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) |
(I.R.S. Employer Identification No.) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
one-half of one Redeemable Warrant |
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| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ||||
| Emerging growth company | ||||||
CASCADIA ACQUISITION CORP.
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2022
TABLE OF CONTENTS
i
| September 30, 2022 | ||||||||
(Unaudited) |
December 31, 2021 | |||||||
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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Investments Held in Trust Account |
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Total assets |
$ | $ | ||||||
LIABILITIES, REDEEMABLE CLASS A COMMON STOCK AND STOCKHOLDERS’ DEFICIT |
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LIABILITIES |
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Current liabilities |
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Accrued expenses |
$ | $ | ||||||
Accrued offering costs |
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Franchise tax payable |
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Income tax payable |
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Total current liabilities |
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Non-current liabilities |
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Deferred underwriter fee payable |
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Warrant liability |
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Note payable |
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Total non-current liabilities |
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Total liabilities |
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Commitments and contingencies |
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Redeemable Class A common stock, $ |
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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 |
( |
) | ( |
) | ||||
Total Stockholders’ Deficit |
( |
) | ( |
) | ||||
Total Liabilities, Redeemable Class A Common Stock and Stockholders’ Deficit |
$ | $ | ||||||
| For the Three Months Ended September 30, |
For the Nine Months Ended September 30, 2022 |
For the Period From February 16, 2021 (inception) through September 30, 2021 |
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| 2022 | 2021 | |||||||||||||||
| General and administrative expenses |
$ | $ | $ | $ | ||||||||||||
| Formation costs |
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| Franchise tax expense |
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| |
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| Loss from operations |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
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| Other income (expense) |
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| Interest earned on marketable securities held in Trust Account |
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| Unrealized gain (loss) on investments held in Trust Account, net |
( |
) | ||||||||||||||
| Change in fair value of derivative warrant liabilities |
( |
) | ( |
) | ||||||||||||
| Offering costs associated with derivative warrant liabilities |
( |
) | ( |
) | ||||||||||||
| |
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| Total other income (expense) |
( |
) | ( |
) | ||||||||||||
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| Income (loss) before benefit from (provision for) income taxes |
( |
) | ( |
) | ||||||||||||
| Benefit from (provision for) income taxes |
( |
) | ( |
) | ||||||||||||
| |
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| Net income (loss) allocable to common stockholders |
$ | $ | ( |
) | $ | $ | ( |
) | ||||||||
| |
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| Weighted average of shares outstanding of Class A redeemable common shares, basic and diluted |
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| Basic and diluted net income (loss) per share, Class A re deemable common shares |
$ | $ | ( |
) | $ | $ | ( |
) | ||||||||
| |
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| Weighted average of shares of Class B non-redeemable common shares (1) |
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| Basic and diluted net income (loss) per share, Class B non-redeemable common shares |
$ | $ | ( |
) | $ | $ | ( |
) | ||||||||
| |
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| (1) | For the three months ended September 30, 2021 and period from February 16, 2021 (inception) through September 30, 2021, this excludes up to |
Stockholders’ Equity (Deficit) |
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Redeemable Class A Common Stock |
Class B Common Stock |
Additional paid-in capital |
Accumulated deficit |
Total stockholder’s equity (deficit) |
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Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||
Balance, February 16, 2021 (inception) |
$ |
$ |
$ |
$ |
$ |
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Issuance of Class B common stock to Sponsor (1) |
— | — | — | |||||||||||||||||||||||||
Net loss |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||
Balance, March 31, 2021 |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||||||||||
Net loss |
— | — | — | — | — | — | ||||||||||||||||||||||
Balance, June 30, 2021 |
$ |
$ |
$ |
$ |
( |
) |
$ |
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Sale of units in initial public offering, less allocation to derivative warrant liabilities, gross |
— | — | — | — | — | |||||||||||||||||||||||
Offering costs |
— | ( |
) | — | — | — | — | — | ||||||||||||||||||||
Private placement of warrants, includes excess cash received of $ |
— | — | — | — | ||||||||||||||||||||||||
Deemed dividend to Class A Stockholders |
— | — | — | ( |
) | ( |
) | ( |
) | |||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Balance, September 30, 2021 |
( |
) | ( |
) | ||||||||||||||||||||||||
Stockholders’ Equity (Deficit) |
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Redeemable Class A Common Stock |
Class B Common Stock |
Additional paid-in capital |
Accumulated deficit |
Total stockholder’s equity (deficit) |
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Shares |
Amount |
Shares |
Amount |
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| Balance, December 31, 2021 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||||
| Net income |
— | — | — | — | — | |||||||||||||||||||||||
| |
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| Balance, March 31, 2022 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
| |
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| Net income |
— | — | — | — | — | |||||||||||||||||||||||
| |
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| Balance, June 30, 2022 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
| |
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| Accretion for Class A Common Stock Subject to redemption |
( |
) | ( |
) | ||||||||||||||||||||||||
| Net income |
— | — | — | — | — | |||||||||||||||||||||||
| |
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|
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|
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| Balance, September 30, 2022 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
| |
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| (1) | Includes up to |
| For the Nine Months Ended September 30, 2022 |
For the Period From February 16, 2021 (inception) through September 30, 2021 |
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| Cash Flows from Operating Activities |
| |||||||
| Net income (loss) |
$ | $ | ( |
) | ||||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: |
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| Interest earned on marketable securities held in Trust Account |
( |
) | — | |||||
| Unrealized loss on investments held in Trust Account, net |
— | |||||||
| Change in fair value of derivative warrant liabilities |
( |
) | ||||||
| Offering costs associated with derivative warrant liabilities |
— | |||||||
| Changes in operating assets and liabilities: |
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| Prepaid expenses |
( |
) | ||||||
| Accrued expenses |
( |
) | ||||||
| Income tax payable |
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| Franchise tax payable |
( |
) | ||||||
| |
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| Net cash used in operating activities |
( |
) | ( |
) | ||||
| |
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| Cash Flows from Investing Activities |
| |||||||
| Cash deposited in Trust Account |
— | ( |
) | |||||
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| Net cash used in investing activities |
— | ( |
) | |||||
| |
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| Cash Flows from Financing Activities |
| |||||||
| Proceeds from issuance of Class B common stock to Sponsor |
— | |||||||
| Proceeds from Sponsor note |
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| Repayment of Sponsor note |
— | ( |
) | |||||
| Proceeds received from initial public offering, gross |
— | |||||||
| Proceeds received from private placement |
— | |||||||
| Offering costs paid |
— | ( |
) | |||||
| |
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|
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| Net cash provided by financing activities |
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| Net increase (decrease) 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 non-cash activities: |
| |||||||
| Offering costs included in accrued offering costs |
$ | — |
$ | |||||
| Deferred underwriting commissions |
|
$ |
— |
|
|
$ |
|
|
| Deemed dividend to Class A stockholders |
|
$ |
— |
