☒	QUARTERLY 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 of Delaware		86-2858172
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

P.O. Box 1314 New York, NY		10028
(Address of Principal Executive Offices)		(Zip Code)

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

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-Accelerated Filer	☒	Smaller Reporting Company	☒
		Emerging Growth Company	☒

		Page
Forward-Looking Statements		1
PART I-FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Condensed Balance Sheets as of March 31, 2023 (unaudited) and December 31, 2022 (audited)	3
	Condensed Unaudited Statements of Operations for the Three Months Ended March 31, 2023 and March 31, 2022	4
	Condensed Unaudited Statements of Changes in Stockholders’ Equity (Deficit) for the Three Months Ended March 31, 2023 and March 31, 2022	5
	Condensed Unaudited Statements of Cash Flows for the Three Months Ended March 31, 2023 and March 31, 2022	7
	Notes to Condensed Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	33
PART II-OTHER INFORMATION
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	35
Signatures		37

•

our ability to complete our initial business combination;

•

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

•

our ability to assess the management of a prospective target business;

•

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

•

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

•

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

•

our issuance of additional shares of capital stock or debt securities to complete a business combination, thereby reducing the equity interest of our stockholders and likely causing a change in control of our ownership;

•

our ability to amend the terms of the warrants or warrant agreement in a manner that may be adverse to holders of public warrants with the approval by the holders of at least a majority of the then outstanding public warrants;

•

our ability to redeem your unexpired warrants prior to their exercise;

•

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

•

changes in laws or regulations, including changes imposing additional requirements on business combination transactions involving SPACs and private operating companies and the impact of the Inflation Reduction Act of 2022;

•

the risk of cyber incidents or attacks directed at us resulting in information theft, data corruption, operational disruption and/or financial loss;

•

the liquidity and trading market for our public securities;

•

the lack of a market for our securities;

•

our status as a an emerging growth company and a smaller reporting company within the meaning of the Securities Act;

•

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;

•

the potential tax consequences of investing in our securities; or

•

our financial performance.

ITEM 1.

FINANCIAL STATEMENTS

		As of
		March 31, 2023 (Unaudited)				December 31, 2022 (Audited)
ASSETS
Current Assets
Cash		$	607,506			$	1,082,183
Prepaid expenses			240,942				285,816
Investment held in Trust Account – current portion due			180,577,599				—
Total Current Assets			181,426,047				1,367,999
Investment held in Trust Account			24,351,415				202,945,447
Total Assets		$	205,777,462			$	204,313,446
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable		$	32,597			$	3,647
Accrued expenses			2,850,889				948,135
Stockholder Redemptions due			180,577,599				—
Total Current Liabilities			183,461,085				951,782
Warrant liabilities			5,579,000				93,000
Deferred tax liability			—				277,820
Deferred underwriter fee payable			7,000,000				7,000,000
Total Liabilities			196,040,085				8,322,602
Commitments and Contingencies
Class A common stock subject to possible redemption, 2,272,935 at redemption value of $10.21 and 20,000,000 shares at redemption value of $10.11 at March 31, 2023 and December 31, 2022, respectively			23,197,585				202,187,705
Stockholders’ Deficit
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding at March 31, 2023 and December 31, 2022, respectively			—				—
Class A common stock, $0.0001 par value, 200,000,000 shares authorized, 3,650,000 and none issued and outstanding at March 31, 2023 and December 31, 2022, respectively (less 2,272,935 and 20,000,000 shares subject to possible redemption at March 31, 2023 and December 31, 2022, respectively)			365				—
Class B common stock, $0.0001 par value, 20,000,000 shares authorized, 1,350,000 and 5,000,000 issued and outstanding at March 31, 2023 and December 31, 2022, respectively			135				500
Accumulated deficit			(13,460,708	)			(6,197,361	)
Total Stockholders’ Deficit			(13,460,208	)			(6,196,861	)
Total Liabilities and Stockholders’ Deficit		$	205,777,462			$	204,313,446

		For the Three Months Ended
		March 31, 2023				March 31, 2022
Formation, general and administrative expenses		$	1,827,442			$	554,764
Loss from Operations			(1,827,442	)			(554,764	)
Other Income
Unrealized gain on Investment held in Trust Account			2,059,562				66,974
Gain (loss) on change in fair value of Warrant Liabilities			(5,486,000	)			3,996,000
Total Other Income			(3,426,438	)			4,062,974
Income (Loss) before Income Tax Provision			(5,253,880	)			3,508,210
Income Tax Provision			(421,988	)			—
Net Income (Loss)		$	(5,675,868	)		$	3,508,210
Basic and diluted weighted average shares outstanding, Class A Common Stock			19,687,176				20,000,000
Basic and diluted net income (loss) per share, Class A Common Stock		$	(0.23	)		$	0.14
Basic and diluted weighted average shares outstanding, Class B Common Stock			4,918,889				5,000,000
Basic and diluted net income (loss) per share, Class B Common Stock		$	(0.23	)		$	0.14

		Class A Common Stock								Class B Common Stock								Additional Paid-in				Accumulated				Total Stockholders’
		Shares				Amount				Shares				Amount				Capital				Deficit				Deficit
Balance – December 31, 2022 (audited)			—			$	—				5,000,000			$	500			$	—			$	(6,197,361	)		$	(6,196,861	)
Remeasurement of Class A common stock subject to possible redemption											—				—				—				(1,587,479	)			(1,587,479	)
Conversion of Class B Common Stock to Class A Common Stock by Sponsor			3,650,000				365				(3,650,000	)			(365	)			—				—				—
Net loss			—				—				—				—				—				(5,675,868	)			(5,675,868	)
Balance – March 31, 2023 (unaudited)			3,650,000			$	365				1,350,000			$	135			$	—			$	(13,460,708	)		$	(13,460,208	)

		Class B Common Stock								Additional Paid-in Capital				Accumulated Deficit				Total Stockholders’ Equity (Deficit)
		Shares				Amount
Balance – December 31, 2021 (audited)			5,000,000			$	500			$	—			$	(14,095,323	)		$	(14,094,823	)
Net loss			—				—				—				3,508,210				3,508,210
Balance – March 31, 2022 (unaudited)			5,000,000			$	500			$	—			$	(10,587,113	)		$	(10,586,613	)

		For the three months ended March 31, 2023				For the three months ended March 31, 2022
Cash Flows from Operating Activities:
Net income (loss)		$	(5,675,868	)		$	3,508,210
Adjustments to reconcile net income (loss) to net cash used in operating activities
Interest earned on Investment held in Trust Account			(2,059,562	)			(66,974	)
Change in fair value of warrant liabilities			5,486,000				(3,996,000	)
Changes in operating assets and liabilities:
Prepaid expenses			44,874				67,195
Accounts payable			28,950				—
Accrued expenses			1,902,754				76,141
Deferred tax liability			(277,820	)			—
Net cash used in operating activities			(550,672	)			(411,428	)
Cash Flows from Investing Activities:
Withdrawal from Trust Account for tax			75,995				18,919
Net cash from investing activities			75,995				18,919
Net change in cash			(474,677	)			(392,509	)
Cash at beginning of period			1,082,183				2,132,242
Cash at end of period		$	607,506			$	1,739,733
Supplemental Non-cash Disclosures:
Redemption of Class A shares subject to redemption		$	180,577,599			$	—
Remeasurement of Class A common stock subject to possible redemption		$	1,587,479			$	—

NOTE 1 – ORGANIZATION AND BUSINESS BACKGROUND

 

Home Plate Acquisition Corporation (the “Company”) was incorporated in the State of Delaware on March 24, 2021. The Company was incorporated for the purpose of effecting a merger, stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company has not yet selected any specific Business Combination target. 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.

 

The Company’s sponsor is Home Plate Sponsor LLC, a Delaware limited liability company (the “Sponsor”). As of March 31, 2023, the Company had not commenced any operations. All activity for the period from March 24, 2021 (inception) through March 31, 2023 relates to the Company’s formation and its initial public offering (the “IPO”) described below, and, since the IPO, the search for a target for its initial Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the IPO. The Company has selected December 31 as its fiscal year end.

 

On October 4, 2021, the Company completed the sale of 20,000,000 units (the “Units” and, with respect to the shares of common stock included in the Units being offered, the “Public Shares”) at $10.00 per Unit, generating gross proceeds of $200,000,000, which is described in Note 3. Simultaneous with the closing of the IPO, the Company completed the sale of 7,600,000 private placement warrants (the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to certain funds and accounts managed by the Sponsor as well as to Jefferies LLC (“Jefferies”), who acted as the sole book running manager for the IPO, generating gross proceeds of $7,600,000 from the sale of the Private Placement Warrants.

 

In accordance with the rules of Nasdaq, the Company’s initial Business Combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the net assets held in the Trust Account (as defined in the following paragraph) (excluding the amount of deferred underwriting discounts and commissions held in trust and taxes payable on the income earned on the Trust Account) at the time of the signing of a definitive agreement in connection with the initial Business Combination. However, the Company will only complete a Business Combination if the post-Business Combination Company owns or acquires 50% or more of the outstanding voting securities of the target, or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment Company under the Investment Company Act 1940, as amended (the “Investment Company Act”).

 

Following the closing of the IPO on October 4, 2021, $200,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants, was placed in a Trust Account (“Trust Account”), located in the United States at a nationally recognized financial institution, with Continental Stock Transfer & Trust Company acting as trustee, and invested only in in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, as amended, the trustee will not be permitted to invest in other securities or assets. The Trust Account is intended as a holding place for funds pending the earliest to occur of either: (i) the completion of the initial Business Combination; (ii) the redemption of any Public Shares properly tendered in connection with a stockholder vote to amend the Company’s amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to provide holders of the Class A common stock the right to have their shares redeemed in connection with the initial Business Combination or to redeem 100% of the Public Shares if the Company does not complete the initial Business Combination within 24 months from the closing of the IPO or (B) with respect to any other provision relating to the rights of holders of the Class A common stock; or (iii) absent the completion of an initial Business Combination within 24 months from the closing of the IPO, the return of the funds held in the Trust Account to the public stockholders as part of the redemption of the Public Shares. If the Company does not invest the proceeds as discussed above, the Company may be deemed to be subject to the Investment Company Act.

 

If the Company were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which the Company has not allotted funds and may hinder the ability to complete a Business Combination. If the Company has not consummated the initial Business Combination within the required time period, the public stockholders may receive only approximately $10.00 per Public Share, or less in certain circumstances, on the liquidation of the Trust Account and the warrants will expire worthless.

 

The Company will provide the holders of the Public Shares (the “Public Stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a general meeting called to approve the Business Combination or (ii) without a stockholder vote by means of a tender offer. 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, solely in its discretion. 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 $10.00 per Public Share).

These Public Shares were classified as temporary equity upon the completion of the IPO in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and a majority of the shares voted are voted in favor of the Business Combination.

 

If the Company is unable to complete a Business Combination within 24 months from the closing of the Initial Public Offering (the “Combination Period”), 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 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 on the funds held in the Trust Account (less taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the board of directors, liquidate and dissolve, subject, in the case of clauses (ii) and (iii), to the Company’s obligations under Delaware state law to provide for claims of creditors and in all cases subject to the other requirements of applicable law. There will be no redemption rights or liquidating distributions with respect to the warrants, which will expire worthless if the Company fails to complete its initial Business Combination within the Combination Period.

 

The Company’s Sponsor, officers and directors have agreed to (i) waive their redemption rights with respect to their Founder Shares (defined in Note 4) and any Public Shares held by them in connection with the completion of the initial Business Combination, (ii) waive their redemption rights with respect to their Founder Shares and Public Shares in connection with a stockholder vote to approve an amendment to the Company’s amended and restated memorandum and articles of association, (iii) waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete the initial Business Combination within the Combination Period, and (iv) vote any Founder Shares held by them and any Public Shares purchased during or after the Initial Public Offering (including in open market and privately-negotiated transactions) in favor of the initial Business Combination.

 

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 auditors) for services rendered or products sold to the Company, or a prospective target business with which the Company have discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) 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 $10.00 per Public Share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay the Company’s tax obligations, provided that such liability will not apply to any claims by a third-party or prospective target business that executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under the indemnity of the underwriter of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, 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.

 

Extension Special Meeting

 

On March 30, 2023, the Company held a special meeting of stockholders (the “Special Meeting”) at which it submitted multiple proposals to vote as described below.

 

As approved by its stockholders at the Special Meeting of stockholders, Home Plate Acquisition Corporation and Continental Stock Transfer & Trust Company entered into Amendment No. 1 (the “IMTA Amendment”) to the Investment Management Trust Agreement, dated as of September 29, 2021 (the “IMTA”).  The IMTA Amendment amends the IMTA allowing the Company to extend the period of time the Company must consummate a Business Combination (as defined in the IMTA) pursuant to the IMTA from April 4, 2023 to October 4, 2023.

 

As approved by its stockholders at the Special Meeting, the Company filed an amendment (the “Extension Amendment”) to the Company’s Amended and Restated Certificate of Incorporation (the “A&R Charter”) with the Secretary of State of the State of Delaware.  The Extension Amendment (i) extends the date by which the Company must consummate its initial business combination from April 4, 2023 to October 4, 2023 and (ii) provides holders of the Company’s Class B common stock, par value $0.0001 per share (“Class B Common Stock”) the right to convert any and all of their Class B Common Stock into the Company’s Class A common stock, par value $0.0001 per share (“Class A Common Stock” and, together with the Class B Common Stock, the “Common Stock”) on a one-for-one basis prior to the closing of a business combination at the election of the holder.

In connection with the Special Meeting, stockholders were given the opportunity to redeem their shares at their discretion. As a result, 17,727,065 shares were redeemed leaving 2,272,935 shares outstanding, prior to the conversion of Class B Founder shares to Class A shares issued to the Sponsor, discussed in more detail below. In connection with these redemptions, $180,577,599 is to be paid out of the Trust Account with a redemption value of approximately $10.19 per share of Class A common stock.  This was comprised of the initial investment of $10.00 in addition to the stockholders’ proportionate share of interest income earned on the Investments held in the Trust Account.

 

Unregistered Sales of Equity Securities

On March 30, 2023, the Company issued an aggregate of 3,650,000 shares of its Class A common stock, Class A Common Stock to the Sponsor, Michael A. DeSimone, Michele Docharty, Ross Fubini and Rhonda Ramparas, holders of the Company’s Class B common stock (“Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”) (such holders of shares of Class B Common Stock collectively, the “Initial Stockholders”), upon the conversion of an equal number of shares of Class B Common Stock (the “Conversion”). The 3,650,000 shares of Class A Common Stock issued in connection with the Conversion are subject to the same restrictions as applied to the shares of Class B Common Stock before the Conversion, including, among other things, certain transfer restrictions, waiver of redemption rights and the obligation to vote in favor of an initial business combination, as described in the prospectus for the Company’s initial public offering.

Following the Conversion, there are 5,922,935 shares of Class A Common Stock issued and outstanding, and 1,350,000 shares of Class B Common Stock issued and outstanding. As a result of the Conversion, the Initial Stockholders hold approximately 61.6% of the outstanding shares of the Company’s Class A Common Stock.

Business Combination Agreement

 

On March 19, 2023, Home Plate Acquisition Corporation, a Delaware corporation (“Home Plate”), Home Plate Sponsor LLC, a Delaware limited liability company (“Sponsor”), Heidmar Marine Inc., a company organized and existing under the laws of Marshall Islands (“Holdings”), HP Merger Subsidiary Corp., a Delaware corporation (“Merger Sub”), Heidmar Inc., a company organized and existing under the laws of Marshall Islands ( “Heidmar”), and those shareholders of the Company party thereto (collectively, the “Heidmar Shareholders”), entered into a Business Combination Agreement (the “Business Combination Agreement”), pursuant to which, subject to the satisfaction or waiver of certain conditions precedent in the Business Combination Agreement, the following transactions will occur: (a) the merger of Merger Sub with and into Home Plate (the “Merger”), with Home Plate surviving the Merger and the security holders of Home Plate (other than the security holders of Home Plate electing to redeem their shares of Home Plate common stock or shares of Home Plate common stock held in treasury) becoming security holders of Holdings, (b)  the automatic modification of each Home Plate warrant to no longer entitle the holder to purchase Home Plate shares of common stock and instead acquire an equal number of Holdings common shares per Home Plate warrant, (c) the acquisition by Holdings of all of the issued and outstanding share capital of Heidmar from the Heidmar Shareholders in exchange for the issuance of Holdings common shares and, if applicable, the issuance of Earnout Shares (as defined in the Business Combination Agreement), pursuant to which Heidmar will become a direct wholly owned subsidiary of Holdings (the “Share Acquisition”), and (d) the other transactions contemplated by the Business Combination Agreement and the Ancillary Documents referred to therein (together with the Merger and Share Acquisition, the “Transactions”).

