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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM
10-Q
 
 
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
For the quarterly period ended June 30, 2022
 
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
                    
to
                    
Commission File Number
001-39858
 
 
TASTEMAKER ACQUISITION CORP.
(Exact name of registrant as specified in its charter)
 
 
 
Delaware
  
85-2478126
(State or other jurisdiction of
incorporation or organization)
  
(I.R.S Employer
Identification No.)
501 Madison Avenue, Floor 12
New York, NY 10019
(Address of principal executive offices and zip code)
(212)
616-9600
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
  
Trading
Symbol(s)
  
Name of each exchange
on which registered
Units, each consisting of one share of Class A Common Stock and
one-half
of one Redeemable Warrant
  
TMKRU
  
The Nasdaq Stock Market LLC
Class A Common Stock, par value $0.0001 per share
  
TMKR
  
The Nasdaq Stock Market LLC
Warrants, each exercisable for one share of Class A Common Stock for $11.50 per share
  
TMKRW
  
The Nasdaq Stock Market LLC
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒     No  ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T
(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
    
Yes
  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule
12b-2
of the Exchange Act:
 
Large accelerated filer   ☐    Accelerated filer   ☐
       
Non-accelerated filer   ☒    Smaller reporting company   ☒
       
         Emerging growth company   ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2
of the Exchange Act).    Yes  ☒    No  ☐
As of August 15, 2022, there wer
e 27,600,000
shares of the Class A common stock, par value $0.0001 per share,
and 6,900,000
shares of the Class B common stock, par value $0.0001 per share, of the registrant issued and outstanding.
 
 
 
TASTEMAKER ACQUISITION CORP.
TABLE OF CONTENTS
 
 
 
 
  
Page
 
  
Item 1.
 
  
 
  
 
1
 
 
  
 
2
 
 
  
 
3
 
 
  
 
4
 
 
  
 
5
 
Item 2.
 
  
 
22
 
Item 3.
 
  
 
27
 
Item 4.
 
  
 
27
 
  
Item 1.
 
  
 
28
 
Item 1A.
 
  
 
28
 
Item 2.
 
  
 
30
 
Item 3.
 
  
 
30
 
Item 4.
 
  
 
30
 
Item 5.
 
  
 
30
 
Item 6.
 
  
 
31
 
  
 
32
 
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TASTEMAKER ACQUISITION CORP.
CONDENSED BALANCE SHEETS
 
    
June 30, 2022
    
December 31, 2021
  
    
(Unaudited)
        
Assets:
                 
Current assets:
                 
Cash
    $ 17,776     $ 181,220  
Accrued interest receivable
      226,928       —    
 
 
 
 
 
 
 
 
Prepaid expenses and other
      163,383       259,396  
    
 
 
    
 
 
  
Total current assets
      408,087       440,616  
Investments held in Trust Account
      278,948,720       278,820,318  
    
 
 
    
 
 
  
Total Assets
   
$
279,356,807
 
  
$
279,260,934
 
    
 
 
    
 
 
  
Liabilities and Stockholders’ Deficit:
                 
Current liabilities:
                 
Accounts payable
    $ 132,254     $ 13,474  
Income tax payable
      21,048       —    
Franchise tax payable
      99,178       137,049  
Accrued expenses
      238,350       178,350  
Convertible promissory note—related party
      18,700       —    
    
 
 
    
 
 
  
Total current liabilities
      509,530       328,873  
Deferred underwriting fee payable
      10,350,000     $ 10,350,000  
Warrant liabilities
      1,800,000       11,250,000  
    
 
 
    
 
 
  
Total liabilities
   
 
12,659,530
 
  
 
21,928,873
 
    
 
 
    
 
 
  
Commitments and Contingencies (Note 6)
                 
Class A common stock, $0.0001 par value, subject to possible redemption; 27,600,000 shares at redemption value at June 30, 2022 and December 31, 2021
      278,760,000       278,760,000  
Stockholders’ Deficit:
                 
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding
      —         —    
Class A common stock, $0.0001 par value; 100,000,000 shares authorized; no shares issued at June 30, 2022 and December 31, 2021; no shares outstanding (excluding 27,600,000 shares subject to possible redemption) at June 30, 2022 and December 31, 2021
      —         —    
Class B common stock, $0.0001 par value; 10,000,000 shares authorized; 6,900,000 shares issued and
outstanding at June 30, 2022 and December 31, 2021
      690       690  
Additional
paid-in
capital
      115,100       —    
Accumulated deficit
      (12,178,513 )      (21,428,629 ) 
    
 
 
    
 
 
  
Total Stockholders’ Deficit
      (12,062,723 )      (21,427,939 ) 
    
 
 
    
 
 
  
Total Liabilities and Stockholders’ Deficit
   
$
279,356,807
 
  
$
279,260,934
 
    
 
 
    
 
 
  
The accompanying notes are an integral part of these unaudited condensed financial statements.
 
1
TASTEMAKER ACQUISITION CORP.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
 
    
Three Months
Ended
June 30, 2022
    
Three Months
Ended
June 30, 2021
    
Six Months
Ended

June 30, 2022
    
Six Months
Ended

June 30, 2021
  
Operating and formation costs
    $ 194,833     $ 202,684     $ 513,727     $ 282,704  
Expensed offering costs
      —         —         —         736,627  
Franchise tax expense
      49,863       49,727       99,378       98,907  
    
 
 
    
 
 
    
 
 
    
 
 
  
Loss from operations
      (244,696 )      (252,411 )      (613,105 )      (1,118,238 ) 
Unrealized gain on investments held in Trust Account
      411,042       6,458       418,068       46,032  
Interest Income
      —         13       1       17  
Change in fair value of warrant liabilities
      3,150,000       (3,687,000 )      9,450,000       4,863,006  
Change in fair value of convertible promissory note—related party
      10,800       —         16,200       —    
Income (loss) before income taxes
   
$
3,327,146
 
  
$
(3,932,940
) 
  
$
9,271,164
 
  
$
3,790,817
 
Income tax expense
      (21,048 )      —         (21,048 )      —    
    
 
 
    
 
 
    
 
 
    
 
 
  
Net income (loss)
   
$
3,306,098
 
  
$
(3,932,940
) 
  
$
9,250,116
 
  
$
3,790,817
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Basic and diluted weighted average shares outstanding, Class A common stock
   
 
27,600,000
 
  
 
27,600,000
 
  
 
27,600,000
 
  
 
25,770,166
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Basic and diluted net income (loss) per share, Class A common stock
   
$
0.10
 
  
$
(0.11
) 
  
$
0.27
 
  
$
0.12
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Basic and diluted weighted average shares outstanding, Class B common stock
   
 
6,900,000
 
  
 
6,900,000
 
  
 
6,900,000
 
  
 
6,845,304
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Basic and diluted net income (loss) per share, Class B common stock
   
$
0.10
 
  
$
(0.11
) 
  
$
0.27
 
  
$
0.12
 
    
 
 
    
 
 
    
 
 
    
 
 
  
The accompanying notes are an integral part of these unaudited condensed financial statements.
 
2
TASTEMAKER ACQUISITION CORP.
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
(UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022

 
  
Common Stock
 
  
Additional
Paid-in

Capital
 
  
Accumulated
Deficit
 
 
 
 
 
Total
Stockholders’
Deficit
 
 
  
Class A
 
  
Class B
 
 
  
Shares
 
  
Amount
 
  
Shares
 
  
Amount
 
Balance - January 1, 2022
  
 
—  
 
   
$
—  
 
   
 
6,900,000
 
   
$
690
 
   
$
—  
 
   
$
(21,428,629
) 
 
      
 
$
(21,427,939
) 
Proceeds
 
received
 
in
 
excess
 
of
 
initial
 
fair
 
value
 
of
 
convertible
promissory note - related
  
   —          —          —          —          115,100        —  
 
 
      
 
   115,100
 
Net income
  
   —          —          —          —          —          5,944,018
 
 
      
 
   5,944,018
 
 
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
 
 
      
 
 
 
 
Balance - March 31, 2022
  
 
—  
 
   
 
—  
 
   
 
6,900,000
 
   
 
690
 
   
 
115,100
 
   
 
(15,484,611
) 
 
      
 
 
(15,368,821
) 
Net Income
  
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
      3,306,098
 
 
      
 
   3,306,098
 
 
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
 
 
      
 
 
 
 
Balance - June 30, 2022
  
 
—  
 
   
$
—  
 
   
 
6,900,000
 
   
$
690
 
   
$
115,100
 
   
$
(12,178,513
) 
 
      
 
$
(12,062,723
) 
 
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
 
 
      
 
 
 
 
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021
 
 
  
Common Stock
 
  
Additional
Paid-in

Capital
 
 
Accumulated
Deficit
 
 
Total
Stockholders’
Deficit
 
 
  
Class A
 
  
Class B
 
 
  
Shares
 
  
Amount
 
  
Shares
 
  
Amount
 
Balance - January 1, 2021
   
 
—  
 
   
$
—  
 
   
 
6,900,000
 
   
$
690
 
   
$
24,310
 
  
$
(106,670
) 
  
$
(81,670
) 
Excess of cash received over fair value of private
placement warrants
      —          —          —          —          348,000       —         348,000  
Accretion of Class A common stock to redemption
amount
      —          —          —          —          (372,310 )      (29,956,516 )      (30,328,826 ) 
Net income
      —          —          —          —          —         7,723,757       7,723,757  
    
 
 
     
 
 
     
 
 
     
 
 
     
 
 
    
 
 
    
 
 
  
Balance - March 31, 2021
   
 
—  
 
   
 
—  
 
   
 
6,900,000
 
   
 
690
 
   
 
—  
 
  
 
(22,339,429
) 
  
 
(22,338,739
) 
Net loss
      —          —          —          —          —         (3,932,940 )      (3,932,940 ) 
    
 
 
     
 
 
     
 
 
     
 
 
     
 
 
    
 
 
    
 
 
  
Balance - June 30, 2021
   
 
—  
 
   
$
—  
 
   
 
6,900,000
 
   
$
690
 
   
$
—  
 
  
$
(26,272,369
) 
  
$
(26,271,679
) 
    
 
 
     
 
 
     
 
 
     
 
 
     
 
 
    
 
 
    
 
 
  
The accompanying notes are an integral part of these unaudited condensed financial statements.
 
