ||
Accounts payable and accrued expenses | 2,078,927 | 482,828 |
Income taxes payable | 545,056 | |
Working Capital Loan | 120,000 | |
Promissory note - related party | 4,140,000 | 2,070,000 |
Deferred tax liability | 91,572 | |
Total Liabilities | 6,883,983 | 2,644,400 |
Commitments and contingencies | ||
Stockholders' Deficit | ||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding at March 31, 2023 and December 31, 2022 | ||
Accumulated deficit | (5,950,118) | (1,970,450) |
Total Stockholders' Deficit | (5,949,503) | (1,969,835) |
TOTAL LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION, AND STOCKHOLDERS' DEFICIT | 217,911,024 | 213,858,117 |
Common stock subject to possible redemption | ||
Current liabilities | ||
Common stock subject to possible redemption 20,700,000 shares at $10.48 and $10.30 per share redemption value at March 31, 2023 and December 31, 2022, respectively | 216,976,544 | 213,183,552 |
Common stock not subject to possible redemption | ||
Stockholders' Deficit | ||
Common stock, $0.0001 par value; 100,000,000 shares authorized; 6,151,000 shares issued and outstanding (excluding 20,700,000 shares subject to possible redemption) at March 31, 2023 and December 31, 2022 | $ 615 | $ 615 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock subject to possible redemption | ||
Common stock subject to possible redemption | 20,700,000 | 20,700,000 |
Common stock subject to possible redemption, redemption price per share | $ 10.48 | $ 10.30 |
Common stock not subject to possible redemption | ||
Common stock, shares issued | 6,151,000 | 6,151,000 |
Common stock, shares outstanding | 6,151,000 | 6,151,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
General and administrative expenses | $ 1,959,668 | $ 289,327 |
Loss from operations | (1,959,668) | (289,327) |
Other income: | ||
Interest earned on investments held in Trust Account | 2,231,003 | 63,213 |
Other income | 2,231,003 | 63,213 |
Income (loss) before provision for income taxes | 271,335 | (226,114) |
Provision for income taxes | (458,011) | |
Net loss | $ (186,676) | $ (226,114) |
Basic weighted average shares outstanding | 26,851,000 | 26,851,000 |
Diluted weighted average shares outstanding | 26,851,000 | 26,851,000 |
Basic net loss per common stock | $ (0.01) | $ (0.01) |
Diluted net loss per common stock | $ (0.01) | $ (0.01) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) EQUITY - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Beginning balance at Dec. 31, 2021 | $ 615 | $ 1,362,780 | $ (235,380) | $ 1,128,015 |
Beginning balance (in shares) at Dec. 31, 2021 | 6,151,000 | |||
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) EQUITY | ||||
Net loss | (226,114) | (226,114) | ||
Ending balance at Mar. 31, 2022 | $ 615 | 1,362,780 | (461,494) | 901,901 |
Ending balance (in shares) at Mar. 31, 2022 | 6,151,000 | |||
Beginning balance at Dec. 31, 2021 | $ 615 | 1,362,780 | (235,380) | 1,128,015 |
Beginning balance (in shares) at Dec. 31, 2021 | 6,151,000 | |||
Ending balance at Dec. 31, 2022 | $ 615 | $ 0 | (1,970,450) | (1,969,835) |
Ending balance (in shares) at Dec. 31, 2022 | 6,151,000 | |||
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) EQUITY | ||||
Accretion of Common stock subject to redemption | $ 0 | (3,792,992) | (3,792,992) | |
Net loss | 0 | (186,676) | (186,676) | |
Ending balance at Mar. 31, 2023 | $ 615 | $ (5,950,118) | $ (5,949,503) | |
Ending balance (in shares) at Mar. 31, 2023 | 6,151,000 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (186,676) | $ (226,114) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Income from investments held in Trust Account | (2,231,003) | (63,213) |
Changes in operating assets and liabilities: | ||
Prepaid expenses | 43,135 | (489,137) |
Prepaid income taxes | 4,527 | |
Accounts payable and accrued expenses | 1,596,099 | (13,793) |
Deferred tax liability | (91,572) | |
Income taxes payable | 545,056 | |
Net cash used in operating activities | (320,434) | (792,257) |
Cash Flows from Investing Activities: | ||
Investment of cash into Trust Account | (2,070,000) | |
Net cash used in investing activities | (2,070,000) | |
Cash Flows from Financing Activities: | ||
Payment of offering costs | (11,300) | |
Proceeds from promissory note | 120,000 | |
Proceeds from promissory note - related party | 2,070,000 | |
Net cash provided by financing activities | 2,190,000 | (11,300) |
Net Change in Cash | (200,434) | (803,557) |
Cash - Beginning of Period | 207,915 | 1,361,137 |
Cash - End of period | $ 7,481 | $ 557,580 |
DESCRIPTION OF ORGANIZATION AND
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | 3 Months Ended |
Mar. 31, 2023 | |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS ROC Energy Acquisition Corp. is a newly incorporated blank check company incorporated as a Delaware corporation on September 2, 2021. The ROC Energy Acquisition Corp. was incorporated for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more target businesses (the “Business Combination”). ROC Energy Acquisition Corp. has a wholly owned subsidiary. ROC Merger Sub, Inc (“Merger Sub”), a Delaware corporation, which was formed on January 17, 2023. ROC Energy Acquisition Corp. and its subsidiary are collectively referred to as “the Company”. As of March 31, 2023, the Company had not commenced any operations. All activity for the period from September 2, 2021 (inception) through March 31, 2023 relates to the Company’s formation and the initial public offering (“Initial Public Offering”), which is described below, and, subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end. On February 13, 2023, the Company entered into an agreement and plan of merger (as it may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”) with Merger Sub, and Drilling Tools International Holdings, Inc., a Delaware corporation (“Drilling Tools”). The registration statements for the Company’s Initial Public Offering were declared effective on December 1, 2021. On December 6, 2021, the Company consummated the Initial Public Offering of 18,000,000 units (the “Units” and, with respect to the shares of common stock included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $180,000,000, which is described in Note 3. An additional $1,800,000 was funded by proceeds of the sale of Private Placement Units (as defined below) to ROC Energy Holdings, LLC which resulted in a total balance in the Trust Account of $181,800,000. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 715,000 Units (each, a “Private Placement Unit”) at a price of $10.00 per Private Placement Unit in a private placement to ROC Energy Holdings, LLC, a Delaware limited liability company (the “Sponsor”), generating gross proceeds of $7,150,000, which is described in Note 4. On December 9, 2021, the underwriters fully exercised their over-allotment option, resulting in an additional 2,700,000 Units issued for an aggregate amount of $27,000,000. In connection with the underwriters’ full exercise of their over-allotment option, the Company also consummated the sale of an additional 81,000 Private Placement Units at $10.00 per Private Placement Unit, generating total proceeds of $27,810,000. A total of $27,270,000 was deposited into the Trust Account, bringing the aggregate proceeds held in the Trust Account to $209,070,000. Transaction costs amounted to $4,012,520, consisting of $3,600,000 of underwriting fees and $412,520 of other offering costs. In addition, cash of $1,509,600 was held outside of the Trust Account and is available for the payment of offering costs and for working capital purposes. On December 9, 2021, due to the full exercise of the overallotment option by the underwriters, additional transaction costs amounted to $540,000, consisting of cash underwriting fees. A total of $27,270,000 was deposited into the Trust Account, bringing the aggregate proceeds held in the Trust Account to $209,070,000. Following the closing of the Initial Public Offering on December 6, 2021, and the over-allotment on December 9, 2021, an amount of $209,070,000 ($10.10 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Units was placed in a trust account (the “Trust Account”), and was 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 money market funds meeting certain conditions under 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 funds in the Trust Account to the Company’s stockholders, as described below. 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 Private Placement Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the Trust Account (as defined below) (excluding taxes payable on the interest earned on the Trust Account). The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. The Company will provide the holders of the outstanding Public Shares (the “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. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.10 per Public Share, plus any pro rata interest then in the Trust Account, net of taxes payable). The Company will only proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 either immediately prior to or upon consummation of the Business Combination and after payment of underwriters’ fees and commissions and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by applicable law or stock exchange listing requirements and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by applicable law or stock exchange listing requirements, or the Company decides to obtain stockholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 5), Private Placement Shares (as defined in Note 4) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each Public Stockholder may elect to redeem their Public Shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction. If the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Certificate of Incorporation will provide that a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 20% of the Public Shares, without the prior consent of the Company. The Sponsor has agreed (a) to waive its redemption rights with respect to the Founder Shares, Private Shares and Public Shares held by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemptions in connection with a Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or (ii) with respect to any other provision relating to stockholders’ rights or pre-Business Combination activity, unless the Company provides the Public Stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment. On December 2, 2022, the Company extended the date by which the Company has to consummate a business combination from December 6, 2022 to March 6, 2023 (the “Extension”). The Extension is the first of two three-month extensions permitted under the Company’s governing documents. On December 6, 2022, the Company issued a promissory note, as described in Note 5, in the principal amount of $2,070,000 (the “Extension Payment”) to an affiliate of the Company’s Sponsor in connection with the Extension. On March 3, 2023, the Company extended the date by which the Company has to consummate a business combination from March 6, 2023 to June 6, 2023 (the “Second Extension”). The Second Extension is the second of two three-month extensions permitted under the Company’s governing documents. On March 2, 2023, the Company issued a promissory note in the principal amount of $2,070,000 to an affiliate of the Company’s Sponsor in connection with the Second Extension. The Company will have until June 6, 2023 (the “Combination Period”). If the Company has not completed a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten The Sponsor has agreed to waive its liquidation rights with respect to the Founder Shares and Private Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor acquires Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. 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). In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.10 per Public Share and (ii) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. 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 (except for the Company’s independent registered accounting firm), prospective target businesses and 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. Going Concern In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Subtopic 205-40, “Presentation of Financial Statements – Going Concern,” the Company has until June 6, 2023, to consummate an initial Business Combination. It is uncertain that the Company will be able to consummate an initial Business Combination by this time. If an initial Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Additionally, the Company may not have sufficient liquidity to fund the working capital needs of the Company through one year from the issuance of these financial statements. Management has determined that the liquidity condition and mandatory liquidation, should an initial Business Combination not occur, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after June 6, 2023. Management intends to consummate a business combination prior to June 6, 2023. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the period ended December 31, 2022, as filed with the SEC on March 21, 2023. The interim results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any future periods. 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 financial statement 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 condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the 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 short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of March 31, 2023 and December 31, 2022. Investments Held in Trust Account The Company classifies its U.S. Treasury and equivalent securities as held to maturity in accordance with ASC 320, “Investments – Debt and Equity Securities” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying condensed consolidated balance sheets and adjusted for the amortization or accretion of premiums or discounts. Offering Costs The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering”. Offering costs consist of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering date that are directly related to the Initial Public Offering. Offering costs were charged to temporary equity upon the completion of the Initial Public Offering. Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2023 and December 31, 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has been subject to income tax examinations by major taxing authorities since inception. Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are 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 in temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Public Shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at March 31, 2023 and December 31, 2022, the Public Shares are presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s condensed consolidated balance sheets. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of the common stock subject to possible redemption to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid-in capital and accumulated deficit. This method would view the end of the reporting period as if it were also the redemption date for the security. At March 31, 2023 and December 31, 2022, the common stock subject to possible redemption reflected in the condensed consolidated balance sheets is reconciled in the following table: Common stock subject to possible redemption as of December 31, 2021 $ 209,070,000 Plus: Remeasurement of carrying value to redemption value 4,113,552 Common stock subject to possible redemption as of December 31, 2022 213,183,552 Plus: Remeasurement of carrying value to redemption value 3,792,992 Common stock subject to possible redemption as of March 31, 2023 $ 216,976,544 Net Loss per Common Share The Company complies with the accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period. Accretion associated with the redeemable shares of common stock is excluded from earnings per share as the redemption value approximates fair value. The calculation of diluted loss per share does not consider the effect of the Rights issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exchange of the Rights is contingent upon the occurrence of future events. The Rights may be exchanged for 2,070,000 shares of common stock in the aggregate. As of March 31, 2023 and 2022, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted net loss per share of common stock is the same as basic net loss per share of common stock for the periods presented. The following table reflects the calculation of basic and diluted net loss per share of common stock (in dollars, except per share amounts): For the Three Months Ended March 31, 2023 2022 Common Stock Common Stock Basic and diluted net loss per common stock Numerator: Allocation of net loss $ (186,676) $ (226,114) Denominator: Basic and diluted weighted average shares outstanding 26,851,000 26,851,000 Basic and diluted net loss per common stock $ (0.01) $ (0.01) Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows. Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying condensed consolidated balance sheets, primarily due to their short-term nature. Recent Accounting Standards In June 2016, FASB issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. ASU 2016-13 also requires additional disclosures regarding significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. The Company adopted ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have a material impact on its condensed consolidated financial statements. Besides the above, the Company’s management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted. would have a material effect on the accompanying condensed consolidated financial statements. |
INITIAL PUBLIC OFFERING
INITIAL PUBLIC OFFERING | 3 Months Ended |
Mar. 31, 2023 | |
INITIAL PUBLIC OFFERING | |
INITIAL PUBLIC OFFERING | NOTE 3. INITIAL PUBLIC OFFERING Pursuant to the Initial Public Offering, the Company sold 18,000,000 Units at a price of $10.00 per Unit. Each Unit consists of one share of common stock and one right (“Public Right”). Each right entitles the holder thereof to receive one-tenth ( 1/10 |
PRIVATE PLACEMENT
PRIVATE PLACEMENT | 3 Months Ended |
Mar. 31, 2023 | |
PRIVATE PLACEMENT | |
PRIVATE PLACEMENT | NOTE 4. PRIVATE PLACEMENT Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 715,000 Placement Units at a price of $10.00 per Placement Unit, for an aggregate purchase price of $7,150,000, in a private placement. Each Private Placement Unit consists of a share of common stock 1/10 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2023 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 5. RELATED PARTY TRANSACTIONS Founder Shares On October 7, 2021, the Sponsor paid $25,000 to cover certain offering costs of the Company in consideration for 4,312,500 shares of common stock (the “Founder Shares”). In December 2021, the Company effected a stock dividend of 0.2 shares for each share of common stock outstanding, resulting in the Sponsor holding an aggregate number of 5,175,000 Founder Shares. The Founder Shares include an aggregate of up to 675,000 shares subject to forfeiture to the extent that the underwriters’ over-allotment option is not exercised in full or in part, so that the number of Founder Shares will equal 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Sponsor does not purchase any Public Shares in the Initial Public Offering and excluding the Representative Shares and Private Shares). As a result of the underwriters’ election to fully exercise their over-allotment option on December 9, 2021, no Founder Shares are currently subject to forfeiture. The Sponsor has agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until (1) with respect to 50% of the Founder Shares, the earlier of one year after the completion of a Business Combination and the date on which the closing price of the common stock equals or exceeds $12.50 per share (as adjusted for share sub-divisions, share dividends, rights issuances, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing after a Business Combination and (2) with respect to the remaining 50% of the Founder Shares, one year after the completion of a Business Combination, or earlier, in either case, if, subsequent to a Business Combination, the Company completes a liquidation, merger, share exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their common stock for cash, securities or other property. Administrative Support Agreement The Company entered into an agreement, commencing on December 1, 2021, through the earlier of the Company’s consummation of a Business Combination and its liquidation, to pay Fifth Partners, LLC, an affiliate of the Sponsor, a total of $13,000 per month for general and administrative services including office space, utilities and secretarial support. For the three months ended March 31, 2023 and 2022, the Company incurred $39,000 and $39,000 in fees for these services, respectively. As of March 31, 2023 and December 31, 2022, there was $13,000 included in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheets. Promissory Notes — Related Parties On September 2, 2021, the Sponsor issued an unsecured promissory note to the Company (the “Promissory Note”), pursuant to which the Company could borrow up to an aggregate principal amount of $300,000. The Promissory Note was non-interest bearing and payable on the earlier of September 30, 2022 or the consummation of the Initial Public Offering. As of December 6, 2021, the Company had $135,463 outstanding under the Promissory Note. There was no amount outstanding on the Promissory Note as of March 31, 2023 and December 31, 2022. The Promissory Note is no longer available to be drawn upon. On December 6, 2022, the Company issued a promissory note (the “Note”) in the principal amount of $2,070,000 (the “Extension Payment”) to an affiliate of the Company’s Sponsor (the “Payee”) in connection with the Extension (as defined in Note 1). The Note bears no interest and is due and payable upon the earlier to occur of (i) the date on which the Company’s initial business combination is consummated and (ii) the liquidation of the Company on or before June 6, 2023 or such later liquidation date as may be approved by the Company’s stockholders. At the election of the Payee, the unpaid principal amount of the Note may be converted into units of the Company (the “Conversion Units”) with the total Conversion Units so issued will be equal to (x) the portion of the principal amount of the Note being converted divided by (y) the conversion price of ten dollars ($10.00), rounded up to the nearest whole number of units. On March 2, 2023, the Company issued a promissory note in the principal amount of $2,070,000 to an affiliate of the Company’s Sponsor in connection with the Second Extension. The Note bears no interest and is due and payable upon the earlier to occur of (i) the date on which the Company’s initial business combination is consummated and (ii) the liquidation of the Company on or before June 6, 2023 or such later liquidation date as may be approved by the Company’s stockholders. At the election of the Payee, the unpaid principal amount of the Note may be converted into units of the Company (the “Conversion Units”) with the total Conversion Units so issued will be equal to: (x) the portion of the principal amount of the Note being converted divided by (y) the conversion price of ten dollars ($10.00), rounded up to the nearest whole number of units. On March 7, 2023, the Sponsor entered into a letter agreement, where the conversion option was modified to convert the unpaid principal amount of the Notes into that number of shares as prescribed by the subscription agreement terms as described below. The modification was analyzed under ASC 470, “Debt—Debt with Conversion and Other Options.” The convertible note did not require bifurcation both before and after the modification under ASC-815. The change to the conversion option is more representative of a modification of a substantive feature and not an elimination and addition of a substantive conversion feature. As such the modification does not require accounting for as a debt extinguishment. Related Party Loans In addition, in order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account. 