QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification Number) |
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(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
one-third of one redeemable warrant to purchase one share of Class A common stock |
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Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
Page No. |
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Item 1. |
(unaudited) |
1 |
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1 |
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2 |
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3 |
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4 |
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5 |
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Item 2. |
18 |
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Item 3. |
22 |
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Item 4. |
22 |
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Item 1. |
23 |
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Item 1A. |
23 |
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Item 2. |
23 |
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Item 3. |
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Item 4. |
23 |
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Item 5. |
23 |
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Item 6. |
24 |
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25 |
Item 1. |
Financial Information |
June 30, 2022 |
December 31, 2021 |
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(Unaudited) |
(Audited) |
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ASSETS |
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CURRENT ASSETS |
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Cash |
$ | $ | ||||||
Prepaid expenses |
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Total current assets |
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NONCURRENT ASSETS |
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Cash held in trust account |
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Other assets |
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Derivative forward purchase agreement asset |
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Total noncurrent assets |
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TOTAL ASSETS |
$ | $ | ||||||
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LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ DEFICIT |
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CURRENT LIABILITIES |
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Accounts payable and accrued expenses |
$ | $ | ||||||
Franchise tax payable |
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Note payable - related party |
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Income tax payabl e |
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Total current liabilities |
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LONG-TERM LIABILITIE S |
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Deferred underwriting commissions |
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Derivative warrant liabilitie s |
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Derivative forward purchase agreement liability |
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Total liabilities |
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Commitments and Contingencies |
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REEDEMABLE COMMON STOCK |
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Class A common stock subject to possible redemption: as of June 30, 2022 and $ |
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STOCKHOLDERS’ DEFICIT |
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Preferred stock, $ |
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Class A common stock, $ |
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Class B common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
( |
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Total stockholders’ deficit |
( |
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TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ DEFICI T |
$ | $ | ||||||
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Three months ended June 30, |
Six months ended June 30, |
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2022 |
2021 |
2022 |
2021 |
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OPERATING EXPENSES |
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General and administrative expenses |
$ | $ | $ | $ | ||||||||||||
Franchise tax expense |
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Total operating expenses |
( |
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) | ( |
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OTHER INCOME (EXPENSE) |
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Interest income on marketable securities held in Trust Account |
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Underwriting discounts and offering costs attributed to derivative warrant liabilit ies |
( |
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Change in fair value of derivative warrant liabilities |
( |
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Change in fair value of derivative forward purchase agreement |
( |
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Total other income (expense) |
( |
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NET INCOME (LOSS) BEFORE INCOME TAX |
( |
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Income tax expense |
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NET INCOME (LOSS) |
$ | $ | ( |
) | $ | $ | ||||||||||
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Basic and diluted weighted average shares outstanding, Class A common stock |
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Basic and diluted net income (loss) per share, Class A common stoc k |
$ | $ | ( |
) | $ | $ | ||||||||||
Basic and diluted weighted average shares outstanding, Class B common stock |
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Basic and diluted net income (loss) per share, Class B common stoc k |
$ | $ | ( |
) | $ | $ |
Additional |
Total |
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Class B Common Stock |
Paid-in |
(Accumulated |
Stockholders’ |
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Shares |
