かぶたん ロゴ
英語
エドガーで原本を確認する
false Q3 0001817640 --12-31 P10D 1.00 P20D P30D P20D P30D P3D P20D 0.05 1.00 0.05 P5Y4M2D P5Y11M23D 0001817640 2021-01-01 2021-09-30 0001817640 us-gaap:CommonStockMember 2021-01-01 2021-09-30 0001817640 us-gaap:RightsMember 2021-01-01 2021-09-30 0001817640 us-gaap:WarrantMember 2021-01-01 2021-09-30 xbrli:shares 0001817640 2021-12-31 iso4217:USD 0001817640 2021-09-30 0001817640 2020-12-31 iso4217:USD xbrli:shares 0001817640 2021-07-01 2021-09-30 0001817640 2020-06-11 2021-09-30 0001817640 us-gaap:CommonStockMember 2020-12-31 0001817640 us-gaap:RetainedEarningsMember 2020-12-31 0001817640 us-gaap:RetainedEarningsMember 2021-01-01 2021-03-31 0001817640 2021-01-01 2021-03-31 0001817640 us-gaap:CommonStockMember 2021-03-31 0001817640 us-gaap:RetainedEarningsMember 2021-03-31 0001817640 2021-03-31 0001817640 us-gaap:RetainedEarningsMember 2021-04-01 2021-06-30 0001817640 2021-04-01 2021-06-30 0001817640 us-gaap:CommonStockMember 2021-06-30 0001817640 us-gaap:RetainedEarningsMember 2021-06-30 0001817640 2021-06-30 0001817640 us-gaap:CommonStockMember 2021-07-01 2021-09-30 0001817640 us-gaap:AdditionalPaidInCapitalMember 2021-07-01 2021-09-30 0001817640 us-gaap:RetainedEarningsMember 2021-07-01 2021-09-30 0001817640 us-gaap:CommonStockMember 2021-09-30 0001817640 us-gaap:AdditionalPaidInCapitalMember 2021-09-30 0001817640 us-gaap:RetainedEarningsMember 2021-09-30 0001817640 us-gaap:CommonStockMember 2020-06-11 0001817640 us-gaap:AdditionalPaidInCapitalMember 2020-06-11 0001817640 us-gaap:RetainedEarningsMember 2020-06-11 0001817640 2020-06-11 0001817640 us-gaap:CommonStockMember 2020-06-12 2020-06-30 0001817640 us-gaap:AdditionalPaidInCapitalMember 2020-06-12 2020-06-30 0001817640 2020-06-12 2020-06-30 0001817640 us-gaap:CommonStockMember 2020-06-30 0001817640 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0001817640 2020-06-30 0001817640 us-gaap:CommonStockMember 2020-07-01 2020-09-30 0001817640 us-gaap:AdditionalPaidInCapitalMember 2020-07-01 2020-09-30 0001817640 us-gaap:RetainedEarningsMember 2020-07-01 2020-09-30 0001817640 2020-07-01 2020-09-30 0001817640 us-gaap:CommonStockMember 2020-09-30 0001817640 us-gaap:AdditionalPaidInCapitalMember 2020-09-30 0001817640 2020-09-30 0001817640 brez:ModifiedBlackScholesMember 2021-01-01 2021-09-30 0001817640 brez:IPOIncludingOverAllotmentOptionMember 2020-11-25 2020-11-25 0001817640 2020-11-25 2020-11-25 0001817640 2020-11-25 0001817640 us-gaap:PrivatePlacementMember 2020-11-25 2020-11-25 0001817640 brez:IPOIncludingOverAllotmentOptionMember 2020-11-25 0001817640 us-gaap:PrivatePlacementMember 2020-11-25 0001817640 brez:RepresentativeFounderSharesMember 2020-11-25 2020-11-25 xbrli:pure 0001817640 brez:BreezeSponsorLLCMember us-gaap:SubsequentEventMember 2021-11-22 0001817640 brez:RelatedPartyLoansMember srt:MaximumMember 2021-09-30 0001817640 brez:RelatedPartyLoansMember 2021-09-30 0001817640 srt:RestatementAdjustmentMember 2021-03-31 0001817640 srt:ScenarioPreviouslyReportedMember 2021-03-31 0001817640 srt:RestatementAdjustmentMember 2021-06-30 0001817640 srt:ScenarioPreviouslyReportedMember 2021-06-30 0001817640 brez:RedeemableCommonStockMember srt:ScenarioPreviouslyReportedMember 2021-01-01 2021-03-31 0001817640 brez:RedeemableCommonStockMember srt:RestatementAdjustmentMember 2021-01-01 2021-03-31 0001817640 brez:NonRedeemableCommonStockMember srt:ScenarioPreviouslyReportedMember 2021-01-01 2021-03-31 0001817640 brez:NonRedeemableCommonStockMember srt:RestatementAdjustmentMember 2021-01-01 2021-03-31 0001817640 srt:RestatementAdjustmentMember 2021-01-01 2021-03-31 0001817640 brez:RedeemableCommonStockMember srt:ScenarioPreviouslyReportedMember 2021-04-01 2021-06-30 0001817640 brez:RedeemableCommonStockMember srt:RestatementAdjustmentMember 2021-04-01 2021-06-30 0001817640 brez:NonRedeemableCommonStockMember srt:ScenarioPreviouslyReportedMember 2021-04-01 2021-06-30 0001817640 brez:NonRedeemableCommonStockMember srt:RestatementAdjustmentMember 2021-04-01 2021-06-30 0001817640 srt:RestatementAdjustmentMember 2021-04-01 2021-06-30 0001817640 brez:RedeemableCommonStockMember srt:ScenarioPreviouslyReportedMember 2021-01-01 2021-06-30 0001817640 brez:RedeemableCommonStockMember srt:RestatementAdjustmentMember 2021-01-01 2021-06-30 0001817640 brez:NonRedeemableCommonStockMember srt:ScenarioPreviouslyReportedMember 2021-01-01 2021-06-30 0001817640 brez:NonRedeemableCommonStockMember srt:RestatementAdjustmentMember 2021-01-01 2021-06-30 0001817640 srt:RestatementAdjustmentMember 2021-01-01 2021-06-30 0001817640 2021-01-01 2021-06-30 0001817640 us-gaap:CommonStockMember srt:ScenarioPreviouslyReportedMember 2020-12-31 0001817640 us-gaap:AdditionalPaidInCapitalMember srt:ScenarioPreviouslyReportedMember 2020-12-31 0001817640 us-gaap:RetainedEarningsMember srt:ScenarioPreviouslyReportedMember 2020-12-31 0001817640 srt:ScenarioPreviouslyReportedMember 2020-12-31 0001817640 us-gaap:CommonStockMember srt:ScenarioPreviouslyReportedMember 2021-01-01 2021-03-31 0001817640 us-gaap:AdditionalPaidInCapitalMember srt:ScenarioPreviouslyReportedMember 2021-01-01 2021-03-31 0001817640 srt:ScenarioPreviouslyReportedMember 2021-01-01 2021-03-31 0001817640 us-gaap:RetainedEarningsMember srt:ScenarioPreviouslyReportedMember 2021-01-01 2021-03-31 0001817640 us-gaap:CommonStockMember srt:ScenarioPreviouslyReportedMember 2021-03-31 0001817640 us-gaap:RetainedEarningsMember srt:ScenarioPreviouslyReportedMember 2021-03-31 0001817640 us-gaap:CommonStockMember srt:ScenarioPreviouslyReportedMember 2021-04-01 2021-06-30 0001817640 us-gaap:RetainedEarningsMember srt:ScenarioPreviouslyReportedMember 2021-04-01 2021-06-30 0001817640 srt:ScenarioPreviouslyReportedMember 2021-04-01 2021-06-30 0001817640 us-gaap:CommonStockMember srt:ScenarioPreviouslyReportedMember 2021-06-30 0001817640 us-gaap:RetainedEarningsMember srt:ScenarioPreviouslyReportedMember 2021-06-30 0001817640 us-gaap:CommonStockMember srt:RestatementAdjustmentMember 2020-12-31 0001817640 us-gaap:AdditionalPaidInCapitalMember srt:RestatementAdjustmentMember 2020-12-31 0001817640 us-gaap:RetainedEarningsMember