ANNUAL 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.) | |
(Address of principal executive offices) |
(Zip Code) |
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 | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
Auditor Firm ID: |
Auditor Name: |
Auditor Location: |
PAGE |
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Item 1. |
1 |
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Item 1A. |
17 |
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Item 1B. |
18 |
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Item 2. |
18 |
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Item 3. |
18 |
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Item 4. |
18 |
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19 |
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Item 5. |
19 |
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Item 6. |
20 |
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Item 7. |
20 |
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Item 7A. |
25 |
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Item 8. |
25 |
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Item 9. |
26 |
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Item 9A. |
26 |
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Item 9B. |
26 |
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Item 9C. |
26 |
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27 |
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Item 10. |
27 |
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Item 11. |
31 |
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Item 12. |
32 |
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Item 13. |
33 |
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Item 14. |
35 |
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36 |
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Item 15. |
36 |
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Item 16. |
36 |
• | our ability to complete our initial business combination; |
• | our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination; |
• | our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination, as a result of which they would then receive expense reimbursements; |
• | our potential ability to obtain additional financing to complete our initial business combination; |
• | the ability of our officers and directors to generate a number of potential acquisition opportunities; |
• | our pool of prospective target businesses; |
• | the ability of our officers and directors to generate a number of potential acquisition opportunities; |
• | our public securities’ potential liquidity and trading; |
• | the lack of a market for our securities; |
• | the use of proceeds not held in the trust account or available to us from interest income on the trust account balance; or |
• | our financial performance. |
• | “anchor investors” are to certain qualified institutional buyers or institutional accredited investors (none of which are affiliated with any member of our management team, our sponsor or any other anchor investor) that purchased an aggregate of approximately $60.8 million of units in our initial public offering, and became a member of our sponsor at the closing of our initial public offering; |
• | “board of directors” or “board” are to the board of directors of the Company; |
• | “Carnegie Park” are to Carnegie Park Capital, LLC (and/or its affiliates), with which we have entered into a forward purchase agreement; |
• | “Class A common stock” are to the shares of Class A common stock of the Company, par value $0.0001 per share; |
• | “Class B common stock” are to the shares of Class B common stock of the Company, par value $0.0001 per share; |
• | “common stock” are to the Class A common stock and the Class B common stock; |
• | “Continental” are to Continental Stock Transfer & Trust Company, trustee of our trust account (as defined below) and warrant agent of our public warrants (as defined below); |
• | “Crescent Park” are to Crescent Park Management, L.P. as the investment advisor to Crescent Park Master Fund, L.P., Crescent Park FOF Partners, L.P. and Crescent Park Global Equity Master Fund, L.P. (and/or their affiliates), with which we have entered into a forward purchase agreement; |
• | “DGCL” are to the Delaware General Corporation Law; |
• | “directors” are to our current directors; |
• | “DWAC System” are to the Depository Trust Company’s Deposit/Withdrawal At Custodian System; |
• | “Exchange Act” are to the Securities Exchange Act of 1934, as amended; |
• | “Extension Period” are to the Securities Exchange Act of 1934, as amended; |
• | “FINRA” are to any extended period of time that we may have to consummate an initial business combination as a result of an amendment to our amended and restated certificate of incorporation; |
• | “forward purchase agreements” are to the agreements providing for the sale of shares of Class A common stock to the forward purchasers in private placements that will close concurrently with the closing of our initial business combination; |
• | “forward purchase shares” are to the shares of Class A common stock to be issued pursuant to the forward purchase agreements; |
• | “forward purchasers” are to Carnegie Park and to Crescent Park as the purchasers under their respective forward purchase agreements; |
• | “forward transferee” are to any affiliate to which a forward purchaser transfers any portion of its rights and obligations to purchase the forward purchase shares under its forward purchase agreement; |
• | “founder shares” are to shares of Class B common stock initially purchased by our sponsor in a private placement prior to our initial public offering and the shares of Class A common stock that will be issued upon the automatic conversion of the shares of Class B common stock at the time of our initial business combination as described herein; |
• | “GAAP” are to the accounting principles generally accepted in the United States of America; |
• | “IFRS” are to the International Financial Reporting Standards, as issued by the International Accounting Standards Board; |
• | “initial business combination” are to a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses; |
• | “initial public offering” are to the initial public offering that was consummated by the Company on November 5, 2021; |
• | “initial stockholders” are to holders of our founder shares prior to our initial public offering |
• | “Investment Company Act” are to the Investment Company Act of 1940, as amended; |
• | “JOBS Act” are to the Jumpstart Our Business Startups Act of 2012; |
• | “management” or our “management team” are to our executive officers and directors; |
• | “Marcum” are to Marcum LLP, our independent registered public accounting firm; |
• | “Nasdaq” are to the Nasdaq Stock Market; |
• | “PCAOB” are to the Public Company Accounting Oversight Board (United States); |
• | “private placement warrants” are to the warrants issued to our sponsor in a private placement simultaneously with the closing of our initial public offering; |
• | “public shares” are to shares of Class A common stock sold as part of the units in our initial public offering (whether they were purchased in our initial public offering or thereafter in the open market); |
• | “public stockholders” are to the holders of our public shares, including our initial stockholders and management team to the extent our initial stockholders and/or members of our management team purchase public shares; provided, that each initial stockholder’s and member of our management team’s status as a “public stockholder” only exists with respect to such public shares; |
• | “public warrants” are to the warrants sold as part of the units in our initial public offering (whether they were purchased in our initial public offering or thereafter in the open market); |
• | “Registration Statement” are to the Form S-1 filed with the SEC November 2, 2021 (File No. 333-257058), as amended; |
• | “Report” are to this Annual Report on Form 10-K for the fiscal year ended December 31, 2021; |
• | “representative” is to Wells Fargo Securities, LLC, the representative of the underwriters of our initial public offering; |
• | “Sarbanes-Oxley Act” are to the Sarbanes-Oxley Act of 2002; |
• | “SEC” are to the U.S. Securities and Exchange Commission; |
• | “Securities Act” are to the Securities Act of 1933, as amended; |
• | “SPAC” refers to Special Purpose Acquisition Company; |
• | “sponsor” are to Integral Sponsor LLC, a Delaware limited liability company. |
• | “trust account” are to the U.S.-based trust account in which an amount of $116,725,000 from the net proceeds of the sale of the units (as defined below) in the initial public offering and private placement warrants was placed following the closing of the initial public offering; |
• | “units” are to the units sold in our initial public offering, which consist of one public share and one-half of one public warrant; and |
• | “we,” “us,” “Company” or “our Company” are to Integral Acquisition Corporation 1. |
• | Track record of operating, growing, and advising businesses in both public and private settings; |
• | deep and broad relationships with and connectivity to chief executive officers, founders, entrepreneurs, family owners and venture capital and private equity sponsors in Australia and New Zealand to create a significant pipeline of proprietary opportunities; |
• | the combination of having a local presence in the region with our market knowledge of the target sectors could serve as a source of competitive advantage when we approach potential target companies; |
• | relationships with capital markets advisors, as well as experience raising both debt and equity capital across business cycles and geographies; |
• | mergers and acquisitions track record of acquiring and integrating companies at attractive valuations across a wide range of sectors; |
• | success of identifying private companies that would operate best as public companies, thoroughly and expeditiously preparing them to be public companies, as well as advising and leading them through and after an initial public offering; |
• | long tenures of serving on leading public companies to effect change; and a |
• | track record of expeditiously enhancing and exiting investments to deliver substantial stockholder value. |
• | has a sustainable, leading market position in an attractive industry in Australia and/or New Zealand; |
• | possesses significant competitive advantages via its disruptive business model and/or innovative product, service, or business; |
• | has demonstrated operating stability and has a proven combination of systems, processes, and managerial talent; |
• | has achieved or has the potential for significant long-term revenue or earnings growth through a combination of organic growth, synergistic add-on acquisitions, new product markets and/or geographies, increased production capacity, expense reduction, and/or increased operating leverage; |
• | has a committed, capable, and aligned management team that would benefit from the leadership and strategic vision of our management team; and |
• | would benefit from being a publicly owned company and can effectively utilize the broader access to capital markets to help achieve the company’s business strategy and capital structure needs. |
• | subject us to negative economic, competitive, and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination, and |
• | cause us to depend on the marketing and sale of a single product or limited number of products or services. |
TYPE OF TRANSACTION |
WHETHER STOCKHOLDER APPROVAL IS REQUIRED | |
Purchase of assets |
No | |
Purchase of stock of target not involving a merger with the Company |
No | |
Merger of target into a subsidiary of the Company |
No | |
Merger of the Company with a target |
Yes |
• | We issue shares of common stock that will be equal to or in excess of 20% of the number of our shares of common stock then outstanding (other than in a public offering); |
• | Any of our directors, officers, or substantial stockholders (as defined by Nasdaq rules) has a 5% or greater interest earned on the trust account (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of common stock could result in an increase in outstanding common stock or voting power of 5% or more; or |
• | The issuance or potential issuance of common stock will result in our undergoing a change of control. |
• | conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and |
• | file proxy materials with the SEC. |
• | conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and |
• | file tender offer documents with the SEC prior to completing our initial business combination, which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. |
Item 1A. |
Risk Factors. |
• | we are a blank check company with no revenue or basis to evaluate our ability to select a suitable business target; |
• | we may not be able to select an appropriate target business or businesses and complete our initial business combination in the prescribed time frame; |
• | our expectations around the performance of a prospective target business or businesses may not be realized; |
