UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
For the transition period from to
Commission File No.
| (Exact name of registrant as specified in its charter) |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| (Address of Principal Executive Offices, including zip code) |
| (Registrant’s telephone number, including area code) |
| N/A |
| (Former name, former address and former fiscal year, if changed since last report) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Units, each consisting of one subunit and one-half of one Redeemable Warrant | ACKIU | The Nasdaq Stock Market LLC | ||
| Subunits included as part of the units, each consisting of one share of common stock, $0.0001 par value, and one-half of one warrant | ACKIT | The Nasdaq Stock Market LLC | ||
| The | ||||
| Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 | ACKIW | The Nasdaq Stock Market LLC |
Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
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).
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 | |
| ☒ | ||
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
As of May 13, 2022, there were
ACKRELL SPAC PARTNERS
I CO.
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2022
TABLE OF CONTENTS
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PART I – FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
ACKRELL SPAC PARTNERS I CO.
(f.k.a. ABLE ACQUISITION CORP.)
CONDENSED BALANCE SHEETS
| March 31, 2022 | December 31, 2021 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Cash | $ | $ | ||||||
| Prepaid assets | ||||||||
| Total Current Assets | ||||||||
| Cash and securities held in Trust Account | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Deficit | ||||||||
| Accounts payable and accrued expense | $ | $ | ||||||
| State franchise tax accrual | ||||||||
| Due to related parties | ||||||||
| Promissory note – related party | ||||||||
| Promissory note – Blackstone | - | |||||||
| Total current liabilities | ||||||||
| Warrant liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments | ||||||||
| Common stock subject to possible redemption, | ||||||||
| Stockholders’ Deficit: | ||||||||
| Preferred stock, $ | ||||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total Liabilities and Stockholders’ Deficit | $ | $ | ||||||
The accompanying notes are an integral part of these condensed financial statements.
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ACKRELL SPAC PARTNERS I CO.
(f.k.a. ABLE ACQUISITION CORP.)
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
| For the Three Months Ended | For the Three Months Ended | |||||||
| March 31, 2022 | March 31, 2021 | |||||||
| Formation and operating costs | $ | $ | ||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income | ||||||||
| Interest income | ||||||||
| Change in fair value of warrant liabilities | ||||||||
| Total other income | ||||||||
| Net income (loss) | $ | ( | ) | $ | ||||
| Basic and diluted weighted average shares outstanding, common stock subject to redemption | ||||||||
| Basic and diluted net (loss) income per share attributable to common stock subject to redemption | $ | ( | ) | $ | ||||
| Basic and diluted weighted average shares outstanding, common stock | ||||||||
| Basic and diluted net (loss) income per share attributable to common stockholders | $ | ( | ) | $ | ||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
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ACKRELL SPAC PARTNERS I CO.
(f.k.a. ABLE ACQUISITION CORP.)
UNAUDITED CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY
| Common Stock (1) | Additional Paid-in | Accumulated | Total Stockholders’ | |||||||||||||||||
| Shares | Par Value | Capital | Deficit | Deficit | ||||||||||||||||
| Balance as of December 31, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Extension Funds attributable to common stock subject to redemption under ASC 480-10-S99 against additional paid-in-capital (“APIC”) | - | ( | ) | ( | ) | |||||||||||||||
| Subsequent measurement of common stock subject to redemption under ASC 480-10-S99 against APIC (interest earned on Trust Account) | - | ( | ) | ( | ) | |||||||||||||||
| Balance as of March 31, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Common Stock (1) | Additional Paid-in | Accumulated | Total Stockholders’ | |||||||||||||||||
| Shares | Par Value | Capital | Deficit | Equity | ||||||||||||||||
| Balance as of December 31, 2020 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Net loss | - | |||||||||||||||||||
| Subsequent measurement of common stock subject to redemption under ASC 480-10-S99 against APIC (interest earned on Trust Account) | - | ( | ) | ( | ) | |||||||||||||||
| Balance as of March 31, 2021 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| (1) |
The accompanying notes are an integral part of these unaudited condensed financial statements.
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ACKRELL SPAC PARTNERS I CO.
(f.k.a. ABLE ACQUISITION CORP.)
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
| For the Three Months | For the Three Months | |||||||
| Ended | Ended | |||||||
| March 31, | March 31, | |||||||
| 2022 | 2021 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net income (loss) | $ | ( | ) | $ | ||||
| Adjustments to reconcile net loss to net cash provided by/(used in) operating activities: | ||||||||
| Interest earned on investment held in Trust Account | ( | ) | ( | ) | ||||
| Change in fair value of warrants | ( | ) | ( | ) | ||||
| Changes in current assets and current liabilities: | ||||||||
| Prepaid assets | ( | ) | ||||||
| Accounts payable and accrued expense | ( | ) | ||||||
| State franchise tax accrual | ||||||||
| Due to related parties | ||||||||
| Net cash provided by/(used in) operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Cash deposited in Trust Account | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from promissory note - Blackstone | ||||||||
| Net cash provided by financing activities | ||||||||
| Net Increase in Cash | ( | ) | ( | ) | ||||
| Cash - Beginning | ||||||||
| Cash - Ending | $ | $ | ||||||
| Supplemental Disclosure of Non-cash Financing Activities: | ||||||||
| Extension Funds attributable to common stock subject to redemption under ASC 480-10-S99 against APIC | $ | $ | ||||||
| Subsequent measurement of common stock subject to redemption under ASC 480-10-S99 against APIC (interest earned on Trust Account) | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
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ACKRELL SPAC PARTNERS I CO.
(f.k.a. ABLE ACQUISITION CORP.)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 1 — Organization and Business Operations
Organization and General
Ackrell SPAC Partners I Co. (the “Company”) is a blank check company formed under the laws of the State of Delaware on September 11, 2018. The Company was formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities (the “Business Combination” or “Initial Business Combination”).
The Company has selected December 31 as its fiscal year end. The Company’s sponsor is Ackrell SPAC Sponsors I LLC (the “Sponsor”), a Delaware limited liability company.
As of March 31, 2022, the Company had not yet commenced any revenue-generating operations. All activity through March 31, 2022 relates to the Company’s formation, the Initial Public Offering (as defined below), the search for a prospective Initial Business Combination, and efforts toward consummating the Initial Business Combination. The Company will not generate any operating revenues until after the completion of its Initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO and will recognize changes in the fair value of warrant liability as other income (expense) (See Note 10).
On December 15, 2021, the Company formed Blackstone Products, Inc. (“Newco”), a Delaware corporation that is a wholly-owned subsidiary of the Company, and Ackrell Merger Sub Inc. (“Merger Sub”), a Delaware corporation that is a wholly-owned subsidiary of Newco, for the purpose of executing the Merger Agreement (as defined below). All activities of Newco and Merger Sub through March 31, 2022 related to executing the Merger Agreement.
On December 22, 2021, the Company, Newco and Merger
Sub entered into a business combination agreement (the “Merger Agreement”) with North Atlantic Imports, LLC, an innovative
griddle company d/b/a Blackstone Products (“Blackstone”), pursuant to which the two companies agreed to consummate a Business
Combination where the combined company will own
Financing
The registration statements (“Registration
Statements”) for the Company’s initial public offering (“Initial Public Offering” or “IPO”) were declared
effective on December 21, 2020. On December 23, 2020, the Company consummated the Initial Public Offering of
Simultaneously with the closing of the IPO, the
Company consummated the sale of an aggregate of
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Trust Account
Following the closing of the IPO on December 23, 2020,
an amount of $
Initial Business Combination
The Company’s Business Combination must
be with one or more target businesses that together have a fair market value equal to at least
The Company had 12 months from the closing of the IPO to consummate a Business Combination with an opportunity to extend the period of time up to two times each by an additional three months (for a total of up to 18 months to complete a business combination) (the “Combination Period”), subject to the Sponsor and/or its designees depositing into the Trust Account, on or prior to the applicable deadline, additional funds of $1,380,000 ($0.10 per unit) for each of the available three-month extensions. On December 23, 2021, the Company deposited $1,380,000 into the Trust Account and extended the period of time to consummate the Initial Business Combination by three months from December 23, 2021 to March 23, 2022. On March 21, 2022, the Company deposited an additional $1,380,000 into the Trust Account and further extended the period of time to consummate the Initial Business Combination by an additional three months from March 23, 2022 to June 23, 2022. The aggregate of $2,760,000 from the above mentioned two extensions was funded by proceeds from the promissory notes issued to the Sponsor and Blackstone on December 23, 2021 and March 16, 2022, respectively (See Note 5 and Note 8).
The Sponsor, EarlyBirdCapital and the Company’s
officer and directors have agreed to (i) waive their conversion rights with respect to their Founder Shares (See Note 5), Representative
Shares (See Note 8) and Private Subunits (collectively, the “Private Securities”) in connection with the consummation of a
Business Combination, (ii) to waive their rights to liquidating distributions from the Trust Account with respect to their Private Securities
if the Company fails to consummate a Business Combination within the Extended Combination Period and (iii) not to propose an amendment
to the Company’s amended and restated certificate of incorporation that would affect the substance or timing of the Company’s
obligation to redeem
6
Liquidation
Liquidity and Going Concern
As of March 31, 2022, the Company had cash outside
the Trust Account of $
Through March 31, 2022, the Company’s liquidity
needs were satisfied through receipt of $
The Company’s initial stockholders, officers,
directors or their affiliates may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”).
If the Company completes a Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account
released to the Company. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account. In the event
that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working
Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans, other than the interest on such
proceeds that may be released for working capital purposes. Except for the foregoing, the terms of such Working Capital Loans, if any,
have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid
upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $
Until consummation of its Business Combination, the Company will be using the funds not held in the Trust Account, and any additional Working Capital Loans from the Initial Stockholders, the Sponsor, the Company’s officers and directors, or their respective affiliates, for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination.
7
The Company anticipates that the $
Note 2 — Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 as filed with the SEC on March 31, 2022, which contained the audited financial statements and notes thereto. The interim results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any future interim periods.
Emerging Growth Company Status
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
8
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of unaudited condensed financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments
with an original maturity of three months or less when purchased to be cash equivalents. The Company had $
Investment Held in Trust Account
As of March 31, 2022 and December 31, 2021, the
Company had $
On April 28, 2022, pursuant to the trust
agreement dated as of December 21, 2020 between the Company and CST, the Company issued a request to CST to withdraw $
A decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment that reduces the carrying costs to such securities’ fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and the duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest method. Such amortization and accretion are included in the “interest income” line item in the condensed statements of operations. Interest income is recognized when earned.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the Financial Accounting Standards Board (“FASB”) ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet.
9
Common Stock (underlying the Public Subunits) Subject to Possible Redemption
The Company accounts for its common stock underlying the Public Subunits that are subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock underlying the Public Subunits subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable common stock underlying Public Subunits (including common stock underlying Public Subunits that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, common stock underlying the Public Subunits are classified as stockholders’ equity. The Company’s common stock underlying the Public Subunits feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at March 31, 2022 and December 31, 2021, common stock underlying the Public Subunits subject to possible redemption are presented as temporary equity, outside of the stockholders’ equity section of the Company’s condensed balance sheets.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period.
Derivative instruments are recorded at fair value at inception and re-valued at each reporting date, with changes in the fair value reported in the statements of operations.
Derivative assets and liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
Net Income (Loss) Per Common Share
The Company complies with accounting and disclosure
requirements of FASB ASC 260, Earnings Per Share. The statements of operations include a presentation of income (loss) per redeemable
Public Share underlying the Public Subunit and income (loss) per non-redeemable Founder Share following the two-class method of income
(loss) per share. In order to determine the net income (loss) attributable to both the public redeemable shares and founder non-redeemable
shares, the Company first considered the total income (loss) allocable to both sets of shares. This is calculated using the total net
income (loss) less any dividends paid. For purposes of calculating net income (loss) per share, any remeasurement of the accretion to
redemption value of the common stock subject to possible redemption was considered to be dividends paid to the public stockholders. Subsequent
to calculating the total income (loss) allocable to both sets of shares, the Company split the amount to be allocated using a ratio of
The earnings per share presented in the statements of operations is based on the following:
| For the three months ended | For the three months ended | |||||||
| March 31, 2022 | March 31, 2021 | |||||||
| Net income (loss) | $ | ( | ) | $ | ||||
| Attribution of extension funds to redeemable shares | ( | ) | - | |||||
| Accretion of temporary equity to redemption value | ( | ) | ( | ) | ||||
| Net income (loss) including accretion of temporary equity to redemption value | $ | ( | ) | $ | ||||
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| For the three months ended | For the three months ended | |||||||||||||||
| March 31, 2022 | March 31, 2021 | |||||||||||||||
| Redeemable | Non-redeemable | Redeemable | Non-redeemable | |||||||||||||
| Basic and diluted net income (loss) per share: | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Allocation of net income (loss) including accretion of temporary equity | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||
| Attribution of extension funds to redeemable shares | ||||||||||||||||
| Accretion of temporary equity to redemption value | ||||||||||||||||
| Allocation of net income (loss) | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||
| Denominator: | ||||||||||||||||
| Weighted-average shares outstanding | ||||||||||||||||
| Basic and diluted net income (loss) per share | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||
As of March 31, 2022 and December 31, 2021, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into common stock and then share in the Company’s earnings. As a result, diluted loss per share is the same as basic loss per share for the periods presented.
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed the Federal
depository insurance coverage of $
Income Taxes
The Company accounts for income taxes under ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2022 and December 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has identified the United States as its only “major” tax jurisdiction. The Company may be subject to potential examination by federal and state 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 and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. The provision for income taxes was deemed to be immaterial as of March 31, 2022 and December 31, 2021.
