0001213900-23-087064.txt : 20231114 0001213900-23-087064.hdr.sgml : 20231114 20231114170028 ACCESSION NUMBER: 0001213900-23-087064 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 34 CONFORMED PERIOD OF REPORT: 20230930 FILED AS OF DATE: 20231114 DATE AS OF CHANGE: 20231114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Sentinel Energy Services Inc. CENTRAL INDEX KEY: 0001709768 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 981370747 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-38271 FILM NUMBER: 231407678 BUSINESS ADDRESS: STREET 1: 700 LOUISIANA STREET STREET 2: SUITE 2700 CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: (281) 407-0686 MAIL ADDRESS: STREET 1: 700 LOUISIANA STREET STREET 2: SUITE 2700 CITY: HOUSTON STATE: TX ZIP: 77002 10-Q 1 f10q0923_sentinelenergy.htm QUARTERLY REPORT

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2023

 

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 number: 001-38271

 

SENTINEL ENERGY SERVICES INC.

(Exact name of registrant as specified in its charter)

 

Delaware   98-1370747
(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer
Identification No.)

 

2500 Summer Street Suite 1100

Houston, TX 77007

(281) 407-0686

Address (including zip code) and telephone number (including area code) of principal executive offices

 

Securities registered pursuant to Section 12(b) of the Act: None

 

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 November 14, 2023, 575,911 shares of Class A common stock, par value $0.0001 per share and 862,500 shares of Class B common stock, par value $0.0001 per share were issued and outstanding.

 

 

 

 

 

 

TABLE OF CONTENTS

 

    Page
Part I. Financial Information  
     
Item 1. Condensed Financial Statements 1
     
  Condensed Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022 1
     
  Unaudited Condensed Statements of Operations for the three and nine months ended September 30, 2023 and 2022 2
     
  Unaudited Condensed Statements of Changes in Stockholders’ Deficit for the three and nine months ended September 30, 2023 and 2022 3
     
  Unaudited Condensed Statements of Cash Flows for the nine months ended September 30, 2023 and 2022 4
     
  Notes to Unaudited Condensed Financial Statements 5
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 12
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 15
     
Item 4. Controls and Procedures 15
     
Part II. Other Information  
     
Item 1. Legal Proceedings 16
     
Item 1A. Risk Factors 16
     
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer  Purchases of Equity Securities 16
     
Item 5. Other Information 16
     
Item 6. Exhibits 17
     
Signatures 18

 

i

 

 

PART I - FINANCIAL INFORMATION

 

Item 1. Condensed Financial Statements

 

SENTINEL ENERGY SERVICES INC.

CONDENSED BALANCE SHEETS

 

   September 30,
2023
(unaudited)
   December 31,
2022
 
ASSETS        
Current assets:        
Cash  $7,606   $21,963 
Prepaid expenses   10,417    10,417 
Total current assets   18,023    32,380 
           
Prepaid expenses – long term   17,364    25,176 
Total assets  $35,387   $57,556 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
Liabilities:          
Accounts payable and accrued expenses  $296,017   $325,512 
Total liabilities   296,017    325,512 
           
Stockholders’ Deficit:          
Preferred shares, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding as of September 30, 2023 and December 31, 2022   
    
 
Class A common stock, $0.0001 par value, 200,000,000 shares authorized; 575,911 shares issued and outstanding at September 30, 2023 and 565,911 shares issued and outstanding at December 31, 2022   58    56 
Class B common stock, $0.0001 par value, 20,000,000 shares authorized; 862,500 shares issued and outstanding at September 30, 2023 and December 31, 2022   86    86 
Additional paid-in capital   5,859,397    5,759,399 
Accumulated deficit   (6,120,171)   (6,027,497)
Total stockholders’ deficit   (260,630)   (267,956)
Total liabilities and stockholders’ deficit  $35,387   $57,556 

 

See accompanying notes to unaudited condensed financial statements.

 

1

 

 

SENTINEL ENERGY SERVICES INC.

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

 

   For the
Three Months Ended
September 30,
   For the
Nine Months Ended
September 30,
 
   2023   2022   2023   2022 
                 
REVENUE  $
   $
   $
   $
 
                     
EXPENSES                    
General and administrative   32,571    16,416    92,674    87,258 
TOTAL EXPENSES   32,571    16,416    92,674    87,258 
                     
LOSS BEFORE INCOME TAX PROVISION   (32,571)   (16,416)   (92,674)   (87,258)
                     
Income tax provision   
    
    
    
 
                     
Net loss  $(32,571)  $(16,416)  $(92,674)  $(87,258)
                     
Weighted average number of shares of common stock outstanding, basic and diluted 1   1,435,763    1,274,620    1,431,301    1,415,801 
Basic and diluted net loss per share of common stock
  $(0.02)  $(0.01)  $(0.06)  $(0.06)

 

1For the three and nine months ended September 30, 2023 and 2022, the Class A and Class B common stock participate in losses equally and thus are included together herein.

 

See accompanying notes to unaudited condensed financial statements.

 

2

 

 

SENTINEL ENERGY SERVICES INC.

UNAUDITED CONDENSED StatementS of Changes in STOCKHOLDERS’ DEFICIT

 

For the Three and Nine Months Ended September 30, 2023

 

   Class A
Common Stock
   Class B
Common Stock
   Additional
Paid-in
   Accumulated   Total
Stockholders’
 
   Shares   Amount   Shares   Amount   Capital   Deficit   Deficit 
Balance as of January 1, 2023   565,911   $56    862,500   $86   $5,759,399   $(6,027,497)  $(267,956)
                                    
Issuance of Class A shares to Sponsor   1,000    
    
    
    10,000    
    10,000 
Net loss       
        
    
    (35,651)   (35,651)
Balance as of March 31, 2023 (unaudited)   566,911    56    862,500    86    5,769,399    (6,063,148)   (293,607)
Net loss       
        
    
    (24,452)   (24,452)
Balance as of June 30, 2023 (unaudited)   566,911   $56    862,500   $86   $5,769,399   $(6,087,600)  $(318,059)
Issuance of Class A shares to Sponsor   9,000    2    
 
    
 
    89,998         90,000 
Net loss       
        
    
    (32,571)   (32,571)
Balance as of September 30, 2023 (unaudited)   575,911   $58    862,500   $86   $5,859,397   $(6,120,171)  $(260,630)

 

For the Three and Nine Months Ended September 30, 2022

 

   Class A
Common Stock
   Class B
Common Stock
   Additional
Paid-in
   Accumulated   Total
Stockholders’
 
   Shares   Amount   Shares   Amount   Capital   Deficit   Deficit 
Balance as of January 1, 2022   554,411   $55    862,500   $86   $5,644,400   $(5,925,876)  $(281,335)
                                    
Issuance of Class A shares to Sponsor   2,500    
    
    
    25,000    
    25,000 
Net loss       
        
    
    (36,557)   (36,557)
Balance as of March 31, 2022 (unaudited)   556,911    55    862,500   $86    5,669,400    (5,962,433)   (292,892)
Net loss       
        
    
    (34,285)   (34,285)
Balance as of June 30, 2022 (unaudited)   556,911   $55    862,500   $86   $5,669,400   $(5,996,718)  $(327,177)
Issuance of Class A shares to Sponsor   3,000    
    
    
    30,000    
    30,000 
Net loss       
        
    
    (16,416)   (16,416)
Balance as of June 30, 2022 (unaudited)   559,911   $55    862,500   $86   $5,699,400   $(6,013,134)  $(313,593)

 

See accompanying notes to unaudited condensed financial statements.

 

3

 

 

SENTINEL ENERGY SERVICES INC.

UNAUDITED CONDENSED StatementS of Cash Flows

 

   For the
Nine Months Ended
September 30,
 
   2023   2022 
Cash Flows From Operating Activities:        
Net loss  $(92,674)  $(87,258)
Adjustments to reconcile net loss to net cash used in operating activities:          
Changes in operating assets and liabilities:          
Prepaid expenses   
-
    2,088 
Prepaid expenses – long term   7,812    7,811 
Accounts payable and accrued expenses   (29,495)   20,418 
Net cash used in operating activities   (114,357)   (56,941)
           
Cash Flows From Financing Activities:          
Proceeds from issuance of Class A common stock - Sponsor   10,000    55,000 
Capital contributions from Sponsor   90,000    
-
 
Net cash provided financing activities   100,000    55,000 
           
Net change in cash   (14,357)   (1,941)
Cash at beginning of period   21,963    8,314 
Cash at end of period  $7,606   $6,373 

 

See accompanying notes to unaudited condensed financial statements.

 

4

 

 

SENTINEL ENERGY SERVICES INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023

 

1. Description of Organization and Business Operations

 

Organization and General

 

Sentinel Energy Services Inc. (the “Company”) was incorporated in the Cayman Islands on June 5, 2017. The Company was formed as a blank check company for the purpose of effecting a merger, amalgamation, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. The Company is also a “smaller reporting company” as defined in the Exchange Act of 1934, as amended (the “Exchange Act”).

 

On December 28, 2018, the Company changed its jurisdiction of incorporation from the Cayman Islands (“Sentinel Cayman”) to the State of Delaware (“Sentinel Delaware”), as described further below (the “Domestication”) and continued to be named Sentinel Energy Services Inc. As a result of the Domestication, the securities of Sentinel Cayman converted into securities of Sentinel Delaware, such that Sentinel Cayman’s issued and outstanding Class A ordinary shares (the “Class A ordinary shares”) and Class B ordinary shares (the “Class B ordinary shares”) automatically converted by operation of law into one share of Class A common stock (“Class A common stock”) and Class B common stock (“Class B common stock”), of Sentinel Delaware, respectively. Similarly, each of Sentinel Cayman’s outstanding units and warrants automatically converted by operation of law, on a one-for-one basis, into Units (as defined below) of Sentinel Delaware and warrants, including the Private Placement Warrants and Public Warrants (each as defined below) to acquire the corresponding number of shares of Class A common stock, respectively. Accordingly, all references to the Company’s capital stock both before and after the Domestication are referred to as shares of “common stock” in this filing.

 

At September 30, 2023, the Company had not yet commenced operations. All activity through September 30, 2023 relates to (1) the Company’s formation and issuance of the Founder Shares (as defined in Note 4), (2) the Public Offering (as defined below) and sale of warrants in a private placement to the Sponsor (the “Private Placement Warrants”) which closed in November 2017, (3) the subsequent search for a business combination candidate, including activities in connection with an announced and subsequently terminated proposed business combination and (4) liquidation activities, including liquidation of the Trust Account (as defined below), following the Company’s inability to consummate a business combination prior to the November 7, 2019 deadline under the Company certificate of incorporation (the “Charter”). The Company has not generated any operating revenues since inception. The Company generated non-operating income in the form of interest income from the proceeds derived from the Public Offering and sale of Private Placement Warrants until November 2019.