• | we may not be successful in retaining or recruiting required officers, key employees or directors following our initial business combination; |
• | our officers and directors may have difficulties allocating their time between the Company and other businesses and may potentially have conflicts of interest with our business or in approving our initial business combination; |
• | we may not be able to obtain additional financing to complete our initial business combination or reduce the number of shareholders requesting redemption; |
• | we may issue our shares to investors in connection with our initial business combination at a price that is less than the prevailing market price of our shares at that time; |
• | you may not be given the opportunity to choose the initial business target or to vote on the initial business combination; |
• | trust account funds may not be protected against third party claims or bankruptcy; |
• | an active market for our public securities’ may not develop and you will have limited liquidity and trading; |
• | the availability to us of funds from interest income on the trust account balance may be insufficient to operate our business prior to the business combination; |
• | our financial performance following a business combination with an entity may be negatively affected by their lack an established record of revenue, cash flows and experienced management; |
• | there may be more competition to find an attractive target for an initial business combination, which could increase the costs associated with completing our initial business combination and may result in our inability to find a suitable target; |
• | Changes in the market for directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination; |
• | We may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability; |
• | We may engage one or more of our underwriters or one of their respective affiliates to provide additional services to us after the initial public offering, which may include acting as a financial advisor in connection with an initial business combination or as placement agent in connection with a related financing transaction. Our underwriters are entitled to receive deferred underwriting commissions that will be released from the trust account only upon a completion of an initial business combination. These financial incentives may cause them to have potential conflicts of interest in rendering any such additional services to us after the initial public offering, including, for example, in connection with the sourcing and consummation of an initial business combination; |
• | We may attempt to complete our initial business combination with a private company about which little information is available, which may result in a business combination with a company that is not as profitable as we suspected, if at all; |
• | Since our initial stockholders will lose their entire investment in us if our initial business combination is not completed (other than with respect to any public shares they may acquire during or after our initial public offering), and because our sponsor, officers and directors may profit substantially even under circumstances in which our public stockholders would experience losses in connection with their investment, a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination; |
• | Changes in laws or regulations or how such laws or regulations are interpreted or applied, or a failure to comply with any laws or regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination, and results of operations; |
• | The value of the founder shares following completion of our initial business combination is likely to be substantially higher than the nominal price paid for them, even if the trading price of our common stock at such time is substantially less than $10.00 per share; and |
• | Resources could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.00 per share, or less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless. |
Item 1B. |
Unresolved Staff Comments. |
Item 2. |
Properties. |
Item 3. |
Legal Proceedings. |
Item 4. |
Mine Safety Disclosures. |
Item 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities. |
Item 6. |
Reserved. |
Item 7. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
• | to $9.20 if the aggregate purchase price paid by the forward purchaser at $10.00 per share would exceed the lesser of (i) a specified dollar amount and (ii) a specified percentage of the aggregate purchase price paid by the purchasers of the SPAC’s Class A common stock in private placements that occur on or prior to the date of the SPAC’s initial business combination (“PIPEs”); |
• | and to below $9.20 if the price per share in any PIPE is less than $9.20 (in which case the price per share paid by the forward purchaser will be at an 8% discount from the price per share in such PIPE). |
• | Each forward purchase share is one share of the Company’s Class A common stock. No payment is due from the forward purchaser until immediately before the initial business combination. The purchase price is $10.00 per forward purchase share, subject to the discounted purchase price. The discounted purchase price is either at $9.20 per share or at an 8% discount to the PIPE price if the PIPE is priced below $9.20. |
• | The conditions upon obtaining a $9.20 purchase price are within the control of the holder of the forward purchase share (the “FPA holder”) because the FPA holder will control the aggregate purchase price of the forward purchase shares to be purchased by the FPA holder and, in the case of the forward purchaser that is expected to purchase public units, such forward purchaser and its affiliates will control whether such forward purchaser and its affiliates sell or redeem more than 50% of the public units (or, following the separate trading of the public shares and the public warrants, the public shares) on or prior to the initial business combination. The FPA holder that is expected to purchase public units is assumed to have no negative economic impact from not selling or redeeming more than 50% of the public units (or, following the separate trading of the public shares and the public warrants) on or prior to the initial business combination since such forward purchaser would be selling at market price, without knowledge of future pricing, so that not selling or redeeming and realizing the 8% discount to market price on its future purchase is actually a positive feature to such FPA holder. Therefore, the Company’s management assumed that the likelihood of the FPA holder to have a $10.00 purchase price is de minimus. |
• | Management assumed a PIPE would be priced below $9.20 per share only 5% of the time and would be priced at $9.00 per share when it is priced below $9.20 per share. |
Item 7A. |
Quantitative and Qualitative Disclosures about Market Risk. |
Item 8. |
Financial Statements and Supplementary Data. |
Item 9. |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. |
Item 9A. |
Controls and Procedures. |
Item 9B. |
Other Information. |
Item 9C. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. |
Item 10. |
Directors, Executive Officers and Corporate Governance. |
Name |
Age |
Position | ||
Enrique Klix | 53 | Chief Executive Officer and Director | ||
Brittany Lincoln | 41 | Chief Financial Officer | ||
James Cotton | 45 | Director | ||
Stuart Hutton | 54 | Director | ||
Niraj Javeri | 40 | Director | ||
Lynne Thornton | 48 | Director |
• | meeting with our independent registered public accounting firm regarding, among other issues, audits, and adequacy of our accounting and control systems; |
• | monitoring the independence of the registered public accounting firm; |
• | verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law; |
• | inquiring and discussing with management our compliance with applicable laws and regulations; |
• | pre-approving all audit services and permitted non-audit services to be performed by our registered public accounting firm, including the fees and terms of the services to be performed; |
• | appointing or replacing the registered public accounting firm; |
• | determining the compensation and oversight of the work of the registered public accounting firm (including resolution of disagreements between management and the registered public accounting firm regarding financial reporting) for the purpose of preparing or issuing an audit report or related work; |
• | establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; |
• | monitoring compliance on a quarterly basis with the terms of our initial public offering and, if any noncompliance is identified, immediately taking all action necessary to rectify such noncompliance or otherwise causing compliance with the terms of our initial public offering; and |
• | reviewing and approving all payments made to our existing stockholders, executive officers or directors and their respective affiliates. Any payments made to members of our audit committee will be reviewed and approved by our board of directors, with the interested director or directors abstaining from such review and approval. |
• | reviewing and approving on an annual basis the corporate goals and objectives relevant to our chief executive officer’s compensation, evaluating our chief executive officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our chief executive officer’s based on such evaluation; |
• | reviewing and approving the compensation of all of our other Section 16 executive officers; |
• | reviewing our executive compensation policies and plans; |
• | implementing and administering our incentive compensation equity-based remuneration plans; |
• | assisting management in complying with our proxy statement and annual report disclosure requirements; |
• | approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees; |
• | producing a report on executive compensation to be included in our annual proxy statement; and |
• | reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. |
Item 11. |
Executive Compensation. |
Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |
• | each person known by us to be the beneficial owner of more than 5% of our outstanding common stock; |
• | each of our executive officers and directors that beneficially owns our common stock; and |
• | all our executive officers and directors as a group. |
Class A Common Stock |
Class B Common Stock |
Approximate |
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Name and Address of Beneficial Owner (1) |
Number of Shares Beneficially Owned |
Approximate Percentage of Class |
Number of Shares Beneficially Owned |
Approximate Percentage of Class |
Percentage of Outstanding Common Stock |
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Integral Sponsor LLC (2) |
— | — | 2,875,000 | 100 | % | 20 | % | |||||||||||||
Enrique Klix (2) |
— | — | 2,875,000 | 100 | % | 20 | % | |||||||||||||
Brittany Lincoln (2) |
— | — | — | — | — | |||||||||||||||
James Cotton (2) |
— | — | — | — | — | |||||||||||||||
Stuart Hutton (2) |
— | — | — | — | — | |||||||||||||||
Niraj Javeri (2) |
— | — | — | — | — | |||||||||||||||
Lynne Thornton (2) |
— | — | — | — | — | |||||||||||||||
All executive officer and directors as a group (6 individuals) |
— | — | 2,875,000 | 100 | % | 20 | % | |||||||||||||
Other 5% Stockholders |
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Beryl Capital Management LLC (3) |
955,706 | 8.31 | % | — | — | 6.65 | % | |||||||||||||
Magnetar Financial LLC (4) |
750,000 | 6.52 | % | — | — | 5.22 | % | |||||||||||||
Polar Asset Management Partners Inc. (5) |
650,000 | 5.65 | % | — | — | 4.52 | % | |||||||||||||
HGC Investment Management Inc. (6) |
650,000 | 5.65 | % | — | — | 4.52 | % | |||||||||||||
Periscope Capital Inc. (7) |
588,900 | 5.12 | % | — | — | 4.10 | % |
(1) | Unless otherwise noted, the business address of each of the following entities or individuals is 667 Madison Avenue, 5th floor, New York, New York 10065. |
(2) | Our sponsor, Integral Sponsor LLC, is the record holder of the shares reported herein. Mr. Klix is the Managing Member of Integral Sponsor LLC and has voting and investment discretion with respect to the common stock held of record by Integral Sponsor LLC. Each of our other directors are non-managing members of Integral Sponsor LLC. Mr. Klix disclaims beneficial ownership of such shares, other than his pecuniary interest therein and each of Messrs. Cotton, Hutton and Javeri and Ms. Thornton disclaims any beneficial ownership of any shares held by Integral Sponsor LLC. |
(3) | According to a Schedule 13G/A filed on February 11, 2022, Beryl Capital Management LLC, Beryl Capital Management LP, Beryl Capital Partners II LP, and David A. Witkin acquired 955,706 shares of Class A common stock. The business address for each of the reporting persons is 1611 S. Catalina Ave., Suite 309, Redondo Beach, CA 90277. |
(4) | According to a Schedule 13G filed on February 4, 2022, Magnetar Financial LLC, Magnetar Capital Partners LP, Supernova Management LLC, and Alec. Litowitz acquired 750,000 shares of Class A common stock. The business address for each of the reporting persons is 1603 Orrington Avenue, 13th Floor, Evanston, Illinois 60201. |