 

In consideration for the Merger, each Home Plate shareholder will receive one Holdings common share for each share of common stock they hold in Home Plate immediately prior to the Merger. In accordance with the terms and subject to the conditions of the Business Combination Agreement, the consideration to be received by the Heidmar Shareholders in connection with the Share Acquisition shall be the issuance of an aggregate number of Holdings common shares equal to (a) $160,000,000 divided by (b) $10.00. As additional consideration for the Heidmar shares acquired by Holdings in connection with the Share Acquisition, (i) Holdings will issue to eligible Heidmar Shareholders up to an aggregate of 3,900,000 Earnout Shares, subject to certain triggering events, as described further in the Business Combination Agreement, (ii) Sponsor has agreed, pursuant to the terms of the Sponsor Support Agreement (as defined below), to forfeit the right to receive (1) 1,212,500 Holdings common shares and (2) Holdings warrants in an amount equal to $5.00 per Holdings warrant to the extent that the transaction expenses of Home Plate exceed $15,000,000, and in each case, such forfeited Holdings common shares and Holding warrants, if any, will be issued to Heidmar Shareholders, as described further in the Business Combination Agreement and Sponsor Support Agreement.

 

Sponsor Support Agreement

 

In connection with the execution of the Business Combination Agreement, the Sponsor has entered into a Sponsor Support Agreement (the “Sponsor Support Agreement”) with Home Plate, Holdings and the Company, pursuant to which the Sponsor has agreed to, among other things, (a) waive its anti-dilution rights in the SPAC Charter with respect to the SPAC Class B common stock (collectively, the “Sponsor Securities”), (b) vote at any meeting of Home Plate shareholders to be called for approval of the Transactions (as defined in the Business Combination Agreement) all Sponsor Securities held of record or thereafter acquired in favor of the Shareholder Approval Matters, (c) be bound by certain other covenants and agreements related to the Transactions and (d) be bound by certain transfer restrictions with respect to the Sponsor Securities and warrants exercisable for Sponsor Securities, in each case, on the terms and subject to the conditions set forth in the Sponsor Support Agreement. The Sponsor Support Agreement also provides that the Sponsor has agreed irrevocably to waive its redemption rights in connection with the consummation of the Transactions with respect to any Sponsor Securities they may hold.

 

Subject to the conditions set forth in the Sponsor Support Agreement, the Sponsor additionally agreed to subject 365,000 Holdings common shares the Sponsor is to receive in connection with the Transactions with respect to its Sponsor Securities (“Sponsor Earnout Shares”) to an earn-out that is subject to vesting and release as follows: (i) if at any time prior to or as of the fifth anniversary of the Closing (the “Share Price Earnout Period”), the VWAP (as adjusted for share splits, share capitalization, reorganizations, recapitalizations and the like) over any 20 trading days within any 30 trading day period, is equal to or greater than (A) $12.50, then 91,250 of the Sponsor Earnout Shares will vest, and (B) $14.00, then 91,250 of the Sponsor Earnout Shares will vest (the Sponsor Earnout Shares referred to in this clause (i) being the “Share Price Sponsor Earnout Shares”), and (ii) if Adjusted EBITDA of Holdings for the twelve months ending (A) December 31, 2023 equals or exceeds $29,000,000, then 91,250 of the Sponsor Earnout Shares will vest, and (B) December 31, 2024 equals or exceeds $35,000,000, then 91,250 of the Sponsor Earnout Shares will vest (the Sponsor Earnout Shares referred to in clause (ii) being the “Performance Sponsor Earnout Shares”). If a Change of Control (as defined in the Sponsor Support Agreement) occurs during calendar year 2023, all 182,500 Performance Sponsor Earnout Shares will vest, and if a Change of Control occurs during calendar year 2024, 91,250 Performance Sponsor Earnout Shares will vest. In addition, if a Change of Control occurs during the Share Price Earnout Period (as defined in the Sponsor Support Agreement), pursuant to which Holdings or its shareholders receive consideration implying a value per Holdings common share (as determined in good faith by the board of directors of Holdings) of (a) less than $12.50, then no Share Price Sponsor Earnout Shares will vest, (b) greater than or equal to $12.50 but less than $14.00, 91,250 Share Price Sponsor Earnout Shares will vest, and (c) greater than or equal to $14.00, then all 182,500 Share Price Sponsor Earnout Shares will vest.

Sponsor has agreed to forfeit for issuance to the Heidmar Shareholders, for no consideration, the right to receive 1,212,500 Holdings common shares that would otherwise be issued to Sponsor in connection with the Closing.  In the event that the SPAC Transaction Expenses are greater than $15 million, Sponsor shall forfeit for issuance to the Heidmar Shareholders, for no consideration, as of the Closing Date (as defined in the Business Combination Agreement), the right to receive Holdings Private Warrants that would otherwise be issued to Sponsor in connection with the Closing equal to (i) the amount SPAC Transaction Expenses are greater than $15 million divided by (ii) $5.00.

 

Lock-Up Agreements

 

In connection with the Closing, the Heidmar Shareholders will enter into agreements (the “Heidmar Shareholder Lock-Up Agreements”) providing that the Heidmar Shareholders will not, subject to certain exceptions (including the payment of taxes arising from the Transactions), transfer any Restricted Securities (as defined in the Heidmar Shareholder Lock-Up Agreements) during the period commencing from the Closing Date until 150 days after the Closing Date.

 

In connection with the Closing, the Sponsor will enter into an agreement (the “Sponsor Lock-Up Agreement”) providing that it will not, subject to certain exceptions, transfer any Restricted Securities during the period commencing from the Closing Date until the date that is 150 days after the Closing Date.

 

The foregoing summary of the Heidmar Shareholder Lock-Up Agreements and Sponsor Lock-Up Agreement are qualified in its entirety by reference to the full text of the form of Sponsor Lock-Up Agreement and form of Heidmar Shareholder Lock-Up Agreement, the terms of which are incorporated herein by reference.

 

New Registration Rights Agreement

 

Warrant Assumption Agreement

 

Non-Redemption Agreement

Liquidity and Going Concern

 

As of March 31, 2023, the Company had $607,506 in its operating bank account, and a working capital deficit of $2,035,038. The Company’s liquidity needs up to and through March 31, 2023 have been satisfied through a payment from the Sponsor for the Founder Shares and the loan under an unsecured promissory note from the Sponsor of up to $300,000. The Promissory Note was fully repaid as of October 4, 2021 and there were no amounts outstanding under it as of March 31, 2023.

