| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation: The accompanying unaudited condensed interim financial
statements of the Company are presented in U.S. dollars and in conformity with accounting principles generally accepted in the United
States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”)
and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a
fair presentation of the financial position as of June 30, 2022 and December 31, 2021, and the results of operations and cash flows for
the periods presented. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP
have been omitted pursuant to such rules and regulations. Interim results are not necessarily indicative of results for a full year. The accompanying unaudited condensed interim financial
statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2021. Emerging Growth Company: Section 102(b)(1) of the JOBS Act exempts emerging
growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those
that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the
Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can
elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any
such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that
when an accounting standard is issued or revised and it has different application dates for public or private companies, the Company,
as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company
nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential
differences in accounting standards used. Net Income (Loss) Per Common Share: Net income (loss) per common share is computed
by dividing net income (loss) applicable to common stockholders by the weighted average number of common shares outstanding during
the period as calculated using the treasury stock method. The Company has not considered the effect of the warrants sold in the
Public Offering and the Private Placement to purchase an aggregate of 15,558,333 shares of Class A common stock in the calculation
of diluted income (loss) per share, since their inclusion would be anti-dilutive under the treasury stock method and are dependent
on future events. As a result, diluted income (loss) per common share is the same as basic loss per common share for the period. The Company complies with the accounting and disclosure
requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has two classes of stock, which are referred to as Class
A common stock and Class B common stock. Income and losses are shared pro rata between the two classes of stock. Net income (loss) per
common share is calculated by dividing the net income (loss) by the weighted average number of common shares outstanding during the respective
period. The following table reflects the earnings per share
after allocating income between the shares based on outstanding shares.
For the three months ended For the three months ended
Class A Class B Class A Class B
Numerator:
Allocation of net income (loss) $ 2,498,000 $ 625,000 $ (10,961,000 ) $ (2,740,000 )
Denominator:
Weighted average shares outstanding 34,500,000 8,625,000 34,500,000 8,625,000
Basic and diluted net income (loss) per share $ 0.07 $ 0.07 $ (0.32 ) $ (0.32 )
For the six months ended For the six months ended
Class A Class B Class A Class B
Numerator:
Allocation of net income (loss) $ 7,476,000 $ 1,869,000 $ (12,634,000 ) $ (3,502,000 )
Denominator:
Weighted average shares outstanding 34,500,000 8,625,000 30,688,000 8,506,000
Basic and diluted net income (loss) per share $ 0.22 $ 0.22 $ (0.41 ) $ (0.41 ) Concentration of Credit Risk: Financial instruments that potentially subject the
Company to concentrations of credit risk consist of cash accounts in a financial institution which, at times, may exceed the Federal Deposit
Insurance Corporation maximum coverage of $250,000. The Company has not experienced losses on these accounts and management believes the
Company is not exposed to significant risks on such accounts. Fair value of financial Instruments: The fair value of the Company’s assets and
liabilities (excluding the warrant liability), which qualify as financial instruments under FASB Accounting Standards Codification (“ASC”)
820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the condensed financial statements
primarily due to their short-term nature. The fair value of the Company’s assets and
liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates
the carrying amounts represented in the balance sheets primarily due to their short-term nature, except for derivative warrant liabilities
(see Note 6). Fair value is defined as the price that would be received for sale
of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes
a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority
to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable
inputs (Level 3 measurements). These tiers include:
● Level 1, defined as observable inputs such as quoted prices
(unadjusted) for identical instruments in active markets;
● Level 2, defined as inputs other than quoted prices in active
markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices
for identical or similar instruments in markets that are not active; and
● Level 3, defined as unobservable inputs in which little or no
market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques
in which one or more significant inputs or significant value drivers are unobservable. In some circumstances, the inputs used to measure fair value might
be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its
entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. Use of Estimates: The preparation of condensed financial statements
in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed financial statements and the
reported amounts of expenses during the reporting period. Making estimates requires management to exercise
significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances
that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near
term due to one or more future confirming events. One of the more significant estimates included in these financial statements is the
determination of the fair value of the warrant liability. Such estimates may be subject to change as more current information becomes
available and accordingly the actual results could differ significantly from those estimates. Offering Costs: The Company complies with the requirements of the