(5) | According to a Schedule 13G filed on February 9, 2022, Polar Asset Management Partners Inc. acquired 650,000 shares of Class A common stock. The business address for the reporting person is 16 York Street, Suite 2900, Toronto, ON, Canada M5J 0E6. |
(6) | According to a Schedule 13G filed on February 14, 2022, HGC Investment Management Inc. acquired 650,000 shares of Class A common stock. The business address for the reporting person is 1073 Yonge Street, 2nd Floor, Toronto, Ontario M4W 2L2, Canada. |
(7) | According to a Schedule 13G filed on February 14, 2022, Periscope Capital Inc. acquired 588,900 shares of Class A common stock. The business address for the reporting person is 333 Bay Street, Suite 1240, Toronto, Ontario, Canada M5H 2R2. |
Item 13. |
Certain Relationships and Related Transactions, and Director Independence. |
Item 14 . |
Principal Accountant Fees and Services. |
Item 15. |
Exhibit and Financial Statement Schedules. |
Page No. | ||
F-2 | ||
F-3 | ||
F-4 | ||
F-5 | ||
F-6 | ||
F-7 to F-20 |
Item 16. |
Form 10-K Summary. |
F-2 | ||
F-3 | ||
F-4 | ||
F-5 | ||
F-6 | ||
F-7 to F-20 |
December 31, 2021 |
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Assets |
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Current assets: |
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Cash |
$ | |||
Prepaid expenses |
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|
|
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Total current assets |
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Investments held in trust account |
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Other noncurrent assets |
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Total Assets |
$ | |||
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Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit |
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Current liabilities: |
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Accrued offering costs and expenses |
$ | |||
Franchise tax payable |
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Total current liabilities |
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Deferred underwriting commission |
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Forward Purchase Agreement liability |
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Total liabilities |
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Commitments and Contingencies (Note 6) |
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Class A common stock subject to possible redemption, |
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Stockholders’ Deficit: |
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Preferred stock, $ |
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Class A common stock, $ |
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| |
Class B common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
( |
) | ||
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Total stockholders’ deficit |
( |
) | ||
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|
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Total Liabilities, Redeemable Common Stock and Stockholders’ Deficit |
$ | |||
|
|
For the period from February 16, 2021 (Inception) through December 31, 2021 |
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Formation and operating costs |
$ | |||
|
|
|||
Loss from operations |
( |
) | ||
Unrealized gain on change in fair value of Forward Purchase Agreement liability |
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Interest income |
$ | |||
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Net loss |
( |
) | ||
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Basic and diluted weighted average shares outstanding, common stock subject to redemption |
$ | |
||
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|
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Basic and diluted net loss per common stock subject to redemption |
( |
) | ||
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|
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Basic and diluted weighted average shares outstanding, non-redeemable common stock |
$ | |||
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|
|||
Basic and diluted net loss per non-redeemable common stock |
( |
) | ||
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|
Class A |
Class B |
Additional |
Total |
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Common Stock |
Common Stock |
Paid-in |
Accumulated |
Stockholders’ |
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Stock |
Amount |
Stock |
Amount |
Capital |
Deficit |
Deficit |
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Balance as of February 16, 2021 (inception) |
$ |
$ |
$ |
$ |
$ |
$ |
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Class B common stock issued to initial stockholders |
— | — | — | |||||||||||||||||||||||||
Sale of |
— | — | — | — | — | |||||||||||||||||||||||
Proceeds allocated to the fair value of the Public Warrants |
— |
— |
— |
— |
— | |||||||||||||||||||||||
Offering costs allocated to warrants |
— |
— |
— |
— |
( |
) | — | ( |
) | |||||||||||||||||||
Initial classification of FPA liability |
— | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|||||||||||||||||
Excess fair value of Anchor Investor shares |
— | — | — | — | — | |||||||||||||||||||||||
Accretion of Class A shares to redemption amount |
— | — | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
Net loss |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance as of December 31, 2021 |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities: |
||||
Net loss |
$ | ( |
) | |
Adjustments to reconcile net income to net cash used in operating activities: |
||||
Formation costs paid by Sponsor |
||||
Formation costs paid by Sponsor in exchange for issuance of Class B common shares |
||||
Unrealized gain on change in fair value of Forward Purchase Agreement liability |
( |
) | ||
Interest earned on investments held in Trust Account |
( |
) | ||
Changes in operating assets and liabilities: |
||||
Prepaid expenses |
( |
) | ||
Accrued offering costs and expenses |
||||
Franchise taxes payable |
||||
Net cash used in operating activities |
( |
) | ||
Cash Flows from Investing Activities: |
||||
Investment of cash in Trust Account |
( |
) | ||
Net cash used in investing activities |
( |
) | ||
Cash Flows from Financing Activities: |
||||
Proceeds from issuance of Private Placement Warrants |
||||
Proceeds from issuance of Founder Shares |
||||
Reimbursement of offering costs from underwriters |
||||
Proceeds from issuance of promissory note – related party |
||||
Proceeds from Initial Public Offering |
||||
Payment of advances due to related party |
( |
) | ||
Payment of deferred underwriter discount |
( |
) | ||
Payment of deferred offering costs |
( |
) | ||
Net cash provided by financing activities |
||||
Net change in cash |
||||
Cash, beginning of period |
||||
Cash, end of the period |
$ | |||
Supplemental disclosure of cash flow information: |
||||
Initial value of Forward Purchase Agreement liability |
$ | |||
Deferred offering costs paid by Sponsor in promissory note |
$ | |||
Deferred underwriting commission in equity |
$ | |||
Initial value of Class A common stock subject to possible redemption |
$ | |||
Excess fair value of Anchor Investor shares |
$ | |||
Proceeds from IPO |
$ | |
||
Less: Proceeds allocated to Public Warrants |
( |
) | ||
Class A common stock issuance costs |
( |
) | ||
Plus: |
||||
Accretion of carrying value to redemption value |
||||
|
|
|||
Class A common stock subject to possible redemption |
$ | |||
|
|
For the period from February 16 2021 (inception) through December 31, 2021 |
||||||||
Class A |
Class B |
|||||||
Basic and diluted net loss per share |
||||||||
Numerator: |
||||||||
Allocation of net loss |
$ | ( |
) | $ | ( |
) | ||
Denominator |
||||||||
Weighted-average shares outstanding |
||||||||
Basic and diluted net loss per share |
$ | ( |
) | $ | ( |
) |
• | to $9.20 if the aggregate purchase price paid by the forward purchaser at $10.00 per share would exceed the lesser of (i) a specified dollar amount and (ii) a specified percentage of the aggregate purchase price paid by the purchasers of the SPAC’s Class A common stock in private placements that occur on or prior to the date of the SPAC’s initial business combination (“PIPEs”); |
• | and to below $9.20 if the price per share in any PIPE is less than $9.20 (in which case the price per share paid by the forward purchaser will be at an 8% discount from the price per share in such PIPE). |
• | Each forward purchase share is one share of the Company’s Class A common stock. No payment is due from the forward purchaser until immediately before the initial business combination. The purchase price is $10.00 per forward purchase share, subject to the discounted purchase price. The discounted purchase price is either at $9.20 per share or at an |
• | The conditions upon obtaining a $9.20 purchase price are within the control of the holder of the forward purchase share (the “FPA holder”) because the FPA holder will control the aggregate purchase price of the forward purchase shares to be purchased by the FPA holder and, in the case of the forward purchaser that is expected to purchase public units, such forward purchaser and its affiliates will control whether such forward purchaser and its affiliates sell or redeem more than |
• | Management assumed a PIPE would be priced below $9.20 per share only |
• | In whole and not in part; |
• | at a price of $ |
• | upon not less than (the “30-day redemption period”) to each warrant holder; and |
• | if, and only if, the reported last sale price of the Class A common stock equals or exceeds $ a period commencing once the warrants become exercisable and ending three business days before we send the notice of redemption to the warrant holders. |
Amortized Cost and Carrying Value |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value as of December 31, 2021 |
|||||||||||||||||
U.S. Treasury Securities |
$ | $ | ( |
) | $ | |||||||||||||||
|
|
|
|
|
|
|
|
Level 1 | Level 2 | Level 3 | ||||||||||
Assets |
||||||||||||
Investments held in Trust Account—U.S. Treasury |
$ | $ | $ | |||||||||
Liabilities |
||||||||||||
FPA |
$ | $ | $ |
Input |
December 31, 2021 |
August 23, 2021 |
||||||
Probability of successful business combination |
% | % | ||||||
Likelihood by 3/31/2022 |
% | % | ||||||
Likelihood by 4/30/2022 |
% | % | ||||||
Likelihood by 3/31/2023 |
% | % | ||||||
Likelihood by 4/30/2023 |
% | % | ||||||
Likelihood by 9/30/2023 |
% | % | ||||||
Likelihood by 10/31/2023 |
% | % | ||||||
Risk-free rate |
% | % | ||||||
Stock price |
$ | $ | ||||||
Estimated term remaining (years) |
||||||||
Volatility |
% | % |
Fair Value at August 23, 2021 |
$ | |||
Change in fair value |
( |
) | ||
Fair Value at December 31, 2021 |
$ |
December 31, 2021 |
||||
Federal |
||||
Current |
$ | |||
Deferred |
( |
) | ||
State |
||||
Current |
||||
Deferred |
||||
Change in valuation allowance |
||||
|
|
|||
Income tax provision |
$ | |||
|
|
December 31, 2021 |
||||
Deferred tax asset |
||||
Organizational costs/Startup expenses |
$ | |||
Federal net operating loss |
||||
|
|
|||
Total deferred tax asset |
||||
Valuation allowance |
( |
) | ||
|
|
|||
Deferred tax asset, net of allowance |
$ |
|||
|
|
Statutory federal income tax rate |
% | |||
State taxes, net of federal tax benefit |
% | |||
Permanent Book/Tax Differences |
% | |||
Change in valuation allowance |
( |
)% | ||
|
|
|||
Income tax provision |
% | |||
|
|
* | Filed herewith. |
** | Furnished herewith |
(1) | Incorporated by reference to the Company’s Registration Statement on Form S-1/A, filed with the SEC on September 3, 2021. |
(2) | Incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on November 8, 2021. |
April 1, 2022 | INTEGRAL ACQUISITION CORPORATION 1 | |||||
By: | /s/ Enrique Klix | |||||
Name: | Enrique Klix | |||||
Title: | Chief Executive Officer (Principal Executive Officer) |
Name |
Position |
Date | ||
/s/ Enrique Klix |
Chairman of the Board and Chief Executive Officer | April 1, 2022 | ||
Enrique Klix | (Principal Executive Officer) |
|||
/s/ Brittany Lincoln |
Chief Financial Officer | April 1, 2022 | ||
Brittany Lincoln | (Principal Financial and Accounting Officer) |
|||
/s/ James Cotton |
Director | April 1, 2022 | ||
James Cotton | ||||
/s/ Stuart Hutton |
Director | April 1, 2022 | ||
Stuart Hutton | ||||
/s/ Niraj Javeri |
Director | April 1, 2022 | ||
Niraj Javeri | ||||
/s/ Lynne Thornton |
Director | April 1, 2022 | ||
Lynne Thornton |
Exhibit 4.5
DESCRIPTION OF THE REGISTRANTS SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
As of December 31, 2021, Integral Acquisition Corporation 1 (we, our, us or the Company) had the following three classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the Exchange Act): (i) its units, consisting of one share of Class A common stock (as defined below) and one-half of one redeemable warrant (as defined below), with each whole warrant entitling the holder thereof to purchase one share of Class A common stock (the units), (ii) its Class A common stock, $0.0001 par value per share (Class A common stock), and (iii) its public warrants, with each whole warrant exercisable for one share of Class A common stock for $11.50 per share (the warrants).