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. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into Units upon consummation of the Business Combination at a price of $10.00 per unit. The Units would be identical to the Placement Units. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. On January 16, 2023, the Company issued a promissory note (the “Working Capital Loan”) in the principal amount of up $800,000 to an affiliate of the Company’s Sponsor (the “Payee”), for working capital. The Working Capital Loan bears no interest and is due and payable upon the earlier to occur of (i) the date on which the Company’s initial business combination is consummated and (ii) the liquidation of the Company on or before March 6, 2023 (unless extended to June 6, 2023) or such later liquidation date as may be approved by the Company’s stockholders. At the election of the Payee, the unpaid principal amount of the Working Capital Loan may be converted into units of the Company (the “Conversion Units”) with the total Conversion Units so issued will be equal to (x) the portion of the principal amount of the Working Capital Loan being converted divided by (y) the conversion price of ten dollars ($10.00), rounded up to the nearest whole number of units. As of March 31, 2023, the Company has a $120,000 outstanding balance under the Working Capital Loan. Subscription Agreement The Company executed a Subscription Agreement (the “Subscription Agreement”) dated March 7, 2023, with the Sponsor and its affiliates (the “Subscribers”), whereby the Subscribers, subscribed for and will purchase, and the Company will issue and sell, at the closing of the Business Combination, 1,485,149 shares of Common Stock for a total consideration $15,000,000. The Subscribers are entitled to up to an additional 2,347,419 shares of Common Stock if the share price falls below $10.10. |
COMMITMENTS
COMMITMENTS | 3 Months Ended |
Mar. 31, 2023 | |
COMMITMENTS | |
COMMITMENTS | NOTE 6. COMMITMENTS Risks and Uncertainties Management continues to evaluate the impact of the COVID-19 pandemic and Russia-Ukraine war on the industry and has concluded that while it is reasonably possible that the virus and the war in Ukraine 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 these condensed consolidated financial statements. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. Inflation Reduction Act of 2022 On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. Any redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Business Combination and in the Company’s ability to complete a Business Combination. Registration Rights Pursuant to a registration rights agreement entered into on December 1, 2021, the holders of the Founder Shares, Representative Shares, Placement Units (including securities contained therein) and Units (including securities contained therein) that may be issued upon conversion of Working Capital Loans and loans that may be made by the Sponsor or its designee in connection with the extension of the Combination Period are entitled to registration rights. The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities. Notwithstanding anything to the contrary, the underwriters may only make a demand on one occasion and only during the 5-year 7-year Underwriting Agreement The Company had granted the underwriters a 45-day On December 9, 2021, the underwriters elected to fully exercise the over-allotment option to purchase an additional 2,700,000 Public Shares at a price of $10.00 per Public Share. Representative Shares The Company had issued to EarlyBirdCapital, underwriter, 180,000 representative founder (the “Representative Shares”) shares for nominal consideration, subsequently paid in October 2021. The holders of the Representative Shares have agreed not to transfer, assign or sell any such shares without the Company’s prior consent until 30 days after the completion of the Business Combination. In addition, the holders of the Representative Shares have agreed (i) to waive their redemption rights (or right to participate in any tender offer) with respect to such shares in connection with the completion of the Business Combination and (ii) to waive their rights to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete the Business Combination within the Combination Period. The Representative Shares have been deemed compensation by Financial Industry Regulatory Authority (“FINRA”) and are therefore subject to a lock-up for a period of 180 days immediately following the date of the effectiveness of the registration statement of which the Initial Public Offering forms a part pursuant to Rule 5110I(1) of the FINRA Manual. Pursuant to FINRA Rule 5110(e)(1), these securities will not be sold during the offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days immediately following the effective date of the registration statement, except to any underwriter and selected dealer participating in the offering and their bona fide officers or partners, provided that all securities so transferred remain subject to the lockup restriction above for the remainder of the time period. The Company have granted the holders of these shares the registration rights. In compliance with FINRA Rule 5110(g)(8), the registration rights granted to the underwriters are limited to demand and “piggy back” rights for periods of five Business Combination Marketing Agreement The Company engaged EarlyBirdCapital as an advisor in connection with the Business Combination to assist in holding meetings with the stockholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing securities in connection with the Business Combination, assist in obtaining stockholder approval for the Business Combination and assist with press releases and public filings in connection with the Business Combination. The Company will pay EarlyBirdCapital a cash fee for such services upon the consummation of the Business Combination in an amount equal to 3.5% of the gross proceeds of the Initial Public Offering (exclusive of any applicable finders’ fees which might become payable). In addition, the Company will pay EarlyBirdCapital a cash fee in an amount equal to 1.0% of the total consideration payable to the target in the Business Combination if EarlyBirdCapital introduces the target business with whom the Company completes the Business Combination; provided that the foregoing fee will not be paid prior to the date that is 60 days from the effective date of the registration statement, unless such payment would not be deemed underwriters’ compensation in connection with the Initial Public Offering pursuant to FINRA Rule 5110. In connection with the Merger Agreement on February 13, 2023, the Company has amended EarlyBirdCapital’s fees under the Business Combination Marketing Agreement from (i) 3.5% of the total gross proceeds raised in the initial public offering and (ii) 1% of the total consideration of an initial business combination transaction to a flat cash fee of $2,000,000. Merger Agreement On February 13, 2023, the Company (after the Effective Time, “PubCo”) entered into the Merger Agreement with Merger Sub, and Drilling Tools. Pursuant to the terms of the Merger Agreement, a business combination between the Company and Drilling Tools will be effected through the merger of Merger Sub with and into Drilling Tools, with Drilling Tools surviving the merger as a wholly owned subsidiary of PubCo (the “Merger,” and together with the other transactions contemplated by the Merger Agreement and the other agreements contemplated thereby, the “Transactions”). The board of directors of the Company unanimously (i) approved and declared advisable the Merger Agreement and the Transactions and (ii) resolved to recommend the approval and adoption of the Merger Agreement and the Transactions by the stockholders of the Company. The material terms and conditions of the Merger