|
|
$ |
|
|
| Accretion of Class A common stock subject to possible redemption |
$ | $ |
— |
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| |
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| • | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
| • | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
| • | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
| For the three months ended September 30, | For the nine months ended September 30, 2022 |
For the period from February 16, 2021 (Inception) through September 30, 2021 |
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| 2022 | 2021 | |||||||||||||||||||||||||||||||
| Class A | Class B | Class A | Class B | Class A | Class B | Class A | Class B | |||||||||||||||||||||||||
Basic and diluted net income (loss) per common share |
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Numerator: |
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Allocation of net income (loss) |
$ | $ | ( $ |
) |
( $ |
) |
$ | $ | ($ | ) | ($ | ) | ||||||||||||||||||||
Denominator: |
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Basic and diluted weighted average common shares outstanding |
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Basic and diluted net income (loss) per common share |
$ | $ | ( $ |
) |
( $ |
) |
$ | $ | ($ | ) | $ | ( |
) | |||||||||||||||||||
| • | in whole and not in part; |
| • | at a price of $ |
| • | upon not less than |
| • | if, and only if, the closing price of the common stock equals or exceeds $ |
Description |
Quoted Prices in Active Markets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Other Unobservable Inputs (Level 3) |
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Assets: |
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Investments held in Trust Account - Treasury Securities |
$ | $ | $ | |||||||||
Liabilities: |
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Public Warrants |
$ | $ | $ | |||||||||
Private Placement Warrants |
$ | $ | $ | |||||||||
Description |
Quoted Prices in Active Markets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Other Unobservable Inputs (Level 3) |
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Assets: |
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Investments held in Trust Account - Treasury Securities |
$ | $ | $ | |||||||||
Liabilities: |
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Public Warrants |
$ | $ | $ | |||||||||
Private Placement Warrants |
$ | $ | $ | |||||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
References to the “Company,” “Cascadia Acquisition Corp.,” “Cascadia,” “our,” “us” or “we” refer to Cascadia Acquisition Corp. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited financial statements and related notes included herein.
Cautionary Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this Report including, without limitation, statements under this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. When used in this Report, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or our management, identify forward-looking statements. Such forward- looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management. Actual results could differ materially from those contemplated by the forward- looking statements as a result of certain factors detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited financial statements and the notes thereto contained elsewhere in this Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Overview
We are a blank check company incorporated in Delaware on February 16, 2021. We were formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses (the “Business Combination”).
Although we are not limited to a particular industry or sector for purposes of consummating a Business Combination, we intend to concentrate on sourcing business combination opportunities in industry sectors that are being fundamentally reshaped by the introduction of advanced technologies, such as robotics, automation and artificial intelligence (“RAAI”), commonly referred to as “Industry 4.0.” In addition to RAAI, which we expect will be a key theme and focus as we source business combination opportunities, we plan to also utilize the experience and relationship networks of our management team and board of directors to identify and source attractive and high growth opportunities in the environmental, social and governance, and specifically, the sustainability arena.
Our sponsor is Cascadia Acquisition Sponsor LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for our initial public offering (the “Initial Public Offering”) was declared effective on August 25, 2021. On August 30, 2021, we consummated our Initial Public Offering of 15,000,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units being offered, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $150,000,000, and incurring offering costs of $8,868,326 of which $5,250,000 was for deferred underwriting commissions. We granted the underwriter a 45- day option to purchase up to an additional 2,250,000 Units at the Initial Public Offering price to cover over- allotments, if any. On October 11, 2021, the underwriter waived the election to exercise its over-allotment option.
Each Unit consists of one share of the Company’s Class A common stock, $0.0001 par value, and one-half of one redeemable warrant (“Public Warrant”). Each Public Warrant entitles the holder to purchase one share of Class A common stock at an exercise price of $11.50 per whole share.
Simultaneously with the consummation of the closing of the Initial Public Offering, we consummated the private placement of an aggregate of 5,000,000 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant to the Sponsor, generating total gross proceeds of $5,000,000 (the “Private Placement”). We granted the underwriter a 45-day option to purchase up to an additional 450,000 Private Placement Warrants at the Initial Public Offering to cover over-allotments, if any. On October 11, 2021, the underwriter waived the election to exercise its over-allotment option.
19
Following the closing of the Initial Public Offering on August 30, 2021, an amount of $150,000,000, or $10.00 per Unit, from the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”) in the United States maintained by Continental Stock Transfer & Trust Company, as trustee, and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the funds in the Trust Account to the Company’s stockholders, as described below.
Our management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that we will be able to complete a Business Combination successfully. The Nasdaq rules provide that the Initial Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the value of the Trust Account (excluding deferred underwriting costs and taxes payable on the income earned on the Trust Account) at the time of the signing a definitive agreement to enter a Business Combination. We will only complete a Business Combination if the post-business combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act.
We will have until 18 months from the closing of the Initial Public Offering to complete a Business Combination (the “Combination Period”). If we are unable to complete a Business Combination within the Combination Period, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
Liquidity and Capital Resources, and Going Concern
As of September 30, 2022, we had $17,857 of cash in our operating bank account and $535,283 in current liabilities.
Our liquidity needs prior to the consummation of the Initial Public Offering were satisfied through the payment of $25,000 from our Sponsor to cover certain offering costs on our behalf in exchange for the issuance of Founder Shares, and loan proceeds of $123,795 under a promissory note. We repaid the promissory note in full on August 30, 2021. Our liquidity needs have otherwise been satisfied through the net proceeds from the consummation of the Initial Public Offering, the Private Placement and a working capital loan from our Sponsor with $70,000 outstanding as of September 30, 2022.
Based on the foregoing, we do not believe we have sufficient liquidity to meet our current and future estimated financial obligations. The Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, provide the Company with working capital loans. If we complete a business combination, we would repay any working capital loans out of the proceeds of the Trust Account released to us. 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 through September 30, 2022. The working capital loans would either be repaid without interest, or, at the lender’s discretion, up to $1,500,000 of such working capital loans may be convertible into warrants at a price of $1.50 per warrant of the post-business combination entity. The warrants would be identical to the Private Placement Warrants.
20
Additionally, if our estimates of the costs of undertaking in-depth due diligence and negotiating our initial business combination are less than the actual amount necessary to do so, or the amount of interest available to us from the Trust Account is less than we expect as a result of the current interest rate environment, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to consummate our initial business combination or because we become obligated to redeem a significant number of our Public Shares upon consummation of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination. Subject to compliance with applicable securities laws, we would only consummate such financing simultaneously with the consummation of our initial business combination. Following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations. If we are unable to complete a business combination by February 28, 2023, we will cease all operations except for the purpose of liquidation, unless the Combination Period is extended.