3
TASTEMAKER ACQUISITION CORP.
CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
 
    
Six Months
Ended June 30, 2022
    
Six Months
Ended June 30, 2021
  
Cash Flows from Operating Activities:
                 
Net income
    $ 9,250,116     $ 3,790,817  
Adjustments to reconcile net income to net cash used in operating activities:
                 
Change in fair value of convertible promissory note - related party
      (16,200 )      —    
Expensed offering costs on issuance of Public Warrants
      —         736,627  
Unrealized gain on investments held in Trust Account
      (191,140 )      (46,032 ) 
Change in fair value of warrant liabilities
      (9,450,000 )      (4,863,006 ) 
Changes in operating assets and liabilities:
                 
Accrued interest receivable
      (226,928 )      —    
Accounts payable
      118,780       —    
Income tax payable
      21,048       —    
Franchise tax payable
      (37,871 )      (11,348 ) 
Accrued expenses
      60,000       48,000  
Prepaid expenses
      96,013       (395,791 ) 
    
 
 
    
 
 
  
Net cash used in operating activities
   
 
(376,182
) 
  
 
(740,733
) 
    
 
 
    
 
 
  
Cash Flows from Investing Activities:
                 
Cash deposited in Trust Account
      —         (278,760,000 ) 
Proceeds from Trust Account for payment of franchise taxes
      62,738       —    
    
 
 
    
 
 
  
Net cash provided by (used in) investing activities
   
 
62,738
 
  
 
(278,760,000
) 
    
 
 
    
 
 
  
Cash Flows from Financing Activities:
                 
Repayment of promissory note
      —         (195,000 ) 
Proceeds from Initial Public Offering, net of underwriter’s discount paid
      —         270,480,000  
Proceeds from sale of Private Placement Warrants
      —         8,700,000  
Proceeds from convertible promissory note - related party
      150,000       —    
Reimbursed offering costs
      —         1,352,400  
Offering costs paid
      —         (366,876 ) 
    
 
 
    
 
 
  
Net cash provided by financing activities
   
 
150,000
 
  
 
279,970,524
 
    
 
 
    
 
 
  
Net change in cash
   
 
(163,444
) 
  
 
469,791
 
Cash - beginning of period
   
 
181,220
 
  
 
18,716
 
    
 
 
    
 
 
  
Cash - end of period
   
$
17,776
 
  
$
488,507
 
    
 
 
    
 
 
  
Supplemental disclosure of noncash investing and financing activities:
                 
Excess of cash received over fair value of convertible promissory note - related party
    $ 115,100     $ —    
    
 
 
    
 
 
  
Accretion of Class A common stock subject to possible redemption at IPO date
    $ —       $ 30,328,826  
    
 
 
    
 
 
  
Deferred underwriting fee payable
    $ —       $ 10,350,000  
    
 
 
    
 
 
  
Reclassification of deferred offering costs to equity upon completion of the initial public offering
    $ —       $ 172,970  
    
 
 
    
 
 
  
The accompanying notes are an integral part of these unaudited condensed financial statements.
 
4
TASTEMAKER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2022
(UNAUDITED)
 
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS AND LIQUIDITY
Tastemaker Acquisition Corp. (the “Company” or “Tastemaker”) is a blank check company incorporated in Delaware on August 10, 2020. The Company was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”).
The Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of June 30, 2022, the Company had not commenced any operations. All activity from August 10, 2020 (inception) through June 30, 2022 relates to the Company’s formation, the initial public offering (the “Initial Public Offering”) as described below, and since the closing of the Initial Public Offering, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate
non-operating
income in the form of interest income or gains on investments on the cash and investments held in a Trust Account from the proceeds derived from the Initial Public Offering, and potential gains from changes in the fair value of warrant liabilities and convertible promissory notes.
The registration statement for the Company’s Initial Public Offering was declared effective on January 7, 2021. On January 12, 2021, the Company consummated the Initial Public Offering of 27,600,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), at $10.00 per Unit, including 3,600,000 Units issued pursuant to the exercise of the underwriters’ over-allotment option in full, generating gross proceeds of $276,000,000, which is discussed in Note 3.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 8,700,000 Private Placement Warrants (as defined in Note 4) at a price of $1.00
per Private Placement Warrant in the Private Placement (as defined in Note 4) to Tastemaker Sponsor, LLC (the “Sponsor”) generating gross proceeds
of
$8,700,000, which is described in Note 4.
Following the closing of the Initial Public Offering on January 12, 2021, an amount of $278,760,000 ($10.10 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering, the exercise of the underwriters’ over-allotment option in full, and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”), invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with maturities of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule
2a-7
of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination or (ii) the distribution of the funds in the Trust Account.
Transaction costs related to the issuances described above amounted to $15,057,447, consisting of $5,520,000 of cash underwriting fees, $10,350,000 of deferred underwriting fees, and $539,847 of other offering costs, partially offset by reimbursed offering costs of $1,352,400. In addition, at June 30, 2022 and December 31, 2021, $17,776 and $181,220 of cash was held outside of the Trust Account and is available for working capital purposes, respectively.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Company must complete a Business Combination with one or more target businesses that together have an aggregate fair market value of at least 80% of the value of the Trust Account (excluding the deferred underwriting commissions and taxes payable on income earned on the Trust Account) at the time of the agreement to enter into an initial Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect a Business Combination.
 
5
TASTEMAKER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2022
(UNAUDITED)
 
The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.10 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Public Shares subject to redemption were recorded at redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity (“ASC 480”).
The Company will proceed with the Business Combination only if the Company has net tangible assets of at least $5,000,001 either prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its amended and restated Certificate of Incorporation (the “Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the Business Combination is required by law, or the Company decides to obtain stockholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed Business Combination or do not vote at all.
Notwithstanding the above, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company.
The Sponsor has agreed to waive (i) redemption rights with respect to any Founder Shares and Public Shares held in connection with the completion of an initial Business Combination, (ii) redemption rights with respect to any Founder Shares and Public Shares held in connection with a stockholder vote to approve an amendment to the Certificate of Incorporation to modify the substance or timing of our obligation to allow redemption in connection with an initial Business Combination or to redeem 100% of Public Shares if the Company has not consummated an initial Business Combination within 24 months from the closing of the Initial Public Offering or with respect to any other provisions relating to stockholders’ rights or
pre-initial
Business Combination activity and (iii) rights to liquidating distributions from the Trust Account with respect to any Founder Shares held if the Company fails to complete an initial Business Combination within 24 months from the closing of the Initial Public Offering or any extended period of time that the Company may have to consummate an initial Business Combination.
The Company will have until January 12, 2023 to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a
per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any),
 
6
TASTEMAKER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2022
(UNAUDITED)
 
and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within in the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).
Indemnity
In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.10 per Public Share or (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay the Company’s taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Liquidity
As of June 30, 2022, the Company had $17,776 in cash held outside of the Trust Account and a working capital deficit of $101,443.
The Company’s liquidity needs prior to the consummation of the Initial Public Offering were satisfied through the proceeds of $25,000 from the sale of the Founder Shares, and a loan of $300,000
under an unsecured and
non-interest
bearing promissory note (see Note 6). Subsequent to the consummation of the Initial Public Offering, the Company’s liquidity was and will be satisfied through the net proceeds from the Private Placement held outside of the Trust Account and proceeds from the Working Capital Loans (as defined in Note 5).
Based on the foregoing, management believes that the Company will not have sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a Business Combination or for at least one year from this filing. Over this time period, the Company will be using the funds held outside of the Trust Account for paying existing accounts payable and accrued liabilities, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.
Going Concern Consideration
The Company has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans. The Company anticipates that the cash held outside of the Trust Account as of June 30, 2022, will be not sufficient to allow the Company to operate until January 12, 2023, the date at which the Company must complete a Business Combination, which is less than one year from the issuance of the financial statements. If a
 
7
TASTEMAKER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2022
(UNAUDITED)
 
Business Combination is not consummated by January 12, 2023, there will be a mandatory liquidation and subsequent dissolution of the Company. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
Management plans to address this uncertainty through the Business Combination as discussed above. There is no assurance that the Company’s plans to consummate a Business Combination will be successful or successful within the Combination Period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Risks and Uncertainties
The United States and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the recent invasion of Ukraine by Russia in February 2022. In response to such invasion, the North Atlantic Treaty Organization (“NATO”) deployed additional military forces to eastern Europe, and the United States, the United Kingdom, the European Union and other countries have announced various sanctions and restrictive actions against Russia, Belarus and related individuals and entities, including the removal of certain financial institutions from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system. Certain countries, including the United States, have also provided and may continue to provide military aid or other assistance to Ukraine during the ongoing military conflict, increasing geopolitical tensions with Russia. The invasion of Ukraine by Russia and the resulting measures that have been taken, and could be taken in the future, by NATO, the United States, the United Kingdom, the European Union and other countries have created global security concerns that could have a lasting impact on regional and global economies. Although the length and impact of the ongoing military conflict in Ukraine is highly unpredictable, the conflict could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions. Additionally, Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets. In addition, the recent invasion of Ukraine by Russia, and the impact of sanctions against Russia and the potential for retaliatory acts from Russia, could result in increased cyber-attacks against U.S. companies.
Any of the above mentioned factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian invasion of Ukraine and subsequent sanctions, could adversely affect the Company’s search for a Business Combination and any target business with which the Company may ultimately consummate a Business Combination. The extent and duration of the Russian invasion of Ukraine, resulting sanctions and any related market disruptions are impossible to predict, but could be substantial, particularly if current or new sanctions continue for an extended period of time or if geopolitical tensions result in expanded military operations on a global scale. Any such disruptions may also have the effect of heightening many of the other risks described in the “Risk Factors” section of the Company’s Annual Report on Form
10-K.
If these disruptions or other matters of global concern continue for an extensive period of time, the Company’s ability to consummate a Business Combination, or the operations of a target business with which the Company may ultimately consummate a Business Combination, may be materially adversely affected.
Management continues to evaluate the impact of the
COVID-19
pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying condensed financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form
10-Q
and Article 8 of Regulation
S-X
of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying condensed financial statements should be read in conjunction with the Company’s Form
10-K
as filed with the SEC on March 25, 2022. The interim results for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any future periods.
 
8
TASTEMAKER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2022
(UNAUDITED)
 
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to
non-emerging
growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. More significant accounting estimates included in the financial statements include the determination of the fair value of warrant liabilities, and the fair value of the Company’s related party loans, both of which are described below.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. The initial valuation of the Public Warrants (as defined in Note 3), the recurring valuation of the Private Placement Warrants (as defined in Note 4), and the valuations for the Sponsor Working Capital Loan (as defined in Note 5) require management to exercise significant judgement in its estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of June 30, 2022 and December 31, 2021.
 
9
TASTEMAKER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2022
(UNAUDITED)
 
As of June 30, 2022 and December 31, 2021, the Company had operating cash (i.e. cash held outside the Trust Account) of $17,776 and $181,220, respectively.
Accrued interest receivable
Accrued interest receivable relates to accrued interest income from assets held in the Trust Account that is not currently reflected in the Investments Held in Trust Account. This accrued interest income was received the following month from the current balance sheet date of June 30, 2022.
Investments Held in Trust Account
At June 30, 2022 and December 31, 2021, the assets held in the Trust Account were held in money market funds, which are invested in U.S. Treasury securities.
Convertible Promissory Note—Related Party
The Company accounts for the convertible promissory notes under ASC Topic 815. The Company has made the election under
815-15-25
to account for the notes under the fair value option. Using the fair value option, the convertible promissory notes are required to be recorded at their initial fair value on the date of issuance, and each balance sheet thereafter. Differences between the face value of the note and fair value at issuance are recognized as either an expense in the statement of operations (if issued at a premium) or as a capital contribution (if issued at a discount). Any material changes in the estimated fair value of the notes are recognized as
non-cash
gains or losses in the condensed statements of operations.
Class A Common Stock Subject to Possible Redemption
All of the 27,600,000
shares of Class A common stock sold as part of the Units in the Initial Public Offering contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s amended and restated Certificate of Incorporation. In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC
480-10-S99,
redemption provisions not solely within the control of the Company require common stock subject to redemption to be classified outside of permanent equity. Therefore, all Class A common stock has been classified outside of permanent equity.

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional
paid-in
capital and accumulated deficit.
As of June 30, 2022 and December 31, 2021, the Class A common stock reflected in the condensed balance sheets are reconciled in the following table:
 
Gross proceeds
    $ 276,000,000  
Less:
         
Proceeds allocated to Public Warrants
      (13,248,006 ) 
Issuance costs allocated to Class A common stock
      (14,320,820 ) 
Plus:
         
Accretion of carrying value to redemption value
      30,328,826  
    
 
 
  
Class A common stock subject to possible redemption
   
$
278,760,000
 
    
 
 
  
 
10
TASTEMAKER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2022
(UNAUDITED)
 
Offering Costs associated with the Initial Public Offering
The Company complies with the requirements of ASC
 Topic
340-10-S99-1
and SEC Staff Accounting Bulletin Topic 5A—Expenses of Offering. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the Initial Public Offering. Offering costs directly attributable to the issuance of an equity contract to be classified in equity are recorded as a reduction in equity. Offering costs for equity contracts that are classified as assets and liabilities are expensed immediately. The Company incurred offering costs amounting to $15,057,446 as a result of the Initial Public Offering (consisting of $5,520,000 of cash underwriting discounts, $10,350,000 of deferred underwriting discounts, and $539,846 of other offering costs). The Company was reimbursed $1,352,400 for offering costs by the underwriters. As such, the Company recorded $14,320,820 of offering costs as a reduction of equity in connection with the shares of Class A common stock included in the Units. The Company immediately expensed $736,627 of offering costs in connection with the Public Warrants (as defined in Note 3) included in the Units that were classified as liabilities.
Warrant Liabilities
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480 and ASC Topic 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional
paid-in
capital at the time of issuance.
For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a
non-cash
gain or loss on the statements of operations. The initial fair value of the Public Warrants was estimated using a Monte Carlo simulation approach and the initial and subsequent fair value of the Private Placement Warrants was estimated using a Black-Scholes Option Pricing Model. The subsequent measurement of the fair value of the Public Warrants was measured using quoted market prices (see Note 9).
Income Taxes
The Company complies with the accounting and reporting requirements of ASC Topic 740, Income Taxes (“ASC 740”), which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be
more-likely-than-not
to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
The Company’s effective tax rate for the three and six months ended June 30, 2022 was 0.6% and 0.2%, respectively. The Company’s effective tax rate for the three and six months ended June 30, 2021 was 0.0% and 0.0%, respectively. The Company’s effective tax rate differs from the statutory income tax rate
o
f
 21%
 
primarily due to the recognition of gains or losses from the change in the fair value of warrant liabilities and derivative asset—forward purchase agreement, which are not recognized for tax purposes, and recording a full valuation allowance on deferred tax assets. The Company has
 
11
TASTEMAKER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2022
(UNAUDITED)
 
historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full fiscal year to income or loss for the reporting period. The Company has used a discrete effective tax rate method to calculate taxes for the three and six months ended June 30, 2022. The Company believes that, at this time, the use of the discrete method for the three and six months ended June 30, 2022 is more appropriate than the estimated annual effective tax rate method as the estimated annual effective tax rate method is not reliable due to a high degree of uncertainty in estimating annual pretax earnings.
Net Income (Loss) Per Share of Common Stock
The Company complies with accounting and disclosure requirements of ASC Topic 260,
Earnings Per Share
. The Company has two classes of common stock, which are referred to as Class A common stock and Class B common stock. Net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Accretion associated with the redeemable shares of Class A common stock is excluded from net income per share as the redemption value approximates fair value. Therefore, the earnings per share calculation allocates income shared pro rata between Class A and Class B common stock. As a result, the calculated net income per share is the same for Class A and Class B shares of common stock. The Company has not considered the effect of the warrants sold in the Initial Public Offering and the Private Placement to purchase an aggregate
of 22,500,000
shares in the calculation of diluted income per share, or the effects of the convertible promissory note to since the exercise of the warrants and conversion of the promissory note is contingent upon the occurrence of future events. 
The following table reflects the calculation of basic and diluted net income per common share (in dollars, except per share amounts):
 
 
  
For the Three Months Ended
June 30, 2022
 
  
For the Three Months Ended
June 30, 2021
 
 
For the Six Months Ended
June 30, 2022
 
  
For the Six Months Ended
June 30, 2021
 
 
  
Class A
 
  
Class B
 
  
Class A
 
 
Class B
 
 
Class A
 
  
Class B
 
  
Class A
 
  
Class B
 
Basic and diluted net income
(loss) per share:
                                                                      
Numerator:
                                                                      
Net income (loss)
    $ 2,644,877      $ 661,221      $ (3,146,352 )    $ (786,588 )    $ 7,400,093      $ 1,850,023      $ 2,995,204      $ 795,613  
    
 
 
     
 
 
     
 
 
    
 
 
    
 
 
     
 
 
     
 
 
     
 
 
  
Denominator:
                                                                      
Basic and diluted weighted
average shares
outstanding
      27,600,000        6,900,000        27,600,000       6,900,000       27,600,000        6,900,000        25,770,166        6,845,304  
Basic and diluted net income
(loss) per share
    $ 0.10      $ 0.10      $ (0.11 )    $ (0.11 )    $ 0.27      $ 0.27      $ 0.12      $ 0.12  
    
 
 
     
 
 
     
 
 
    
 
 
    
 
 
     
 
 
     
 
 
     
 
 
  
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.
Fair Value of Financial Instruments
The Company applies ASC Topic 820,
Fair Value Measurement
(“ASC 820”), which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances.
 
12
TASTEMAKER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2022
(UNAUDITED)
 
The carrying amounts reflected in the balance sheet for cash, prepaid expenses and accrued offering costs approximate fair value due to their short-term nature.
Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities.
Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals.
Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities.
Recent Accounting Standards
The Company’s management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering, the Company sold 27,600,000 Units, which includes the full exercise by the underwriters of their over-allotment option in the amount of 3,600,000, at $10.00 per Unit, generating gross proceeds of $276,000,000. Each Unit consisted of one share of the Company’s Class A common stock, $0.0001 par value, and
one-half
of one redeemable warrant (“Public Warrant”). Each Public Warrant entitles the holder to purchase one share of Class A common stock at an exercise price of $11.50 per whole share (see Note 7).
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 8,700,000 warrants at a price of $1.00 per warrant in a private placement (the “Private Placement Warrants”) to the Sponsor, generating gross proceeds of $8,700,000
 
(the “Private Placement”). Each Private Placement Warrant is exercisable to purchase
one share of Class A common stock at a price of $11.50 per share. The proceeds from the sale of the Private Placement Warrants were added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless. There will be no redemption rights or liquidating distributions from the Trust Account with respect to the Private Placement Warrants.
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On August 10, 2020, the Sponsor paid $25,000 to cover certain offering costs of the Company in consideration for 5,750,000 shares of Class B common stock (the “Founder Shares”). In January 2021, the Company effected a 1:1.20 stock split of Class B common stock, resulting in an aggregate of 6,900,000 shares of Class B common stock issued and outstanding. Effective upon consummation of the Initial Public Offering, the Sponsor collectively owns, on an
as-converted
basis, 20% of the Company’s issued and outstanding shares.
The Sponsor has agreed that, subject to certain limited exceptions, the Founder Shares will not be transferred, assigned, sold or released from escrow until the earlier of (a) one year after the completion of a Business Combination or (b) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction after a Business Combination that results in all of the Company’s stockholders having the right to
 
13
TASTEMAKER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2022
(UNAUDITED)
 
exchange their Class A common stock for cash, securities or other property. Notwithstanding the foregoing, if (i) the closing price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any
30-trading
day period commencing at least 150 after the Business Combination or (ii) if the Company consummates a transaction after the Business Combination which results in the Company’s stockholders having the right to exchange their shares for cash, securities or other property, the founder shares will be released from the
lock-up.
​​​​​​​
Promissory Note—Related Party
On August 10, 2020, the Company issued an unsecured promissory note to the Sponsor, pursuant to which the Company received proceeds of $300,000 to cover expenses related to the Initial Public Offering.
The promissory note was
 
non-interest
bearing and was payable on the earlier of March 31, 2021 or the completion of the Initial Public Offering.
The outstanding balance under the promissory note o
f $195,000 was repaid at the closing of the Initial Public Offering on January 12, 2021.
Related Party Loans
In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s directors and officers may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants.
On March 22, 2022, the Company entered into a working capital loan with the Sponsor (the “Sponsor Working Capital Loan”) in the amount of
$150,000,
pursuant to which the Company received proceeds
 of $150,000.
The Sponsor Working Capital Loan is non-interest bearing and payable upon the earlier of (i) completion of the initial Business Combination or (ii) the date the winding up of the Company is effective. The unpaid principal balance on the promissory note may be convertible into warrants at the option of the Sponsor at a price of
 $1.00
per warrant. The warrants would be identical to the Private Placement Warrants. As of June 30, 2022, the total amount drawn on the Working Capital Loan
 was
$150,000.
The fair value option was elected (see Note 9) and, as such, the fair value of the Working Capital Loan is shown on the balance sheet as
$18,700.
Administrative Support Agreement
The Company entered into an agreement, commencing on the effective date of the Initial Public Offering, to pay the Sponsor a total of $10,000 per month for secretarial and administrative support. Upon completion of the Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. During the three months ended June 30, 2022 and June 30, 2021, the Company incurred expenses of $30,000 and $30,000, respectively. During the six months ended June 30, 2022 and June 30, 2021, the Company incurred expenses of $60,000 and $48,000, respectively. These expenses are recorded in Accrued expenses in the balance sheets.
NOTE 6. COMMITMENTS
Registration Rights
The holders of the Founder Shares, Private Placement Warrants and 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) will have registration rights to require the Company to register a sale of any of its securities held by them pursuant to a registration rights agreement. The holders of these securities are entitled to make up to three demands,
 
14
TASTEMAKER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2022
(UNAUDITED)
 
excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company granted the underwriters a
45-day
option to purchase up to 3,600,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions. On January 12, 2021 the underwriters exercised the over-allotment option in full and purchased 3,600,000 Units at an offering price of $10.00 per Unit, generating additional gross proceeds of $36,000,000 to the Company.
The underwriters were paid a cash underwriting fee of $0.20 per Unit, or $5,520,000 in the aggregate. In addition, $0.375 per Unit, or $10,350,000 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 the Company completes a Business Combination, subject to the terms of the underwriting agreement.
NOTE 7. REDEEMABLE WARRANTS
Each whole redeemable warrant is exercisable to purchase one share of Class A common stock and only whole warrants are exercisable. The redeemable warrants will become exercisable on the later of 30 days after the completion of the Initial Business Combination or 12 months from the closing of the Initial Public Offering. Each whole redeemable warrant entitles the holder to purchase one share of Class A common stock at an exercise price of $11.50.
Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares of Class A common stock. This means that only a whole warrant may be exercised at any given time by a warrant holder. No fractional warrants will be issued upon separation of the units and only whole warrants will trade requiring a purchase at least three units to receive or trade a whole warrant. The warrants will expire five years after the completion of the Initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
If the shares issuable upon exercise of the warrants are not registered under the Securities Act within 60 business days following the Initial Business Combination, the Company will be required to permit holders to exercise their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, unless an exemption is available. In the event that the conditions in the immediately preceding sentence are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will the Company be required to net cash settle any warrant. In the event that a registration statement is not effective for the exercised warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for the share of Class A common stock underlying such unit.
The Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of the Initial Business Combination, the Company will use its reasonable best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the shares of Class A common stock issuable upon exercise of the warrants. The Company will use its reasonable best efforts to cause the same to become effective within 60 business days following its Initial Business Combination and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if the Company’s Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with
 
15
TASTEMAKER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2022
(UNAUDITED)
 
Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but the Company will be required to use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
Once the Public Warrants become exercisable, the Company may redeem the Public Warrants for redemption:
 
  •  
in whole and not in part;
 
  •  
at a price of $0.01 per Public Warrant;
 
  •  
upon not less than 30 days’ prior written notice of redemption to each warrant holder; and
 
  •  
if, and only if, the closing price of the common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a
30-trading
day period commencing after the warrants become exercisable and ending three business days before the Company sends the notice of redemption to the warrant holders.
In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of the Initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any founder shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, inclusive of interest earned on equity held in trust, available for the funding of the Initial Business Combination on the date of the consummation of the Initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Initial Business Combination is consummated (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
Private Placement Warrants
The Private Placement Warrants are identical to the Public Warrants underlying the Units being sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be
non-redeemable
so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants
.
The Private Placement Warrants (including the Class A common stock issuable upon exercise of the Private Placement Warrants) will not be transferable, assignable or saleable until 30 days after the completion of the Initial Business Combination and they will not be redeemable so long as they are held by the Company’s Sponsor or its permitted transferees. Otherwise, the Private Placement Warrants have terms and provisions that are identical to those of the Redeemable Warrants, including as to exercise price, exercisability and exercise period. If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis the Redeemable Warrants.
If holders of the Private Placement Warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering their warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the Class A
 
16
TASTEMAKER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2022
(UNAUDITED)
 
common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent. The reason that the Company has agreed that these warrants will be exercisable on a cashless basis so long as they are held by the Sponsor, or its permitted transferees is because it is not known at this time whether they will be affiliated with us following the Initial Business Combination. If they remain affiliated with the Company, their ability to sell the Company’s securities in the open market will be significantly limited. The Company expects to have policies in place that prohibit insiders from selling the Company’s securities except during specific periods of time. Even during such periods of time when insiders will be permitted to sell the Company’s securities, an insider cannot trade in the Company’s securities if he or she is in possession of material
non-public
information. Accordingly, unlike public stockholders who could sell the shares of Class A common stock issuable upon exercise of the warrants freely in the open market, the insiders could be significantly restricted from doing so. As a result, the Company believes that allowing the holders to exercise such warrants on a cashless basis is appropriate.
The Company’s Sponsor has agreed not to transfer, assign or sell any of the Private Placement Warrants (including the Class A common stock issuable upon exercise of any of these warrants) until the date that is 30 days after the date the Company completes its Initial Business Combination.
At June 30, 2022 and December 31, 2021, there were 13,800,000 Public Warrants and 8,700,000 Private Placement Warrants outstanding. The Company accounts for the Public Warrants and Private Placement Warrants in accordance with the guidance contained in ASC
 Topic
815-40.
Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability.
The accounting treatment of derivative financial instruments required that the Company record the warrants as derivative liabilities at fair value upon the closing of the Initial Public Offering. The Public Warrants were allocated a portion of the proceeds from the issuance of the Units equal to its fair value. The warrant liabilities are subject to
re-measurement
at each balance sheet date. With each such
re-measurement,
the warrant liabilities are adjusted to current fair value, with the change in fair value recognized in the Company’s statement of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification.
NOTE 8. STOCKHOLDERS’ DEFICIT
Preferred stock
— The Company
is authorized to issue 1,000,000 shares of $0.0001 par value preferred stock. As of June 30, 2022 and December 31, 2021, there were no shares of preferred stock issued or outstanding.
Class A common stock
— The Company
is authorized to issue up to 100,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of the Company’s Class A common stock are entitled to one vote for each share. At June 30, 2022 and December 31, 2021, there were 27,600,000 shares of Class A common stock issued and outstanding, including 27,600,000 shares of Class A common stock subject to possible redemption, respectively.
Class B common stock
— The
Company is authorized to issue up to 10,000,000 shares of Class B common stock with a par value of $0.0001 per share. Holders of Class B common stock are entitled to one vote for each share. At June 30, 2022 and December 31, 2021, there were 6,900,000 shares of Class B common stock issued and outstanding.
Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of stockholders except as required by law. Prior to an initial Business Combination, holders of Class B common stock will have the right to elect all of the Company’s directors and may remove members of the board of directors for any reason.
The Class B common stock will automatically convert into shares of Class A common stock concurrently with or immediately following the consummation of an initial Business Combination, or earlier at the option of the holder, on a
one-for-one
basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and subject to further adjustment. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with an initial Business Combination, the number of shares of Class A common stock issuable upon conversion of all Founder Shares will equal, in the aggregate, on an
 
17
TASTEMAKER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2022
(UNAUDITED)
 
as-converted
basis, 20% of the total number of shares of Class A common stock outstanding after such conversion (after giving effect to any redemptions of shares of Class A common stock by public stockholders), including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the company in connection with or in relation to the consummation of the initial Business Combination, excluding any shares of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in the initial Business Combination and any Private Placement Warrants issued to the Sponsor, officers or directors upon conversion of working capital loans, provided that such conversion of Founder Shares will never occur on a less than
one-for-one
basis.
NOTE 9. FAIR VALUE MEASUREMENTS
The following table presents information about the Company’s financial assets that are measured at fair value on a recurring basis at June 30, 2022 and December 31, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
 
Description
   
Amount at

Fair Value
     
Level 1
     
Level 2
     
Level 3
  
June 30, 2022
                                    
Assets
                                    
Investments held in Trust Account:
                                    
Money Market investments
    $ 278,948,720      $ 278,948,720      $ —        $ —    
Liabilities
                                    
Warrant liability – Public Warrants
    $ 1,104,000      $ 1,104,000      $ —        $ —    
Warrant liability – Private Placement Warrants
    $ 696,000      $ —        $ 696,000      $ —    
Convertible promissory note—related party
    $ 18,700      $ —        $ —        $ 18,700  
 
Description
   
Amount at

Fair Value
     
Level 1
     
Level 2
     
Level 3
  
December 31, 2021
                                    
Assets
                                    
Investments held in Trust Account:
                                    
Money Market investments
    $ 278,820,318      $ 278,820,318      $ —        $ —    
Liabilities
                                    
Warrant liability – Public Warrants
    $ 6,900,000      $ 6,900,000      $ —        $ —    
Warrant liability – Private Placement Warrants
    $ 4,350,000      $ —        $ 4,350,000      $ —    
The Company utilized a Monte Carlo simulation model for the initial valuation
of
the Public Warrants. The subsequent measurement of the Public Warrants as of June 30, 2022 and December 31, 2021 is classified as Level 1 due to the use of an observable market quote in an active market under the ticker TMKRW. The quoted price of the Public Warrants was $0.08 and $0.50 per warrant as of June 30, 2022 and December 31, 2021, respectively.
The Company utilizes a Modified Black-Scholes model to value the Private Placement Warrants at each reporting period, with changes in fair value recognized in the statement of operations. Inherent in a binomial options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury
zero-coupon
yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their
remaining
contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero.
 
18
TASTEMAKER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2022
(UNAUDITED)
 
The aforementioned warrant liabilities are not subject to qualified hedge accounting.
Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period. The estimated fair value of the Public Warrants transferred from a Level 3 measurement to a Level 1 fair value measurement in March 2021 when the Public Warrants were separately listed and traded. There were no transfers between Levels 1, 2 or 3 during the three and six months ended June 30, 2022.
 
19
TASTEMAKER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2022
(UNAUDITED)
 
The following table provides the significant inputs to the Monte Carlo Simulation for the fair value of the Public Warrants:
 
    
At January 12, 2021
(Initial Measurement)
  
Stock price
    $ 10.00  
Strike price
    $ 11.50  
Probability of completing a Business Combination
      90.0 % 
Expected life of the option to convert (in years)
      6.6  
Volatility
     
4.0% pre-merger
/
30.0% post-merger
  
 
Risk-free rate
      0.8 % 
Fair value of warrants
    $ 0.96  
The following table provides the significant inputs to the Modified Black-Scholes model for the fair value of the Private Placement
Warrants:

 
 
  
As of June 30,
2021
 
 
As of December 31,
2021
 
 
As of June 30,
2022
 
Stock price
    $ 9.72     $ 9.89     $ 9.92  
Strike price
      11.50       11.50       11.50  
Probability of completing a Business Combination
      100.0 %      100.0 %      13.0 % 
Dividend yield
      —   %      —   %      —   % 
Remaining term (in years)
      6.1       5.6       5.5  
Volatility
      12.0 %      8.7 %      5.5 % 
Risk-free rate
      1.1 %      1.3 %      3.0 % 
Fair value of warrants
    $ 0.75     $ 0.50     $ 0.08  
The convertible promissory note—related party was valued using a combination of Black-Scholes and Discounted Cash Flows methods, which is considered to be a Level 3 fair value measurement. The estimated fair value of the convertible promissory note—related party was based on the following significant inputs:
 
    
As of March 2,
2022 (Initial
Measurement)
    
As of March 25,
2022 (Initial
Measurement)
    
As of June 30,
2022
  
Warrant price
    $ 0.22     $ 0.23     $ 0.08  
Conversion price
    $ 1.00     $ 1.00     $ 1.00  
Expected term
      0.45       0.38       0.53  
Warrant volatility
      79.0 %      77.0 %      91.6 % 
Risk free rate
      0.6 %      0.8 %      2.5 % 
Discount rate
      3.91 %      4.96 %      7.73 % 
Probability of completing a Business Combination
      25.0 %      21.0 %      13.0 % 
Fair value convertible promissory note—related party
    $ 24,600     $ 10,300     $ 18,700  
The Company recognized a gain on the change in fair value of convertible promissory note—related party of $10,800 and $16,200 in the condensed statement of operations for the three and six months ended June 30, 2022, respectively.
 
20
TASTEMAKER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2022
(UNAUDITED)
 
The following tables present the changes in the fair value of warrant liabilities:
 
    
Private
Placement
Warrants
      Public
Warrants		      Warrant
Liabilities		  
Fair value as of December 31, 2020
    $ —        $ —        $ —    
Initial measurement at January 12, 2021
      8,352,000        13,248,006        21,600,006  
Change in valuation inputs or other assumptions
      (3,306,000 )       (5,244,006 )       (8,550,006 ) 
    
 
 
     
 
 
     
 
 
  
Fair value as of March 31, 2021
      5,046,000        8,004,000        13,050,000  
Change in valuation inputs or other assumptions
      1,479,000        2,208,000        3,687,000  
    
 
 
     
 
 
     
 
 
  
Fair value as of June 30, 2021
   
$
6,525,000
 
   
$
10,212,000
 
   
$
16,737,000
 
    
 
 
     
 
 
     
 
 
  
The Company recognized a gain (loss) in connection with changes in the fair value of
warrant liabilities of
 $(3,687,000) and $4,863,006 within the change in fair value of warrant liabilities in the condensed statements of operating during the three and six months ended June 30, 202
1
, respectively.
 