11
Recent Accounting Pronouncements
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The ASU introduced a new credit loss methodology, the Current Expected Credit Losses (“CECL”) methodology, which requires earlier recognition of credit losses, while also providing additional transparency about credit risk. The CECL methodology utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses for loans, held-to maturity debt securities, trade receivables and other receivables measured at amortized cost at the time the financial asset is originated or acquired. After the issuance of ASU 2016-13, the FASB issued several additional ASUs to clarify implementation guidance, provide narrow-scope improvements and provide additional disclosure guidance. In November 2019, the FASB issued an amendment making this ASU effective for fiscal years beginning after December 15, 2022 for smaller reporting companies. The Company plans to adopt this standard in the first quarter of 2023 and does not expect the adoption will have a significant impact on its financial statements and related disclosures.
Other than as noted above, Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
Note 3 — Initial Public Offering
On December 23, 2020, the Company sold
Note 4 — Private Placements
Simultaneously with the closing of the IPO, the
Sponsor and EarlyBirdCapital purchased an aggregate of
The Private Units and their underlying securities are identical to the units sold in the Initial Public Offering except the Private Warrants will be non-redeemable and may be exercised on a cashless basis. The purchasers of the Private Units have agreed not to transfer, assign or sell any of the Private Units or underlying securities (except to the same permitted transferees as the Founder Shares) until the completion of the Business Combination.
If the Company does not complete a Business Combination within the Extended Combination Period, the proceeds of the sale of the Private Units will be used to fund the redemption of the Public Subunits (subject to the requirements of applicable law).
12
Note 5 — Related Party Transactions
Founder Shares
On September 11, 2018, the Company issued
On November 25, 2020, the Sponsor contributed
back to the Company, for no consideration,
On December 21, 2020, the Company effected a stock dividend of 0.2 shares of common stock for every share of common stock outstanding, resulting in an aggregate of 3,450,000 Founder Shares outstanding.
Founder Shares, subject to certain limited exceptions contained in the Registration Statements, will not be transferred, assigned, sold or released from escrow for a period ending on the six-month anniversary of the date of the consummation of the Initial Business Combination or earlier if, subsequent to its Initial Business Combination, the Company consummates a liquidation, merger, stock exchange or other similar transaction which results in all of the stockholders having the right to exchange
Promissory Note – Related Party
On December 23, 2021, the Company issued an unsecured
promissory note in the principal amount of $
Administrative Services Agreement
Commencing on the effective date of the Registration
Statements, the Company has agreed to pay an affiliate of the Company’s Chairman an aggregate fee of $
Working Capital Loans
In addition, in order to finance transaction costs
in connection with a Business Combination, the Sponsor may, but is not obligated to, provide the Company Working Capital Loans. If the
Company completes a Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released
to the Company. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account. In the event that
a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital
Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans, other than the interest on such proceeds
that may be released for working capital purposes. Except for the foregoing, the terms of such Working Capital Loans, if any, have not
been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation
of a Business Combination, without interest, or, at the lender’s discretion, up to $
Note 6 — Cash and Securities Held in Trust Account
As of March 31, 2022 and December 31, 2021, cash
and securities held in Trust Account are $
13
Note 7 — Stockholders’ Equity
Preferred Stock — The Company
is authorized to issue a total of
Common Stock — The Company
is authorized to issue a total of
On December 23, 2020, the Company sold
As of March 31, 2022 and December 31, 2021, shares
of common stock subject to redemption were
Warrants — Each whole warrant
entitles the registered holder to purchase
Note 8 — Commitments & Contingencies
Registration Rights
The holders of the Founder Shares, Private Units (and their underlying securities), Representative Shares (As defined below) and any Units that may be issued upon conversion of the Working Capital Loans (and their underlying securities) will be entitled to registration rights pursuant to an agreement signed on the effective date of the Registration Statements. The holders of a majority of these securities will be entitled to make up to two demands that the Company register such securities. The holders of the majority of the Founder Shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Private Units and units issued in payment of Working Capital Loans made to the Company (or underlying securities) can elect to exercise these registration rights at any time after the Company consummates an Initial Business Combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s consummation of an Initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
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Underwriting Agreement
On December 23, 2020, the underwriters were paid
a cash underwriting fee of
In addition, prior to the IPO, the Company issued
to EarlyBirdCapital an aggregate of
The Representative Shares have been deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following the date of the effectiveness of the Registration Statements pursuant to Rule 5110(g)(1) of the FINRA Manual. Pursuant to FINRA Rule 5110(g)(1), these securities will not be sold during the offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days immediately following the effective date of the Registration Statements, except to any underwriter and selected dealer participating in the offering and their bona fide officers or partners, provided that all securities so transferred remain subject to the lockup restriction above for the remainder of the time period.
Business Combination Marketing Agreement
The Company has engaged EarlyBirdCapital as an
advisor in connection with the Company’s business combination to assist the Company in holding meetings with the Company’s
stockholders to discuss the potential business combination and the target business’ attributes, introduce the Company to potential
investors that are interested in purchasing the Company’s securities in connection with the Company’s Initial Business Combination,
assist the Company in obtaining stockholder approval for the business combination and assist the Company with its press releases and public
filings in connection with the Initial Business Combination. The Company will pay EarlyBirdCapital a cash fee for such services upon the
consummation of the Company’s Initial Business Combination in an amount equal to
Capital Markets Advisors Agreements
The Company has engaged Nomura Securities International,
Inc. (“Nomura”) as an advisor to assist the Company with identifying and assessing potential Business Combination targets.
Upon the closing of the Business Combination, the Company will pay Nomura a variable transaction fee of up to $
Additionally, the Company has engaged Nomura and Barclays Capital Inc.
(“Barclays”) (collectively, the “Blackstone Advisors”) to serve as exclusive capital markets advisors and exclusive
joint placement agents in connection with the Company’s Business Combination with Blackstone. Upon the consummation of the Company’s
Business Combination with Blackstone, the Company will pay Barclays an advisory fee of $
15
Additionally, the Company has engaged Telsey Advisory Group (“Telsey”)
to provide capital markets advisory services in connection with the Company’s Business Combination with Blackstone. The Company
will pay Telsey a fixed fee of $
Promissory Notes - Blackstone
On March 16, 2022, the Company issued an unsecured
promissory note in the principal amount of $
On April 6, 2022, the Company issued another unsecured
promissory note in the principal amount of $
On
April 27, 2022, the Company issued another unsecured promissory note, the terms of which were later amended and restated on
May 11, 2022, in the principal amount of $
Note 9 — Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
| ● | Level 1 - defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; | |
| ● | Level 2 - defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and | |
| ● | Level 3 - defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
The fair value of the Company’s certain assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the condensed balance sheet. The fair values of cash and cash equivalents, prepaid assets, accounts payable and accrued expenses, due to related parties are estimated to approximate the carrying values as of March 31, 2022 and December 31, 2021 due to the short maturities of such instruments.
Fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and includes situations where there is little, if any, market activity for the asset or liability.
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Recurring Fair Value Measurements
As of March 31, 2022, investment in the Company’s
Trust Account consisted of $
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2022 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
| March 31, | Quoted Prices In Active Markets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | |||||||||||||
| Description | 2022 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
| Assets: | ||||||||||||||||
| Cash held in Trust Account | $ | $ | ||||||||||||||
| U.S. Treasury Securities held in Trust Account | ||||||||||||||||
| Liabilities: | ||||||||||||||||
| Warrant Liability – Private Warrants | $ | $ | $ | $ | ||||||||||||
As of December
31, 2021, investment in the Company’s Trust Account consisted of $
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
| December 31, | Quoted Prices In Active Markets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | |||||||||||||
| Description | 2021 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
| Assets: | ||||||||||||||||
| Cash held in Trust Account | $ | $ | ||||||||||||||
| U.S. Treasury Securities held in Trust Account | ||||||||||||||||
| Liabilities: | ||||||||||||||||
| Warrant Liability – Private Warrants | $ | $ | $ | $ | ||||||||||||
Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period. There were no transfers between levels for the three months ended March 31, 2022 and 2021.
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Note 10 — Warrant Liabilities
At March 31, 2022 and December 31, 2021, there
were
The Company utilizes a Monte Carlo simulation
model to value the warrants at each reporting period, with changes in fair value recognized in the statement of operations. The estimated
fair value of the warrant liability is determined using Level 3 inputs. Inherent in a Monte Carol simulation model are assumptions
related to expected stock price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility
of its shares of common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest
rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of
the warrants. The expected life of the warrants is simulated based on management assumptions regarding the timing and likelihood of completing
a business combination. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero. Once the warrants
become exercisable, the Company may redeem the outstanding warrants when the price per share of common stock equals or exceeds $
The aforementioned warrant liabilities are not subject to qualified hedge accounting.
The following table provides quantitative information regarding Level 3 fair value measurements of the Private Warrants:
| As of March 31, 2022 | As of December 31, 2021 | |||||||
| Stock price | $ | $ | ||||||
| Strike price | $ | $ | ||||||
| Term (in years) | ||||||||
| Volatility | % | % | ||||||
| Risk-free rate | % | % | ||||||
| Dividend yield | % | % | ||||||
Note 11 — 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 and has concluded that all such events that would require adjustment or disclosure have been recognized or disclosed.
On April 6, 2022, the Company issued another unsecured
promissory note in the principal amount of $
On April 26, 2022, the Company engaged Telsey to provide capital markets
advisory services in connection with the Company’s Business Combination with Blackstone. The Company will pay Telsey a fixed fee
of $
On April 27,
2022, the Company issued another unsecured promissory note, the terms of which were later amended and restated on May 11, 2022,
in the principal amount of $
On April 28, 2022, pursuant to the trust agreement
dated as of December 21, 2020 between the Company and CST, the Company issued a request to CST to withdraw $
On May 13, 2022, the Company filed a preliminary proxy statement on Form PRE 14A (“Extension Proxy Statement”) for a special meeting of stockholders to be held for the approval of the extension of the date by which we must consummate an initial business combination from June 23, 2022 (which is 18 months from the closing of our initial public offering) to September 23, 2022 (or such earlier date as determined by the Company’s Board of Directors).
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Ackrell SPAC Partners I Co. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Ackrell SPAC Sponsors I LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Exchange Act that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and final prospectus for its IPO filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a blank check company formed under the laws of the State of Delaware on September 11, 2018 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. We intend to effectuate our business combination using cash from the proceeds of the IPO and the sale of the private units, our capital stock, debt or a combination of cash, stock and debt.
All activity through March 31, 2022 relates to our formation, IPO, and search for a target for our Initial Business Combination, including Blackstone.
Factors That May Adversely Affect Our Results of Operations
Our results of operations and our ability to complete an Initial Business Combination may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control. Our business could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending, the ongoing effects of the COVID-19 pandemic, including resurgences and the emergence of new variants, and geopolitical instability, such as the military conflict in the Ukraine. We cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business and our ability to complete an Initial Business Combination.
Recent Developments
On December 22, 2021, we entered into the Merger Agreement with Blackstone, among others, pursuant to which the two companies agreed to consummate a Business Combination (the “Blackstone Merger”). The aggregate consideration to be paid in the transactions is based on a pre-money Blackstone equity valuation of approximately $721 million and will be made up of cash consideration and stock consideration as more fully described in the Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 31, 2022 (the “Form 10-K”) and the Registration Statement on Form S-4 of Newco filed with the SEC on February 15, 2022, as amended (the "Newco Form S-4"). In connection with the Blackstone Merger, we and Newco entered into Subscription Agreements with the PIPE Investors, pursuant to which Newco agreed to issue and sell to the PIPE Investors 3,100,000 units for a purchase price of $10.00 per unit, for an aggregate of approximately $31,000,000, with each unit consisting of one share of Newco common stock and one-half of a warrant to acquire Newco common stock at an exercise price of $11.50 per share and Newco agreed to issue and sell approximately $111,000,000 principal amount of Newco convertible notes immediately prior to closing of the Blackstone Merger. For more information on the Blackstone Merger, the Merger Agreement and Related Agreements as well as the PIPE Investment, see “Item 1. Business” in the Form 10-K and the Newco Form S-4.
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On May 13, 2022, we filed the Extension Proxy Statement for a special meeting of stockholders to be held for the approval of the extension of the date by which we must consummate an initial business combination from June 23, 2022 (which is 18 months from the closing of our initial public offering) to September 23, 2022 (or such earlier date as determined by the Company’s Board of Directors).
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities from inception through March 31, 2022 were organizational activities and those necessary to prepare for the IPO, described below, and searching for a prospective Initial Business Combination, including the Blackstone Merger. We do not expect to generate any operating revenues until after the completion of our Initial Business Combination. We generate non-operating income in the form of interest income on marketable securities held after the IPO and will recognize changes in the fair value of warrant liability as other income (expense). We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses related to our search for targets for our Initial Business Combination.
For the three months ended March 31, 2022, we had a net loss of $500,554 which consisted of loss from operations of $667,558, interest income of $35,037 on marketable securities held in the Trust Account, and other income of $131,967 resulting from a decrease in fair value of our warrants.
For the three months ended March 31, 2021, we had a net income of $120,137 which consisted of loss from operations of $199,795, interest income of $24,047 on marketable securities held in the Trust Account, and other income of $295,885 resulting from an increase in fair value of our warrants.
Liquidity and Capital Resources
On December 23, 2020, we consummated our IPO of 13,800,000 units, which included the full exercise of the underwriter’s option to purchase up to an additional 1,800,000 units at the IPO price to cover over-allotments, at a price of $10.00 per unit, generating gross proceeds of $138,000,000. Simultaneously with the closing of the IPO, we consummated the sale of 539,000 placement units at a price of $10.00 per placement unit in a private placement to the Sponsor and EBC, generating gross proceeds of $5,390,000.