Our anticipated shortfall of sufficient liquidity to meet our current and future estimated financial obligations raises substantial doubt about our ability to continue as a going concern for a period of time within one year after the date that the accompanying financial statements are issued. We plan to address this uncertainty through working capital loans, and through consummation of our initial business combination. There is no assurance that working capital loans will be available to the Company or that our plans to consummate our initial Business Combination will be successful.
Management continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as of the date of this quarterly report. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Results of Operations
Our entire activity since inception up to September 30, 2022, was in preparation for our formation and the Initial Public Offering, and since the Initial Public Offering, our search for a prospective Business Combination. We will not be generating any operating revenues until the closing and completion of our initial Business Combination.
For the three months ended September 30, 2022, we had net income of approximately $681,000, which consisted of a loss from operations of approximately $290,000, which was comprised of approximately $240,000 of general and administrative expenses and $50,000 of franchise tax expense, and non-operating income of approximately $1,129,000, which was comprised of interest earned on marketable securities held in the Trust Account of approximately $518,000, a change in fair value of derivative warrant liabilities of $450,000 and an unrealized gain on investments held in the Trust Account of approximately $161,000.
For the nine months ended September, 2022, we had net income of approximately $4,537,000, which consisted of a loss from operations of approximately $874,000, which was comprised of approximately $724,000 of general and administrative expenses and $150,000 of franchise tax expense, and non-operating income of approximately $5,569,000, which was comprised of interest earned on marketable securities held in Trust Account of approximately $904,000 and a change in fair value of warrant liabilities of $4,800,000, offset by an unrealized loss on investments held in the Trust Account of approximately $135,000.
Contractual Obligations
Administrative Services Agreement
Commencing on the date of the Initial Public Offering, we entered into an agreement to pay Cascadia Capital Holdings, LLC a total of $10,000 per month for executive and other operational support, including accounting services and office space provided to members of our management team. The Company and Cascadia Capital
21
Holdings, LLC agreed to end these payments after the February 2022 payment. The Company and the Sponsor have agreed to indemnify Cascadia Capital Holdings, LLC and its affiliates in connection with the services provided pursuant to the services agreement. In addition, our Sponsor, executive officers and directors, and any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations.
Underwriting Agreement
We granted the underwriter a 45-day option to purchase up to 2,250,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions. The underwriter waived the election to exercise its over-allotment option on October 11, 2021.
The underwriter received a cash underwriting discount of $0.55 per Unit, or $8,250,000 in the aggregate of which $3,000,000 was paid upon the closing of the Initial Public Offering. The representative of the underwriter has agreed to defer underwriting commissions of 3.5% of the gross proceeds of this offering. Upon and concurrently with the completion of our initial business combination, $5,250,000, which constitutes the underwriter’s deferred commissions will be paid to the underwriter from the funds held in the Trust Account.
Critical Accounting Policies
Derivative Warrant Liabilities and Class A Common Stock Subject to Possible Redemption
We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We account for warrants based on an assessment of specific terms and applicable authoritative guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 Distinguishing Liabilities from Equity (“ASC 480”) and FASB ASC Topic 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent reporting period while the warrants are outstanding. Because the Company does not control the occurrence of events, such as a tender offer or exchange, that may trigger cash settlement of the warrants where not all of the shareholders also receive cash, the warrants do not meet the criteria for equity treatment thereunder, as such, the warrants must be recorded as a derivative liability.
We issued 7,500,000 Public Warrants to investors in our Initial Public Offering and issued 5,000,000 Private Placement Warrants. All of our outstanding warrants are recognized as derivative liabilities in accordance with ASC 815. Accordingly, we recognize the warrant instruments as liabilities at fair value and adjust the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. The fair value of the Public Warrants and Private Placement Warrants were estimated using a Monte-Carlo simulation model.
The Company will provide its 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, solely in its discretion. 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 $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Public Shares subject to redemption are recorded at redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance with the FASB ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”).
22
Net Income per Common Share
We comply with accounting and disclosure requirements of FASB ASC Topic 260, Earnings Per Share. Net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period as calculated using the two-class method. At September 30, 2022, we had outstanding warrants to purchase up to 12,500,000 Class A common shares. The weighted average of these shares was excluded from the calculation of diluted net income per common share since the exercise of the warrants is contingent upon the occurrence of future events. As a result, diluted net income per common share is the same as basic net income per common share for the three and nine months ended September 30, 2022. We have two classes of common shares, Class A common shares and Class B common shares. Earnings and losses are shared pro rata between the two classes of common shares.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
| Item 4. | Controls and Procedures |
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure.
The Company conducted an evaluation (pursuant to Rule 13a-15(b) under the Exchange Act), under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of September 30, 2022, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer has concluded that as of September 30, 2022, our disclosure controls and procedures were effective.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the quarter ended September 30, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors.
As of the date of this Quarterly Report on Form 10-Q, there have been no material changes with respect to those risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021, other than as provided below. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.
The SEC’s new SPAC proposal could chill or impede the completion of our Business Combination
On March 30, 2022, the SEC proposed comprehensive new rules and amendments to enhance disclosure and investor protection in initial public offerings by special purpose acquisition companies (“SPACs”) and in Business Combination transactions involving SPACs and private operating companies. If adopted, these new and amended rules could make our completion of a Business Combination more difficult, costly and time consuming.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not Applicable.
Item 5. Other Information.
None.
Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report.
