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, 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 001-40679

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 10, 2022, there were 18,041,500 shares of the registrant’s Class A common stock, par value $0.0001 per share, and 4,510,375 shares 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.	CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

	Condensed Balance Sheets as of September 30, 2022 and December 31, 2021	1

	Condensed Statements of Operations for the three and nine months ended September 30, 2022, for the three months ended September 30, 2021 and for the period from March 1, 2021 (inception) through September 30, 2021	2

	Condensed Statements of Changes in Stockholders' Equity (Deficit) for the three and nine months ended September 30, 2022, for the three months ended September 30, 2021 and for the period from March 1, 2021 (inception) through September 30, 2021	3

	Condensed Statements of Cash Flows for the nine months ended September 30, 2022 and for the period from March 1, 2021 (inception) through September 30, 2021	5

	Notes to Condensed Financial Statements	6

Item 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	25

Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	29

Item 4.	CONTROLS AND PROCEDURES	29

PART II - OTHER INFORMATION

Item 1.	LEGAL PROCEEDINGS	30

Item 1A.	RISK FACTORS	30

Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	31

Item 3.	DEFAULTS UPON SENIOR SECURITIES	31

Item 4.	MINE SAFETY DISCLOSURES	31

Item 5.	OTHER INFORMATION	31

Item 6.	EXHIBITS	32

SIGNATURES		33

Table of Contents

PART 1 – FINANCIAL INFORMATION

Item 1.

FINANCIAL STATEMENTS

MERCURY ECOMMERCE ACQUISITION CORP.

CONDENSED BALANCE SHEETS

	September 30, 2022			December 31, 2021
	(Unaudited)
ASSETS
Current assets:
Cash	$	27,598		$	842,059
Prepaid expenses and other current assets		252,409			465,183
Total current assets		280,007			1,307,242
Investments held in Trust Account		183,448,890			182,248,837
Total Assets	$	183,728,897		$	183,556,079

LIABILITIES, REDEEMABLE CLASS A COMMON STOCK AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued expenses	$	16,713		$	117,274
Franchise tax payable		47,858			167,123
Total current liabilities		64,571			284,397
Warrant liabilities		1,021,992			7,494,608
Deferred underwriting fee payable		6,314,525			6,314,525
Total Liabilities		7,401,088			14,093,530

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		183,448,890			182,248,837

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			451
Additional paid-in capital		—			—
Accumulated deficit		(7,121,532	)		(12,786,739	)
Total Stockholders’ Deficit		(7,121,081	)		(12,786,288	)
TOTAL LIABILITIES, REDEEMABLE CLASS A COMMON STOCK AND STOCKHOLDERS’ DEFICIT	$	183,728,897		$	183,556,079

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

Table of Contents

MERCURY ECOMMERCE ACQUISITION CORP.

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended September 30, 2022			For the Three Months Ended September 30, 2021			For the Nine Months Ended September 30, 2022			For the Period from March 1, 2021 (inception) Through September 30, 2021
Formation and operating costs	$	223,899		$	228,514		$	656,811		$	283,202
Franchise tax		50,000			116,393			150,598			116,393
Loss from operations		(273,899	)		(344,907	)		(807,409	)		(399,595	)

Other income (expense)
Expensed offering costs		—			(762,517	)		—			(762,517	)
Realized gain on investments held in Trust Account		410,818			—			521,431			—
Unrealized gain on investments held in Trust Account		487,146			3,059			678,622			3,059
Gain from change in fair value of warrant liabilities		2,043,984			7,153,945			6,472,616			7,153,945
Total other income, net		2,941,948			6,394,487			7,672,669			6,394,487

Net income	$	2,668,049		$	6,049,580		$	6,865,260		$	5,994,892

Weighted average shares outstanding, Class A common stock subject to possible redemption		18,041,500			12,034,799			18,041,500			5,198,129
Basic and diluted net income per share, Class A common stock subject to possible redemption	$	0.13		$	0.93		$	0.32		$	2.82

Weighted average shares outstanding, Class B common stock⁽¹⁾		4,510,375			4,435,330			4,510,375			4,339,438
Basic and diluted net income (loss) per share, Class B common stock	$	0.08		$	(1.15	)	$	0.25		$	(1.99	)

⁽¹⁾ The three months ended September 30, 2021 and the period from March 1, 2021 (inception) through September 30, 2021 excludes 656,250 shares of Class B common stock subject to forfeiture if the over-allotment option was not exercised in full or in part by the underwriter. The underwriter partially exercised its over-allotment option on August 20, 2021 and forfeited the remainder of the option; thus, 520,875 Founder Shares were forfeited by the Sponsor.

