| Significant Accounting Policies | Note 2 - Significant Accounting Policies Basis of Presentation The accompanying unaudited
condensed financial statements of the Company are presented in U.S. dollars in conformity with accounting principles generally accepted
in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form
10-Q and Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in
accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting.
Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results
of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments,
consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and
cash flows for the period presented. The accompanying unaudited
condensed financial statements should be read in conjunction with the Company’s annual report on Form 10-K for the year ended December
31, 2021 and filed with the SEC on April 15, 2022. The interim results for the three and nine months ended September 30, 2022 are not
necessarily indicative of the results to be expected for the year ending December 31, 2022 or any future period. Reclassifications Certain reclassifications have been
made to the historical financial statements to conform to the current year’s presentation. Such reclassifications have no effect
on net income (loss), assets, liabilities and equity, as previously reported. Deferred liabilities as of December 31, 2021 consist of
deferred legal fees that were previously carried in accounts payable and accrued expenses. These were reclassified to conform to the
current year’s presentation. Emerging Growth Company Status The Company is an “emerging
growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012,
(the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable
to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the
auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation
in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive
compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1)
of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until
private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class
of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS
Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging
growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition
period which means that when a standard is issued or revised and it has different application dates for public or private companies,
the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised
standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging
growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because
of the potential differences in accounting standards used. Use of Estimates The preparation of the accompanying
unaudited condensed financial statements in conformity with 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 financial
statements and the reported amounts of revenues and expenses during the reporting periods. 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 accounting estimates included
in these unaudited condensed financial statements is the determination of the fair value of the warrant liabilities. Such estimates may
be subject to change as more current information becomes available and accordingly, the actual results could differ significantly from
those estimates. Cash and Cash Equivalents The Company considers all
short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have
any cash equivalents as of September 30, 2022 and December 31, 2021. Investments Held in the Trust Account At September 30, 2022 and
December 31, 2021, the assets held in the Trust Account were money market funds. The money market funds are presented on the condensed
balance sheets at fair value at the end of the reporting period. Gains and losses resulting from the change in fair value of the money
market funds are included in interest earned on the Trust Account in the accompanying condensed statements of operations.
Concentration of Credit Risk Financial instruments that
potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times,
may exceed the Federal Deposit Insurance Corporation coverage limit of $250,000. At September 30, 2022 and December 31, 2021, the
Company had not experienced losses on this account and management believes the Company is not exposed to significant risk on such account. 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 Topic 480 “Distinguishing Liabilities
from Equity” (“ASC 480”). Shares of Class A common stock subject to mandatory redemption (if any) are classified as
a liability instrument and are measured at fair value. Conditionally redeemable common stock (including common stock that feature redemption
rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within
the Company’s control) are classified as temporary equity. 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 the occurrence of uncertain future events. Accordingly, as of September 30, 2022 and December 31, 2021, 35,000,000 shares
of Class A common stock subject to possible redemption were presented at redemption value as temporary equity, outside of the stockholders’
deficit section of the Company’s condensed balance sheets. Under ASC 480-10-S99, the
Company has elected to recognize changes in the redemption value immediately as they occur and adjust the carrying value of the security
to equal the redemption value at the end of the reporting period. This method would view the end of the reporting period as if it were
also the redemption date of the security. Effective with the closing of the IPO, the Company recognized the accretion from initial book
value to redemption amount, which resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit. Net Income per Share of Common Stock The Company complies with
the accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has two classes of common
stock, which are referred to as Class A common stock and Class B common stock. Earnings and losses are shared pro rata between the two
classes of stock. This presentation assumes a Business Combination as the most likely outcome. The 13,000,000 shares of common
stock underlying the outstanding warrants of the Company were excluded from diluted earnings per share for the three and nine months
ended September 30, 2022 and 2021 because the warrants are contingently exercisable, and the contingencies have not yet been met. As
a result, diluted net income per share of common stock is the same as basic net income per share of common stock for the periods presented.