 

The Company intended to finance its initial business combination with proceeds from the Company’s initial public offering (the “Public Offering”) of the Company units (“Units”) and the sale of the Private Placement Warrants. Each Unit consisted of (A) one share of the Company’s Class A common stock, par value $0.0001 per share (the “Public Shares”), and (B) one-third of one warrant exercisable to purchase one share of the Company’s Class A common stock (each whole warrant, a “Public Warrant”), and from the Company’s private placement sale of warrants exercisable to purchase one share of Company’s Class A common stock (each, a “Private Placement Warrant”) to the Sentinel Management Holdings, LLC (the “Sponsor”). Upon the closings of the Public Offering and the sale of the Private Placement Warrants, approximately $345,000,000 was placed in a trust account (the “Trust Account”). The Company was not able to consummate a business combination prior to the November 7, 2019 deadline under the Company’s Charter. As a result, the Company commenced the liquidation of the Trust Account, which then had a balance of approximately $355,500,000, and returned the funds held therein to its public stockholders by redeeming 100% of the Public Shares in accordance with the Charter. During the liquidation period, the Company and the holders of the Public Warrants also executed an amendment to the Warrant Agreement, dated as of November 2, 2017, by and between the Company and Continental Stock Transfer & Trust Company, which automatically converted the Public Warrants into the right to receive $0.02 per whole Public Warrant, payable in cash. The redemption of the Public Shares and the conversion of the Public Warrants completely extinguished the public stockholders’ rights in the Company. In addition, the Sponsor forfeited the Private Placement Warrants as a result of the Company being unable to consummate a business combination prior to the deadline in its Charter.

 

5

 

 

SENTINEL ENERGY SERVICES INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023

 

In connection with the redemption of the Public Shares, each stockholder received approximately $10.30 per share on November 18, 2019. The Company withheld approximately $1,350,000 from the distribution. In April 2020, the Company paid the income tax liability for the year ended December 31, 2019 of $259,284 and, following payment of distribution settlement expenses of $100,351, the Company distributed the remaining $1,152,035 to its public stockholders on May 4, 2020 for a distribution of approximately $0.03 per share. The Trust Account was subsequently closed with no balance remaining. In December 2019, the Company paid $225,990 in connection with the conversion of the Public Warrants.

 

Following the redemption of the Public Shares, the conversion of the Public Warrants and the forfeiture of the Private Placement Warrants, there were no Units, Public Shares, Public Warrants or Private Placement Warrants outstanding. Additional shares of Class A common stock were subsequently issued and shares of Class B common stock remain outstanding. For more information on additional issuances, see Note 4 and the Company’s previous filings with the Securities and Exchange Commission (the “SEC”).

 

Initial Business Combination

 

The Company’s management had broad discretion with respect to the specific application of the net proceeds of the Public Offering, although substantially all of the net proceeds of the Public Offering were intended to be generally applied toward consummating an initial business combination.

 

The Charter and the prospectus that the Company filed in connection with the Public Offering provided that the Company had 24 months after the closing of its Public Offering, or until November 7, 2019, to complete a business combination. During the period since the Company’s Public Offering, the Company diligently searched for a business to combine with in a transaction that would generate value for the Company’s stockholders; however, over the same period, the energy sector experienced significant headwinds, which increased the challenges faced by the Company in sourcing a compelling target business. Despite the Company’s best efforts, it was not able to consummate a business combination prior to the November 7, 2019 deadline under its Charter. As a result, the Company commenced the liquidation of the Trust Account and returned the funds held therein to its public stockholders by redeeming 100% of the Company’s Public Shares in accordance with the Charter, which together with the conversion of the Public Warrants extinguished the public stockholders’ rights in the Company.

 

Liquidity and Going Concern

 

In connection with the Company’s assessment of going concern considerations in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Update 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company determined that it does not have sufficient liquidity to meet its future obligations. As of September 30, 2023, the Company had a working capital deficit of $277,994, current liabilities of $296,017, and cash of $7,606.

 

Pursuant a commitment letter from the Sponsor, the Sponsor intends to financially support the Company sufficient for the Company to satisfy its working capital needs until at least November 14, 2024. For additional information, see the information under the captions “Promissory Note Payable – Sponsor,” “Contributions from Related Party” and “Administrative Support Agreement” in Note 4. 

  

6

 

 

SENTINEL ENERGY SERVICES INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023

 

2. Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying unaudited condensed financial statements of the Company are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the accounting and disclosure rules and regulations of the SEC, and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the financial position as of September 30, 2023 and the results of operations and cash flows for the periods presented. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. Interim results are not necessarily indicative of results for a full year.

 

The accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Annual Report on Form 10-K filed by the Company with the SEC on March 31, 2023.

 

Use of Estimates

 

The preparation of 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 expenses during the reporting periods. Actual results could differ from those estimates. 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 unaudited condensed 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.

  

Concentration of Credit Risk

 

The Company has had significant cash balances at financial institutions which throughout the year may exceed the federally insured limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.

  

Financial Instruments

 

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the condensed balance sheets.

 

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 had no cash equivalents as of September 30, 2023 and December 31, 2022.

 

Net Loss per Share of Common Stock

 

Net loss per share of common stock is computed by dividing net loss applicable to the shares of common stock by the weighted average number of shares outstanding for the periods. As a result of the redemption of Public Shares in November 2019, for the three and nine months ended September 30, 2023 and 2022, the Class A shares have no specific redemption rights. Net loss per common share is calculated by dividing the net loss by the weighted average number of Class A and Class B shares outstanding for the periods.

 

7

 

 

SENTINEL ENERGY SERVICES INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023

 

Income Taxes

 

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

  

FASB Topic ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of September 30, 2023 and December 31, 2022. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at September 30, 2023 and December 31, 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has been subject to income tax examinations by major taxing authorities since inception.

 

The Company may be subject to potential examination by federal, state, and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, and compliance with federal, state, and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

 

During the three and nine months ended September 30, 2023 and 2022, the Company recorded no income tax expense.

 

Recent Accounting Pronouncements

 

The Company’s management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have an effect on the Company’s financial statements.

 

3. Public Offering and Private Placement Warrants

 

In November 2017, the Company closed its Public Offering of 34,500,000 units at a price of $10.00 per Unit, with gross proceeds of $345,000,000 from the sale of Units. The closings occurred on November 7, 2017 with respect to 30,000,000 Units and on November 9, 2017 with respect to 4,500,000 Units related to the exercise of the underwriters’ overallotment option.

 

During the liquidation period, the Company and the holders of its Public Warrants executed an amendment to the Warrant Agreement, dated as of November 2, 2017, between the Company and Continental Stock Transfer & Trust Company, to automatically convert all of the outstanding Public Warrants into the right to receive $0.02 per whole Public Warrant, payable in cash. In December 2019, the Company paid $225,990 to its warrant holders in connection with the conversion of the Public Warrants.

 

Simultaneously with the closing of the Public Offering on November 7, 2017, the Sponsor purchased an aggregate of 5,333,333 Private Placement Warrants at a price of $1.50 per whole warrant ($8,000,000 in gross proceeds) in a private placement. Simultaneously with the closing of the overallotment, the Company consummated the private placement of an additional 600,000 Private Placement Warrants to the Sponsor, generating additional gross proceeds of $900,000.

 

8

 

 

SENTINEL ENERGY SERVICES INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023

 

The Company paid an underwriting discount of 2.0% of the per Unit offering price to the underwriters at the closing of the Public Offering, with the Deferred Discount payable upon the Company’s completion of an initial business combination. The Deferred Discount was payable to the underwriters from the amounts held in the Trust Account solely in the event the Company completed its initial business combination. In accordance with the terms of the underwriting agreement entered into in connection with the Public Offering, the underwriters forfeited any rights or claims to the Deferred Discount because the Company was unable to consummate an initial business combination by the November 7, 2019 deadline under its Charter.

 

Following the redemption of the Public Shares, the conversion of the Public Warrants and the forfeiture of the Private Placement Warrants, there were no Units, Public Shares, Public Warrants or Private Placement Warrants outstanding. Additional shares of Class A common stock were subsequently issued and shares of Class B common stock remain outstanding. For more information on additional issuances, see Note 4 and the Company’s previous filings with the SEC.

 

4. Related Party Transactions

 

Founder Shares

 

In June 2017 prior to the Public Offering, the Sponsor entered into an Amended and Restated Securities Purchase Agreement for the purchase of 14,375,000 shares of Class B common stock (the “Founder Shares”) for $25,000, or approximately $0.002 per share. The Sponsor is a portfolio company of CSL Capital Management, L.P., an energy services-focused private equity fund. Following the redemption of the Public Shares, the conversion of the Public Warrants and the forfeiture of the Private Placement Warrants noted above, the only securities of the Company outstanding were the Founder Shares.

 

The Founder Shares are identical to the shares of Class A common stock that were included in the Units sold in the Public Offering except that (1) holders of the Founder Shares have the right to vote on the election of directors prior to an initial business combination, (2) the Founder Shares are subject to certain transfer restrictions, as described in more detail below, (3) holders of the Founder Shares entered into letter agreements with the Company pursuant to which they agreed to waive their redemption rights with respect to any Founder Shares held by them in connection with the completion of an initial business combination, (4) the Founder Shares will automatically convert on a one-for-one basis into shares of Class A common stock at the time of an initial business combination and (5) the Founder Shares are subject to registration rights, as described below.

 

In August 2017, the Sponsor surrendered 5,750,000 shares of its Class B common stock for no consideration to adjust its holdings to an expected 20% of the Company’s combined outstanding shares of Class A common stock and Class B common following the Public Offering, resulting in the Sponsor holding an aggregate of 8,625,000 Founder Shares.

  

In October 2017 and April 2018, the Sponsor transferred 37,500 Founder Shares to Marc Zenner and Jon A. Marshall, respectively, both of whom were independent directors of the Company at the time, at the original purchase price. Each of the Sponsor and Messrs. Zenner and Marshall subsequently agreed to forfeit 90% of their Founder Shares when the Company was unable to consummate a business combination prior to the deadline in its Charter, resulting in the Sponsor currently holding 855,000 Founder Shares and each of Messrs. Zenner and Marshall owning 3,750 Founder Shares. As a result, the total number of Founder Shares outstanding as of September 30, 2023 is 862,500.

 

Transfer Restrictions

 

The terms applicable to the Founder Shares provide that, subject to limited exceptions, the Sponsor may not transfer, assign or sell any of the same until the earlier to occur of (A) one year after the completion of the initial business combination or (B) subsequent to the initial business combination, (x) if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial business combination, or (y) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the Company’s stockholders having the right to exchange their common stock for cash, securities or other property. The Sponsor transferred the portion of its Founder Shares noted above to Messrs. Zenner and Marshall in accordance with those terms or pursuant to a waiver thereof.

 

9

 

 

SENTINEL ENERGY SERVICES INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023

 

Registration Rights

 

The holders of Founder Shares that may be issued equity securities of the Company upon conversion of working capital loans may be entitled to registration rights (in the case of the Founder Shares, only after conversion of such shares to shares of Class A common stock) pursuant to a registration rights agreement, by and between the Company, the Sponsor and Mr. Zenner. The registration rights include certain demand and “piggyback” rights.