Agreement and the related ancillary agreements, including those briefly explained below, were previously disclosed in the Company’s Current Report on Form 8-K filed by the Company with the SEC on February 14, 2023. Support Agreements In connection with the execution of the Merger Agreement, the Sponsor, entered into a support agreement with Drilling Tools and the Company (the “Sponsor Support Agreement”) pursuant to which the Sponsor has agreed to vote all Subject Shares (as therein defined) beneficially owned by it in favor of the Merger. Further, pursuant to the Sponsor Support Agreement, in order to induce Drilling Tools to enter into the Merger Agreement, the Sponsor agrees to forfeit up to 50% of the Founder Shares (as therein defined) to the Company for reissuance to investors in connection with the Equity Financing and (b) to split the remainder of the Founder Shares with Drilling Tools stockholders as set forth in the Sponsor Support Agreement. Amended and Restated Registration Rights Agreement In connection with the Transactions, the Company and certain stockholders of each of the Company and Drilling Tools who will receive PubCo Common Stock pursuant to the Merger Agreement have entered into an amended and restated registration rights agreement (“Registration Rights Agreement”), to become effective upon the Closing. Lock-up Agreement and Arrangements Prior to the consummation of the Transactions, certain Drilling Tools stockholders, including all existing stockholders of Drilling Tools holding greater than 5% of its share capital, will enter into a lock-up agreement (the “Drilling Tools Stockholder Lock-up Agreement”) with the Company. In addition, the Company and Sponsor intend to undertake an amendment and restatement to the Stock Escrow Agreement, dated December 1, 2021, by and among the Company, Sponsor and the escrow agent named therein (the “Escrow Agreement” and, when amended and restated, the “Amended and Restated Escrow Agreement”) to align Sponsor’s restrictions on transfer with respect to all shares of Common Stock it owns (which will be PubCo Common Stock after the Closing), including the Founder Shares, to those described below. Under the terms of the Drilling Tools Stockholder Lock-up Agreement, and under the terms of the Sponsor lock-up provisions to be contained in the Amended and Restated Escrow Agreement, such Drilling Tools stockholders and Sponsor, will each agree, subject to certain customary exceptions, that during the period that is the earlier of (i) the date that is 180 days following the Closing Date, and (ii) the date specified in a written waiver of the provisions of the Drilling Tools Stockholder Lock-up Agreement duly executed by Sponsor and the Company, not to offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any Lock-up Shares, enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of such Lock-up Shares (whether any of these transactions are to be settled by delivery of any such Lock-up Shares, in cash or otherwise), publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, or engage in any “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act, or any type of direct and indirect stock pledges, forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), or sales or other transactions through non-US broker dealers or foreign regulated brokers. As used herein, “Lock-up Shares” means, (a) in the case of Drilling Tools Stockholders, those shares of PubCo Common Stock received by such Drilling Tools stockholder (the “Holder”) as merger consideration in the Transactions and beneficially owned by such Drilling Tools Stockholder as specified on the signature block of the Drilling Tools Stockholder Lock-up Agreement, and (b) in the case of Sponsor, the Escrow Shares (as defined in the Escrow Agreement). Director Nomination Agreement In connection with the Closing, the Company and the Sponsor will enter into a director nomination agreement (the “Director Nomination Agreement”) pursuant to which PubCo agrees to nominate an individual designated by the Sponsor to serve on the board of directors of the PubCo as a Class III director of PubCo, effective as of immediately after the Effective Time. Registration Statement on Form S-4 The Company initially filed a Registration Statement on Form S-4, as amended, with the SEC on February 14, 2023 along with subsequent amendments on April 3, 2023, April 24, 2023, May 8, 2023, and May 11, 2023, in connection with the registration under the Securities Act of the shares of the Company’s common stock to be issued under the Merger Agreement as the Merger Consideration. This Registration Statement was declared effective by the SEC on May 12, 2023. |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 3 Months Ended |
Mar. 31, 2023 | |
STOCKHOLDERS' DEFICIT | |
STOCKHOLDERS' DEFICIT | NOTE 7. STOCKHOLDERS’ DEFICIT Preferred Stock Common Stock Holders of record of the Company’s common stock are entitled to one vote for each share held on all matters to be voted on by stockholders. In connection with any vote held to approve the Company’s Business Combination, the insiders, officers and directors, have agreed to vote their respective shares of common stock owned by them immediately prior to this offering, including both the Founder Shares and the Private Shares, and any Public shares acquired in the open market, in favor of the initial Business Combination. The Company will consummate the Business Combination only if Public Stockholders do not exercise redemption rights in an amount that would cause the net tangible assets to be less than $5,000,001 either immediately prior to or upon consummation of the Business Combination and after payment of underwriters’ fees and commissions and a majority of the outstanding shares of common stock voted are voted in favor of the Business Combination. Pursuant to the Certificate of Incorporation, if the Company does not consummate the Business Combination within the Combination Period, it will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten The stockholders have no redemption, pre-emptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the shares of common stock, except that Public Stockholders have the right to sell their shares to the Company in any tender offer or have their shares of common stock redeemed to cash equal to their pro rata share of the Trust Account if they vote on the proposed Business Combination and the Business Combination is completed. If the Company hold a stockholder vote to amend any provisions of the Certificate of Incorporation relating to stockholder’s rights or pre-Business Combination activity (including the substance or timing within which the Company has to complete a Business Combination), the Company will provide the Public Stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment 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 the franchise and income taxes, divided by the number of then outstanding Public Shares, in connection with any such vote. In either of such events, redeeming stockholders would be paid their pro rata portion of the Trust Account promptly following consummation of the Business Combination or the approval of the amendment to the Certificate of Incorporation. If the Business Combination is not consummated or the amendment is not approved, stockholders will not be paid such amounts. Rights — one If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of rights will not receive any of such funds with respect to their rights, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such rights, and the rights will expire worthless. Further, there are no contractual penalties for failure to deliver securities to the holders of the rights upon consummation of a Business Combination. Additionally, in no event will the Company be required to net cash settle the rights. Accordingly, the rights may expire worthless. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2023 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 8. FAIR VALUE MEASUREMENTS The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. Level 3: Unobservable inputs based on assessment of the assumptions that market participants would use in pricing the asset or liability. The Company classifies its U.S. Treasury and equivalent securities as held-to-maturity in accordance with ASC Topic 320, “Investmens - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying condensed consolidated balance sheets and adjusted for the amortization or accretion of premiums or discounts. At March 31, 2023, assets held in the Trust Account were comprised of $217,776,175 in mutual funds. During the three months ended March 31, 2023, the Company had no withdrawal of interest income from the Trust Account to pay franchise and income taxes. At December 31, 2022, assets held in the Trust Account were comprised of $543,817 in mutual funds and $212,931,355 in U.S. Treasury securities. The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at March 31, 2023 and December 31, 2022 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. The gross holding gains and fair value of held-to-maturity securities at March 31, 2023 and December 31, 2022 are as follows: Gross Amortized Holding Held-To-Maturity Level Cost Gain Fair Value March 31, 2023 Mutual Funds 1 $ 217,776,175 $ — $ 217,776,175 December 31, 2022 U.S. Treasury Securities (Mature on 3/14/2023) 1 $ 212,931,355 $ 6,119 $ 212,937,474 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2023 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 9. SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the condensed consolidated balance sheet date up to the date that the condensed consolidated financial statements were issued. Based upon this review, other than the below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements. On April 3, 2023, April 24, 2023, May 8, 2023 and May 11, 2023, the Company filed amendments to its Registration Statement on Form S-4. The Registration Statement was declared effective by the SEC on May 12, 2023. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the period ended December 31, 2022, as filed with the SEC on March 21, 2023. The interim results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any future periods. |
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 financial statement 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 condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the 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 short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of March 31, 2023 and December 31, 2022. |
Investments Held in Trust Account | Investments Held in Trust Account The Company classifies its U.S. Treasury and equivalent securities as held to maturity in accordance with ASC 320, “Investments – Debt and Equity Securities” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying condensed consolidated balance sheets and adjusted for the amortization or accretion of premiums or discounts. |
Offering Costs | Offering Costs The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering”. Offering costs consist of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering date that are directly related to the Initial Public Offering. Offering costs were charged to temporary equity upon the completion of the Initial Public Offering. |
Income Taxes | Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2023 and December 31, 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has been subject to income tax examinations by major taxing authorities since inception. |
Common Stock Subject to Possible Redemption | Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are 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 in temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Public Shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at March 31, 2023 and December 31, 2022, the Public Shares are presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s condensed consolidated balance sheets. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of the common stock subject to possible redemption to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid-in capital and accumulated deficit. This method would view the end of the reporting period as if it were also the redemption date for the security. At March 31, 2023 and December 31, 2022, the common stock subject to possible redemption reflected in the condensed consolidated balance sheets is reconciled in the following table: Common stock subject to possible redemption as of December 31, 2021 $ 209,070,000 Plus: Remeasurement of carrying value to redemption value 4,113,552 Common stock subject to possible redemption as of December 31, 2022 213,183,552 Plus: Remeasurement of carrying value to redemption value 3,792,992 Common stock subject to possible redemption as of March 31, 2023 $ 216,976,544 |
Net Loss per Common Share | Net Loss per Common Share The Company complies with the accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period. Accretion associated with the redeemable shares of common stock is excluded from earnings per share as the redemption value approximates fair value. The calculation of diluted loss per share does not consider the effect of the Rights issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exchange of the Rights is contingent upon the occurrence of future events. The Rights may be exchanged for 2,070,000 shares of common stock in the aggregate. As of March 31, 2023 and 2022, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted net loss per share of common stock is the same as basic net loss per share of common stock for the periods presented. The following table reflects the calculation of basic and diluted net loss per share of common stock (in dollars, except per share amounts): For the Three Months Ended March 31, 2023 2022 Common Stock Common Stock Basic and diluted net loss per common stock Numerator: Allocation of net loss $ (186,676) $ (226,114) Denominator: Basic and diluted weighted average shares outstanding 26,851,000 26,851,000 Basic and diluted net loss per common stock $ (0.01) $ (0.01) |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage of $250,000. Any loss incurred or a lack |
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 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying condensed consolidated balance sheets, primarily due to their short-term nature. |
Recent Accounting Standards | Recent Accounting Standards In June 2016, FASB issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. ASU 2016-13 also requires additional disclosures regarding significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. The Company adopted ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have a material impact on its condensed consolidated financial statements. Besides the above, the Company’s management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted. would have a material effect on the accompanying condensed consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of common stock subject to possible redemption | Common stock subject to possible redemption as of December 31, 2021 $ 209,070,000 Plus: Remeasurement of carrying value to redemption value 4,113,552 Common stock subject to possible redemption as of December 31, 2022 213,183,552 Plus: Remeasurement of carrying value to redemption value 3,792,992 Common stock subject to possible redemption as of March 31, 2023 $ 216,976,544 |
Schedule of basic and diluted net loss per share of common stock | For the Three Months Ended March 31, 2023 2022 Common Stock Common Stock Basic and diluted net loss per common stock Numerator: Allocation of net loss $ (186,676) $ (226,114) Denominator: Basic and diluted weighted average shares outstanding 26,851,000 26,851,000 Basic and diluted net loss per common stock $ (0.01) $ (0.01) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
FAIR VALUE MEASUREMENTS | |