    
Private
Placement
Warrants
     
Public
Warrants
     
Warrant
Liabilities
  
Fair value as of December 31, 2021
    $ 4,350,000      $ 6,900,000      $ 11,250,000  
Change in valuation inputs or other assumptions
      (2,436,000 )       (3,864,000 )       (6,300,000 ) 
    
 
 
     
 
 
     
 
 
  
Fair value as of March 31, 2022
      1,914,000        3,036,000        4,950,000  
Change in valuation inputs or other assumptions
      (1,218,000 )       (1,932,000 )       (3,150,000 ) 
    
 
 
     
 
 
     
 
 
  
Fair value as of June 30, 2022
   
$
696,000
 
   
$
1,104,000
 
   
$
1,800,000
 
    
 
 
     
 
 
     
 
 
  
The Company recognized a gain in connection with changes in the fair value of warrant liabilities of $3,150,000
and $9,450,000 within change in fair value of warrant liabilities in the condensed statements of operations during the three and six months ended June 30, 2022, respectively. 
The following table presents the changes in the fair value of the Company’s Level 3 financial instruments that are measured at fair value:
 
Fair value at August 10, 2020 (inception)
    $ —    
Initial measurement of Public Warrants and Private Placement Warrants as of January 12, 2021
      21,600,006  
Change in fair value
      (8,550,006 ) 
Transfer of Public Warrants to Level 1 measurement
      (8,004,000 ) 
Transfer of Private Placement Warrants to Level 2 measurement
      (5,046,000 ) 
Initial measurement of draw on convertible promissory note—related party on March 2, 2022
      24,600  
Initial measurement of draw on convertible promissory note—related party on March 25, 2022
      10,300  
Change in fair value
      (5,400 ) 
Fair value as of March 31, 2022
      29,500  
Change in fair value
      (10,800 ) 
    
 
 
  
Fair value as of June 30, 2022
   
$
18,700
 
    
 
 
  
NOTE 10. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed financial statements were issued. On July 21, 2022, the Company issued a convertible promissory note for
 
proceeds of $
375,000
.
The note matures on the earliest to occur of (i) the date on which the Company consummates its initial Business Combination and (ii) the date that the winding up of the Company is effective. The note is convertible into warrants
 
at $
1.00
per warrant on terms identical to those of the Private Placement Warrants. On July 21, 2022,
the
Company drew
 $370,000 from the promissory note, which has not yet been repaid. 
 
21
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Cautionary Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 (the “Report”) including, without limitation, statements under this “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward- looking statements. When used in this Report, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or our management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Overview
We are a blank check company incorporated on August 10, 2020 as a Delaware corporation and formed for the purpose of effectuating a Business Combination with one or more businesses. We intend to effectuate our initial Business Combination using cash from the proceeds of the Initial Public Offering and the Private Placement of the Private Placement Warrants, the proceeds of the sale of our shares in connection with our initial Business Combination (pursuant to forward purchase agreements or backstop agreements we may enter into following the consummation of the Initial Public Offering or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing.
Recent Developments
On July 21, 2022, we issued a convertible promissory note for proceeds of $375,000. The note matures on the earliest to occur of (i) the date on which we consummates our initial Business Combination and (ii) the date that the winding up of the Company is effective. The note is convertible into warrants at $1.00 per warrant on terms identical to those of the Private Placement Warrants. On July 21, 2022, we drew $370,000 from the promissory note, which has not yet been repaid.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities for the period from August 10, 2020 (inception) through June 30, 2022 were formation and operational activities, and, since January 2021, those related to identifying a target company for a Business
Combination. We do not expect to generate any operating revenues until after the completion of our initial Business Combination. We generate
non-operating
income in the form of interest income on cash and cash equivalents held after the Initial Public Offering and potential gains in the changes in the fair value of warrant liabilities and convertible notes. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
 
22
For the three months ended June 30, 2022, we had net income of $3,306,098, which resulted primarily from a gain on change in fair value of warrant liabilities for $3,150,000, unrealized gain on investments held in our trust account (the “Trust Account”) of $411,042 and a change in fair value of convertible promissory note - related party of $10,800, partially offset by a loss from operations for $244,696, and the provision for income tax of $21,048.
For the three months ended June 30, 2021, we had a net loss of $3,932,940, which resulted primarily from a loss on the change in fair value of warrant liabilities of $3,687,000 and a loss from operations of $252,411, partially offset by unrealized gains in the Trust Account of $6,458 and interest income of $13.
For the six months ended June 30, 2022, we had a net income of $9,250,116, which primarily resulted from a gain in the change in fair value of warrant liabilities of $9,450,000, interest income of $1, an unrealized gain on investments held in the Trust Account for $418,068, and a gain in the change in fair value of the convertible promissory note to a related party for $16,200, partially offset by a loss from operations for $613,105, and the provision for income tax of $21,048.
For the six months ended June 30, 2021, we had a net income of $3,790,817, which primarily resulted from a gain in the change in fair value of warrant liabilities of $4,863,006, an unrealized gain on investments held in the Trust Account for $46,032, interest income of $17, partially offset by a loss from operations for $1,118,238.
Liquidity and Capital Resources
On January 12, 2021, we consummated an Initial Public Offering of 27,600,000 units, including 3,600,000 units issued pursuant to the exercise of the underwriters’ over-allotment option in full, generating gross proceeds to the Company of $276,000,000. Simultaneously with the consummation of the
Initial Public Offering, we completed the private sale of 8,700,000 Private Placement Warrants to the Sponsor at a purchase price of $1.00 per warrant (the “Private Placement Warrants”), generating gross proceeds of $8,700,000. The proceeds from the sale of the Private Placement Warrants were added to the net proceeds from the Initial Public Offering held in the Trust Account. If we do not complete an initial Business Combination by January 12, 2023, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the public shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.
For the six months ended June 30, 2022, net cash used in operating activities was $376,182, which was primarily due to net income of $9,250,116, an increase of accrued expenses of $60,000, an increase in prepaid expenses of $96,013, and increase in income tax payable of $21,048, and an increase in accounts payable for $118,780 partially offset by a change in fair value of warrant liabilities of $9,450,000, an increase in accrued interest receivable of $226,928, a decrease in franchise taxes payable of $37,871, change in fair value of convertible promissory note - related party of $16,200, and an unrealized gain on investments held in the Trust Account of $191,140.
For the six months ended June 30, 2021, net cash used in operating activities was $740,733. This was primarily due to net income of $3,790,817, expensed offering costs of $736,627, and an increase in accrued expenses of $48,000 offset by a change in fair value of warrant liabilities of $4,863,006, a decrease in prepaid expenses of $395,791, an unrealized gain in the Trust Account of $46,032, and a decrease in franchise tax payable of $11,348.
For the six months ended June 30, 2022, net cash provided by investing activities was $62,738, which resulted from $62,738 in proceeds from the Trust Account to pay for franchise taxes.
Net cash used in investing activities for the six months ended June 30, 2021 was $278,760,000, which was a result of a cash deposited into the Trust Account.
For the six months ended June 30, 2022, net cash provided from financing activities was $150,000, which was a result of proceeds from a convertible promissory note.
 
23
Net cash provided by financing activities for the six months ended June 30, 2021 was $279,970,524 was comprised of $270,480,000 in proceeds from Initial Public Offering, net of underwriter’s discount paid, $8,700,000 for proceeds from the sale of Private Placement Warrants, $1,352,400 for reimbursed offering costs partially offset by $366,876 in offering costs paid and repayment of promissory note for $195,000.
As of June 30, 2022 and December 31, 2021, we had cash of $17,776 and $181,220 held outside the Trust Account. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.
In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required on a
non-interest
basis. If we complete our initial Business Combination, we would repay such loaned amounts. In the event that our initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants of the post Business Combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial Business Combination, we do not expect to seek loans from parties other than our Sponsor or an affiliate of our Sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our Trust Account. On March 22, 2022, we entered into the Working Capital Loan with the Sponsor in the amount of $150,000, pursuant to which the Company received proceeds of $150,000. The Sponsor Working Capital Loan is
non-interest
bearing and payable upon the earlier of (i) completion of the initial Business Combination or (ii) the date the winding up of the Company is effective. The unpaid principal balance on the promissory note may be convertible into warrants at the option of the Sponsor at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants.
We anticipate that the cash held outside of the Trust Account as of June 30, 2022, will be not sufficient to allow us to operate for at least the next 12 months from the issuance of the financial statements, assuming that a Business Combination is not consummated during that time. We have incurred and expect to continue to incur significant costs in pursuit of our acquisition plans. These conditions raise substantial doubt about our ability to continue as a going concern from the date that the financial statements are released to January 12, 2023, the date at which the Company must complete a Business Combination, which is less than one year from the issuance of the financial statements. If a Business Combination is not consummated by January 12, 2023, there will be a mandatory liquidation and subsequent dissolution of the Company. There is no assurance that our plans to consummate the Business Combination will be successful or successful within the Combination Period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Off-Balance
Sheet Arrangements
We did not have any
off-balance
sheet arrangements as of June 30, 2022 and December 31, 2021.
Contractual Obligations
Registration Rights
The holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of the working capital loans (and any Class A common stock issuable upon the exercise of the Private Placement Warrants) will have registration rights to require the Company to register a sale of any of its securities held by them pursuant to a registration rights agreement. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
 