 

In order to finance transaction costs in connection with the Business Combination, the Company’s Sponsor, an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, provide the Company Working Capital Loans (defined in Note 4). As of March 31, 2023, there were no amounts outstanding under any Working Capital Loans.

In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 205-40, Presentation of Financial Statements—Going Concern, if the Company is not able to consummate a Business Combination before October 4, 2023, the Company will commence an automatic winding up, dissolution and liquidation. Management has determined that the automatic liquidation, should a Business Combination not occur, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. While management intends to complete a Business Combination on or before October 4, 2023, it is uncertain whether the Company will be able to do so. Additionally, the Company may not have sufficient liquidity to fund the working capital needs of the Company through one year from the issuance of these financial statements.  No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after October 4, 2023.

 

Risks and Uncertainties

 

Results of operations and the Company’s ability to complete a Business Combination may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond its control. The business could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending, the ongoing effects of the COVID-19 pandemic, including resurgences and the emergence of new variants, and geopolitical instability, such as the military conflict in the Ukraine. Management continues to evaluate the impact of the foregoing events and has concluded that while it is reasonably possible that such events could have a negative effect on the Company’s business, financial position, and our ability to complete an initial Business Combination, management cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude or their specific impact. The condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into law. The IR Act provides for, among other measures, a new 1% U.S. federal excise tax on certain repurchases (including redemptions) of stock by publicly traded domestic (i.e., U.S.) corporations. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from whom the shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased. For purposes of calculating the excise tax, however, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury Department”) has been given authority to provide regulations and other guidance to carry out, and prevent the abuse or avoidance of, the excise tax. The IR Act applies only to repurchases that occur after December 31, 2022.

 

Any redemption or other repurchase effected by the Company that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to this excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with a Business Combination will depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination or any extension vote, (ii) the structure of any Business Combination and the taxable year in which it occurs; (iii) the nature and amount of any “PIPE” financing or other equity issuances in connection with the Business Combination or otherwise (or any other equity issuances within the same taxable year of the Business Combination) and (iv) the content of final and proposed regulations and further guidance from the U.S. Department of the Treasury. In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the specific mechanics of any required payment of the excise tax have not been determined. It is expected that, at the time of the redemption of public shares, the amount of the excise tax payable may not be known with certainty. The Company confirms that amounts payable to public stockholders with respect to redemptions of public shares out of funds held in the trust account and any additional amounts deposited into the trust account, as well as any interest earned thereon, will not be reduced by the excise tax, if any, resulting from redemptions of our public shares.

 

If the Company has not consummated a Business Combination by October 4, 2023 (as approved at the Special Meeting), it will redeem the public shares in a liquidating distribution. The Company does not expect such redemption in connection with the liquidating distribution to be subject to the excise tax under the Notice, but such expectation is subject to a number of factual and legal uncertainties, including further guidance from the U.S. Department of the Treasury.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

 

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 (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.

 

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 and Exchange Act of 1934, as amended (the “Exchange Act”)) 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.

 

Smaller Reporting Company Status

 

Additionally, the Company is a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. The Company will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of the Company’s shares of common stock held by non-affiliates equaled or exceeded $250 million as of the prior June 30, and (2) the Company’s annual revenues equaled or exceeded $100 million during such completed fiscal year or the market value of its shares of common stock held by non-affiliates equaled or exceeded $700 million as of the prior June 30. To the extent the Company takes advantage of such reduced disclosure obligations, it may also make comparison of these financial statements with other public companies difficult or impossible.

 

Use of Estimates

 

The preparation of 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 financial statements and the reported amounts of revenues and expenses during the reporting period. 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 financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. One of the more significant accounting estimates included in these financial statements is the determination of the fair value of the warrant liabilities. Such estimates may be subject to change as more current information becomes available and 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 $607,506 and $1,082,183 and no cash equivalents as of March 31, 2023 and December 31, 2022, respectively.

Cash Held in Trust Account

 

As of March 31, 2023 and December 31, 2022, the assets held in the Trust Account consisted of cash equivalents in the amount of $204,929,014 and $202,945,447, respectively. Gains and losses resulting from the change in fair value of the assets held in Trust Account are included in interest earned on investments held in Trust Account in the accompanying statement of operations.

 

Concentration of Credit Risk

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. As of March 31, 2023, the Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

 

Offering Costs Associated with IPO

 

The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A—”Expenses of Offering”. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the IPO. Offering costs are charged to stockholders’ equity or the statement of operations based on the relative value of the Public Warrants and the Private Placement Warrants to the proceeds received from the Units sold upon the completion of the IPO. Accordingly, on October 4, 2021 the Company incurred offering costs amounting to $22,252,049, consisting of $4,000,000 of cash underwriting fees, $7,000,000 of deferred underwriting fees, $10,670,740 for the excess fair value of founder shares attributable to the Anchor Investors (as described in Note 4) and $581,309 of other offering costs. As such, the Company recorded $20,892,809 of offering costs allocated to the Class A common stock as a reduction of temporary equity and $1,359,240 of offering costs allocated to the warrants to the statement of operations in 2021 when the IPO was consummated.

 

Fair Value of Financial Instruments

 

The fair value of the Company’s assets and liabilities approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.

 

The Company applies ASC 820, which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances.

 

Level 1—Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities.

 

Level 2—Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals.

 

Level 3—Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities.

 

Derivative Financial Instruments

 

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

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 in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Class A common stock subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable common stock (including Class A common stock that feature redemption rights that is 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 feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at March 31, 2023, Class A common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s balance sheet.

 

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable 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 the re-measurement from initial carrying 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 (to the extent possible), accumulated deficit and Class A common stock.

 

As a result of the Special Meeting held on March 30, 2023, 17,727,065 shares of Class A common stock subject to redemption were redeemed which left a balance of 2,272,935 remaining shares of Class A common stock subject to redemption.

