Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations.
Results of Operations and Known Trends or Future Events
We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities, those
necessary to prepare for our Initial Public Offering and identifying a target company for our initial Business Combination. We do not expect to generate any operating revenues until after completion of our initial Business Combination. We generate non-operating income in the form of interest income on cash and cash equivalents held in the Trust Account. 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.
For the three months ended, we had a net income of $104,200. We incurred $40,802 of
formation and operating costs consisting mostly of general and administrative expenses.
As a result of the restatement described in Note 2 to the
financial statements included herein, we classify the Warrants issued in connection with our Initial Public Offering and private placement as liabilities at their fair value and adjust the Warrant instruments to fair value at each reporting period.
These liabilities are subject to remeasurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. As part of the reclassification to warrant liability, we reclassed a portion of the
offering costs associated with the IPO originally charged to stockholders equity, to an expense in the statement of operations in the amount of $228,331 based on a relative fair value basis. For the three months ended March 31, 2021, the
change in fair value of Warrants was an decrease in the liability of approximately $373,333.
Liquidity and Capital Resources
As of March 31, 2021, we had cash outside the Trust Account of $2,500,001 available for working capital needs. All remaining cash held in the Trust
Account are generally unavailable for the Companys use, prior to an initial Business Combination, and is restricted for use either in a Business Combination or to redeem common stock. As of March 31, 2021, none of the amount in the Trust
Account was available to be withdrawn as described above.
Through March 31, 2021, the Companys liquidity needs were satisfied through receipt
of $25,000 from the sale of the founder shares, and the remaining net proceeds from the Initial Public Offering and the sale of Private Placement Warrants.
The Company anticipates that the $2,500,001 outside of the Trust Account as of March 31, 2021, will be sufficient to allow the Company to operate for at
least the next 12 months, assuming that a Business Combination is not consummated during that time. Until consummation of our initial Business Combination, the Company will be using the funds not held in the Trust Account, and any additional Working
Capital Loans (as defined in Note 5 to our financial statements) from the initial stockholders, the Companys officers and directors, or their respective affiliates (which is described in Note 5 to our financial statements), for identifying and
evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and
material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the initial Business Combination.
The Company does not believe it will need to raise additional funds in order to meet the expenditures required for operating its business. However, if the
Companys estimates of the costs of undertaking in-depth due diligence and negotiating a Business Combination is less than the actual amount necessary to do so, the Company may have insufficient funds
available to operate its business prior to the initial Business Combination. Moreover, the Company will need to raise additional capital through loans from its Sponsor, officers, directors, or third parties. None of the Sponsor, officers or
directors are under any obligation to advance funds to, or to invest in, the Company. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not
necessarily be limited to, curtailing operations, suspending the pursuit of its business plan, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if
at all.
Derivative Warrant Liabilities
We do not
use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain
features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as
equity, is reassessed at the end of each reporting period.
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