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: 001-41128

Jackson Acquisition Company

(Exact name of registrant as specified in its charter)

Delaware		86-2494888
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2655 Northwinds Parkway Alpharetta, GA		30009 (Zip Code)
(Address of principal executive offices)

(678) 690-1079

(Registrant’s telephone number, including area code)

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	RJAC.U	The New York Stock Exchange
Class A Common Stock, par value $0.0001 per share	RJAC	The New York Stock Exchange
Redeemable warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50	RJAC.WS	The New York Stock Exchange

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 ☐

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of August 11, 2022, there were 22,250,000 shares of Class A Common Stock and 5,562,500 shares of Class B Common Stock, par value $0.0001 per share, of the registrant issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.

TABLE OF CONTENTS

		Page
	FINANCIAL INFORMATION
Item 1:	Financial Statements	F-1
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operation	1
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	5
Item 4:	Controls and Procedures	6

	OTHER INFORMATION
Item 1:	Legal Proceedings	6
Item 1A:	Risk Factors	6
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	7
Item 3:	Defaults Upon Senior Securities	7
Item 4:	Mine Safety Disclosures	7
Item 5:	Other Information	7
Item 6:	Exhibits	7

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10‑Q, or Quarterly Report, contains forward-looking statements that involve substantial risks and uncertainties. All statements contained in this Quarterly Report, other than statements of historical fact, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate, “around” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. The forward-looking statements in this report include, among other things, statements about:

•	our ability to select an appropriate target business or businesses;

•	our ability to complete our initial business combination;

•	our expectations around the performance of a prospective target business or businesses;

•	our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;

•	our directors and officers allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination;

•	our potential ability to obtain additional financing to complete our initial business combination;

•	our pool of prospective target businesses and our target industries;

•	our ability to consummate an initial business combination due to the uncertainty resulting from the COVID-19 pandemic;

•	the ability of our directors and officers to generate a number of potential business combination opportunities;

•	our public securities’ liquidity and trading;

•	the market for our securities;

•	the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;

•	the trust account not being subject to claims of third parties;

•	our financial performance; or

•	other risks and uncertainties, including those described in the ‘‘Risk Factors’’ section of this Quarterly Report and our Annual Report on Form 10-K.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make.

You should refer to the “Risk Factors” section of this Quarterly Report and of our Annual Report on Form 10-K for a discussion of important factors that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. We do not assume any obligation to update any forward-looking statements, except as required by applicable law.

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

JACKSON ACQUISITION COMPANY

INDEX TO FINANCIAL STATEMENTS

Financial Statements:
Condensed Balance Sheets as of June 30, 2022 (unaudited) and December 31, 2021	F-2
Condensed Statements of Operations for the Three Months ended June 30, 2022 and 2021, for the Six Months ended June 30, 2022 and the Period from March 5, 2021 (inception) through June 30, 2021 (unaudited)	F-3
Condensed Statements of Changes in Stockholders’ Equity for the Six Months ended June 30, 2022 and the Period from March 5, 2021 (inception) through June 30, 2021 (unaudited)	F-4
Condensed Statements of Cash Flows for the Six Months ended June 30, 2022 and for the Period from March 5, 2021 (inception) through June 30, 2021 (unaudited)	F-5
Notes to the Condensed Financial Statements (unaudited)	F-6

F-1

Table of Contents

JACKSON ACQUISITION COMPANY

CONDENSED BALANCE SHEETS

	June 30, 2022			December 31, 2021
	(unaudited)
ASSETS
Current Assets:
Cash	$	673,085		$	1,923,321
Prepaid expenses and other current assets		434,464			395,350
Total Current Assets		1,107,549			2,318,671

Investments held in the Trust Account		226,092,718			203,000,654

Other assets		169,450			355,015
Total Assets	$	227,369,717		$	205,674,340

LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable and accrued expenses	$	509,642		$	1,091,191
Accrued offering costs		399,000			410,768
Income taxes payable		34,498			—
Overallotment liability		—			325,831
Total Current Liabilities		943,140			1,827,790

Derivative warrant liabilities		3,220,875			9,584,400
Deferred underwriting commission		7,787,500			7,000,000
Total liabilities		11,951,515			18,412,190

COMMITMENTS AND CONTINGENCIES (Note 6)

Class A common stock subject to possible redemption; 22,250,000 and 20,000,000 shares at June 30, 2022 and December 31, 2021, respectively		226,058,910			203,000,000

Stockholders’ deficit:
Preferred Stock, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding		—			—
Class A common stock, $0.0001 par value, 500,000,000 shares authorized, 0 shares issued and outstanding (excluding 22,250,000 and 20,000,000 shares at June 30, 2022 and December 31, 2021, respectively, subject to possible redemption)		—			—
Class B common stock, $0.0001 par value, 50,000,000 shares authorized, 5,562,500 and 5,750,000 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively (1)		556			575
Additional paid-in capital		—			—
Accumulated deficit		(10,641,264	)		(15,738,425	)
Total Stockholders’ Deficit		(10,640,708	)		(15,737,850	)
Total Liabilities, Common Stock Subject to Possible Redemption and Stockholders’ Deficit	$	227,369,717		$	205,674,340

(1)

Share amount at December 31, 2021, includes an aggregate of up to 750,000 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 7). Upon partial exercise of the over-allotment option by the underwriters, 187,500 shares were forfeited.

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

F-2

Table of Contents

JACKSON ACQUISITION COMPANY

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended						For the Six Months Ended			For the Period March 5, 2021 (Inception) Through
	June 30,						June 30,			June 30,
	2022			2021			2022			2021
EXPENSES
Administration fee - related party	$	30,000		$	—		$	60,000		$	—
General and administrative		287,769			494			809,562			14,494
TOTAL EXPENSES		317,769			494			869,562			14,494

OTHER INCOME (EXPENSES)
Income earned on Investments held in Trust Account		299,304			—			320,756			—
Transaction costs allocable to derivative warrant liabilities		—			—			(25,112	)		—
Change in fair value of derivative warrant liabilities		1,073,625			—			7,300,650			—
TOTAL OTHER INCOME (EXPENSES) - NET		1,372,929			—			7,596,294			—

Income (loss) before provision for income taxes		1,055,160			(494	)		6,726,732			(14,494	)

Provision for income taxes		(34,498	)		—			(34,498	)		—

Net income (loss)	$	1,020,662		$	(494	)	$	6,692,234		$	(14,494	)

Weighted average number of shares of Class A common stock outstanding, basic and diluted		22,250,000			—			22,175,414			—
Basic and diluted net income per share of Class A common stock	$	0.04		$	—		$	0.24		$	—

Weighted average number of shares of Class B common stock outstanding, basic and diluted⁽¹⁾		5,562,500			5,000,000			5,543,854			5,000,000
Basic and diluted net income (loss) per share of Class B common stock	$	0.04		$	(0.00	)	$	0.24		$	(0.00	)

(1)

Share amount at June 30, 2021, excludes an aggregate of up to 750,000 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 7). Upon partial exercise of the over-allotment option by the underwriters, 187,500 shares were forfeited.

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

F-3

Table of Contents

JACKSON ACQUISITION COMPANY

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY

(UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2022

	Class B Common Stock						Additional Paid-In Capital			Accumulated Deficit			Stockholders’ Deficit
	Shares			Amount			Additional Paid-In Capital			Accumulated Deficit			Stockholders’ Deficit
Balance as of January 1, 2022⁽¹⁾		5,750,000		$	575		$	—		$	(15,738,425	)	$	(15,737,850	)

Forfeiture of Class B common stock		(187,500	)		(19	)		19			—			—

Proceeds in excess of fair value of Private Placement Warrants		—			—			401,625			—			401,625