 

However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act of 1933, as amended (the “Securities Act”), to become effective until termination of the applicable lock-up period for the securities to be registered. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

 

Promissory Note Payable Sponsor

 

On March 1, 2019, the Company issued a convertible promissory note (the “Convertible Promissory Note”) in the amount of up to $1,500,000 with the Sponsor to fund the Company’s ongoing expenses. The Convertible Promissory Note does not bear interest and all unpaid principal was due and payable in full on the earlier of November 7, 2019 or the consummation of an initial business combination by the Company. The Sponsor had the option to convert any amounts outstanding under the Convertible Promissory Note into warrants of a post-business combination entity to purchase shares, at a conversion price of $1.50 per warrant. On March 31, 2020, the Sponsor converted the $999,640 outstanding into 99,964 shares of Class A common stock of the Company at a conversion price of $10.00 per share.

 

All unpaid principal under the Convertible Promissory Note was due and payable in full on the earlier of November 7, 2019 or the consummation of an initial business combination by the Company by the deadline specified in its Charter. As a result, the Convertible Promissory Note is no longer available to the Company as a source of financing and no amount has been outstanding thereunder since March 31, 2020. As of September 30, 2023 and December 31, 2022, the outstanding balance on Convertible Promissory Note was $0.

 

Contributions from Related Party

 

In January 2022, the Company received a contribution of $25,000 from the Sponsor to fund ongoing operations and expenses. The amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor 2,500 shares of the Company’s Class A common stock at $10.00 per share on January 25, 2022.

 

In September 2022, the Company received a contribution of $30,000 from the Sponsor to fund ongoing operations and expenses. The amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor 3,000 shares of the Company’s Class A common stock at $10.00 per share on September 20, 2022.

 

In December 2022, the Company received a contribution of $60,000 from the Sponsor to fund ongoing operations and expenses. The amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor 6,000 shares of the Company’s Class A common stock at $10.00 per share on December 13, 2022.

 

In March 2023, the Company received a contribution of $10,000 from the Sponsor to fund ongoing operations and expenses. The amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor 1,000 shares of the Company’s Class A common stock at $10.00 per share on March 3, 2023.

 

In July 2023, the Company received a contribution of $70,000 from the Sponsor to fund ongoing operations and expenses. The amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor 7,000 shares of the Company’s Class A common stock at $10.00 per share on July 18, 2023.

 

10

 

 

SENTINEL ENERGY SERVICES INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023

 

In August 2023, the Company received a contribution of $20,000 from the Sponsor to fund ongoing operations and expenses. The amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor 2,000 shares of the Company’s Class A common stock at $10.00 per share on August 31, 2023.

 

As of September 30, 2023 and December 31, 2022, there were 575,911 and 565,911 shares of the Company’s Class A common stock outstanding, respectively, all of which are held by the Sponsor.

 

Administrative Support Agreement

 

Commencing on the date the Units were first listed on the Nasdaq Capital Market, the Company agreed to pay an affiliate of the Sponsor up to $10,000 per month for office space, utilities and secretarial and administrative support. Since the Company was unable to complete its initial business combination prior to the November 7, 2019 deadline in the Charter, pursuant to the Administrative Support Agreement, the Company ceased paying these monthly fees. The Administrative Support Agreement, however, remains in place for the benefit of the Company.

 

The Company did not incur any expenses under the Administrative Support Agreement for the three and nine months ended September 30, 2023 and 2022.

 

5. Stockholders’ Deficit

 

Common Stock

 

The authorized common stock of the Company includes up to 200,000,000 shares of Class A common stock, par value of $0.0001 per share, and 20,000,000 shares of Class B common stock, par value of $0.0001 per share, or the Founder Shares. If the Company entered into an initial business combination, it may (depending on the terms of such an initial business combination) be required to increase the number of shares of Class A common stock which the Company is authorized to issue at the same time as the Company’s stockholders vote on an initial business combination to the extent the Company seeks stockholder approval in connection with an initial business combination. Holders of the Company’s common stock are entitled to one vote for each share of common stock held by them.

 

The Sponsor currently holds 855,000 Founder Shares and each of Messrs. Zenner and Marshall holds 3,750 Founder Shares. For a discussion of transactions resulting in these holdings as well as transactions related to Class A common stock, see Note 4 and the Company’s previous filings with the SEC.

 

At September 30, 2023 and December 31, 2022, there were 575,911 and 565,911 shares of Class A common stock issued and outstanding, respectively, and 862,500 and 862,500 shares of Class B common stock issued and outstanding, respectively.

 

Preferred Stock

 

The Company is authorized to issue 1,000,000 shares of preferred stock, 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, 2023 and December 31, 2022, there were no shares of preferred stock issued or outstanding.

 

6. Subsequent Events

 

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the unaudited condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.

 

11

 

 

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

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q (this “Report”), including, without limitation, statements under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of Exchange Act Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “look,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. There can be no assurance that actual results will not materially differ from expectations. Such statements include, but are not limited to, any statements relating to our ability to consummate any acquisition or other business combination and any other statements that are not statements of current or historical facts. These statements are based on management’s current expectations, but actual results may differ materially due to various factors, including, but not limited to:

 

  our inability to complete our initial business combination;

 

  the lack of a market for our securities; or

 

  our financial performance.

 

The forward-looking statements contained in this Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors” in this Report. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. These risks and others described under “Risk Factors” in this Report may not be exhaustive.

 

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and developments in the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this Report. In addition, even if our results or operations, financial condition and liquidity, and developments in the industry in which we operate are consistent with the forward-looking statements contained in this Report, those results or developments may not be indicative of results or developments in subsequent periods.

 

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

 

Overview

 

The Company was formed as a blank check company for the purpose of effecting a merger, amalgamation, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. For more information about the Company, please see Note 1 to our unaudited condensed financial statements included in this Report.

 

12

 

 

Results of Operations

 

We have not generated any operating revenues to date, and we will likely not generate any operating revenues in the future. Our entire activity up to September 30, 2023 has related (1) the Company’s formation and issuance of the Founder Shares in June 2017, (2) the Public Offering and sale of Private Placement Warrants which closed in November 2017, (3) the subsequent search for a business combination candidate, including activities in connection with an announced and subsequently terminated proposed business combination, and (4) liquidation activities following the Company’s inability to consummate a business combination prior to the November 7, 2019 deadline under the Company’s Charter.

 

For the three months ended September 30, 2023, we had a net loss of $32,571, which consisted of general and administrative expenses.

 

For the three months ended September 30, 2022, we had a net loss of $16,416, which consisted of general and administrative expenses.

 

For the nine months ended September 30, 2023, we had a net loss of $92,674, which consisted of general and administrative expenses.

 

For the nine months ended September 30, 2022, we had a net loss of $87,258, which consisted of general and administrative expenses.

 

Liquidity and Capital Resources

 

We presently have no revenue; our net loss was $32,571 and $92,674 for the three and nine months ended September 30, 2023, respectively, and consisted of general and administrative expenses. Our net loss was $16,416 and $87,258 for the three and nine months ended September 30, 2022, respectively, and consisted of general and administrative expenses. For the three and nine months ended September 30, 2023 and 2022, our liquidity needs were satisfied through funding from our Sponsor. The Company does not expect to seek loans, advances or contributions from parties other than the Sponsor or an affiliate of the Sponsor.

 

Contributions from Related Party

 

In January 2022, the Company received a contribution of $25,000 from the Sponsor to fund ongoing operations and expenses. The amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor 2,500 shares of the Company’s Class A common stock at $10.00 per share on January 25, 2022.

 

In September 2022, the Company received a contribution of $30,000 from the Sponsor to fund ongoing operations and expenses. The amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor 3,000 shares of the Company’s Class A common stock at $10.00 per share on September 20, 2022.

 

In December 2022, the Company received a contribution of $60,000 from the Sponsor to fund ongoing operations and expenses. The amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor 6,000 shares of the Company’s Class A common stock at $10.00 per share on December 13, 2022.

 

In March 2023, the Company received a contribution of $10,000 from the Sponsor to fund ongoing operations and expenses. The amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor 1,000 shares of the Company’s Class A common stock at $10.00 per share on March 3, 2023.

 

In July 2023, the Company received a contribution of $70,000 from the Sponsor to fund ongoing operations and expenses. The amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor 7,000 shares of the Company’s Class A common stock at $10.00 per share on July 18, 2023.

 

In August 2023, the Company received a contribution of $20,000 from the Sponsor to fund ongoing operations and expenses. The amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor 2,000 shares of the Company’s Class A common stock at $10.00 per share on August 31, 2023.

 

13

 

 

Liquidity and Going Concern 

 

In connection with the Company’s assessment of going concern considerations in accordance with the Financial Accounting Standards Board Accounting Standards Update 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company determined that it does not have sufficient liquidity to meet its future obligations; As of September 30, 2023, the Company had a working capital deficit of $277,994, current liabilities of $296,017 and cash of $7,606.

 

Pursuant a commitment letter from the Sponsor, the Sponsor intends to financially support the Company sufficient for the Company to satisfy its working capital needs until at least November 14, 2024. For more information regarding our liquidity, see “-Liquidity and Capital Resources” above.

 

The Company demonstrates adverse conditions that raise substantial doubt about the Company’s ability to continue as a going concern for one year following the issuance of these financial statements. These adverse conditions are negative financial trends, specifically operating loss, working capital deficiency, and other adverse key financial ratios. However, management has determined that, pursuant to a commitment letter from the Sponsor, it has access to funds from the Sponsor that alleviate the substantial doubt about the Company’s ability to continue as a going concern. 

 

The Company has not established any source of revenue to cover its operating costs. Management plans to fund operating expenses with a commitment letter from the Sponsor. The unaudited condensed financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern.

 

Critical Accounting Estimates

 

During the nine months ended September 30, 2023, there have been no material changes in our critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K filed with the SEC on March 31, 2023

 

JOBS Act

 

The Jumpstart Our Business Startups Act (“JOBS Act”) contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. Companies that qualify as an “emerging growth company” under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies and are eligible for reduced reporting requirements provided by the JOBS Act. We are no longer an emerging growth company after December 31, 2022 due to the passing the fifth anniversary of the completion of the Public Offering. As a result, we must adopt all accounting pronouncements as of public company effective dates and are no longer eligible for reduced reporting requirements provided by the JOBS Act.

 

Off-Balance Sheet Arrangements

 

We did not have any off-balance sheet arrangements as of September 30, 2023.

 

Contractual Obligations

 

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities.

 

The underwriters in the Public Offering were entitled to deferred underwriting commissions of $12,075,000. The deferred underwriting commissions would have become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete an initial business combination, subject to the terms of the underwriting agreement. The underwriters were not entitled to any interest accrued on the deferred underwriting commissions. Because we were unable to complete an initial business combination under the November 7, 2019 deadline under our Charter, the underwriters will not receive the deferred underwriting commission.