Pursuant to our amended and restated certificate of incorporation, our authorized capital stock consists of 110,000,000 shares of common stock, including 100,000,000 shares of Class A common stock, $0.0001 par value and 10,000,000 shares of Class B common stock, $0.0001 par value, and 1,000,000 shares of undesignated preferred stock, $0.0001 par value. The following description summarizes the material terms of our capital stock and does not purport to be complete. It is subject to, and qualified in its entirety by reference to, our amended and restated certificate of incorporation, our bylaws and our warrant agreement, each of which is incorporated by reference as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2021 (the Report) of which this Exhibit 4.5 is a part.
Defined terms used herein but not otherwise defined shall have the meaning ascribed to such terms in the Report.
Units
Each unit consists of one share of Class A common stock and one-half of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one share of Class A common stock at a price of $11.50 per share. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of the shares of Companys Class A common stock.
Common Stock
Stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Holders of Class A common stock and holders of Class B common stock will vote together as a single class on all matters submitted to a vote of our stockholders except as required by law. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors. Our stockholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor.
We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the Trust Account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations described herein. Our initial stockholders, sponsor, officers, and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares they hold in connection with the completion of our initial business combination.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our 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 Exchange Act), will be restricted from redeeming its shares with respect to Excess Shares, without our prior consent. However, we would not be restricting our stockholders ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Our stockholders inability to redeem the Excess Shares will reduce their influence over our ability to complete our initial business combination, and such stockholders could suffer a material loss in their investment if they sell such Excess Shares on the open market. Additionally, such stockholders will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And, as a result, such stockholders will continue to hold that number of shares exceeding 15% and, in order to dispose such shares would be required to sell their shares in open market transactions, potentially at a loss.
In the event of a liquidation, dissolution or winding up of the Company after a business combination, our stockholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of shares, if any, having preference over the common stock. Our stockholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the common stock, except that we will provide our public stockholders with the opportunity to redeem their public shares for cash at a per share price equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, upon the completion of our initial business combination, subject to the limitations described herein.
Redeemable Warrants
Each whole warrant entitles the registered holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment as discussed below, at any time 30 days after the completion of our initial business combination; provided, that we have an effective registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the warrants and a current prospectus relating to them is available (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement) and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares of Class A common stock.
The warrants will expire five years after the completion of our initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
We will not be obligated to deliver any Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to our satisfying our obligations described below with respect to registration. No warrant will be exercisable, and we will not be obligated to issue a share of Class A common stock upon exercise of a warrant unless the share of Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.
In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will we be required to net cash settle any warrant. In the event that a registration statement is not effective for the exercised warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for the share of Class A common stock underlying such unit.
We have agreed that as soon as practicable, but in no event later than fifteen (15) business days after the closing of our initial business combination, we will use our best efforts to file with the SEC a post-effective amendment to the Registration Statement or a new registration statement for the registration, under the Securities Act, of the Class A common stock issuable upon exercise of the warrants. We will use our 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 our initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when we 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 our 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, we may, at our 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 we so elect, we will not be required to file or maintain in effect a registration statement, and in the event we do not so elect, we will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the excess of the fair market value (defined below) less the exercise price of the warrants by (y) the fair market value. The fair market value as used in this paragraph shall mean the average last reported sale price of the Class A common stock for the 10 trading days ending on the third trading day immediately prior to the date on which the notice of exercise is received by the warrant agent.
Redemption of public warrants.
Once the public warrants become exercisable, we may redeem the outstanding public warrants:
| in whole and not in part; |
| at a price of $0.01 per public warrant; |
| upon a minimum of 30 days prior written notice of redemption to each holder of public warrants; and |
| if, and only if, the closing price of the Class A common stock equals or exceeds $18.00 per share (subject to adjustments as described under the heading Warrants Public Stockholders Warrants Anti-Dilution Adjustments) for any 20 trading days within a 30-trading day period ending three trading days before we send the notice of redemption to the holders of public warrants. |
We will not redeem the public warrants as described above unless a registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the public warrants is then effective and a current prospectus relating to those shares of Class A common stock is available throughout the 30-day redemption period. If and when the public warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
If we call the public warrants for redemption in the manner described above, we will have the option to require all holders that wish to exercise such public warrants to do so on a cashless basis. In determining whether to require all holders to exercise their public warrants on a cashless basis, we will consider, among other factors, our cash position, the number of public warrants that are outstanding and the dilutive effect on our stockholders of issuing the maximum number of shares of Class A common stock issuable upon the exercise of our public warrants. In such event, each holder would pay the exercise price by surrendering the public warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the public warrants, multiplied by the difference between the exercise price of the public warrants and the fair market value (defined below) by (y) the fair market value. The fair market value means the average last reported sale price of the Class A common stock for the 10 trading days ending on the trading day prior to the date on which the notice of redemption is sent to the holders of the public warrants. If we take advantage of this option, the notice of redemption will contain the information necessary to calculate the number of shares of Class A common stock to be received upon exercise of the public warrants, including the fair market value in such case. Requiring a cashless exercise in this manner will reduce the number of shares to be issued and thereby lessen the dilutive effect of a warrant redemption. We believe this feature is an attractive option to us if we do not need the cash from the exercise of the public warrants after our initial business combination. If we call our public warrants for redemption and we do not take advantage of this option, holders of private placement warrants would still be entitled to exercise their private placement warrants for cash or on a cashless basis as described in more detail below.
Redemption Procedures
A holder of a warrant may notify us in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such warrant, to the extent that after giving effect to such exercise, such person (together with such persons affiliates), to the warrant agents actual knowledge, would beneficially own in excess of 4.9% or 9.9% (as specified by the holder) of the Class A common stock outstanding immediately after giving effect to such exercise.
Anti-Dilution Adjustments
The warrants have certain anti-dilution and adjustments rights upon certain events.
In addition, if (x) we issue additional shares of Class A common stock or equity-linked securities (other than any forward purchase shares) for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per share (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our sponsor or its affiliates, without taking into account any founder shares held by our 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 our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (z) the volume weighted average trading price of our Class A common stock during the 20 trading day period starting on the trading day prior to the day on which we consummate our 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 under Redemption of public warrants 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 warrants will be issued in registered form under a warrant agreement between Continental, as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, and that all other modifications or amendments will require the vote or written consent of the holders of a majority of the then outstanding public warrants, and, solely with respect to any amendment to the terms of the private placement warrants, a majority of the then outstanding private placement warrants. You should review a copy of the warrant agreement, which was filed with the Registration Statement, for a complete description of the terms and conditions applicable to the warrants.
The warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price (or on a cashless basis, if applicable), by certified or official bank check payable to us, for the number of warrants being exercised. The warrant holders do not have the rights or privileges of holders of common stock and any voting rights until they exercise their warrants and receive Class A common stock. After the issuance of Class A common stock upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.
No fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number the number of shares of Class A common stock to be issued to the warrant holder.
Exhibit 31.1
CERTIFICATION OF THE
PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO
RULE 13a-14(a) AND RULE 15d-14(a)
UNDER THE
SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Enrique Klix, certify that:
1. | I have reviewed this Annual Report on Form 10-K of Integral Acquisition Corporation 1; |
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. | The registrants other certifying officer[s] and I are 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 omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313); |
c) | Evaluated the effectiveness of the registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer[s] and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting. |
Date: April 1, 2022 | By: | /s/ Enrique Klix | ||||
Enrique Klix | ||||||
Chief Executive Officer | ||||||
(Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF THE
PRINCIPAL FINANCIAL OFFICER
PURSUANT TO
RULE 13a-14(a) AND RULE 15d-14(a)
UNDER THE
SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Brittany Lincoln, certify that:
1. | I have reviewed this Annual Report on Form 10-K of Integral Acquisition Corporation 1; |
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. | The registrants other certifying officer[s] and I are 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 omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313); |
c) | Evaluated the effectiveness of the registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer[s] and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting. |
Date: April 1, 2022 | By: | /s/ Brittany Lincoln | ||||
Brittany Lincoln | ||||||
Chief Financial Officer | ||||||
(Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION OF THE
PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K of Integral Acquisition Corporation 1 (the Company) for the year ended December 31, 2021, as filed with the Securities and Exchange Commission (the Report), I, Enrique Klix, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 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, as amended; and |
2. | To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report. |
Date: April 1, 2022 | By: | /s/ Enrique Klix | ||||
Enrique Klix | ||||||
Chief Executive Officer | ||||||
(Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION OF THE
PRINCIPAL FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K of Integral Acquisition Corporation 1 (the Company) for the year ended December 31, 2021, as filed with the Securities and Exchange Commission (the Report), I, Brittany Lincoln, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 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, as amended; and |
2. | To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the report. |
Date: April 1, 2022 | By: | /s/ Brittany Lincoln | ||||
Brittany Lincoln | ||||||
Chief Financial Officer | ||||||
(Principal Financial Officer) |
Balance Sheet (Parenthetical) |
Dec. 31, 2021
$ / shares
shares
|
---|---|
Preferred stock par or stated value per share | $ / shares | $ 0.0001 |
Preferred stock shares authorized | 1,000,000 |
Preferred stock shares outstanding | 0 |
Preferred stock shares issued | 0 |
Common Class A [Member] | |
Temporary equity, shares outstanding | 11,500,000 |
Temporary Equity, Redemption Price Per Share | $ / shares | $ 10.15 |
Common stock par or stated value per share | $ / shares | $ 0.0001 |
Common stock shares authorized | 100,000,000 |
Common stock shares issued | 0 |
Common stock shares outstanding | 0 |
Common Class B [Member] | |
Common stock par or stated value per share | $ / shares | $ 0.0001 |
Common stock shares authorized | 10,000,000 |
Common stock shares issued | 2,875,000 |
Common stock shares outstanding | 2,875,000 |
Statement of Operations |
11 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
$ / shares
shares
| |
Formation and operating costs | $ 385,971 |
Loss from operations | (385,971) |
Unrealized gain on change in fair value of Forward Purchase Agreement liability | 6,001 |
Interest income | 8,409 |
Net loss | $ (371,561) |
Common Stock [Member] | |
Basic and diluted weighted average shares outstanding | shares | 2,054,859 |
Basic and diluted net loss per common share | $ / shares | $ (0.08) |
Non Redeemable Common Shares [Member] | |
Weighted Average Shares Outstanding Of Common Stock Subject To Redemption Basic And Diluted | shares | 2,875,000 |
Basic And Diluted Net Income Per Share Common Stock Subject To Redemption | $ / shares | $ (0.08) |
Statement of Changes in Stockholder's Deficit - 11 months ended Dec. 31, 2021 - USD ($) |
Total |
Common Class A [Member] |
Common Class B [Member] |
Common Stock [Member]
Common Class A [Member]
|
Common Stock [Member]
Common Class B [Member]
|
Additional Paid-in Capital [Member] |
Accumulated Deficit [Member] |
---|---|---|---|---|---|---|---|
Beginning Balance at Feb. 15, 2021 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||
Beginning Balance , shares at Feb. 15, 2021 | 0 | 0 | |||||
Initial classification of FPA liability | (1,013,935) | (1,013,935) | |||||
Accretion of Class A shares to redemption amount | (17,722,056) | (9,200,046) | (8,522,010) | ||||
Class B common stock issued to initial stockholders | 25,000 | $ 288 | 24,712 | ||||
Stock shares issued during the period shares | 2,875,000 | 2,875,000 | |||||
Sale of 4,950,000 Private Placement Warrants | 4,950,000 | 4,950,000 | |||||
Proceeds allocated to the fair value of the Public Warrants | 5,750,000 | 5,750,000 | |||||
Offering costs allocated to warrants | (510,731) | (510,731) | |||||
Excess fair value of Anchor Investor shares | 3,386,739 | 3,386,739 | |||||
Net loss | (371,561) | $ (154,874) | $ (216,687) | $ 0 | 0 | (371,561) | |
Balance Ending at Dec. 31, 2021 | $ (5,506,544) | $ 0 | $ 288 | $ 0 | $ (5,506,832) | ||
Balance Ending , shares at Dec. 31, 2021 | 0 | 2,875,000 |
Statement of Changes in Stockholder's Deficit (Parenthetical) |
11 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
Adjustments To Additional Paid In Capital, Warrant Issued | $ 4,950,000 |
Private Placement Warants [Member] | |
Adjustments To Additional Paid In Capital, Warrant Issued | $ 4,950,000 |
Organization, Business Operations and Liquidity |
11 Months Ended |
---|---|
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Business Operations and Liquidity | Note 1 — Organization, Business Operations and Liquidity Organization and General Integral Acquisition Corporation 1 (the “Company”) is a newly organized blank check company incorporated as a Delaware corporation on February 16, 2021. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company has not selected any specific Business Combination target and the Company has not, nor has anyone on its behalf, initiated any substantive discussions, directly or indirectly, with any Business Combination target. As of December 31, 2021, the Company has neither engaged in any operations nor generated any revenues. All activity for the period from February 16, 2021 (inception) through December 31, 2021 relates to the Company’s formation and the initial public offering (“IPO”) described below and since the closing of the IPO, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO. Sponsor and Financing The Company’s sponsor is Integral Sponsor, LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for the Company’s IPO was declared effective on November 2, 2021 (the “Effective Date”). On November 5, 2021, the Company, consummated its IPO of 11,500,000 units, including 1,500,000 units issued upon exercise in full by the underwriter of its option to purchase additional units (the “Units”). Each Unit consists of one share of Class A common stock of the Company, par value $0.0001 per share (the “Class A Common stock”), and one-half of one redeemable warrant of the Company (a “Warrant”), with each whole Warrant entitling the holder thereof to purchase one share of Class A Common stock for $11.50 per share. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $115,000,000. which is discussed in Note 3. Simultaneously with the closing of the IPO the Company completed the private sale of an aggregate of 4,950,000 warrants, including 90,000 warrants issued in connection with the exercise in full by the underwriter of its option to purchase additional Units (the “Private Placement Warrants”) to the Sponsor at a purchase price of $1.00 per Private Placement Unit, generating gross proceeds to the Company of $4,950,000. No underwriting discounts or commissions were paid with respect to such sale. The issuance of the Private Placement Units was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. Offering costs amounted to $10,757,787 consisting of $2,000,000 of underwriting commissions, $6,050,000 of deferred underwriting commissions, an excess of fair value of the Founder Shares acquired by the Anchor Investors of $3,386,739, and $556,048 of other offering costs (before $1,235,000 of offering costs reimbursed by the underwriter). Of the total offering costs, $10,247,056 was charged to temporary equity and the remaining $510,731 in included in equity. Upon the closing of the IPO and the private placement, $116,725,000 has been placed in the Trust Account (as defined below), representing the redemption value of the Class A common stock sold in the IPO, at their redemption value of $10.15 per share. The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the value of the assets held in the Trust Account (as defined below) (excluding the amount of deferred underwriting discounts held in trust and taxes payable on the income earned on the Trust Account) at the time of the signing a definitive agreement in connection with the initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act 1940, as amended (the “Investment Company Act”). There is no assurance that the Company will be able to complete a Business Combination successfully. Trust Account The funds in the trust account (the “Trust Account”) will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government obligations. Funds will remain in the Trust Account until the earlier of (i) the consummation of its first Business Combination and (ii) the distribution of the Trust Account as described below. The remaining proceeds outside the Trust Account may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses Initial Business Combination The Company will provide its public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of 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 its discretion. The stockholders will be entitled to redeem all or a portion of their public shares upon the completion of the initial Business Combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations and on the conditions described herein. The amount in the Trust Account is initially anticipated to be $10.15 per public share. The per share amount the Company will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the representative of the underwriters. The shares of common stock subject to redemption will be recorded at a redemption value and classified as temporary equity upon the completion of the IPO, in accordance with Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the issued and outstanding shares voted are voted in favor of the Business Combination. The Company will have only 18 months from the closing of the IPO to complete the initial Business Combination (the “Combination Period”). However, if the Company is unable to complete the initial 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 (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), 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, liquidate and dissolve, 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. The Sponsor, officers and directors have agreed to (i) waive their redemption rights with respect to any Founder Shares and public shares they hold in connection with the completion of the initial Business Combination, (ii) waive their redemption rights with respect to any Founder Shares and public shares they hold in connection with a stockholder vote to approve an amendment to the Company’s amended and restated certificate of incorporation, (iii) waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares they hold if the Company fails to complete the initial Business Combination within the Combination Period, and (iv) vote their Founder Shares and any public shares purchased during or after the IPO in favor of the initial Business Combination. The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.15 per public share and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.15 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and the Company believes that the Sponsor’s only assets are securities of the Company. Therefore, the Company cannot assure that the Sponsor would be able to satisfy those obligations. None of the Company’s officers or directors will indemnify the Company for claims by third parties including, without limitation, claims by vendors and prospective target businesses. Risks and Uncertainties Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Liquidity- and Capital Resources As of December 31, 2021, the Prior to the completion of the IPO the Company’s liquidity needs had been satisfied through a loan under an unsecured promissory note with the Sponsor totaling $252,950 and the issuance of 2,875,000 Class B common stock at approximately $0.009 per share for gross proceeds of $25,000. There is no balance outstanding under the promissory note as of December 31, 2021. Subsequent to the consummation of the initial public offering the Company’s liquidity needs have been satisfied through the issuance of the Private Placement Warrants which generated gross proceeds of $4,950,000. Based on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, the Company will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target. |
Significant Accounting Policies |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies | Note 2 — Significant Accounting Policies Basis of Presentation The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments (consisting of normal recurring adjustments) have been made that are necessary to present fairly the financial position, and the results of its operations and its cash flows. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of financial statements in conformity with US 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 and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgement. 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, actual results could differ from those estimates. Deferred Offering Costs The Company complies with the requirements of the ASC 340-10-S99-1. 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 had cash of $1,309,165, and no cash equivalents as of December 31, 2021. 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. As of December 31, 2021, the Company had not experienced losses on this account. Investment Held in Trust Account Investment held in Trust Account consist of United States Treasury securities. The Company classifies its United States Treasury securities as held-to-maturity Held-to-maturity Held-to-maturity A decline in the market value of held-to-maturity year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet, primarily due to its short-term nature. The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment. Level 2—Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means. Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement. Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. Derivative instruments are initially recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. Forward Purchase Agreement Liability The Company accounts for the 3,000,000 forward purchase shares (as described in Note 6) issued pursuant to the forward purchase agreements (the “FPA”) in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the FPA shares do not meet the criteria for equity treatment thereunder, each FPA share must be recorded as a liability. Accordingly, the Company classifies each FPA share as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the FPA liability will be adjusted to fair value, with the change in fair value recognized in the statement of operations. Income Taxes The Company accounts for income taxes under FASB ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position 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. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. 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 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 has identified the United States as its only “major” tax jurisdiction. The Company is subject to income tax examinations by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. Common Stock Subject to Possible Redemption All of the 11,500,000 common stock sold as part of the Units in the IPO contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, if there is a shareholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s amended and restated certificate of incorporation. In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid in capital and accumulated deficit. The Class A common stock subject to possible redemption reflected on the balance sheet as of December 31, 2021 is reconciled in the following table:
Net Loss Per Common Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, Earnings Per Share. Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period, excluding common stock subject to forfeiture. At December 31, 2021, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into shares of common stock and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the period presented. The Company’s statement of operations applies the
two-class method in calculating net income (loss) per share. Basic and diluted net income (loss) per common share for Class A common stock and Class B common stock is calculated by dividing net income (loss) attributable to the Company by the weighted average number of shares of Class A common stock and Class B common stock outstanding, allocated proportionally to each class of common stock.
