For the period from January 12, 2021 (inception) through June 30, 2021, we had net losses of approximately $386,000, which consisted of approximately $266,000 in general and administrative expenses, approximately $38,000 in administrative expenses—related party, and approximately $93,000 in franchise tax expenses, offset by approximately $11,000 in gain on investments held in Trust Account.
Administrative Services Agreement
Commencing on the date that our securities were first listed on Nasdaq and continuing until the earlier of our consummation of a Business Combination or our liquidation, we agreed to pay the Sponsor a total of $10,000 per month for office space, secretarial and administrative services provided to members of our management team.
Our Sponsor, executive officers and directors, or any of their respective affiliates will be reimbursed for any
expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee reviews on a quarterly basis all payments that are made to our Sponsor, executive officers or directors, or our or their affiliates.
For the three months ended June 30, 2022 and 2021, the Company incurred expenses of
approximately
$30,000 under this agreement. For the six months ended June 30, 2022 and for the period from January 12, 2021 (inception) through June 30, 2021, the Company incurred expenses of $60,000 and approximately $38,000, respectively, under this agreement. As of June 30, 2022 and December 31, 2021, the amount due to the Sponsor for these services was $150,000 and approximately $90,000, respectively, which is included in accounts payable and accrued expenses on the accompanying condensed balance sheets.
The holders of Founder Shares, Private Placement Shares and shares that may be issued upon conversion of Working Capital Loans (including the Conversion Shares), if any, are entitled to registration rights pursuant to a registration rights agreement signed upon the consummation of the IPO. These holders are entitled to certain demand and “piggyback” registration rights. We will bear the expenses incurred in connection with the filing of any such registration statements.
We granted the underwriters a
45-day
option from the date of the final prospectus relating to the IPO to purchase up to 3,000,000 additional Public Shares to cover over-allotments, if any, at the IPO price, less underwriting discounts and commissions. On March 9, 2021, the underwriters partially exercised the over-allotment option to purchase 2,266,185 Public Shares and forfeited the remainder of their option.
The underwriters were entitled to an underwriting discount of $0.20 per Public Share, or approximately $4.5 million in the aggregate, paid upon the closing of the IPO. In addition, $0.35 per Public Share, or approximately $7.8 million in the aggregate, will be payable to the underwriters for deferred underwriting commissions. The deferred fee will become payable to the underwriters 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.
Critical Accounting Estimates
This management’s discussion and analysis of our financial condition and results of operations is based on our condensed financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these condensed financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our condensed financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We have identified the following as our critical accounting estimates: