Mason Industrial Technology 10Q 2022 Q3 Quarterly report

Mason Industrial Technology (MIT) 10-Q2022 Q3 Quarterly report

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

MASON INDUSTRIAL TECHNOLOGY, INC.

(Exact name of registrant as specified in its charter)


Delaware	001-39955	85-2856616
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification Number)


110 East 59th Street New York, NY		10022
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (212)

771-1200

Not Applicable

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b)

the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units, each consisting of one share of Class A common stock and one-third of one redeemable warrant to purchase one share of Class A common stock	MIT.U	New York Stock Exchange

Class A common stock, par value $0.0001 per share Redeemable warrants exercisable for one share of Class A common stock at an exercise price of $11.50	MIT MIT.W	New York Stock Exchange New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

☒

No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation

S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule

12b-2

of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule

12b-2

of the Exchange Act). Yes ☒ No ☐

As of

October 21

, 2022, 50,000,000 shares of Class A common stock, par value $0.0001 per share, and 12,500,000 shares of Class B common stock, par value $0.0001 per share, were issued and outstanding.

Mason Industrial Technology, Inc.

Quarterly Report on Form 10-Q

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		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Balance Sheets (Unaudited)		1
	Condensed Statements of Operations (Unaudited)		2
	Condensed Statements of Changes in Stockholders’ Deficit (Unaudited)		3
	Condensed Statements of Cash Flows (Unaudited)		4
	Notes to Condensed Financial Statements (Unaudited)		5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		21
Item 4.	Controls and Procedures		21
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		22
Item 1A.	Risk Factors		22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities		23
Item 3.	Defaults Upon Senior Securities		23
Item 4.	Mine Safety Disclosures		23
Item 5.	Other Information		23
Item 6.	Exhibits		23
SIGNATURES			24

PART I—FINANCIAL INFORMATION

Item 1.

Financial Information

MASON INDUSTRIAL TECHNOLOGY, INC.

CONDENSED BALANCE SHEETS


	September 30,			December 31,
	2022			2021
	(unaudited)

ASSETS
CURRENT ASSETS
Cash	$	352,615		$	975,393
Prepaid and other current assets		231,313			522,200

Total current assets		583,928			1,497,593

NONCURRENT ASSETS
Cash held in trust account		502,593,553			500,029,521
Other assets		—			43,517
Derivative forward purchase agreement asset		—			102,643

Total noncurrent assets		502,593,553			500,175,681

TOTAL ASSETS	$	503,177,481		$	501,673,274

LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILTIES
Accounts payable and accrued expenses	$	5,583		$	206,424
Franchise tax payable		38,412			186,031
Convertible note payable - related party		300,000			—
Income tax payable		418,045			—

Total current liabilities		762,040			392,455

LONG-TERM LIABILTIES
Deferred underwriting commissions		17,500,000			17,500,000
Derivative warrant liabilities		1,019,200			16,816,800
Derivative forward purchase agreement liability		30,045			—

Total liabilities		19,311,285			34,709,255

Commitments and Contingencies
REEDEMABLE COMMON STOCK
Class A common stock subject to possible redemption: 50,000,000 shares as of September 30, 2022 and December 31, 2021, respectively, at redemption value of $10.04 per share as of September 30, 2022 and $10.00 per share as of December 31, 2021, respectively		502,136,962			500,000,000
STOCKHOLDERS’ DEFICIT
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		—			—
Class A common stock, $0.0001 par value; 400,000,000 shares authorized; no shares issued and outstanding (excluding 50,000,000 and 0 shares subject to possible redemption) as of September 30, 2022 and December 31, 2021, respectively		—			—
Class B common stock, $0.0001 par value; 50,000,000 shares authorized; 12,500,000 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		1,250			1,250
Additional paid-in capital		—			—
Accumulated deficit		(18,272,016	)		(33,037,231	)

Total stockholders’ deficit		(18,270,766	)		(33,035,981	)

TOTAL LIABILITIES, REEDEMABLE COMMON STOCK AND STOCKHOLDERS’ DEFICIT	$	503,177,481		$	501,673,274

The accompanying notes are an integral part of these unaudited condensed financial statements.

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MASON INDUSTRIAL TECHNOLOGY, INC.

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)


	Three months ended						Nine months ended
	September 30, 2022			September 30, 2021			September 30, 2022			September 30, 2021
OPERATING EXPENSES
General and administrative expenses	$	251,802		$	255,261		$	1,056,207		$	667,878
Franchise tax expense		50,000			50,000			150,136			218,310

Total operating expenses		(301,802	)		(305,261	)		(1,206,343	)		(886,188	)

OTHER INCOME (EXPENSE)
Interest income on marketable securities held in Trust Account		2,260,666			7,682			3,011,653			20,040
Underwriting discounts and offering costs attributed to derivative warrant liabilities		—			—			—			(1,321,353	)
Change in fair value of derivative warrant liabilities		2,548,000			4,674,534			15,797,600			18,374,401
Change in fair value of derivative forward purchase agreement		151,906			(158,035	)		(132,688	)		462,191

Total other income		4,960,572			4,524,181			18,676,565			17,535,279

NET INCOME BEFORE INCOME TAX		4,658,770			4,218,920			17,470,222			16,649,091
Income tax expense		464,234			—			568,045			—

NET INCOME	$	4,194,536		$	4,218,920		$	16,902,177		$	16,649,091

Basic and diluted weighted average shares outstanding, Class A common stock		50,000,000			50,000,000			50,000,000			44,301,471
Basic and diluted net income per share, Class A common stock	$	0.07		$	0.07		$	0.27		$	0.29
Basic and diluted weighted average shares outstanding, Class B common stock		12,500,000			12,500,000			12,500,000			12,544,872
Basic and diluted net income per share, Class B common stock	$	0.07		$	0.07		$	0.27		$	0.29

The accompanying notes are an integral part of these unaudited condensed financial statements.

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MASON INDUSTRIAL TECHNOLOGY, INC.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(Unaudited)


	Class B Common Stock						Additional Paid-in			Accumulated			Total Stockholders’
	Shares			Amount			Capital			Deficit			Deficit
Balance—December 31, 2021		12,500,000		$	1,250		$	—		$	(33,037,231	)	$	(33,035,981	)
Net income		—			—			—			7,444,176			7,444,176

Balance—March 31, 2022		12,500,000		$	1,250		$	—		$	(25,593,055	)	$	(25,591,805	)
Remeasurement of Class A common stock subject to possible redemption		—			—			—			(390,530	)		(390,530	)
Net income		—			—			—			5,263,465			5,263,465

Balance—June 30, 2022		12,500,000		$	1,250		$	—		$	(20,720,120	)	$	(20,718,870	)
Remeasurement of Class A common stock subject to possible redemption		—			—			—			(1,746,432	)		(1,746,432	)
Net income		—			—			—			4,194,536			4,194,536

Balance—September 30, 2022		12,500,000		$	1,250		$	—		$	(18,272,016	)	$	(18,270,766	)


	Class B Common Stock						Additional Paid-in			Accumulated			Total Stockholders’
	Shares			Amount			Capital			Deficit			Deficit
Balance—December 31, 2020		12,937,500		$	1,294		$	23,706		$	(83,334	)	$	(58,334	)
Forfeiture of Founder Shares (1)		(437,500	)		(44	)		44			—			—
Initial classification of derivative forward purchase agreement		—			—			(327,414	)		—			(327,414	)
Remeasurement of Class A common stock subject to possible redemption		—			—			303,664			(50,385,572	)		(50,081,908	)
Net income		—			—			—			17,723,284			17,723,284

Balance—March 31, 2021		12,500,000		$	1,250		$	—		$	(32,745,622	)	$	(32,744,372	)
Net loss		—			—			—			(5,293,113	)		(5,293,113	)

Balance—June 30, 2021		12,500,000		$	1,250		$	—		$	(38,038,735	)	$	(38,037,485	)
Net income		—			—			—			4,218,920			4,218,920

Balance—September 30, 2021		12,500,000		$	1,250		$	—		$	(33,819,815	)	$	(33,818,565	)

(1)	On January 29, 2021 the Sponsor forfeited 437,500 Founder Shares as a result of the underwriters election to partially exercise their overallotment option.

The accompanying notes are an integral part of these unaudited condensed financial statements.