  

14

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

As a “smaller reporting company,” we are not required to provide disclosure pursuant to this Item.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Under the supervision and with the participation of our management, including our Chief Financial Officer (the “Certifying Officer”) who is both our principal executive and principal financial officer, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the evaluation, our Certifying Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Report.

 

Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Certifying Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

 

We believe, however, that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls systems are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, within a company have been detected.

  

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

15

 

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

To the knowledge of our management, there is no material litigation, arbitration, bankruptcy, receivership, governmental proceeding or other proceeding currently pending against us or any members of our management team in their capacity as such.

 

Item 1A. Risk Factors

 

As of the date of this Report, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K filed with the SEC on March 31, 2023.

 

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

 

On July 18, 2023, the Company issued 7,000 shares of the Company’s Class A common stock to the Sponsor in exchange for the Sponsor’s payment of a $70,000 capital contribution. These shares were issued pursuant to a private placement offering and the proceeds were used to support he ongoing operations of the Company.

 

On August 31, 2023, the Company issued 2,000 shares of the Company’s Class A common stock to the Sponsor in exchange for the Sponsor’s payment of a $20,000 capital contribution. These shares were issued pursuant to a private placement offering and the proceeds were used to support he ongoing operations of the Company.

 

Item 5. Other Information

 

None.

 

16

 

 

Item 6. Exhibits

 

EXHIBIT INDEX

 

Exhibit Number   Description
31.1   Certification of Principal Executive Officer and Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).
     
32.1   Certification of Principal Executive Officer and Principal Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.
     
101.INS   Inline XBRL Instance Document
     
101.SCH   Inline XBRL Taxonomy Extension Schema
     
101.CAL   Inline XBRL Taxonomy Calculation Linkbase
     
101.LAB   Inline XBRL Taxonomy Label Linkbase
     
101.PRE   Inline XBRL Definition Linkbase Document
     
101.DEF   Inline XBRL Definition Linkbase Document
     
104   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

 

17

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

 

November 14, 2023

 

  SENTINEL ENERGY SERVICES INC.
     
  By: /s/ Gerald Cimador
    Gerald Cimador
    Chief Financial Officer
(Principal Executive, Financial and
Accounting Officer)

 

 

18

 

 

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EX-31.1 2 f10q0923ex31-1_sentinel.htm CERTIFICATION

Exhibit 31.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL
OFFICER PURSUANT TO RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002

 

I, Gerald Cimador, certify that:

 

1.I have reviewed this Quarterly Report on Form 10-Q of Sentinel Energy Services Inc.;

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 14, 2023 By: /s/ Gerald Cimador
    Gerald Cimador
    Chief Financial Officer
    (Principal Executive Officer, Principal Financial and Accounting Officer)

 

EX-32.1 3 f10q0923ex32-1_sentinel.htm CERTIFICATION

Exhibit 32.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND

PRINCIPAL FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Sentinel Energy Services Inc. (the “Registrant”) on Form 10-Q for the quarter ended September 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, in the capacity and on the date indicated below, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

 

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

 

Date: November 14, 2023 By: /s/ Gerald Cimador
    Gerald Cimador
    Chief Financial Officer
    (Principal Executive Officer, Principal Financial and Accounting Officer)

 

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Entity Address, State or Province TX  
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Liabilities:    
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EXPENSES        
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Issuance of Class A shares to Sponsor (in Shares) 3,000      
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Description of Organization and Business Operations
9 Months Ended
Sep. 30, 2023
Description of Organization and Business Operations [Abstract]  
Description of Organization and Business Operations

1. Description of Organization and Business Operations

 

Organization and General

 

Sentinel Energy Services Inc. (the “Company”) was incorporated in the Cayman Islands on June 5, 2017. The Company was formed as a blank check company for the purpose of effecting a merger, amalgamation, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. The Company is also a “smaller reporting company” as defined in the Exchange Act of 1934, as amended (the “Exchange Act”).

 

On December 28, 2018, the Company changed its jurisdiction of incorporation from the Cayman Islands (“Sentinel Cayman”) to the State of Delaware (“Sentinel Delaware”), as described further below (the “Domestication”) and continued to be named Sentinel Energy Services Inc. As a result of the Domestication, the securities of Sentinel Cayman converted into securities of Sentinel Delaware, such that Sentinel Cayman’s issued and outstanding Class A ordinary shares (the “Class A ordinary shares”) and Class B ordinary shares (the “Class B ordinary shares”) automatically converted by operation of law into one share of Class A common stock (“Class A common stock”) and Class B common stock (“Class B common stock”), of Sentinel Delaware, respectively. Similarly, each of Sentinel Cayman’s outstanding units and warrants automatically converted by operation of law, on a one-for-one basis, into Units (as defined below) of Sentinel Delaware and warrants, including the Private Placement Warrants and Public Warrants (each as defined below) to acquire the corresponding number of shares of Class A common stock, respectively. Accordingly, all references to the Company’s capital stock both before and after the Domestication are referred to as shares of “common stock” in this filing.

 

At September 30, 2023, the Company had not yet commenced operations. All activity through September 30, 2023 relates to (1) the Company’s formation and issuance of the Founder Shares (as defined in Note 4), (2) the Public Offering (as defined below) and sale of warrants in a private placement to the Sponsor (the “Private Placement Warrants”) which closed in November 2017, (3) the subsequent search for a business combination candidate, including activities in connection with an announced and subsequently terminated proposed business combination and (4) liquidation activities, including liquidation of the Trust Account (as defined below), following the Company’s inability to consummate a business combination prior to the November 7, 2019 deadline under the Company certificate of incorporation (the “Charter”). The Company has not generated any operating revenues since inception. The Company generated non-operating income in the form of interest income from the proceeds derived from the Public Offering and sale of Private Placement Warrants until November 2019.

 

The Company intended to finance its initial business combination with proceeds from the Company’s initial public offering (the “Public Offering”) of the Company units (“Units”) and the sale of the Private Placement Warrants. Each Unit consisted of (A) one share of the Company’s Class A common stock, par value $0.0001 per share (the “Public Shares”), and (B) one-third of one warrant exercisable to purchase one share of the Company’s Class A common stock (each whole warrant, a “Public Warrant”), and from the Company’s private placement sale of warrants exercisable to purchase one share of Company’s Class A common stock (each, a “Private Placement Warrant”) to the Sentinel Management Holdings, LLC (the “Sponsor”). Upon the closings of the Public Offering and the sale of the Private Placement Warrants, approximately $345,000,000 was placed in a trust account (the “Trust Account”). The Company was not able to consummate a business combination prior to the November 7, 2019 deadline under the Company’s Charter. As a result, the Company commenced the liquidation of the Trust Account, which then had a balance of approximately $355,500,000, and returned the funds held therein to its public stockholders by redeeming 100% of the Public Shares in accordance with the Charter. During the liquidation period, the Company and the holders of the Public Warrants also executed an amendment to the Warrant Agreement, dated as of November 2, 2017, by and between the Company and Continental Stock Transfer & Trust Company, which automatically converted the Public Warrants into the right to receive $0.02 per whole Public Warrant, payable in cash. The redemption of the Public Shares and the conversion of the Public Warrants completely extinguished the public stockholders’ rights in the Company. In addition, the Sponsor forfeited the Private Placement Warrants as a result of the Company being unable to consummate a business combination prior to the deadline in its Charter.

 

In connection with the redemption of the Public Shares, each stockholder received approximately $10.30 per share on November 18, 2019. The Company withheld approximately $1,350,000 from the distribution. In April 2020, the Company paid the income tax liability for the year ended December 31, 2019 of $259,284 and, following payment of distribution settlement expenses of $100,351, the Company distributed the remaining $1,152,035 to its public stockholders on May 4, 2020 for a distribution of approximately $0.03 per share. The Trust Account was subsequently closed with no balance remaining. In December 2019, the Company paid $225,990 in connection with the conversion of the Public Warrants.

 

Following the redemption of the Public Shares, the conversion of the Public Warrants and the forfeiture of the Private Placement Warrants, there were no Units, Public Shares, Public Warrants or Private Placement Warrants outstanding. Additional shares of Class A common stock were subsequently issued and shares of Class B common stock remain outstanding. For more information on additional issuances, see Note 4 and the Company’s previous filings with the Securities and Exchange Commission (the “SEC”).

 

Initial Business Combination

 

The Company’s management had broad discretion with respect to the specific application of the net proceeds of the Public Offering, although substantially all of the net proceeds of the Public Offering were intended to be generally applied toward consummating an initial business combination.

 

The Charter and the prospectus that the Company filed in connection with the Public Offering provided that the Company had 24 months after the closing of its Public Offering, or until November 7, 2019, to complete a business combination. During the period since the Company’s Public Offering, the Company diligently searched for a business to combine with in a transaction that would generate value for the Company’s stockholders; however, over the same period, the energy sector experienced significant headwinds, which increased the challenges faced by the Company in sourcing a compelling target business. Despite the Company’s best efforts, it was not able to consummate a business combination prior to the November 7, 2019 deadline under its Charter. As a result, the Company commenced the liquidation of the Trust Account and returned the funds held therein to its public stockholders by redeeming 100% of the Company’s Public Shares in accordance with the Charter, which together with the conversion of the Public Warrants extinguished the public stockholders’ rights in the Company.

 

Liquidity and Going Concern

 

In connection with the Company’s assessment of going concern considerations in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Update 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company determined that it does not have sufficient liquidity to meet its future obligations. As of September 30, 2023, the Company had a working capital deficit of $277,994, current liabilities of $296,017, and cash of $7,606.

 

Pursuant a commitment letter from the Sponsor, the Sponsor intends to financially support the Company sufficient for the Company to satisfy its working capital needs until at least November 14, 2024. For additional information, see the information under the captions “Promissory Note Payable – Sponsor,” “Contributions from Related Party” and “Administrative Support Agreement” in Note 4. 

XML 17 R9.htm IDEA: XBRL DOCUMENT v3.23.3
Summary of Significant Accounting Policies
9 Months Ended
Sep. 30, 2023
Summary of Significant Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying unaudited condensed financial statements of the Company are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the accounting and disclosure rules and regulations of the SEC, and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the financial position as of September 30, 2023 and the results of operations and cash flows for the periods presented. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. Interim results are not necessarily indicative of results for a full year.

 

The accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Annual Report on Form 10-K filed by the Company with the SEC on March 31, 2023.

 

Use of Estimates

 

The preparation of 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 expenses during the reporting periods. Actual results could differ from those estimates. 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 unaudited condensed 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.

  

Concentration of Credit Risk

 

The Company has had significant cash balances at financial institutions which throughout the year may exceed the federally insured limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.

  

Financial Instruments

 

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the condensed balance sheets.

 

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 had no cash equivalents as of September 30, 2023 and December 31, 2022.