Following the IPO and the private placement, a total of $139,380,000 was placed in the Trust Account. We incurred $4,085,051 in transaction costs, including $2,760,000 of underwriting fees and $1,325,051 of other offering costs.
As of March 31, 2022, we had marketable securities held in the Trust Account of $142,237,615 consisting of both cash and U.S. treasury bills with a maturity of 185 days or less.
We had $25,212 of cash held outside of the Trust Account as of March 31, 2022 and $86,792 as of December 31, 2021. We did not have any cash equivalents held outside of the Trust Account as of March 31, 2022 and December 31, 2021.
Through March 31, 2022, our liquidity needs were satisfied through receipt of $5,000 from the sale of the Founder Shares (See Note 5), advances from the Sponsor in an aggregate amount of $300,000 which were repaid upon the IPO, and the remaining net proceeds from the IPO and private placement (See Note 4 and 5) held outside of the Trust Account. Additionally, the Company received $1,380,000 from the Sponsor Extension Loan (see Note 5) and another $1,380,000 from the Blackstone Extension Loan (See Note 8), which the Company deposited into the Trust Account to extend the period of time to consummate the Initial Business Combination from December 23, 2021 to June 23, 2022.
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We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account to complete our business combination. We may withdraw interest to pay taxes. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our business combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, such as Blackstone, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a business combination.
In order to fund working capital deficiencies or finance transaction costs in connection with a business combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete a business combination, we may repay such loaned amounts out of the proceeds of the Trust Account released to us. In the event that a business combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into units, at a price of $10.00 per unit, at the option of the lender. The units would be identical to the placement units.
We anticipate that the $25,212 outside of the Trust Account as of March 31, 2022 will not be sufficient to allow us to operate for at least the next 12 months, assuming that a business combination is not consummated during that time. On December 23, 2021, we deposited $1,380,000 into the Trust Account, representing $0.10 per unit, and extended the period of time to consummate our Initial Business Combination by three months from December 23, 2021 to March 23, 2022. On March 21, 2022, we deposited an additional $1,380,000 into the Trust Account, representing $0.10 per public unit, and further extended the period of time we have to consummate our Initial Business Combination by an additional three months from March 23, 2022 to June 23, 2022. The aggregate of $2,760,000 from the above mentioned two extensions was funded by proceeds from the Sponsor Extension Loan and the Blackstone Extension Loan. On April 6, 2022, we issued a third unsecured promissory note in the principal amount of $115,000 to Blackstone to fund payment of fees due to Nasdaq (See Note 11). On April 27, 2022, we issued a fourth unsecured promissory note, the terms of which were later amended and restated on May 11, 2022, in the principal amount of $385,000 to Blackstone to fund our continued operations (See Note 11). On April 28, 2022, pursuant to the trust agreement dated as of December 21, 2020 between us and CST, we issued a request to CST to withdraw $129,279 of interest income from the Trust Account for the payment of our taxes (See Note 11). We may need to obtain additional financing to consummate our Initial Business Combination but there is no assurance that new financing will be available to us on commercially acceptable terms. Furthermore, if we are not able to consummate a Business Combination by June 23, 2022, it will trigger our automatic winding up, liquidation and dissolution. These conditions raise substantial doubt about our ability to continue as a going concern.
Critical Accounting Policies and Estimates
The preparation of the unaudited condensed financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
One of the more significant accounting estimates included in these financial statements is the determination of the fair value of our warrant liability. Such estimates may be subject to change as more current information becomes available and, accordingly, the actual results could differ significantly from those estimates (See Note 10).
21
We have identified the following as our critical accounting policies:
Common Stock Subject to Possible Redemption
We account for common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. Our common stock feature certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of our balance sheet.
Derivative Financial Instruments
We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period.
Derivative instruments are recorded at fair value at inception and re-valued at each reporting date, with changes in the fair value reported in the statements of operations.
Derivative assets and liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
Net Income (Loss) Per Common Share
We comply with accounting and disclosure requirements of FASB ASC 260, Earnings Per Share. The statements of operations include a presentation of income (loss) per redeemable Public Share (underlying the Public Subunit) and income (loss) per non-redeemable Founder Share following the two-class method of income (loss) per share. In order to determine the net income (loss) attributable to both the public redeemable shares and founder non-redeemable shares, we first considered the total income (loss) allocable to both sets of shares. This is calculated using the total net income (loss) less any dividends paid. For purposes of calculating net income (loss) per share, any remeasurement of the accretion to redemption value of the common stock subject to possible redemption was considered to be dividends paid to the public stockholders. Subsequent to calculating the total income (loss) allocable to both sets of shares, the Company split the amount to be allocated using a ratio of 76% for the Public Shares (underlying the Public Subunits) and 24% for the non-redeemable Founder Shares for the three months ended March 31, 2022 and 2021, reflective of the respective participation rights.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of March 31, 2022.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than described below.
We have engaged EBC as an advisor in connection with our business combination to assist us in holding meetings with our stockholders to discuss the potential business combination and the target business’ attributes, introduce us to potential investors that are interested in purchasing our securities in connection with our Initial Business Combination, assist us in obtaining stockholder approval for the Business Combination and assist us with our press releases and public filings in connection with the business combination. We will pay EBC a cash fee of $4,830,000 for such services upon the consummation of our Initial Business Combination (exclusive of any applicable finders’ fees which might become payable); provided that up to 30% of the fee may be allocated at our sole discretion to other FINRA members that assist us in identifying or consummating an Initial Business Combination.
We have engaged Nomura as an advisor to assist us with identifying and assessing potential Business Combination targets. Upon the closing of the Business Combination, we will pay Nomura a variable transaction fee of up to $10 million based on the transaction value of the Business Combination, with a minimum transaction fee of $5 million which may be reduced by up to $750,000 to cover our costs to obtain fairness opinion(s).
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Additionally, we have engaged the Blackstone Advisors to serve as exclusive capital markets advisors and exclusive joint placement agents in connection with our Business Combination with Blackstone. Upon the consummation of our Business Combination with Blackstone, we will pay Barclays an advisory fee of $1.5 million and will pay the Blackstone Advisors a placement fee equal to 5.0% of the gross proceeds received by us from any private placements arranged by the Advisors in connection with our Business Combination with Blackstone, with a minimum placement fee of $6.0 million.
Additionally, we have engaged Telsey to provide capital markets advisory services in connection with our Business Combination with Blackstone. We will pay Telsey a fixed fee of $650,000, of which $50,000 is payable within thirty days of Telsey completing its capital markets advisory services and the remaining $600,000 is payable upon the consummation of the Company’s Business Combination with Blackstone (See Note 11).
The preparation of condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the period reported. Actual results could materially differ from those estimates. We have not identified any critical accounting policies.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not required for smaller reporting companies.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended March 31, 2022, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial and accounting officer have concluded that, as of March 31, 2022, our disclosure controls and procedures were effective at a reasonable assurance level and, accordingly, provided reasonable assurance that the information required to be disclosed by us in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Changes in Internal Control over Financial Reporting
During the most recently completed fiscal quarter ended March 31, 2022, we have enhanced our internal controls over financial reporting relating to Private Warrants, redeemable equity instruments and Representative Shares by continuing to regularly assess the fair value of our Private Warrants, recognizing all Public Subunits as temporary equity and adopting a more robust approach to assessing the fair value of our equity instruments. We further improved this process by expanding and improving our review for complex securities and related accounting standards, enhancing access to accounting literature, identification of third-party professionals with whom to consult regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects. There have been no changes in our internal controls over financial reporting, except as previously noted, that has materially affected, or is reasonably likely to affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors.
Not required for a smaller reporting company. However, as of the date of this Quarterly Report, except as set forth below, there have been no material changes with respect to those risk factors previously disclosed in the Company’s final prospectus as filed with the SEC on December 9, 2020 and the Company’s Form 10-K. For risk factors relating to Blackstone and the Blackstone Merger, please see the proxy statement/prospectus included in the Newco Form S-4.
Changes in laws or regulations or in how such laws or regulations are interpreted or applied, or a failure to comply with any laws, regulations, interpretations or applications, may adversely affect our business, including our ability to negotiate and complete our Initial Business Combination.
We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our Initial Business Combination and results of operations.
On March 30, 2022, the SEC issued proposed rules relating to, among other items, disclosures in business combination transactions involving SPACs and private operating companies; the financial statement requirements applicable to transactions involving shell companies; the use of projections in SEC filings in connection with proposed business combination transactions; the potential liability of certain participants in proposed business combination transactions; and the extent to which special purpose acquisition companies (“SPACs”) could become subject to regulation under the Investment Company Act of 1940, as amended, including a proposed rule that would provide SPACs a safe harbor from treatment as an investment company if they satisfy certain conditions that limit a SPAC’s duration, asset composition, business purpose and activities. These rules, if adopted, whether in the form proposed or in a revised form, may increase the costs of and the time needed to negotiate and complete an Initial Business Combination, and may constrain the circumstances under which we could complete an Initial Business Combination.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
For a description of the use of the proceeds generated in our IPO, see Part II, Item 2 of the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2021. There has been no material change in the planned use of the proceeds from the Company’s IPO and private placement as is described in the Company’s final prospectus, dated December 21, 2020.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not Applicable.
Item 5. Other Information.
None.
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Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| * | Filed herewith. |
| ** | Furnished. |
| (1) | Incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on December 28, 2020. |
| (2) | Incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on December 30, 2020. |
| (3) | Incorporated herein by reference to Exhibit 3.3 to the Registrant’s Registration Statement on Form S-1 filed on December 1, 2020. |
| (4) | Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on March 21, 2022. |
| (5) | Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on April 7, 2022. |
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ACKRELL SPAC PARTNERS I CO. | ||
| Date: May 16, 2022 | By: | /s/ Jason Roth |
| Name: | Jason Roth | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) | ||
| Date: May 16, 2022 | By: | /s/ Long Long |
| Name: | Long Long | |
| Title: | Chief Financial Officer | |
| (Principal Accounting and Financial Officer) | ||
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EXHIBIT 10.3
THIS AMENDED AND RESTATED PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THIS AMENDED AND RESTATED PROMISSORY NOTE HAS BEEN ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF REGISTRATION OF THE RESALE THEREOF UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY IN FORM, SCOPE AND SUBSTANCE TO MAKER THAT SUCH REGISTRATION IS NOT REQUIRED.
PROMISSORY NOTE
| Dated as of May 11, 2022 | |
| Principal Amount: $385,000 | New York, New York |
This Amended and Restated Promissory Note (this “Note”) amends and restates the Promissory Note, dated as of April 27, 2022 (the “Existing Note”) from Ackrell SPAC Partners I Co., a Delaware corporation (“Maker”), payable to the order of North Atlantic Imports, LLC or its registered assigns or successors in interest (“Payee”). The terms, conditions and provisions of the Existing Note are hereby amended and restated in their entirety effective as of the date hereof so that henceforth the terms, conditions and provisions of the Existing Note shall read and be as set forth in this Note and Maker agrees to comply with and be subject to all of the terms, covenants and conditions of this Note effective as of the date hereof. Maker hereby acknowledges and agrees that this Note evidences the outstanding principal balance evidenced by the Existing Note, if any, as amended and restated pursuant to the immediately preceding sentence, together with any additional draw down on the principal of this Note. Neither this Note nor anything contained herein shall be construed as a substitution or novation of the outstanding principal balance evidenced by the Existing Note or of the Existing Note, which shall remain in full force and effect as hereby amended and restated. Maker promises to pay to the order of Payee, or order, the principal sum of Three Hundred Eighty-Five Thousand Dollars ($385,000) in lawful money of the United States of America, on the terms and conditions described below. All payments on this Note shall be made by check or wire transfer of immediately available funds, without setoff or counterclaim, to such account as Payee may from time to time designate by written notice in accordance with the provisions of this Note.
1. Maturity. Subject to Section 1(b), the principal balance of this Note shall be due and payable by Maker upon the earlier of (i) the closing of a Repayment Trigger Event, as such term is defined below, and (ii) September 23, 2022 (the “Maturity Date”). The principal balance may be prepaid in whole or in part at any time and from time to time prior to the Maturity Date without premium or penalty upon written notice by Maker to Payee.
| (a) | A “Repayment Trigger Event” means the consummation of the Business Combination as defined in the Certificate of Incorporation of Maker, as amended (the “COI”). |
Maker shall provide Payee at least 10 days’ prior notice of any Repayment Trigger Event and to the extent applicable a copy of the material terms of the Business Combination. Under no circumstances shall any individual, including but not limited to, any officer, director, employee or stockholder of Maker, be obligated personally for any obligations or liabilities of Maker hereunder.
(b) Form of Repayment. All amounts due under this Note shall be repaid in cash.
2. Interest. This Note will be non-interest bearing and unsecured.
3. Application of Payments. All payments shall be applied first to payment in full of any costs incurred in the collection of any sum due under this Note, including (without limitation) reasonable attorneys’ fees, and then to the reduction of the unpaid principal balance of this Note.
4. Use of Proceeds. On the date of this Note, Payee shall remit the full principal amount to Maker in accordance with the wiring instructions attached here to as Exhibit A. Maker hereby represents, warrants and covenants to Payee that the entire principal amount will be used by Maker solely for purposes of paying certain fees owed by the Maker to fund the ongoing operations of the Maker.
5. Events of Default. The following shall constitute an event of default (“Event of Default”):
(a) Failure to Make Required Payments. Failure by Maker to pay any principal amount due pursuant to this Note within five (5) business days of the Maturity Date.
(b) Breach of Use of Proceeds. Failure by Maker to comply with the provisions of Section 4 of this Note.