The table below presents a reconciliation of the numerator and denominator used to compute basic and diluted net income per share for
each class of common stock:
For the three months For the three months
Class A Class B Class A Class B
Basic and diluted net income per share:
Numerator:
Allocation of net income $ 5,745,481 $ 1,436,370 $ 3,438,638 $ 859,660
Denominator:
Weighted-average shares outstanding 35,000,000 8,750,000 35,000,000 8,750,000
Basic and diluted net income per share $ 0.16 $ 0.16 $ 0.10 $ 0.10
For the nine months For the nine months
Class A Class B Class A Class B
Basic and diluted net income per share:
Numerator:
Allocation of net income $ 10,386,385 $ 2,596,596 $ 4,584,618 $ 1,549,862
Denominator:
Weighted-average shares outstanding 35,000,000 8,750,000 25,897,436 8,754,808
Basic and diluted net income per share $ 0.30 $ 0.30 $ 0.18 $ 0.18 Offering Costs The Company complies with
the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (SAB) Topic 5A- “Expense of Offering”. Offering costs
consist of legal, accounting, underwriting fees and other costs that are directly related to the IPO. Offering costs are allocated to
the separable financial instruments issued in the IPO based on a relative fair value basis, compared to total proceeds received. Offering
costs associated with warrant liabilities are expensed as incurred, presented as non-operating expenses in the condensed statements of
operations. Offering costs associated with the shares of Class A common stock were charged against the carrying value of the shares of
Class A common stock upon the completion of the IPO. The Company classifies deferred underwriting commissions as noncurrent liabilities
as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. Offering
costs amounting to $19,691,331 (consisting of $7,000,000 in underwriting commissions, $12,250,000 of deferred underwriters’
fee and $441,331 of other offering costs) were incurred, of which $754,694 was allocated to warrants and expensed and $18,936,637
was charged to temporary equity.
Warrant Liabilities The Company does not use
derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial
instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify
as embedded derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments
should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. The Company accounts for its warrants in accordance with the guidance contained in ASC 815-40 under which the warrants do not meet the
criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the warrants as liabilities at
their fair value and adjusts the warrants to fair value at each reporting period. This liability is subject to re-measurement at each
balance sheet date until exercised, and any change in fair value is recognized in the Company’s unaudited condensed statements of
operations. The Private Placement Warrants and the Public Warrants for periods where no observable traded price was available are valued
using the Black-Scholes Option Pricing Method. For periods subsequent to the detachment of the Public Warrants from the Units, the Public
Warrant quoted market price was used as the fair value as of each relevant date. Fair Value of Financial Instruments The fair value of the Company’s
assets and liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair Value Measurements and Disclosures,”
approximates the carrying amounts represented in the condensed balance sheets, primarily due to their short-term nature, except the warrant
liabilities (see Note 9). I ncome Taxes ASC 740-270-25-2 requires
that an annual effective tax rate be determined and such annual effective rate applied to year to date income in interim periods under
ASC 740-270-30-5. 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 2.6% and 0.0% for the three months ended September
30, 2022 and 2021, respectively, and 1.6% and 0.0% for the nine months ended September 30, 2022 and 2021, respectively. The effective
tax rate differs from the statutory tax rate of 21% for the three and nine months ended September 30, 2022 and 2021, due to changes in
fair value in warrant liability and the valuation allowance on the deferred tax assets. ASC 740 also clarifies the
accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold
and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax
return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.
ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and
transition. The Company recognizes accrued
interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts
accrued for interest and penalties as of 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. Inflation Reduction Act of 2022 On August 16, 2022, the
Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things,
a new U.S. federal 1% excise tax on certain repurchases (including redemptions) of stock by publicly traded domestic (i.e., U.S.) corporations
and certain domestic subsidiaries of publicly traded foreign corporations. The excise tax is imposed on the repurchasing corporation
itself, not its stockholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value
of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations
are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the
same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”)
has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.
The IR Act applies only to repurchases that occur after December 31, 2022. Any redemption or other
repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject
to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with a Business Combination,
extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases
in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and
amount of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued not in connection
with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and
other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the redeeming holder,
the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available
on hand to complete a Business Combination and in the Company’s ability to complete a Business Combination. At this time, it has been
determined that none of the IR Act tax provisions have an impact to the Company's fiscal 2022 tax provision. The Company will continue
to monitor for updates to the Company's business along with guidance issued with respect to the IR Act to determine whether any adjustments
are needed to the Company's tax provision in future periods. Recent Accounting Standards In August 2020, the Financial
Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt - Debt with Conversion
and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU
2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation
of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance
pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures
for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends
the diluted earnings per share guidance, including the requirement to use the converted method for all convertible instruments. As a
smaller reporting company, ASU 2020-06 is effective beginning on January 1, 2024 for fiscal years beginning after December 15, 2023 and
should be applied on a full or modified retrospective basis, with early adoption permitted on January 1, 2021. The Company is currently
assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations and cash flows. 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’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 Company’s unaudited condensed financial statements. |
