| 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 (“US GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article
10 of Regulation S-X of the U.S. Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures
normally included in unaudited condensed financial statements prepared in accordance with US 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 periods presented. The accompanying
unaudited condensed financial statements should be read in conjunction with the Company’s Form 10-K for the period ended December
31, 2021 as filed with the SEC on April 15, 2022, which contains the audited financial statements and notes thereto. The interim results
for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31,
2022 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 approval of any golden parachute payments not previously approved. Further,
Section102(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 unaudited 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 the unaudited condensed financial statements in conformity with US GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements. Making estimates requires management to exercise significant judgement. It is at least reasonably possible that the estimate
of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management
considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, 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 held no cash equivalents as of March 31, 2022. The Company held U.S. Treasury Bills with a maturity of less than three months
in the amount of $205,274,080 which it considers as cash equivalents as of December 31, 2021. Cash
and Securities Held in Trust Account As of March
31, 2022, investment in the Company’s Trust Account consisted of $28,489 cash and $205,316,512 in U.S. Treasury Securities.
As of December 31, 2021, investment in the Company’s Trust Account consisted of $13,115 cash and $205,274,080 in U.S.
Treasury Securities. All of the U.S. Treasury Securities held at March 31, 2022 which were purchased on March 10, 2022 will mature on June
21, 2022. The Company earned interest of $57,806 for the three months ended March 31, 2022. The Company did not withdraw any of the interest
income from the Trust Account to pay its tax obligations. The Company
classifies its United States Treasury securities as held-to-maturity in accordance with FASB ASC Topic 320 “Investments - Debt and
Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until
maturity. Held-to-maturity treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums
or discounts. A decline
in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment that
reduces the carrying cost to such securities’ fair value. The impairment is charged to earnings and a new cost basis for the security
is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability and intent
to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable
outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and the
duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition
in the geographic area or industry in which the investee operates. Premiums
and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest
method. Such amortization and accretion are included in the “interest income” line item in the statements of operations. Interest
income is recognized when earned. The carrying value, excluding gross unrealized holding gains, and fair value of held to maturity securities
at March 31, 2022 and December 31, 2021 are as follows:
Carrying Gross Gross Fair Value
U.S. Treasury Securities $ 205,316,512 $ — $ (34,342 ) $ 205,282,170
Cash 28,489 — — 28,489
$ 205,345,001 $ — $ (34,342 ) $ 205,310,659
Carrying Gross Gross Fair Value
U.S. Treasury Securities $ 205,274,080 $ 920 $ — $ 205,275,000
Cash 13,115 — — 13,115
$ 205,287,195 $ 920 $ — $ 205,288,115 Common
Stock Subject to Possible Redemption All of the 20,125,000 public shares
contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation,
if there is a stockholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to
the Company’s amended and restated certificate of incorporation. In accordance with the SEC and its guidance on redeemable equity
instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of a company require common
stock subject to redemption 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 ASC 480. Accordingly, at March 31,
2022 and December 31, 2021, all shares of common stock subject to possible redemption are presented as temporary equity, outside of the
stockholders’ deficit section of the Company’s financial statements. The Company
recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the
redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected
by charges against additional paid in capital and accumulated deficit. The Class
A common stock subject to possible redemption reflected on the balance sheets as of March 31, 2022 and December 31, 2021 is reconciled
in the following table:
Gross Proceeds from IPO $ 210,250,000
Proceeds allocated to Public Warrants (4,628,750 )
Class A common stock issuance costs (13,147,623 )
Accretion of carrying value to redemption value 21,801,373
Class A common stock subject to possible redemption $ 205,275,000 Offering
Costs associated with the Initial Public Offering The Company
complies with the requirements of the ASC 340-10-S99-1. Offering costs consisted of legal, accounting, underwriting fees and other costs
incurred through the IPO that were directly related to the IPO. Offering costs amounted to $13,436,005 and were charged to temporary
equity upon the completion of the IPO. Fair
Value of Financial Instruments The Company
applies ASC Topic 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring fair value
and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that
would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly
transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an
entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs
reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained
from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data
and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to
be developed based on the best information available in the circumstances. The carrying
amounts reflected in the balance sheets for current assets and current liabilities approximate fair value due to their short-term nature. Level 1
— Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement
are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2
— Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying
terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted
intervals. Level 3
— Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little
or no market data exists for the assets or liabilities. Derivative
Financial Instruments The Company
evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives
in accordance with ASC Topic 815, “Derivatives and Hedging”. Derivative instruments are initially recorded at fair value on
the grant date and re-valued at each reporting date, with changes in the fair value reported in the statements of operations. Derivative
assets and liabilities are classified in the balance sheets as current or non-current based on whether or not net-cash settlement or conversion
of the instrument could be required within 12 months of the balance sheet date. Income
Taxes The Company
accounts for income taxes under FASB ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of
deferred tax assets and liabilities for both the expected impact of differences between the 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. 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,
if any, as income tax expense. There were no unrecognized tax benefits or uncertain tax positions as of March 31, 2022 and December 31,
2021, and, as such, no amounts accrued for interest and penalties as of March 31, 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. Warrants 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 in 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 common
stock 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. 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 of 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. The Company accounts for its outstanding warrants as equity-classified instruments. 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 Depository Insurance Coverage of $250,000. At March 31, 2022 and December 31, 2021, the Company
had not experienced losses on this account and management believes the Company was not exposed to significant risks on such account. Net Loss
Per Common Share The Company
complies with the accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net loss per share of
common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period,
excluding common stock subject to forfeiture. At March 31, 2022 and December 31, 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 the earnings of the Company.
As a result, diluted net loss per share of common stock is the same as basic net loss per share of common stock for the period presented.
For the three months ended For the period from
Class A Class B Class A Class B
Basic and diluted net loss per share:
Numerator:
Allocation of net loss $ (182,027 ) $ (45,507 ) $ - $ (694 )
Denominator:
Weighted-average shares outstanding including common stock subject to redemption 20,125,000 5,031,250 - 5,031,250
Basic and diluted net loss per share $ (0.01 ) $ (0.01 ) $ - $ (0.00 ) Recent
Accounting Pronouncements The Company’s
management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material
effect on the accompanying financial statements. |