(c) Voluntary Bankruptcy, Etc. The commencement by Maker of a voluntary case under any applicable bankruptcy, insolvency, reorganization, rehabilitation or other similar law, or the consent by it to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of Maker or for any substantial part of its property, or the making by it of any assignment for the benefit of creditors, or the failure of Maker generally to pay its debts as such debts become due, or the taking of corporate action by Maker in furtherance of any of the foregoing.
(d) Involuntary Bankruptcy, Etc. The entry of a decree or order for relief by a court having jurisdiction in the premises in respect of Maker in an involuntary case under any applicable bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of Maker or for any substantial part of its property, or ordering the winding-up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days.
6. Remedies.
(a) Upon the occurrence of an Event of Default specified in Section 5(a) or Section 5(b) hereof, Payee may, by written notice to Maker, declare this Note to be due immediately and payable, whereupon the unpaid principal amount of this Note, and all other amounts payable hereunder, shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the documents evidencing the same to the contrary notwithstanding.
(b) Upon the occurrence of an Event of Default specified in Sections 5(c) and 5(d), the unpaid principal balance of this Note, and all other sums payable with regard to this Note, shall automatically and immediately become due and payable, in all cases without any action on the part of Payee.
7. Enforcement Costs. In case any principal of on this Note is not paid when due, Maker shall be liable for all costs of enforcement and collection of this Note incurred by Payee and any other Holders (as defined below), including but not limited to, reasonable attorneys’ fees and expenses.
8. Waivers. Maker and all endorsers and guarantors of, and sureties for, this Note waive presentment for payment, demand, notice of dishonor, protest, and notice of protest with regard to the Note, all errors, defects and imperfections in any proceedings instituted by Payee under the terms of this Note, and all benefits that might accrue to Maker by virtue of any present or future laws exempting any property, real or personal, or any part of the proceeds arising from any sale of any such property, from attachment, levy or sale under execution, or providing for any stay of execution, exemption from civil process, or extension of time for payment; and Maker agrees that any real estate that may be levied upon pursuant to a judgment obtained by virtue hereof or any writ of execution issued hereon, may be sold upon any such writ in whole or in part in any order desired by Payee.
9. Unconditional Liability. Maker hereby waives all notices in connection with the delivery, acceptance, performance, default, or enforcement of the payment of this Note, and agrees that its liability shall be unconditional, without regard to the liability of any other party, and shall not be affected in any manner by any indulgence, extension of time, renewal, waiver or modification granted or consented to by Payee, and consents to any and all extensions of time, renewals, waivers, or modifications that may be granted by Payee with respect to the payment or other provisions of this Note, and agrees that additional makers, endorsers, guarantors, or sureties may become parties hereto without notice to Maker or affecting Maker’s liability hereunder. Any failure of Payee to exercise any right hereunder shall not be construed as a waiver of the right to exercise the same or any other right at any time and from time to time thereafter. Payee may accept late payments, or partial payments, even though marked “payment in full” or containing words of similar import or other conditions, without waiving any of its rights.
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10. Notices. All notices, statements or other documents which are required or contemplated by this Note shall be made in writing and delivered: (i) personally or sent by first class registered or certified mail, overnight courier service or facsimile or electronic transmission to the address designated in writing, (ii) by facsimile to the number most recently provided to such party or such other address or fax number as may be designated in writing by such party or (iii) by electronic mail, to the electronic mail address most recently provided to such party or such other electronic mail address as may be designated in writing by such party. Any notice or other communication so transmitted shall be deemed to have been given on the day of delivery, if delivered personally, on the business day following receipt of written confirmation, if sent by facsimile or electronic transmission, one (1) business day after delivery to an overnight courier service or five (5) days after mailing if sent by mail. As of the date of this Note, the following addresses are designated for notices: (a) if to Maker, Ackrell SPAC Partners I Co., 2093 Philadelphia Pike #1968, Claymont, DE 19703, Attn: Long Long, email: long@spacpartners.com; (b) if to Payee, North Atlantic Imports, LLC, 513W 2500 N Logan, Utah 84341, Attn: Vincent Chen, email: vincent@blackstoneproducts.com.
11. Construction; Governing Law; Venue; Waiver of Jury Trial; Etc. THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF. MAKER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS NOTE SHALL AFFECT ANY RIGHT THAT PAYEE OR ANY OTHER HOLDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS NOTE AGAINST MAKER OR ITS PROPERTIES IN THE COURTS OF ANY OTHER JURISDICTION. MAKER WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO MAKER AT ITS ADDRESS SET FORTH IN SECTION 10 OR TO ANY OTHER ADDRESS AS MAY APPEAR IN PAYEE’S OR SUCH OTHER HOLDER’S RECORDS AS THE ADDRESS OF MAKER. IN ANY ACTION, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT OF THIS NOTE, PAYEE AND MAKER WAIVE TRIAL BY JURY, AND EACH OF MAKER AND PAYEE WAIVES (I) THE RIGHT TO INTERPOSE ANY SET-OFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION, (II) ANY OBJECTION BASED ON FORUM NON CONVENIENS OR VENUE, AND (III) ANY CLAIM FOR CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES.
12. Severability. Any provision contained in this Note which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
13. Trust Waiver. Notwithstanding anything herein to the contrary, but subject to the following sentence of this Section 13, Payee hereby waives any and all right, title, interest or claim of any kind (“Claim”) in or to any distribution of or from the trust account (the “Trust Account”) established in which the proceeds of the initial public offering (the “IPO”) conducted by Maker (including the deferred underwriters’ discounts and commissions) and the proceeds of the sale of the units issued in a private placement that occurred prior to the closing of the IPO were deposited, as described in greater detail in Maker’s Registration Statements on Form S-1 (File No. 333- 251060 and 333- 251537) filed with the Securities and Exchange Commission in connection with the IPO (the “Registration Statement”), and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the Trust Account for any reason whatsoever. Notwithstanding the foregoing, Payee does not waive any Claims and does not waive its rights to seek recourse, reimbursement, payment or satisfaction for any Claim against the Trust Account for distributions of remaining funds released to Maker from the Trust Account following redemptions or other distributions to Maker’s public stockholders.
14. Amendment; Waiver. Any amendment hereto or waiver of any provision hereof may be made with, and only with, the written consent of Maker and Payee.
15. Assignment. This Note binds and is for the benefit of the successors and permitted assigns of Maker and Payee. No assignment or transfer of this Note or any rights or obligations hereunder may be made by any party hereto (by operation of law or otherwise) without the prior written consent of the other party hereto and any attempted assignment without the required consent shall be void; provided, that (i) upon the announcement of a Business Combination or occurrence and during the continuation of an Event of Default, Payee shall have the right to assign this Note in its discretion without the consent of Maker and (ii) Payee shall be permitted to collaterally assign its respective rights under this Note to any lender or lenders providing financing to Payee.
[Signature page follows]
3
IN WITNESS WHEREOF, Maker, intending to be legally bound hereby, has caused this Note to be duly executed by the undersigned as of the day and year first above written.
| Ackrell SPAC Partners I Co. | |||
| By: | /s/ Long Long | ||
| Name: | Long Long | ||
| Title: | Chief Financial Officer | ||
EXHIBIT A
[Intentionally Omitted]
EXHIBIT 31.1
CERTIFICATION
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, Jason Roth, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Ackrell SPAC Partners I Co.; |
| 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 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)) 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 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 controls over financial reporting. |
| Date: May 16, 2022 | By: | /s/ Jason Roth |
| Jason Roth | ||
| Chief Executive Officer (Principal Executive Officer) |
EXHIBIT 31.2
CERTIFICATION
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, Long Long, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Ackrell SPAC Partners I Co.; |
| 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 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)) 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 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 controls over financial reporting. |
| Date: May 16, 2022 | By: | /s/ Long Long |
| Long Long | ||
| Chief Financial Officer (Principal Financial and Accounting Officer) |
EXHIBIT 32.1
CERTIFICATION 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 Ackrell SPAC Partners I Co. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jason Roth, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 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; and |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: May 16, 2022
| /s/ Jason Roth | ||
| Name: | Jason Roth | |
| Title: | Chief Executive Officer (Principal Executive Officer) | |
EXHIBIT 32.2
CERTIFICATION 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 Ackrell SPAC Partners I Co. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Long Long, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 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; and |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: May 16, 2022
| /s/ Long Long | ||
| Name: | Long Long | |
| Title: | Chief Financial Officer (Principal Financial and Accounting Officer) | |
Condensed Balance Sheets (Parentheticals) - $ / shares |
Mar. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Common stock subject to possible redemption | 13,800,000 | 13,800,000 |
| Redemption value per share (in Dollars per share) | $ 10.3 | $ 10.2 |
| Preferred stock par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
| Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
| Preferred stock, shares issued | ||
| Preferred stock, shares outstanding | ||
| Common stock par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
| Common stock, shares authorized | 100,000,000 | 100,000,000 |
| Common stock, shares issued | 4,369,000 | 4,369,000 |
| Common stock, shares outstanding | 4,369,000 | 4,369,000 |
Unaudited Condensed Statements of Operations - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
| Income Statement [Abstract] | ||
| Formation and operating costs | $ 667,558 | $ 199,795 |
| Loss from operations | (667,558) | (199,795) |
| Other income | ||
| Interest income | 35,037 | 24,047 |
| Change in fair value of warrant liabilities | 131,967 | 295,885 |
| Total other income | 167,004 | 319,932 |
| Net income (loss) | $ (500,554) | $ 120,137 |
| Basic and diluted weighted average shares outstanding, common stock subject to redemption (in Shares) | 13,800,000 | 13,800,000 |
| Basic and diluted net (loss) income per share attributable to common stock subject to redemption (in Dollars per share) | $ 0 | $ 0.01 |
| Basic and diluted weighted average shares outstanding, common stock (in Shares) | 4,369,000 | 4,369,000 |
| Basic and diluted net (loss) income per share attributable to common stockholders (in Dollars per share) | $ (0.11) | $ 0.01 |
Unaudited Condensed Statements of Cash Flows - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
| Cash Flows from Operating Activities: | ||
| Net income (loss) | $ (500,554) | $ 120,137 |
| Adjustments to reconcile net loss to net cash provided by/(used in) operating activities: | ||
| Interest earned on investment held in Trust Account | (35,037) | (24,047) |
| Change in fair value of warrants | (131,967) | (295,885) |
| Changes in current assets and current liabilities: | ||
| Prepaid assets | 34,782 | (3,556) |
| Accounts payable and accrued expense | 490,151 | (182,248) |
| State franchise tax accrual | 51,045 | 42,090 |
| Due to related parties | 30,000 | 30,000 |
| Net cash provided by/(used in) operating activities | (61,580) | (313,509) |
| Cash Flows from Investing Activities: | ||
| Cash deposited in Trust Account | (1,380,000) | |
| Net cash used in investing activities | (1,380,000) | |
| Cash Flows from Financing Activities: | ||
| Proceeds from promissory note - Blackstone | 1,380,000 | |
| Net cash provided by financing activities | 1,380,000 | |
| Net Increase in Cash | (61,580) | (313,509) |
| Cash - Beginning | 86,792 | 677,130 |
| Cash - Ending | 25,212 | 363,621 |
| Supplemental Disclosure of Non-cash Financing Activities: | ||
| Extension Funds attributable to common stock subject to redemption under ASC 480-10-S99 against APIC | 1,380,000 | |
| Subsequent measurement of common stock subject to redemption under ASC 480-10-S99 against APIC (interest earned on Trust Account) | $ 35,037 | $ 24,047 |
Organization and Business Operations |
3 Months Ended |
|---|---|
Mar. 31, 2022 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Organization and Business Operations | Note 1 — Organization and Business Operations
Organization and General
Ackrell SPAC Partners I Co. (the “Company”) is a blank check company formed under the laws of the State of Delaware on September 11, 2018. The Company was formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities (the “Business Combination” or “Initial Business Combination”).
The Company has selected December 31 as its fiscal year end. The Company’s sponsor is Ackrell SPAC Sponsors I LLC (the “Sponsor”), a Delaware limited liability company.
As of March 31, 2022, the Company had not yet commenced any revenue-generating operations. All activity through March 31, 2022 relates to the Company’s formation, the Initial Public Offering (as defined below), the search for a prospective Initial Business Combination, and efforts toward consummating the Initial Business Combination. The Company will not generate any operating revenues until after the completion of its Initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO and will recognize changes in the fair value of warrant liability as other income (expense) (See Note 10).
On December 15, 2021, the Company formed Blackstone Products, Inc. (“Newco”), a Delaware corporation that is a wholly-owned subsidiary of the Company, and Ackrell Merger Sub Inc. (“Merger Sub”), a Delaware corporation that is a wholly-owned subsidiary of Newco, for the purpose of executing the Merger Agreement (as defined below). All activities of Newco and Merger Sub through March 31, 2022 related to executing the Merger Agreement.
On December 22, 2021, the Company, Newco and Merger Sub entered into a business combination agreement (the “Merger Agreement”) with North Atlantic Imports, LLC, an innovative griddle company d/b/a Blackstone Products (“Blackstone”), pursuant to which the two companies agreed to consummate a Business Combination where the combined company will own 100% of Blackstone post Business Combination. The aggregate consideration to be paid in the transactions is based on a pre-money Blackstone equity valuation of approximately $721 million. In connection with the Business Combination, the Company and Newco entered into subscription agreements with certain investors (the “PIPE Investors”), pursuant to which Newco agreed to issue and sell to the PIPE Investors approximately 3,100,000 units (the “Newco Units”) for a purchase price of $10.00 per unit, for an aggregate of approximately $31,000,000 and approximately $111,000,000 principal amount of Newco convertible notes immediately prior to the closing of the Business Combination. Each Newco Unit consists of one share of Newco common stock and one-half of a warrant to acquire Newco common stock at an exercise price of $11.50 per share.
