| Significant Accounting Policies | Note
2 — Significant Accounting Policies Basis
of Presentation The
accompanying unaudited 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 in accordance with the instructions to Form
10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (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 statement of the financial position, operating results and cash flows for the periods presented. The
interim results for the period from February 18, 2021 (inception) to September 30, 2021 are not necessarily indicative of the results
to be expected for the year ending December 31, 2021 or for any future interim periods. 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 condensed financial statements with another public
company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition
period difficult or impossible because of the potential differences in accounting standards used. Use
of Estimates The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of expenses during the reporting period. Actual results could differ 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, 2021. Fair
Value of Financial Instruments FASB
ASC Topic 820, “Fair Value Measurement”, defines fair value as the amount that would be received to sell an asset or paid
to transfer a liability, in an orderly transaction between market participants. Fair value measurements are classified on a three-tier
hierarchy as follows:
● 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
many cases, a valuation technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy described
above. The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy. The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under the ASC Topic 820 approximates
the carrying amounts represented in the balance sheet, primarily due to its short-term nature. Derivative
Financial Instruments The
Company accounts for derivative financial instruments in accordance with ASC Topic 815, “Derivatives and Hedging”. For derivative
financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value upon issuance
and remeasured at each reporting date, with changes in the fair value reported in the statements of operations. The classification of
derivative financial instruments is evaluated at the end of each reporting period. Warrants The
Company accounts for the redeemable warrants to public investors (the “Public Warrants”) and Private Placement Warrants as
liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance of
ASC Topic 480 and ASC Topic 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC
480, meet the definition of a liability pursuant to ASC Topic 480, and whether the warrants meet all of the requirements for equity classification
under ASC Topic 815, including whether the warrants are indexed to the Company’s own common shares and whether the warrant holders
could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions
for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance
and as of each subsequent quarterly period end date while the warrants are outstanding. Because the Company does not control the occurrence
of events, such as a tender offer or exchange, that may trigger cash settlement of the warrants where not all of the shareholders also
receive cash, the warrants do not meet the criteria for equity treatment thereunder, as such, the warrants must be recorded as derivative
liability. 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 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. 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. Common
stock subject to mandatory redemption (if any) are classified as a liability instrument and 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 and subsequently
measured at redemption value. At all other times, shares of common stock are classified as stockholders’ equity (deficit). The
Company’s shares of 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 uncertain future events. Accordingly, 34,089,611 Class A common stock subject to possible
redemption are presented at redemption value as temporary equity, outside of the stockholders’ equity (deficit) section of the
Company’s balance sheet. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying
value of redeemable common stock to equal the redemption value at the end of each reporting period. Such changes are reflected in additional
paid-in capital, or in the absence of additional paid-in capital, in accumulated deficit. For the period from February 18, 2021 (inception)
through September 30, 2021, the Company recorded an accretion of $28,306,480, $3,710,222 of which was recorded in additional paid
in capital and $24,596,258 was recorded in accumulated deficit. Offering
Costs Associated with IPO The
Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A—“Expenses
of Offering”. Offering costs consist principally of professional and registration fees incurred through the balance sheet date
that are related to the IPO. Offering costs are charged against the carrying value of Class A Common Stock or the statement of operations
based on the relative value of the Class A Common Stock and the Public Warrants to the proceeds received from the Units sold upon the
completion of the IPO. Accordingly, on September 30, 2021, offering costs totaling $18,860,728 were recognized, $561,610 of
which was allocated to the Public Warrants and immediately expensed, and $18,299,118 were allocated to Class A Common Stock reducing
the initial carrying amount of such shares. Net
Income (Loss) Per Common Stock The
Company complies with accounting and disclosure requirements of ASC Topic 260, “Earnings Per Share”. The condensed statements
of operations include a presentation of income (loss) per Class A redeemable public stock and income (loss) per non-redeemable stock
following the two-class method of income per share. In order to determine the net income (loss) attributable to both the Class A redeemable
stock and non-redeemable stock, the Company first considered the total income (loss) allocable to both sets of stock. This is calculated
using the total net income (loss) less any dividends paid. For purposes of calculating net income (loss) per share, any remeasurement
of the Class A common stock subject to possible redemption was considered to be dividends paid to the public stockholders. Subsequent
to calculating the total income (loss) allocable to both sets of stock, the Company split the amount to be allocated using a ratio of
80% for the Class A public stock and 20% for the non-redeemable stock for the three months ended September 30, 2021 and 65% for the Class
A public stock and 35% for the non-redeemable stock for the period from February 18, 2021 (inception) to September 30, 2021, reflective
of the respective participation rights. The
earnings per share presented in the condensed statements of operations is based on the following:
For the period from
For the three months February 18,
September 30, September 30,
2021 2021
Net income (loss) $ 1,481,534 $ (1,568,813 )
Accretion of temporary equity to redemption value (5,092 ) (24,596,258 )
Net income (loss) including accretion of temporary equity to redemption
value $ 1,476,442 $ (26,165,071 )
For the three months For the period from
September
30, September
Class A Class B Class A Class B
Basic and diluted net income (loss) per share:
Numerator:
Allocation of net income (loss) including accretion of temporary
equity $ 1,181,154 $ 295,286 $ (17,580,008 ) $ (8,585,063 )
Accretion of temporary equity to redemption value 5,092 - 24,596,258 -
Net income (loss) $ 1,186,246 $ 295,286 $ 7,016,250 $ (8,585,063 )
Denominator:
Weighted-average shares outstanding 34,089,611 8,522,403 16,363,013 7,990,753
Basic and diluted net income (loss) per share $ 0.03 $ 0.03 $ 0.43 $ (1.07 ) In
connection with the underwriters’ partial exercise of the over-allotment option on June 15, 2021, 1,022,403 Founder Shares
were no longer subject to forfeiture. These shares were excluded from the calculation of weighted average shares outstanding until they
were no longer subject to forfeiture. At
September 30, 2021, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted
into common stock and then share in earnings. As a result, diluted income (loss) per share is the same as basic income (loss) per share
for the periods presented. Income
Taxes The
Company accounts for income taxes under ASC Topic 740, “Income Taxes”. ASC Topic 740 requires the recognition of deferred
tax assets and liabilities for both the expected impact of differences between the financial statement 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 Topic 740 additionally requires
a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC Topic 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 Topic 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, 2021. The Company is currently not aware of any issues
under review that could result in significant payments, accruals or material deviation from its position. The
Company has identified the United States as its only “major” tax jurisdiction. The
Company is subject to income tax examinations by major taxing authorities since inception. These examinations may include questioning
the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws.
The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next
twelve months. The
provision for income taxes was deemed to be immaterial for the period from February 18, 2021 (inception) through September 30, 2021. Recent
Accounting Pronouncements Management
does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect
on the Company’s condensed financial statements. |