As of March 31, 2023 and December 31, 2022, the Class A common stock subject to possible redemption reflected in the balance sheets is reconciled in the following table:

		March 31, 2023				December 31, 2022
As of beginning of the period		$	202,187,705			$	200,000,000
Gross Proceeds			—				—
Less:
Redemptions in connection with Special Meeting			(180,577,599	)			—
Plus:
Remeasurement of Class A common stock subject to possible redemption carrying value to redemption value			1,587,479				2,187,705
Class A common stock subject to possible redemption		$	23,197,585			$	202,187,705

 

Stockholder Redemptions Due

 

As a result of the Special Meeting held on March 30, 2023, 17,727,065 shares of Class A common stock subject to redemption were redeemed which left a balance of 2,272,935 remaining shares of Class A common stock subject to redemption.  These redemptions were paid out to stockholders on April 12, 2023 and as such are recorded as stockholder redemptions due in the balance sheet as of March 31, 2023.

Income Taxes

 

The Company accounts for income taxes under ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.

 

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.

 

The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2023. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

The Company has identified the United States as its only “major” tax jurisdiction.

 

The Company may be subject to potential examination by federal and state taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

 

The effective tax rate was -8.0% for the three months ended March 31, 2023 and 0.0% for the three months ended March 31, 2022. The effective tax rates differ from the statutory tax rate of 21.0% due to the change in fair value of warrants and the valuation allowance on deferred tax assets.

 

Net Income (Loss) Per Share of Common Stock

 

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings 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 income (loss) per share of common stock. Re-measurement associated with the redeemable shares of Class A common stock is excluded from income (loss) per common share as the redemption value approximates fair value.

 

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) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase 17,600,000 shares of Class A common stock in the aggregate. As of March 31, 2023, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted net income (loss) per common share is the same as basic net income (loss) per common share for the periods presented.

 

Class B common stock subject to forfeiture (see Note 5) are not included in weighted average shares outstanding until the forfeiture restrictions lapse.

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

		For the three months ended March 31, 2023								For the three months ended March 31, 2022
		Redeemable Class A Common Stock				Non-Redeemable Class B Common Stock				Redeemable Class A Common Stock				Non-Redeemable Class B Common Stock
Basic and diluted net income (loss) per share
Numerator:
Allocation of net income (loss)		$	(4,541,231	)		$	(1,134,637	)		$	2,806,568			$	701,642
Denominator:
Weighted-average shares outstanding			19,687,176				4,918,889				20,000,000				5,000,000
Basic and diluted net income (loss) per share		$	(0.23	)		$	(0.23	)		$	0.14			$	0.14

Recent Accounting Pronouncements

 

In August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The update simplifies the accounting for convertible instruments by removing certain separation models in Subtopic 470-20, Debt—Debt with Conversion and Other Options for convertible instruments and introducing other changes. As a result of ASU No. 2020-06, more convertible debt instruments will be accounted for as a single liability measured at amortized cost and more convertible preferred stock will be accounted for as a single equity instrument measured at historical cost, as long as no features require bifurcation and recognition as derivatives. The amendments are effective for smaller reporting companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently assessing what impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows.

 

Management does not believe that any other recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.

NOTE 3 – INITIAL PUBLIC OFFERING

 

On October 4, 2021 the Company completed its IPO of 20,000,000 Units at a price of $10.00 per Unit, generating gross proceeds of $200,000,000. Each Unit consisted of one share of Class A common stock and one-half of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder thereof to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 7).

 

The Company granted the underwriter a 45-day option from the date of the IPO to purchase up to 3,000,000 additional Units to cover over-allotments, if any, at the IPO price less the underwriting discounts and commissions. This option expired unused in November 2021.

 

An aggregate of $10.00 per Unit sold in the IPO was held in the Trust Account and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of 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 meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company.

NOTE 4 – RELATED PARTY TRANSACTIONS

 

Founder Shares

 

On May 5, 2021, the Sponsor and certain directors of the Company paid $25,000 (approximately $0.004 per share) in consideration for 5,750,000 shares of Class B common stock with par value of $0.0001 (the “Founder Shares”). Up to 750,000 of these shares of Class B common stock were subject to forfeiture by the Sponsor if the underwriter’s over-allotment option is not exercised. The underwriter’s over-allotment option expired unused in November 2021 which resulted in aggregate outstanding Class B common stock of 5,000,000 shares.

 

Subject to each Anchor Investor purchasing 100% of the Units allocated to it, in connection with the closing of the Initial Public Offering, the Sponsor sold up to 150,000 Founder Shares to each Anchor Investor (other than those funds managed by UBS O’Connor, LLC) (an aggregate of 1,350,000 Founder Shares to all of the Anchor Investors) at their original purchase price. The Company estimated the aggregate fair value of these shares of Class B common stock attributable to such Anchor Investors to be $10,676,610 or $7.9086 per share.

 

The excess of the fair value over consideration of the Founder Shares was determined to be an offering cost in accordance with Staff Accounting Bulletin Topic 5A and 5T. Accordingly, the offering cost have been allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to derivative warrant liabilities were expensed as incurred in the statement of operations. Offering costs allocated to the Public Shares were charged to stockholders’ deficit upon the completion of the Initial Public Offering.

On March 30, 2023, the Company issued an aggregate of 3,650,000 shares of its Class A common stock, Class A Common Stock to the Sponsor, Michael A. DeSimone, Michele Docharty, Ross Fubini and Rhonda Ramparas, holders of the Company’s Class B common stock (“Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”) (such holders of shares of Class B Common Stock collectively, the “Initial Stockholders”), upon the conversion of an equal number of shares of Class B Common Stock (the “Conversion”). The 3,650,000 shares of Class A Common Stock issued in connection with the Conversion are subject to the same restrictions as applied to the shares of Class B Common Stock before the Conversion, including, among other things, certain transfer restrictions, waiver of redemption rights and the obligation to vote in favor of an initial business combination, as described in the prospectus for the Company’s initial public offering.