Financing
The registration statements (“Registration Statements”) for the Company’s initial public offering (“Initial Public Offering” or “IPO”) were declared effective on December 21, 2020. On December 23, 2020, the Company consummated the Initial Public Offering of 13,800,000 units (the “Public Units”), which included the full exercise of the underwriter’s overallotment option, generating gross proceeds of $138,000,000, which is described in Note 3. Each Public Unit consists of (i) one subunit (the “Public Subunit”), which consists of one share of common stock (the “Public Share”) and one-half of one redeemable warrant, and (ii) one-half of one redeemable warrant (collectively, the redeemable warrants included in the Public Units and Public Subunits, the “Public Warrants”). Each whole Public Warrant entitles the holder to purchase one share of common stock at a price of $11.50 per share.
Simultaneously with the closing of the IPO, the Company consummated the sale of an aggregate of 539,000 units (the “Private Units”) at a price of $10.00 per unit in a private placement to the Sponsor and EarlyBirdCapital, Inc. (“EarlyBirdCapital”), generating gross proceeds of an aggregate of $5,390,000, which is described in Note 4. Each Private Unit consists of (i) one subunit (the “Private Subunit”), which consists of one share of common stock (the “Private Share”) and one-half of one redeemable warrant, and (ii) one-half of one redeemable warrant (collectively, the redeemable warrants included in the Private Units and Private Subunits, the “Private Warrants”). Each whole Private Warrant entitles the holder to purchase one share of common stock at a price of $11.50 per share.
Trust Account
Following the closing of the IPO on December 23, 2020, an amount of $139,380,000 ($10.10 per Unit) from the net proceeds of the sale of the Public and Private Units in the IPO and private placement was placed in a trust account (“Trust Account”) which will be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act, which invest only in direct U.S. government treasury obligations, until the earlier of (a) the completion of the Company’s Initial Business Combination, (b) the redemption of any Public Subunits properly submitted in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation, or (c) the redemption of the Company’s Public Subunits if the Company is unable to complete the Initial Business Combination within the Combination Period (as defined below). On December 23, 2021, the Company deposited $1,380,000 into the Trust Account and extended the period of time to consummate the Initial Business Combination by three months from December 23, 2021 to March 23, 2022. On March 21, 2022, the Company deposited an additional $1,380,000 into the Trust Account and further extended the period of time to consummate the Initial Business Combination by an additional three months from March 23, 2022 to June 23, 2022 (the “Extended Combination Period”). The aggregate of $2,760,000 from the above mentioned two extensions was funded by proceeds from the promissory notes issued to the Sponsor and Blackstone on December 23, 2021 and March 16, 2022, respectively (See Note 5 and Note 8). On April 28, 2022, pursuant to the trust agreement dated as of December 21, 2020 between the Company and Continental Stock Transfer & Trust Company (“CST”), the trustee of the Trust Account, the Company issued a request to CST to withdraw $129,279 of interest income from the Trust Account for the payment of the Company’s taxes. The proceeds from this withdrawal were deposited into the Company’s operating bank account on May 10, 2022 (See Note 11).
Initial Business Combination
The Company’s Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (net of taxes payable) at the time of the signing an agreement to enter into a Business Combination. However, the Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect a Business Combination. The Company will provide its stockholders with the opportunity to redeem all or a portion of their Public Subunits included in the Public Units sold in the IPO upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The stockholders will be entitled to redeem their Public Subunits for a pro rata portion of the amount then on deposit in the Trust Account (initially approximately $10.10 per subunit, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations).
The Company had 12 months from the closing of the IPO to consummate a Business Combination with an opportunity to extend the period of time up to two times each by an additional three months (for a total of up to 18 months to complete a business combination) (the “Combination Period”), subject to the Sponsor and/or its designees depositing into the Trust Account, on or prior to the applicable deadline, additional funds of $1,380,000 ($0.10 per unit) for each of the available three-month extensions. On December 23, 2021, the Company deposited $1,380,000 into the Trust Account and extended the period of time to consummate the Initial Business Combination by three months from December 23, 2021 to March 23, 2022. On March 21, 2022, the Company deposited an additional $1,380,000 into the Trust Account and further extended the period of time to consummate the Initial Business Combination by an additional three months from March 23, 2022 to June 23, 2022. The aggregate of $2,760,000 from the above mentioned two extensions was funded by proceeds from the promissory notes issued to the Sponsor and Blackstone on December 23, 2021 and March 16, 2022, respectively (See Note 5 and Note 8).
The Sponsor, EarlyBirdCapital and the Company’s officer and directors have agreed to (i) waive their conversion rights with respect to their Founder Shares (See Note 5), Representative Shares (See Note 8) and Private Subunits (collectively, the “Private Securities”) in connection with the consummation of a Business Combination, (ii) to waive their rights to liquidating distributions from the Trust Account with respect to their Private Securities if the Company fails to consummate a Business Combination within the Extended Combination Period and (iii) not to propose an amendment to the Company’s amended and restated certificate of incorporation that would affect the substance or timing of the Company’s obligation to redeem 100% of its Public Subunits if the Company does not complete a Business Combination, unless the Company provides the public stockholders with the opportunity to redeem their Public Subunits in conjunction with any such amendment.
Liquidation
The holders of the Private Securities will not participate in any liquidation distribution with respect to such securities. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the $10.10 per Public Unit in the IPO. The Sponsor has agreed that it will be liable to ensure that the proceeds in the Trust Account are not reduced below $10.10 per Public Subunit by the claims of target businesses or claims of vendors or other entities that are owed money by the Company for services rendered or contracted for or products sold to the Company. The agreement entered into by the Sponsor specifically provides for two exceptions to the indemnity it has given: it will have no liability (1) as to any claimed amounts owed to a target business or vendor or other entity who has executed an agreement with us waiving any right, title, interest or claim of any kind they may have in or to any monies held in the Trust Account, or (2) as to any claims for indemnification by the underwriters of the Company’s IPO against certain liabilities, including liabilities under the Securities Act. The Company has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations. The Company believes that the Sponsor’s only assets are securities of the Company. Therefore, the Company believes it is unlikely that Sponsor will be able to satisfy its indemnification obligations if it is required to do so.
Liquidity and Going Concern
As of March 31, 2022, the Company had cash outside the Trust Account of $25,212 available for working capital needs. All remaining cash and securities were held in the Trust Account and are generally unavailable for the Company’s use prior to an Initial Business Combination (except that the Company may withdraw interest generated in the Trust Account to pay taxes) and are restricted for use either in a Business Combination or to redeem Public Subunits. As of March 31, 2022, none of the amount on deposit in the Trust Account was available to be withdrawn as described above (except $95,129 of interest income that may be withdrawn to pay taxes).
Through March 31, 2022, the Company’s liquidity needs were satisfied through receipt of $5,000 from the sale of the Founder Shares (See Note 5), advances from the Sponsor in an aggregate amount of $300,000 which were repaid upon the IPO, and the remaining net proceeds from the IPO and private placement (See Note 4 and 5) held outside of the Trust Account. Additionally, the Company received $1,380,000 from the Sponsor Extension Loan (see Note 5) and another $1,380,000 from the Blackstone Extension Loan (See Note 8), which the Company deposited into the Trust Account to extend the period of time to consummate the Initial Business Combination from December 23, 2021 to June 23, 2022.
The Company’s initial stockholders, officers, directors or their affiliates may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans, other than the interest on such proceeds that may be released for working capital purposes. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into units of the post Business Combination entity at a price of $10.00 per unit. As of March 31, 2022 and December 31, 2021, no Working Capital Loans were outstanding.
Until consummation of its Business Combination, the Company will be using the funds not held in the Trust Account, and any additional Working Capital Loans from the Initial Stockholders, the Sponsor, the Company’s officers and directors, or their respective affiliates, for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination.
The Company anticipates that the $25,212 outside of the Trust account as of March 31, 2022 will not be sufficient to allow the Company to operate for at least the next 12 months, assuming that a Business Combination is not consummated during that time. On December 23, 2021, the Company deposited $1,380,000 into the Trust Account and extended the period of time to consummate the Initial Business Combination by three months from December 23, 2021 to March 23, 2022. On March 21, 2022, the Company deposited an additional $1,380,000 into the Trust Account and further extended the period of time to consummate the Initial Business Combination by an additional three months from March 23, 2022 to June 23, 2022. The aggregate of $2,760,000 from the above mentioned two extensions was funded by proceeds from the promissory notes issued to the Sponsor and Blackstone on December 23, 2021 and March 16, 2022, respectively (See Note 5). On April 6, 2022, the Company issued a third unsecured promissory note in the principal amount of $115,000 to Blackstone to fund payment of fees due to Nasdaq (See Note 11). On April 27, 2022, the Company issued a fourth unsecured promissory note, the terms of which were later amended and restated on May 11, 2022, in the principal amount of $385,000 to Blackstone to fund the Company’s continued operations (See Note 11). On April 28, 2022, pursuant to the trust agreement dated as of December 21, 2020 between the Company and CST, the Company issued a request to CST to withdraw $129,279 of interest income from the Trust Account for the payment of the Company’s taxes (See Note 11). The Company may need to obtain additional financing to consummate its Initial Business Combination but there is no assurance that new financing will be available to the Company on commercially acceptable terms. Furthermore, if the Company is not able to consummate a business combination by June 23, 2022, it will trigger the Company’s automatic winding up, liquidation and dissolution. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. |
Significant Accounting Policies |
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Significant Accounting Policies | Note 2 — Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 as filed with the SEC on March 31, 2022, which contained the audited financial statements and notes thereto. The interim results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any future interim periods.
Emerging Growth Company Status
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of unaudited condensed financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had $25,212 of cash held outside of the Trust Account as of March 31, 2022 and $86,792 as of December 31, 2021. The Company did not have any cash equivalents as of March 31, 2022 and December 31, 2021.
Investment Held in Trust Account
As of March 31, 2022 and December 31, 2021, the Company had $142,237,615 and $140,822,578, respectively, in the Trust Account which may be utilized for Business Combination. As of March 31, 2022 and December 31, 2021, the Trust Account consisted of both cash and Treasury securities. The Company classifies its United States Treasury securities as held-to-maturity in accordance with FASB ASC Topic 320 “Investments – Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts.
On April 28, 2022, pursuant to the trust agreement dated as of December 21, 2020 between the Company and CST, the Company issued a request to CST to withdraw $129,279 of interest income from the Trust Account for the payment of the Company’s taxes. The proceeds from this withdrawal were deposited into the Company’s operating bank account on May 10, 2022 (See Note 11).
A decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment that reduces the carrying costs to such securities’ fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and the duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest method. Such amortization and accretion are included in the “interest income” line item in the condensed statements of operations. Interest income is recognized when earned.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the Financial Accounting Standards Board (“FASB”) ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet.
Common Stock (underlying the Public Subunits) Subject to Possible Redemption
The Company accounts for its common stock underlying the Public Subunits that are subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock underlying the Public Subunits subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable common stock underlying Public Subunits (including common stock underlying Public Subunits that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, common stock underlying the Public Subunits are classified as stockholders’ equity. The Company’s common stock underlying the Public Subunits feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at March 31, 2022 and December 31, 2021, common stock underlying the Public Subunits subject to possible redemption are presented as temporary equity, outside of the stockholders’ equity section of the Company’s condensed balance sheets.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period.
Derivative instruments are recorded at fair value at inception and re-valued at each reporting date, with changes in the fair value reported in the statements of operations.
Derivative assets and liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
Net Income (Loss) Per Common Share
The Company complies with accounting and disclosure requirements of FASB ASC 260, Earnings Per Share. The statements of operations include a presentation of income (loss) per redeemable Public Share underlying the Public Subunit and income (loss) per non-redeemable Founder Share following the two-class method of income (loss) per share. In order to determine the net income (loss) attributable to both the public redeemable shares and founder non-redeemable shares, the Company first considered the total income (loss) allocable to both sets of shares. This is calculated using the total net income (loss) less any dividends paid. For purposes of calculating net income (loss) per share, any remeasurement of the accretion to redemption value of the common stock subject to possible redemption was considered to be dividends paid to the public stockholders. Subsequent to calculating the total income (loss) allocable to both sets of shares, the Company split the amount to be allocated using a ratio of 76% for the Public Shares underlying the Public Subunits and 24% for the non-redeemable Founder Shares for the three months ended March 31, 2022 and 2021, reflective of the respective participation rights.
The earnings per share presented in the statements of operations is based on the following:
As of March 31, 2022 and December 31, 2021, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into common stock and then share in the Company’s earnings. As a result, diluted loss per share is the same as basic loss per share for the periods presented.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
Income Taxes
The Company accounts for income taxes under ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2022 and December 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has identified the United States as its only “major” tax jurisdiction. The Company may be subject to potential examination by federal and state 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 and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. The provision for income taxes was deemed to be immaterial as of March 31, 2022 and December 31, 2021.
Recent Accounting Pronouncements
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The ASU introduced a new credit loss methodology, the Current Expected Credit Losses (“CECL”) methodology, which requires earlier recognition of credit losses, while also providing additional transparency about credit risk. The CECL methodology utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses for loans, held-to maturity debt securities, trade receivables and other receivables measured at amortized cost at the time the financial asset is originated or acquired. After the issuance of ASU 2016-13, the FASB issued several additional ASUs to clarify implementation guidance, provide narrow-scope improvements and provide additional disclosure guidance. In November 2019, the FASB issued an amendment making this ASU effective for fiscal years beginning after December 15, 2022 for smaller reporting companies. The Company plans to adopt this standard in the first quarter of 2023 and does not expect the adoption will have a significant impact on its financial statements and related disclosures.