Remeasurement of Class A common stock to redemption value		—			—			(401,644	)		(1,373,663	)		(1,775,307	)

Net income		—			—			—			5,671,572			5,671,572
Balance as of March 31, 2022		5,562,500			556			—			(11,440,516	)		(11,439,960	)

Remeasurement of Class A common stock to redemption value		—			—			—			(221,410	)		(221,410	)

Net income		—			—			—			1,020,662			1,020,662
Balance as of June 30, 2022		5,562,500		$	556		$	—		$	(10,641,264	)	$	(10,640,708	)

FOR THE PERIOD MARCH 5, 2021 (INCEPTION) THROUGH JUNE 30, 2021

	Class B Common Stock				Additional Paid-In Capital		Accumulated Deficit			Stockholders’ Equity
	Shares		Amount		Additional Paid-In Capital		Accumulated Deficit			Stockholders’ Equity
Balance as of March 5, 2021 (inception)		—	$	—	$	—	$	—		$	—

Issuance of Class B common stock to Sponsor (1)		5,750,000		575		24,425		—			25,000

Net loss		—		—		—		(14,000	)		(14,000	)
Balance as of March 31, 2021		5,750,000	$	575	$	24,425	$	(14,000	)	$	11,000

Net loss		—		—		—		(494	)		(494	)
Balance as of June 30, 2021		5,750,000	$	575	$	24,425	$	(14,494	)	$	10,506

(1)	Includes an aggregate of up to 750,000 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 7). Upon partial exercise of the over-allotment option by the underwriters, 187,500 shares were forfeited.

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

F-4

Table of Contents

JACKSON ACQUISITION COMPANY

CONDENSED STATEMENT OF CASH FLOWS

(UNAUDITED)

	For the Six Months Ended June 30, 2022			For the Period From March 5, 2021 (Inception) Through June 30, 2021
Cash Flows From Operating Activities:
Net income (loss)	$	6,692,234		$	(14,494	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Formation and organization costs paid by related parties		—			14,000
Investment income earned on investments held in the Trust Account		(320,756	)		—
Transaction costs allocable to derivative warrant liabilities		25,112			—
Gain on change in fair value of derivative warrant liabilities		(7,300,650	)		—
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(39,114	)		—
Other assets		185,565			—
Accounts payable and accrued expenses		(581,549	)		—
Income taxes payable		34,498			—
Net Cash Used In Operating Activities		(1,304,660	)		(494	)

Cash Flows From Investing Activities:
Cash deposited into Trust Account		(22,837,500	)		—
Interest released from Trust Account		66,192			—
Net Cash Used In Investing Activities		(22,771,308	)		—

Cash Flows From Financing Activities:
Proceeds from sale of Units in exercise of underwriter over-allotment option, net of underwriting fee		22,050,000			—
Proceeds from sale of Private Placement Warrants		787,500			—
Proceeds from note payable		—			300,000
Proceeds from issuance of Class B common stock to Sponsor		—			25,000
Payment of offering costs		(11,768	)		(119,696	)
Net Cash Provided By Financing Activities		22,825,732			205,304

Net change in cash		(1,250,236	)		204,810

Cash at beginning of period		1,923,321			—
Cash at end of period	$	673,085		$	204,810

Supplemental disclosure of non-cash financing activities:

Deferred offering costs included in accrued offering costs	$	—		$	170,000
Deferred underwriters’ commissions	$	787,500		$	—
Initial classification of fair value of Public and Private warrants	$	937,125		$	—
Initial classification of common stock subject to redemption	$	22,837,500		$	—
Remeasurement of Class A common stock to redemption value	$	1,595,073		$	—

F-5

Table of Contents

JACKSON ACQUISITION COMPANY

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 - DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Jackson Acquisition Company (the “Company”) was incorporated in Delaware on March 5, 2021. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company is not limited to a particular industry or sector 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 for the period from March 5, 2021 (inception) through June 30, 2022 relates to the Company’s formation and the initial public offering (“Initial Public Offering”), which is described below. The Company will not generate any operating revenues until after the completion of an initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end.

