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 September 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 No. 001-39936

DIAMONDHEAD HOLDINGS CORP.

(Exact name of registrant as specified in its charter)

Delaware		85-3460766
(State or other jurisdiction of incorporation)		(IRS Employer Identification No.)


250 Park Ave. 7th Floor, New York, New York		10177
(Address of principal executive offices)		(Zip Code)

(212) 572-6260

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, 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, $0.0001 per value and one-fourth of one redeemable warrant	DHHCU	The Nasdaq Stock Market LLC
Class A common stock, par value $0.0001 per share	DHHC	The Nasdaq Stock Market LLC
Warrants, each whole warrant exercisable for one share of Class A common stock, each at an exercise price of $11.50 per share	DHHCW	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 November 7, 2022, 34,500,000 shares of Class A common stock, par value $0.0001 per share, and 8,625,000 shares of Class B common stock, par value $0.0001 per share, were issued and outstanding.

Table of Contents

DIAMONDHEAD HOLDINGS CORP.

Quarterly Report on Form 10-Q

Table of Contents


		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements	1

	Condensed Consolidated Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021	1

	Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021	2

	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the Three and Nine Months Ended September 30, 2022 and 2021	3

	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	4

	Notes to Unaudited Condensed Consolidated financial statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25

Item 4.	Controls and Procedures	25

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	25

Item 1A.	Risk Factors	26

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities	27

Item 3.	Defaults Upon Senior Securities	27

Item 4.	Mine Safety Disclosures	27

Item 5.	Other Information	27

Item 6.	Exhibits	28

SIGNATURES		29

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Condensed Consolidated financial statements.

DIAMONDHEAD HOLDINGS CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS


	September 30, 2022		December 31, 2021
	(unaudited)
Assets:
Current assets:
Cash	$	10,920	$	252,601
Prepaid expenses		137,063		240,075
Total current assets		147,983		492,676
Investments held in Trust Account		346,615,567		345,020,717
Total Assets	$	346,763,550	$	345,513,393

Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit:
Current liabilities:
Accounts payable	$	146,192	$	54,391
Accrued expenses		2,099,500		120,000
Income tax payable		352,045		—
Franchise tax payable		16,614		114,645
Total current liabilities		2,614,351		289,036
Deferred underwriting commissions		—		12,075,000
Derivative warrant liabilities		3,494,000		8,794,330
Total liabilities		6,108,351		21,158,366

Commitments and Contingencies (Note 6)

Class A common stock subject to possible redemption , $0.0001 par value; 34,500,000 shares at $10.031 and $10.000 per share redemption value at September 30, 2022 and December 31, 2021, respectively		346,085,953		345,000,000

Stockholders’ Deficit:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; none issued or outstanding		—		—
Class A common stock, $0.0001 par value; 300,000,000 shares authorized; no non-redeemable shares issued or outstanding at September 30, 2022 and December 31, 2021		—		—
Class B common stock, $0.0001 par value; 10,000,000 shares authorized; 8,625,000 shares issued and outstanding at September 30, 2022 and December 31, 2021		863		863
Additional paid-in capital		—		—
Accumulated deficit		(5,431,617)		(20,645,836)
Total stockholders’ deficit		(5,430,754)		(20,644,973)
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit	$	346,763,550	$	345,513,393

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

DIAMONDHEAD HOLDINGS CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2022		2021		2022		2021

General and administrative expenses	$	2,102,853	$	100,792	$	2,546,562	$	867,930
Franchise tax expense		49,863		49,863		147,945		147,447
Loss from operations		(2,152,716)		(150,655)		(2,694,507)		(1,015,377)
Change in fair value of derivative warrant liabilities		(2,038,170)		6,669,920		5,300,330		3,930,750
Financing costs - derivative warrant liabilities		—		—		—		(449,070)
Income from investments held in Trust Account		1,558,441		5,301		2,076,393		14,175
Gain from settlement of deferred underwriting commissions on public warrants		271,688		—		271,688		—
Net (loss) income before income tax expense		(2,360,757)		6,524,566		4,953,904		2,480,478
Income tax expense		394,167		—		457,045		—
Net (loss) income	$	(2,754,924)	$	6,524,566	$	4,496,859	$	2,480,478

Weighted average shares outstanding of Class A common stock		34,500,000		34,500,000		34,500,000		31,087,912
Basic and diluted net (loss) income per share, Class A common stock	$	(0.06)	$	0.15	$	0.10	$	0.06

Basic weighted average shares outstanding of Class B common stock		8,625,000		8,625,000		8,625,000		8,513,736
Diluted weighted average shares outstanding of Class B common stock		8,625,000		8,625,000		8,625,000		8,625,000
Basic and diluted net (loss) income per share, Class B common stock	$	(0.06)	$	0.15	$	0.10	$	0.06

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

DIAMONDHEAD HOLDINGS CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

For the Three and Nine Months Ended September 30, 2022


	Common Stock										Total
	Class A			Class B			Additional Paid-In		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Deficit
Balance - December 31, 2021	—	$	—	8,625,000	$	863	$	—	$	(20,645,836)	$	(20,644,973)
Net income	—		—	—		—		—		3,628,047		3,628,047
Balance - March 31, 2022 (unaudited)	—	$	—	8,625,000	$	863	$	—	$	(17,017,789)	$	(17,016,926)
Remeasurement of Class A common stock subject to redemption	—		—	—		—		—		(76,542)		(76,542)
Net income	—		—	—		—		—		3,623,736		3,623,736
Balance - June 30, 2022 (unaudited)	—	$	—	8,625,000	$	863	$	—	$	(13,470,595)	$	(13,469,732)
Extinguishment of deferred underwriting commissions on public shares	—		—	—		—		11,803,313		—

SEC Form 10-Q filed by DiamondHead Holdings Corp.