Other than as noted above, Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. |
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Initial Public Offering |
3 Months Ended |
|---|---|
Mar. 31, 2022 | |
| Initial Public Offering Disclosure [Abstract] | |
| Initial Public Offering | Note 3 — Initial Public Offering
On December 23, 2020, the Company sold 13,800,000 Public Units at a price of $10.00 per Public Unit, including the issuance of 1,800,000 Public Units as a result of the underwriters’ full exercise of their over-allotment option. Each Public Unit consists of (i) one Public Subunit, which consists of one Public Share and one-half of one Public Warrant, and (ii) one-half of one Public Warrant. Each whole warrant entitles the holder to purchase one share of common stock at a price of $11.50 per share. (See Note 7). |
Private Placements |
3 Months Ended |
|---|---|
Mar. 31, 2022 | |
| Private Placement [Abstract] | |
| Private Placements | Note 4 — Private Placements
Simultaneously with the closing of the IPO, the Sponsor and EarlyBirdCapital purchased an aggregate of 539,000 Private Units, at a price of $10.00 per unit, for an aggregate purchase price of $5,390,000. A portion of the proceeds from the sale of Private Units were added to the net proceeds from the IPO held in the Trust Account.
The Private Units and their underlying securities are identical to the units sold in the Initial Public Offering except the Private Warrants will be non-redeemable and may be exercised on a cashless basis. The purchasers of the Private Units have agreed not to transfer, assign or sell any of the Private Units or underlying securities (except to the same permitted transferees as the Founder Shares) until the completion of the Business Combination.
If the Company does not complete a Business Combination within the Extended Combination Period, the proceeds of the sale of the Private Units will be used to fund the redemption of the Public Subunits (subject to the requirements of applicable law). |
Related Party Transactions |
3 Months Ended |
|---|---|
Mar. 31, 2022 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions | Note 5 — Related Party Transactions
Founder Shares
On September 11, 2018, the Company issued 3,737,500 shares of common stock (the “Founder Shares”) to its initial stockholder, Able SPAC Holding LLC, for $5,000 in cash, or approximately $0.0013 per share, in connection with formation.
On November 25, 2020, the Sponsor contributed back to the Company, for no consideration, 862,500 Founder Shares for cancellation, resulting in an aggregate of 2,875,000 Founder Shares outstanding.
On December 21, 2020, the Company effected a stock dividend of 0.2 shares of common stock for every share of common stock outstanding, resulting in an aggregate of 3,450,000 Founder Shares outstanding.
Founder Shares, subject to certain limited exceptions contained in the Registration Statements, will not be transferred, assigned, sold or released from escrow for a period ending on the six-month anniversary of the date of the consummation of the Initial Business Combination or earlier if, subsequent to its Initial Business Combination, the Company consummates a liquidation, merger, stock exchange or other similar transaction which results in all of the stockholders having the right to exchange
Promissory Note – Related Party
On December 23, 2021, the Company issued an unsecured promissory note in the principal amount of $1,380,000 to the Sponsor (the “Sponsor Extension Loan”). As of December 31, 2021, the Company had drawn down the full $1,380,000 on the Sponsor Extension Loan. The Sponsor Extension Loan is non-interest bearing and payable in cash upon the closing of the Company’s Initial Business Combination. In the event the Company fails to complete an Initial Business Combination prior to the deadline set forth in its governing document, no payment will be due under the Sponsor Extension Loan and the principal balance of the Sponsor Extension Loan will be forgiven.
Administrative Services Agreement
Commencing on the effective date of the Registration Statements, the Company has agreed to pay an affiliate of the Company’s Chairman an aggregate fee of $10,000 per month for providing the Company with office space and certain office and secretarial services. This arrangement will terminate upon completion of the Company’s Initial Business Combination or the distribution of the Trust Account to the Company’s public stockholders. As of March 31, 2022 and December 31, 2021, the Company has accrued $153,548 and $123,548, respectively, of administrative fees as a due to related party.
Working Capital Loans
In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor may, but is not obligated to, provide the Company Working Capital Loans. If the Company completes a Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans, other than the interest on such proceeds that may be released for working capital purposes. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into units of the post Business Combination entity at a price of $10.00 per unit. As of March 31, 2022 and December 31, 2021, no Working Capital Loans were outstanding. |
Cash and Securities Held in Trust Account |
3 Months Ended |
|---|---|
Mar. 31, 2022 | |
| Cash and Securities Held in Trust Account [Abstract] | |
| Cash and Securities Held in Trust Account | Note 6 — Cash and Securities Held in Trust Account
As of March 31, 2022 and December 31, 2021, cash and securities held in Trust Account are $142,237,615 and $140,822,578, respectively, and will not be released until the earlier of (a) the completion of the Company’s Initial Business Combination, (b) the redemption of any Public Subunits properly submitted in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation, or (c) the redemption of the Company’s Public Subunits if the Company is unable to complete the Initial Business Combination within the Extended Combination Period. |
Stockholders' Equity |
3 Months Ended |
|---|---|
Mar. 31, 2022 | |
| Stockholders' Equity Note [Abstract] | |
| Stockholders' Equity | Note 7 — Stockholders’ Equity
Preferred Stock — The Company is authorized to issue a total of 1,000,000 shares of preferred stock at par value of $0.0001 each. At March 31, 2022 and December 31, 2021, there were no shares of preferred stock issued or outstanding.
Common Stock — The Company is authorized to issue a total of 100,000,000 shares of common stock at par value of $0.0001 each.
On December 23, 2020, the Company sold 13,800,000 shares of common stock as part of units sold in the IPO. Simultaneously with the closing of the IPO, the Sponsor purchased an aggregate of 539,000 shares of common stock as part of the Private Units.
As of March 31, 2022 and December 31, 2021, shares of common stock subject to redemption were 13,800,000. The total number of shares of common stock outstanding at March 31, 2022 and December 31, 2021 was 4,369,000.
Warrants — Each whole warrant entitles the registered holder to purchase one share of common stock at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing on the later of 30 days after the completion of an Initial Business Combination or 12 months from the closing of the Company’s IPO and will expire on the fifth anniversary of the completion of an Initial Business Combination, or earlier upon redemption or liquidation. However, no warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the Public Warrants is not effective within a specified period following the consummation of Initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” for this purpose will mean the average reported last sale price of the shares of common stock for the 5 trading days ending on the trading day prior to the date of exercise. The warrants will expire on the fifth anniversary of completion of an Initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation. The Private Warrants, as well as any warrants underlying additional units the Company may issue to Sponsor, officers, directors or their affiliates in payment of Working Capital Loans made to us, will be identical to the warrants underlying the units sold in the Company’s IPO except that such warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and will not be redeemable by us, in each case so long as they are still held by the Sponsor, EarlyBirdCapital or their permitted transferees. |
Commitments & Contingencies |
3 Months Ended |
|---|---|
Mar. 31, 2022 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments & Contingencies | Note 8 — Commitments & Contingencies
Registration Rights
The holders of the Founder Shares, Private Units (and their underlying securities), Representative Shares (As defined below) and any Units that may be issued upon conversion of the Working Capital Loans (and their underlying securities) will be entitled to registration rights pursuant to an agreement signed on the effective date of the Registration Statements. The holders of a majority of these securities will be entitled to make up to two demands that the Company register such securities. The holders of the majority of the Founder Shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Private Units and units issued in payment of Working Capital Loans made to the Company (or underlying securities) can elect to exercise these registration rights at any time after the Company consummates an Initial Business Combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s consummation of an Initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company granted the underwriters a 45-day option to purchase up to 1,800,000 additional Public Units to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions. On December 23, 2020, the underwriters exercised its full over-allotment option of 1,800,000 units.
On December 23, 2020, the underwriters were paid a cash underwriting fee of 2% of the gross proceeds of the IPO, totaling $2,760,000.
In addition, prior to the IPO, the Company issued to EarlyBirdCapital an aggregate of 380,000 shares of common stock (the “Representative Shares”) at approximately $0.0001 per share.
The Representative Shares have been deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following the date of the effectiveness of the Registration Statements pursuant to Rule 5110(g)(1) of the FINRA Manual. Pursuant to FINRA Rule 5110(g)(1), these securities will not be sold during the offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days immediately following the effective date of the Registration Statements, except to any underwriter and selected dealer participating in the offering and their bona fide officers or partners, provided that all securities so transferred remain subject to the lockup restriction above for the remainder of the time period.
Business Combination Marketing Agreement
The Company has engaged EarlyBirdCapital as an advisor in connection with the Company’s business combination to assist the Company in holding meetings with the Company’s stockholders to discuss the potential business combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with the Company’s Initial Business Combination, assist the Company in obtaining stockholder approval for the business combination and assist the Company with its press releases and public filings in connection with the Initial Business Combination. The Company will pay EarlyBirdCapital a cash fee for such services upon the consummation of the Company’s Initial Business Combination in an amount equal to 3.5% of the gross proceeds of the IPO (exclusive of any applicable finders’ fees which might become payable); provided that up to 30% of the fee may be allocated at the Company’s sole discretion to other FINRA members (including, with EarlyBirdCapital’s prior consent which shall not be unreasonably withheld, companies affiliated with the Company or the Company’s officers or directors, including Ackrell Capital) that assist the Company in identifying or consummating an Initial Business Combination.
Capital Markets Advisors Agreements
The Company has engaged Nomura Securities International, Inc. (“Nomura”) as an advisor to assist the Company with identifying and assessing potential Business Combination targets. Upon the closing of the Business Combination, the Company will pay Nomura a variable transaction fee of up to $10 million based on the transaction value of the Business Combination, with a minimum transaction fee of $5 million which may be reduced by up to $750,000 to cover the Company’s costs to obtain fairness opinion(s).
Additionally, the Company has engaged Nomura and Barclays Capital Inc. (“Barclays”) (collectively, the “Blackstone Advisors”) to serve as exclusive capital markets advisors and exclusive joint placement agents in connection with the Company’s Business Combination with Blackstone. Upon the consummation of the Company’s Business Combination with Blackstone, the Company will pay Barclays an advisory fee of $1.5 million and will pay the Blackstone Advisors a placement fee equal to 5.0% of the gross proceeds received by the Company from any private placements arranged by the Blackstone Advisors in connection with the Company’s Business Combination with Blackstone, with a minimum placement fee of $6.0 million.
Additionally, the Company has engaged Telsey Advisory Group (“Telsey”) to provide capital markets advisory services in connection with the Company’s Business Combination with Blackstone. The Company will pay Telsey a fixed fee of $650,000, of which $50,000 is payable within thirty days of Telsey completing its capital markets advisory services and the remaining $600,000 is payable upon the consummation of the Company’s Business Combination with Blackstone (See Note 11).
Promissory Notes - Blackstone
On March 16, 2022, the Company issued an unsecured promissory note in the principal amount of $1,380,000 to Blackstone (the “Blackstone Extension Loan”). As of March 31, 2022, the Company had drawn down the full $1,380,000 on the Blackstone Extension Loan. The Blackstone Extension Loan is non-interest bearing and payable in cash upon the closing of the Company’s Initial Business Combination. In the event the Company fails to complete an Initial Business Combination prior to the deadline set forth in its governing document, no payment will be due under the Blackstone Extension Loan and the principal balance of the Blackstone Extension Loan will be forgiven.
On April 6, 2022, the Company issued another unsecured promissory note in the principal amount of $115,000 to Blackstone (See Note 11). The proceeds of this note was used to pay outstanding Nasdaq fees owed by the Company. The note is non-interest bearing and payable in cash upon the closing of the Company’s Initial Business Combination. In the event that the Company fails to complete an Initial Business Combination prior to the deadline set forth in its governing document, no payment will be due under the note and the principal balance of the note will be forgiven.
On April 27, 2022, the Company issued another unsecured promissory note, the terms of which were later amended and restated on May 11, 2022, in the principal amount of $385,000 to Blackstone (See Note 11). The proceeds of this note will be used as working capital to fund the continued operations of the Company. The note is non-interest bearing and payable in cash upon the earlier of i) the closing of the Company’s Initial Business Combination, and ii) September 23, 2022. |
Fair Value Measurements |
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| Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Measurements | Note 9 — Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
The fair value of the Company’s certain assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the condensed balance sheet. The fair values of cash and cash equivalents, prepaid assets, accounts payable and accrued expenses, due to related parties are estimated to approximate the carrying values as of March 31, 2022 and December 31, 2021 due to the short maturities of such instruments.
Fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and includes situations where there is little, if any, market activity for the asset or liability.
Recurring Fair Value Measurements
As of March 31, 2022, investment in the Company’s Trust Account consisted of $1,663 in cash and $142,235,952 in U.S. Treasury Securities. The value of the cash held in Trust Account, U.S. Treasury Securities held in Trust Account and Private Warrant liability was determined by quoted prices in active markets (Level 1), significant other observable inputs (Level 2) and significant other unobservable inputs (Level 3), respectively, as of March 31, 2022.
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2022 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
As of December 31, 2021, investment in the Company’s Trust Account consisted of $1,895 in cash and $140,820,683 in U.S. Treasury Securities. The value of the cash held in Trust Account, U.S. Treasury Securities held in Trust Account and Private Warrant liability was determined by quoted prices in active markets (Level 1), significant other observable inputs (Level 2) and significant other unobservable inputs (Level 3), respectively, as of December 31, 2021.
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period. There were no transfers between levels for the three months ended March 31, 2022 and 2021. |
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Warrant Liabilities |
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| Warrant Liabilities | Note 10 — Warrant Liabilities
At March 31, 2022 and December 31, 2021, there were 539,000 Private Warrants outstanding, which the Company accounts for as derivative warrant liabilities in accordance with ASC 815-40. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are subject to remeasurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statement of operations. The fair value of the Private Warrants has been estimated using Monte Carlo simulations at each measurement date.