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

Table of Contents

MERCURY ECOMMERCE ACQUISITION CORP.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(UNAUDITED)

	For the Nine Months Ended September 30, 2022
	Class A Common Stock				Class B Common Stock				Additional					Total
	Shares		Amount		Shares		Amount		Paid-in Capital		Accumulated Deficit			Stockholders’ Deficit
Balance as of December 31, 2021		—	$	—		4,510,375	$	451	$	—	$	(12,786,739	)	$	(12,786,288	)
Subsequent accretion of Class A common stock subject to redemption to redemption amount as of March 31, 2022		—		—		—		—		—		(71,491	)		(71,491	)
Net income		—		—		—		—		—		1,671,654			1,671,654
Balance as of March 31, 2022		—		—		4,510,375		451		—		(11,186,576	)		(11,186,125	)
Subsequent accretion of Class A common stock subject to redemption to redemption amount as of June 30, 2022		—		—		—		—		—		(230,598	)		(230,598	)
Net income		—		—		—		—		—		2,525,557			2,525,557
Balance as of June 30, 2022		—	$	—		4,510,375	$	451	$	—	$	(8,891,617	)	$	(8,891,166	)
Subsequent accretion of Class A common stock subject to redemption to redemption amount as of September 30, 2022		—		—		—		—		—		(897,964	)		(897,964	)
Net income		—		—		—		—		—		2,668,049			2,668,049
Balance as of September 30, 2022		—	$	—		4,510,375	$	451	$	—	$	(7,121,532	)	$	(7,121,081	)

Table of Contents

	For the Period from March 1, 2021 (inception) Through September 30, 2021
	Class A Common Stock				Class B Common Stock						Additional						Total
	Shares		Amount		Shares			Amount			Paid-in Capital			Accumulated Deficit			Stockholders’ Equity (Deficit)
Balance as of March 1, 2021 (inception)		—	$	—		—		$	—		$	—		$	—		$	—
Issuance of Class B common stock to Sponsor⁽¹⁾		—		—		5,031,250			503			24,497			—			25,000
Net loss		—		—		—			—			—			(11,768	)		(11,768	)
Balance as of March 31, 2021		—		—		5,031,250			503			24,497			(11,768	)		13,232
Net loss		—		—		—			—			—			(42,920	)		(42,920	)
Balance as of 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 as of September 30, 2021		—	$	—		4,510,375		$	451		$	—		$	(13,881,360	)	$	(13,880,909	)

⁽¹⁾ Included up to 656,250 shares of Class B common stock subject to forfeiture if the over-allotment option was not exercised in full or in part by the underwriter. The underwriter partially exercised its over-allotment option on August 20, 2021 and forfeited the remainder of the option; thus, 520,875 Founder Shares were forfeited by the Sponsor.

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

Table of Contents

MERCURY ECOMMERCE ACQUISITION CORP.

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Nine Months Ended September 30, 2022			For the Period from March 1, 2021 (inception) Through September 30, 2021
Cash Flows from Operating Activities:
Net income	$	6,865,260		$	5,994,892
Adjustments to reconcile net income to net cash used in operating activities:
Realized gain on investments held in Trust Account		(521,431	)		—
Unrealized gain on investments held in Trust Account		(678,622	)		(3,059	)
Expensed offering costs		—			762,517
Change in fair value of warrant liabilities		(6,472,616	)		(7,153,945	)
Changes in operating assets and liabilities:
Prepaid expenses		212,774			(561,937	)
Accounts payable and accrued expenses		(100,561	)		110,149
Franchise tax payable		(119,265	)		116,393
Net cash used in operating activities		(814,461	)		(734,990	)

Cash Flows from Investing Activities:
Proceeds from redemption of U.S. government treasury obligations		365,098,000			—
Purchase of U.S. government treasury obligations		(365,098,000	)		—
Investment of cash into Trust Account		—

SEC Form 10-Q filed by Mercury Ecommerce Acquisition Corp