| * | Filed herewith |
| ** | Furnished herewith |
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Cascadia Acquisition Corp. | ||||||
| Date: November 14, 2022 | By: | /s/ Jamie Boyd | ||||
| Name: | Jamie Boyd | |||||
| Title: | Chief Executive Officer & Chief Financial Officer | |||||
| (Principal Executive Officer) | ||||||
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Exhibit 31.1
CERTIFICATION
I, Jamie Boyd, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Cascadia Acquisition Corp.:
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | [Paragraph intentionally omitted in accordance with Exchange Act Rules 13a-14(a) and 15d-14(a)]; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
November 14, 2022
| /s/ Jamie Boyd |
| Jamie Boyd |
| Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. SECTION 1350)
In connection with the Quarterly Report of Cascadia Acquisition Corp., a Delaware corporation (the “Company”), on Form 10-Q for the quarter ended September 30, 2022, as filed with the Securities and Exchange Commission (the “Report”), I, Jamie Boyd, Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350 as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 14, 2022
| /s/ Jamie Boyd |
| Jamie Boyd |
| Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial Officer) |
Statements of Operations - USD ($) |
3 Months Ended | 8 Months Ended | 9 Months Ended | |||
|---|---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2021 |
Sep. 30, 2022 |
|||
| General and administrative expenses | $ 239,953 | $ 80,658 | $ 80,658 | $ 723,717 | ||
| Formation costs | 2,500 | |||||
| Franchise tax expense | 50,000 | 16,667 | 16,667 | 150,000 | ||
| Loss from operations | (289,953) | (97,325) | (99,825) | (873,717) | ||
| Other income (expense) | ||||||
| Interest earned on marketable securities held in Trust Account | 518,219 | 0 | 0 | 904,167 | ||
| Unrealized gain (loss) on investments held in Trust Account, net | 160,971 | 0 | 0 | (134,788) | ||
| Change in fair value of derivative warrant liabilities | 450,000 | (375,000) | (375,000) | 4,800,000 | ||
| Offering costs associated with derivative warrant liabilities | (326,718) | (326,718) | 0 | |||
| Total other income (expense) | 1,129,190 | (701,718) | (701,718) | 5,569,379 | ||
| Income (loss) before benefit from (provision for) income taxes | 839,237 | (799,043) | (801,543) | 4,695,662 | ||
| Benefit from (provision for) income taxes | (158,376) | (158,376) | ||||
| Net income (loss) allocable to common stockholders | $ 680,861 | $ (799,043) | $ (801,543) | $ 4,537,286 | ||
| Common Stock Subject To Possible Redemption [Member] | Common Class A [Member] | ||||||
| Other income (expense) | ||||||
| Weighted average of shares outstanding, Basic | 15,000,000 | 15,000,000 | 15,000,000 | 15,000,000 | ||
| Basic net income (loss) per share | $ 0.04 | $ (0.79) | $ (0.79) | $ 0.25 | ||
| Weighted average of shares outstanding, Diluted | 15,000,000 | 15,000,000 | 15,000,000 | 15,000,000 | ||
| Diluted net income (loss) per share | $ 0.04 | $ (0.79) | $ (0.79) | $ 0.25 | ||
| Non Redeemable Common Stock [Member] | Common Class B [Member] | ||||||
| Other income (expense) | ||||||
| Weighted average of shares outstanding, Basic | [1] | 3,750,000 | 3,750,000 | 3,750,000 | 3,750,000 | |
| Basic net income (loss) per share | $ 0.01 | $ (0.79) | $ (0.79) | $ 0.22 | ||
| Weighted average of shares outstanding, Diluted | [1] | 3,750,000 | 3,750,000 | 3,750,000 | 3,750,000 | |
| Diluted net income (loss) per share | $ 0.01 | $ (0.79) | $ (0.79) | $ 0.22 | ||
| ||||||
Statements of Operations (Parenthetical) - shares |
Sep. 30, 2022 |
Oct. 11, 2021 |
Sep. 30, 2021 |
|---|---|---|---|
| Over-Allotment Option [Member] | Common Class B [Member] | |||
| Temporary Equity, Shares Outstanding | 562,500 | 562,500 | 562,500 |
Statements of Changes in Class A Common Stock Subject to Possible Redemption and Stockholders' Equity (Deficit) (Parenthetical) |
3 Months Ended |
|---|---|
|
Sep. 30, 2021
USD ($)
shares
| |
| Warrant issuance cost | $ | $ 1,250,000 |
| Common Class B [Member] | Over-Allotment Option [Member] | |
| Temporary Equity, Shares Outstanding | shares | 562,500 |
Description of Organization and Business Operations |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Description of Organization and Business Operations | NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Cascadia Acquisition Corp. (the “Company”) is a blank check company incorporated in Delaware on February 16, 2021. The Company was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or other similar business combination with one or more businesses (the “Initial Business Combination” or “Business Combination”). Although the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company intends to concentrate on sourcing business combination opportunities in industry sectors that are being fundamentally reshaped by the introduction of advanced technologies, such as robotics, automation, and artificial intelligence (“RAAI”), commonly referred to as “Industry 4.0.” In addition to RAAI, which the Company expects will be a key theme and focus as it sources business combination opportunities, the Company plans to also utilize the experience and relationship networks of its management team and board of directors to identify and source attractive and high growth opportunities in the environmental, social and governance, and specifically, the sustainability arena. As of September 30, 2022, the Company had not commenced operations. All activity for the period from February 16, 2021 (inception) through September 30, 2022, relates to the Company’s formation and the initial public offering (“Initial Public Offering”). The Company will generate non-operating income in the form of dividend income on cash and cash equivalents from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end. The Company’s sponsor is Cascadia Acquisition Sponsor LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for the Company’s Initial Public Offering was declared effective on August 25, 2021. On August 30, 2021, the Company consummated its Initial Public Offering of 15,000,000 units (the “Units” and, with respect to the shares of the Class A common stock included in the Units being offered, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $150,000,000, and incurring offering costs of $8,868,326 of which $5,250,000 was for deferred underwriting commissions (see Note 6). The Company granted the underwriter a 45-day option to purchase up to an additional 2,250,000 Units at the Initial Public Offering price to cover over- allotments, if any. On October 11, 2021, the underwriter waived the election to ex its over- allotment option. ercise Simultaneously with the closing of the Initial Public Offering, the Company consummated the private placement of an aggregate of 5,000,000 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”), at a price of $1.00 per Private Placement Warrant to the Sponsor, generating total gross proceeds of $5,000,000 (the “Private Placement”). The Company granted the underwriter a 45-day option to purchase up to an additional 450,000 Private Placement Warrants at the Initial Public Offering to cover over-allotments, if any. On October 11, 2021, the underwriter waived the election to exercise its over-allotment option (see Note 5). Following the closing of the Initial Public Offering on August 30, 2021, $150,000,000, or $10.00 per Unit, from this Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”) in the United States maintained by Continental Stock Transfer & Trust Company, as trustee, and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions 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 the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Nasdaq rules provide that the Initial Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the value of the Trust Account (excluding deferred underwriting costs and taxes payable on the income earned on the Trust Account) at the time of the signing of a definitive agreement to enter into a Business Combination. The Company will only complete a Business Combination if the post-business combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect a Business Combination. The Company will provide its 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, solely in its discretion. 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 $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Public Shares subject to redemption are recorded at redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity The Company will proceed with a Business Combination only if the Company has net tangible assets, after payment of the deferred underwriting commissions, of at least $5,000,001 either prior to or upon such consummation of a Business Combination 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 law 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, 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 law, 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) 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 irrespective of whether they vote for or against the proposed transaction or don’t vote at all. Notwithstanding the above, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the amended and restated certificate of incorporation provides 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 15% or more of the Public Shares, without the prior consent of the Company. The Company will have until 18 months from the closing of the Initial Public Offering to complete a Business Combination (the “Combination Period”). If the Company is unable to complete 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 business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period. 