UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

☐ 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 001-40679

Mercury Ecommerce Acquisition Corp.

(Exact name of registrant as specified in its charter)

Delaware		86-2365445
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

3737 Buffalo Speedway, Suite 1750

Houston, TX 77098

(Address of principal executive offices and zip code)

(713) 715-6820

(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 warrant	MEACU	The Nasdaq Stock Market LLC

Class A common stock, par value $0.0001 per share	MEAC	The Nasdaq Stock Market LLC

Warrants, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50 per share	MEACW	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 (Section 232.405 of this chapter) during the preceding 12 months (or 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 18, 2021, there were 18,041,500 of the registrant’s Class A common stock, par value $0.001 per share, and 4,510,375 of the registrant’s Class B common stock, par value $0.0001 per share, issued and outstanding.

MERCURY ECOMMERCE ACQUISITION CORP.

TABLE OF CONTENTS

			Page
PART 1 - FINANCIAL INFORMATION

Item 1.	FINANCIAL STATEMENTS (UNAUDITED)

		Condensed Balance Sheet as of September 30, 2021	1

		Condensed Statements of Operations for the Three Months ended September 30, 2021 and for the period from March 1, 2021 (inception) Through September 30, 2021	2

		Condensed Statement of Changes in Stockholders' Equity (Deficit) for the Three Months ended September 30, 2021 and for the period from March 1, 2021 (inception) Through September 30, 2021	3

		Condensed Statement of Cash Flows for the period from March 1, 2021 (inception) Through September 30, 2021	4

		Notes to Condensed 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	26

Item 1A.		RISK FACTORS	26

Item 2.		UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	26

Item 3.		DEFAULTS UPON SENIOR SECURITIES	27

Item 4.		MINE SAFETY DISCLOSURES	27

Item 5.		OTHER INFORMATION	27

Item 6.		EXHIBITS	28

SIGNATURES			28

ASSETS
Current assets:
Cash	$	1,125,817
Prepaid expenses		561,937
Total current assets		1,687,754
Investments held in Trust Account		182,222,209
Total Assets	$	183,909,963

LIABILITIES, REDEEMABLE CLASS A COMMON STOCK AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued expenses	$	110,149
Franchise tax payable		116,393
Total current liabilities		226,542
Warrant liabilities		9,027,596
Deferred underwriting fee payable		6,314,525
Total Liabilities		15,568,663

Commitments and Contingencies (Note 6)
Class A common stock, $0.0001 par value, subject to possible redemption; 18,041,500 shares at redemption value of $10.10 per share and unrealized gain on investments held in Trust Account		182,222,209

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; 150,000,000 shares authorized; no shares issued and outstanding (excluding 18,041,500 shares subject to possible redemption)		—
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 4,510,375 shares issued and outstanding		451
Additional paid-in capital		—
Accumulated Deficit		(13,881,360	)
Total Stockholders’ Deficit		(13,880,909	)
TOTAL LIABILITIES, REDEEMABLE CLASS A COMMON STOCK AND STOCKHOLDERS’ DEFICIT	$	183,909,963

	Three Months Ended September 30, 2021			For the Period from March 1, 2021 (Inception) Through September 30, 2021
Formation and operating costs	$	228,514		$	283,202
Franchise tax		116,393			116,393
Loss from Operations		(344,907	)		(399,595	)
Other income (expense):
Expensed offering costs		(762,517	)		(762,517	)
Unrealized gain on investments held in Trust Account		3,059			3,059
Change in fair value of warrant liabilities		7,153,945			7,153,945
Total other income, net		6,394,487			6,394,487

Net income	$	6,049,580		$	5,994,892

Weighted average shares outstanding, Class A common stock subject to possible redemption		12,034,799			5,198,129
Basic and diluted net income per share, Class A common stock common stock subject to redemption	$	0.93		$	2.82

Weighted average shares outstanding, Class B common stock		4,435,330			4,339,438
Basic and diluted net loss per share, Class B common stock	$	(1.15)		$	(1.99)

	Class A Common Stock				Class B Common Stock						Additional						Total Stockholders'
	Shares		Amount		Shares			Amount			Paid-in Capital			Accumulated Deficit			Equity (Deficit)
Balance at March 1, 2021 (inception)		—	$	—		—		$	—		$	—		$	—		$	—
Issuance of Class B common stock to Sponsor		—		—		5,031,250			503			24,497			—			25,000
Net loss		—		—		—			—			—			(11,768	)		(11,768	)

Balance at March 31, 2021		—		—		5,031,250			503			24,497			(11,768	)		13,232
Net loss		—		—		—			—			—			(42,920	)		(42,920	)

Balance at June 30, 2021		—	$	—		5,031,250		$	503		$	24,497		$	(54,688	)	$	(29,688	)
Excess of cash received over the fair value of the private placement warrants		—		—		—			—			392,500			—			392,500
Excess of fair value of Founder Shares sold over the purchase price		—		—		—			—			4,714,400			—			4,714,400
Excess of cash received over the fair value of the over-allotment private placement warrants		—		—		—			—			8,122			—			8,122
Forfeiture of Class B common stock		—		—		(520,875	)		(52	)		52			—			—
Accretion of Class A common stock to redemption amount		—		—		—			—			(5,139,571	)		(19,876,252	)		(25,015,823	)
Net income		—		—		—			—			—			6,049,580			6,049,580

