Restatement of Previously Issued Financial Statements

12 Months Ended

Dec. 31, 2021

Restatement of Previously Issued Financial Statements [Abstract]

Restatement of Previously Issued Financial Statements

Note 2  — Restatement of Previously Issued Financial Statements

In the Company’s previously issued financial statements, a portion of the public shares were classified as permanent equity to maintain stockholders’ equity greater than $5,000,000 on the basis that the Company will consummate its initial business combination only if the Company has net tangible assets of at least $5,000,001. Thus, the Company can only complete a merger and continue to exist as a public company if there is sufficient Public Shares that do not redeem at the merger and so it was deemed appropriate to classify the portion of its public shares required to keep its stockholders’ equity above the $5,000,000 threshold as "shares not subject to redemption."

Management re-evaluated the Company’s application of ASC 480-10-99 to its accounting classification of public shares. Upon re-evaluation, management determined that the public shares include certain provisions that require classification of the public shares as temporary equity regardless of the minimum net tangible assets required by the Company to complete its initial business combination.

In connection with the change in presentation for the Class A common stock subject to possible redemption, the Company also revised its earnings per share calculation to allocate income and losses pro rata to Class A and Class B common stock. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of stock share pro rata in the income and losses of the Company.

In accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements;” the Company evaluated the changes and has determined that the related impacts were quantitatively material to previously presented financial statements. Therefore, the Company, in consultation with its Audit Committee, concluded that its previously issued financial statements impacted should be restated to report all public shares as temporary equity. As a result, the Company will restate its previously filed financial statements to classify all of its Class A common stock as temporary equity and to recognize accretion from the initial book value to redemption value at the time of its IPO and in accordance with ASC 480. The Company filed a Current Report on Form 8-K reporting under Item 4.02 that the impacted periods should no longer be relied upon and restated all affected periods with an appropriate explanation of the amount, reason and impact. Under this approach, the previously issued IPO Balance Sheet will not be amended and the Company is reporting the restatement in this Annual Report.

Impact of the Restatement

The impact to the financial statements as of February 19, 2021:

	As Reported			Adjustment			As Restated
Balance Sheet as of February 19, 2021
Warrant liability	$	—		$	17,605,070		$	17,605,070
Total Liabilities		6,908,602			17,605,070			24,513,672
Class A Common stock subject to possible redemption ($)	$	163,188,100		$	9,311,900		$	172,500,000
Class A common stock, $0.0001 par value		93			(93	)		—
Additional Paid in Capital		5,002,165			(5,002,165	)		—
Accumulated Deficit		(2,682	)		(21,918,712	)		(21,921,394	)
Total Stockholders' Equity (Deficit)		5,000,007			(26,920,970	)		(21,920,963	)
Class A common stock subject to redemption		16,318,810			2,772,315			17,250,000