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 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 (1) $10.00 per Public Share or (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes. This liability will not apply with respect to any claims by a third party whose 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 (other than the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest, cause of action or claim of any kind in or to monies held in the Trust Account. Liquidity and Capital Resources, and Going Concern As of September 30, 2022, the Company had $17,857 of cash in its operating bank account and $535,283 in current liabilities. The Company’s liquidity needs prior to the consummation of the Initial Public Offering were satisfied through the payment of $25,000 from the Sponsor to cover certain offering costs on the Company’s behalf in exchange for the issuance of Founder Shares (as defined in Note 5), and a promissory note from the Sponsor (as defined in Note 5). Subsequent to the consummation of the Initial Public Offering, the Company’s liquidity needs have been satisfied through the net proceeds from the consummation of the Initial Public Offering and the Private Placement. Based on the foregoing, the Company does not believe that it has sufficient liquidity, through funds held outside of the Trust Account, to meet its current and future estimated financial obligations. The Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, provide the Company with Working Capital Loans (as defined in Note 5). As of September 30, 2022, there was $70,000 outstanding under a Working Capital Loan with the Sponsor. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of time within one year after the date of the financial statements. Management plans to address this uncertainty through Working Capital Loans, and through consummation of a Business Combination. There is no assurance that Working Capital Loans will be available to the Company or that the Company’s plans to consummate a Business Combination will be successful. Furthermore, if the Company is unable to complete a Business Combination by February 28, 2023, the Company will cease all operations except for the purpose of liquidation, unless there is an extension on our period to complete a Business Combination. |
Summary of Significant Accounting Policies |
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying interim unaudited financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP. In the opinion of management, the interim unaudited financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected through December 31, 2022. The accompanying interim unaudited financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 as filed with the SEC on Mar ch 31, 2022. Use of Estimates The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Cash and Cash Equivalents 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 cash equivalents as of September 30, 2022 or December 31, 2021. Investments Held in Trust Account The Company’s portfolio of investments held in the Trust Account is comprised solely of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government securities and generally have a readily determinable fair value, or a combination thereof. Such securities and investments in money market funds are presented on the balance sheet at fair value at the end the reporting period. Gains and losses resulting from the change in fair value of these securities is included in income from investments held in the Trust Account in the accompanying statement of operations. The estimated fair values of investments held in the Trust Account are determined using available market information. Offering Costs Associated with the Initial Public Offering The Company complies with the requirements of the ASC 340-10-S99-1 Expenses of Offering Warrant Liabilities and Class A Common Stock Subject to Possible Redemption The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company accounts for warrants based on an assessment of specific terms and applicable authoritative guidance in ASC 480 and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent reporting period while the warrants are outstanding. Because the Company does not control the occurrence of events, such as a tender offer or exchange, that may trigger cash settlement of the warrants where not all of the shareholders also receive cash, the warrants do not meet the criteria for equity treatment thereunder, as such, the warrants must be recorded as a derivative liability. The 7,500,000 public warrants issued in connection with the Initial Public Offering and the 5,000,000 Private Placement Warrants are recognized as derivative liabilities in accordance with ASC 815-40. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised. The initial fair value of the Public Warrants issued in connection with the Initial Public Offering and Private Placement Warrants were estimated using a Monte-Carlo simulation model at the measurement date. The fair value of the Public Warrants and Private Placement Warrants have subsequently been measured based on the listed market price of the Public Warrants or inputs derived from the Public Warrants. Warrant liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. As discussed in Note 3, all of the 15,000,000 Class A common stock sold as part of the Units in the Initial Public Offering contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s amended and restated certificate of incorporation. In accordance with ASC 480, conditionally redeemable Class A common stock (including shares of Class A common stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of ASC 480. Although the Company did not specify a maximum redemption threshold, its charter provides that currently, the Company will not redeem its public shares in an amount that would cause its net tangible assets (stockholders’ equity) to be less than $5,000,001. However, the threshold in its charter would not change the nature of the underlying shares as redeemable and thus public shares would be required to be disclosed outside of permanent equity. Accordingly, as of September 30, 2022 and December 31, 2021, 15,000,000 shares of Class A common stock subject to possible redemption at the redemption amount are presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s balance sheet. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Such changes are reflected in additional paid-in capital, or in the absence of additional capital, in accumulated deficit. Income Taxes The Company complies with the accounting and reporting requirements of ASC Topic 740, Income Taxes 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 September 30, 2022 and December 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is and has been subject to income tax examinations by major taxing authorities since inception. Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, other than the warrant liabilities, which qualify as financial instruments under ASC Topic 820, Fair Value Measurement Fair Value Measurements Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal depository insurance coverage of $250,000. At September 30, 2022 and December 31, 2021, the Company had not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. Risks and Uncertainties Management continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Net Income (Loss) per Common Share The Company complies with accounting and disclosure requirements of ASC Topic 260, Earnings Per Share warrants are contingently exercisable, and the contingencies have not yet been met . The Company’s statement of operations includes a presentation of income (loss) per share for common shares subject to possible redemption in a manner similar to the two-class method of income (loss) per share. Net income (loss) per share, basic and diluted, for Class A redeemable common shares is calculated by dividing the net earnings (dividend income earned on the Trust Account less funds released to pay taxes) during the reporting period by the weighted average number of Class A redeemable common shares outstanding since original issuance. Net income (loss) per share, basic and diluted, for Class B non-redeemable common shares is calculated by dividing the net income (loss), adjusted for net earnings, as described above, attributable to Class A redeemable common shares during the reporting period, by the weighted average number of Class B non-redeemable common shares outstanding for the period. Class B non-redeemable common shares includes the Founder Shares as these shares do not have any redemption features and do not participate in the income earned on the Trust Account less amounts to be paid for taxes, including franchise taxes, however such taxes cannot exceed the dividend income earned on the Trust Account for purposes of the allocation. At September 30, 2022 and 2021, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into common shares and then share in the earnings of the Company. As a result,diluted As of September 30, 2022 and 2021, the Company has two classes of common shares, Class A common shares and Class B common shares. For the three months ended September 30, 2022 and 2021, nine months ended September 30, 2022 and period from February 16, 2021 (Inception) through September 30, 2021, earnings and losses are allocated pro rata between the two classes of common shares as follows:
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Initial Public Offering |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Equity [Abstract] | |
| Initial Public Offering | NOTE 3. INITIAL PUBLIC OFFERING On August 30, 2021, the Company consummated its Initial Public Offering of 15,000,000 Units, at $10.00 per Unit, generating gross proceeds of $150,000,000. Each Unit consisted of one share of the Company’s Class A common stock, $0.0001 par value, and
one-half of one redeemable warrant (“Public Warrant”). Each Public Warrant entitles the holder to purchase one share of Class A common stock at an exercise price of $11.50 per whole share. |
Private Placement |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Equity [Abstract] | |
| Private Placement | NOTE 4. PRIVATE PLACEMENT Simultaneously with the closing of the Initial Public Offering, the Sponsor has purchased an aggregate of 5,000,000 warrants at a price of $1.00 per Private Placement Warrant, for an aggregate purchase price of $5,000,000. Each of the Private Placement Warrants is exercisable to purchase one share of Class A common stock at a price of $11.50 per share. The Sponsor transferred $5,000,000 to the Trust Account. The proceeds from the sale of the Private Placement Warrants were added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless. |
Related Party Transactions |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions | NOTE 5. RELATED-PARTY TRANSACTIONS Founder Shares On February 22, 2021, the Sponsor paid $25,000 in consideration for 4,312,500 shares of Class B common stock (the “Founder Shares”). The Founder Shares included an aggregate of up to 562,500 shares of Class B common stock subject to forfeiture by the Sponsor to the extent that the underwriter’s over-allotment was not exercised in full or in part, so that the Sponsor would own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Sponsor did not purchase any Public Shares in the Initial Public Offering). The underwriter waived the election to exercise its over-allotment option on October 11, 2021, and as a result, 562,500 Founder Shares were forfeited, resulting in 3,750,000 Founder Shares outstanding as of October 11, 2021. The Sponsor has agreed not to transfer, assign or sell any of its Founder Shares, with the exception of transferring, assigning or selling its Founder Shares to members of the Company’s board of directors and management team, until the earlier to occur of: (A) one year after the completion of a Business Combination or (B) the date on which the Company completes a liquidation, merger, capital stock exchange or similar transaction that results in the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Business Combination, the Founder Shares will be released from the lock-up. On August 26, 2021, the Sponsor assigned 75,000 Founder Shares to three directors (25,000 shares each) of the Company that will automatically convert to Class A shares upon the consummation of the Initial Business Combination (the “Award”). Pursuant to ASC 718, Compensation-Stock Compensation Related-Party Loans In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s directors and officers may loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would 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. Except for the foregoing, the terms of such Working Capital Loans have not been determined and no written agreements exist with respect to such 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 warrants of the post-business combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants. As of September 30, 2022 and December 31, 2021, there was $70,000 and $-, respectively, outstanding under a Working Capital Loan with the Sponsor, which is included in “Note payable” in the accompanying balance sheets. Promissory Note – Related Party On February 16, 2021, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the “Promissory Note”). The Promissory Note was non-interest bearing and was payable on the earlier of September 30, 2021, or (ii) the date on which the Company consummated an Initial Public Offering. The Company borrowed $123,795 under the Promissory Note and repaid the Promissory Note on August 30, 2021, with proceeds from the Initial Public Offering. There was no balance under the Promissory Note at September 30, 2022 or December 31, 2021. Administrative Services Agreement Commencing on the date of the Initial Public Offering, the Company entered into an agreement to pay Cascadia Capital Holdings, LLC a total of $10,000 per month for executive, and other operational support, including accounting services and office space provided to members of our management team. The Company and Cascadia Capital Holdings, LLC agreed to end these payments after the February 2022 payment. The Company and the Sponsor have agreed to indemnify Cascadia Capital Holdings, LLC and its affiliates in connection with the services provided pursuant to the services agreement. In addition, our sponsor, executive officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket During the three and nine months ended September 30, 2022, the Company incurred $0 and $20,000 of services agreement expenses, respectively, which are included in “General and administrative expenses” in the accompanying statement of operations. |
Commitments and Contingencies |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and Contingencies | NOTE 6. COMMITMENTS AND CONTINGENCIES Registration Rights The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of the Working Capital Loans (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) are entitled to registration rights pursuant to a registration rights agreement signed on the effective date of the Initial Public Offering, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to our Class A common stock). The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Underwriter’s Agreement The Company granted the underwriter a 45-day option to purchase up to 2,250,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions. The underwriter waived the election to exercise its over-allotment option on October 11, 2021. The underwriter received a cash underwriting discount of $0.55 per Unit, or $8,250,000 in the aggregate of which $3,000,000 was paid upon the closing of the Initial Public Offering. The representative of the underwriter has agreed to defer underwriting commissions of 3.5% of the gross proceeds of this offering. Upon and concurrently with the completion of our initial business combination, $5,250,000, which constitutes the underwriter’s deferred commissions will be paid to the underwriter from the funds held in the Trust Account. |
Redeemable Class A Common Stock And Stockholders' Equity |
9 Months Ended |
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Sep. 30, 2022 | |
| Stockholders' Equity Note [Abstract] | |
| Redeemable Class A Common Stock And Stockholders' Equity | NOTE 7. REDEEMABLE CLASS A COMMON STOCK AND STOCKHOLDERS’ E QUITY Preferred stock Class A Common Stock Holders of the Company’s Class A common stock have the opportunity to redeem all or a portion of their public shares upon the completion of the Initial Business Combination either (i) in connection with a stockholder meeting called to approve the business combination or (ii) without a stockholder vote by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a proposed business combination or conduct a tender offer will be made by the Company, solely in management’s discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require the Company to seek stockholder approval under applicable law or stock exchange listing requirement. The Company’s amended and restated certificate of incorporation provides that in no event will the Company redeem its Class A common stock in an amount that would cause the Company’s net tangible assets to be less than $5,000,001 (as prescribed by exchange listing standards). In addition, the proposed Initial Business Combination may impose a minimum cash requirement for: (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. In the event the aggregate cash consideration the Company would be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed Initial Business Combination exceed the aggregate amount of cash available to the Company, the Company will not complete the Initial Business Combination or redeem any shares in connection with such Initial Business Combination, and all shares of Class A common stock submitted for redemption will be returned to the holders thereof. Class B Common Stock Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of shareholders, except as required by law, provided that only holders of Class B common stock have the right to vote on the election of the Company’s directors prior to the initial Business Combination and may remove a member of the board of directors for any reason. The shares of Class B common stock will automatically convert into shares of Class A common stock upon the consummation of a Business Combination on a one-for-one as-converted basis, 20% of the total number of shares of Class A common stock outstanding after such conversion, including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of a Business Combination, excluding any shares of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in a Business Combination and any Private Placement Warrants issued to the Sponsor, officers or directors upon conversion of Working Capital Loans, provided that such conversion of Founder Shares will never occur on a less than one-for-one |