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MASON INDUSTRIAL TECHNOLOGY, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)


	Nine months ended September 30,
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	16,902,177		$	16,649,091
Adjustments to reconcile net income to net cash used in operating activities:
Interest earned on cash held in Trust Account		(3,011,653	)		(20,040	)
Underwriting discounts and transaction costs attributed to warrant liability		—			1,321,353
Change in fair value of derivative liabilities		(15,797,600	)		(18,374,401	)
Change in fair value of derivative forward purchase agreement		132,688			(462,191	)
Changes in operating assets and liabilities:
Prepaid and other current assets		290,887			(247,758	)
Accounts payable and accrued expenses		(200,841	)		(66,878	)
Other Assets		43,517			(174,067	)
Franchise tax payable		(147,619	)		218,310
Income tax payable		418,045			—

Net cash used in operating activities		(1,370,399	)		(1,156,581	)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment of cash in Trust Account		—			(500,000,000	)
Cash withdrawn from Trust Account to pay franchise and income taxes		447,621			—

Net cash provided by (used in) investing activities		447,621			(500,000,000	)

CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from sale of Units, net of underwriting discounts paid		—			489,596,740
Proceeds from sale of Private Placement Warrants		—			13,220,000
Proceeds received from related party working capital loan		300,000			—
Repayment of note payable – related party					(300,000	)
Payment of offering costs		—			(125,000	)

Net cash provided by financing activities		300,000			502,391,740

NET CHANGE IN CASH		(622,778	)		1,235,159
CASH, BEGINNING OF PERIOD		975,393			167,224

CASH, END OF PERIOD	$	352,615		$	1,402,383

NONCASH ACTIVITIES
Initial classification of derivative liability	$	—		$	36,720,001
Initial classification of derivative forward purchase agreement	$	—		$	(327,414	)
Initial value of common stock subject to possible redemption	$	—		$	500,000,000
Remeasurement of Class A common stock subject to possible redemption	$	2,136,962		$	50,281,408
Deferred underwriting fees charged to additional paid-in capital	$	—		$	17,500,000
SUPPLEMENTAL DISCLOSURES
Cash paid for taxes	$	150,058			—

The

accompanying notes are an integral part of these unaudited condensed financial statements.

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NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Organization and Operations

Mason Industrial Technology, Inc. (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 is an early stage and emerging growth company, and as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

As of September 30, 2022, the Company had not commenced any operations. All activity through September 30, 2022, relates to the Company’s formation, its Initial Public Offering (the “IPO”) and identifying a target company for a Business Combination. The Company will not generate any operating revenues until after completion of its initial Business Combination, at the earliest. The Company will generate

non-operating

income in the form of interest income on cash from the proceeds derived from the IPO (see below for more information on the IPO) and recognizes changes in the fair value of warrant liabilities and forward purchase agreement as other income (expense).

Corporate Organization and Initial Public Offering

The Company was incorporated in Delaware on August 31, 2020. The Company’s sponsor is Mason Industrial Sponsor, LLC, a Delaware limited liability company (the “Sponsor”).

On February 2, 2021, the Company consummated its IPO of 50,000,000 units (the “Units” and, with respect to the Class A common stock included in the Units being offered, the “Public Shares”) at $10.00 per Unit, raising $500.0 million of gross proceeds. Of the 50,000,000 units issued, 45,000,000 Units were included in the Company’s initial offering, and 5,000,000 Units resulted from the underwriter partially exercising its over- allotment option. The net proceeds of the IPO were $472.1 million, after deducting expenses and underwriting discounts and commissions of approximately $27.9 million, which includes $17.5 million in deferred underwriting commissions (see Note 8, Commitments and Contingencies, for more information).

Public Warrants

Each Unit consists of one share of Class A common stock and

one-third

of one redeemable warrant (each, a “Public Warrant” and, collectively, the “Public Warrants”). Each whole Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share. In addition, if (x) the Company issues additional shares of Class A common stock for capital raising purposes in connection with the closing of the Company’s Initial Business Combination at an issue 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 the Company’s board of directors and, in the case of any such issuance to the Sponsor or their affiliates, without taking into account any shares of Class B common stock held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the amount that is the total equity proceeds (and interest thereon), available for the funding of the Initial Business Combination on the date of the consummation (net of redemptions) and (z) the volume- weighted average trading price of the Company’s Class A common stock during the

20-trading-day

period starting on the trading day prior to the date on which the Company consummates its Initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the Public Warrants will be adjusted, to the nearest cent, to 115% of the higher of the Newly Issued Price and the Market Value, and the $18.00 per share redemption trigger price described below will be adjusted, to the nearest cent, to be equal to 180% of the higher of the Newly Issued Price and the Market Value.

No fractional shares will be issued upon separation of the Units and only whole Public Warrants will trade. Each Public Warrant will become exercisable on the later of 30 days after the completion of the Company’s Initial Business Combination or 12 months from the closing of the IPO and will expire five years after the completion of the Company’s Initial Business Combination or earlier upon redemption or liquidation.

Once the Public Warrants become exercisable, the Company 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, if and only if the last sale price of the Company’s Class A common stock equals or exceeds $18.00 per share for any 20 trading days within a

30-trading

day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the Public Warrant holders.

Private Placement Warrants

Simultaneously with the closing of the IPO, the Company consummated a private sale (the “Private Placement”) of 8,813,334 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants” and together with the Public Warrants, the “Warrants”) to the Sponsor at a price of $1.50 per Private Placement Warrant, generating gross proceeds of approximately $13.2 million (see Note 6, Related Party Transactions, for more information). The Private Placement Warrants are identical to the Warrants included in the Units sold in the IPO, except as otherwise disclosed in the Registration Statement. No underwriting discounts or commissions were paid with respect to such sale.

Forward Purchase Agreement

Simultaneously with the closing of the IPO, the Company entered into a Forward Purchase Agreement (the “FPA”) with the Sponsor, pursuant to which the Sponsor committed that it will purchase up to 8,000,000 forward purchase units (the “FPA Units”), consisting of one share of Class A common stock (the “FPA Share”) and

one-third

of one warrant to purchase one share of Class A common stock (the “FPA Warrant”) for $10.00 per unit, or an aggregate amount of up to $80,000,000, in a private placement that will close concurrently with the closing of the initial Business Combination (see Note 6, Related Party Transactions, for more information). In addition, the Sponsor’s commitment under the FPA will be subject to approval, prior to entering into a definitive agreement for the initial Business Combination, of Mason Capital Management LLC, an affiliate of the

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managing member of the Sponsor. The FPA Shares will be identical to the shares of Class A common stock included in the units being sold in the IPO, except that they will be subject to transfer restrictions and registration rights. The FPA Warrants will have the same terms as the Private Placement Warrants so long as they are held by the Sponsor or its permitted assignees and transferees.

Transaction Costs

Transaction costs amounted to $27.9 million, consisting of $10.0 million of underwriting fees, $17.5 million of deferred underwriting commissions, and $0.4 million of other offering costs.

The Trust Account

Following the closing of the IPO on February 2, 2021, $500.0 million of the net proceeds of the sale of the Units and the Private Placement Warrants were placed in a trust account (the “Trust Account”). The funds held in the Trust Account are invested in U.S. government treasury bills with a maturity of one hundred eighty (180) days or less or in money market funds that meet certain conditions under Rule

2a-7

under the Investment Company Act of 1940 and that invest only in direct U.S. government obligations. Funds will remain in the Trust Account until the earlier of (i) the consummation of the Initial Business Combination or (ii) the distribution of the Trust Account proceeds 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.

Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its taxes, the proceeds from the IPO and the Private Placement will not be released from the Trust Account until the earlier of: (i) the completion of the Company’s Initial Business Combination; (ii) the redemption of any Public Shares that have been properly tendered in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation (A) to modify the substance or timing of the Company’s obligation to redeem 100% of Public Shares if the Company does not complete its Initial Business Combination within 24 months from the closing of the IPO (or 30 months from the closing of the IPO if the Company has executed a letter of intent, agreement in principle or definitive agreement for the Initial Business Combination within 24 months from the closing of the IPO but has not completed the Initial Business Combination within such 24 month period) (the “Combination Period”) or (B) with respect to any other provision relating to stockholders’ right for

pre-Initial

Business Combination activity; and (iii) the redemption of 100% of the Public Shares if the Company is unable to complete an Initial Business Combination within the Combination Period, subject to the requirements of law. The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Company’s public stockholders.

Initial Business Combination

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPO, although substantially all of the net proceeds of the IPO are intended to be generally applied toward consummating an Initial Business Combination. The Initial Business Combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding the amount of any deferred underwriting discount held in the trust account) at the time of the agreement to enter into the Initial Business Combination. Furthermore, there is no assurance that the Company will be able to successfully effect an Initial Business Combination.

The Company, after signing a definitive agreement for an Initial Business Combination, will either (i) seek stockholder approval of the Initial Business Combination at a meeting called for such purpose in connection with which stockholders may seek to redeem their shares, regardless of whether they vote for or against the Initial Business Combination, for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account 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 and not previously released to the Company to pay the Company’s taxes, or (ii) provide stockholders with the opportunity to sell their Public Shares to the Company by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount in cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account 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 and not previously released to the Company to pay the Company’s taxes. The decision as to whether the Company will seek stockholder approval of the Initial Business Combination or will allow stockholders to sell their Public Shares in a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek stockholder approval, unless a vote is required by law or under NYSE rules. If the Company seeks stockholder approval, it will complete its Initial Business Combination only if a majority of the outstanding shares of common stock voted are voted in favor of the Initial Business Combination.

If the Company holds a stockholder vote or there is a tender offer for shares in connection with an Initial Business Combination, a public stockholder will have the right to redeem its shares for an amount in cash equal to its pro rata share of the aggregate amount then on deposit in the Trust Account 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 and not previously released to the Company to pay the Company’s taxes.

Pursuant to the Company’s amended and restated certificate of incorporation, 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 no more than ten business days thereafter, redeem the Public Shares, at a

per-share

price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay the Company’s taxes (less $100,000 to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

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The Sponsor and the Company’s directors, director nominees and officers have entered into a letter agreement with the Company, pursuant to which they have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares (as defined below) (Note 3, Fair Value Measurements) held by them if the Company fails to complete an Initial Business Combination within the Combination Period.

However, if the Sponsor or any of the Company’s directors, officers or affiliates acquired shares of Class A common stock in the IPO or acquires such shares after the IPO, they will be entitled to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete the Initial Business Combination within the Combination Period.

Separate Trading of Class A common shares and Public Warrants

On March 18, 2021, the Company announced that, commencing March 22, 2021, the holders of the Company’s Units may elect to separately trade the Class A common stock and Public Warrants comprising the Units. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Those units not separated will continue to trade on the New York Stock Exchange under the symbol “MIT.U,” and each of the shares of Class A common stock and Public Warrants that are separated will trade on the New York Stock Exchange under the symbols “MIT” and “MIT.W,” respectively.

Risks and Uncertainties

Management is continuing 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 search for a target company, the specific impacts are 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.

In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy are not determinable as of the date of these financial statements. The specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these financial statements.

Liquidity and Capital Resources

in-depth

due diligence and negotiating an Initial Business Combination are less than the actual amount necessary to do so, the Company may have insufficient funds available to operate the business prior to the Initial Business Combination. Moreover, the Company may need to obtain additional financing either to complete the Initial Business Combination or to redeem a significant number of our public shares upon completion of the Initial Business Combination, in which case the Company may issue additional securities or incur debt in connection with such Initial Business Combination. If the Company is unable to complete the Business Combination because it does not have sufficient funds available, the Company will be forced to cease operations and liquidate the Trust Account.

Going Concern

205-40,

Presentation of Financial Statements—Going Concern, the Company has until February 2, 2023, to consummate an initial business combination. It is uncertain that the Company will be able to consummate an initial business combination by this time. If an initial business combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Additionally, the Company may not have sufficient liquidity to fund the working capital needs of the Company through one year from the issuance of these financial statements. Management has determined that the liquidity condition and mandatory liquidation, should an initial business combination not occur, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after February 2, 2023. The Company’s sponsor, officers and directors may, but are not obligated to, loan the Company funds from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and should be read in conjunction with the Company’s financial statements, summary of significant accounting policies and notes included in the Company’s Annual Report on Form

10-K

for the year ended December 31, 2021 (the “2021 Form

10-K”).

Accordingly, certain disclosures required by GAAP and normally included in Annual Reports on Form

10-K

have been condensed or omitted from this report; however, except as disclosed herein, there has been no material change in the information disclosed in the notes to condensed financial statements included in the Company’s 2021 Form

10-K.

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It is the opinion of management that all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation of interim financial information, have been included. The Company has no items of other comprehensive income or loss; therefore, its net income or loss is identical to its comprehensive income or loss. Operating results for the periods presented are not necessarily indicative of expected results for the full year or for any future interim periods.

Use of Estimates

In the course of preparing the condensed financial statements, management makes various assumptions, judgments and estimates to determine the reported amounts of assets, liabilities, income and expenses, and in the disclosures of commitments and contingencies. Changes in these assumptions, judgments and estimates will occur as a result of the passage of time and the occurrence of future events. Although management believes these estimates are reasonable, actual results could differ from these estimates.

Estimates made in preparing these condensed financial statements include, among other things, (1) the measurement of derivative warrant liabilities (2) the measurement of the derivative forward purchase agreement, (3) the measurement of convertible notes, and (4) accrued expenses. Changes in these estimates and assumptions could have a significant impact on results in future periods.

Cash and cash equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2022 and December 31, 2021. The Company’s cash balances held at commercial banks may at times exceed the Federal Deposit Insurance Corporation limit. The Company has not experienced any credit losses to date.

Cash held in Trust Account

At September 30, 2022 and December 31, 2021, the Company had approximately $502.6 million and $500.0 million in cash held in the Trust Account that were held in U.S. Treasury Bills, respectively.

Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Certain financial assets and liabilities, such as the derivative liability, are measured at fair value on a recurring basis. Nonfinancial assets and liabilities, if any, are recognized at fair value on a nonrecurring basis.

The Company categorizes the inputs to the fair value of its financial assets and liabilities using a three-tier fair value hierarchy, established by the FASB, that prioritizes the significant inputs used in measuring fair value. These levels are:

Level 1—inputs are based on unadjusted quoted prices that are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Examples of Level 1 inputs include financial instruments such as exchange-traded derivatives, listed securities and U.S. government treasury securities.

Level 2—inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g., the Black-Scholes model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, credit spreads, foreign exchange rates, and forward and spot prices for currencies. Examples of Level 2 inputs include nonexchange-traded derivatives such as

over-the-counter

forwards, swaps, and options.

Level 3—inputs that are generally unobservable from objective sources and typically reflect management’s estimates and assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.

Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash held in Trust Account. The Company’s Trust Account is maintained with a high-quality financial institution, with the compositions and maturities of the Trust Account’s investments are regularly monitored by management.

Derivative liabilities and forward purchase agreement

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company accounts for derivative instruments as either equity-classified or liability-classified instruments based on an assessment of the instruments specific terms and applicable authoritative guidance in ASC 480, Distinguishing liabilities from equity (“ASC 480”), and ASC 815, Derivatives and hedging (“ASC 815”). The assessment considers whether the instruments are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability

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pursuant to ASC 480, and whether the instruments meet all of the requirements for equity classification under ASC 815, including whether the instruments are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of instruments issuance and as of each subsequent reporting period end date while the instruments are outstanding.

The Company evaluated the Public Warrants, the Private Placement Warrants, Over-allotment option, and the FPA (which are discussed in Note 3, Fair Value Measurements, Note 4, Stockholders’ Deficit and Note 6, Related Party Transactions) in accordance with ASC

815-40,

Contracts in an entity’s own equity (“ASC

815-40”),

and concluded that each contained provisions related to certain tender or exchange offers which precludes them from being accounted for as a component of equity. As the Warrant’s, Over-allotment option, and FPA meet the definition of a derivative as contemplated in ASC 815, the Warrants, Over-allotment option, and FPA were measured at fair value at inception (on the date of the IPO) and recorded as assets or liabilities on the balance sheets. The Warrants, Over-allotment option, and FPA are subject to remeasurement at each reporting date until exercised in accordance with ASC 820, Fair Value Measurement (“ASC 820”), with changes in fair value recognized on the statements of operation in the period of change. Subsequent to becoming publicly traded on March 22, 2021, the fair value of the Public Warrants was determined based on their quoted trading price. The fair value of Private Warrants was determined based on the quoted trading price of the Public Warrants. Prior to September 30, 2022, Private Placement Warrants were estimated using a modified Black-Scholes valuation mode. Prior to being publicly traded, the fair value of the Public Warrants was estimated using a Binomial Lattice valuation model, while the fair value of the Over-allotment option and FPA are estimated using a modified Black-Scholes and adjusted net assets valuation model, respectively. See Note 3, Fair Value Measurements, for more information regarding the methods used to fair value the derivative liabilities and the FPA.

