ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Securities registered pursuant to Section 12(b) of the Act: | ||||
Title of each class |
Trading Symbol |
Name of each exchange on which registered | ||
and one-half of one Redeemable Warrant |
||||
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
Auditor PCAOB ID Number : |
Auditor Name: |
Auditor Location: New York, |
• | we are a blank check company with no revenue or basis to evaluate our ability to select a suitable business target; |
• | we may not be able to select an appropriate target business or businesses and complete our initial business combination in the prescribed time frame; |
• | our expectations around the performance of a prospective target business or businesses may not be realized; |
• | we may not be successful in retaining or recruiting required officers, key employees or directors following our initial business combination; |
• | our officers and directors may have difficulties allocating their time between the Company and other businesses and may potentially have conflicts of interest with our business or in approving our initial business combination; |
• | we may not be able to obtain additional financing to complete our initial business combination or reduce the number of stockholders requesting redemption; |
• | we may issue our shares to investors in connection with our initial business combination at a price that is less than the prevailing market price of our shares at that time; |
• | you may not be given the opportunity to choose the initial business target or to vote on the initial business combination; |
• | trust account funds may not be protected against third party claims or bankruptcy; |
• | an active market for our public securities’ may not develop and you will have limited liquidity and trading; |
• | the availability to us of funds from interest income on the trust account balance may be insufficient to operate our business prior to the business combination; |
• | our financial performance following a business combination with an entity may be negatively affected by their lack of an established record of revenue, cash flows and experienced management. |
• | Leading Industry Relationships. Our management team possesses a deep network of contacts across various sectors, which will be a source of potential business combination targets. Our network of industry contacts combined with our extensive due diligence and underwriting capabilities will be crucial in sourcing and evaluating opportunities. |
• | Partnership Approach. We intend to capitalize on the extensive publicly company experience of our management and build a long-term partnership with management of the target company. Through leveraging the benefits of the network and expertise of our management team, the target company will entertain increased opportunities for growth, improved business operations, and capital raising. Our management team intends to remain engaged with the company post-closing and continue to provide support and guidance in growing the company with a focus on long-term share price performance. |
• | Driving Growth. We believe our management team has experience in growing companies both organically and inorganically, and will provide material guidance to management regarding acquisitions and strategic transactions, and evaluating organic growth opportunities through an analysis of the addressable market and customer base. |
• | Improving Profitability. Our management team has a demonstrated track record of improving a company’s profitability with a particular emphasis on growth strategies, capital allocation, operational efficiencies, strategic acquisitions or divestitures, and identifying and recruiting top talent. |
• | Capital Markets Experience. We believe our management team possesses strong experience in the capital markets and will provide material advice to management of the target company in future capital raising and strategic transactions. |
• | Has a diversified and growing customer base or can capture additional market share through improved market positioning and accelerated organic and external growth. |
• | Has a strong management team which can execute on growth strategies after the close of the business combination, or our management team can identify and recruit individuals who can assist the target company in executing the business strategy. |
• | Has the opportunity for strategic transactions to grow the business and enhance the market position of the target company. |
• | Has a strong culture which we believe to be important to the continued success of the company and will allow for a productive long-term partnership between our management team and the management of the target company. |
• | The company is at an inflection point and the expertise and experience of our management team combined with access to capital can propel the target company to the next stage in its growth and maturity. |
• | Our due diligence leads us to believe that there is significant value that is unrecognized by the marketplace and where our management team can provide material guidance on how to improve positioning and enhance market value. |
• | Would benefit from the experience, expertise and relationships of our management team to enhance operating and financial performance. |
• | subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination, and |