 

Net Loss per Share of Common Stock

 

Net loss per share of common stock is computed by dividing net loss applicable to the shares of common stock by the weighted average number of shares outstanding for the periods. As a result of the redemption of Public Shares in November 2019, for the three and nine months ended September 30, 2023 and 2022, the Class A shares have no specific redemption rights. Net loss per common share is calculated by dividing the net loss by the weighted average number of Class A and Class B shares outstanding for the periods.

 

Income Taxes

 

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

  

FASB Topic ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of September 30, 2023 and December 31, 2022. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at September 30, 2023 and December 31, 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has been subject to income tax examinations by major taxing authorities since inception.

 

The Company may be subject to potential examination by federal, state, and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, and compliance with federal, state, and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

 

During the three and nine months ended September 30, 2023 and 2022, the Company recorded no income tax expense.

 

Recent Accounting Pronouncements

 

The Company’s management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have an effect on the Company’s financial statements.

XML 18 R10.htm IDEA: XBRL DOCUMENT v3.23.3
Public Offering and Private Placement Warrants
9 Months Ended
Sep. 30, 2023
Public Offering and Private Placement Warrants [Abstract]  
Public Offering and Private Placement Warrants

3. Public Offering and Private Placement Warrants

 

In November 2017, the Company closed its Public Offering of 34,500,000 units at a price of $10.00 per Unit, with gross proceeds of $345,000,000 from the sale of Units. The closings occurred on November 7, 2017 with respect to 30,000,000 Units and on November 9, 2017 with respect to 4,500,000 Units related to the exercise of the underwriters’ overallotment option.

 

During the liquidation period, the Company and the holders of its Public Warrants executed an amendment to the Warrant Agreement, dated as of November 2, 2017, between the Company and Continental Stock Transfer & Trust Company, to automatically convert all of the outstanding Public Warrants into the right to receive $0.02 per whole Public Warrant, payable in cash. In December 2019, the Company paid $225,990 to its warrant holders in connection with the conversion of the Public Warrants.

 

Simultaneously with the closing of the Public Offering on November 7, 2017, the Sponsor purchased an aggregate of 5,333,333 Private Placement Warrants at a price of $1.50 per whole warrant ($8,000,000 in gross proceeds) in a private placement. Simultaneously with the closing of the overallotment, the Company consummated the private placement of an additional 600,000 Private Placement Warrants to the Sponsor, generating additional gross proceeds of $900,000.

 

The Company paid an underwriting discount of 2.0% of the per Unit offering price to the underwriters at the closing of the Public Offering, with the Deferred Discount payable upon the Company’s completion of an initial business combination. The Deferred Discount was payable to the underwriters from the amounts held in the Trust Account solely in the event the Company completed its initial business combination. In accordance with the terms of the underwriting agreement entered into in connection with the Public Offering, the underwriters forfeited any rights or claims to the Deferred Discount because the Company was unable to consummate an initial business combination by the November 7, 2019 deadline under its Charter.

 

Following the redemption of the Public Shares, the conversion of the Public Warrants and the forfeiture of the Private Placement Warrants, there were no Units, Public Shares, Public Warrants or Private Placement Warrants outstanding. Additional shares of Class A common stock were subsequently issued and shares of Class B common stock remain outstanding. For more information on additional issuances, see Note 4 and the Company’s previous filings with the SEC.

XML 19 R11.htm IDEA: XBRL DOCUMENT v3.23.3
Related Party Transactions
9 Months Ended
Sep. 30, 2023
Related Party Transactions [Abstract]  
Related Party Transactions

4. Related Party Transactions

 

Founder Shares

 

In June 2017 prior to the Public Offering, the Sponsor entered into an Amended and Restated Securities Purchase Agreement for the purchase of 14,375,000 shares of Class B common stock (the “Founder Shares”) for $25,000, or approximately $0.002 per share. The Sponsor is a portfolio company of CSL Capital Management, L.P., an energy services-focused private equity fund. Following the redemption of the Public Shares, the conversion of the Public Warrants and the forfeiture of the Private Placement Warrants noted above, the only securities of the Company outstanding were the Founder Shares.

 

The Founder Shares are identical to the shares of Class A common stock that were included in the Units sold in the Public Offering except that (1) holders of the Founder Shares have the right to vote on the election of directors prior to an initial business combination, (2) the Founder Shares are subject to certain transfer restrictions, as described in more detail below, (3) holders of the Founder Shares entered into letter agreements with the Company pursuant to which they agreed to waive their redemption rights with respect to any Founder Shares held by them in connection with the completion of an initial business combination, (4) the Founder Shares will automatically convert on a one-for-one basis into shares of Class A common stock at the time of an initial business combination and (5) the Founder Shares are subject to registration rights, as described below.

 

In August 2017, the Sponsor surrendered 5,750,000 shares of its Class B common stock for no consideration to adjust its holdings to an expected 20% of the Company’s combined outstanding shares of Class A common stock and Class B common following the Public Offering, resulting in the Sponsor holding an aggregate of 8,625,000 Founder Shares.

  

In October 2017 and April 2018, the Sponsor transferred 37,500 Founder Shares to Marc Zenner and Jon A. Marshall, respectively, both of whom were independent directors of the Company at the time, at the original purchase price. Each of the Sponsor and Messrs. Zenner and Marshall subsequently agreed to forfeit 90% of their Founder Shares when the Company was unable to consummate a business combination prior to the deadline in its Charter, resulting in the Sponsor currently holding 855,000 Founder Shares and each of Messrs. Zenner and Marshall owning 3,750 Founder Shares. As a result, the total number of Founder Shares outstanding as of September 30, 2023 is 862,500.

 

Transfer Restrictions

 

The terms applicable to the Founder Shares provide that, subject to limited exceptions, the Sponsor may not transfer, assign or sell any of the same until the earlier to occur of (A) one year after the completion of the initial business combination or (B) subsequent to the initial business combination, (x) if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial business combination, or (y) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the Company’s stockholders having the right to exchange their common stock for cash, securities or other property. The Sponsor transferred the portion of its Founder Shares noted above to Messrs. Zenner and Marshall in accordance with those terms or pursuant to a waiver thereof.

 

Registration Rights

 

The holders of Founder Shares that may be issued equity securities of the Company upon conversion of working capital loans may be entitled to registration rights (in the case of the Founder Shares, only after conversion of such shares to shares of Class A common stock) pursuant to a registration rights agreement, by and between the Company, the Sponsor and Mr. Zenner. The registration rights include certain demand and “piggyback” rights.

 

However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act of 1933, as amended (the “Securities Act”), to become effective until termination of the applicable lock-up period for the securities to be registered. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

 

Promissory Note Payable Sponsor

 

On March 1, 2019, the Company issued a convertible promissory note (the “Convertible Promissory Note”) in the amount of up to $1,500,000 with the Sponsor to fund the Company’s ongoing expenses. The Convertible Promissory Note does not bear interest and all unpaid principal was due and payable in full on the earlier of November 7, 2019 or the consummation of an initial business combination by the Company. The Sponsor had the option to convert any amounts outstanding under the Convertible Promissory Note into warrants of a post-business combination entity to purchase shares, at a conversion price of $1.50 per warrant. On March 31, 2020, the Sponsor converted the $999,640 outstanding into 99,964 shares of Class A common stock of the Company at a conversion price of $10.00 per share.

 

All unpaid principal under the Convertible Promissory Note was due and payable in full on the earlier of November 7, 2019 or the consummation of an initial business combination by the Company by the deadline specified in its Charter. As a result, the Convertible Promissory Note is no longer available to the Company as a source of financing and no amount has been outstanding thereunder since March 31, 2020. As of September 30, 2023 and December 31, 2022, the outstanding balance on Convertible Promissory Note was $0.

 

Contributions from Related Party

 

In January 2022, the Company received a contribution of $25,000 from the Sponsor to fund ongoing operations and expenses. The amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor 2,500 shares of the Company’s Class A common stock at $10.00 per share on January 25, 2022.

 

In September 2022, the Company received a contribution of $30,000 from the Sponsor to fund ongoing operations and expenses. The amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor 3,000 shares of the Company’s Class A common stock at $10.00 per share on September 20, 2022.

 

In December 2022, the Company received a contribution of $60,000 from the Sponsor to fund ongoing operations and expenses. The amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor 6,000 shares of the Company’s Class A common stock at $10.00 per share on December 13, 2022.

 

In March 2023, the Company received a contribution of $10,000 from the Sponsor to fund ongoing operations and expenses. The amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor 1,000 shares of the Company’s Class A common stock at $10.00 per share on March 3, 2023.

 

In July 2023, the Company received a contribution of $70,000 from the Sponsor to fund ongoing operations and expenses. The amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor 7,000 shares of the Company’s Class A common stock at $10.00 per share on July 18, 2023.

 

In August 2023, the Company received a contribution of $20,000 from the Sponsor to fund ongoing operations and expenses. The amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor 2,000 shares of the Company’s Class A common stock at $10.00 per share on August 31, 2023.

 

As of September 30, 2023 and December 31, 2022, there were 575,911 and 565,911 shares of the Company’s Class A common stock outstanding, respectively, all of which are held by the Sponsor.

 

Administrative Support Agreement

 

Commencing on the date the Units were first listed on the Nasdaq Capital Market, the Company agreed to pay an affiliate of the Sponsor up to $10,000 per month for office space, utilities and secretarial and administrative support. Since the Company was unable to complete its initial business combination prior to the November 7, 2019 deadline in the Charter, pursuant to the Administrative Support Agreement, the Company ceased paying these monthly fees. The Administrative Support Agreement, however, remains in place for the benefit of the Company.

 

The Company did not incur any expenses under the Administrative Support Agreement for the three and nine months ended September 30, 2023 and 2022.

XML 20 R12.htm IDEA: XBRL DOCUMENT v3.23.3
Stockholders’ Deficit
9 Months Ended
Sep. 30, 2023
Stockholders’ Deficit [Abstract]  
Stockholders’ Deficit

5. Stockholders’ Deficit

 

Common Stock

 

The authorized common stock of the Company includes up to 200,000,000 shares of Class A common stock, par value of $0.0001 per share, and 20,000,000 shares of Class B common stock, par value of $0.0001 per share, or the Founder Shares. If the Company entered into an initial business combination, it may (depending on the terms of such an initial business combination) be required to increase the number of shares of Class A common stock which the Company is authorized to issue at the same time as the Company’s stockholders vote on an initial business combination to the extent the Company seeks stockholder approval in connection with an initial business combination. Holders of the Company’s common stock are entitled to one vote for each share of common stock held by them.

 

The Sponsor currently holds 855,000 Founder Shares and each of Messrs. Zenner and Marshall holds 3,750 Founder Shares. For a discussion of transactions resulting in these holdings as well as transactions related to Class A common stock, see Note 4 and the Company’s previous filings with the SEC.

 

At September 30, 2023 and December 31, 2022, there were 575,911 and 565,911 shares of Class A common stock issued and outstanding, respectively, and 862,500 and 862,500 shares of Class B common stock issued and outstanding, respectively.