Recent Accounting Pronouncements In August 2020, FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic815-40) (“ASU 2020-06”) to ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis. On February 16, 2021, the date of the Company’s inception, the Company adopted the new standard. The Company’s management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.
|
Initial Public Offering |
11 Months Ended |
---|---|
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Initial Public Offering | Note 3 — Initial Public Offering On November 5, 2021, the Company sold 11,500,000 Units at a purchase price of $10.00 per Unit which included the exercise of the underwriters’ over-allotment option to purchase an additional 1,500,000 Units at the initial public offering price to cover over-allotments. Each Unit had an offering price of $10.00 and consists of one share of Class A common stock of the Company, par value $0.0001 per share, and one-half of one warrant of the Company. Each full Warrant entitles the holder thereof to purchase one share of Class A Common Stock at a price of $11.50 per share. Following the closing of the IPO on November 5, 2021, $116,725,000 ($10.15 per Unit) from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was deposited into the Trust Account. The net proceeds deposited into the Trust Account will be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act with a maturity of 180 days or less or in money market funds meeting certain conditions under
Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. |
Private Placement |
11 Months Ended |
---|---|
Dec. 31, 2021 | |
Private Placement Warrants [Abstract] | |
Private Placement | Note 4 — Private Placement On November 5, 2021, simultaneously with the closing of the IPO, the Company completed the private sale of 4,950,000 warrants (the “Private Placement Warrants”) at a purchase price of $1.00 per Private Placement Warrant to the Sponsor, generating gross proceeds to the Company of $4,950,000. A portion of the proceeds from the Private Placement Warrants has been added to the proceeds from the IPO to be held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds of 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. The Private Placement Warrants will not be redeemable by the Company. The holders of the Private Placement Warrants have the option to exercise the Private Placement Warrants on a cashless basis. Otherwise, the Private Placement Warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in the IPO.
|
Related Party Transactions |
11 Months Ended |
---|---|
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 5 — Related Party Transactions Founder Shares On February 16, 2021, the Sponsor paid $25,000, or approximately $0.009 per share, to cover certain offering costs in consideration for 2,875,000 shares of Class B common stock, par value $0.0001 (the “Founder Shares”). Up to 375,000 of the Founder Shares were subject to forfeiture by the Sponsor depending on the extent to which the underwriters’ over-allotment option is exercised. At the IPO, the underwriters fully exercised their over-allotment option resulting in no founder shares being subject for forfeiture. In connection with the IPO, the Anchor Investors, collectively, acquired from the Sponsor in the aggregate 500,000 Founder Shares. The excess of the fair value of the Founder Shares was determined to be an offering cost in accordance with Staff Accounting Bulletin Topic 5A. Accordingly, offering cost associated with the IPO includes $3,386,739 of excess value of the anchor investors. The valuation of $6.78 per Founder Share (or $3,391,739 in the aggregate) of the anchor investors was reduced by $0.01 per founder share (or $5,000 in the aggregate), the price paid for the founder shares. The valuation was determined using an internal Monte Carlo simulation model. The initial stockholders have agreed not to transfer, assign or sell any of their Founder Shares and any Class A common stocks issuable upon conversion thereof until the earlier to occur of: (A) one year after the completion of the initial Business Combination and (B) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction after the Company’s initial Business Combination that results in all of the Company’s stockholders having the right to exchange their Class A common stock for cash, securities or other property; except to certain permitted transferees and under certain circumstances (the “Lock-up”). Any permitted transferees will be subject to the same restrictions and other agreements of the Company’s initial stockholders with respect to any Founder Shares. Notwithstanding the foregoing, the Founder Shares will be released from the Lock-up if the closing price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Company’s initial Business Combination. Promissory Note — Related Party On February 16, 2021, the Sponsor agreed to loan the Company up to $300,000 to be used for a portion of the expenses of the IPO. These loans are non-interest bearing, unsecured and are due at the earlier of December 31, 2021 or the closing of the IPO. At December 31, 2021 there were no borrowings under the promissory note. Related Party Loans In order to finance transaction costs in connection with an intended Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required on a non-interest basis (“Working Capital Loans”). If the Company completes the initial Business Combination, it will repay the Working Capital Loans. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from the Trust Account would be used to repay the Working Capital Loans. 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 at the option of the lender. Such warrants would be identical to the Private Placement Warrants. Except as set forth above, the terms of Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. As of December 31, 2021, the Company had no borrowings under the Working Capital Loans. Administrative Fees Commencing on the date the Units are first listed on the Nasdaq, the Company has agreed to pay the Sponsor a total of $20,000 per month for office space, utilities, and secretarial and administrative support. Upon completion of the Initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. Total administrative fee for the period from February 16, 2021 (inception) to December 31, 2021 is $40,000. Engagement of Services On May 28, 2021, the Company entered into a letter agreement with J.V.B. Financial Group, LLC (“J.V.B.”) pursuant to which the Company engaged Cohen & Company Capital Markets, a division of J.V.B., to provide consulting and advisory services in connection with the IPO in return for a transaction fee to be paid to J.V.B. in an amount equal % of the aggregate underwriting discount and commissions earned by the underwriters in connection with the IPO to be paid simultaneously with the actual payment of such underwriting discount and commissions to the underwriters upon (i) the closing of the IPO and (ii) the completion of the Company’s initial Business Combination. J.V.B. was one of the Company’s Anchor Investors that purchased Units in the IPO and became a member of the Company’s Sponsor at the closing of our IPO to hold an indirect interest in a specified number of the Founder Shares held by the Sponsor. On November 4, 2021, the Company paid J.V.B. $85,000 in cash from funds outside of the Trust Account. Funds due to J.V.B. upon the completion of the Company’s initial Business Combination ($605,000 in the aggregate) will be paid by the underwriters. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||
Commitments and Contingencies | Note 6 — Commitments and Contingencies Registration and Stockholder Rights The holders of the (i) Founder Shares, which were issued in a private placement prior to the closing of this offering, (ii) Private Placement Warrants, which will be issued in a private placement simultaneously with the closing of this offering and the shares of Class A common stock underlying such private placement warrants, (iii) private placement warrants that may be issued upon conversion of working capital loans and (iv) the forward purchase shares that may be purchased pursuant to the related forward purchase agreements will have registration rights to require us to register a sale of any of our securities held by them prior to the consummation of our initial business combination pursuant to a registration rights agreement to be signed prior to or on the effective date of this offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our initial business combination. We will bear the expenses incurred in connection with the filing of any such registration statements. Underwriter Agreement The underwriters’ were due a commission of . Additionally, the underwriters agreed to reimburse us $1,235,000 for certain offering costs upon the IPO. On November 5, 2021, the Company paid a cash underwriting commissions The underwriters are entitled to deferred underwriting commissions of $0.50 on the first 10,000,000 Units sold in the IPO and $0.70 per unit per Unit sold thereafter, or $6,050,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes an Initial Business Combination, subject to the terms of the underwriting agreement for the offering. Anchor Investment Certain qualified institutional buyers or institutional accredited investors (none of which are affiliated with any member of the Company’s management team, the Sponsor or any other anchor investor) (the “Anchor Investors”), have purchased an aggregate of approximately $60.8 million of the units in the IPO at the public offering price. There can be no assurance that the Anchor Investors will retain their Units prior to or upon the consummation of the initial Business Combination. In addition, none of the Anchor Investors has any obligation to vote any of their public shares in favor of the initial Business Combination. The anchor investors have not been granted any stockholder or other rights that are in addition to those granted to our other public stockholders, and will only be issued equity interests in our sponsor, with no right to control our sponsor or vote or dispose of any securities held by our sponsor. Further, unlike some anchor investor arrangements of other blank check companies, the anchor investors are not required to (i) hold any units, Class A common stock or warrants they may purchase in this offering or thereafter for any amount of time, (ii) vote any shares of Class A common stock they may own at the applicable time in favor of our initial business combination or (iii) refrain from exercising their right to redeem their public shares at the time of our initial business combination. The anchor investors will have the same rights to the funds held in the Trust Account with respect to the Class A common stock underlying the units they may purchase in the IPO as the rights afforded to the Company’s other public stockholders. The excess of the fair value of the Founder Shares was determined to be an offering cost in accordance with Staff Accounting Bulletin Topic 5A. Accordingly, offering cost associated with the IPO includes $3,386,739 of excess value of the anchor investors. The valuation of $6.78 per Founder Share (or $3,391,739 in the aggregate) of the anchor investors was reduced by $0.01 per founder share (or $5,000 in the aggregate), the price paid for the founder shares. Forward Purchase Shares Crescent Park, which is one of the Company’s Anchor Investors, and Carnegie Park have agreed, as the forward purchasers pursuant to their respective forward purchase agreements entered into with the Company, to purchase up to 2,500,000 shares of Class A common stock in the case of Crescent Park and up to 500,000 shares of Class A common stock in the case of Carnegie Park (referred to herein as the forward purchase shares) at $10.00 per share (as such price per share may be reduced to $9.20 per share or further reduced to below $9.20 per share with respect to all or part of the forward purchase shares that are purchased in the manner described below) for gross proceeds up to $30,000,000 in the aggregate if all of the forward purchase shares are purchased at $10.00 per share (or up to $27,600,000 in the aggregate if all of the forward purchase shares are purchased at $9.20 per share or up to a lower amount in the aggregate if all of the forward purchase shares are purchased at less than $9.20 per share) in private placements that occurred concurrently with the consummation of the initial Business Combination. The price to be paid for forward purchase shares will be reduced to or below $9.20 per share in the following circumstances:
One of the forward purchasers and/or its affiliates is expected to purchase the Company’s public units. If such forward purchaser and/or any of its affiliates sell more than 50% of the aggregate number of the public units purchased in the IPO or, following the separate trading of the public shares and the public warrants, the public shares that are a component of the public units that are purchased by the forward purchaser or any of its affiliates in the IPO, in sales that are consummated on or prior to the initial business combination, then the price per share for the forward purchase shares will remain at $10.00 per share for forward purchase shares in an aggregate number equal to the number of public units and public shares sold by the forward purchaser and/or its affiliates in such manner. The following assumptions were utilized in the determination of fair value for the FPA liability:
The purchase of forward purchase shares by Crescent Park and Carnegie Park as the forward purchasers pursuant to their respective forward purchase agreements will be subject to their respective internal approval processes and the other closing conditions set forth in their respective forward purchase agreements. Since the decision whether or not to purchase the forward purchase shares will be in the sole discretion of the forward purchasers, there can be no assurance that such purchases will be consummated. Each of the forward purchasers has the right to transfer all or a portion of its rights and obligation to purchase the forward purchase shares to one or more transferees who are affiliates of the forward purchaser (the “forward transferees”), subject to compliance with applicable securities laws. Any such forward transferee will be subject to the same terms and conditions under the relevant forward purchase agreement. The forward purchase shares will be identical to the shares of Class A common stock underlying the units being sold in the IPO, except that they will be subject to certain registration rights and transfer restrictions. The funds from the sale of the forward purchase shares will be used as part of the consideration to the sellers in the initial Business Combination and any excess funds will be used for working capital in the post-transaction company. This commitment is independent of the percentage of stockholders electing to redeem their public shares and is intended to provide the Company with a minimum funding level for the initial Business Combination. |
Stockholders' Equity |
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Stockholders' Equity Note [Abstract] | |||||||||||||||
Stockholders' Equity | Note 7— Stockholders’ Equity Preferred Stock The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At December 31, 2021, there were no shares of preferred stock issued or outstanding. Class A Common Stock The Company is authorized to issue 100,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of Class A common stock are entitled to one vote for each share. As of December 31, 2021, there were no shares of Class A common stock issued or outstanding, excluding 11,500,000 shares subject to possible redemption Class B Common Stock The Company is authorized to issue 10,000,000 shares of Class B common stock with a par value of $0.0001 per share. Holders of the Company’s Class B common stock are entitled to one vote for each common share. At December 31, 2021, there were 2,875,000 shares of Class B common stock issued and outstanding. The Class B common stock will automatically convert into shares of Class A common stock concurrently with or immediately following the consummation of the initial Business Combination on a one-for-one basis, an as-converted basis, 20% of the total number of shares of Class A common stock outstanding after such conversion (after giving effect to any redemptions of shares of Class A common stock by public stockholders), 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 the initial 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 the initial 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 basis. Warrants—Each whole warrant entitles the registered holder to purchase one share of the Class A common stock at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing 30 days after the completion of the initial Business Combination. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares of Class A common stock. This means that only a whole warrant may be exercised at any given time by a warrant holder. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. The warrants will expire five years after the completion of the Company’s initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation. The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of its initial Business Combination, the Company will use its best efforts to file with the SEC a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants, to cause such registration statement to become effective and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed, as specified in 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 60th business day after the closing of the initial 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 foregoing, if a registration statement covering the Class A common stock issuable upon exercise of the warrants is not effective within a specified period following the consummation of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”), provided that such exemption is available. Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00. Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described herein with respect to the Private Placement Warrants):
In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination (other than any forward purchase shares) at a Newly Issued 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), 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 initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z) the Market Value is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater 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 greater of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to the greater of the Market Value and the Newly Issued Price. The Company accounts for the 10,700,000 warrants issued in connection with the IPO (comprised of 5,750,000 Public Warrants and 4,950,000 Private Placement Warrants) in accordance with the guidance contained in
ASC 815-40. Such guidance provides that the warrants described above are not precluded from equity classification. Equity-classified contracts are initially measured at fair value (or allocated value). Subsequent changes in fair value are not recognized as long as the contracts continue to be classified in equity. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Note 8 — Fair Value Measurements At December 31, 2021, the Company’s FPA was valued at $1,007,934. Under the guidance in ASC 815-40 the FPA does not meet the criteria for equity classification. As such, the FPA must be recorded on the balance sheet at fair value. This valuation is subject to re-measurement at each balance sheet date. With each re-measurement, the valuations will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations. As of December 31, 2021, investments in the Company’s Trust Account of $116,733,409 primarily consisted of U.S. Treasury Securities that mature in May 2022. The Company classifies its United States Treasury securities as
held-to-maturity Held-to-maturity
Recurring Fair Value Measurements The following table presents fair value information as of December 31, 2021 of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. The following table sets forth by level within the fair value hierarchy the Company’s assets and liabilities that were accounted for at fair value on a recurring basis at December 31, 2021:
Measurement On December 31, 2021 and August 23, 2021, the Company used a Probability Weighted Expected Return (PWER) model to value the FPA liability. The key inputs into the modified PWER model for the FPA liability were as follows:
The following table provides a reconciliation of changes in fair value of the beginning and ending balances for the FPA liability classified as Level 3:
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Income Tax |
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Income Tax | Note 9 – Income Tax The income tax provision consists of the following:
As of December 31, 2021, the Company has $160,435 of U.S. federal net operating loss carryovers, which do not expire, and no state net operating loss carryovers available to offset future taxable income. In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the period from February 16, 2021 (inception) through December 31, 2021, the change in the valuation allowance was $78,028. The Company’s net deferred tax assets are as follows:
A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2021 is as follows:
The Company files income tax returns in the U.S. federal jurisdiction and in New York and is subject to examination by the various taxing authorities. The Company’s effective tax rates for the period presented differ from the expected (statutory) rates due to the recording of full valuation allowances on deferred tax assets
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Subsequent Events |
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Subsequent Events [Abstract] | |
Subsequent Events | Note 10 — Subsequent Events The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based on the Company’s review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements. |
Significant Accounting Policies (Policies) |
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Basis of Presentation | Basis of Presentation The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments (consisting of normal recurring adjustments) have been made that are necessary to present fairly the financial position, and the results of its operations and its cash flows.
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Emerging Growth Company | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that
apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. |
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with US 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 and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgement. 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, actual results could differ from those estimates.
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Deferred Offering Costs | Deferred Offering Costs The Company complies with the requirements of the ASC 340-10-S99-1. |
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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 had cash of $1,309,165, and no cash equivalents as of December 31, 2021.
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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. As of December 31, 2021, the Company had not experienced losses on this account.