• | cause us to depend on the marketing and sale of a single product or limited number of products or services. |
Type of Transaction |
Whether Stockholder Approval is Required | |
Purchase of assets | No | |
Purchase of stock of target not involving a merger with the company | No | |
Merger of target into a subsidiary of the company | No | |
Merger of the company with a target | Yes |
• | we issue shares of Class A common stock that will be equal to or in excess of 20% of the number of shares of our Class A common stock then outstanding; |
• | any of our directors, officers or substantial stockholders (as defined by Nasdaq rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of common stock could result in an increase in outstanding common shares or voting power of 5% or more; or |
• | the issuance or potential issuance of common stock will result in our undergoing a change of control. |
• | conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and |
• | file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. |
• | conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and |
• | file proxy materials with the SEC. |
Item 1A. |
Risk Factors |
• | we are an early stage Company with no revenue or basis to evaluate our ability to select a suitable business target; |
• | we may not be able to select an appropriate target business or businesses and complete our initial business combination in the prescribed time frame; |
• | our expectations around the performance of a prospective target business or businesses may not be realized; |
• | we may not be successful in retaining or recruiting required officers, key employees or directors following our initial business combination; |
• | our officers and directors may have difficulties allocating their time between the Company and other businesses and may potentially have conflicts of interest with our business or in approving our initial business combination; |
• | we may not be able to obtain additional financing to complete our initial business combination or reduce number of stockholders requesting redemption; |
• | we may issue our shares to investors in connection with our initial business combination at a price that is less than the prevailing market price of our shares at that time; |
• | you may not be given the opportunity to choose the initial business target or to vote on the initial business combination; |
• | trust account funds may not be protected against third party claims or bankruptcy; |
• | an active market for our public securities’ may not develop and you will have limited liquidity and trading; |
• | the availability to us of funds from interest income on the trust account balance may be insufficient to operate our business prior to the business combination; |
• | our financial performance following a business combination with an entity may be negatively affected by their lack an established record of revenue, cash flows and experienced management; and |
• | the ongoing Russian invasion of Ukraine may result in market volatility that could adversely affect our stock price and may impact our financial condition and search for a target company. |
Item 1B. |
Unresolved Staff Comments |
Item 2. |
Properties |
Item 3. |
Legal Proceedings |
Item 4. |
Mine Safety Disclosures |
Item 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities |
Item 6. |
Reserved |
Item 7. |
Management’s Discussion and Analysis of Financial Condition and Results of Operation |
Item 7A. |
Quantitative and Qualitative Disclosures about Market Risk |
Item 8. |
Financial Statements and Supplementary Data |
Item 9. |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
Item 9A. |
Controls and Procedures. |
Item 9B. |
Other Information |
Item 9C. |
Disclosure regarding Foreign Jurisdictions that Prevent Inspections |
Item 10. |
Directors, Executive Officers and Corporate Governance |
Name |
Age |
Position | ||
Charles Alutto |
56 | Chief Executive Officer | ||
Robert Ryder |
61 | Chief Financial Officer | ||
Richard Burke |
56 | Executive Co-Chairman |
Kenneth Campbell |
64 | Executive Co-Chairman | ||
Ross Berner |
57 | Chief Operating Officer | ||
Scott Daum |
49 | President | ||
Brenda Frank |
52 | Director | ||
Alex Zoghlin |
52 | Director | ||
Ivan Brockman |
52 | Director |
Item 11. |
Executive Compensation |
Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
• | each person known by us to be the beneficial owner of more than 5% of our outstanding common stock; |
• | each of our executive officers and directors that beneficially owns our common stock; and |
• | all our executive officers and directors as a group. |
Class A Common Stock |
Class B Common Stock |
|||||||||||||||||||
Name and Address of Beneficial Owner (1) |
Number of Shares Beneficially Owned |
Approximate Percentage of Class |
Number of Shares Beneficially Owned(2) |
Approximate Percentage of Class |
Approximate Percentage of Outstanding Shares |
|||||||||||||||
Sierra Lake Sponsor LLC (our Sponsor)(3) |
— | — | 5,625,000 | 75.00 | % | 15.00 | % | |||||||||||||
Charles Alutto |
— | — | 5,625,000 | 75.00 | % | 15.00 | % | |||||||||||||
Robert Ryder |
— | — | — | — | — | |||||||||||||||
Richard Burke |
— | — | — | — | — | |||||||||||||||
Kenneth Campbell |
— | — | — | — | — | |||||||||||||||
Ross Berner |
— | — | — | — | — | |||||||||||||||
Scott Daum |
— | — | — | — | — | |||||||||||||||
Brenda Frank |