Warrant Liability |
9 Months Ended | ||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||
| Warrant Liability [Abstract] | |||||||||||||||||
| Warrant Liability | NOTE 8. WARRANT LIABILITY As of September 30, 2022 and December 31, 2021, the Company had 7,500,000 Public Warrants and 5,000,000 Private Placement Warrants outstanding in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Accordingly, the Company classified each warrant as a liability at its fair value, with the change in fair value recognized in the Company’s statement of operations. Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the consummation of a Business Combination or (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years from the consummation of a Business Combination or earlier upon redemption or liquidation. The Company will not be obligated to deliver any Class A common stock pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, it will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A common stock issuable upon exercise of the warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the sixtieth (60th) business day after the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, the Company will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. Once the Public Warrants become exercisable, the Company may redeem the Public Warrants:
If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws. The exercise price and number of Class A common stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a stock split, stock dividend, reorganization, recapitalization and the like. However, except as described below, the Public Warrants will not be adjusted for issuances of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. 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 Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination on the date of the consummation of such initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the common shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and will be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The Company accounted for the 12,500,000 warrants issued in connection with the Initial Public Offering (comprised of 7,500,000 Public Warrants and 5,000,000 Private Placement Warrants) in accordance with the guidance contained in FASB ASC Topic 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. The accounting treatment of derivative financial instruments requires that the Company record a derivative liability upon the closing of the Initial Public Offering. Accordingly, the Company classified each warrant as a liability at its fair value and the warrants were allocated a portion of the proceeds from the issuance of the Units equal to its fair value. This liability is subject to remeasurement at each balance sheet date. With each such
re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification. |
Fair Value Measurements |
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| Fair Value Measurements | NOTE 9. FAIR VALUE MEASUREMENTS At December 31, 2021, assets held in the Trust Account were comprised of $150,001,689, in U.S. treasury bills and mutual funds which are invested in U.S. Treasury Securities. During the quarter ended June 30, 2022, the U.S. treasury bills held at December 31, 2021 matured, the proceeds of which were used to acquire U.S. treasury notes. At September 30, 2022, assets held in the Trust Account were comprised of $150,771,068, in U.S. treasury notes and mutual funds which are invested in U.S. Treasury Securities. The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2022, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value:
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2021, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value:
Transfer to/from Levels 1, 2, and 3 are recognized at the beginning of the quarter in which the transfer occurred. There were no transfers between levels of the hierarchy for the three and nine months ended September 30, 2022. The Public Warrants are classified as Level 1 as they are separately listed and traded in an active market during the period. The Private Placement Warrants are classified as Level 2 as all of the significant inputs to the valuation model used to estimate the fair value of the Private Placement Warrants became directly or indirectly observable from the listed Public Warrants. Level 1 assets include investments in U.S. treasury bills and notes, and mutual funds. For the nine months ended September 30, 2022, the Company recognized an unrealized gain in the statement of operations resulting from a decrease in the fair value of the warrant liability of $4.8 million from December 31, 2021. |
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Summary of Significant Accounting Policies (Policies) |
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basis of Presentation | Basis of Presentation The accompanying interim unaudited financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP. In the opinion of management, the interim unaudited financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected through December 31, 2022. The accompanying interim unaudited financial statements should be read in conjunction with the Company’s Annual Report on Form
10-K for the year ended December 31, 2021 as filed with the SEC on Mar ch 31, 2022. |
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| Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. |
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| 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 cash equivalents as of September 30, 2022 or December 31, 2021. |
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| Investments Held in Trust Account | Investments Held in Trust Account The Company’s portfolio of investments held in the Trust Account is comprised solely of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government securities and generally have a readily determinable fair value, or a combination thereof. Such securities and investments in money market funds are presented on the balance sheet at fair value at the end the reporting period. Gains and losses resulting from the change in fair value of these securities is included in income from investments held in the Trust Account in the accompanying statement of operations. The estimated fair values of investments held in the Trust Account are determined using available market information. |
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| Offering Costs Associated with the Initial Public Offering | Offering Costs Associated with the Initial Public Offering The Company complies with the requirements of the ASC
340-10-S99-1 Expenses of Offering |
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| Warrant Liabilities and Class A Common Stock Subject to Possible Redemption | Warrant Liabilities and Class A Common Stock Subject to Possible Redemption The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company accounts for warrants based on an assessment of specific terms and applicable authoritative guidance in ASC 480 and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent reporting period while the warrants are outstanding. Because the Company does not control the occurrence of events, such as a tender offer or exchange, that may trigger cash settlement of the warrants where not all of the shareholders also receive cash, the warrants do not meet the criteria for equity treatment thereunder, as such, the warrants must be recorded as a derivative liability. The 7,500,000 public warrants issued in connection with the Initial Public Offering and the 5,000,000 Private Placement Warrants are recognized as derivative liabilities in accordance with ASC 815-40. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised. The initial fair value of the Public Warrants issued in connection with the Initial Public Offering and Private Placement Warrants were estimated using a Monte-Carlo simulation model at the measurement date. The fair value of the Public Warrants and Private Placement Warrants have subsequently been measured based on the listed market price of the Public Warrants or inputs derived from the Public Warrants. Warrant liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. As discussed in Note 3, all of the 15,000,000 Class A common stock sold as part of the Units in the Initial Public Offering contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s amended and restated certificate of incorporation. In accordance with ASC 480, conditionally redeemable Class A common stock (including shares of Class A common stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of ASC 480. Although the Company did not specify a maximum redemption threshold, its charter provides that currently, the Company will not redeem its public shares in an amount that would cause its net tangible assets (stockholders’ equity) to be less than $5,000,001. However, the threshold in its charter would not change the nature of the underlying shares as redeemable and thus public shares would be required to be disclosed outside of permanent equity. Accordingly, as of September 30, 2022 and December 31, 2021, 15,000,000 shares of Class A common stock subject to possible redemption at the redemption amount are presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s balance sheet. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Such changes are reflected in additional
paid-in capital, or in the absence of additional capital, in accumulated deficit. |
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| Income Taxes | Income Taxes The Company complies with the accounting and reporting requirements of ASC Topic 740, Income Taxes 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 September 30, 2022 and December 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is and has been subject to income tax examinations by major taxing authorities since inception. |
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| Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, other than the warrant liabilities, which qualify as financial instruments under ASC Topic 820, Fair Value Measurement |
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| Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. |
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| Recent Accounting Standards | Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. |
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| Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal depository insurance coverage of $250,000. At September 30, 2022 and December 31, 2021, the Company had not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. |
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| Risks and Uncertainties | Risks and Uncertainties Management continues to evaluate the impact of the
COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
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| Net Income (Loss) per Common Share | Net Income (Loss) per Common Share The Company complies with accounting and disclosure requirements of ASC Topic 260, Earnings Per Share warrants are contingently exercisable, and the contingencies have not yet been met . The Company’s statement of operations includes a presentation of income (loss) per share for common shares subject to possible redemption in a manner similar to the two-class method of income (loss) per share. Net income (loss) per share, basic and diluted, for Class A redeemable common shares is calculated by dividing the net earnings (dividend income earned on the Trust Account less funds released to pay taxes) during the reporting period by the weighted average number of Class A redeemable common shares outstanding since original issuance. Net income (loss) per share, basic and diluted, for Class B non-redeemable common shares is calculated by dividing the net income (loss), adjusted for net earnings, as described above, attributable to Class A redeemable common shares during the reporting period, by the weighted average number of Class B non-redeemable common shares outstanding for the period. Class B non-redeemable common shares includes the Founder Shares as these shares do not have any redemption features and do not participate in the income earned on the Trust Account less amounts to be paid for taxes, including franchise taxes, however such taxes cannot exceed the dividend income earned on the Trust Account for purposes of the allocation. At September 30, 2022 and 2021, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into common shares and then share in the earnings of the Company. As a result,diluted As of September 30, 2022 and 2021, the Company has two classes of common shares, Class A common shares and Class B common shares. For the three months ended September 30, 2022 and 2021, nine months ended September 30, 2022 and period from February 16, 2021 (Inception) through September 30, 2021, earnings and losses are allocated pro rata between the two classes of common shares as follows:
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Summary of Significant Accounting Policies (Tables) |
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Earnings Per Share, Basic and Diluted | For the three months ended September 30, 2022 and 2021, nine months ended September 30, 2022 and period from February 16, 2021 (Inception) through September 30, 2021, earnings and losses are allocated pro rata between the two classes of common shares as follows:
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Fair Value Measurements (Tables) |
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| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Assets Measured at Fair Value On a Recurring Basis | The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2022, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value:
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2021, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value:
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Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) |
9 Months Ended | |
|---|---|---|
Sep. 30, 2022 |
Dec. 31, 2021 |
|
| Cash insured with federal depository insurance corporation | $ 250,000 | |
| Cash equivalents | $ 0 | $ 0 |
| Public Warrants [Member] | ||
| Class of warrants or rights warrants issued during the period units | 7,500,000 | |
| Private Placement Warrants [Member] | ||
| Class of warrants or rights warrants issued during the period units | 5,000,000 | |
| Common Class A [Member] | ||
| Antidiluted securities | 12,500,000 |
Summary of Significant Accounting Policies - Schedule Of Earnings Per Share Basic And Diluted (Detail) - USD ($) |
3 Months Ended | 8 Months Ended | 9 Months Ended | |||
|---|---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2021 |
Sep. 30, 2022 |
|||
| Common Class A [Member] | ||||||
| Numerator: | ||||||
| Allocation of net income (loss) | $ 638,852 | $ (11,912,521) | $ (11,914,521) | $ 3,722,029 | ||
| Common Class A [Member] | Common Stock Subject To Possible Redemption [Member] | ||||||
| Denominator: | ||||||
| Weighted average common shares outstanding, Basic | 15,000,000 | 15,000,000 | 15,000,000 | 15,000,000 | ||
| Basic net income (loss) per common share | $ 0.04 | $ (0.79) | $ (0.79) | $ 0.25 | ||
| Denominator: | ||||||
| Weighted average common shares outstanding, Diluted | 15,000,000 | 15,000,000 | 15,000,000 | 15,000,000 | ||
| Diluted net income (loss) per common share | $ 0.04 | $ (0.79) | $ (0.79) | $ 0.25 | ||
| Common Class B [Member] | ||||||
| Numerator: | ||||||
| Allocation of net income (loss) | $ 42,009 | $ (2,978,130) | $ (2,978,630) | $ 815,257 | ||
| Common Class B [Member] | Non Redeemable Common Stock [Member] | ||||||
| Denominator: | ||||||
| Weighted average common shares outstanding, Basic | [1] | 3,750,000 | 3,750,000 | 3,750,000 | 3,750,000 | |
| Basic net income (loss) per common share | $ 0.01 | $ (0.79) | $ (0.79) | $ 0.22 | ||
| Denominator: | ||||||
| Weighted average common shares outstanding, Diluted | [1] | 3,750,000 | 3,750,000 | 3,750,000 | 3,750,000 | |
| Diluted net income (loss) per common share | $ 0.01 | $ (0.79) | $ (0.79) | $ 0.22 | ||
| ||||||
Initial Public Offering - Additional Information (Detail) - USD ($) |
Aug. 30, 2021 |
Sep. 30, 2022 |
Dec. 31, 2021 |
|---|---|---|---|
| Proceeds from temporary equity issuance | $ 150,000,000 | ||
| Common Class A [Member] | |||
| Temporary Equity, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 |
| Common Class A [Member] | Public Warrants [Member] | |||
| Class of warrants or rights exercise price per share | $ 11.5 | ||
| IPO [Member] | Common Class A [Member] | |||
| Temporary equity stock shares issued during the period shares | 15,000,000 | ||
| Temporary equity shares issued price per share | $ 10 |
Private Placement - Additional Information (Detail) |
9 Months Ended |
|---|---|
|
Sep. 30, 2022
USD ($)
$ / shares
shares
| |
| Proceeds raised from warrant issuances transferred to the trust account | $ | $ 5,000,000 |
| Private Placement Warrants [Member] | |
| Class of warrants or rights warrants issued during the period units | shares | 5,000,000 |
| Class of warrants or rights warrants issued issue price per warrant | $ / shares | $ 1 |
| Class of warrants or rights number of shares called by each warrant or right | shares | 1 |
| Class of warrants or rights exercise price per share | $ / shares | $ 11.5 |
| Proceeds from issuance of warrants | $ | $ 5,000,000 |
Commitments - Additional Information (Detail) - USD ($) |
9 Months Ended | ||
|---|---|---|---|
Aug. 30, 2021 |
Sep. 30, 2022 |
Dec. 31, 2021 |
|
| Commitments [Line Items] | |||
| Underwriting discount per unit | $ 0.55 | ||
| Underwriting discount | $ 8,250,000 | ||
| Deferred underwriting discount non current | 5,250,000 | $ 5,250,000 | $ 5,250,000 |
| IPO [Member] | |||
| Commitments [Line Items] | |||
| Payment of underwriting fees | $ 3,000,000 | ||
| Deferred underwriting commission as a percentage of gross proceeds | 3.50% |
Fair Value Measurements - Additional Information (Detail) - USD ($) |
9 Months Ended | |
|---|---|---|
Sep. 30, 2022 |
Dec. 31, 2021 |
|
| Unrealized gain from fair value of warrant liabilities | $ 4,800,000 | |
| US Treasury Securities [Member] | ||
| Assets held in the Trust Account | $ 150,771,068 | $ 150,001,689 |