srt:RestatementAdjustmentMember 2020-12-31 0001817640 srt:RestatementAdjustmentMember 2020-12-31 0001817640 us-gaap:CommonStockMember srt:RestatementAdjustmentMember 2021-01-01 2021-03-31 0001817640 us-gaap:AdditionalPaidInCapitalMember srt:RestatementAdjustmentMember 2021-01-01 2021-03-31 0001817640 us-gaap:RetainedEarningsMember srt:RestatementAdjustmentMember 2021-01-01 2021-03-31 0001817640 us-gaap:CommonStockMember srt:RestatementAdjustmentMember 2021-03-31 0001817640 us-gaap:RetainedEarningsMember srt:RestatementAdjustmentMember 2021-03-31 0001817640 us-gaap:CommonStockMember srt:RestatementAdjustmentMember 2021-04-01 2021-06-30 0001817640 us-gaap:RetainedEarningsMember srt:RestatementAdjustmentMember 2021-04-01 2021-06-30 0001817640 us-gaap:CommonStockMember srt:RestatementAdjustmentMember 2021-06-30 0001817640 us-gaap:RetainedEarningsMember srt:RestatementAdjustmentMember 2021-06-30 0001817640 srt:ScenarioPreviouslyReportedMember 2021-01-01 2021-06-30 0001817640 us-gaap:IPOMember 2021-09-30 0001817640 brez:CommonStockSubjectToPossibleRedemptionMember 2021-09-30 0001817640 brez:CommonStockSubjectToPossibleRedemptionMember 2021-01-01 2021-09-30 0001817640 us-gaap:IPOMember 2021-01-01 2021-09-30 0001817640 us-gaap:IPOMember brez:RepresentativeFounderSharesMember 2021-01-01 2021-09-30 0001817640 brez:PublicWarrantsAndPrivatePlacementWarrantsMember 2021-09-30 0001817640 us-gaap:IPOMember 2020-11-25 2020-11-25 0001817640 us-gaap:IPOMember 2020-11-25 0001817640 us-gaap:OverAllotmentOptionMember 2020-11-23 2020-11-23 0001817640 us-gaap:OverAllotmentOptionMember 2020-11-23 0001817640 brez:PublicWarrantsMember 2021-09-30 0001817640 brez:FounderSharesMember brez:BreezeSponsorLLCMember 2020-06-01 2020-06-30 0001817640 brez:FounderSharesMember 2020-11-25 0001817640 srt:MaximumMember brez:BreezeSponsorLLCMember brez:FounderSharesMember 2020-07-15 2020-07-15 0001817640 brez:BreezeSponsorLLCMember brez:FounderSharesMember 2020-07-15 2020-07-15 0001817640 brez:BreezeSponsorLLCMember brez:FounderSharesMember 2021-01-01 2021-09-30 0001817640 brez:BreezeSponsorLLCMember 2021-01-01 2021-09-30 0001817640 brez:BreezeSponsorLLCMember 2021-09-30 0001817640 brez:BreezeSponsorLLCMember 2020-11-23 2020-11-23 0001817640 brez:BreezeSponsorLLCMember 2021-07-01 2021-09-30 0001817640 brez:RepresentativeMember us-gaap:OverAllotmentOptionMember 2020-11-23 2020-11-23 0001817640 brez:ConsultantMember us-gaap:PrivatePlacementMember 2020-11-23 2020-11-23 0001817640 brez:RepresentativeAndConsultantMember 2020-11-23 2020-11-23 0001817640 brez:RepresentativeAndConsultantMember 2020-11-23 0001817640 brez:UnderwritingAgreementMember 2020-11-23 0001817640 brez:UnderwritingAgreementMember 2020-11-23 2020-11-23 0001817640 brez:PublicWarrantsMember 2020-12-31 0001817640 brez:PrivatePlacementWarrantsMember 2021-09-30 0001817640 brez:PrivatePlacementWarrantsMember 2020-12-31 0001817640 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember brez:CashAndMarketableSecuritiesHeldInTrustAccountMember 2021-09-30 0001817640 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember brez:PublicWarrantsMember 2021-09-30 0001817640 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember brez:PrivatePlacementWarrantsMember 2021-09-30 0001817640 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2021-09-30 0001817640 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2021-09-30 0001817640 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember brez:CashAndMarketableSecuritiesHeldInTrustAccountMember 2020-12-31 0001817640 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember brez:PublicWarrantsMember 2020-12-31 0001817640 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember brez:PrivatePlacementWarrantsMember 2020-12-31 0001817640 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001817640 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001817640 us-gaap:FairValueInputsLevel1Member 2021-09-30 0001817640 us-gaap:FairValueInputsLevel1Member 2020-12-31 0001817640 brez:ModifiedBlackScholesMember us-gaap:MeasurementInputSharePriceMember brez:PrivatePlacementWarrantsMember 2021-09-30 0001817640 brez:ModifiedBlackScholesMember us-gaap:MeasurementInputSharePriceMember brez:PrivatePlacementWarrantsMember 2020-12-31 0001817640 brez:ModifiedBlackScholesMember us-gaap:MeasurementInputExercisePriceMember brez:PrivatePlacementWarrantsMember 2021-09-30 0001817640 brez:ModifiedBlackScholesMember us-gaap:MeasurementInputExercisePriceMember brez:PrivatePlacementWarrantsMember 2020-12-31 0001817640 brez:ModifiedBlackScholesMember brez:PrivatePlacementWarrantsMember 2021-01-01 2021-09-30 0001817640 brez:ModifiedBlackScholesMember brez:PrivatePlacementWarrantsMember 2020-01-01 2020-12-31 0001817640 brez:ModifiedBlackScholesMember us-gaap:MeasurementInputExpectedTermMember brez:PrivatePlacementWarrantsMember 2021-01-01 2021-09-30 0001817640 brez:ModifiedBlackScholesMember us-gaap:MeasurementInputExpectedTermMember brez:PrivatePlacementWarrantsMember 2020-01-01 2020-12-31 0001817640 brez:ModifiedBlackScholesMember us-gaap:MeasurementInputPriceVolatilityMember brez:PrivatePlacementWarrantsMember 2021-09-30 0001817640 brez:ModifiedBlackScholesMember us-gaap:MeasurementInputPriceVolatilityMember brez:PrivatePlacementWarrantsMember 2020-12-31 0001817640 brez:ModifiedBlackScholesMember us-gaap:MeasurementInputRiskFreeInterestRateMember brez:PrivatePlacementWarrantsMember 2021-09-30 0001817640 brez:ModifiedBlackScholesMember us-gaap:MeasurementInputRiskFreeInterestRateMember brez:PrivatePlacementWarrantsMember 2020-12-31 0001817640 brez:ModifiedBlackScholesMember brez:PrivatePlacementWarrantsMember 2021-09-30 0001817640 brez:ModifiedBlackScholesMember brez:PrivatePlacementWarrantsMember 2020-12-31 0001817640 brez:PrivatePlacementWarrantsMember 2020-12-31 0001817640 brez:PublicWarrantsMember 2020-12-31 0001817640 brez:PrivatePlacementWarrantsMember 2021-01-01 2021-09-30 0001817640 brez:PublicWarrantsMember 2021-01-01 2021-09-30 0001817640 brez:PrivatePlacementWarrantsMember 2021-09-30 0001817640 brez:PublicWarrantsMember 2021-09-30