FASB ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (SAB) Topic 5A — “Expenses of Offering.” Costs incurred in connection
with preparation for the Public Offering were approximately $19,689,000, including the underwriters discount of $18,975,000. Such costs
were allocated among the equity and warrant liability components based on their fair values and approximately $19,050,000 of such costs
have been charged to temporary equity and the remainder, approximately $639,000, have been charged to the condensed statement of operations
upon completion of the Public Offering in January 2021. Income Taxes: The Company follows the asset and liability method
of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for
the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances
are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company’s currently taxable income consists
of interest income on the Trust Account net of taxes. The Company’s general and administrative costs are generally considered start-up
costs and are not currently deductible. During the three and six months ended June 30, 2022, and 2021 the Company recorded income tax
expense of approximately $-0- in all periods because the cost of deductible franchise taxes and costs related to a terminated transaction
exceeded the interest income earned on the Trust Account so there was no income for tax purposes. The Company’s effective tax rate
for the three and six months ended June 30, 2022 and 2021 was approximately -0-% in all periods which differs from the expected income
tax rate due to the start-up costs (discussed above) which are not currently deductible and certain business combination and warrant costs
which may not be deductible. At June 30, 2022 and December 31, 2021, the Company has a deferred tax asset of approximately $600,000 and
$400,000, respectively, primarily related to start-up costs. Management has determined that a full valuation allowance of the deferred
tax asset is appropriate at this time. FASB ASC 740 prescribes a recognition threshold
and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in
a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing
authorities. There were no unrecognized tax benefits as of June 30, 2022 or December 31, 2021. The Company recognizes accrued interest
and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties
at June 30, 2022 and December 31, 2021. The Company is currently not aware of any issues under review that could result in significant
payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities
since inception. Redeemable Common Stock: As discussed in Note 4, all of the 34,500,000 public
shares sold as part of Units in the Public Offering contain a redemption feature which allows for the redemption of public shares if the
Company holds a stockholder vote or there is a tender offer for shares in connection with a Business Combination. In accordance with FASB
ASC 480, redemption provisions not solely within the control of the Company require the security to be classified outside of permanent
equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are
excluded from the provisions of FASB ASC 480. Although the Company did not specify a maximum redemption threshold, its charter provides
that in no event will it redeem its public shares in an amount that would cause its net tangible assets to be less than $5,000,001 upon
the closing of a Business Combination. However, because all of the shares of Class A common stock are redeemable, all of the shares are
recorded as Class A common stock subject to redemption on the enclosed unaudited condensed balance sheets. The Company recognizes changes in redemption value
immediately as they occur and adjusts the carrying value of the securities at the end of each reporting period. Increases or decreases
in the carrying amount of redeemable common stock are affected by adjustments to additional paid-in capital. Accordingly, at June 30,
2022 and December 31, 2021, 34,500,000 of the 34,500,000 public shares were classified outside of permanent equity. Class A common stock
subject to redemption consist of:
Gross proceeds of Public Offering $ 345,000,000
Less: Proceeds allocated to Public Warrants (13,973,000 )
Offering costs (19,050,000 )
Plus: Accretion of carrying value to redemption value 33,023,000
Class A common shares subject to redemption $ 345,000,000 Warrant Liability The Company accounts for warrants as either equity-classified
or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance
FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC
815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition
of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including
whether the warrants are indexed to the Company’s own shares, among other conditions for equity classification. This assessment,
which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period
end date while the warrants are outstanding. For issued or modified warrants that meet all of
the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time
of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to
be recorded as a liability at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the
estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. Costs associated with
issuing the warrants accounted for as liabilities are charged to operations when the warrants are issued. The fair value of the warrants
was estimated in the initial periods using a Monte Carlo simulation approach for the public and private warrants and in the current period
based upon, or derived from, the public trading warrants in an active, open market. Recent Accounting Pronouncements: In August 2020, the FASB issued ASU 2020-06, Debt
— Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own
Equity Management does not believe that any other recently
issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial
statements. Subsequent Events: Management has evaluated subsequent events and transactions
that occurred after the unaudited condensed balance sheet date and up to the date that the financial statements were issued and has concluded
that all such events that would require adjustment or disclosure have been recognized or disclosed. |