The registration statement for the Company’s Initial Public Offering was declared effective on December 8, 2021. On December 13, 2021, the Company consummated the Initial Public Offering of 20,000,000 units (“Units” and, with respect to the common stock included in the Units being offered, the “Public Shares”), generating gross proceeds of $200,000,000, which is described in Note 3. The Company granted the underwriter a 45-day option from the date of Initial Public Offering to purchase up to 3,000,000 additional Units to cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions. On January 6, 2022, the over-allotment option was partially exercised by the underwriter, and the Company sold an additional 2,250,000 units generating gross proceeds of $22,500,000.

Simultaneously with the closing of the Initial Public Offering, the Company consummated the private sale (the “Private Placement”) of an aggregate of 9,560,000 warrants (the “Private Placement Warrants”) to RJ Healthcare SPAC, LLC (the “Sponsor”) at a purchase price of $1.00 per Private Placement Warrant, generating gross proceeds to the Company in the amount of $9,560,000. To the extent that the underwriter exercised its 45-day option, the Sponsor would purchase up to an additional 1,050,000 Private Placement Warrants at a purchase price of $1.00 per warrant. On January 6, 2022, the underwriter option was partially exercised by the underwriter and the Company sold an additional 787,500 private placement warrants generating proceeds of $787,500.

Transaction costs amounted to $13,255,861 consisting of $4,450,000 of underwriting fees, $7,787,500 of deferred underwriting fees payable (which are held in a trust account with Continental Stock Transfer & Trust Company acting as trustee (the “Trust Account”) and $1,018,361 of other offering costs related to the Initial Public Offering. Cash of $673,085 was held outside of the Trust Account on June 30, 2022 and was available for working capital purposes. As described in Note 6, the $7,787,500 deferred underwriting fees are contingent upon the consummation of the Business Combination within 18 months (or 21 months if extended) from the closing of the Initial Public Offering.

Following the closing of the Initial Public Offering on December 13, 2021 and the partial exercise of the over-allotment option, an amount of $225,837,500 ($10.15 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the Private Placement was placed in the Trust Account which may be 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 a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the Trust Account, as described below.

F-6

Table of Contents

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 stock exchange listing rules require that the Business Combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the assets held in the Trust Account (as defined below) (excluding the amount of deferred underwriting commissions and taxes payable on the income earned on the Trust Account). The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business 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.

The Company will provide the holders of the outstanding Public Shares (the “Public Stockholders”) with the opportunity to redeem all or a portion of their Public Shares either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer in connection with the Business Combination. 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. 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 $10.15 per Public Share, plus any pro rata interest then in the Trust Account, net of taxes payable). 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 a redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance with the Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity” (ASC 480).

All of the Public Shares 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 Company’s Business Combination and in connection with certain amendments to the Company’s amended and restated certificate of incorporation (the “Certificate of Incorporation”). In accordance with the rules of the U.S. Securities and Exchange Commission (the “SEC”) and its guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of a company require common stock subject to redemption to be classified outside of permanent equity. Given that the Public Shares were issued with other freestanding instruments (i.e., public warrants), the initial carrying value of the Class A common stock classified as temporary equity is the allocated proceeds determined in accordance with ASC 470-20. The shares of the Class A common stock are subject to ASC 480-10-S99. If it is probable that the equity instrument will become redeemable, the Company has the option to either (i) accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or (ii) recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately. The Public Shares are redeemable and will be classified outside of permanent equity as such on the balance sheet until such date that a redemption event takes place. Redemptions of the Company’s Public Shares may be subject to the satisfaction of conditions, including minimum cash conditions, pursuant to an agreement relating to the Company’s Business Combination.