 

 

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, 2021

 

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

 

For the transition period from                  to                   

 

Commission File No. 001-39718

 

BREEZE HOLDINGS ACQUISITION CORP.

(Exact name of registrant as specified in its charter)

 

Delaware

 

85-1849315

(State or other jurisdiction of
incorporation or organization)

 

(I.R.S. Employer
Identification No.) 

 

955 W. John Carpenter Freeway, Suite 100-929

 

 

Irving, TX

 

75039

(Address of principal executive offices)

 

(Zip Code)

 

(619) 500-7747

(Registrant’s telephone number, including area code)

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

 

BREZ

 

The Nasdaq Stock Market LLC

Rights exchangeable into one-twentieth of one share of common stock

 

BREZR

 

The Nasdaq Stock Market LLC

Warrants, each whole warrant exercisable for one share of common stock at an exercise price of $11.50 per whole share

 

BREZW

 

The Nasdaq Stock Market LLC

 

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.

 

 

Large accelerated filer

 

Accelerated filer

 

 

 

 

 

 

 

Non-accelerated filer

 

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

Emerging growth company

 

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 December 31, 2021, there were 14,640,000 shares of the registrant’s common stock, $0.0001 per share, issued and outstanding.

 

 

 

 


BREEZE HOLDINGS ACQUISITON CORP.

FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2021 

TABLE OF CONTENTS

 

 

 

Page

Part I. Financial Information

 

2

Item 1. Condensed Financial Statements

 

2

Condensed Balance Sheets as of September 30, 2021 (Unaudited) and December 31, 2020

 

2

Unaudited Condensed Statements of Operations for the Three and Nine Months ended September 30, 2021 and the Period from June 11, 2020 (inception) through September 30, 2020

 

3

Unaudited Condensed Statements of Changes in Stockholders’ Equity (deficit) for the Three and Nine Months ended September 30, 2021 and the Period from June 11, 2020 (inception) through September 30, 2020

 

4

Unaudited Condensed Statement of Cash Flows for the Nine Months ended September 30, 2021

 

5

Notes to Unaudited Condensed Financial Statements

 

6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

24

Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk

 

28

Item 4. Controls and Procedures

 

28

Part II. Other Information

 

29

Item 1. Legal Proceedings

 

29

Item 1A. Risk Factors

 

29

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

29

Item 3. Defaults Upon Senior Securities

 

29

Item 4. Mine Safety Disclosures

 

29

Item 5. Other Information

 

29

Item 6. Exhibits

 

29

Part III. Signatures

 

30

 

 

 

1


 

PART I - FINANCIAL INFORMATION

Item 1. INTERIM FINANCIAL STATEMENTS

BREEZE HOLDINGS ACQUISITION CORP.

CONDENSED BALANCE SHEETS

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

 

 

(unaudited)

 

 

(restated)

 

ASSETS

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash

 

$

9,584

 

 

$

693,818

 

Prepaid expenses

 

 

177,448

 

 

 

136,949

 

Total Current Assets

 

 

187,032

 

 

 

830,767

 

Cash and marketable securities held in Trust Account

 

 

116,764,515

 

 

 

116,734,480

 

Prepaid expenses, non-current

 

 

 

 

 

23,292

 

TOTAL ASSETS

 

$

116,951,547

 

 

$

117,588,539

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

244,895

 

 

$

67,264

 

Common stock payable

 

 

 

 

 

 

74,850

 

Current maturities of long-term liability

 

 

57,978

 

 

 

136,949

 

Franchise taxes payable

 

 

149,589

 

 

 

23,156

 

Total Current Liabilities

 

 

452,462

 

 

 

302,219

 

Warrant liabilities

 

 

8,855,250

 

 

 

17,487,000

 

Long-term liability

 

 

 

 

 

23,292

 

Total Liabilities

 

 

9,307,712

 

 

 

17,812,511

 

Commitments

 

 

 

 

 

 

 

 

Common stock subject to possible redemption, 11,500,000 shares at

   redemption value as of September 30, 2021 and December 31, 2020,

   respectively

 

 

115,000,000

 

 

 

115,000,000

 

Stockholders’ Deficit

 

 

 

 

 

 

 

 

Preferred stock, $0.0001 par value; 1,000,000 authorized; none issued and

   outstanding

 

 

 

 

 

 

Common stock, $0.0001 par value; 100,000,000 shares authorized; 3,140,000

   shares and 3,125,000 shares issued and outstanding as of September 30,

   2021 and December 31, 2020, respectively (excluding 11,500,000 shares

   subject to possible redemption)

 

 

315

 

 

 

313

 

Additional paid-in capital

 

 

74,848

 

 

 

 

Accumulated deficit

 

 

(7,431,328

)

 

 

(15,224,285

)

Total Stockholders’ Deficit

 

 

(7,356,165

)

 

 

(15,223,972

)

TOTAL LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION  AND STOCKHOLDERS’ DEFICIT

 

$

116,951,547

 

 

$

117,588,539

 

 

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

 

2


 

BREEZE HOLDINGS ACQUISITION CORP.

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

Three Months

Ended

September 30,

2021

 

 

Nine Months

Ended

September 30,

2021

 

 

June 11, 2020 (inception) through September 30, 2020

 

Operating and formation costs

$

190,570

 

 

$

869,591

 

 

$

 

Loss from operations

 

190,570

 

 

 

869,591

 

 

 

 

Other income:

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

76

 

 

 

763

 

 

 

 

Unrealized gain on marketable securities held in Trust Account

 

14,444

 

 

 

30,035

 

 

 

 

Change in fair value of warrant liabilities

 

3,777,750

 

 

 

8,631,750

 

 

 

 

Total other income

 

3,792,270

 

 

 

8,662,548

 

 

 

 

Net income

$

3,601,700

 

 

$

7,792,957

 

 

$

 

Basic and diluted weighted average shares outstanding

 

14,634,130

 

 

 

14,628,077

 

 

 

2,875,000

 

Basic and diluted net income per share, Common Stock

$

0.25

 

 

$

0.53

 

 

$

 

 

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

3


 

BREEZE HOLDINGS ACQUISITION CORP.

CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ (DEFICIT)

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021

(UNAUDITED)

 

 

 

Common Stock

 

 

Additional

Paid-in

 

 

Accumulated

 

 

Total

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Deficit

 

Balance – January 1, 2021, as restated

 

 

3,125,000

 

 

$

313

 

 

$

 

 

$

(15,224,285

)

 

$

(15,223,972

)

Net income

 

 

 

 

 

 

 

 

 

 

 

5,776,318

 

 

 

5,776,318

 

Balance – March 31, 2021, as restated

 

 

3,125,000

 

 

$

313

 

 

$

 

 

$

(9,447,967

)

 

$

(9,447,654

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(1,585,061

)

 

 

(1,585,061

)

Balance – June 30, 2021, as restated

 

 

3,125,000

 

 

$

313

 

 

$

 

 

$

(11,033,028

)

 

$

(11,032,715

)

Common Stock issued to Consultant

 

 

15,000

 

 

 

2

 

 

 

74,848

 

 

 

 

 

 

74,850

 

Net income

 

 

 

 

 

 

 

 

 

 

 

3,601,700

 

 

 

3,601,700

 

Balance – September 30, 2021

 

 

3,140,000

 

 

$

315

 

 

$

74,848

 

 

$

(7,431,328

)

 

$

(7,356,165

)

 

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

 

 

BREEZE HOLDINGS ACQUISITION CORP.

STATEMENTS OF CHANGES IN STOCKHOLDER’S EQUITY

FOR THE PERIOD FROM JUNE 11, 2020 (INCEPTION) THROUGH SEPTEMBER 30, 2020

 

 

 

Common Stock

 

 

Additional

Paid-in

Capital

 

 

Accumulated

Deficit

 

 

Total

Stockholder’s

Equity

 

 

Shares

 

 

Amount

 

Balance – June 11, 2020 (inception)

 

 

 

 

$

 

 

$

 

 

$

 

 

$

 

Issuance of Founder Shares to Sponsor

 

 

2,875,000

 

 

 

288

 

 

 

24,712

 

 

 

 

 

 

25,000

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance – June 30, 2020 (audited)

 

 

2,875,000

 

 

$

288

 

 

$

24,712

 

 

$

 

 

$

25,000

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance – September 30, 2020 (unaudited)

 

 

2,875,000

 

 

$

288

 

 

$

24,712

 

 

$

 

 

$

25,000

 

 

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

 

4


 

BREEZE HOLDINGS ACQUISITION CORP.

CONDENSED STATEMENT OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2021

(UNAUDITED)

 

Cash Flows from Operating Activities:

 

 

 

 

Net income

 

$

7,792,957

 

Adjustments to reconcile net income to net cash used in operating activities:

 

 

 

 

Unrealized gain on marketable securities held in Trust Account

 

 

(30,035

)

Change in fair value of warrant liabilities

 

 

(8,631,750

)

Changes in operating assets and liabilities

 

 

 

 

Prepaid expenses and other liabilities

 

 

(119,470

)

Accounts payable and accrued expenses

 

 

177,631

 

Franchise taxes payable

 

 

126,433

 

Net cash used in operating activities

 

 

(684,234

)

Net Change in Cash

 

 

(684,234

)

Cash – Beginning of period

 

 

693,818

 

Cash – End of period

 

$

9,584

 

Non-Cash investing and financing activities

 

 

 

 

Common stock issued to Consultant

 

$

74,850

 

 

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

5


 

BREEZE HOLDINGS ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

(Unaudited)

Note 1 — Description of Organization and Business Operations

Breeze Holdings Acquisition Corp. (the “Company”) is a blank check company incorporated in Delaware on June 11, 2020. 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, 2021, the Company had not commenced any operations. All activity through September 30, 2021 relates to the Company’s formation, the initial public offering (“Initial Public Offering”), which is described below, and, after the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.

The registration statement for the Company’s Initial Public Offering was declared effective on November 23, 2020. On November 25, 2020, the Company consummated the Initial Public Offering of 11,500,000 units (the “Units” and, with respect to the shares of common stock included in the Units sold, the “Public Shares”), generating gross proceeds of $115,000,000, which is described in Note 4.

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 5,425,000 warrants (the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to Breeze Sponsor, LLC, a Delaware limited liability company (the “Sponsor”), generating gross proceeds of $5,425,000, which is described in Note 5.

Following the closing of the Initial Public Offering on November 25, 2020, an amount of $115,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and $1,725,000 from the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”) and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act of 1940, as amended (the “Investment Company Act”), as determined by the Company, until the earlier of: (i) the completion of a Business Combination or (ii) the distribution of the Trust Account to the Company’s stockholders, as described below.

Transaction costs incurred in connection with the Initial Public Offering amounted to $4,099,907, consisting of $2,300,000 of underwriting fees, $1,322,350 of representative share offering costs, and $477,557 of other offering costs. As of September 30, 2021, cash of $9,584 was held outside of the Trust Account and was available for working capital purposes.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete an initial Business Combination having an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable) at the time of the agreement to enter into the initial Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act.

6


 

The Company will provide its stockholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The stockholders will be entitled to redeem their shares for a pro rata portion of the amount then in the Trust Account ($10.15 per share), plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations. The per-share amount to be distributed to stockholders who redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 7). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.

The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination. If a stockholder vote is not required and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”) and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks stockholder approval in connection with a Business Combination, the Company’s Sponsor has agreed to vote its Founder Shares (as defined in Note 6) and any Public Shares purchased by it during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares, regardless of whether they vote for or against a Business Combination.

If the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s Amended and Restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from seeking redemption rights with respect to 15% or more of the Public Shares, without the Company’s prior written consent.