 

Preferred Stock

 

The Company is authorized to issue 1,000,000 shares of preferred stock, 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, 2023 and December 31, 2022, there were no shares of preferred stock issued or outstanding.

XML 21 R13.htm IDEA: XBRL DOCUMENT v3.23.3
Subsequent Events
9 Months Ended
Sep. 30, 2023
Subsequent Events [Abstract]  
Subsequent Events

6. Subsequent Events

 

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the unaudited condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.

XML 22 R14.htm IDEA: XBRL DOCUMENT v3.23.3
Accounting Policies, by Policy (Policies)
9 Months Ended
Sep. 30, 2023
Summary of Significant Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed financial statements of the Company are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the accounting and disclosure rules and regulations of the SEC, and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the financial position as of September 30, 2023 and the results of operations and cash flows for the periods presented. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. Interim results are not necessarily indicative of results for a full year.

The accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Annual Report on Form 10-K filed by the Company with the SEC on March 31, 2023.

Use of Estimates

Use of Estimates

The preparation of 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 expenses during the reporting periods. Actual results could differ from those estimates. 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 unaudited condensed 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.

Concentration of Credit Risk

Concentration of Credit Risk

The Company has had significant cash balances at financial institutions which throughout the year may exceed the federally insured limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.

Financial Instruments

Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the condensed balance sheets.

Cash and Cash Equivalents

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 had no cash equivalents as of September 30, 2023 and December 31, 2022.

Net Loss per Share of Common Stock

Net Loss per Share of Common Stock

Net loss per share of common stock is computed by dividing net loss applicable to the shares of common stock by the weighted average number of shares outstanding for the periods. As a result of the redemption of Public Shares in November 2019, for the three and nine months ended September 30, 2023 and 2022, the Class A shares have no specific redemption rights. Net loss per common share is calculated by dividing the net loss by the weighted average number of Class A and Class B shares outstanding for the periods.

 

Income Taxes

Income Taxes

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

FASB Topic ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of September 30, 2023 and December 31, 2022. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at September 30, 2023 and December 31, 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has been subject to income tax examinations by major taxing authorities since inception.

The Company may be subject to potential examination by federal, state, and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, and compliance with federal, state, and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

During the three and nine months ended September 30, 2023 and 2022, the Company recorded no income tax expense.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

The Company’s management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have an effect on the Company’s financial statements.