If the Company seeks stockholder approval of the Business Combination, the Company will proceed with a Business Combination if a majority of the outstanding shares of common stock voted are voted in favor of the Business Combination, or such other vote as required by law or stock exchange rule. If a stockholder vote is not required and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Certificate of Incorporation, conduct the redemptions pursuant to the tender offer rules of the SEC, and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks stockholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares 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, without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination.

Notwithstanding the foregoing, if the Company seeks stockholder approval of the Business Combination and the Company does not conduct redemptions pursuant to the tender offer rules, 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% of the Public Shares without the Company’s prior written consent.

F-7

Table of Contents

The Sponsor has agreed (a) to waive its redemption rights with respect to any Founder Shares and Public Shares held by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of the Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless the Company provides the Public Stockholders with the opportunity to redeem their Public Shares upon approval of any such amendment.

If the Company has not completed a Business Combination within 18 months from the closing of the Initial Public Offering (the ‘Combination Period”) (or 21 months from the closing of the Initial Public Offering if the period of time to consummate a business combination is extended), 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 100% of 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 and not previously released to the Company to pay its taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued and outstanding Public Shares, which redemption will completely extinguish the rights of the Public Stockholders as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining Public Stockholders and its Board of Directors, liquidate and dissolve, 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 Sponsor has agreed to waive its rights to liquidating distributions from the Trust Account with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor or any of its respective affiliates acquire Public Shares, such Public Shares will be entitled to liquidating distributions from the Trust Account 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 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).

In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent registered public accounting firm) 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 the lesser of (1) $10.15 per Public Share and (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.15 per Public Share, due to reductions in the value of trust assets, in each case net of the interest that may be withdrawn to pay taxes. This liability will not apply to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and 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”). 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 (other than 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.

F-8

Table of Contents

Going Concern Consideration

At June 30, 2022, the Company had cash outside of trust of $673,085 and working capital of $164,409. Further, the Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. In connection with the Company’s assessment of going concern considerations in accordance with Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that these liquidity risks, as well as if the Company is unsuccessful in consummating an initial business combination within 18 months (or up to 21 months if the Company extends the period of time to consummate a business combination) from the closing of the IPO, the requirement that the Company cease all operations, redeem the public shares and thereafter liquidate and dissolve raises substantial doubt about the ability to continue as a going concern. The condensed balance sheets do not include any adjustments that might result from the outcome of this uncertainty.

Risks and Uncertainties

Management is currently evaluating the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the pandemic 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 the balance sheet. The condensed balance sheet does 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 are presented in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the SEC.

Certain information and note disclosures normally included in the condensed financial statements prepared in accordance with US GAAP have been condensed. As such, the information included in these condensed financial statements should be read in conjunction with the audited financial statements as of December 31, 2021 filed with the SEC on Form 10-K. In the opinion of the Company’s management, these condensed financial statements include all adjustments, which are only of a normal and recurring nature, necessary for a fair statement of the Company’s financial position as of June 30, 2022 and the Company’s results of operations and cash flows for the periods presented. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the full year ending December 31, 2022.

Reclassification

Certain amounts have been reclassified as of December 31, 2021 to conform to the current presentation.

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, as amended (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, 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.

F-9

Table of Contents

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 Securities Exchange Act of 1934, as amended) 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 the condensed financial statements in conformity with US GAAP requires the Company’s 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 condensed balance sheet.

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 balance sheet, 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.

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 had cash of $673,085 and $1,923,321 as of June 30, 2022 and December 31, 2021, respectively. The Company did not have any cash equivalents as of June 30, 2022 and December 31, 2021.

Investments held in Trust Account

At June 30, 2022 and December 31, 2021, the Company had $226.1 million and $203.0 million in investments in treasury securities held in the Trust Account, respectively.