The Sponsor has agreed (a) to waive its redemption rights with respect to any Founder Shares and Public Shares held by it in connection with the completion of a Business Combination and (b) to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination by November 25, 2021 (which can be extended up to 6 months) and (c) not to propose an amendment to the Amended and Restated Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment. However, if the Sponsor acquires Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period.  On November 22, 2021, the Company announced that its sponsor, Breeze Sponsor, LLC, timely deposited an aggregate of $1,150,000 (the “Extension Payment”), representing $0.10 per public share, into the Company’s trust account in order to extend the date by which the Company has to consummate a business combination from November 25, 2021 to February 25, 2022 (the “Extension”). The Sponsor loaned the Extension Payment to the Company in exchange for a promissory note in the amount of the Extension Payment. The loan under the promissory note is non-interest bearing and will be repaid upon the consummation of a business combination. The Company’s stockholders are not entitled to vote on or redeem their shares in connection with such extension.

The Company will have until February 25, 2022 (which can be extended up to 3 months) to consummate a Business Combination (the “Combination Period”). If the Company is unable to complete a 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 not 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 its tax obligations (less up to $100,000 of interest 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), 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.

7


 

There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.

The Sponsor has agreed to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, the Sponsor will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares purchased by it during or after the Initial Public Offering if the Company fails to complete its Business Combination. The underwriters have agreed to waive their rights to their deferred underwriting commission held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than $10.15 per public share.

In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.15 per Public Share or (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and will not apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

Going Concern and Liquidity Consideration

As of September 30, 2021, the Company had $9,584 in cash held outside of the Trust Account and negative working capital of $115,841, excluding franchise tax payable.

The Company has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of time within one year after the date that the financial statements are issued. Management plans to address this uncertainty through the Business Combination as discussed above. In addition, in order to finance transaction costs in connection with an intended initial business combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $1,000,000 of the notes may be converted upon completion of a Business Combination into warrants at a price of $1.00 per warrant. Such warrants would be identical to the Private Placement Warrants. There is no assurance that the Company’s plans to consummate the Business Combination or obtain Working Capital Loans will be successful or successful within the Combination Period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.  

 

Risks and Uncertainties

 

Management continues to evaluate the impact of the COVID-19 pandemic on the industry 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/or search for a target company, the specific impact is 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.

 

8


 

Note 2 — Restatement of previously issued Financial Statements

 

In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require common stock subject to redemption to be classified outside of permanent equity. The Company had previously classified a portion of the redeemable common stock in permanent equity. Although the Company did not specify a maximum redemption threshold, its charter provides that currently, the Company will not redeem its public shares in an amount that would cause its net tangible assets to be less than $5,000,001. The Company restated its financial statements to classify all redeemable common stock as temporary equity at redemption value and any related impact, as the threshold in its charter would not change the nature of the underlying shares as redeemable and thus would be required to be classified outside of permanent equity. The Company also recorded additional offering costs related to the excess fair value over purchase price for the sale of common stock to the Company’s Underwriters (“Representative Shares”) and to the Company’s Consultant (“Consultant Shares”) as compensation for the underwriting and consulting services, respectively, in connection with the Initial Public Offering (see Note 6).  In addition, the Company recorded additional paid-in capital related to the relative fair value of the Rights as part of the Units issued in the Initial Public Offering that were not previously recorded (see Note 9).

 

The reclassification of amounts from permanent equity to temporary equity resulted in non-cash financial statement corrections and will have no impact on the Company’s current or previously reported cash position, operating expenses or total operating, investing or financing cash flows. Further, the additional offering costs recorded in relation to the Representative Shares and Consultant Shares and recording of the Rights issued in the Initial Public Offering also result in non-cash financial statement corrections and will have no impact on the Company’s current or previously reported cash position, and investing or financing cash flows. In connection with the change in presentation for the redeemable common stock subject to possible redemption, the Company has restated its earnings per share calculation to allocate income and losses shared pro rata between redeemable and nonredeemable common stock. This presentation contemplates a Business Combination as the most likely outcome, in which case, redeemable and nonredeemable common stock share pro rata in the income and losses of the Company.

 

The following tables summarize the effect of the restatement on each financial statement line item as of the dates, and for the periods, indicated:

 

 

 

March 31, 2021

 

 

As Previously Reported

 

Adjustments

 

As Restated

Balance Sheet (unaudited)

 

 

 

 

 

 

Common stock payable

 

$

— 

 

 

$

74,850 

 

 

$

74,850 

 

Total common stock subject to possible redemption

 

100,627,190 

 

 

14,372,810 

 

 

115,000,000 

 

Common stock

 

471 

 

 

(158)

 

 

313 

 

Retained earnings (accumulated deficit)

 

4,999,535 

 

 

(14,447,502)

 

 

(9,447,967)

 

Total stockholders’ equity (deficit)

 

5,000,006 

 

 

(14,447,660)

 

 

(9,447,654)

 

 

9


 

 

 

 

June 30, 2021

 

 

As Previously Reported

 

Adjustments

 

As Restated

Balance Sheet (unaudited)

 

 

 

 

 

 

Common stock payable

 

$

— 

 

 

$

74,850 

 

 

$

74,850 

 

Total common stock subject to possible redemption

 

99,042,129 

 

 

15,957,871 

 

 

115,000,000 

 

Common stock

 

486 

 

 

(173)

 

 

313 

 

Accumulated deficit

 

4,999,520 

 

 

(16,032,548)

 

 

(11,033,028)

 

Total stockholders’ equity (deficit)

 

5,000,006 

 

 

(16,033,721)

 

 

(11,032,715)

 

 

 

For the Three Months Ended March 31, 2021

 

 

 

As Previously

Reported

 

 

Adjustment

 

 

As Restated

 

Basic and diluted weighted average shares outstanding, Redeemable Common Stock

 

 

9,914,009

 

 

 

(9,914,009

)

 

 

 

Basic and diluted net earnings per share, Redeemable Common Stock

 

$

 

 

$

 

 

$

 

Basic and diluted weighted average shares outstanding, Non-Redeemable Common Stock

 

 

4,710,991

 

 

 

(4,710,991

)

 

 

 

Basic and diluted net loss per share, Non-Redeemable Common Stock

 

$

(0.04

)

 

$

0.04

 

 

$

 

Basic and diluted weighted average shares outstanding

 

 

 

 

 

14,625,000

 

 

 

14,625,000

 

Basic and diluted net loss per share of Common Stock

 

$

 

 

$

0.39

 

 

$

0.39

 

 

 

10


 

 

For the Three Months Ended June 30, 2021

 

 

 

As Previously

Reported

 

 

Adjustment

 

 

As Restated

 

Basic and diluted weighted average shares outstanding, Redeemable Common Stock

 

 

9,912,293

 

 

 

(9,912,293

)

 

 

 

Basic and diluted net earnings per share, Redeemable Common Stock

 

$

 

 

$

 

 

$

 

Basic and diluted weighted average shares outstanding, Non-Redeemable Common Stock

 

 

4,712,707

 