Amount |
Capital |
Deficit) |
Deficit |
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Balance—December 31, 2021 |
$ | $ | $ | ( |
) | $ | ( |
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Net income |
— | — | — | |||||||||||||||||
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Balance—March 31, 2022 |
$ | $ | $ | ( |
) | $ | ( |
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Remeasurement of Class A common stock subject to possible redemption |
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— |
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— |
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— |
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( |
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( |
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Net income |
— | — | — | |||||||||||||||||
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Balance—June 30, 2022 |
$ | $ | $ | ( |
) | $ | ( |
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Additional |
Total |
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Class B Common Stock |
Paid-in |
(Accumulated |
Stockholders’ |
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Shares |
Amount |
Capital |
Deficit) |
Defi cit |
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Balance—December 31, 2020 |
$ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||
Forfeiture of Founder Shares (1) |
( |
) | ( |
) | — | — | ||||||||||||||
Initial classification of derivative forward purchase agreement |
— | — | ( |
) | — | ( |
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Remeasurement of Class A common stock subject to possible redemption |
— | — | ( |
) | ( |
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Net income |
— | — | — | |||||||||||||||||
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Balance—March 31, 2021 |
$ | |
$ | $ | ( |
) | $ | ( |
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Net loss |
— | — | — | ( |
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Balance—June 30, 2021 |
$ | $ | $ | ( |
) | $ | ( |
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(1) | On January 29, 2021 the Sponsor forfeited |
Six months ended June 30, |
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2022 |
2021 |
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net income |
$ | $ | ||||||
Adjustments to reconcile net income to net cash used in operating activities: |
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Interest earned on cash held in Trust Account |
( |
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Underwriting discounts and transaction costs attributed to warrant liability |
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Change in fair value of derivative liabilities |
( |
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) | ||||
Change in fair value of derivative forward purchase agreement |
( |
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Changes in operating assets and liabilities: |
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Prepaid expenses |
( |
) | ||||||
Accounts payable and accrued expenses |
( |
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) | ||||
Other Assets |
( |
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Franchise tax payable |
( |
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e |
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Net cash used in operating activities |
( |
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CASH FLOWS FROM INVESTING ACTIVITIES |
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Investment of cash in Trust Account |
( |
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Net cash used in investing activities |
( |
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CASH FLOW FROM FINANCING ACTIVITIES |
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Proceeds from sale of Units, net of underwriting discounts paid |
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Proceeds from sale of Private Placement Warrants |
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Proceeds received from related party working capital loan |
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Repayment of note payable – related party |
( |
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Payment of offering costs |
( |
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Net cash provided by financing activities |
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NET CHANGE IN CASH |
( |
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CASH, BEGINNING OF PERIOD |
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CASH, END OF PERIOD |
$ | $ | ||||||
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SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES |
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Initial classification of derivative liability |
$ | $ | ||||||
Initial classification of derivative forward purchase agreement |
$ | $ | ( |
) | ||||
Initial value of common stock subject to possible redemption |
$ | $ | ||||||
Remeasurement of Class A common stock subject to possible redemption |
$ | $ | ||||||
Deferred underwriting fees charged to additional paid-in capital |
$ | $ |
Fair Value Measured as of June 30, 2022 |
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Level 1 |
Level 2 |
Level 3 |
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Assets: |
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Investments held in Trust Account (1) |
$ | $ | — | $ | — | |||||||
Liabilities: |
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Derivative forward purchase agreements (2) |
$ | — | $ | — | $ | |||||||
Derivative warrant liabilities - Public Warrants (3) |
$ | $ | — | $ | — | |||||||
Derivative warrant liabilities - Private Placement Warrants (4) |
$ | — | $ | — | $ | |||||||
Fair Value Measured as of December 31, 2021 |
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Level 1 |
Level 2 |
Level 3 |
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Assets: |
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Investments held in Trust Account (1) |
$ | $ | — | $ | — | |||||||
Derivative forward purchase agreements (2) |
$ | — | $ | — | $ | |||||||
Liabilities: |
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Derivative warrant liabilities - Public Warrants (3) |
$ | $ | — | $ | — | |||||||
Derivative warrant liabilities - Private Placement Warrants (4) |