XML 23 R15.htm IDEA: XBRL DOCUMENT v3.23.3
Description of Organization and Business Operations (Details) - USD ($)
1 Months Ended 9 Months Ended
May 04, 2020
Nov. 07, 2019
Nov. 02, 2017
Apr. 30, 2020
Dec. 31, 2019
Sep. 30, 2023
Dec. 31, 2022
Nov. 18, 2019
Description of Organization and Business Operations (Details) [Line Items]                
Liquidation of trust account   $ 355,500,000            
Public shares, percentage   100.00%       100.00%    
Public warrant per share (in Dollars per share)     $ 0.02          
Amount withheld from distribution           $ 1,350,000    
Payments of income tax liability       $ 259,284        
Payment of distribution settlement expenses       $ 100,351        
Amount of distributed remaining to public shareholder $ 1,152,035              
Distribution price per share (in Dollars per share) $ 0.03              
Working capital deficit           277,994    
Current liabilities           296,017    
Cash           7,606    
Public Shares [Member]                
Description of Organization and Business Operations (Details) [Line Items]                
Stockholder received (in Dollars per share)               $ 10.3
Private Placement Warrants [Member]                
Description of Organization and Business Operations (Details) [Line Items]                
Sale of stock in amount           $ 345,000,000    
Class A Common Stock [Member]                
Description of Organization and Business Operations (Details) [Line Items]                
Common stock par value (in Dollars per share)           $ 0.0001 $ 0.0001  
Class A Common Stock [Member] | Public Shares [Member]                
Description of Organization and Business Operations (Details) [Line Items]                
Common stock par value (in Dollars per share)           $ 0.0001    
Warrant [Member]                
Description of Organization and Business Operations (Details) [Line Items]                
Payment of warrant holders         $ 225,990      
XML 24 R16.htm IDEA: XBRL DOCUMENT v3.23.3
Summary of Significant Accounting Policies (Details)
Sep. 30, 2023
USD ($)
Summary of Significant Accounting Policies [Abstract]  
Federally insured limit $ 250,000
XML 25 R17.htm IDEA: XBRL DOCUMENT v3.23.3
Public Offering and Private Placement Warrants (Details) - USD ($)
1 Months Ended 9 Months Ended
Nov. 09, 2017
Nov. 07, 2017
Nov. 02, 2017
Dec. 31, 2019
Nov. 30, 2017
Sep. 30, 2023
Public Offering and Private Placement Warrants (Details) [Line Items]            
Percentage of underwriting discount           2.00%
Public Offering [Member]            
Public Offering and Private Placement Warrants (Details) [Line Items]            
Number of shares in units         34,500,000  
Price per share (in Dollars per share)         $ 10  
Gross proceeds from sale of units (in Dollars)         $ 345,000,000  
Over-Allotment Option [Member]            
Public Offering and Private Placement Warrants (Details) [Line Items]            
Number of shares in units 4,500,000 30,000,000        
Public Warrant [Member]            
Public Offering and Private Placement Warrants (Details) [Line Items]            
Warrant exercise price (in Dollars per share)     $ 0.02      
Paid to warrant (in Dollars)       $ 225,990    
Sponsor [Member] | Private Placement [Member]            
Public Offering and Private Placement Warrants (Details) [Line Items]            
Paid to warrant (in Dollars)   $ 900,000        
Sponsor [Member] | Private Placement Warrants [Member]            
Public Offering and Private Placement Warrants (Details) [Line Items]            
Number of shares in units   5,333,333        
Gross proceeds from sale of units (in Dollars)   $ 8,000,000        
Warrant price (in Dollars per share)   $ 1.5        
Sale of public offering, shares   600,000        
XML 26 R18.htm IDEA: XBRL DOCUMENT v3.23.3
Related Party Transactions (Details) - USD ($)
1 Months Ended 3 Months Ended 9 Months Ended
Aug. 31, 2023
Jul. 31, 2023
Mar. 31, 2023
Dec. 31, 2022
Sep. 30, 2022
Jan. 31, 2022
Apr. 30, 2018
Oct. 31, 2017
Aug. 31, 2017
Jun. 30, 2017
Mar. 31, 2020
Sep. 30, 2023
Jul. 18, 2023
Mar. 03, 2023
Dec. 13, 2022
Sep. 20, 2022
Jan. 25, 2022
Mar. 01, 2019
Related Party Transactions (Details) [Line Items]                                    
Price per share (in Dollars per share)                   $ 0.002       $ 10        
Percentage of subject to forfeiture                       90.00%            
Aggregate of founder shares                 8,625,000                  
Sponsor transferred shares             37,500         855,000            
Founder shares outstanding                       862,500            
Convertible promissory note outstanding balance (in Dollars)       $ 0               $ 0            
Operations and expenses (in Dollars) $ 20,000 $ 70,000 $ 10,000 $ 60,000 $ 30,000 $ 25,000                        
Common stock, shares Issued 2,000                       7,000 1,000        
Pay an affiliate (in Dollars)                       $ 10,000            
Class B Common Stock [Member]                                    
Related Party Transactions (Details) [Line Items]                                    
Purchase of shares                   14,375,000                
Class B Common Stock [Member] | Founder Shares [Member]                                    
Related Party Transactions (Details) [Line Items]                                    
Aggregate price (in Dollars)                   $ 25,000                
Class A Common Stock [Member]                                    
Related Party Transactions (Details) [Line Items]                                    
Price per share (in Dollars per share) $ 10                       $ 10   $ 10 $ 10 $ 10  
Exceeds price per share (in Dollars per share)                       $ 12            
Common stock, shares Issued                               3,000 2,500  
Convertible Promissory Note [Member]                                    
Related Party Transactions (Details) [Line Items]                                    
Convertible promissory note amount (in Dollars)                                   $ 1,500,000
Conversion price of per share (in Dollars per share)                                   $ 1.5
Sponsor converted the outstanding (in Dollars)                     $ 999,640              
Convertible Promissory Note [Member] | Class A Common Stock [Member]                                    
Related Party Transactions (Details) [Line Items]                                    
Conversion price of per share (in Dollars per share)                     $ 10              
Converted into common stock, shares                     99,964              
Sponsor [Member]                                    
Related Party Transactions (Details) [Line Items]                                    
Percentage of subject to forfeiture                 20.00%                  
Sponsor transferred shares                       3,750            
Sponsor [Member] | Class B Common Stock [Member]                                    
Related Party Transactions (Details) [Line Items]                                    
Subject to forfeiture                 5,750,000                  
Sponsor [Member] | Class A Common Stock [Member]                                    
Related Party Transactions (Details) [Line Items]                                    
Common stock, shares Issued                             6,000      
Common stock, shares outstanding       565,911               575,911            
Founder Shares [Member]                                    
Related Party Transactions (Details) [Line Items]                                    
Sponsor transferred shares               37,500                    
XML 27 R19.htm IDEA: XBRL DOCUMENT v3.23.3
Stockholders’ Deficit (Details) - $ / shares
9 Months Ended
Sep. 30, 2023
Dec. 31, 2022
Stockholders’ Deficit (Details) [Line Items]    
Preferred shares, authorized 1,000,000 1,000,000
Preferred stock, par value (in Dollars per share) $ 0.0001 $ 0.0001
Preferred stock issued
Preferred stock outstanding
Class A Common Stock [Member]    
Stockholders’ Deficit (Details) [Line Items]    
Common shares, authorized 200,000,000 200,000,000
Common shares, par value (in Dollars per share) $ 0.0001 $ 0.0001
Common stock issued 575,911 565,911
Common shares, outstanding 575,911 565,911
Class B Common Stock [Member]    
Stockholders’ Deficit (Details) [Line Items]    
Common shares, authorized 20,000,000 20,000,000
Common shares, par value (in Dollars per share) $ 0.0001 $ 0.0001
Common stock issued 862,500 862,500
Common shares, outstanding 862,500 862,500
Messrs. Zenner [Member]    
Stockholders’ Deficit (Details) [Line Items]    
Founder shares 855,000  
Marshall [Member]    
Stockholders’ Deficit (Details) [Line Items]    
Founder shares 3,750  
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DE 98-1370747 2500 Summer Street Suite 1100 Houston TX 77007 (281) 407-0686 Yes Yes Non-accelerated Filer true false true 575911 862500 7606 21963 10417 10417 18023 32380 17364 25176 35387 57556 296017 325512 296017 325512 0.0001 0.0001 1000000 1000000 0.0001 0.0001 200000000 200000000 575911 575911 565911 565911 58 56 0.0001 0.0001 20000000 20000000 862500 862500 862500 862500 86 86 5859397 5759399 -6120171 -6027497 -260630 -267956 35387 57556 32571 16416 92674 87258 32571 16416 92674 87258 -32571 -16416 -92674 -87258 -32571 -16416 -92674 -87258 1435763 1274620 1431301 1415801 -0.02 -0.01 -0.06 -0.06 565911 56 862500 86 5759399 -6027497 -267956 1000 10000 10000 -35651 -35651 566911 56 862500 86 5769399 -6063148 -293607 -24452 -24452 566911 56 862500 86 5769399 -6087600 -318059 9000 2 89998 90000 -32571 -32571 575911 58 862500 86 5859397 -6120171 -260630 554411 55 862500 86 5644400 -5925876 -281335 2500 25000 25000 -36557 -36557 556911 55 862500 86 5669400 -5962433 -292892 -34285 -34285 556911 55 862500 86 5669400 -5996718 -327177 3000 30000 30000 -16416 -16416 559911 55 862500 86 5699400 -6013134 -313593 -92674 -87258 -2088 -7812 -7811 -29495 20418 -114357 -56941 10000 55000 90000 100000 55000 -14357 -1941 21963 8314 7606 6373 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>1. Description of Organization and Business Operations</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Organization and General</span></i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Sentinel Energy Services Inc. (the “Company”) was incorporated in the Cayman Islands on June 5, 2017. The Company was formed as a blank check company for the purpose of effecting a merger, amalgamation, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. The Company is also a “smaller reporting company” as defined in the Exchange Act of 1934, as amended (the “Exchange Act”).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On December 28, 2018, the Company changed its jurisdiction of incorporation from the Cayman Islands (“Sentinel Cayman”) to the State of Delaware (“Sentinel Delaware”), as described further below (the “Domestication”) and continued to be named Sentinel Energy Services Inc. As a result of the Domestication, the securities of Sentinel Cayman converted into securities of Sentinel Delaware, such that Sentinel Cayman’s issued and outstanding Class A ordinary shares (the “Class A ordinary shares”) and Class B ordinary shares (the “Class B ordinary shares”) automatically converted by operation of law into one share of Class A common stock (“Class A common stock”) and Class B common stock (“Class B common stock”), of Sentinel Delaware, respectively. Similarly, each of Sentinel Cayman’s outstanding units and warrants automatically converted by operation of law, on a one-for-one basis, into Units (as defined below) of Sentinel Delaware and warrants, including the Private Placement Warrants and Public Warrants (each as defined below) to acquire the corresponding number of shares of Class A common stock, respectively. Accordingly, all references to the Company’s capital stock both before and after the Domestication are referred to as shares of “common stock” in this filing.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At September 30, 2023, the Company had not yet commenced operations. All activity through September 30, 2023 relates to (1) the Company’s formation and issuance of the Founder Shares (as defined in Note 4), (2) the Public Offering (as defined below) and sale of warrants in a private placement to the Sponsor (the “Private Placement Warrants”) which closed in November 2017, (3) the subsequent search for a business combination candidate, including activities in connection with an announced and subsequently terminated proposed business combination and (4) liquidation activities, including liquidation of the Trust Account (as defined below), following the Company’s inability to consummate a business combination prior to the November 7, 2019 deadline under the Company certificate of incorporation (the “Charter”). The Company has not generated any operating revenues since inception. The Company generated non-operating income in the form of interest income from the proceeds derived from the Public Offering and sale of Private Placement Warrants until November 2019.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company intended to finance its initial business combination with proceeds from the Company’s initial public offering (the “Public Offering”) of the Company units (“Units”) and the sale of the Private Placement Warrants. Each Unit consisted of (A) one share of the Company’s Class A common stock, par value $0.0001 per share (the “Public Shares”), and (B) one-third of one warrant exercisable to purchase one share of the Company’s Class A common stock (each whole warrant, a “Public Warrant”), and from the Company’s private placement sale of warrants exercisable to purchase one share of Company’s Class A common stock (each, a “Private Placement Warrant”) to the Sentinel Management Holdings, LLC (the “Sponsor”). Upon the closings of the Public Offering and the sale of the Private Placement Warrants, approximately $345,000,000 was placed in a trust account (the “Trust Account”). The Company was not able to consummate a business combination prior to the November 7, 2019 deadline under the Company’s Charter. As a result, the Company commenced the liquidation of the Trust Account, which then had a balance of approximately $355,500,000, and returned the funds held therein to its public stockholders by redeeming 100% of the Public Shares in accordance with the Charter. During the liquidation period, the Company and the holders of the Public Warrants also executed an amendment to the Warrant Agreement, dated as of November 2, 2017, by and between the Company and Continental Stock Transfer &amp; Trust Company, which automatically converted the Public Warrants into the right to receive $0.02 per whole Public Warrant, payable in cash. The redemption of the Public Shares and the conversion of the Public Warrants completely extinguished the public stockholders’ rights in the Company. In addition, the Sponsor forfeited the Private Placement Warrants as a result of the Company being unable to consummate a business combination prior to the deadline in its Charter.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection with the redemption of the Public Shares, each stockholder received approximately $10.30 per share on November 18, 2019. The Company withheld approximately $1,350,000 from the distribution. In April 2020, the Company paid the income tax liability for the year ended December 31, 2019 of $259,284 and, following payment of distribution settlement expenses of $100,351, the Company distributed the remaining $1,152,035 to its public stockholders on May 4, 2020 for a distribution of approximately $0.03 per share. The Trust Account was subsequently closed with no balance remaining. In December 2019, the Company paid $225,990 in connection with the conversion of the Public Warrants.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Following the redemption of the Public Shares, the conversion of the Public Warrants and the forfeiture of the Private Placement Warrants, there were no Units, Public Shares, Public Warrants or Private Placement Warrants outstanding. Additional shares of Class A common stock were subsequently issued and shares of Class B common stock remain outstanding. For more information on additional issuances, see Note 4 and the Company’s previous filings with the Securities and Exchange Commission (the “SEC”).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Initial Business Combination</span></i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company’s management had broad discretion with respect to the specific application of the net proceeds of the Public Offering, although substantially all of the net proceeds of the Public Offering were intended to be generally applied toward consummating an initial business combination.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Charter and the prospectus that the Company filed in connection with the Public Offering provided that the Company had 24 months after the closing of its Public Offering, or until November 7, 2019, to complete a business combination. During the period since the Company’s Public Offering, the Company diligently searched for a business to combine with in a transaction that would generate value for the Company’s stockholders; however, over the same period, the energy sector experienced significant headwinds, which increased the challenges faced by the Company in sourcing a compelling target business. Despite the Company’s best efforts, it was not able to consummate a business combination prior to the November 7, 2019 deadline under its Charter. As a result, the Company commenced the liquidation of the Trust Account and returned the funds held therein to its public stockholders by redeeming 100% of the Company’s Public Shares in accordance with the Charter, which together with the conversion of the Public Warrants extinguished the public stockholders’ rights in the Company.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Liquidity and Going Concern</span></i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection with the Company’s assessment of going concern considerations in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Update 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company determined that it does not have sufficient liquidity to meet its future obligations. As of September 30, 2023, the Company had a working capital deficit of $277,994, current liabilities of $296,017, and cash of $7,606.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Pursuant a commitment letter from the Sponsor, the Sponsor intends to financially support the Company sufficient for the Company to satisfy its working capital needs until at least November 14, 2024. For additional information, see the information under the captions</span> <span style="font-family: Times New Roman, Times, Serif">“Promissory Note Payable – Sponsor,” “Contributions from Related Party” and “Administrative Support Agreement” in Note 4. </span></p> 0.0001 345000000 355500000 1 0.02 10.3 1350000 259284 100351 1152035 0.03 225990 1 277994 296017 7606 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>2. Summary of Significant Accounting Policies</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Basis of Presentation</span></i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The accompanying unaudited condensed financial statements of the Company are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the accounting and disclosure rules and regulations of the SEC, and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the financial position as of September 30, 2023 and the results of operations and cash flows for the periods presented. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. Interim results are not necessarily indicative of results for a full year.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Annual Report on Form 10-K filed by the Company with the SEC on March 31, 2023.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Use of Estimates</span></i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The preparation of 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 expenses during the reporting periods. Actual results could differ from those estimates. 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 unaudited condensed 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Concentration of Credit Risk</span></i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company has had significant cash balances at financial institutions which throughout the year may exceed the federally insured limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Financial Instruments</span></i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the condensed balance sheets.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Cash and Cash Equivalents</span></i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had no cash equivalents as of September 30, 2023 and December 31, 2022.