 

 

(4,712,707

)

 

 

 

Basic and diluted net loss per share, Non-Redeemable Common Stock

 

$

(0.09

)

 

$

0.09

 

 

$

 

Basic and diluted weighted average shares outstanding

 

 

 

 

 

14,625,000

 

 

 

14,625,000

 

Basic and diluted net loss per share of Common Stock

 

$

 

 

$

(0.11

)

 

$

(0.11

)

 

For the Six Months Ended June 30, 2021

 

 

 

As Previously

Reported

 

 

Adjustment

 

 

As Restated

 

Basic and diluted weighted average shares outstanding, Redeemable Common Stock

 

 

9,630,170

 

 

 

(9,630,170

)

 

 

 

Basic and diluted net earnings per share, Redeemable Common Stock

 

$

 

 

$

 

 

$

 

Basic and diluted weighted average shares outstanding, Non-Redeemable Common Stock

 

 

4,993,967

 

 

 

(4,993,967

)

 

 

 

Basic and diluted net loss per share, Non-Redeemable Common Stock

 

$

(0.12

)

 

$

0.12

 

 

$

 

Basic and diluted weighted average shares outstanding

 

 

 

 

 

14,625,000

 

 

 

14,625,000

 

Basic and diluted net loss per share of Common Stock

 

$

 

 

$

0.29

 

 

$

0.29

 

 

11


 

Changes in the Statement of Stockholders’ Equity for the periods ended March 31, 2021 and June 30, 2021

 

 

 

Common Stock

 

Additional Paid-in Capital

 

Accumulated Deficit

 

Total Stockholders' Equity(Deficit)

 

 

Shares

 

Amount

 

As Previously Reported:

 

 

 

 

 

 

 

 

 

 

Balance - January 1, 2021

 

5,280,087 

 

 

$

529 

 

 

$

583,698 

 

 

$

4,415,775 

 

 

$

5,000,002 

 

Change in common stock subject to possible redemption

 

(569,096)

 

 

(58)

 

 

(5,776,256)

 

 

— 

 

 

(5,776,314)

 

Reclassify negative portion of addition paid-in capital

 

— 

 

 

— 

 

 

5,192,558 

 

 

(5,192,558)

 

 

— 

 

Net income

 

— 

 

 

— 

 

 

— 

 

 

5,776,318 

 

 

5,776,318 

 

Balance - March 31, 2021

 

4,710,991 

 

 

$

471 

 

 

$

— 

 

 

$

4,999,535 

 

 

$

5,000,006 

 

Change in common stock subject to possible redemption

 

156,164 

 

 

15 

 

 

— 

 

 

1,585,046 

 

 

1,585,061 

 

Net loss

 

— 

 

 

— 

 

 

— 

 

 

(1,585,061)

 

 

(1,585,061)

 

Balance - June 30, 2021

 

4,867,155 

 

 

$

486 

 

 

$

— 

 

 

$

4,999,520 

 

 

$

5,000,006 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

Balance - January 1, 2021

 

(2,155,087)

 

 

$

(216)

 

 

$

(583,698)

 

 

$

(19,640,060)

 

 

$

(20,223,974)

 

Change in common stock subject to possible redemption

 

569,096 

 

 

58 

 

 

5,776,256 

 

 

— 

 

 

5,776,314 

 

Reclassify negative portion of addition paid-in capital

 

— 

 

 

— 

 

 

(5,192,558)

 

 

5,192,558 

 

 

— 

 

Net income

 

— 

 

 

— 

 

 

— 

 

 

— 

 

 

— 

 

Balance - March 31, 2021

 

(1,585,991)

 

 

$

(158)

 

 

$

— 

 

 

$

(14,447,502)

 

 

$

(14,447,660)

 

Change in common stock subject to possible redemption

 

(156,164)

 

 

(15)

 

 

— 

 

 

(1,585,046)

 

 

(1,585,061)

 

Net loss

 

— 

 

 

— 

 

 

— 

 

 

— 

 

 

— 

 

Balance - June 30, 2021

 

(1,742,155)

 

 

$

(173)

 

 

$

— 

 

 

$

(16,032,548)

 

 

$

(16,032,721)

 

As Restated:

 

 

 

 

 

 

 

 

 

 

Balance - January 1, 2021

 

3,125,000 

 

 

$       313 

 

 

$             — 

 

 

$   (15,224,285)

 

 

$  (15,223,972)

 

Net income

 

— 

 

 

— 

 

 

— 

 

 

5,776,318 

 

 

5,776,318 

 

Balance - March 31, 2021

 

3,125,000 

 

 

$       313 

 

 

$             — 

 

 

$     (9,447,967)

 

 

$    (9,447,654)

 

Net loss

 

— 

 

 

— 

 

 

— 

 

 

(1,585,061)

 

 

(1,585,061)

 

Balance - June 30, 2021

 

3,125,000 

 

 

$

313 

 

 

$

— 

 

 

$

(11,033,028)

 

 

$

(11,032,715)

 

 

Statement of Cash Flows for the Three Months Ending March 31, 2021

 

Three Months Ended March 31, 2021

 

As Previously Reported

Adjustments

As Restated

Non-Cash investing and financing activities:

 

 

 

Change in value of common stock subject to redemption

$  5,776,314

$         (5,776,314)

$   —

 

 

 

12


 

Statement of Cash Flows for the Six Months Ending June 30, 2021

 

 

Six Months Ended June 30, 2021

 

As Previously Reported

Adjustments

As Restated

Non-Cash investing and financing activities:

 

 

 

Change in value of common stock subject to redemption

$     4,191,253

$        (4,191,253)

$     —

 

Note 3 — Summary of 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 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 periods presented.

The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the period ended December 31, 2020 as filed with the SEC on March 31, 2021, and the Company’s Amended Annual Report on Form 10-K/A as filed with the SEC on June 24, 2021, and the Company’s Amended Annual Report on Form 10-K/A as filed with the SEC on January 14, 2022 . The financial information as of December 31, 2020 is derived from the audited financial statements presented in the Company’s Amended Annual Report on Form 10-K/A for the period ended December 31, 2020. The interim results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the period ending December 31, 2021 or for any future interim periods.

Reclassification

Certain amounts in the prior period have been reclassified to conform to the current period presentation.

Emerging growth company

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 independent registered public accounting firm 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.

13


 

Use of estimates

The preparation of the 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 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. 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, 2021 and December 31, 2020.

Cash and marketable securities held in Trust Account

At September 30, 2021 and December 31, 2020, substantially all of the assets held in the Trust Account were held in U.S. Treasury securities.

Common stock subject to possible redemption

All of the 11,500,000 shares of common stock sold as part of the Units in the Initial Public Offering contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, if there is a shareholder 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 SEC and its staff’s guidance on redeemable equity instruments, which has been codified in Accounting Standards Codification (“ASC”) 480-10-S99, redemption provisions not solely within the control of the Company require common stock subject to possible redemption to be classified outside of permanent equity. Therefore, all of the 11,500,000 shares of common stock sold as part of the Units in the Initial Public offering have been classified outside of permanent equity.

