Restatement of Previously Issued Balance Sheet

12 Months Ended

Dec. 31, 2021

Condensed Financial Information Disclosure [Abstract]

RESTATEMENT OF PREVIOUSLY ISSUED BALANCE SHEET

NOTE 7 – RESTATEMENT OF PREVIOUSLY ISSUED BALANCE SHEET

Public and Private Placement Warrants

The Company accounts for its warrants outstanding consistent with the “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (the “Staff Statement”) issued on April 12, 2021 by the staff (the “Staff”) of the Division of Corporation Finance of the SEC. The Staff Statement, among other things, highlights the potential accounting implications of certain terms that are common in warrants issued in connection with the initial public offerings of special purpose acquisition companies (“SPAC”) such as the Company. The Staff Statement reflects the Staff’s view that in many cases, warrants issued by SPACs should be characterized as liabilities for accounting purposes, rather than as equity securities, unless certain conditions are met. As a result of this guidance, the Company’s management evaluated its warrants under ASC Subtopic 815-40, Contracts in Entity’s Own Equity including the assistance of accounting and valuation consultants and concluded that the Company’s warrants are not indexed to the Company’s shares in the manner contemplated by ASC Section 815-40-15 because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares.

The impact to the balance sheet as of January 20, 2021 prepared in connection with the Public Offering and filed in a Current Report on Form 8-K with the SEC on January 26, 2021 (the “Form 8-K) related to the impact of accounting for warrants as liabilities at fair value resulted in approximately a $25,205,000 increase to the warrant liabilities line item at January 20, 2021 and an offsetting decrease to the Class A common stock subject to redemption. There is no change to total stockholders’ equity at any reported balance sheet date. In addition, the Company has recorded approximately $1,471,000 of costs to the statement of operations at inception of the warrants to reflect (i) approximately $639,000 of warrant issuance costs and (ii) approximately $832,000 for costs associated with the issuance of the Private Placement Warrants to the Sponsor for the difference between the price paid for the warrants and the fair value at that date.

Class A Common Stock Subject to Redemption

The Company has determined that since all of the Class A common stock is redeemable, all such shares should be accounted for as redeemable in such companies’ financial statements. Previously, the Company accounted for all but the amount necessary to have $5,000,001 of stockholders’ equity, as redeemable since the Company would not enter a transaction that would cause its stockholders’ equity to be below the $5,000,001 threshold. In November 2021 the Company determined that such revisions, because of their quantitative materiality, should be presented as restatements rather than revisions.

As a result of the above, the Company has recorded all outstanding Class A common stock as Class A common stock subject to redemption in the December 31, 2021 balance sheet. The effect of these changes (warrant liability and Class A common stock subject to redemption) on the Company’s previously issued balance sheet at January 20, 2021 as it was originally issued is as follows:

		As Filed			Adjustment			As Restated
Balance Sheet at January 20, 2021
Warrant liability	$		-		$	25,205,000		$	25,205,000
Class A common stock subject to possible redemption	$		330,792,000		$	14,208,000		$	345,000,000
Additional paid-in-capital	$		5,043,000		$	(5,043,000	)	$	-
Accumulated deficit	$		(44,000	)	$	(34,470,000	)	$	(34,514,000	)
Total stockholders’ equity	$		5,000,000		$	(39,513,000	)	$	(34,513,000	)

The Company’s accounting for (i) its Public Warrants and Private Placement Warrants as liabilities and (ii) all of the Class A common stock as redeemable instead of including a portion in stockholders’ equity did not have any effect on the Company’s previously reported operating expenses, cash flows or cash.