Offering Costs associated with the Initial Public Offering

The Company complies with the requirements of the Financial Accounting Standards Board (“FASB”) ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A, “Expenses of Offering.” Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering. Upon completion of the Initial Public Offering, offering costs associated with warrant liabilities are expensed as incurred. Offering costs associated with the Units were allocated between temporary equity and the Public Warrants by the relative fair value method. Offering costs of $1,018,361 consisted principally of costs incurred in connection with preparation for the Initial Public Offering. These offering costs, together with the underwriter fees of $12,237,500 (or $4,450,000 paid in cash upon the closing of the Initial Public Offering and partial exercise of the over-allotment option and a deferred fee of $7,787,500), were allocated between temporary equity, the Public Warrants and the Private Placement Warrants in a relative fair value method upon completion of the Initial Public Offering. Of these costs, $836,603 were allocated to the Public Warrants and to the Private Placement Warrants and were charged to the statement of operations at December 31, 2021. Upon close of the partial exercise of the over-allotment option, $25,112 of costs were charged to the accompanying condensed statement of operations.

Class A Common Stock Subject to Possible Redemption

The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance enumerated in ASC 480 “Distinguishing Liabilities from Equity”. Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Class A common stock features certain redemption rights that are considered by the Company to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, at June 30, 2022 and December 31, 2021, the 22,250,000 and 20,000,000 shares of Class A common stock subject to possible redemption in the amount of $226,058,910 and $203,000,000, respectively, is presented as temporary equity, outside of the stockholders’ deficit section of the Company’s condensed balance sheets.

F-10

Table of Contents

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable Class A common stock to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized a measurement adjustment from initial book value to redemption amount value. The change in the carrying value of redeemable Class A common stock resulted in charges against additional paid-in capital and accumulated deficit.

At June 30, 2022, the Class A common stock reflected in the condensed balance sheets is reconciled in the following table:

Gross proceeds	$	222,500,000
Less:
Transaction costs allocated to Class A common stock		(12,500,843	)
Proceeds allocated to Public Warrants		(13,751,250	)
		(26,252,093	)

Plus:
Remeasurement of carrying value to redemption value as of December 31, 2021		27,814,286
Remeasurement of carrying value to redemption value as of June 30, 2022		1,996,717
Class A common stock subject to possible redemption	$	226,058,910

At December 31, 2021, the Class A common stock reflected in the condensed balance sheets is reconciled in the following table:

Gross proceeds	$	200,000,000
Less:
Transaction costs allocated to Class A common stock		(11,193,526	)
Overallotment liability		(420,760	)
Proceeds allocated to Public Warrants		(13,200,000	)
		(24,814,286	)

Plus:
Remeasurement of carrying value to redemption value		27,814,286
Class A common stock subject to possible redemption	$	203,000,000

Net income (loss) per share

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. The Company applies the two-class method in calculating earnings (loss) per share. Earnings and losses are shared pro rata between the two classes of shares. The calculation of diluted income (loss) per share of common stock does not consider the effect of the warrants issued in connection with the (i) Public Offering and (ii) Private Placement, because the warrants are contingently exercisable, and the contingencies have not yet been met. As a result, diluted earnings (loss) per common share is the same as basic earnings (loss) per common share for the periods presented. As of June 30, 2022, the Public Warrants and Private Warrants are exercisable to purchase an aggregate of 11,125,000 and 10,347,500 shares of Class A common stock, respectively.

F-11

Table of Contents

The following table reflects the calculation of basic and diluted net income (loss) per common share (in dollars, except per share amounts):

	Three months Ended June 30, 2022		Three months ended June 30, 2021

Class A Redeemable common stock
Numerator: Income allocable to Class A common stock	$	816,530
Denominator: Basic and diluted weighted average shares outstanding		22,250,000
Basic and diluted net income per share, Class A Common Stock	$	0.04


Class B Non-redeemable common stock
Numerator: Income (loss) allocable to Class B common stock	$	204,132	$	(494	)
Denominator: Basic and diluted weighted average shares outstanding		5,562,500		5,000,000
Basic and diluted net income (loss) per share, Class B Common Stock	$	0.04	$	(0.00	)