The Company utilizes a Monte Carlo simulation model to value the warrants at each reporting period, with changes in fair value recognized in the statement of operations. The estimated fair value of the warrant liability is determined using Level 3 inputs. Inherent in a Monte Carol simulation model are assumptions related to expected stock price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its shares of common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is simulated based on management assumptions regarding the timing and likelihood of completing a business combination. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero. Once the warrants become exercisable, the Company may redeem the outstanding warrants when the price per share of common stock equals or exceeds $18.00. The assumptions used in calculating the estimated fair values at the end of the reporting period represent the Company’s best estimate. However, inherent uncertainties are involved. If factors or assumptions change, the estimated fair values could be materially different.
The aforementioned warrant liabilities are not subject to qualified hedge accounting.
The following table provides quantitative information regarding Level 3 fair value measurements of the Private Warrants:
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Subsequent Events |
3 Months Ended |
|---|---|
Mar. 31, 2022 | |
| Subsequent Events [Abstract] | |
| Subsequent Events | Note 11 — 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 and has concluded that all such events that would require adjustment or disclosure have been recognized or disclosed.
On April 6, 2022, the Company issued another unsecured promissory note in the principal amount of $115,000 to Blackstone. The proceeds of this note was used to pay outstanding Nasdaq fees owed by the Company. The note is non-interest bearing and payable in cash upon the closing of the Company’s Initial Business Combination. In the event that the Company fails to complete an Initial Business Combination prior to the deadline set forth in its governing document, no payment will be due under the note and the principal balance of the note will be forgiven.
On April 26, 2022, the Company engaged Telsey to provide capital markets advisory services in connection with the Company’s Business Combination with Blackstone. The Company will pay Telsey a fixed fee of $650,000, of which $50,000 is payable within thirty days of Telsey completing its capital markets advisory services and the remaining $600,000 is payable upon the consummation of the Company’s Business Combination with Blackstone.
On April 27, 2022, the Company issued another unsecured promissory note, the terms of which were later amended and restated on May 11, 2022, in the principal amount of $385,000 to Blackstone. The proceeds of this note will be used as working capital to fund the continued operations of the Company. The note is non-interest bearing and payable in cash upon the earlier of i) the closing of the Company’s Initial Business Combination, and ii) September 23, 2022. The $385,000 of proceeds from this promissory note was deposited into the Company’s operating bank account on May 13, 2022.
On April 28, 2022, pursuant to the trust agreement dated as of December 21, 2020 between the Company and CST, the Company issued a request to CST to withdraw $129,279 of interest income from the Trust Account for the payment of the Company’s taxes. The proceeds from this withdrawal were deposited into the Company’s operating bank account on May 10, 2022.
On May 13, 2022, the Company filed a preliminary proxy statement on Form PRE 14A (“Extension Proxy Statement”) for a special meeting of stockholders to be held for the approval of the extension of the date by which we must consummate an initial business combination from June 23, 2022 (which is 18 months from the closing of our initial public offering) to September 23, 2022 (or such earlier date as determined by the Company’s Board of Directors). |
Accounting Policies, by Policy (Policies) |
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| Basis of Presentation | Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 as filed with the SEC on March 31, 2022, which contained the audited financial statements and notes thereto. The interim results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any future interim periods.
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| Emerging Growth Company Status | Emerging Growth Company Status
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
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| Use of Estimates | Use of Estimates
The preparation of unaudited condensed financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
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| 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 $25,212 of cash held outside of the Trust Account as of March 31, 2022 and $86,792 as of December 31, 2021. The Company did not have any cash equivalents as of March 31, 2022 and December 31, 2021.
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| Investment Held in Trust Account | Investment Held in Trust Account
As of March 31, 2022 and December 31, 2021, the Company had $142,237,615 and $140,822,578, respectively, in the Trust Account which may be utilized for Business Combination. As of March 31, 2022 and December 31, 2021, the Trust Account consisted of both cash and Treasury securities. The Company classifies its United States Treasury securities as held-to-maturity in accordance with FASB ASC Topic 320 “Investments – Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts.
On April 28, 2022, pursuant to the trust agreement dated as of December 21, 2020 between the Company and CST, the Company issued a request to CST to withdraw $129,279 of interest income from the Trust Account for the payment of the Company’s taxes. The proceeds from this withdrawal were deposited into the Company’s operating bank account on May 10, 2022 (See Note 11).
A decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment that reduces the carrying costs to such securities’ fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and the duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest method. Such amortization and accretion are included in the “interest income” line item in the condensed statements of operations. Interest income is recognized when earned.
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| Fair Value of Financial Instruments | Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the Financial Accounting Standards Board (“FASB”) ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet.
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| Common Stock (underlying the Public Subunits) Subject to Possible Redemption | Common Stock (underlying the Public Subunits) Subject to Possible Redemption
The Company accounts for its common stock underlying the Public Subunits that are subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock underlying the Public Subunits subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable common stock underlying Public Subunits (including common stock underlying Public Subunits that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, common stock underlying the Public Subunits are classified as stockholders’ equity. The Company’s common stock underlying the Public Subunits feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at March 31, 2022 and December 31, 2021, common stock underlying the Public Subunits subject to possible redemption are presented as temporary equity, outside of the stockholders’ equity section of the Company’s condensed balance sheets.
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| Derivative Financial Instruments | Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period.
Derivative instruments are recorded at fair value at inception and re-valued at each reporting date, with changes in the fair value reported in the statements of operations.
Derivative assets and liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
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| Net Income (Loss) Per Common Share | Net Income (Loss) Per Common Share
The Company complies with accounting and disclosure requirements of FASB ASC 260, Earnings Per Share. The statements of operations include a presentation of income (loss) per redeemable Public Share underlying the Public Subunit and income (loss) per non-redeemable Founder Share following the two-class method of income (loss) per share. In order to determine the net income (loss) attributable to both the public redeemable shares and founder non-redeemable shares, the Company first considered the total income (loss) allocable to both sets of shares. This is calculated using the total net income (loss) less any dividends paid. For purposes of calculating net income (loss) per share, any remeasurement of the accretion to redemption value of the common stock subject to possible redemption was considered to be dividends paid to the public stockholders. Subsequent to calculating the total income (loss) allocable to both sets of shares, the Company split the amount to be allocated using a ratio of 76% for the Public Shares underlying the Public Subunits and 24% for the non-redeemable Founder Shares for the three months ended March 31, 2022 and 2021, reflective of the respective participation rights.
The earnings per share presented in the statements of operations is based on the following:
As of March 31, 2022 and December 31, 2021, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into common stock and then share in the Company’s earnings. As a result, diluted loss per share is the same as basic loss per share for the periods presented.
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| Concentration of Credit Risk | Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
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| Income Taxes | Income Taxes
The Company accounts for income taxes under ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2022 and December 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has identified the United States as its only “major” tax jurisdiction. The Company may be subject to potential examination by federal and state 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 and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. The provision for income taxes was deemed to be immaterial as of March 31, 2022 and December 31, 2021.
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| Recent Accounting Pronouncements | Recent Accounting Pronouncements
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The ASU introduced a new credit loss methodology, the Current Expected Credit Losses (“CECL”) methodology, which requires earlier recognition of credit losses, while also providing additional transparency about credit risk. The CECL methodology utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses for loans, held-to maturity debt securities, trade receivables and other receivables measured at amortized cost at the time the financial asset is originated or acquired. After the issuance of ASU 2016-13, the FASB issued several additional ASUs to clarify implementation guidance, provide narrow-scope improvements and provide additional disclosure guidance. In November 2019, the FASB issued an amendment making this ASU effective for fiscal years beginning after December 15, 2022 for smaller reporting companies. The Company plans to adopt this standard in the first quarter of 2023 and does not expect the adoption will have a significant impact on its financial statements and related disclosures.
Other than as noted above, Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. |
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Significant Accounting Policies (Tables) |
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of net income (loss) per common share |
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| Schedule of earnings per share presented in the statements of operations |
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Fair Value Measurements (Tables) |
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| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of assets and liabilities that are measured at fair value on a recurring basis |
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Warrant Liabilities (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Warrant Liabilities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of fair value measurements of the Private Warrants |
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Organization and Business Operations (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 06, 2022 |
Dec. 23, 2021 |
Apr. 28, 2022 |
Apr. 27, 2022 |
Dec. 23, 2021 |
Dec. 22, 2021 |
Dec. 23, 2020 |
Jun. 23, 2022 |
Mar. 31, 2022 |
Mar. 23, 2022 |
Mar. 16, 2022 |
Dec. 31, 2021 |
Mar. 21, 2022 |
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| Organization and Business Operations (Details) [Line Items] | |||||||||||||
| Blackstone equity valuation | $ 721,000,000 | ||||||||||||
| Agreed to issue and sell to the PIPE investors (in Shares) | 3,100,000 | ||||||||||||
| Purchase price per share unit (in Dollars per share) | $ 10 | ||||||||||||
| Aggregate value | $ 31,000,000 | ||||||||||||
| Principal amount | $ 111,000,000 | ||||||||||||
| Gross proceeds | $ 2,760,000 | ||||||||||||
| Deposited in trust account | $ 1,380,000 | $ 1,380,000 | |||||||||||
| Deposited an additional amount into trust account | $ 1,380,000 | ||||||||||||
| Proceeds from the promissory notes | $ 2,760,000 | ||||||||||||
| Interest income | $ 129,279 | $ 95,129 | |||||||||||
| Percentage of fair market value | 80.00% | ||||||||||||
| Deposit in trust account of per subunit (in Dollars per share) | $ 10.1 | ||||||||||||
| Liquidation, description | The holders of the Private Securities will not participate in any liquidation distribution with respect to such securities. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the $10.10 per Public Unit in the IPO. The Sponsor has agreed that it will be liable to ensure that the proceeds in the Trust Account are not reduced below $10.10 per Public Subunit by the claims of target businesses or claims of vendors or other entities that are owed money by the Company for services rendered or contracted for or products sold to the Company. | ||||||||||||
| Cash outside the trust account | $ 25,212 | ||||||||||||
| Sale of insider shares | 5,000 | ||||||||||||
| Sponsor extension loan | 1,380,000 | ||||||||||||
| Blackstone extension loan | 1,380,000 | ||||||||||||
| Working capital loans | 1,500,000 | ||||||||||||
| Trust account value | 25,212 | ||||||||||||
| Principal amount | $ 1,380,000 | ||||||||||||
| Trust account | $ 1,663 | $ 1,895 | |||||||||||
| Common Stock [Member] | |||||||||||||
| Organization and Business Operations (Details) [Line Items] | |||||||||||||