Balance at September 30, 2021		—	$	—		4,510,375		$	451		$	—		$	(13,881,360	)	$	(13,880,909	)

Cash Flows from Operating Activities:
Net income	$	5,994,892
Adjustments to reconcile net income to net cash used in operating activities:
Unrealized gain on investments held in Trust Account		(3,059	)
Expensed offering costs		762,517
Change in fair value of warrant liabilities		(7,153,945	)
Changes in operating assets and liabilities:
Prepaid expenses		(561,937	)
Accounts payable and accrued expenses		110,149
Franchise tax payable		116,393
Net cash used in operating activities		(734,990	)

Cash Flows from Investing Activities:
Investment of cash into Trust Account		(182,219,150	)
Net cash used in investing activities		(182,219,150	)

Cash Flows from Financing Activities:
Proceeds from promissory note - related party		300,000
Repayment of promissory note - related party		(300,000	)
Proceeds from initial public offering, net of underwriting fees		176,806,700
Proceeds from sale of Private Placement Warrants		8,012,451
Payment of offering costs		(764,193	)
Proceeds from sale of Class B common stock to Sponsor		25,000
Net cash provided by financing activities		184,079,957

Net Change in Cash		1,125,817
Cash - Beginning of period		—
Cash - End of period	$	1,125,817

Non-cash investing and financing activities
Deferred underwriting fee payable	$	6,314,525
Excess of the fair value of Founder Shares sold over the purchase price	$	4,714,400
Forfeiture of Class B common stock	$	52
Accretion of Class A common stock subject to redemption to redemption value	$	25,015,823

Gross proceeds	$	180,415,000
Less:
Proceeds allocated to Public Warrants		(8,569,713	)
Issuance costs allocated to Class A common stock		(14,638,901	)
Plus:
Initial accretion of carrying value to redemption value		25,012,764
Accretion of carrying value to redemption value as of September 30, 2021		3,059
Class A common stock subject to possible redemption	$	182,222,209

	Three Months Ended September 30, 2021			For the Period from March 1, 2021 (Inception) Through September 30, 2021
Net income	$	6,049,580		$	5,994,892
Accretion of Class A common stock to redemption amount		(25,015,823	)		(25,015,823	)
Net loss including accretion of temporary equity to redemption value	$	(18,966,243	)	$	(19,020,931	)

	Three Months Ended September 30, 2021								For the Period from March 1, 2021 (Inception) Through September 30, 2021
	Class A				Class B				Class A				Class B
Basic and diluted net income (loss) per share:
Numerator:
Net loss including accretion of temporary equity to redemption value			(13,858,721	)			(5,107,522	)			(10,366,716	)			(8,654,215	)
Accretion of Class A common stock to redemption amount			25,015,823				—				25,015,823				—
Net income (loss)		$	11,157,102			$	(5,107,522)			$	14,649,107			$	(8,654,215)
Denominator:
Basic and diluted weighted average shares outstanding			12,034,799				4,435,330				5,198,129				4,339,438
Basic and diluted net income (loss) per share		$	0.93			$	(1.15)			$	2.82			$	(1.99)

Description	Amount at Fair Value		Level 1		Level 2		Level 3
September 30, 2021
Assets
Investments held in Trust Account:
U.S. government treasury obligations	$	182,222,209	$	182,222,209	$	—	$	—
Liabilities
Warrant liability – Public Warrants	$	4,780,998	$	4,780,998	$	—	$	—
Warrant liability – Private Placement Warrants	$	4,246,599	$	—	$	4,246,599	$	—

	At July 30, 2021 (Initial Measurement)
Stock price	$	9.47
Exercise price	$	11.50
Dividend yield		—	%
Expected term (in years)		5.50
Volatility		20.0	%
Risk-free rate		0.80	%
Fair value	$	0.95

Fair value as of March 1, 2021	$	—
Initial measurement of Public Warrants and Private Placement Warrants at July 30, 2021		15,770,000
Initial measurement of Public Warrants and Private Placement Warrants upon exercise of over-allotment on August 20, 2021		411,541
Transfer of Public Warrants to Level 1 measurement		(4,780,998	)
Transfer of Private Placement Warrants to Level 2 measurement		(4,246,599	)
Change in fair value		(7,153,945	)
Fair value as of September 30, 2021	$	—

Exhibit No.		Description
31.1*		Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		XBRL Instance Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.SCH*		XBRL Taxonomy Extension Schema Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

	Mercury Ecommerce Acquisition Corp.

Date: November 18, 2021	By:	/s/ R. Andrew White
		R. Andrew White
		President and Chief Executive Officer

	Mercury Ecommerce Acquisition Corp.

Date: November 18, 2021	By:	/s/ Winston Gilpin
		Winston Gilpin
		Chief Financial Officer

	At July 30, 2021 (Initial Measurement)			As of September 30, 2021
Stock price	$	9.47		$	9.81
Exercise price	$	11.50		$	11.50
Dividend yield		-	%		-	%
Expected term (in years)		5.50			5.50
Volatility		20.0	%		—	%
Risk-free rate		0.80	%		—	%
Fair value	$	0.95		$	0.53

SEC Form 10-Q filed by Mercury Ecommerce Acquisition Corp