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Investment Held in Trust Account | Investment Held in Trust Account Investment held in Trust Account consist of United States Treasury securities. The Company classifies its United States Treasury securities as held-to-maturity Held-to-maturity Held-to-maturity A decline in the market value of held-to-maturity year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in. Premiums and discounts are amortized or accreted over the life of the related
held-to-maturity |
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Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet, primarily due to its short-term nature. The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment. Level 2—Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means. Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
|
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Derivative Financial Instruments | Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. Derivative instruments are initially recorded at fair value on the grant date
and re-valued at each reporting date, with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. |
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Forward Purchase Agreement Liability | Forward Purchase Agreement Liability The Company accounts for the 3,000,000 forward purchase shares (as described in Note 6) issued pursuant to the forward purchase agreements (the “FPA”) in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the FPA shares do not meet the criteria for equity treatment thereunder, each FPA share must be recorded as a liability. Accordingly, the Company classifies each FPA share as a liability at its fair value. This liability is subject
to re-measurement at each balance sheet date. With each such re-measurement, the FPA liability will be adjusted to fair value, with the change in fair value recognized in the statement of operations. |
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Income Taxes | Income Taxes The Company accounts for income taxes under FASB ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position 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. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. 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 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 has identified the United States as its only “major” tax jurisdiction. The Company is subject to income tax examinations by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. |
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Common Stock Subject to Possible Redemption | Common Stock Subject to Possible Redemption All of the 11,500,000 common stock sold as part of the Units in the IPO contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, if there is a shareholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s amended and restated certificate of incorporation. In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid in capital and accumulated deficit. The Class A common stock subject to possible redemption reflected on the balance sheet as of December 31, 2021 is reconciled in the following table:
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Net Loss Per Common Share | Net Loss Per Common Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, Earnings Per Share. Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period, excluding common stock subject to forfeiture. At December 31, 2021, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into shares of common stock and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the period presented. The Company’s statement of operations applies the
two-class method in calculating net income (loss) per share. Basic and diluted net income (loss) per common share for Class A common stock and Class B common stock is calculated by dividing net income (loss) attributable to the Company by the weighted average number of shares of Class A common stock and Class B common stock outstanding, allocated proportionally to each class of common stock.
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Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2020, FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic815-40) (“ASU 2020-06”) to ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis. On February 16, 2021, the date of the Company’s inception, the Company adopted the new standard. The Company’s management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.
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Significant Accounting Policies (Tables) |
11 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of reconciliation of Class A common stock subject to possible redemption | The Class A common stock subject to possible redemption reflected on the balance sheet as of December 31, 2021 is reconciled in the following table:
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Summary of Reconciliation of Net Income Per Ordinary Share |
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Fair Value Measurements (Tables) |
11 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Held To Maturity Securities | The carrying value, excluding gross unrealized holding losses and fair value of held to maturity securities on December 31, 2021 are as follows:
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Summary of Assets and Liabilities that are measured at fair value on a recurring basis | The following table sets forth by level within the fair value hierarchy the Company’s assets and liabilities that were accounted for at fair value on a recurring basis at December 31, 2021:
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FPA liability [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of model for the FPA liability | The key inputs into the modified PWER model for the FPA liability were as follows:
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Summary of reconciliation of changes in fair value for the FPA liability classified as Level 3 | The following table provides a reconciliation of changes in fair value of the beginning and ending balances for the FPA liability classified as Level 3:
|
Income Taxes (Tables) |
11 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Income Tax Provision | The income tax provision consists of the following:
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Summary of Net Deferred Tax Assets | The Company’s net deferred tax assets are as follows:
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Summary of Reconciliation of the Federal Income Tax Rate | A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2021 is as follows:
|
Significant Accounting Policies- Summary of reconciliation of Class A common stock subject to possible redemption (Detail) |
11 Months Ended | |
---|---|---|
Dec. 31, 2021
USD ($)
|
Dec. 31, 2021
USD ($)
|
|
Temporary Equity [Line Items] | ||
Proceeds from IPO | $ 115,000,000 | |
Class A common stock subject to possible redemption | $ 116,725,000 | 116,725,000 |
Common Class A [Member] | ||
Temporary Equity [Line Items] | ||
Proceeds from IPO | 115,000,000 | |
Proceeds allocated to Public Warrants | (5,750,000) | |
Class A common stock issuance costs | (10,247,056) | |
Accretion of carrying value to redemption value | 17,722,056 | |
Class A common stock subject to possible redemption | $ 116,725,000 | $ 116,725,000 |
Significant Accounting Policies- Summary of Reconciliation of Net Income Per Ordinary Share (Detail) |
11 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
$ / shares
shares
| |
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | |
Allocation of net loss | $ (371,561) |
Common Class A [Member] | |
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | |
Allocation of net loss | $ (154,874) |
Weighted-average shares outstanding | shares | 2,054,859 |
Basic and diluted net loss per share | $ / shares | $ (0.08) |
Common Class B [Member] | |
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | |
Allocation of net loss | $ (216,687) |
Weighted-average shares outstanding | shares | 2,875,000 |
Basic and diluted net loss per share | $ / shares | $ (0.08) |
Significant Accounting Policies - Additional Information (Detail) - USD ($) |
Dec. 31, 2021 |
Nov. 05, 2021 |
---|---|---|
Cash | $ 1,309,165 | |
Cash equivalents | 0 | |
Cash insured with federal insurance corporation | 250,000 | |
Unrecognised tax benefits | 0 | |
Accrued interest and penalties on unrecognised tax benefits | $ 0 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | |
Forward Purchase agreement [Member] | ||
Common stock issued to Sponsors ,shares | 3,000,000 | |
Common Class A [Member] | IPO [Member] | ||
Stock shares issued during the period shares | 11,500,000 |
Initial Public Offering - Additional Information (Detail) - USD ($) |
11 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Nov. 05, 2021 |
Dec. 31, 2021 |
|
Payments to acquire restricted investment | $ 116,725,000 | $ 116,725,000 | |
Per share value of restricted assets | $ 10.15 | ||
IPO [Member] | |||
Payments to acquire restricted investment | $ 116,725,000 | ||
Per share value of restricted assets | $ 10.15 | ||
Common Class A [Member] | |||
Common stock par or stated value per share | 0.0001 | 0.0001 | $ 0.0001 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 11.50 | $ 11.50 | $ 11.50 |
Common Class A [Member] | IPO [Member] | |||
Stock shares issued during the period shares | 11,500,000 | ||
Shares Issued, Price Per Share | $ 10.00 | ||
Common Class A [Member] | Over-Allotment Option [Member] | |||
Stock shares issued during the period shares | 1,500,000 |
Private Placement - Additional Information (Detail) - USD ($) |
11 Months Ended | |
---|---|---|
Nov. 05, 2021 |
Dec. 31, 2021 |
|
Proceeds from Issuance of Private Placement | $ 4,950,000 | |
Private Placement Warrants [Member] | ||
Proceeds from Issuance of Private Placement | $ 4,950,000 | |
Sponsor [Member] | Private Placement Warrants [Member] | ||
Class Of Warrants and Rights Issued During the Period | 4,950,000 | |
Proceeds from Issuance of Private Placement | $ 4,950,000 | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1.00 |
Fair Value Measurements - Additional Information (Detail) |
Dec. 31, 2021
USD ($)
|
---|---|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Assets Held In Trust Account | $ 116,733,409 |
FPA liability [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Forward Purchase Agreement Liability Fair Value Disclosure | 1,007,934 |
US Treasury Securities [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Assets Held In Trust Account | $ 116,733,409 |
Fair Value Measurements - Summary of table provides a reconciliation of changes in fair value of the beginning (Detail) - FPA liability [Member] |
4 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Fair value at August 23, 2021 | $ 1,007,934 |
Change in fair value | (6,001) |
Fair Value at December 31, 2021 | $ 1,013,935 |
Fair value Measurements- Summary Of Held To Maturity Securities (Detail) - U.S. Treasury Securities [Member] |
Dec. 31, 2021
USD ($)
|
---|---|
Schedule of Held-to-maturity Securities [Line Items] | |
Amortized Cost and Carrying Value | $ 116,733,409 |
Gross Unrealized Gains | 0 |
Gross Unrealized Losses | (16,360) |
Fair Value as of December 31, 2021 | $ 116,716,698 |
Fair Value Measurements- Summary of Assets and Liabilities that are measured at fair value on a recurring basis (Detail) |
Dec. 31, 2021
USD ($)
|
---|---|
Fair Value, Inputs, Level 1 [Member] | U.S. Treasury Securities [Member] | |
Assets | |
Investments held in Trust Account | $ 116,716,698 |
Fair Value, Inputs, Level 1 [Member] | FPA [Member] | |
Liabilities | |
FPA | 0 |
Fair Value, Inputs, Level 2 [Member] | U.S. Treasury Securities [Member] | |
Assets | |
Investments held in Trust Account | 0 |
Fair Value, Inputs, Level 2 [Member] | FPA [Member] | |
Liabilities | |
FPA | 0 |
Fair Value, Inputs, Level 3 [Member] | U.S. Treasury Securities [Member] | |
Assets | |
Investments held in Trust Account | 0 |
Fair Value, Inputs, Level 3 [Member] | FPA [Member] | |
Liabilities | |
FPA | $ 1,007,934 |
Income Tax - Summary of Income Tax Provision (Detail) |
11 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
Federal | |
Current | $ 0 |
Deferred | (78,028) |
State | |
Current | 0 |
Deferred | 0 |
Change in valuation allowance | 78,028 |
Income tax provision | $ 0 |
Income Tax - Summary of Net Deferred Tax Assets (Detail) |
Dec. 31, 2021
USD ($)
|
---|---|
Deferred tax asset | |
Organizational costs/Startup expenses | $ 44,336 |
Federal net operating loss | 33,691 |
Total deferred tax asset | 78,028 |
Valuation allowance | (78,028) |
Deferred tax asset, net of allowance | $ 0 |
Income Tax - Summary of Reconciliation of the Federal Income Tax Rate (Detail) |
11 Months Ended |
---|---|
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Statutory federal income tax rate | 21.00% |
State taxes, net of federal tax benefit | 0.00% |
Permanent Book/Tax Differences | 0.00% |
Change in valuation allowance | (21.00%) |
Income tax provision | 0.00% |
Income Tax - Additional Information (Detail) |
Dec. 31, 2021
USD ($)
|
---|---|
Operating loss carry forwards | $ 33,691 |
Change in valuation allowance | 78,028 |
Domestic Tax Authority [Member] | |
Operating loss carry forwards | 160,435 |
State and Local Jurisdiction [Member] | |
Operating loss carry forwards | $ 0 |
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