Allocation of Issuance costs

The Company accounts for the allocation of its issuance costs to its Warrants using the guidance in ASC

470-20,

Debt with conversion and other options (“ASC

470-20”),

applied by analogy. Under this guidance, if debt or stock is issued with detachable warrants, the proceeds need to be allocated to the two instruments using either the fair value method, the relative fair value method, or the residual value method. The guidance also requires companies to use a consistent approach in allocating issuance costs between the instruments. Accordingly, the Company allocated its issuance costs of $27,903,259—consisting of $10,000,000 of underwriting fees, $17,500,000 of deferred underwriting commissions, and $403,259 of other offering costs—to the issuance of its Class A shares and Public Warrants in the amount of $26,581,907 and $1,321,353, respectively. Issuance costs attributed to the Public Warrants were expensed during the first quarter of 2021 to the statements of operations.

Issuance costs associated with the issuance of Class A common stock were charged against the carrying value of the Class A common stock subject to possible redemption upon the completion of the IPO. The Company classifies deferred underwriting commissions as

non-current

liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.

Class A Common Stock Subject to Possible Redemption

The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in ASC 480. Shares of Class A common stock subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Class A common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at September 30, 2022 and December 31, 2021, 50,000,000 shares of Class A common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheets, respectively. Immediately upon the closing of the IPO, the Company recognized the remeasurement from initial book value to redemption amount, which approximates fair value. The change in the carrying value of Class A common stock subject to possible redemption resulted in charges against additional

paid-in

capital (to the extent available), accumulated deficit and Class A common stock.

Franchise Tax Obligation

As a Delaware corporation, the Company’s franchise tax obligation is based on the number of shares of common stock authorized and outstanding. As of September 30, 2022 and December 31, 2021, the Company has recorded franchise taxes payable of $38,412 and $186,031, respectively.

Income Taxes

The Company accounts for income taxes under ASC 740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the unaudited condensed 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. As of September 30, 2022 and December 31, 2021, the Company’s deferred tax asset had a full valuation allowance recorded against it.

The Company’s effective tax rate was 9.96% and 0.00% for the three months ended September 30, 2022 and 2021, respectively, and 3.25% and 0.00% for the nine months ended September 30, 2022 and 2021, respectively. The effective tax rate differs from the statutory tax rate of 21.00% for the three months and nine months ended September 30, 2022 and 2021, due to changes in fair value in derivative warrant liabilities and derivative forward purchase agreements.

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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.

While ASC 740 identifies usage of an effective annual tax rate for purposes of an interim provision, it does allow for estimating individual elements in the current period if they are significant, unusual, or infrequent. Computing the effective tax rate for the Company is complicated due to the potential impact of the timing of any Business Combination expense and the actual interest income that will be recognized during the year. The Company has taken a position as to the calculation of income tax expense in a current period based on ASC 740-270-25-3 which states, “If an entity is unable to estimate a part of its ordinary income (or loss) or the related tax (benefit) but is otherwise able to make a reasonable estimate, the tax (or benefit) applicable to the item that cannot be estimated shall be reported in the interim period in which the item is reported.” The Company believes its calculation to be a reliable estimate and allows it to properly take into account the unusual elements that can impact its annualized book income and its impact on the effective tax rate. As such, the Company is computing its taxable income (loss) and associated income tax provision based on actual results through September 30, 2022.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2022 and December 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

The Company has identified the United States as its only “major” tax jurisdiction. The Company is subject to income taxation 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.

The Inflation Reduction Act (“IRA”) was enacted on August 16, 2022. The IRA includes provisions imposing a 1% excise tax on share repurchases that occur after December 31, 2022 and introduces a 15% corporate alternative minimum tax (“CAMT”) on adjusted financial statement income. The CAMT will be effective for us beginning in fiscal 2024. We currently are not expecting the IRA to have a material adverse impact to our financial statements.

Net Income Per Common Share

The Company has two classes of shares, Class A common stock and Class B common stock. Net income per common share is computed by dividing net income, on a pro rata basis, by the weighted average number of common shares outstanding for the period. The Company applies the two- class method in calculating earnings per share. Remeasurement associated with the redeemable Class A common stock is excluded from net income per common share as the redemption value approximates fair value.

The Company has not considered the effect of the warrants sold in the IPO and Private Placement to purchase 25,480,001 shares of Class A common stock in the calculation of diluted income per share, since the exercise of the warrants is contingent upon the occurrence of future events. As of September 30, 2022, and December 31, 2021, the Company did not have any other dilutive securities or other contracts that could, potentially, be exercised or converted into shares of common stock and then share in earnings of the Company.

Recently issued accounting standards

In August 2020, the FASB issued Accounting Standards Update (“ASU”)

No. 2020-06,

“Debt — Debt with Conversion and Other Options (Subtopic

470-20)

and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic

815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU

2020-06”),

which simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The new standard is effective for the Company on January 1, 2024, although early adoption is permitted. The ASU allows the use of the modified retrospective method or the fully retrospective method. The Company is still in the process of evaluating the impact of this new standard; however, the Company does not believe the initial impact of adopting the standard will result in any changes to the Company’s statements of financial position, operations or cash

flows.

In June 2022, the FASB issued ASU 2022-03, ASC Subtopic 820 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.” The ASU amends ASC 820 to clarify that a contractual sales restriction is not considered in measuring an equity security at fair value and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. The ASU applies to both holders and issuers of equity and equity-linked securities measured at fair value. The amendments in this ASU are effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company is still evaluating the impact of this pronouncement on the condensed financial statements.

The Company’s management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed financial statements.

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NOTE 3 — FAIR VALUE MEASUREMENTS

Financial Assets and Liabilities Measured on a Recurring Basis

Certain assets and liabilities are reported at fair value on a recurring basis. These assets and liabilities include the investments held in Trust Account, the derivative forward purchase agreement, and derivative liabilities.

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis and where they are classified within the fair value hierarchy at September 30, 2022 and December 31, 2021.


	Fair Value Measured as of September 30, 2022
Assets:	Level 1		Level 2		Level 3
Investments held in Trust Account (1)	$	502,593,553	$	—	$	—
Liabilities:
Derivative forward purchase agreements (2)	$	—	$	—	$	30,045
Derivative warrant liabilities - Public Warrants (3)	$	666,667	$	—	$	—
Derivative warrant liabilities - Private Placement Warrants (4)	$	—	$	—	$	352,533

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	Fair Value Measured as of December 31, 2021
	Level 1		Level 2		Level 3

Assets:
Investments held in Trust Account (1)	$	500,029,521	$	—	$	—
Derivative forward purchase agreements (2)	$	—	$	—	$	102,643
Liabilities:
Derivative warrant liabilities - Public Warrants (3)	$	11,000,000	$	—	$	—
Derivative warrant liabilities - Private Placement Warrants (4)	$	—	$	—	$	5,816,800

(1)	The fair value of investments in Trust Account was based on the quoted market price.

(2)	The fair value of derivative forward purchase agreement was based on the forward price formula.

(3)	The fair value of derivative liabilities – Public Warrants was based on the quoted market price for MIT.W as of the reporting date.

(4)	The fair value of derivative liabilities – Private Placement Warrants was based on the quoted market price for MIT.W as of September 30, 2022 and a modified Black-Scholes model as of December 31, 2021.

Investments held in Trust Account.

At September 30, 2022 and December 31, 2021, the investments held in Trust Account were entirely comprised of U.S. Treasury Bills, respectively. During the three months ended September 30, 2022 the Company withdrew $447,620 of interest income from the Trust Account in order to satisfy tax obligations related to the earnings of the Trust Account. During the year ended December 31, 2021, the Company did not withdraw any interest income from the Trust Account.

Derivative liabilities

The Warrants are accounted for as liabilities in accordance with ASC

815-40

and are presented within derivative warrant liabilities on the balance sheets. The derivative warrant liabilities were measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of derivative liabilities in the statements of operations.