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.

As of September 30, 2021, the common stock reflected in the condensed balance sheet are reconciled in the following table:

 

Gross proceeds

 

$

115,000,000 

 

Less:

 

 

Proceeds allocated to Public Warrants

 

10,580,000

 

Issuance costs allocated to common stock

 

3,704,282

 

  Proceeds allocated to Public Rights, net of offering costs

 

                  4,214,968

Plus:

 

 

 

Accretion of carrying value to redemption value

 

18,499,250 

 

Common stock subject to possible redemption

 

$

115,000,000 

 

 

14


 

Offering Costs associated with the Initial Public Offering

The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin 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 Initial Public Offering. Offering costs directly attributable to the issuance of an equity contract to be classified in equity are recorded as a reduction in equity. Offering costs for equity contracts that are classified as assets and liabilities are expensed immediately. The Company incurred offering costs amounting to $4,099,907 as a result of the Initial Public Offering (consisting of a $2,300,000 underwriting fees, $1,322,350 of representative share offering costs, and $477,557 of other offering costs). The Company recorded $3,704,282 of offering costs as a reduction of equity in connection with the shares of common stock included in the Units. The Company immediately expensed $395,625 of offering costs in connection with the Public Warrants and Private Placement Warrants that were classified as liabilities.

Warrant liabilities

The Company evaluated the Public Warrants and Private Placement Warrants (collectively, “Warrants”, see Note 7) in accordance with ASC 815-40, “Derivatives and Hedging — Contracts in Entity’s Own Equity”, and concluded that a provision in the warrant agreement related to certain tender or exchange offers precludes the Warrants from being accounted for as components of equity. As the Warrants meet the definition of a derivative as contemplated in ASC 815, the Warrants are recorded as derivative liabilities on the Condensed balance sheet and measured at fair value at inception (on the date of the Initial Public Offering) and at each reporting date in accordance with ASC 820, “Fair Value Measurement” (“ASC 820”), with changes in fair value recognized in the Statement of Operations in the period of change.

Income taxes

The Company follows the asset and liability method of accounting for income taxes under 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.

ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement’s 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. 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 and December 31, 2020. 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.

15


 

Net income per share

Net income per share of common stock is computed by dividing net income by the weighted-average number of common shares outstanding during the period. As the Public Shares are considered to be redeemable at fair value, and a redemption at fair value does not amount to a distribution different than other shareholders, redeemable and non-redeemable shares of common stock are presented as one class of shares in calculating net income per share of common stock.  As a result, the calculated net income per share is the same for redeemable and non-redeemable shares of common stock. 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 the earnings of the Company. As a result, diluted income per share is the same as basic income per share for the periods presented.

The following table reflects the calculation of basic and diluted net loss per common share (in dollars, except per share amounts):

 

 

 

Three

Months

Ended

September 30,

2021

 

 

Nine

Months

Ended

September 30,

2021

 

Basic and diluted net income per share of common stock

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

Net income

 

$

3,601,700

 

 

$

7,792,957

 

Denominator:

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares common stock outstanding

 

 

14,634,130

 

 

 

14,628,077

 

Basic and diluted net income per share common stock

 

$

0.25

 

 

$

0.53

 

 

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 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 Company applies 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 sheet for cash, prepaid expenses and accrued offering costs approximate fair value due to their short-term nature.

Recent accounting pronouncements

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.

16


 

ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning 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 or cash flows.

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

Note 4 — Initial Public Offering

Pursuant to the Initial Public Offering, the Company sold 10,000,000 Units at a purchase price of $10.00 per Unit. Each Unit consists of one share of common stock, one right worth one-twentieth of a share and one warrant (“Public Warrant”). On November 23, 2020, in connection with the underwriters’ exercise of the over-allotment option in full, the Company sold an additional 1,500,000 Units at a price of $10.00 per Unit. Each whole Public Warrant entitles the holder to purchase one share of common stock at an exercise price of $11.50 per whole share (see Note 8).

Note 5 — Private Placement

Simultaneously with the closing of the Initial Public Offering (including the exercise of the over-allotment option), the Sponsor purchased an aggregate of 5,425,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, for an aggregate purchase price of $5,425,000. Each Private Placement Warrant is exercisable to purchase one share of 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 Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, certain of the proceeds from the sale of the Private Placement Warrants 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.

Note 6 — Related Party Transactions

Founder Shares

In June 2020, the Sponsor purchased 100 shares of common stock (the “Founder Shares”) for an aggregate purchase price of $25,000. On July 15, 2020, the Sponsor effected a 28,750-for-1 forward stock split and, as a result, our initial shareholders held 2,875,000 Founder Shares as of the date of our initial public offering.

The 2,875,000 Founder Shares included an aggregate of up to 375,000 shares subject to forfeiture to the extent that the underwriters’ over-allotment option was not exercised in full or in part, so that the Sponsor will own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Sponsor does not purchase any Public Shares in the Initial Public Offering). As a result of the underwriters’ election to fully exercise their over-allotment option, 375,000 Founder Shares are no longer subject to forfeiture. The Founder Shares will automatically convert into shares of common stock upon consummation of a Business Combination on a one-for-one basis, subject to certain adjustments, as described in Note 7 .

The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination or (B) subsequent to a Business Combination, (x) if the last sale price of the Company’s 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 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital 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.      

17


 

Administrative Support Agreement

 

The Company entered into an agreement whereby, commencing on November 23, 2020 through the earlier of the Company’s consummation of a Business Combination and its liquidation, the Company will pay an affiliate of the Sponsor a total of $5,000 per month for office space, utilities and secretarial and administrative support services. For the three and nine months ended September 30, 2021, the Company incurred and paid $15,000 and $45,000, respectively, in fees for these services.

 

Related Party Loans

 

In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,000,000 of notes may be converted upon consummation of a Business Combination into warrants at a price of $1.00 per warrant. Such warrants would be identical to the Private Placement Warrants. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.

 

Representative Shares

 

Pursuant to the underwriting agreement (the “Underwriting Agreement”) between the Company and I-Bankers Securities (the “Representative”), on November 23, 2020, the Company issued to the Representative and its designees 250,000 shares of common stock and separately agreed to issue the Company’s Consultant 15,000 shares of common stock for nominal consideration in a private placement intended to be exempt from registration under Section 4(a)(2) of the Act. In August 2021, the Company issued to the Consultant such Consultant Shares. The Company accounts for the Representative Shares as a deferred offering cost of the Initial Public Offering. Accordingly, the offering cost will be allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to the Warrants will be expensed immediately in the Statement of Operations, while offering costs allocated to the redeemable Public Shares will be deferred and subsequently charged to temporary shareholder’s equity upon the completion of the Initial Public Offering.

