QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(IRS Employer Identification No.) |
(Address Of Principal Executive Offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
one-half of one Redeemable Warrant |
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Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
June 30, 2022 |
December 31, 2021 |
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(unaudited) |
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Assets: |
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Current assets: |
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Cash |
$ | $ | ||||||
Prepaid expenses |
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Total current assets |
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Other Assets |
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Investments held in Trust Account |
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Total Assets |
$ |
$ |
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Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit: |
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Current liabilities: |
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Accounts payable |
$ | $ | ||||||
Accrued expenses |
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Accrued expenses - related party |
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Franchise tax payable |
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Total current liabilities |
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Deferred underwriting commissions in connection with the Initial Public Offering |
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Derivative liabilities |
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Total Liabilities |
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Commitments and Contingencies |
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Class A common stock subject to possible redemption, $ |
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Stockholders’ Deficit: |
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Preferred stock, $ |
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Class A common stock, $ non-redeemable shares issued or outstanding at March 31, 2022 and December 31, 2021, respectively |
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Class B common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
( |
) | ( |
) | ||||
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Total stockholders’ deficit |
( |
) | ( |
) | ||||
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Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit |
$ |
$ |
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For the three months ended June 30, 2022 |
For the six months ended June 30, 2022 |
For the period from April 20, 2021 (inception) through June 30, 2021 |
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General and administrative expenses |
$ | $ | $ | |||||||||
Franchise tax expenses |
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Loss from operations |
( |
) | ( |
) | ( |
) | ||||||
Other income: |
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Change in fair value of derivative warrant liabilities |
( |
) | ( |
) | ||||||||
Net gain on investments held in Trust Account |
( |
) | ( |
) | ||||||||
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Total other income |
( |
) | ( |
) | ||||||||
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Net income (loss) |
$ |
$ |
$ |
( |
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Weighted average shares outstanding of Class A common stock, basic and diluted |
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Basic and diluted net income per common share, Class A common stock |
$ | $ | $ | |||||||||
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Weighted average shares outstanding of Class B common stock, basic and diluted |
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Basic and diluted net income (loss) per common share, Class B common stock |
$ | $ | $ | ( |
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Common Stock |
Total |
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Class A |
Class B |
Additional Paid-In |
Accumulated |
Stockholders’ |
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Shares |
Amount |
Shares |
Amount |
Capital |
Deficit |
Deficit |
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Balance - December 31, 2021 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||
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Balance - March 31, 2022 (unaudited) |
( |
) |
( |
) | ||||||||||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||
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Balance - June 30, 2022 (unaudited) |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
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Common Stock |
Total |
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Class A |
Class B |
Additional Paid-In |
Accumulated |
Stockholders’ |
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Shares |
Amount |
Shares |
Amount |
Capital |
Deficit |
Deficit |
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Balance - April 20, 2021 (inception) |
$ |
$ |
$ |
$ |
$ |
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Issuance of Class B common stock to Sponsor |
— | — | — | |||||||||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
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Balance - June 30, 2021 (unaudited) |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
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For the six months ended June 30, 2022 |
For the period from April 20, 2021 (inception) through June 30, 2021 |
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Cash Flows from Operating Activities: |
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Net income (loss) |
$ | $ | ( |
) | ||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: |
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Change in fair value of derivative warrant liabilities |
( |
) | ||||||
Net gain on investments held in Trust Account |
( |
) | ||||||
Changes in operating assets and liabilities: |
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Prepaid expenses |
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Accounts payable |
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Accrued expenses - related party |
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Franchise tax payable |
( |
) | ||||||
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Net cash used in operating activities |
( |
) | ||||||
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Cash Flows from Financing Activities: |
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Proceeds from note payable to related party |
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Offering costs paid |
( |
) | ||||||
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Net cash (used in) provided by financing activities |
( |
) | ||||||
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Net change in cash |
( |
) | ||||||
Cash - beginning of the period |
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Cash - end of the period |
$ |
$ |
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Supplemental disclosure of noncash financing activities: |
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Offering costs paid by the Sponsor in exchange for issuance of Class B common stock |