Measurement

The Warrants are measured at fair value on a recurring basis. The subsequent measurement of the Public Warrants as of September 30, 2022 and December 31, 2021 are classified as Level 1 due to the use of an observable market quote in an active market under the ticker MIT.W.

As of September 30, 2022, the fair market value of Public Warrants was used to determine the fair market value of Private Warrants. The modified Black-Scholes valuation model could not be used as the implied volatility for the Public Warrants was unsolvable as of September 30, 2022, due to the fair market value of Public Warrants declining from $0.66 as of December 31, 2021, to $0.04 as of September 30, 2022. The modified Black-Scholes valuation model was used to measure the fair value of the Private Warrants as of March 31, 2022, and December 31, 2021, respectively.

The change in fair value of the derivative liabilities through September 30, 2022 is as follows:


							Total Derivative
	Public Warrants			Private Warrants			Warrants Liability
Derivative warrant liabilities at January 1, 2022	$	11,000,000		$	5,816,800		$	16,816,800
Change in fair value of warrant liabilities		(5,500,000	)		(2,908,400	)		(8,408,400	)

Derivative warrant liabilities at March 31, 2022		5,500,000			2,908,400			8,408,400
Change in fair value of warrant liabilities		(3,166,667	)		(1,674,533	)		(4,841,200	)

Derivative warrant liabilities at June 30, 2022	$	2,333,333		$	1,233,867		$	3,567,200
Change in fair value of warrant liabilities		(1,666,666	)		(881,334	)		(2,548,000	)

Derivative warrant liabilities at September 30, 2022	$	666,667		$	352,533		$	1,019,200

Derivative forward purchase agreement

. The FPA is accounted for as a derivative instrument in accordance with ASC

815-40

and is presented as a derivative forward purchase agreement asset or liability on the balance sheets. The FPA was measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of forward purchase agreement in the statements of operations.

The FPA was valued using an adjusted net assets method, which is considered to be a Level 3 fair value measurement. Under the adjusted net assets method utilized, the aggregate commitment of $80.0 million, pursuant to the FPA, is discounted to present value and compared to the fair value of the common stock and warrants to be issued pursuant to the FPA. The fair value of the common stock and warrants to be issued under the FPA were based on the public trading price of one Class A Common Share and the value of

one-third

of one Private Placement Warrant. The excess (liability) or deficit (asset) of the fair value of the common stock and warrants to be issued compared to the $80.0 million fixed commitment is then reduced to account for the probability of consummation of the Business Combination.

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The change in fair value of the derivative forward purchase agreement through September 30, 2022 is as follows:


	FPA Asset (Liability)
Derivative forward purchase agreement at January 1, 2022	$	102,643
Change in fair value of the derivative forward purchase agreement		(431,209	)

Derivative forward purchase agreement at March 31, 2022		(328,566	)
Change in fair value of the derivative forward purchase agreement		146,615

Derivative forward purchase agreement at June 30, 2022	$	(181,951	)
Change in fair value of the derivative forward purchase agreement		151,906

Derivative forward purchase agreement at September 30, 2022	$	(30,045	)

Fair Value of Other Financial Instruments

The carrying value of cash, accounts payable and accrued expenses are considered to be representative of their respective fair values due to the nature of and short-term maturities of those instruments.

NOTE 4 — STOCKHOLDERS’ DEFICIT

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 designation, rights and preferences as may be determined from time to time by the Company’s Board of Directors. At September 30, 2022 and December 31, 2021, there were no shares of preferred stock issued or outstanding.

Class

A Common Stock

— The Company is authorized to issue 400,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of the Company’s Class A common stock are entitled to one vote for each share. As of September 30, 2022 and December 31, 2021, there were no shares of Class A common stock issued and outstanding (excluding 50,000,000 shares of Class A common stock subject to possible redemption), respectively.

If the Company enters into an initial Business Combination, it may (depending on the terms of such an initial Business Combination) be required to increase the number of shares of Class A common stock which the Company is authorized to issue at the same time as the Company’s stockholders vote on the initial Business Combination to the extent the Company seeks stockholder approval in connection with the initial Business Combination.

In addition, 50,000,000 shares of Class A common stock are redeemable upon the consummation of the Company’s initial Business Combination, subject to the requirements of law. In addition, if the Company is unable to complete the initial Business Combination within the Combination Period, the Company will cease all operations except for the purpose of winding up and redeem the shares of Class A common stock at a

per-share

price equal to the aggregate amount then on deposit in the Trust Account, divided by the number of then outstanding Public Shares (see Note 1, Description of Organization and Business Operations, for more information). The Company classified the shares of Class A common stock subject to redemption rights as temporary equity as the event of the consummation of the Company’s initial Business Combination is not solely within the control of the Company.

Class

B Common Stock

— The Company is authorized to issue 50,000,000 shares of Class B common stock with a par value of $0.0001 per share. As of September 30, 2022 and December 31, 2021, 12,500,000 shares of Class B common stock were issued and outstanding. These amounts have been retroactively adjusted to reflect the January 28, 2021 stock dividend of 0.125 shares, described in Note 6, Related Party Transactions.

Holders of the Class A common stock and holders of the Class B common stock will vote together as a single class on all matters submitted to a vote of the stockholders, except as required by law.

The Sponsor, the Company’s officers and directors entered into a letter agreement with the Company, pursuant to which they agreed (i) to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of the initial Business Combination, (ii) to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with a stockholder vote to approve an amendment to the Company’s certificate of incorporation and (iii) to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete the initial Business Combination within the Combination Period, although they will be entitled to liquidating distributions from the Trust Account with respect to their Public Shares if the Company fails to complete the initial Business Combination within such time period.

Warrant Liabilities

— Public Warrants may only be exercised for a whole number of shares. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the IPO; provided in each case that the Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the Public Warrants and a current prospectus relating to them is available. The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, the Company will use its best efforts to file with the U.S Securities and Exchange Commission a registration statement for the registration, under the Securities Act, of the shares of Class A common stock issuable upon exercise of the Public Warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in accordance with the provisions of the warrant

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agreement. Notwithstanding the foregoing, if a registration statement covering the shares of Class A common stock issuable upon exercise of the Public Warrants is not effective within a specified period following the consummation of 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, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.

As of September 30, 2022 and December 31, 2021, the Company had 16,666,667 public warrants outstanding.

The Private Placement Warrants are identical to the Public Warrants underlying the Units being sold in the IPO, except that the Private Placement Warrants and the Class A common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be

non-redeemable

so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

The Company may redeem the Public Warrants (except with respect to the Private Placement Warrants):

•

in whole and not in part;

•

at a price of $0.01 per warrant;

•

at any time during the exercise period;

•

upon a minimum of

days’ prior written notice of redemption; and

•

if, and only if, the last sale price of the Company’s Class A common stock equals or exceeds $18.00 per share for any 20 trading days within a

30-trading

day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.

•

If, and only if, there is a current registration statement in effect with respect to the shares of Class A common stock underlying such warrants.

In addition, the Company may call the Public Warrants for redemption:

•

in whole and not in part;

•

at $0.10 per warrant;

•

upon not less than 30 days’ prior written notice of redemption to each warrant holder, provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive a certain number of shares of Class A common stock, based on the fair market value of the Company’s Class A common stock;

•

if, and only if, the closing price of Class A common stock equals or exceeds $10.00 per share for any 20 trading days within the

30-

trading day period ending three trading days before the notice of redemption is sent to the warrant holders; and

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.

The private placement warrants will be

non-redeemable

and exercisable on a cashless basis so long as they are held by our sponsor or its permitted transferees. If the private placement warrants are held by holders other than our sponsor or its permitted transferees and if the closing price of Class A common stock for any 20 trading days within a

30-trading

day period ending on the third trading day prior to the date on which the notice of redemption is sent to the warrant holders is less than $18.00 per share, the private placement warrants must also be concurrently called for redemption on the same terms as the outstanding public warrants.

The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.

As of September 30, 2022 and December 31, 2021, the Company had 8,813,334 private placement warrants outstanding.

NOTE 5 — CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION

The Company’s Class A common stock feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of future events. As of September 30, 2022 and December 31, 2021, there were 50,000,000 shares of Class A common stock outstanding, all of which were subject to possible redemption.

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As of September 30, 2022 and December 31, 2021, Class A common stock subject to possible redemption reflected on the balance sheets is reconciled on the following table:


Gross proceeds	$	500,000,000
Less:
Offering costs and underwriting fees allocated to Class A common stock subject to possible redemption		(26,781,408	)
Proceeds allocated to Public Warrants at issuance		(23,500,000	)
Plus:
Remeasurement to Class A common stock subject to possible redemption amount		50,281,408

Class A common stock subject to possible redemption - December 31, 2021 and March 31, 2022		500,000,000
Plus:
Remeasurement to Class A common stock subject to possible redemption amount		390,530

Class A common stock subject to possible redemption - June 30, 2022	$	500,390,530
Remeasurement to Class A common stock subject to possible redemption amount		1,746,432

Class A common stock subject to possible redemption - September 30, 2022	$	502,136,962

NOTE 6 — RELATED PARTY TRANSACTIONS

Founder Shares

On January 28, 2021, the Company effected a stock dividend of 0.125 shares of Class B common stock, resulting in the Sponsor holding an aggregate of 12,937,500 Founder Shares (up to 1,687,500 Founder Shares of which are subject to forfeiture to the extent that the underwriters’ over- allotment option is not exercised), representing an adjusted purchase price of approximately $0.002 per share. The financial statements have been retroactively restated to reflect the stock dividend. In January 28, 2021, our sponsor transferred 84,375 founder shares to Edward A. Rose III and 56,250 founder shares to each of James L. Bauman, Diane M. Parisi, William B. Plummer and Philip B. Whitehead, at the original per share purchase price.

On January 29, 2021, the Sponsor forfeited 437,500 Founder Shares as a result of the underwriters’ election to partially exercise their over- allotment option.

The Founder Shares are identical to the Class A common stock included in the Units being sold in the IPO except that the Founder Shares automatically convert into shares of Class A common stock at the time of the Company’s initial Business Combination, on a

one-for-one

basis, subject to adjustments pursuant to certain anti-dilution rights, and the Founder Shares are subject to certain transfer restrictions.

The Company’s initial stockholders have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of the initial Business Combination or (B) subsequent to the initial Business Combination, (x) if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any

30-trading

day period commencing at least 180 days after the initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, stock exchange or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.

The sale or allocation of the Founder Shares to the Company’s director and officers, as described above, is within the scope of FASB ASC Topic 718, Compensation-Stock Compensation (“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The estimated fair value of the Founder Shares granted to the Company’s director nominees, based on a Black-Scholes Option Pricing Model valuation, was approximately $2.2 million, or $7.23 per share. The Founder Shares were effectively sold subject to a performance condition (i.e., the consummation of a Business Combination). Compensation expense related to the Founder Shares is recognized only when the performance condition is probable of achievement under the applicable accounting literature. Stock-based compensation would be recognized at the date a Business Combination is considered probable in an amount equal to the number of Founder Shares multiplied by the grant date fair value per share (unless subsequently modified) less the amount initially received for the purchase of the Founder Shares. As of September 30, 2022, the Company has not yet entered into any definitive agreements in connection with any Business Combination. Any such agreements may be subject to certain conditions to closing, such as, for example, approval by the Company’s shareholders. As a result, the Company determined that the consummation of a Business Combination is not considered probable, and, therefore, no stock-based compensation expense has been recognized.

Private Placement

As described in Note 1, Description of Organization and Business Operations, the Company sold Private Placement Warrants simultaneously with the closing of the IPO. Each whole Private Placement Warrant is exercisable for one whole share of the Company’s Class A common stock at a price of $11.50 per share. A portion of the proceeds from the sale of the Private Placement Warrants were added to the proceeds from the IPO to be held in the Trust Account. If the initial Business Combination is not completed within the Combination Period, the proceeds from the sale of the Private Placement Warrants held in the Trust Account 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.

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The Private Placement Warrants are

non-redeemable

and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees. The Private Placement Warrants are not transferrable, assignable or salable until 30 days after the completion of the initial Business Combination.

Forward Purchase Agreement

As described in Note 1, Description of Organization and Business Operations, the Company entered into an FPA with the Sponsor simultaneously with the closing of the IPO, pursuant to which the Sponsor committed that it will purchase up to 8,000,000 FPA Units, consisting of one share of Class A common stock and

one-third

of one warrant to purchase one share of Class A common stock for $10.00 per unit, or an aggregate amount of up to $80,000,000, in a private placement that will close concurrently with the closing of the initial Business Combination. In addition, the Sponsor’s commitment under the FPA will be subject to approval, prior to entering into a definitive agreement for the initial Business Combination, of Mason Capital Management LLC, an affiliate of the managing member of the Sponsor. The proceeds from the sale of the FPA Units, together with the amounts available to the Company from the Trust Account (after giving effect to any redemptions of Public Shares) and any other equity or debt financing obtained by the Company in connection with the initial Business Combination, will be used to satisfy the cash requirements of the initial Business Combination, including funding the purchase price and paying expenses and retaining specified amounts to be used by the post-business combination company for working capital or other purposes. To the extent that the amounts available from the Trust Account and other financing are sufficient for such cash requirements, the Sponsor may purchase less than 8,000,000 FPA Units. In addition, the Sponsor’s commitment under the FPA will be subject to approval, prior to entering into a definitive agreement for the initial Business Combination, of Mason Capital Management LLC, an affiliate of the managing member of the Sponsor. The FPA Shares will be identical to the shares of Class A common stock included in the units being sold in this offering, except that they will be subject to transfer restrictions and registration rights. The FPA Warrants will have the same terms as the Private Placement Warrants so long as they are held by the Sponsor or its permitted assignees and transferees.

Related Party Loan

The Company’s Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the IPO pursuant to a promissory note (the “Note”). This Note was

non-interest

bearing and payable on the earlier of September 30, 2021 or the completion of the IPO. The outstanding balance under the Note of $300,000 was repaid in full on February 16, 2021.

In order to fund working capital deficiencies or finance transaction costs in connection with the initial Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s directors and officers may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes the initial Business Combination, the Company would repay the Working Capital Loans. In the event that the initial Business Combination does not close, the Company may use a portion of the proceeds held outside the Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used to repay the Working Capital Loans. Up to $1.5 million of the Working Capital Loans may be convertible into warrants, at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants, including as to exercise price, exercisability and exercise period.

On May 27, 2022, the Company borrowed $300,000 under the Working Capital Loans, which was outstanding as of September 30, 2022. The conversion feature included in the Working Capital Loan is considered an embedded derivative under ASC 815 and the fair value is remeasured at the end of each reporting period. The fair value as of May 27, 2022 and September 30, 2022 was immaterial. As of December 31, 2021, the Company had no borrowings under the Working Capital Loans.

NOTE 7 — NET INCOME PER COMMON SHARE

The Company has two classes of shares, Class A common stock and Class B common stock. Net income per common share is computed by dividing net income, on a pro rata basis, by the weighted average number of common shares outstanding for the period. Remeasurement associated with the redeemable Class A common stock is excluded from net income per common share as the redemption value approximates fair value.

The Company has not considered the effect of the Working Capital Loans, and warrants sold in the IPO and Private Placement to purchase 25,480,001 shares of Class A common stock in the calculation of diluted income per share, since the exercise of the warrants is contingent upon the occurrence of future events. As of September 30, 2022 and December 31, 2021, the Company did not have any other dilutive securities or other contracts that could, potentially, be exercised or converted into shares of common stock and then share in earnings of the Company.

As a result, diluted net income per common share is the same as basic net income per common share for the periods presented.

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Reconciliation of Net Income per Common Share

The following table reflects the calculation of basic and diluted Net income per common share:


	Three months ended September 30,
	2022				2021
	Class A		Class B		Class A		Class B
Basic and diluted net income per share
Numerator	$	3,355,629	$	838,907	$	3,376,672	$	842,248

Allocation of net income
Denominator
Weighted-average shares outstanding		50,000,000		12,500,000		50,000,000		12,500,000
Basic and diluted net income per share	$	0.07	$	0.07	$	0.07	$	0.07

	Nine months ended September 30,
	2022				2021
	Class A		Class B		Class A		Class B
Basic and diluted net income per share
Numerator	$	13,521,742	$	3,380,435	$	12,979,386	$	3,669,705

Allocation of net income
Denominator
Weighted-average shares outstanding		50,000,000		12,500,000		44,301,471		12,544,872
Basic and diluted net income per share	$	0.27	$	0.27	$	0.29	$	0.29

NOTE 8 — COMMITMENTS AND CONTINGENCIES

Registration Rights

Pursuant to a registration rights agreement, dated January 28, 2021, the holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants or warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to Class A common stock). The holders of these securities will be entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriting Agreement

The underwriters were paid a cash underwriting discount of 2.0% of the gross proceeds of the IPO, or $10.0 million, with an additional fee (the “Deferred Discount”) of 3.5% of the gross offering proceeds payable upon the Company’s completion of an initial Business Combination. This Deferred Discount of $17.5 million has been recorded as Deferred Underwriting Commissions in the balance sheet as of September 30, 2022 and December 31, 2021. The Deferred Discount will become payable to the underwriters from the amounts held in the Trust Account solely in the event the Company completes its initial Business Combination.