24
Administrative Support Agreement
The Company entered into an agreement, commencing on the effective date of the Initial Public Offering, to pay the Sponsor a total of $10,000 per month for secretarial and administrative support. Upon completion of the Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. During the three and six months ended June 30, 2022, the Company incurred expenses of $30,000 and $60,000, respectively, under this agreement.
Underwriting Agreement
The Company granted the underwriters a
45-day
option to purchase up to 3,600,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions. On January 12, 2021 the underwriters exercised the over-allotment option in full and purchased 3,600,000 Units at an offering price of $10.00 per Unit, generating additional gross proceeds of $36,000,000 to the Company.
The underwriters were paid a cash underwriting fee of $0.20 per Unit, or $5,520,000 in the aggregate. In addition, $0.375 per Unit, or $10,350,000 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 the Company completes a Business Combination, subject to the terms of the underwriting agreement.
Convertible Note—Related Party
On March 22, 2022, the Company entered into the Working Capital Loan with the Sponsor in the amount of $150,000, pursuant to which the Company received proceeds of $150,000. The Sponsor Working Capital Loan is
non-interest
bearing and payable upon the earlier of (i) completion of the initial Business Combination or (ii) the date the winding up of the Company is effective. The unpaid principal balance on the promissory note may be convertible into warrants at the option of the Sponsor at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants.
The Company accounts for the convertible promissory notes under ASC Topic 815. The Company has made the election under
815-15-25
to account for the notes under the fair value option. Using the fair value option, the convertible promissory notes are required to be recorded at their initial fair value on the date of issuance, and each balance sheet thereafter. Differences between the face value of the note and fair value at issuance are recognized as either an expense in the statement of operations (if issued at a premium) or as a capital contribution (if issued at a discount). Any material changes in the estimated fair value of the notes are recognized as non-cash gains or losses in the condensed statements of operations.
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:
 
25
Convertible Promissory Note—Related Party
The Company accounts for the convertible promissory notes under ASC Topic 815, Derivatives and Hedging (“ASC 815”). The Company has made the election under
815-15-25
to account for the notes under the fair value option. Using the fair value option, the convertible promissory notes are required to be recorded at their initial fair value on the date of issuance, and each balance sheet thereafter. Differences between the face value of the note and fair value at issuance are recognized as either an expense in the statement of operations (if issued at a premium) or as a capital contribution (if issued at a discount). Any material changes in the estimated fair value of the notes are recognized as
non-cash
gains or losses in the condensed statements of operations.
Warrant Liabilities
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional
paid-in
capital at the time of issuance.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional
paid-in
capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a
non-cash
gain or loss on the statement of operations. The accounting treatment of derivative financial instruments required that the Company record the warrants as derivative liabilities at fair value upon the closing of the Initial Public Offering. As of June 30, 2022 and December 31, 2021, the Company estimated the fair value of the warrant derivative liabilities to be $1,800,000 and $11,250,000.
Common Stock Subject to Possible Redemption
All of the 27,600,000 shares of Class A common stock sold as part of the Units in the Initial Public Offering contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s amended and restated Certificate of Incorporation. In accordance with the U.S. Securities and Exchange Commission (the “SEC”) and its staff’s guidance on redeemable equity instruments, which has been codified in ASC
480-10-S99,
redemption provisions not solely within the control of the Company require common stock subject to redemption to be classified outside of permanent equity. Therefore, all Class A common stock has been classified outside of permanent equity.
Net Income (loss) Per Share of Common Stock
Net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Accretion associated with the redeemable shares of Class A common stock is excluded from net income per share as the redemption value approximates fair value. Therefore, the earnings per share calculation allocates income shared pro rata between Class A and Class B common stock.
As a result, the calculated net income per share is the same for Class A and Class B shares of common stock. The Company has not considered the effect of the warrants sold in the Initial Public Offering and Private Placement to purchase an aggregate of 22,500,000 shares in the calculation of diluted income per share, or the conversion of promissory notes, since the exercise of the warrants are contingent upon the occurrence of future events.
Recent Accounting Standards
The Company’s management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying financial statements.
Factors That May Adversely Affect our Results of Operations
Our results of operations and our ability to complete an initial Business Combination may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control. Our business could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending, the ongoing effects of the COVID-19 pandemic, including resurgences and the emergence of new variants, and geopolitical instability, such as the military conflict in the Ukraine. We cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business and our ability to complete an initial Business Combination.
 
26
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
ITEM 4. CONTROLS AND PROCEDURES.
Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our
Co-Chief
Executive Officers and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Co-Chief Executive Officers and Chief Financial Officer, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this Report, due to the Company’s restatement of its January 12, 2021, March 31, 2021, and June 30, 2021 financial statements relating to the accounting for complex financial instruments and the inaccurate reporting of period end accruals, as well as inaccurate reporting of accrued interest in connection with preparation of the financial statements for period ended June 30, 2022.
Management concluded that material weaknesses in internal control over financial reporting existed relating to the accounting treatment for complex financial instruments and the recording of accruals. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
In light of this material weakness, we have enhanced our processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of accruals and complex accounting standards that apply to our financial statements including making greater use of third-party professionals with whom we consult regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects. We believe our efforts will enhance our controls relating to accounting for complex financial transactions and period end accruals, but we can offer no assurance that our controls will not require additional review and modification in the future as industry accounting practice may evolve over time.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control over Financial Reporting
Other than as described above, there were no changes in our internal control over financial reporting (as such term is defined in Rules
13a-15(f)
and
15d-15(f)
of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. As of June 30, 2022, the material weaknesses had not been remediated.
 
27
PART II—OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
To the knowledge of our management team, there is no litigation currently pending or contemplated against us, any of our officers or directors in their capacity as such or against any of our property.
ITEM 1A. RISK FACTORS.
As of the date of this Report, other than as set forth below, there have been no material changes with respect to those risk factors previously disclosed in our (i) Registration Statement on Form S-1 initially filed with the SEC on October 2, 2020, as amended, and declared effective on January 7, 2021 (File No. 333-249278) (the “Registration Statement”), (ii) Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 25, 2022, and (iii) Quarterly Reports on Form 10-K for the quarterly periods ended March 31, 2021 and March 31, 2022, as filed with the SEC on May 17, 2021 and May 17, 2022, respectively. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risks could arise that may also affect our business or ability to consummate an initial Business Combination. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
Recent increases in inflation and interest rates in the United States and elsewhere could make it more difficult for us to consummate an initial Business Combination.
Recent increases in inflation and interest rates in the United States and elsewhere may lead to increased price volatility for publicly traded securities, including ours, and may lead to other national, regional and international economic disruptions, any of which could make it more difficult for us to consummate an initial Business Combination.
Military conflict in Ukraine or elsewhere may lead to increased and price volatility for publicly traded securities, which could make it more difficult for us to consummate an initial Business Combination.
Military conflict in Ukraine or elsewhere may lead to increased and price volatility for publicly traded securities, including ours, and to other national, regional and international economic disruptions and economic uncertainty, any of which could make it more difficult for us to identify a Business Combination target and consummate an initial Business Combination on acceptable commercial terms or at all.
The SEC has recently issued proposed rules relating to certain activities of special purpose acquisition companies (“SPACs”). Certain of the procedures that we, a potential Business Combination target, or others may determine to undertake in connection with such proposals may increase our costs and the time needed to complete our initial Business Combination and may constrain the circumstances under which we could complete an initial Business Combination. The need for compliance with the SPAC Rule Proposals (as defined below) may cause us to liquidate the funds in the Trust Account or liquidate the Company at an earlier time than we might otherwise choose.
On March 30, 2022, the SEC issued proposed rules (the “SPAC Rule Proposals”) relating, among other items, to disclosures in Business Combination transactions between SPACS such as us and private operating companies; the condensed financial statement requirements applicable to transactions involving shell companies; the use of projections by SPACs in SEC filings in connection with proposed Business Combination transactions; the potential liability of certain participants in proposed Business Combination transactions; and the extent to which SPACs could become subject to regulation under the Investment Company Act, including a proposed rule that would provide SPACs a safe harbor from treatment as an investment company if they satisfy certain conditions that limit a SPAC’s duration, asset composition, business purpose and activities. The SPAC Rule Proposals have not yet been adopted, and may be adopted in the proposed form or in a different form that could impose additional regulatory requirements on SPACs. Certain of the procedures that we, a potential Business Combination target, or others may determine to undertake in connection with the SPAC Rule Proposals, or pursuant to the SEC’s views expressed in the SPAC Rule Proposals, may increase the costs and time of negotiating and completing an initial Business Combination, and may constrain the circumstances under which we could complete an initial Business Combination. The need for compliance with the SPAC Rule Proposals may cause us to liquidate the funds in the Trust Account or liquidate the Company at an earlier time than we might otherwise choose.
 