Following the Conversion, there are 5,922,935 shares of Class A Common Stock issued and outstanding, and 1,350,000 shares of Class B Common Stock issued and outstanding. As a result of the Conversion, the Initial Stockholders hold approximately 61.6% of the outstanding shares of the Company’s Class A Common Stock.

Private Placement Warrants

 

Simultaneously with the consummation of the IPO on October 4, 2021, the Sponsor and Jefferies purchased an aggregate of 7,600,000 Private Placement Warrants, at a price of $1.00 per Private Placement Warrant ($7,600,000 in the aggregate) in a private placement. Each whole Private Placement Warrant is exercisable for one share of Class A common stock at a price of $11.50 per share.

 

A portion of the proceeds from the sale of the Private Placement Warrants to the Sponsor were added to the proceeds from the Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless.

 

The Private Placement Warrants are non-redeemable for cash and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees. Subject to limited exceptions, the Private Placement Warrants will not be transferable, assignable or saleable until 30 days after the completion of the Business Combination (See Note 7).

 

Related Party Loans

 

On May 5, 2021, the Sponsor agreed to loan up to $300,000 to the Company to cover expenses related to the Initial Public Offering pursuant to a promissory note (the “Note”). The Note was non-interest bearing and was due on the earlier of the completion of the Initial Public Offering or December 31, 2021. As of October 4, 2021, the date of the IPO, $266,912 had been drawn by the Company and was paid off as part of the closing of the transaction. As of March 31, 2023 and December 31, 2022, no amount is outstanding under the Note.

 

In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants.

 

The Sponsor, officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on the Company’s behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. The Company’s audit committee will review on a quarterly basis all payments that were made to the Sponsor, officers or directors, or their affiliates. As of March 31, 2023 and December 31, 2022, the Company had no outstanding borrowings under the Working Capital Loans.

 

Administrative Services

 

The Company has committed to pay up to $15,000 per month to the Sponsor for administrative, financial and support services provided to members of the Company’s sponsor team. This administrative service arrangement will terminate upon completion of the initial Business Combination or liquidation of the Company. For the three months ended March 31, 2023 and the three months ended March 31, 2022, $30,000 and $45,000, respectively, in costs were incurred related to this agreement which are included in formation, general and administrative expenses in the accompanying condensed statements of operations.

NOTE 5 —STOCKHOLDERS’ DEFICIT

 

Preferred Stock—The Company is authorized to issue 1,000,000 shares of preferred stock, with a par value of $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of March 31, 2023 and December 31, 2022, there were no shares of preferred stock issued or outstanding.

 

Class A common stock—The Company is authorized to issue 200,000,000 shares of Class A common stock with a par value of $0.0001 per share. As of March 31, 2023 and December 31, 2022, there were 3,650,000 and no shares of Class A common stock issued or outstanding, respectively (excluding 2,272,935 and 20,000,000 shares subject to possible redemption, respectively).

 

Class B common stock—The Company is authorized to issue 20,000,000 shares of Class B common stock with a par value of $0.0001 per share. As of March 31, 2023 and December 31, 2022 there were 1,350,000 and 5,000,000 shares, respectively, of Class B common stock issued and outstanding.

 

Common stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Holders of the Class A common stock and holders of the Class B common stock will vote together as a single class on all matters submitted to a vote of stockholders, except as required by law or the applicable rules of Nasdaq. Holders of the Class A and Class B common stock will have one vote for every share of common stock with the exception that holders of the Class B common stock have the exclusive right to vote for the election of directors and all other matters properly submitted to a vote of stockholders.

The Class B common stock will automatically convert into shares of Class A common stock concurrently with or immediately following the consummation of the initial Business Combination on a one-for-one basis, subject to adjustment for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with the initial Business Combination, the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, 20% of the total number of shares of Class A common stock outstanding after such conversion (after giving effect to any redemptions of shares of Class A common stock by Public Stockholders), including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding any shares of Class A common stock or equity-linked securities exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in the initial Business Combination and any Private Placement Warrants issued to the Sponsor, officers or directors upon conversion of Working Capital Loans; provided that such conversion of shares of Class B common stock will never occur on a less than one-for-one basis.

NOTE 6 – COMMITMENTS AND CONTINGENCIES

 

Underwriting Agreement

 

The Company granted the underwriter a 45-day option from the date of the Offering to purchase up to 3,000,000 additional Units to cover over-allotments, if any, at the Offering price less the underwriting discounts and commissions. This option expired unused in November 2021.

 

The underwriter has earned an underwriting discount of $0.20 per Unit, or $4,000,000 in the aggregate which was paid upon the closing of the Offering.

 

In addition, the underwriter will be entitled to a deferred fee of $0.35 per Unit, or $7,000,000 in the aggregate. The deferred fee will become payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.

 

Registration Rights

 

The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of working capital loans (and any Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of working capital loans) are entitled to registration rights pursuant to a registration rights agreement. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lockup period, which occurs (i) in the case of the Founder Shares, the period ending on the earlier of (a) one year after the completion of the Company’s initial Business Combination and (b) subsequent to the completion of the Company’s initial Business Combination, (x) if the last reported sale price of the Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Company’s initial Business Combination or (y) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction after the Company’s initial Business Combination that results in all of the Company’s stockholders having the right to exchange their shares of Common Stock for cash, securities or other property., and (ii) in the case of the Private Placement Warrants and the respective Class A common stock underlying such warrants, 30 days after the completion of the initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Consulting Agreements

 

In April 2022, the Company entered into an agreement with a third-party consultant pursuant to which the consultant will provide to the Company, among other services, introductions to, and due diligence of, potential Business Combination target entities. Pursuant to the terms of the agreement, the Company has paid the consultant an initial fee of $100,000 and has agreed to pay a contingent fee, payable upon the satisfaction of certain transaction milestones, of up to $3,900,000 if the Company consummates a Business Combination with a target introduced by the consultant and fewer than 25% of the Public Shares are redeemed by stockholders in connection with such Business Combination. Nothing is recorded in relation to this agreement in the financial statements.