NOTE 9 — SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions through the date these condensed financial statements were issued. The Company determined there were no events that required disclosure in these financial statements.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

References to “we,” “us,” “company” or “our company” are to Mason Industrial Technology, Inc. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward- looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other U.S. Securities and Exchange Commission (“SEC”) filings.

Overview

We are a blank check company incorporated as a Delaware corporation and 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, which we refer to throughout this Annual Report as our initial business combination. We consummated our initial public offering on February 2, 2021.

We currently intend to concentrate our efforts in identifying businesses in the industrial technology, advanced materials or specialty chemicals industries (collectively, “Advanced Industrials”). A common theme across these sectors is the application of technology to make industrial processes more profitable, faster, more sustainable, less capital-intensive and less complex. Specifically, we intend to identify businesses that apply innovative technology to engineering, production, assembly and manufacturing. These innovations include a wide range of automation, analytics and productivity tools, as well as control systems, high precision technologies, sustainability technologies, high performance computing and robotics. These technologies enable companies to confront numerous challenges inherent in their daily operations, such as rising wage rates, globalization, increased regulation, higher quality standards, heightened focus on sustainability and tighter timelines. We are also interested in companies that participate in market segments that are adjacent to Advanced Industrials. We believe that there are many potential targets within Advanced Industrials that could become attractive public companies. These potential targets exhibit a broad range of business models and financial characteristics, with enterprise values ranging between $1 billion and $3 billion. They span a wide continuum that includes both high growth emerging companies and mature businesses with established growth profiles, recurring revenues and strong cash flows. They are generally characterized by strong intellectual property, differentiated product offerings, compelling customer value propositions and corporate cultures that are data-driven and innovative.

We are not, however, required to complete our initial business combination with an Advanced Industrials business and, as a result, we may pursue a business combination outside of this industry. We are seeking to acquire a mature businesses that we believe are fundamentally sound, yet which could benefit from additional financial, operational, strategic or managerial resources to achieve maximum value potential. We are also targeting earlier stage, yet established, companies that exhibit the potential to disrupt the market segments in which they participate through innovation and which offer the potential of sustained high levels of revenue growth.

Our sponsor is affiliated with and controlled by Mason Capital, a registered investment adviser under the Investment Advisers Act of 1940, as amended, which was established in 2000 and had over $1.4 billion of assets under management as of September 30, 2022.

Results of Operations

We have neither engaged in any operations nor generated any revenues to date. All activity from our inception through the date of our IPO, February 2, 2021, was in preparation for our IPO. Since our IPO, our activity has been limited to the evaluation of Business Combination candidates. We do not expect to generate any operating revenues until the closing and completion of our Business Combination. We expect to generate non-operating income in the form of interest income on marketable securities held after the IPO. We incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

Comparison of the three months ended September 30, 2022 versus September 30, 2021

For the three months ended September 30, 2022, we had a net income of $4,194,536 which was primarily driven by a $2,548,000 gain from changes in fair value of derivative liabilities, $2,260,666 of interest income on marketable securities held in the Trust Account, and a $151,906 gain from change in fair value of the derivative FPA. This was offset by general and administrative expenses of $251,802, $464,234 of income tax expense, and $50,000 of franchise tax expense.

For the three months ended September 30, 2021, we had a net income of $4,218,920, which was primarily driven by a $4,674,534 gain from changes in fair value of derivative liabilities, and $7,682 interest income on marketable securities held in the Trust Account. This was offset by general and administrative expenses of $255,261, $50,000 of franchise tax expense, and $158,035 loss from changes in fair value of the derivative FPA.

Comparison of the nine months ended September 30, 2022 versus September 30, 2021

For the nine months ended September 30, 2022, we had a net income of $16,902,177 which was primarily driven by a $15,797,600 gain from changes in fair value of derivative liabilities, and $3,011,653 of interest income on marketable securities held in the Trust Account. This was offset by general and administrative expenses of $1,056,207, $568,045 of income tax expense, $150,136 of franchise tax expense, and $132,688 loss from changes in fair value of the derivative FPA.

For the nine months ended September 30, 2021, we had net income of $16,649,091, which was primarily driven by a $18,374,401 gain from changes in fair value of derivative warrant liabilities, a $462,191 gain from changes in fair value of the derivative FPA, and $20,040 of interest income on marketable securities held in the Trust Account. This was partially offset by $667,878 in general and administrative expense, $218,310 of franchise tax expense, and $1,321,353 of issuance costs attributed to the Warrants.

As described in Note 2, Summary of Significant Accounting Policies, in “Part 1. Financial Information – Item 1. Financial Statements,” we account for (i) the Warrants issued in connection with our IPO and Private Placement and (ii) the forward purchase agreement as derivative instruments which were initially recorded at their fair value. These derivative instruments are subject to remeasurement at each balance sheet date until exercised, and any change in fair value is recognized in our statements of operations.

Liquidity and Capital Resources

As of September 30, 2022, we had cash of $352,615 held outside the Trust Account. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.

As of September 30, 2022, we had cash and marketable securities in the Trust Account of $502,593,553. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less deferred underwriting commissions) to complete our initial Business Combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

Material cash requirements

As of September 30, 2022, we had a $300,000 convertible note outstanding. See Note 6, Related Party Transactions.

The underwriters are entitled to deferred fee of 3.5% of the gross proceeds of the Public Offering, or $17,500,000. The deferred fee will become payable to the underwriters from the amounts held in the trust account solely in the event that we complete our initial business combination.

Sources of cash

Prior to the completion of the IPO, our liquidity needs were satisfied through receipt of $25,000 from the sale of Founder Shares to Mason Industrial Sponsor LLC, or the “Sponsor”.

On February 2, 2021, we consummated the IPO of 50,000,000 Units at a price of $10.00 per Unit generating net proceeds of $472,096,741. Transaction costs were $27,903,259, including $10,000,000 of underwriting fees, $17,500,000 of deferred underwriting fees and $403,259 of other offering costs in connection with the IPO. Simultaneously with the closing of the IPO, we consummated the sale of 8,813,334 Private Placement Warrants to our Sponsor at a price of $1.50 per warrant, generating gross proceeds of $13,220,000. Following the IPO and the sale of the Private Placement Warrants, a total of $500,000,000 was placed in a Trust Account and following the payment of certain transaction expenses.

On May 27, 2022, we borrowed $300,000 under the Working Capital Loans. If we complete an initial Business Combination, we would repay the Working Capital Loans. In the event that the initial Business Combination does not close, we may use a portion of the proceeds held outside the Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used to repay the Working Capital Loans. Up to $1.5 million of the Working Capital Loans may be convertible into warrants, at a price of $1.50 per warrant at the option of the lender.

In the three months ended September 30, 2022, we withdrew $447,621 of interest income from the Trust Account in order to satisfy tax obligations.

Uses of cash


	Nine Months Ended September 30,
	2022			2021			Change
Net cash used in operating activities	$	(1,370,399	)	$	(1,156,581	)	$	(213,818	)
Net cash provided by (used in) investing activities	$	447,621		$	(500,000,000	)	$	500,447,621
Net cash provided by financing activities	$	300,000		$	502,391,740		$	(502,091,740	)

For the nine months ended September 30, 2022, cash used in operating activities was $1,370,399. Net income of $16,902,177 was impacted by the non-cash changes in fair value of the derivative liabilities of $15,797,600 and forward purchase agreement of ($132,688), as well as the interest earned on cash held in trust account of $3,011,653. Additionally, changes in operating assets and liabilities provided $403,989 of cash used in operating activities.

For the nine months ended September 30, 2021, cash used in operating activities was $1,156,581. Net income of $16,649,091 was impacted by the non-cash changes in fair value of the derivative warrant liability and forward purchase agreement of $18,374,401 and $462,191, respectively, the issuance costs attributed to the warrant liabilities of $1,321,353, and $20,040 of interest income. Additionally, changes in operating assets and liabilities provided $270,393 of cash used in operating activities.

In order to fund working capital deficiencies and/or finance transaction costs in connection with an initial Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial Business Combination, we would repay such loaned amounts. In the event that our initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants, including as to exercise price, exercisability and exercise period. As of September 30, 2022, we had $300,000 of such loans outstanding.

As of September 30, 2022 and December 31, 2021, the Company had $352,615 and $975,393 in cash not held in the Trust Account and available for working capital purposes, respectively. The Company believes it will need to raise additional funds in order to meet the expenditures required for operating the business. If the Company’s estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an Initial Business Combination are less than the actual amount necessary to do so, the Company may have insufficient funds available to operate the business prior to the Initial Business Combination. Moreover, the Company may need to obtain additional financing either to complete the Initial Business Combination or to redeem a significant number of our public shares upon completion of the Initial Business Combination, in which case the Company may issue additional securities or incur debt in connection with such Initial Business Combination. If the Company is unable to complete the Business Combination because it does not have sufficient funds available, the Company will be forced to cease operations and liquidate the Trust Account.

In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 205-40, Presentation of Financial Statements—Going Concern, the Company has until February 23, 2023, to consummate an initial business combination. It is uncertain that the Company will be able to consummate an initial business combination by this time. If an initial business combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Additionally, the Company may not have sufficient liquidity to fund the working capital needs of the Company through one year from the issuance of these financial statements. Management has determined that the liquidity condition and mandatory liquidation, should an initial business combination not occur, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after February 2, 2023. The Company’s sponsor, officers and directors may, but are not obligated to, loan the Company funds from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs.

Related Party Transactions

Please refer to Note 6, Related Party Transactions, in “Part 1. Financial Information – Item 1. Financial Statements” for a discussion of our related party transactions.

Critical Accounting Policies and Estimates

Our management makes a number of significant estimates, assumptions and judgments in the preparation of our financial statements. See “Note 2—Summary of Significant Account Policies” in our 2021 Form 10-K, for a discussion of the estimates and judgments necessary in our accounting for common stock subject to possible redemption, and net income per common share. Any new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements have been included in the notes to our condensed financial statements contained in this Quarterly Report on Form 10-Q. The application of our critical accounting policies may require management to make judgments and estimates about the amounts reflected in the condensed financial statements. Management uses historical experience and all available information to make these estimates and judgments. Different amounts could be reported using different assumptions and estimates.

Recent Accounting Pronouncements

Please refer to Note 2, Summary of Significant Accounting Policies, in “Part 1. Financial Information – Item 1. Financial Statements” for a discussion of recent accounting pronouncements and their anticipated effect on our business.

Effects of COVID-19 on Our Business

Management is continuing 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 search for a target company, the specific impacts are 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.

JOBS Act

On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” under the JOBS Act and are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We elected to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

As an “emerging growth company”, we are not required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Not required for smaller reporting companies.

Item 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended September 30, 2022, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, and in light of the material weakness identified related to accounting for complex financial instruments, as described below, our principal executive officer and principal financial and accounting officer has concluded that during the period covered by this report, our disclosure controls and procedures were not effective as of September 30, 2022.

The Company’s management concluded that our control around the interpretation and accounting for certain complex features of the Class A common stock subject to redemption, the forward purchase agreement, the over allotment option, and the warrants issued by the Company was not effectively designed or maintained. This material weakness resulted in a material error in our accounting for these complex financial instruments and restatements of each of the Company’s interim financial statements on Form 10-Q/A during the year ended December 31, 2021.

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Remediation Plan

After identifying the material weakness, we have commenced our remediation efforts by taking the following steps:

•

We have expanded and improved our review process for complex securities and related accounting standards.

•

We have increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications.

•

We have also retained the services of a valuation expert to assist in valuation analysis of the Warrants on a quarterly basis.

•

We are establishing additional monitoring and oversight controls designed to ensure the accuracy and completeness of our financial statements and related disclosures.

The process of designing and implementing an effective financial reporting system is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend resources to maintain a financial reporting system that is adequate to satisfy our reporting obligations. As we continue to evaluate and take actions to improve our internal control over financial reporting, we may determine to take additional actions to address control deficiencies or determine to modify certain of the remediation measures described above. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to remediate the material weaknesses we have identified or avoid potential future material weaknesses.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended September 30, 2022 covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1.

Legal Proceedings

None.

Item 1A.

Risk Factors.

As of the date of this Quarterly Report on Form 10-Q, except for the below, there have been no material changes to the risk factors disclosed in our annual report on Form 10-K filed with the SEC on March 30, 2022. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.

If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.

If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including restrictions on the nature of our investments and restrictions on the issuance of securities, each of which may make it difficult for us to complete our initial business combination. In addition, we may have imposed upon us burdensome requirements, including registration as an investment company, adoption of a specific form of corporate structure and reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations.

On March 30, 2022, the SEC issued proposed rules relating to, among other matters, the extent to which blank check companies like our company could become subject to regulation under the Investment Company Act. The SEC’s proposed rule under the Investment Company Act would provide a safe harbor from the definition of “investment company” under Section 3(a)(1)(A) of the Investment Company Act, provided that the company satisfies certain conditions that limit a company’s duration, asset composition, business purpose and activities. The duration component of the proposed safe harbor rule would require a company like our company to file a report on Form 8-K with the SEC announcing that it has entered into an agreement with the target company (or companies) to engage in an initial business combination no later than 18 months after the effective date of the registration statement for the initial public offering. The company would then be required to complete its initial business combination no later than 24 months after the effective date of its registration statement for its initial public offering.

If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to consummate our initial business combination.

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations.

We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application also may change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business and results of operations.

On March 30, 2022, the SEC issued proposed rules relating to, among other items, enhancing disclosures in business combination transactions involving SPACs and private operating companies; amending the financial statement requirements applicable to transactions involving shell companies; effectively limiting the use of projections in SEC filings in connection with proposed business combination transactions; increasing the potential liability of certain participants in proposed business combination transactions; and the extent to which SPACs could become subject to regulation under the Investment Company Act of 1940. These rules, if adopted, whether in the form proposed or in revised form, may materially adversely affect our ability to negotiate and complete our initial business combination and may increase the costs and time related thereto.

The Excise Tax included in the Inflation Reduction Act of 2022 may decrease the value of our securities following our initial business combination, hinder our ability to consummate an initial business combination, and decrease the amount of funds available for distribution in connection with a liquidation.

On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (“Inflation Reduction Act”), which, among other things, imposes a 1% excise tax on the fair market value of stock repurchased by a domestic corporation beginning in 2023, with certain exceptions (the “Excise Tax”). While not free from doubt, it is possible that the Excise Tax will apply to any redemptions of our common stock after December 31, 2022, including redemptions in connection with an initial business combination, unless an exemption is available. Issuances of securities in connection with any PIPE transaction at the time of our initial business combination can reduce the amount of the Excise Tax in connection with redemptions at such time, but the number of securities redeemed may exceed the number of securities issued in any such PIPE transaction, and the amount of the Excise Tax could be substantial. Consequently, the value of your investment in our securities may decrease as a result of the Excise Tax. In addition, the Excise Tax may make a transaction with us less appealing to potential business combination targets, and thus, potentially hinder our ability to enter into and consummate an initial business combination, particularly an initial business combination in which substantial PIPE issuances are not contemplated. Further, the application of the Excise Tax in the event of a liquidation is uncertain, and the proceeds held in the trust account could be subject to the Excise Tax, in which case the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.

Defaults Upon Senior Securities

None.

Item 4.

Mine Safety Disclosures

Not applicable.

Item 5.

Other Information

None.

Item 6.

Exhibits.


Exhibit Number		Description

31.1*		Certification of Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*		Inline XBRL Instance Document

101.SCH*		Inline XBRL Taxonomy Extension Schema Document

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104*		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

*	Filed herewith.

**	Furnished.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	H.S. senior Bad

Large accelerated filer

Accelerated filer

Non-accelerated
filer

Smaller reporting company

Emerging growth company