— | — | — | — | — | |||||||||||||||
Alex Zoghlin |
— | — | — | — | — | |||||||||||||||
All directors and executive officers as a group (8 individuals) |
— | — | 5,625,000 | 75.00 | % | 15.00 | % | |||||||||||||
Other 5% Owners |
— | — | — | — | — | |||||||||||||||
Polar Asset Management Partners Inc.(4) |
2,970,000 | 9.90 | % | — | — | 7.92 | % | |||||||||||||
Aristeia Capital, L.L.C.(5) |
1,945,000 | 6.48 | % | — | — | 5.19 | % | |||||||||||||
HGC Investment Management Inc.(6) |
1,700,625 | 5.67 | % | — | — | 4.54 | % | |||||||||||||
Nomura Holdings, Inc.(7) |
1,500,000 | 5.00 | % | — | — | 4.00 | % |
Item 13. |
Certain Relationships and Related Transactions, and Director Independence |
• | Repayment of up to an aggregate of $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses; |
• | Reimbursement for any out-of-pocket |
• | Repayment of non-interest bearing loans which may be made by our sponsor or an affiliate of our sponsor or certain of our officers and directors to finance transaction costs in connection with an intended initial business combination. Up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.00 per warrant at the option of the lender. |
Item 14 . |
Principal Accountant Fees and Services. |
Item 15 . |
Exhibits, Financial Statement Schedules |
* | Filed herewith |
** | Furnished herewith |
(1) | Incorporated by reference to the Company’s Form 8-K, filed with the SEC on September 20, 2021. |
(2) | Incorporated by reference to the Company’s S-1, filed on February 25, 2021. |
(3) | Incorporated by reference to the Company’s S-1/A, filed on August 9, 2021. |
(4) | Incorporated by reference to the Company’s S-1/A, filed on August 31, 2021. |
(5) | Incorporated by reference to the Company’s Form 8-K, filed on April 6, 2022. |
Item 16. |
Form 10–K Summary |
Page |
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F-2 |
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F-3 |
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F-4 |
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F-5 |
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F-6 |
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F-7 |
ASSETS |
||||
Current assets: |
||||
Cash |
$ | |||
Prepaid expenses |
||||
|
|
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Total Current Assets |
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Marketable securities held in Trust Account |
||||
|
|
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TOTAL ASSETS |
$ |
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|
|
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
||||
Current liabilities : |
|
|
|
|
Accrued expenses |
$ | |||
Due to related party |
||||
Total Current Liabilities |
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|
|
|
|
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Warrant liabilities |
||||
Deferred underwriting fee payable |
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|
|
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TOTAL LIABILITIES |
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|
|
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Commitments and Contingencies (Note 6) |
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Class A common stock subject to possible redemption, |
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|
|
|||
Stockholders’ Deficit |
||||
Preferred Stock, $ |
||||
Class A common stock, $ |
||||
Class B common stock, $ |
||||
Additional paid-in capital |
||||
Accumulated deficit |
( |
) | ||
|
|
|||
Total Stockholders’ Deficit |
( |
) | ||
|
|
|||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT |
$ |
|||
|
|
Operating and formation costs |
$ | |||
Loss from operations |
( |
) | ||
Other income (loss) : |
||||
Interest earned on marketable securities held in Trust Account |
||||
Unrealized loss on marketable securities held in Trust Account |
( |
) | ||
Other expense relating to fair value exceeding amount paid for warrants |
( |
) | ||
Change in fair value of warrant liabilities |
||||
Change in fair value of overallotment liability |
||||
Transaction costs associated with the Initial Public Offering |
( |
) | ||
Other income, net |
||||
Net income |
$ |
|||
Basic and diluted weighted average shares outstanding, Class A common stock |
||||
Basic and diluted net income per share, Class A common stock |
$ |
|||
Basic and diluted weighted average shares outstanding, Class B common stock |
||||
Basic and diluted net income per share, Class B common stock |
$ |
|||
Class A Common Stock |
Class B Common Stock |
Additional Paid-in |
Accumulated |
Total Stockholders’ |
||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Capital |
Deficit |
Deficit |
||||||||||||||||||||||
Balance — January 26, 2021 (Inception) |
$ | $ | $ | $ | $ | |||||||||||||||||||||||
Issuance of Class B common stock to Sponsor |
— | — | — | |||||||||||||||||||||||||
Accretion of Class A common stock to shares subject to possible redemption |
— | — | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
Forfeiture of Founder Shares |
— | — | ( |
) | ( |
) | — | — | ||||||||||||||||||||
Offering costs charged to operations in connection with Founder Shares allocated to anchor investors |
— | — | — | — | — | |||||||||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance – December 31, 2021 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities: |
||||
Net income |
$ | |||