$ | — | $ | — | $ |
(1) | The fair value of investments in Trust Account was based on the quoted market price. |
(2) | The fair value of derivative forward purchase agreement was based on the forward price formula. |
(3) | The fair value of derivative liabilities – Public Warrants was based on the quoted market price for MIT.W as of the reporting date. |
(4) | The fair value of derivative liabilities – Private Placement Warrants was based on the quoted market price for MIT.W as of June 30, 2022 and a modified Black-Scholes model as of December 31, 202 1 . |
Total Derivative |
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Public Warrants |
Private Warrants |
Warrants Liability |
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Derivative warrant liabilities at January 1, 2022 |
$ | |
$ | $ | |
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Change in fair value of warrant liabilities |
( |
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) | ( |
) | ||||||
Derivative warrant liabilities at March 31, 2022 |
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Change in fair value of warrant liabilities |
( |
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) | ( |
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Derivative warrant liabilities at June 30, 2022 |
$ | $ | $ | |||||||||
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FPA Asset (Liability) |
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Derivative forward purchase agreement at January 1, 2022 |
$ | |||
Change in fair value of the derivative forward purchase agreement |
( |
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Derivative forward purchase agreement at March 31, 2022 |
( |
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Change in fair value of the derivative forward purchase agreement |
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Derivative forward purchase agreement at June 30, 2022 |
$ | ( |
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• | in whole and not in part; |
• | at a price of $ |
• | at any time during the exercise period; |
• | upon a minimum of |
• | if, and only if, the last sale price of the Company’s Class A common stock equals or exceeds $ |
• | If, and only if, there is a current registration statement in effect with respect to the shares of Class A common stock underlying such warrants. |
• | in whole and not in part; |
• | at $ |
• | upon not less than |
• | if, and only if, the closing price of Class A common stock equals or exceeds $ |
Gross proceeds |
$ | |||
Less: |
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Offering costs and underwriting fees allocated to Class A common stock subject to possible redemption |
( |
) | ||
Proceeds allocated to Public Warrants at issuance |
( |
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Plus: |
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Remeasurement to Class A common stock subject to possible redemption amount |
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Class A common stock subject to possible redemption - December 31, 2021 |
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Plus: |
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Remeasurement to Class A common stock subject to possible redemption amount |
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Class A common stock subject to possible redemption - June 30, 2022 |
$ | |||
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Three months ended June 30, |
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2022 |
2021 |
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Class A |
Class B |
Class A |
Class B |
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Basic and diluted net income (loss) per share |
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Numerator |
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Allocation of net income (loss) |
$ | $ | $ | ( |
) | $ | ( |
) | ||||||||
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Denominator |
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Weighted-average shares outstanding |
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Basic and diluted Net income (loss) per shar e |
$ | $ | $ | ( |
) | $ | ( |
) |
Six months ended June 30, |
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2022 |
2021 |
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Class A |
Class B |
Class A |
Class B |
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Basic and diluted net income per share |
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Numerator |
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Allocation of net income |
$ | $ | $ | $ | ||||||||||||
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Denominator |
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Weighted-average shares outstanding |
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Basic and diluted net income per share |
$ | $ | $ | $ |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Six Months Ended June 30, |
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2022 |
2021 |
Change |
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Net cash used in operating activities |
$ | (1,048,302 | ) | $ | (1,047,575 | ) | $ | (727 | ) | |||
Net cash used in investing activities |
$ | — | $ | (500,000,000 | ) | $ | 500,000,000 | |||||
Net cash provided by financing activities |
$ | 300,000 | $ | 502,391,740 | $ | (502,091,740 | ) |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
Item 4. |
Controls and Procedures |
• | We have expanded and improved our review process for complex securities and related accounting standards. |
• | We have increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. |
• | We have also retained the services of a valuation expert to assist in valuation analysis of the Warrants on a quarterly basis. |
• | We are establishing additional monitoring and oversight controls designed to ensure the accuracy and completeness of our financial statements and related disclosures. |
Item 1. |
Legal Proceedings |
Item 1A. |
Risk Factors. |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. |
Defaults Upon Senior Securities |
Item 4. |
Mine Safety Disclosures |
Item 5. |
Other Information |
Item 6. |
Exhibits. |
* | Filed herewith. |
** | Furnished. |
MASON INDUSTRIAL TECHNOLOGY, INC. | ||||
Date: August 11, 2022 | By: | /s/ Derek Satzinger | ||
Name: | Derek Satzinger | |||
Title: | Chief Financial Officer |