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Net Loss per Share of Common Stock</span></i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Net loss per share of common stock is computed by dividing net loss applicable to the shares of common stock by the weighted average number of shares outstanding for the periods. As a result of the redemption of Public Shares in November 2019, for the three and nine months ended September 30, 2023 and 2022, the Class A shares have no specific redemption rights. Net loss per common share is calculated by dividing the net loss by the weighted average number of Class A and Class B shares outstanding for the periods.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Income Taxes</span></i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company follows the asset and liability method of accounting for income taxes under FASB ASC Topic 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 income 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">FASB Topic ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of September 30, 2023 and December 31, 2022. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at September 30, 2023 and December 31, 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has been subject to income tax examinations by major taxing authorities since inception.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company may be subject to potential examination by federal, state, and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, and compliance with federal, state, and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the three and nine months ended September 30, 2023 and 2022, the Company recorded no income tax expense.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Recent Accounting Pronouncements</span></i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company’s management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have an effect on the Company’s financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Basis of Presentation</span></i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The accompanying unaudited condensed financial statements of the Company are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the accounting and disclosure rules and regulations of the SEC, and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the financial position as of September 30, 2023 and the results of operations and cash flows for the periods presented. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. Interim results are not necessarily indicative of results for a full year.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Annual Report on Form 10-K filed by the Company with the SEC on March 31, 2023.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Use of Estimates</span></i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The preparation of 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 expenses during the reporting periods. Actual results could differ from those estimates. 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 unaudited condensed 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Concentration of Credit Risk</span></i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company has had significant cash balances at financial institutions which throughout the year may exceed the federally insured limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.</p> 250000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Financial Instruments</span></i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the condensed balance sheets.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Cash and Cash Equivalents</span></i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had no cash equivalents as of September 30, 2023 and December 31, 2022.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Net Loss per Share of Common Stock</span></i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Net loss per share of common stock is computed by dividing net loss applicable to the shares of common stock by the weighted average number of shares outstanding for the periods. As a result of the redemption of Public Shares in November 2019, for the three and nine months ended September 30, 2023 and 2022, the Class A shares have no specific redemption rights. Net loss per common share is calculated by dividing the net loss by the weighted average number of Class A and Class B shares outstanding for the periods.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Income Taxes</span></i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company follows the asset and liability method of accounting for income taxes under FASB ASC Topic 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 income 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.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">FASB Topic ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of September 30, 2023 and December 31, 2022. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at September 30, 2023 and December 31, 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has been subject to income tax examinations by major taxing authorities since inception.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company may be subject to potential examination by federal, state, and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, and compliance with federal, state, and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the three and nine months ended September 30, 2023 and 2022, the Company recorded no income tax expense.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Recent Accounting Pronouncements</span></i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company’s management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have an effect on the Company’s financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>3. Public Offering and Private Placement Warrants</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In November 2017, the Company closed its Public Offering of 34,500,000 units at a price of $10.00 per Unit, with gross proceeds of $345,000,000 from the sale of Units. The closings occurred on November 7, 2017 with respect to 30,000,000 Units and on November 9, 2017 with respect to 4,500,000 Units related to the exercise of the underwriters’ overallotment option.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the liquidation period, the Company and the holders of its Public Warrants executed an amendment to the Warrant Agreement, dated as of November 2, 2017, between the Company and Continental Stock Transfer &amp; Trust Company, to automatically convert all of the outstanding Public Warrants into the right to receive $0.02 per whole Public Warrant, payable in cash. In December 2019, the Company paid $225,990 to its warrant holders in connection with the conversion of the Public Warrants.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Simultaneously with the closing of the Public Offering on November 7, 2017, the Sponsor purchased an aggregate of 5,333,333 Private Placement Warrants at a price of $1.50 per whole warrant ($8,000,000 in gross proceeds) in a private placement. Simultaneously with the closing of the overallotment, the Company consummated the private placement of an additional 600,000 Private Placement Warrants to the Sponsor, generating additional gross proceeds of $900,000.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company paid an underwriting discount of 2.0% of the per Unit offering price to the underwriters at the closing of the Public Offering, with the Deferred Discount payable upon the Company’s completion of an initial business combination. The Deferred Discount was payable to the underwriters from the amounts held in the Trust Account solely in the event the Company completed its initial business combination. In accordance with the terms of the underwriting agreement entered into in connection with the Public Offering, the underwriters forfeited any rights or claims to the Deferred Discount because the Company was unable to consummate an initial business combination by the November 7, 2019 deadline under its Charter.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Following the redemption of the Public Shares, the conversion of the Public Warrants and the forfeiture of the Private Placement Warrants, there were no Units, Public Shares, Public Warrants or Private Placement Warrants outstanding. Additional shares of Class A common stock were subsequently issued and shares of Class B common stock remain outstanding. For more information on additional issuances, see Note 4 and the Company’s previous filings with the SEC.</p> 34500000 10 345000000 30000000 4500000 0.02 225990 5333333 1.5 8000000 600000 900000 0.02 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>4. Related Party Transactions</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Founder Shares</span></i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In June 2017 prior to the Public Offering, the Sponsor entered into an Amended and Restated Securities Purchase Agreement for the purchase of 14,375,000 shares of Class B common stock (the “Founder Shares”) for $25,000, or approximately $0.002 per share. The Sponsor is a portfolio company of CSL Capital Management, L.P., an energy services-focused private equity fund. Following the redemption of the Public Shares, the conversion of the Public Warrants and the forfeiture of the Private Placement Warrants noted above, the only securities of the Company outstanding were the Founder Shares.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Founder Shares are identical to the shares of Class A common stock that were included in the Units sold in the Public Offering except that (1) holders of the Founder Shares have the right to vote on the election of directors prior to an initial business combination, (2) the Founder Shares are subject to certain transfer restrictions, as described in more detail below, (3) holders of the Founder Shares entered into letter agreements with the Company pursuant to which they agreed to waive their redemption rights with respect to any Founder Shares held by them in connection with the completion of an initial business combination, (4) the Founder Shares will automatically convert on a one-for-one basis into shares of Class A common stock at the time of an initial business combination and (5) the Founder Shares are subject to registration rights, as described below.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In August 2017, the Sponsor surrendered 5,750,000 shares of its Class B common stock for no consideration to adjust its holdings to an expected 20% of the Company’s combined outstanding shares of Class A common stock and Class B common following the Public Offering, resulting in the Sponsor holding an aggregate of 8,625,000 Founder Shares.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In October 2017 and April 2018, the Sponsor transferred 37,500 Founder Shares to Marc Zenner and Jon A. Marshall, respectively, both of whom were independent directors of the Company at the time, at the original purchase price. Each of the Sponsor and Messrs. Zenner and Marshall subsequently agreed to forfeit 90% of their Founder Shares when the Company was unable to consummate a business combination prior to the deadline in its Charter, resulting in the Sponsor currently holding 855,000 Founder Shares and each of Messrs. Zenner and Marshall owning 3,750 Founder Shares. As a result, the total number of Founder Shares outstanding as of September 30, 2023 is 862,500.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>Transfer Restrictions</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The terms applicable to the Founder Shares provide that, subject to limited exceptions, the Sponsor may not transfer, assign or sell any of the same until the earlier to occur of (A) one year after the completion of the initial business combination or (B) subsequent to the initial business combination, (x) if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial business combination, or (y) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the Company’s stockholders having the right to exchange their common stock for cash, securities or other property. The Sponsor transferred the portion of its Founder Shares noted above to Messrs. Zenner and Marshall in accordance with those terms or pursuant to a waiver thereof.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Registration Rights</span></i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The holders of Founder Shares that may be issued equity securities of the Company upon conversion of working capital loans may be entitled to registration rights (in the case of the Founder Shares, only after conversion of such shares to shares of Class A common stock) pursuant to a registration rights agreement, by and between the Company, the Sponsor and Mr. Zenner. The registration rights include certain demand and “piggyback” rights.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act of 1933, as amended (the “Securities Act”), to become effective until termination of the applicable lock-up period for the securities to be registered. The Company will bear the expenses incurred in connection with the filing of any such registration statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Promissory Note Payable </span></i></b><span style="text-decoration:underline">– <b><i>Sponsor</i></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 1, 2019, the Company issued a convertible promissory note (the “Convertible Promissory Note”) in the amount of up to $1,500,000 with the Sponsor to fund the Company’s ongoing expenses. The Convertible Promissory Note does not bear interest and all unpaid principal was due and payable in full on the earlier of November 7, 2019 or the consummation of an initial business combination by the Company. The Sponsor had the option to convert any amounts outstanding under the Convertible Promissory Note into warrants of a post-business combination entity to purchase shares, at a conversion price of $1.50 per warrant. On March 31, 2020, the Sponsor converted the $999,640 outstanding into 99,964 shares of Class A common stock of the Company at a conversion price of $10.00 per share.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">All unpaid principal under the Convertible Promissory Note was due and payable in full on the earlier of November 7, 2019 or the consummation of an initial business combination by the Company by the deadline specified in its Charter. As a result, the Convertible Promissory Note is no longer available to the Company as a source of financing and no amount has been outstanding thereunder since March 31, 2020. As of September 30, 2023 and December 31, 2022, the outstanding balance on Convertible Promissory Note was $0.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Contributions from Related Party</span></i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In January 2022, the Company received a contribution of $25,000 from the Sponsor to fund ongoing operations and expenses. The amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor 2,500 shares of the Company’s Class A common stock at $10.00 per share on January 25, 2022.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In September 2022, the Company received a contribution of $30,000 from the Sponsor to fund ongoing operations and expenses. The amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor 3,000 shares of the Company’s Class A common stock at $10.00 per share on September 20, 2022.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In December 2022, the Company received a contribution of $60,000 from the Sponsor to fund ongoing operations and expenses. The amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor 6,000 shares of the Company’s Class A common stock at $10.00 per share on December 13, 2022.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In March 2023, the Company received a contribution of $10,000 from the Sponsor to fund ongoing operations and expenses. The amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor 1,000 shares of the Company’s Class A common stock at $10.00 per share on March 3, 2023.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In July 2023, the Company received a contribution of $70,000 from the Sponsor to fund ongoing operations and expenses. The amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor 7,000 shares of the Company’s Class A common stock at $10.00 per share on July 18, 2023.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In August 2023, the Company received a contribution of $20,000 from the Sponsor to fund ongoing operations and expenses. The amount advanced by the Sponsor was treated as a capital contribution in exchange for which the Company issued to the Sponsor 2,000 shares of the Company’s Class A common stock at $10.00 per share on August 31, 2023.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of September 30, 2023 and December 31, 2022, there were 575,911 and 565,911 shares of the Company’s Class A common stock outstanding, respectively, all of which are held by the Sponsor.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Administrative Support Agreement</span></i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Commencing on the date the Units were first listed on the Nasdaq Capital Market, the Company agreed to pay an affiliate of the Sponsor up to $10,000 per month for office space, utilities and secretarial and administrative support. Since the Company was unable to complete its initial business combination prior to the November 7, 2019 deadline in the Charter, pursuant to the Administrative Support Agreement, the Company ceased paying these monthly fees. The Administrative Support Agreement, however, remains in place for the benefit of the Company.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company did not incur any expenses under the Administrative Support Agreement for the three and nine months ended September 30, 2023 and 2022.</p> 14375000 25000 0.002 5750000 0.20 8625000 37500 37500 0.90 855000 3750 862500 12 1500000 1.5 999640 99964 10 0 0 25000 2500 10 30000 3000 10 60000 6000 10 10000 1000 10 70000 7000 10 20000 2000 10 575911 565911 10000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>5. Stockholders’ Deficit</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Common Stock</span></i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The authorized common stock of the Company includes up to 200,000,000 shares of Class A common stock, par value of $0.0001 per share, and 20,000,000 shares of Class B common stock, par value of $0.0001 per share, or the Founder Shares. If the Company entered into an initial business combination, it may (depending on the terms of such an initial business combination) be required to increase the number of shares of Class A common stock which the Company is authorized to issue at the same time as the Company’s stockholders vote on an initial business combination to the extent the Company seeks stockholder approval in connection with an initial business combination. Holders of the Company’s common stock are entitled to one vote for each share of common stock held by them.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Sponsor currently holds 855,000 Founder Shares and each of Messrs. Zenner and Marshall holds 3,750 Founder Shares. For a discussion of transactions resulting in these holdings as well as transactions related to Class A common stock, see Note 4 and the Company’s previous filings with the SEC.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At September 30, 2023 and December 31, 2022, there were 575,911 and 565,911 shares of Class A common stock issued and outstanding, respectively, and 862,500 and 862,500 shares of Class B common stock issued and outstanding, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i><span style="text-decoration:underline">Preferred Stock</span></i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company is authorized to issue 1,000,000 shares of preferred stock, 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, 2023 and December 31, 2022, there were <span style="-sec-ix-hidden: hidden-fact-56"><span style="-sec-ix-hidden: hidden-fact-57"><span style="-sec-ix-hidden: hidden-fact-58"><span style="-sec-ix-hidden: hidden-fact-59">no</span></span></span></span> shares of preferred stock issued or outstanding.</p> 200000000 0.0001 20000000 0.0001 855000 3750 575911 575911 565911 565911 862500 862500 862500 862500 1000000 0.0001 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>6. Subsequent Events</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i> </i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the unaudited condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.</p> 1274620 1415801 1431301 1435763 -0.01 -0.02 -0.06 -0.06 false --12-31 Q3 0001709768 For the three and nine months ended September 30, 2023 and 2022, the Class A and Class B common stock participate in losses equally and thus are included together herein. 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