28
If we are deemed to be an investment company for purposes of the Investment Company Act, we would be required to institute burdensome compliance requirements and our activities would be severely restricted. As a result, in such circumstances, unless we are able to modify our activities so that we would not be deemed an investment company, we would expect to abandon our efforts to complete an initial Business Combination and instead to liquidate the Company.
As described further above, the SPAC Rule Proposals relate, among other matters, to the circumstances in which SPACs such as the Company could potentially be subject to the Investment Company Act and the regulations thereunder. The SPAC Rule Proposals would provide a safe harbor for such companies from the definition of “investment company” under Section 3(a)(1)(A) of the Investment Company Act, provided that a SPAC satisfies certain criteria, including a limited time period to announce and complete a de-SPAC transaction. Specifically, to comply with the safe harbor, the SPAC Rule Proposals would require a company to file a report on Form 8-K announcing that it has entered into an agreement with a target company for a Business Combination no later than 18 months after the effective date of its registration statement for its Initial Public Offering (the “IPO Registration Statement”). The company would then be required to complete its initial Business Combination no later than 24 months after the effective date of the IPO Registration Statement.
Because the SPAC Rule Proposals have not yet been adopted, there is currently uncertainty concerning the applicability of the Investment Company Act to a SPAC, including a company like ours, that has not entered into a definitive agreement within 18 months after the effective date of the IPO Registration Statement or that does not complete its Business Combination within 24 months after such date. We have not entered into a definitive Business Combination agreement within 18 months after the effective date of our Registration Statement and may not complete our initial Business Combination within 24 months of such date. As a result, it is possible that a claim could be made that we have been operating as an unregistered investment company.
If we are deemed to be an investment company under the Investment Company Act, our activities would be severely restricted. In addition, we would be subject to burdensome compliance requirements. We do not believe that our principal activities will subject us to regulation as an investment company under the Investment Company Act. However, if we are deemed to be an investment company and subject to compliance with and regulation under the Investment Company Act, we would be subject to additional regulatory burdens and expenses for which we have not allotted funds. As a result, unless we are able to modify our activities so that we would not be deemed an investment company, we would expect to abandon our efforts to complete an initial Business Combination and instead to liquidate the Company.
To mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, we may, at any time, instruct the trustee to liquidate the securities held in the Trust Account and instead to hold the funds in the Trust Account in cash until the earlier of the consummation of our initial Business Combination or our liquidation. As a result, following the liquidation of securities in the Trust Account, we would likely receive minimal interest, if any, on the funds held in the Trust Account, which would reduce the dollar amount our public stockholders would receive upon any redemption or liquidation of the Company.
The funds in the Trust Account have, since our Initial Public Offering, been held only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act. However, to mitigate the risk of us being deemed to be an unregistered investment company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act) and thus subject to regulation under the Investment Company Act, we may, at any time, and we expect that we will, on or prior to the 24-month anniversary of the effective date of the Registration Statement, instruct Continental Stock Transfer & Trust Company, the trustee with respect to the Trust Account, to liquidate the U.S. government treasury obligations or money market funds held in the Trust Account and thereafter to hold all funds in the Trust Account in cash until the earlier of consummation of our initial Business Combination or liquidation of the Company. Following such liquidation, we would likely receive minimal interest, if any, on the funds held in the Trust Account. However, interest previously earned on the funds held in the Trust Account still may be released to us to pay our taxes, if any, and certain other expenses as permitted. As a result, any decision to liquidate the securities held in the Trust Account and thereafter to hold all funds in the Trust Account in cash would reduce the dollar amount our public stockholders would receive upon any redemption or liquidation of the Company.
In addition, even prior to the 24-month anniversary of the effective date of the Registration Statement, we may be deemed to be an investment company. The longer that the funds in the Trust Account are held in short-term U.S. government treasury obligations or in money market funds invested exclusively in such securities, even prior to the 24-month anniversary, the greater the risk that we may be considered an unregistered investment company, in which case we may be required to liquidate the Company. Accordingly, we may determine, in our discretion, to liquidate the securities held in the Trust Account at any time, even prior to the 24-month anniversary, and instead hold all funds in the Trust Account in cash, which would further reduce the dollar amount our public stockholders would receive upon any redemption or liquidation of the Company.
 
29
Were we considered to be a “foreign person,” we might not be able to complete an initial Business Combination with a U.S. target company if such initial business combination is subject to U.S. foreign investment regulations and review by a U.S. government entity such as the Committee on Foreign Investment in the United States (“CFIUS”), or ultimately prohibited.
Certain federally licensed businesses in the United States, such as broadcasters and airlines, may be subject to rules or regulations that limit foreign ownership. In addition, CFIUS is an interagency committee authorized to review certain transactions involving foreign investment in the United States by foreign persons in order to determine the effect of such transactions on the national security of the United States. Were we considered to be a “foreign person” under such rules and regulations, any proposed Business Combination between us and a U.S. business engaged in a regulated industry or which may affect national security could be subject to such foreign ownership restrictions and/or CFIUS review. The scope of CFIUS was expanded by the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”) to include certain non-controlling investments in sensitive U.S. businesses and certain acquisitions of real estate even with no underlying U.S. business. FIRRMA, and subsequent implementing regulations that are now in force, also subject certain categories of investments to mandatory filings. If our potential initial Business Combination with a U.S. business falls within the scope of foreign ownership restrictions, we may be unable to consummate an initial Business Combination with such business. In addition, if our potential Business Combination falls within CFIUS’s jurisdiction, we may be required to make a mandatory filing or determine to submit a voluntary notice to CFIUS, or to proceed with the initial Business Combination without notifying CFIUS and risk CFIUS intervention, before or after closing the initial Business Combination. Our sponsor is a U.S. entity, and the managing member of our sponsor is a U.S. person. Our sponsor is not controlled by and does not have substantial ties with a non-U.S. person. However. if CFIUS has jurisdiction over our initial Business Combination, CFIUS may decide to block or delay our initial business combination, impose conditions to mitigate national security concerns with respect to such initial Business Combination or order us to divest all or a portion of a U.S. business of the combined company if we had proceeded without first obtaining CFIUS clearance. If we were considered to be a “foreign person,” foreign ownership limitations, and the potential impact of CFIUS, may limit the attractiveness of a transaction with us or prevent us from pursuing certain initial business combination opportunities that we believe would otherwise be beneficial to us and our stockholders. As a result, in such circumstances, the pool of potential targets with which we could complete an initial Business Combination could be limited and we may be adversely affected in terms of competing with other SPACs which do not have similar foreign ownership issues.
Moreover, the process of government review, whether by CFIUS or otherwise, could be lengthy. Because we have only a limited time to complete our initial Business Combination, our failure to obtain any required approvals within the requisite time period may require us to liquidate. If we liquidate, our public stockholders may only receive $10.10 per share, and our warrants will expire worthless. This will also cause you to lose any potential investment opportunity in a target company and the chance of realizing future gains on your investment through any price appreciation in the combined company.
We have identified a material weakness in our internal control over financial reporting as of June 30, 2022. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.
We have identified a material weakness in our internal controls over financial reporting relating to our accounting for complex financial instruments, as well as inaccurate reporting of payables and accrued interest on the financial statements. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented, or detected and corrected on a timely basis.
Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. Measures to remediate material weaknesses may be time-consuming and costly and there is no assurance that such initiatives will ultimately have the intended effects. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results
.
If we identify any new material weaknesses in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and adversely affect our business and operating results. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
For a description of the use of proceeds generated in our Initial Public Offering and Private Placement, see the Company’s Annual Report on Form 10-Q for the year ended December 31, 2022, as filed with the SEC on March 25, 2022. There has been no material change in the planned use of proceeds from the Company’s Initial Public Offering and Private Placement as described in the Registration Statement.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
None.
 
30
ITEM 6. EXHIBITS.
The following exhibits are filed as part of, or incorporated by reference into, this Report.
 
No.
   
Description of Exhibit
   
31.1   
   
31.2   
   
31.3   
   
32.1   
   
32.2   
   
32.3   
   
99.1   
   
101.INS   
Inline XBRL Instance Document.*
   
101.SCH   
Inline XBRL Taxonomy Extension Schema Document.*
   
101.CAL   
Inline XBRL Taxonomy Extension Calculation Linkbase Document.*
   
101.DEF   
Inline XBRL Taxonomy Extension Definition Linkbase Document.*
   
101.LAB   
Inline XBRL Taxonomy Extension Label Linkbase Document.*
   
101.PRE   
Inline XBRL Taxonomy Extension Presentation Linkbase Document.*
   
104   
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).*
 
*
Filed herewith.
**
Furnished herewith.
 
31
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
       
Tastemaker Acquisition Corp.
       
Date: August 15, 2022       By:   /s/ David Pace
            Name: David Pace
            Title:
Co-Chief
Executive Officer (Principal Executive Officer)
       
Date: August 15, 2022       By:   /s/ Andrew Pforzheimer
            Name: Andrew Pforzheimer
            Title: Co-Chief Executive Officer (Principal Executive Officer)
       
Date: August 15, 2022       By:   /s/ Christopher Bradley
            Name: Christopher Bradley
            Title: Chief Financial Officer (Principal Financial and Accounting Officer)
 
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