Schedule of company's assets that are measured at fair value on a recurring basis | Gross Amortized Holding Held-To-Maturity Level Cost Gain Fair Value March 31, 2023 Mutual Funds 1 $ 217,776,175 $ — $ 217,776,175 December 31, 2022 U.S. Treasury Securities (Mature on 3/14/2023) 1 $ 212,931,355 $ 6,119 $ 212,937,474 |
DESCRIPTION OF ORGANIZATION A_2
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details) | 3 Months Ended | ||||||
Mar. 03, 2023 USD ($) item | Dec. 02, 2022 USD ($) item | Dec. 09, 2021 USD ($) $ / shares | Dec. 09, 2021 USD ($) $ / shares shares | Dec. 06, 2021 USD ($) $ / shares shares | Mar. 31, 2023 USD ($) item $ / shares | Dec. 31, 2022 USD ($) | |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||
Condition for future business combination number of combinations minimum | item | 1 | ||||||
Operating revenues | $ 0 | ||||||
Shares issued price per share | $ / shares | $ 10.10 | ||||||
Cash and marketable securities held in Trust Account | $ 209,070,000 | $ 209,070,000 | $ 181,800,000 | $ 217,776,175 | $ 213,475,172 | ||
Investment of cash into Trust Account | $ 27,270,000 | $ (2,070,000) | |||||
Transaction Costs | 4,012,520 | ||||||
Underwriting fees | 3,600,000 | ||||||
Other offering costs | 412,520 | ||||||
Cash | $ 1,509,600 | ||||||
Proceeds from sale of trust assets to pay expenses | $ 209,070,000 | ||||||
Condition for future business combination number of businesses minimum | item | 1 | ||||||
Condition for future business combination use of proceeds percentage | 80 | ||||||
Condition for future business combination threshold percentage ownership | 50 | ||||||
Condition for future business combination threshold net tangible assets | $ 5,000,001 | ||||||
Redemption limit percentage without prior consent | 20 | ||||||
Obligation to redeem public shares if entity does not complete a business combination (as a percent) | 100% | ||||||
Redemption period upon closure | 10 days | ||||||
Maximum allowed dissolution expenses | $ 100,000 | ||||||
Private placement warrant | |||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||
Number of units issued | shares | 81,000 | ||||||
Shares issued price per share | $ / shares | $ 10 | $ 10 | |||||
Proceeds from issuance of private placement | $ 27,810,000 | ||||||
Sponsor | |||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||
Shares issued price per share | $ / shares | $ 10 | ||||||
Common stock subject to possible redemption | |||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||
Shares issued price per share | $ / shares | $ 10.10 | ||||||
Initial Public Offering | |||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||
Number of units issued | shares | 18,000,000 | ||||||
Shares issued price per share | $ / shares | $ 10 | ||||||
Proceeds from issuance initial public offering | $ 180,000,000 | ||||||
Initial Public Offering | Private placement warrant | |||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||
Shares issued price per share | $ / shares | 10.10 | $ 10.10 | |||||
Private Placement | Private placement warrant | |||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||
Number of units issued | shares | 715,000 | ||||||
Shares issued price per share | $ / shares | $ 10 | ||||||
Proceeds from issuance of private placement | $ 7,150,000 | ||||||
Private Placement | Sponsor | |||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||
Portion of proceeds from a private placement contributed to the Trust Account | $ 1,800,000 | ||||||
Over-allotment option | |||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||
Number of units issued | shares | 2,700,000 | 2,700,000 | |||||
Shares issued price per share | $ / shares | $ 10 | $ 10 | |||||
Proceeds from issuance initial public offering | $ 27,000,000 | ||||||
Cash underwriting fees | $ 540,000 | $ 540,000 | |||||
Promissory note | Sponsor | First Extension | |||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||
Number of times to extend business acquisition | item | 2 | ||||||
Debt, principal amount | $ 2,070,000 | ||||||
Months to complete acquisition, extension | 3 months | ||||||
Promissory note | Sponsor | Second Extension | |||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||
Number of times to extend business acquisition | item | 2 | ||||||
Debt, principal amount | $ 2,070,000 | ||||||
Months to complete acquisition, extension | 3 months |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Cash equivalents | $ 0 | $ 0 |
Unrecognized tax benefits | 0 | 0 |
Unrecognized tax benefits accrued for interest and penalties | $ 0 | $ 0 |
Aggregate number of shares of common stock into which Rights may be converted | 2,070,000 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reconciliation common stock subject to possible redemption (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Remeasurement of carrying value to redemption value | $ 3,792,992 | ||
Common stock subject to possible redemption | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Remeasurement of carrying value to redemption value | 3,792,992 | $ 4,113,552 | |
Common stock subject to possible redemption | $ 216,976,544 | $ 213,183,552 | $ 209,070,000 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reflects the calculation of basic and diluted net income (loss) per share of common stock (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Allocation of net loss | $ (186,676) | $ (226,114) |
Basic weighted average shares outstanding | 26,851,000 | 26,851,000 |
Diluted weighted average shares outstanding | 26,851,000 | 26,851,000 |
Basic net loss per common stock | $ (0.01) | $ (0.01) |
Diluted net loss per common stock | $ (0.01) | $ (0.01) |
INITIAL PUBLIC OFFERING (Detail
INITIAL PUBLIC OFFERING (Details) - USD ($) | Dec. 09, 2021 | Dec. 06, 2021 | Mar. 31, 2023 |
INITIAL PUBLIC OFFERING | |||
Shares issued price per share | $ 10.10 | ||
Initial Public Offering and Over Allotment Option | |||
INITIAL PUBLIC OFFERING | |||
Number of units issued | 20,700,000 | ||
Proceeds from issuance initial public offering | $ 207,000,000 | ||
Initial Public Offering | |||
INITIAL PUBLIC OFFERING | |||
Number of units issued | 18,000,000 | ||
Shares issued price per share | $ 10 | ||
Number of shares included in each unit | 1 | ||
Number of rights included in each unit | 1 | ||
Number of shares issuable per right | 0.10 | ||
Proceeds from issuance initial public offering | $ 180,000,000 | ||
Over-allotment option | |||
INITIAL PUBLIC OFFERING | |||
Number of units issued | 2,700,000 | 2,700,000 | |
Shares issued price per share | $ 10 | ||
Proceeds from issuance initial public offering | $ 27,000,000 |
PRIVATE PLACEMENT (Details)
PRIVATE PLACEMENT (Details) - USD ($) | Dec. 06, 2021 | Mar. 31, 2023 | Dec. 09, 2021 |
PRIVATE PLACEMENT | |||
Aggregate number of shares of common stock into which Rights may be converted | 2,070,000 | ||
Issued price per share | $ 10.10 | ||
Private Placement | Private Placement Warrants | |||
PRIVATE PLACEMENT | |||
Aggregate number of shares of common stock into which Rights may be converted | 715,000 | ||
Issued price per share | $ 10 | ||
Proceeds from issuance of private placement | $ 7,150,000 | ||
Number of shares included in each unit | 1 | ||
Number of rights included in each unit | 1 | ||
Number of shares issuable per right | 0.1 | ||
Over-allotment option | |||
PRIVATE PLACEMENT | |||
Issued price per share | $ 10 | ||
Over-allotment option | Private Placement Warrants | |||
PRIVATE PLACEMENT | |||
Aggregate number of shares of common stock into which Rights may be converted | 81,000 | ||
Issued price per share | $ 10 |
RELATED PARTY TRANSACTIONS - Fo
RELATED PARTY TRANSACTIONS - Founder Shares (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Dec. 09, 2021 shares | Oct. 07, 2021 USD ($) shares | Dec. 31, 2021 shares | Mar. 31, 2023 D $ / shares shares | Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |||||
Percentage of issued and outstanding shares after the initial public offering collectively held by initial stockholders | 20% | 20% | |||
Restrictions on transfer period of time after business combination completion | 1 year | ||||
Founder Shares | |||||
RELATED PARTY TRANSACTIONS | |||||
Share dividend | 0.2 | ||||
Founder Shares | Sponsor | |||||
RELATED PARTY TRANSACTIONS | |||||
Offering costs paid by Sponsor in exchange for issuance of founder shares | $ | $ 25,000 | ||||
Number of shares issued | 4,312,500 | ||||
Aggregate number of shares owned | 5,175,000 | ||||
Shares subject to forfeiture | 675,000 | 0 | |||
Percentage of issued and outstanding shares after the initial public offering collectively held by initial stockholders | 20% | ||||
Percentage of founders shares subject to exceptions | 50% | ||||
Restrictions on transfer period of time after business combination completion | 1 year | ||||
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 | $ 12.50 | ||||
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 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 01, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Mar. 03, 2023 | Mar. 02, 2023 | Jan. 16, 2023 | Dec. 06, 2022 | Dec. 02, 2022 | Dec. 06, 2021 | Sep. 02, 2021 | |
RELATED PARTY TRANSACTIONS | |||||||||||
Outstanding balance | $ 4,140,000 | $ 2,070,000 | |||||||||
Promissory note | Sponsor | First Extension | |||||||||||
RELATED PARTY TRANSACTIONS | |||||||||||
Debt, principal amount | $ 2,070,000 | ||||||||||
Promissory note | Sponsor | Second Extension | |||||||||||
RELATED PARTY TRANSACTIONS | |||||||||||
Debt, principal amount | $ 2,070,000 | ||||||||||
Promissory Notes with Related parties | |||||||||||
RELATED PARTY TRANSACTIONS | |||||||||||
Maximum borrowing capacity of related party promissory note | $ 300,000 | ||||||||||
Outstanding balance | $ 135,463 | ||||||||||
Promissory note, outstanding | 0 | 0 | |||||||||
Promissory Notes with Related parties | Sponsor | First Extension | |||||||||||
RELATED PARTY TRANSACTIONS | |||||||||||
Debt, principal amount | $ 2,070,000 | ||||||||||
Debt conversion price | $ 10 | ||||||||||
Promissory Notes with Related parties | Sponsor | Second Extension | |||||||||||
RELATED PARTY TRANSACTIONS | |||||||||||
Promissory note, outstanding | 4,140,000 | 2,070,000 | |||||||||
Debt, principal amount | $ 2,070,000 | ||||||||||
Debt conversion price | $ 10 | ||||||||||
Administrative Support Agreement | |||||||||||
RELATED PARTY TRANSACTIONS | |||||||||||
Expenses per month | $ 13,000 | ||||||||||
Expenses incurred | 39,000 | $ 39,000 | |||||||||
Administrative Support Agreement | Accounts payable and accrued expenses | |||||||||||
RELATED PARTY TRANSACTIONS | |||||||||||
Expenses incurred | 13,000 | $ 13,000 | |||||||||
Related Party Loans | |||||||||||
RELATED PARTY TRANSACTIONS | |||||||||||
Debt, principal amount | $ 800,000 | ||||||||||
Related Party Loans | Working Capital Loans | |||||||||||
RELATED PARTY TRANSACTIONS | |||||||||||
Proceeds held in trust account used to repay working capital loans | 0 | ||||||||||
Amount of working capital loans which may be converted into warrants | $ 1,500,000 | ||||||||||
Price of warrant | $ 10 | ||||||||||
Related Party Loans | Promissory note | Sponsor | |||||||||||
RELATED PARTY TRANSACTIONS | |||||||||||
Promissory note, outstanding | $ 120,000 | ||||||||||
Debt conversion price | $ 10 |
RELATED PARTY TRANSACTIONS - Su
RELATED PARTY TRANSACTIONS - Subscription Agreement (Details) - Subscription Agreement with the Sponsor and its affiliates | Mar. 07, 2023 USD ($) $ / shares shares |
RELATED PARTY TRANSACTIONS | |
Number of shares issue and sell | 1,485,149 |
Consideration | $ | $ 15,000,000 |
Maximum additional shares issuable based on trigger of share price | 2,347,419 |
Stock price trigger for issue of additional shares | $ / shares | $ 10.10 |
COMMITMENTS (Details)
COMMITMENTS (Details) | 1 Months Ended | 3 Months Ended | ||||
Feb. 13, 2023 USD ($) | Dec. 09, 2021 $ / shares shares | Dec. 06, 2021 shares | Dec. 01, 2021 item | Oct. 31, 2021 item shares | Mar. 31, 2023 $ / shares | |
COMMITMENTS | ||||||
Maximum number of demands for registration of securities | item | 1 | |||||
Period of time underwriters may make demand for additional securities | 5 years | |||||
Shares issued price per share | $ / shares | $ 10.10 | |||||
Restrictions on transfer period of time after business combination completion | 1 year | |||||
Percent of cash fee paid to underwriters for miscellaneous services | 3.5 | |||||
Percent of cash fee paid to underwriters for introducing the target company | 1 | |||||
Period of time cash fee must be paid to underwriters | 60 days | |||||
Percentage of total gross proceeds | 3.5 | |||||
Percentage of total consideration | 1 | |||||
Business combination transaction fee | $ | $ 2,000,000 | |||||
Period for agreed not transfer any of shares of common stock on closing date of business combination | 180 days | |||||
Lockup Agreements And Arrangements [Member] | ||||||
COMMITMENTS | ||||||
Percentage Of share capital | 5% | |||||
Sponsor | ||||||
COMMITMENTS | ||||||
Maximum number of demands for registration of securities | item | 2 | |||||
Period of time sponsors may exercise registration rights | 3 months | |||||
Shares issued price per share | $ / shares | $ 10 | |||||
Percentage of reissuance of shares forfeited | 50% | |||||
Over-allotment option | ||||||
COMMITMENTS | ||||||
Maximum number of demands for registration of securities | item | 1 | |||||
Period of time sponsors may exercise registration rights | 45 days | |||||
Number of units issued | shares | 2,700,000 | 2,700,000 | ||||
Shares issued price per share | $ / shares | $ 10 | |||||
Founder Shares | ||||||
COMMITMENTS | ||||||
Number of units issued | shares | 180,000 | |||||
Restrictions on transfer period of time after business combination completion | 30 days | |||||
Piggy-Back Option | ||||||
COMMITMENTS | ||||||
Period of time underwriters may make demand for additional securities | 7 years | |||||
Piggy-Back Option | Minimum | ||||||
COMMITMENTS | ||||||
Period of time underwriters may make demand for additional securities | 5 years | |||||
Piggy-Back Option | Maximum | ||||||
COMMITMENTS | ||||||
Period of time underwriters may make demand for additional securities | 7 years |
STOCKHOLDERS' DEFICIT - Preferr
STOCKHOLDERS' DEFICIT - Preferred Stock (Details) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
STOCKHOLDERS' DEFICIT | ||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
STOCKHOLDERS' DEFICIT - Common
STOCKHOLDERS' DEFICIT - Common Stock (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 USD ($) Vote $ / shares shares | Dec. 31, 2022 Vote $ / shares shares | |
STOCKHOLDERS' DEFICIT | ||
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 |
Shares no longer subject to forfeiture | 675,000 | 675,000 |
Percentage of issued and outstanding shares after the initial public offering collectively held by initial stockholders | 20% | 20% |
Condition for future business combination threshold net tangible assets | $ | $ 5,000,001 | |
Threshold business days for redemption of public shares | 10 days | |
Obligation to redeem public shares if entity does not complete a business combination (as a percent) | 100% | |
Number of shares issued per right | 0.1 | |
Common stock not subject to possible redemption | ||
STOCKHOLDERS' DEFICIT | ||
Common stock, shares issued (in shares) | 6,151,000 | 6,151,000 |
Common stock, shares outstanding (in shares) | 6,151,000 | 6,151,000 |
Common stock subject to possible redemption | ||
STOCKHOLDERS' DEFICIT | ||
Common stock subject to possible redemption | 20,700,000 | 20,700,000 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | ||
Cash withdrawn from Trust Account | $ 0 | |
Mutual Fund | ||
FAIR VALUE MEASUREMENTS | ||
Assets held in trust account | 217,776,175 | $ 543,817 |
US Treasury Securities | ||
FAIR VALUE MEASUREMENTS | ||
Assets held in trust account | 212,931,355 | |
Level 1 | Recurring | Mutual Fund | ||
Gross holding gains and fair value of held-to-maturity securities | ||
Amortized Cost | 217,776,175 | |
Fair Value | $ 217,776,175 | |
Level 1 | US Treasury Securities | Recurring | ||
Gross holding gains and fair value of held-to-maturity securities | ||
Amortized Cost | 212,931,355 | |
Gross Holding Gain | 6,119 | |
Fair Value | $ 212,937,474 |