Adjustments to reconcile net income to net cash used in operating activities: |
||||
Change in fair value of warrants liabilities |
( |
) | ||
Change in fair value of overallotment liability |
( |
) | ||
Other expense relating to fair value exceeding amount paid for warrants |
||||
Transaction costs allocable to warrant liabilities |
||||
Interest earned on marketable securities held in Trust Account |
( |
) | ||
Unrealized loss on marketable securities held in Trust Account |
||||
Changes in operating assets and liabilities: |
||||
Prepaid expenses |
( |
) | ||
Accrued expenses |
||||
Due to related party |
| |||
|
|
|||
Net cash used in operating activities |
( |
) | ||
|
|
|||
|
|
|
|
|
Cash Flows from Investing Activities: |
||||
Investment of cash in Trust Account |
( |
) | ||
|
|
|||
Net cash used in investing activities |
( |
) | ||
|
|
|||
|
|
|
|
|
Cash Flows from Financing Activities: |
||||
Proceeds from sale of Units, net of underwriting discounts paid |
||||
Proceeds from sale of Private Placement Warrants |
||||
Advances to related party |
||||
Repayment of advances to related party |
( |
) | ||
Proceeds from promissory note – related party |
||||
Repayment of promissory note – related party |
( |
) | ||
Payment of offering costs |
( |
) | ||
|
|
|||
Net cash provided by financing activities |
||||
|
|
|||
|
|
|
|
|
Net Change in Cash |
||||
Cash – Beginning of period |
||||
|
|
|||
Cash – End of period |
$ |
|||
|
|
|||
|
|
|
|
|
Non-Cash investing and financing activities: |
||||
Offering costs paid by Sponsor in exchange for the issuance of Founder Shares |
$ | |||
|
|
|||
Accretion of Class A common stock to redemption value |
$ | |||
|
|
|||
Deferred underwriting fee payable |
$ | |||
|
|
|||
Forfeiture of Founder Shares |
$ |
( |
) | |
|
|
Gross proceeds |
$ | |
||
Less: |
||||
Proceeds allocated to Public Warrants |
( |
) | ||
Class A common stock issuance costs |
( |
) | ||
Plus: |
||||
Accretion of carrying value to redemption value |
||||
Class A common stock subject to possible redemption |
$ |
|||
For the period from January 26, 2021 (inception) Through December 31, 2021 |
||||||||
Class A |
Class B |
|||||||
Basic and diluted net income per common share |
||||||||
Numerator: |
||||||||
Allocation of net income, as adjusted |
$ | $ | ||||||
Denominator: |
||||||||
Basic and diluted weighted average shares outstanding |
||||||||
Basic and diluted net income per common share |
$ | $ |
• | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
• | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
• | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
• | in whole and not in part; |
• | at a price of $ |
• | upon not less than |
• | if, and only if, the last reported sale price of the shares of Class A common stock for any |
December 31, 2021 |
||||
Deferred tax assets (liability) |
||||
Net operating loss carryforward |
$ | |||
Startup/Organization Expenses |
||||
Unrealized gain on marketable securities |
( |
) | ||
Total deferred tax assets (liability) |
||||
Valuation Allowance |
( |
) | ||
Deferred tax assets (liability), net of allowance |
$ | |||
December 31, 2021 |
||||
Federal |
||||
Current |
$ | |||
Deferred |
( |
) | ||
State and Local |
— | |||
Current |
||||
Deferred |
||||
Change in valuation allowance |
||||
Income tax provision |
$ | |||
December 31, 2021 |
||||
Statutory federal income tax rate |
% | |||
Change in fair value of warrants |
( |
)% | ||
Change in fair value of overallotment liability |
( |
)% | ||
Transaction costs allocated to warrants |
% | |||
Fair value of private warrant liability in excess of proceeds |
% | |||
Valuation allowance |
% | |||
Income tax provision |
% | |||
Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | |||
Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |||
Level 3: | Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. |
Description |
Level |
December 31, 2021 |
||||||
Assets: |
||||||||
Marketable securities held in Trust Account |
1 | $ | ||||||
Liabilities: |
||||||||
Warrant liability – Public Warrants |
1 | $ | ||||||
Warrant liability – Private Placement Warrants |
3 | $ |
Input |
September 17, 2021 |
December 31, 2021 |
||||||
Stock price |
$ | $ | ||||||
Exercise price |
$ | $ | ||||||
Expected term (in years) |
||||||||
Volatility |
% | % | ||||||
Risk-free rate |
% | % | ||||||
Dividend yield |
% | % |
Private Placement |
Public |
Warrant Liabilities |
||||||||||
Initial measurement on September 17, 2021 |
$ | $ | $ | |||||||||
Change in valuation inputs or other assumptions |
( |
) | ( |
) | ( |
) | ||||||
Transfer to Level 1 |
( |
) | ( |
) | ||||||||
Change in fair value |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Fair value as of December 31, 2021 |
$ |
$ |
$ |
|||||||||
|
|
|
|
|
|
SIERRA LAKE ACQUISITION CORP. | ||
By: |
/s/ Charles Alutto | |
Charles Alutto | ||
Chief Executive Officer | ||
(Principal Executive Officer) |
Signature |
Title |
Date | ||
/s/ Charles Alutto |
Chief Executive Officer |
April 13, 2022 | ||
Charles Alutto |
(Principal Executive Officer) |
|||
/s/ Robert Ryder |
Chief Financial Officer |
April 13, 2022 | ||
Robert Ryder |
(Principal Financial Officer and Principal Accounting Officer) |
|||
/s/ Brenda Frank |
Director |
April 13, 2022 | ||
Brenda Frank |
||||
/s/ Alex Zoghlin |
Director |
April 13, 2022 | ||
Alex Zoghlin |
||||
/s/ Ivan Brockman |
Director |
April 13, 2022 | ||
Ivan Brockman |