 

The Company estimated the fair value of the Representative Shares and Consultant Shares to be $1,322,350 based upon the price of the common stock issued ($4.99 per share) to the Representative and Consultant. The holders of the Representative Shares and Consultant Shares have agreed not to transfer, assign or sell any such shares until later of (i) 30 days after the completion of a Business Combination and 180 days pursuant to FINRA Conduct Rule 5110(e)(1) following the effective date of the Registration Statement to anyone other than (i) the Representative or an underwriter or selected dealer in connection with the Offering, or (ii) a bona fide officer or partner of the Representative or of any such underwriter or selected dealer. Additionally, pursuant to FINRA Conduct Rule 5110(e), the Representative Shares and Consultant Shares will not be the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days immediately following the effective date of the Registration Statement.

In addition, the holders of the Representative Shares and Consultant Shares have agreed (i) to waive their redemption rights with respect to such shares in connection with the completion of a Business Combination and (ii) to waive their rights to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete a Business Combination within the time specified in the certificate of incorporation.

Refer to Note 2 for additional information regarding the restatement of financial statements resulting in additional offering costs recorded in relation to the Representative Shares.

18


 

Note 7 — Commitments

Registration and Stockholder Rights

Pursuant to a registration rights and stockholder agreement entered into on November 23, 2020, 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  common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration and stockholder rights requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Company’s common stock). The holders of the majority of these securities are 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

I-Bankers Securities, Inc. (“I-Bankers”), the representative of the underwriters of the Initial Public Offering is entitled to a business combination marketing fee of $0.275 per share, or $3,162,500 in the aggregate. The fee will become payable to I-Bankers from the amounts held in the Trust Account solely in the event the Company completes a Business Combination, subject to the terms of the business combination marketing agreement between the Company and I-Bankers. 

Note 8 – Warrant Liabilities

Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. 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 Initial Public Offering. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.

The Company will not be obligated to deliver any shares of common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the shares of common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue shares of common stock upon exercise of a warrant unless the common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.

The Company has agreed that, as soon as practicable, but in no event later than fifteen (15) business days, after the closing of a Business Combination, the Company will use its best efforts to file with the SEC a registration statement covering the shares of common stock issuable upon exercise of the warrants, to cause such registration statement to become effective and to maintain a current prospectus relating to those shares of common stock until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the shares of common stock issuable upon exercise of the warrants is not effective by the 60th business day after the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis.

Once the warrants become exercisable, the Company may redeem the Public Warrants:

 

in whole and not in part;

 

at a price of $0.01 per warrant;

19


 

 

upon a minimum of 30 days’ prior written notice of redemption; and

 

if, and only if, the reported last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrant holders.

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 exercise price and number of shares of 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 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.

In addition, if (x) the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price 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 its affiliates, without taking into account any Founder Shares 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 total equity proceed, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume Weighted-average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates a Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of (i) the Market Value or (ii) the price at which the Company issue the additional shares of common stock or equity-linked securities.

The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the 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.

At September 30, 2021 and December 31, 2020, there were 11,500,000 Public Warrants and 5,425,000 Private Placement Warrants outstanding. The Company accounts for the Public Warrants and Private Placement Warrants in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability.

The accounting treatment of derivative financial instruments required that the Company record the warrants as derivative liabilities at fair value upon the closing of the Initial Public Offering. The Public Warrants were allocated a portion of the proceeds from the issuance of the Units equal to its fair value. The warrant liabilities are subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liabilities are adjusted to current fair value, with the change in fair value recognized in the Company’s statement of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification.

Note 9 — Stockholder’s Equity

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 designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At September 30, 2021 and December 31, 2020, there were no shares of preferred stock issued or outstanding.

20


 

Common Stock — The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.0001 per share. Holders of common stock are entitled to one vote for each share. At September 30, 2021 and December 31, 2020, there were 3,140,000 and 3,125,000 shares of common stock issued and outstanding, excluding 11,500,000 shares of common stock subject to possible redemption for both periods.

Rights

Except in cases where the Company is not the surviving company in a Business Combination, each holder of a right will automatically receive one-twentieth (1/20) of a share of common stock upon consummation of the Business Combination, even if the holder of a right converted all shares held by him, her or it in connection with the Business Combination or an amendment to the Company’s certificate of incorporation with respect to its pre-business combination activities. In the event that the Company will not be the surviving company upon completion of the Business Combination, each holder of a right will be required to affirmatively convert his, her or its rights in order to receive the one-twentieth (1/20) of a share of common stock underlying each right upon consummation of the Business Combination. No additional consideration will be required to be paid by a holder of rights in order to receive his, her or its additional share of common stock upon consummation of the Business Combination. The shares issuable upon exchange of the rights will be freely tradable (except to the extent held by affiliates of the Company). If the Company enters into a definitive agreement for a Business Combination in which the Company will not be the surviving entity, the definitive agreement will provide for the holders of rights to receive the same per share consideration the holders of shares of common stock will receive in the transaction on an as-converted into common stock basis.

The Company will not issue fractional shares in connection with an exchange of rights. As a result, the holders of the rights must hold rights in multiples of 20 in order to receive shares for all of the holders’ rights upon closing of a Business Combination. If the Company is unable to complete an initial Business Combination within the required time period and the Company liquidates the funds held in the trust account, holders of rights will not receive any of such funds with respect to their rights, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such rights, and the rights will expire worthless. Additionally, in no event will the Company be required to net cash settle the rights. Accordingly, the rights may expire worthless.

Note 10 — Fair Value Measurements 

The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. 

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Level 1:Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2:Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Level 3:Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

21


 

The following table presents information about the Company’s financial assets that are measured at fair value on a recurring basis at September 30, 2021 and December 31, 2020, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

 

As of September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

Description

 

Level 1

 

 

Level 2

 

 

Level 3

 

Investments held in Trust Account:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and marketable securities held in Trust Account

 

$

116,764,515

 

 

$

 

 

$

 

Warrant liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Public Warrants

 

 

5,980,000

 

 

 

 

 

 

 

Private Placement Warrants

 

 

 

 

 

 

 

 

2,875,250

 

Total investments held in trust account and warrant liabilities

 

$

122,744,515

 

 

$

 

 

$

2,875,250

 

 

As of December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

Description

 

Level 1

 

 

Level 2

 

 

Level 3

 

Investments held in Trust Account:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and marketable securities held in Trust Account

 

$

116,734,480

 

 

$

 

 

$

 

Warrant liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Public Warrants

 

 

11,845,000

 

 

 

 

 

 

 

Private Placement Warrants

 

 

 

 

 

 

 

 

5,642,000

 

Total investments held in trust account and warrant liabilities

 

$

128,579,480

 

 

$

 

 

$

5,642,000

 

 

The measurement of the Public Warrants as of September 30, 2021 and December 31, 2020 is classified as Level 1 due to the use of an observable market quote in an active market under the ticker BREZW. The quoted