In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 205-40, Presentation of Financial Statements—Going Concern, if we are not able to consummate a Business Combination before April 4, 2023, we will commence an automatic winding up, dissolution and liquidation. Management has determined that the automatic liquidation, should a Business Combination not occur, and potential subsequent dissolution raises substantial doubt about our ability to continue as a going concern. While management intends to complete a Business Combination on or before April 4, 2023, it is uncertain whether we will be able to do so. No adjustments have been made to the carrying amounts of assets or liabilities should we be required to liquidate after April 4, 2023.
Off-Balance Sheet Arrangements
As of September 30, 2022, we have no obligations, assets or liabilities which would be considered off-balance sheet arrangements.
Commitments and Contractual Obligations
As of September 30, 2022, we did not have any long-term debt, capital or operating lease obligations.
The holders of our Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of Working Capital Loans (and any Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans) are entitled to registration rights pursuant to a registration rights agreement. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of our initial Business Combination. We will bear the expenses incurred in connection with the filing of any such registration statements.
Pursuant to the underwriting agreement, Jefferies, as IPO underwriter, will be entitled to a deferred underwriting fee of $0.35 per Unit sold in the IPO, or $7,000,000 in the aggregate. The deferred fee will become payable from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.
We have committed to pay up to $15,000 per month to our Sponsor for administrative, financial and support services provided to members of our sponsor team. This administrative service arrangement will terminate upon completion of our initial Business Combination or liquidation of the Company. We have incurred $0 pursuant to this agreement for the three months ended September 30, 2022.
On April 19, 2022, the Company entered into an agreement with a third-party consultant pursuant to which the consultant will provide to the Company, among other services, introductions to, and due diligence of, potential Business Combination target entities. Pursuant to the terms of the agreement, the Company has paid the consultant an initial fee of $100,000 and has agreed to pay a contingent fee, payable upon the satisfaction of certain transaction milestones, of up to $3,900,000 if the Company consummates a Business Combination with a target introduced by the consultant and fewer than 25% of the Public Shares are redeemed by stockholders in connection with such Business Combination.
In June 2022, the Company entered into an agreement with a third-party consultant pursuant to which the consultant will provide to the Company, among other services, introductions to, and negotiation assistance with, potential Business Combination target entities. Pursuant to the terms of the agreement, the Company and has agreed to pay a contingent fee, payable upon the satisfaction of certain transaction milestones, of up to $3,900,000 if the Company consummates a Business Combination with a target introduced by the consultant and fewer than 25% of the Public Shares are redeemed by stockholders in connection with such Business Combination. Nothing is recorded in relation to this agreement in the financial statements.
On September 16, 2022, the Company entered into an agreement (the “Capital Markets Advisory Agreement”) with a third-party advisor pursuant to which the advisor will provide to the Company, among other services, introductions to potential Business Combination target entities and introductions to, and will seek investment commitments from, potential third-party investors in any financing by the Company, in the form of a private investment in the Company’s common stock or other structured instrument, in connection with consummating a Business Combination (such financing, as applicable, the “PIPE Financing” and such investors, the “PIPE Investors”). In consideration of the foregoing, the Company has agreed (i) to pay the advisor a cash fee of $1,500,000 in the event a Business Combination is with a target introduced by the advisor (a “Subject Target”) and (ii) to issue to the advisor a number of newly issued Class A common stock of the Company equal to 945,000 multiplied by the percentage of the aggregate PIPE Financing provided by PIPE Investors introduced by the advisor, regardless of whether the Business Combination is with a Subject Target. In the event that there is no PIPE Financing but the Business Combination with a Subject Target, the Company has agreed to issue to the advisor 945,000 shares of Class A common stock. The payment of any case fee and the issuance of any shares are subject to, and will be made upon, the successful closing of a Business Combination. Concurrently with the issuance of common stock to the advisor, the Company will cause the Sponsor to forfeit a corresponding number of Class B common stock.
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