$ | $ | ||||||
Offering costs included in accounts payable |
$ | $ | ||||||
Offering costs included in accrued expenses |
$ | $ | ||||||
Offering costs paid by Sponsor under promissory note |
$ | $ | |
• | 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. |
For the Three Months Ended June 30, 2022 |
For the Six Months Ended June 30, 2022 |
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Class A |
Class B |
Class A |
Class B |
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Basic and diluted net income per common share: |
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Numerator: |
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Allocation of net income |
$ | $ | $ | $ | |
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Denominator: |
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Basic and diluted weighted average common shares outstanding |
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Basic and diluted net income per common share |
$ | $ | $ | $ | ||||||||||||
For the period from April 20, 2021 (inception) through June 30, 2021 |
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Class A |
Class B |
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Basic and diluted net loss per common share: |
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Numerator: |
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Allocation of net loss |
$ |
$ |
( |
) | ||||
Denominator: |
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Basic and diluted weighted average common shares outstanding |
— |
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Basic and diluted net loss per common share |
$ |
— |
$ |
( |
) |
Gross proceeds from Initial Public Offering |
$ | |||
Less: |
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Fair value of Public Warrants at issuance |
( |
) | ||
Offering costs allocated to Class A common stock subject to possible redemption |
( |
) | ||
Plus: |
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Accretion on Class A common stock subject to possible redemption amount |
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Class A common stock subject to possible redemption |
$ |
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• | in whole and not in part; |
• | at a price of $ |
• | upon a minimum of |
• | if, and only if, the closing price of Class A common stock equals or exceeds $ |
Description |
Quoted Prices in Active Markets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Other Unobservable Inputs (Level 3) |
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Assets: |
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Investments held in Trust Account - U.S. Treasury Securities |
$ | $ | — | $ | — | |||||||
Liabilities: |
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Derivative liabilities—public warrants |
$ | $ | — | $ | ||||||||
Derivative liabilities—private warrants |
$ | — | $ | — | $ |
Description |
Quoted Prices in Active Markets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Other Unobservable Inputs (Level 3) |
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Assets: |
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Investments held in Trust Account - U.S. Treasury Securities |
$ | $ | — | $ | — | |||||||
Liabilities: |
||||||||||||
Derivative liabilities—public warrants |
$ | $ | — | $ | ||||||||
Derivative liabilities—private warrants |
$ | — | $ | — | $ |
June 30, 2022 |
December 31, 2021 |
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Exercise price |
$ | $ | ||||||
Stock price |
$ | $ | ||||||
Volatility |
% | % | ||||||
Risk-free rate |
% | % | ||||||
Dividend yield |
% | % |
Derivative liabilities at December 31, 2021 |
$ | |||
Change in fair value of derivative warrant liabilities |
( |
) | ||
|
|
|||
Derivative liabilities at March 31, 2022 |
$ | |||
Change in fair value of derivative warrant liabilities |
( |
) | ||
|
|
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Derivative liabilities at June 30, 2022 |
$ | |||
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• | we have no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective; |
• | our ability to select an appropriate target business or businesses; |
• | our ability to complete a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”); |
• | our expectations around the performance of a prospective target business or businesses; |
• | our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial Business Combination; |
• | our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial Business Combination; |
• | our potential ability to obtain additional financing to complete our initial Business Combination; |
• | our pool of prospective target businesses; |
• | our ability to consummate an initial Business Combination due to the uncertainty resulting from the recent COVID-19 pandemic; |
• | the ability of our officers and directors to generate a number of potential Business Combination opportunities; |
• | our public securities’ potential liquidity and trading; |
• | the use of proceeds not held in the trust account or available to us from interest income on the trust account balance; |
• | the trust account not being subject to claims of third parties; |
• | our financial performance following our IPO; and |
• | the other risks and uncertainties discussed herein, in our filings with the SEC and in our final prospectus relating to our IPO, filed with the SEC on September 2, 2021. |
• | may significantly dilute the equity interest of investors in our IPO, which dilution would increase if the anti-dilution provisions in the Class B common stock resulted in the issuance of Class A common stock on a greater than one-to-one |
• | may subordinate the rights of holders of Class A common stock if preference shares are issued with rights senior to those afforded our Class A common stock; |
• | could cause a change in control if a substantial number of our Class A common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; |
• | may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; and |
• | may adversely affect prevailing market prices for our Class A common stock. |
• | default and foreclosure on our assets if our operating revenues after an initial Business Combination are insufficient to repay our debt obligations; |
• | acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
• | our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand; |
• | our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding; |
• | our inability to pay dividends on our Class A common stock; |
• | using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
• | limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
• | increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
• | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
* | Filed herewith. |
** | Furnished herewith. |
(1) | Incorporated by reference to the Current Report on Form 8-K of Insight Acquisition Corp. filed with the Securities and Exchange Commission on September 7, 2021 (Commission File No. 001-40775). |
(2) | Incorporated by reference to the Form S-1 of Insight Acquisition Corp. filed with the Securities and Exchange Commission on August 11, 2021 (Registration Number 333-258727). |
Dated: August 15, 2022 | INSIGHT ACQUISITION CORP. | |||||
By: | /s/ Jeff Gary | |||||
Name: | Jeff Gary | |||||
Title: | Chief Executive Officer and Chief Financial Officer |