| Exercise price per share (in Dollars per share) | $ 11.5 | ||||||||||||
| Price per share (in Dollars per share) | $ 11.5 | ||||||||||||
| Trust Account [Member] | |||||||||||||
| Organization and Business Operations (Details) [Line Items] | |||||||||||||
| Cash deposited | $ 1,380,000 | ||||||||||||
| Initial Public Offering [Member] | |||||||||||||
| Organization and Business Operations (Details) [Line Items] | |||||||||||||
| Number of units issued in transaction (in Shares) | 13,800,000 | ||||||||||||
| Gross proceeds | $ 138,000,000 | ||||||||||||
| Price per share (in Dollars per share) | $ 10.1 | ||||||||||||
| Net proceeds | $ 139,380,000 | ||||||||||||
| Private Placement [Member] | |||||||||||||
| Organization and Business Operations (Details) [Line Items] | |||||||||||||
| Number of units issued in transaction (in Shares) | 539,000 | ||||||||||||
| Price per share (in Dollars per share) | $ 11.5 | $ 10 | |||||||||||
| Subsequent Event [Member] | |||||||||||||
| Organization and Business Operations (Details) [Line Items] | |||||||||||||
| Principal amount | $ 115,000 | $ 385,000 | |||||||||||
| Trust account | $ 129,279 | ||||||||||||
| Subsequent Event [Member] | Trust Account [Member] | |||||||||||||
| Organization and Business Operations (Details) [Line Items] | |||||||||||||
| Cash deposited | $ 1,380,000 | ||||||||||||
| Sponsor [Member] | |||||||||||||
| Organization and Business Operations (Details) [Line Items] | |||||||||||||
| Aggregate amount | $ 300,000 | ||||||||||||
| Early Bird Capital Inc [Member] | |||||||||||||
| Organization and Business Operations (Details) [Line Items] | |||||||||||||
| Gross proceeds | $ 5,390,000 | ||||||||||||
| Business Combination [Member] | |||||||||||||
| Organization and Business Operations (Details) [Line Items] | |||||||||||||
| Company's business combination percentage | 100.00% | 100.00% | |||||||||||
| Percentage of ownership interest | 50.00% | ||||||||||||
| Business combination price, per unit (in Dollars per share) | $ 10 | ||||||||||||
Significant Accounting Policies (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 12 Months Ended |
|---|---|---|---|
Apr. 28, 2022 |
Mar. 31, 2022 |
Dec. 31, 2021 |
|
| Significant Accounting Policies (Details) [Line Items] | |||
| Cash | $ 25,212 | $ 86,792 | |
| Trust account | $ 142,237,615 | $ 140,822,578 | |
| Public shares percentage | 76.00% | 76.00% | |
| Founder non-redeemable shares percentage | 24.00% | 24.00% | |
| Federal depository insurance coverage amount | $ 250,000 | ||
| Subsequent Event [Member] | |||
| Significant Accounting Policies (Details) [Line Items] | |||
| Interest income | $ 129,279 |
Significant Accounting Policies (Details) - Schedule of net income (loss) per common share - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
| Schedule of net income (loss) per common share [Abstract] | ||
| Net income (loss) | $ (500,554) | $ 120,137 |
| Attribution of extension funds to redeemable shares | (1,380,000) | |
| Accretion of temporary equity to redemption value | (35,037) | (24,047) |
| Net income (loss) including accretion of temporary equity to redemption value | $ (1,915,591) | $ 96,090 |
Significant Accounting Policies (Details) - Schedule of earnings per share presented in the statements of operations - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
| Redeemable [Member] | ||
| Numerator: | ||
| Allocation of net income (loss) including accretion of temporary equity | $ (1,454,959) | $ 72,984 |
| Attribution of extension funds to redeemable shares | 1,380,000 | |
| Accretion of temporary equity to redemption value | 35,037 | 24,047 |
| Allocation of net income (loss) | $ (39,922) | $ 97,031 |
| Denominator: | ||
| Weighted-average shares outstanding (in Shares) | 13,800,000 | 13,800,000 |
| Basic and diluted net income (loss) per share (in Dollars per share) | $ 0 | $ 0.01 |
| Non-redeemable [Member] | ||
| Numerator: | ||
| Allocation of net income (loss) including accretion of temporary equity | $ (460,632) | $ 23,106 |
| Attribution of extension funds to redeemable shares | ||
| Accretion of temporary equity to redemption value | ||
| Allocation of net income (loss) | $ (460,632) | $ 23,106 |
| Denominator: | ||
| Weighted-average shares outstanding (in Shares) | 4,369,000 | 4,369,000 |
| Basic and diluted net income (loss) per share (in Dollars per share) | $ (0.11) | $ 0.01 |
Initial Public Offering (Details) |
1 Months Ended |
|---|---|
|
Dec. 23, 2020
$ / shares
shares
| |
| Initial Public Offering (Details) [Line Items] | |
| Public offering transaction, description | Each Public Unit consists of (i) one Public Subunit, which consists of one Public Share and one-half of one Public Warrant, and (ii) one-half of one Public Warrant. Each whole warrant entitles the holder to purchase one share of common stock at a price of $11.50 per share. (See Note 7). |
| IPO [Member] | |
| Initial Public Offering (Details) [Line Items] | |
| Number of shares sold | 13,800,000 |
| Price per unit (in Dollars per share) | $ / shares | $ 10 |
| Over-Allotment Option [Member] | |
| Initial Public Offering (Details) [Line Items] | |
| Issuance of shares units | 1,800,000 |
Private Placements (Details) |
3 Months Ended |
|---|---|
|
Mar. 31, 2022
USD ($)
$ / shares
shares
| |
| Private Placement [Member] | |
| Private Placements (Details) [Line Items] | |
| Sale units price per share | $ / shares | $ 10 |
| Aggregate purchase price of private placements | $ | $ 5,390,000 |
| EarlyBirdCapital, Inc. [Member] | |
| Private Placements (Details) [Line Items] | |
| Aggregate purchase price | shares | 539,000 |
Related Party Transactions (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 12 Months Ended | |||
|---|---|---|---|---|---|---|
Dec. 23, 2021 |
Sep. 11, 2018 |
Dec. 21, 2020 |
Nov. 25, 2020 |
Mar. 31, 2022 |
Dec. 31, 2021 |
|
| Related Party Transactions (Details) [Line Items] | ||||||
| Principal amount | $ 1,380,000 | |||||
| Promissory notes payable | $ 1,380,000 | |||||
| Aggregate fee | $ 10,000 | |||||
| Administrative fees | 153,548 | $ 123,548 | ||||
| Working capital loans | $ 1,500,000 | |||||
| Business Combination [Member] | ||||||
| Related Party Transactions (Details) [Line Items] | ||||||
| Business combination price, per unit (in Dollars per share) | $ 10 | |||||
| Founder Shares [Member] | ||||||
| Related Party Transactions (Details) [Line Items] | ||||||
| Common stock shares issued (in Shares) | 3,737,500 | |||||
| Cash | $ 5,000 | |||||
| Issued price per share (in Dollars per share) | $ 0.0013 | |||||
| Cancellation of shares (in Shares) | 862,500 | |||||
| Aggregate of shares outstanding (in Shares) | 2,875,000 | |||||
| Founder Shares [Member] | Business Combination [Member] | ||||||
| Related Party Transactions (Details) [Line Items] | ||||||
| Common stock. description | On December 21, 2020, the Company effected a stock dividend of 0.2 shares of common stock for every share of common stock outstanding, resulting in an aggregate of 3,450,000 Founder Shares outstanding. | |||||
Cash and Securities Held in Trust Account (Details) - USD ($) |
Mar. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Cash and Securities Held in Trust Account [Abstract] | ||
| Cash and securities held in trust account | $ 142,237,615 | $ 140,822,578 |
Stockholders' Equity (Details) - $ / shares |
1 Months Ended | 3 Months Ended | |
|---|---|---|---|
Dec. 23, 2020 |
Mar. 31, 2022 |
Dec. 31, 2021 |
|
| Stockholders' Equity (Details) [Line Items] | |||
| Preferred stock, shares authorized | 1,000,000 | 1,000,000 | |
| Preferred stock par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | |
| Preferred stock issued or outstanding, description | At March 31, 2022 and December 31, 2021, there were no shares of preferred stock issued or outstanding. | ||
| Common stock, shares authorized | 100,000,000 | 100,000,000 | |
| Common stock par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | |
| Common stock shares | 4,369,000 | 4,369,000 | |
| Common stock subject to possible redemption | 13,800,000 | 13,800,000 | |
| Common stock, shares outstanding | 4,369,000 | 4,369,000 | |
| Purchase share | 1 | ||
| Price per share (in Dollars per share) | $ 11.5 | ||
| IPO [Member] | Common Stock [Member] | |||
| Stockholders' Equity (Details) [Line Items] | |||
| Common stock shares | 13,800,000 | ||
| Aggregate common stock | 539,000 |
Commitments & Contingencies (Details) - USD ($) |
1 Months Ended | 3 Months Ended | ||||||
|---|---|---|---|---|---|---|---|---|
Apr. 06, 2022 |
Dec. 23, 2021 |
Apr. 27, 2022 |
Apr. 26, 2022 |
Mar. 16, 2022 |
Dec. 23, 2020 |
Mar. 31, 2022 |
Dec. 31, 2021 |
|
| Commitments & Contingencies (Details) [Line Items] | ||||||||
| Underwriters agreement, description | The Company granted the underwriters a 45-day option to purchase up to 1,800,000 additional Public Units to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions. | |||||||
| Underwriting fee percentage | 2.00% | |||||||
| Percentage of fee | 30.00% | |||||||
| Variable fee | $ 10,000,000 | |||||||
| Costs to obtain fairness | 750,000 | |||||||
| Fixed fee | $ 1,500,000 | |||||||
| Variable fee percentage | 5.00% | |||||||
| Principal amount | $ 1,380,000 | |||||||
| Promissory notes payable | $ 1,380,000 | |||||||
| Minimum [Member] | ||||||||
| Commitments & Contingencies (Details) [Line Items] | ||||||||
| Variable fee | $ 5,000,000 | |||||||
| Over-Allotment Option [Member] | ||||||||
| Commitments & Contingencies (Details) [Line Items] | ||||||||
| Number of units issued in transaction (in Shares) | 1,800,000 | |||||||
| Initial Public Offering [Member] | ||||||||
| Commitments & Contingencies (Details) [Line Items] | ||||||||
| Proceeds from Issuance or Sale of Equity | $ 2,760,000 | |||||||
| Subsequent Event [Member] | ||||||||
| Commitments & Contingencies (Details) [Line Items] | ||||||||
| Principal amount | $ 115,000 | $ 385,000 | ||||||
| Business Combination [Member] | ||||||||
| Commitments & Contingencies (Details) [Line Items] | ||||||||
| Percentage of gross proceeds | 3.50% | |||||||
| Business Combination with Blackstone [Member] | ||||||||
| Commitments & Contingencies (Details) [Line Items] | ||||||||
| Fixed fee | $ 650,000 | |||||||
| Acquired payable | 600,000 | |||||||
| Principal amount | $ 1,380,000 | |||||||
| Promissory notes payable | 1,380,000 | |||||||
| Business Combination with Blackstone [Member] | Minimum [Member] | ||||||||
| Commitments & Contingencies (Details) [Line Items] | ||||||||
| Variable fee | 6,000,000 | |||||||
| Business Combination with Blackstone [Member] | Subsequent Event [Member] | ||||||||
| Commitments & Contingencies (Details) [Line Items] | ||||||||
| Fixed fee | $ 650,000 | |||||||
| Acquired payable | 600,000 | |||||||
| Principal amount | $ 115,000 | $ 385,000 | ||||||
| Early Bird Capital Inc [Member] | ||||||||
| Commitments & Contingencies (Details) [Line Items] | ||||||||
| Aggregate shares issued (in Shares) | 380,000 | |||||||
| Share price per share (in Dollars per share) | $ 0.0001 | |||||||
| Telsey Advisory Group [Member] | ||||||||
| Commitments & Contingencies (Details) [Line Items] | ||||||||
| Acquired payable | $ 50,000 | $ 50,000 | ||||||
Fair Value Measurements (Details) - USD ($) |
3 Months Ended | 12 Months Ended |
|---|---|---|
Mar. 31, 2022 |
Dec. 31, 2021 |
|
| Fair Value Disclosures [Abstract] | ||
| Trust account | $ 1,663 | $ 1,895 |
| U.S. Treasury Securities | $ 142,235,952 | $ 140,820,683 |
Fair Value Measurements (Details) - Schedule of assets and liabilities that are measured at fair value on a recurring basis - USD ($) |
Mar. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Assets: | ||
| Cash held in Trust Account | $ 1,663 | $ 1,895 |
| U.S. Treasury Securities held in Trust Account | 142,235,952 | 140,820,683 |
| Fair value of assets | 142,237,615 | 140,822,578 |
| Liabilities: | ||
| Warrant Liability – Private Warrants | 152,803 | 284,770 |
| Quoted Prices In Active Markets (Level 1) | ||
| Assets: | ||
| Cash held in Trust Account | 1,663 | 1,895 |
| U.S. Treasury Securities held in Trust Account | ||
| Fair value of assets | 1,663 | 1,895 |
| Liabilities: | ||
| Warrant Liability – Private Warrants | ||
| Significant Other Observable Inputs (Level 2) | ||
| Assets: | ||
| Cash held in Trust Account | ||
| U.S. Treasury Securities held in Trust Account | 142,235,952 | 140,820,683 |
| Fair value of assets | 142,235,952 | 140,820,683 |
| Liabilities: | ||
| Warrant Liability – Private Warrants | ||
| Significant Other Unobservable Inputs (Level 3) | ||
| Assets: | ||
| Cash held in Trust Account | ||
| U.S. Treasury Securities held in Trust Account | ||
| Fair value of assets | ||
| Liabilities: | ||
| Warrant Liability – Private Warrants | $ 152,803 | $ 284,770 |
Warrant Liabilities (Details) - $ / shares |
3 Months Ended | |
|---|---|---|
Mar. 31, 2022 |
Dec. 31, 2021 |
|
| Warrant Liabilities [Abstract] | ||
| Private warrant outstanding | 539,000 | 539,000 |
| Warrants price per share (in Dollars per share) | $ 18 |
Warrant Liabilities (Details) - Schedule of fair value measurements of the Private Warrants |
3 Months Ended | 12 Months Ended |
|---|---|---|
|
Mar. 31, 2022
$ / shares
$ / item
|
Dec. 31, 2021
$ / shares
$ / item
|
|
| Schedule of fair value measurements of the Private Warrants [Abstract] | ||
| Stock price (in Dollars per share) | $ / shares | $ 10.09 | $ 9.86 |
| Strike price (in Dollars per Item) | $ / item | 11.5 | 11.5 |
| Term (in years) | 5 years 2 months 15 days | 5 years 5 months 4 days |
| Volatility | 3.70% | 9.20% |
| Risk-free rate | 2.42% | 1.30% |
| Dividend yield | 0.00% | 0.00% |
Subsequent Events (Details) - USD ($) |
1 Months Ended | 3 Months Ended | ||||||
|---|---|---|---|---|---|---|---|---|
Apr. 06, 2022 |
Dec. 23, 2021 |
May 28, 2022 |
Apr. 27, 2022 |
Apr. 26, 2022 |
Mar. 16, 2022 |
Mar. 31, 2022 |
May 13, 2022 |
|
| Subsequent Events (Details) [Line Items] | ||||||||
| Principal amount | $ 1,380,000 | |||||||
| Fixed fee | $ 1,500,000 | |||||||
| Subsequent Event [Member] | ||||||||
| Subsequent Events (Details) [Line Items] | ||||||||
| Principal amount | $ 115,000 | $ 385,000 | ||||||
| Forecast [Member] | ||||||||
| Subsequent Events (Details) [Line Items] | ||||||||
| Interest income | $ 129,279 | |||||||
| Telsey Advisory Group [Member] | ||||||||
| Subsequent Events (Details) [Line Items] | ||||||||
| Acquired payable | $ 50,000 | 50,000 | ||||||
| Business Combination with Blackstone [Member] | ||||||||
| Subsequent Events (Details) [Line Items] | ||||||||
| Principal amount | $ 1,380,000 | |||||||
| Fixed fee | 650,000 | |||||||
| Acquired payable | $ 600,000 | |||||||
| Business Combination with Blackstone [Member] | Subsequent Event [Member] | ||||||||
| Subsequent Events (Details) [Line Items] | ||||||||
| Principal amount | $ 115,000 | $ 385,000 | ||||||
| Fixed fee | 650,000 | |||||||
| Acquired payable | $ 600,000 | |||||||
| Net proceeds of promissory note | $ 385,000 | |||||||
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