 

In June 2022, the Company entered into an agreement with a third-party consultant pursuant to which the consultant will provide to the Company, among other services, introductions to, and negotiation assistance with, potential Business Combination target entities. Pursuant to the terms of the agreement, the Company has agreed to pay a contingent fee, payable upon the satisfaction of certain transaction milestones, of up to $3,900,000 if the Company consummates a Business Combination with a target introduced by the consultant and fewer than 25% of the Public Shares are redeemed by stockholders in connection with such Business Combination. Nothing is recorded in relation to this agreement in the financial statements.

In September 2022, the Company entered into an agreement with a third-party consultant pursuant to which the consultant will provide to the Company, among other services, introductions to potential Business Combination target entities. Pursuant to the terms of the agreement, the Company has agreed to pay a contingent fee, payable upon the satisfaction of certain transaction milestones, of up to $1,500,000, in addition to the issuance of newly-issued shares, if the Company consummates a Business Combination with a target introduced by the consultant. Nothing is recorded in relation to this agreement in the financial statements.

NOTE 7 – WARRANT LIABILITY

 

The Company accounted for the 17,600,000 warrants issued in connection with the Initial Public Offering (the 10,000,000 Public Warrants and the 7,600,000 Private Placement Warrants) in accordance with the guidance contained in ASC 815-40. Such guidance provides that, because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Accordingly, the Company has classified each warrant as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date. With each such remeasurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations. The warrants are also subject to re-evaluation of the proper classification and accounting treatment at each reporting period. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification.

 

The Company has 17,600,000 (10,000,000 Public Warrants and 7,600,000 Private Placement Warrants) warrants outstanding.  No changes in classification were made as of and for the three months ended March 31, 2023.

 

Public Warrants

 

The Company offered warrants in connection with its sale of Units. Each whole warrant that is part of the Units sold in the Offering is exercisable to purchase one share of the Company’s Class A common stock, subject to adjustment as provided in the Company’s Offering prospectus, and only whole warrants are exercisable. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. If, upon separation of the Units, a holder of warrants would be entitled to receive a fractional warrant, the Company will round down to the nearest whole number of warrants to be issued to such holder.

 

The exercise price of the warrant will be $11.50 per whole share, subject to adjustments as described in the Company’s Offering prospectus. In addition, if (x) the Company issues additional shares of its Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of the Business Combination at an issue price or effective issue price of less than $9.20 per share of its Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Company’s initial stockholders or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Business Combination on the date of the completion of the Business Combination (net of redemptions), and (z) the volume-weighted average trading price of the Company’s Class A common stock during the 20 trading day period starting on the trading day prior to the day on which the Company completes the Business Combination (such price, the “Market Value”) is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $10.00 and $18.00 per share redemption trigger prices described below will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the Market Value and the Newly Issued Price, respectively.

 

The warrants will become exercisable on the later of: (a) 30 days after the completion of the Business Combination; and (b) 12 months from the closing of the Offering; provided in each case that the Company has an effective registration statement under the Securities Act covering the sale of the shares of its Class A common stock issuable upon exercise of the warrants, and a current Offering prospectus relating thereto is available, and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or the Company permits holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement as a result of (i) the Company’s failure to have an effective registration statement by the 60th business day after the closing of the Business Combination as described in the immediately following paragraph or (ii) a notice of redemption described below). If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.

The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of the Business Combination, the Company will use its commercially reasonable efforts to file with the SEC and have an effective registration statement covering the sale of the shares of Class A common stock issuable upon exercise of the warrants, and to maintain the effectiveness of such registration statement, and a current Offering prospectus relating thereto, until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the sale of the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after the closing of the Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Company’s shares of Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required to file or maintain in effect a registration statement, but the Company will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

 

The warrants will expire at 5:00 p.m., New York City time, five years after the completion of the Business Combination or earlier upon redemption or liquidation. On the exercise of any warrant, the warrant exercise price will be paid directly to the Company and not placed in the Trust Account.

 

Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described in the Company’s Offering prospectus with respect to the private placement warrants):

 

•

in whole and not in part;

 

•

at a price of $0.01 per warrant;

 

•

upon a minimum of 30 days’ prior written notice of redemption, which the Company refers to as the “30-day redemption period”; and

 

•

if, and only if, the last reported sale price of the Company’s Class A common stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders (the “Reference Value”) equals or exceeds $18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like and certain issuances of Class A common stock and equity-linked securities).

The Company will not redeem the warrants as described above unless an effective registration statement under the Securities Act covering the sale of the shares of its Class A common stock issuable upon exercise of the warrants is effective, and a current Offering prospectus relating thereto is available, throughout the 30-day redemption period. Any such exercise would not be on a “cashless basis” and would require the exercising warrant holder to pay the exercise price for each warrant being exercised.

 

Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described below with respect to the Private Placement Warrants):

 

•

in whole and not in part;

 

•

at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption, provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table set forth the Company’s Offering prospectus based on the redemption date and the “fair market value” of the Company’s Class A common stock (as defined below);

 

•

if, and only if, the Reference Value equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like and certain issuances of Class A common stock and equity-linked securities); and

 

•

if the Reference Value is less than $18.00 per share (as adjusted for stock splits, stock dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like and certain issuances of Class A common stock and equity-linked securities), the private placement warrants must also concurrently be called for redemption on the same terms as the outstanding public warrants, as described above.

 

The “fair market value” of the Company’s Class A common stock shall mean the volume-weighted average price of the Class A common stock for the ten trading days immediately following the date on which the notice of redemption is sent to the holders of warrants. This redemption feature differs from the typical warrant redemption features used in other blank check offerings. The Company will provide the warrant holders with the final fair market value no later than one business day after the 10-day trading period described above ends. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.361 shares of the Company’s Class A common stock per warrant (subject to adjustment).

No fractional shares of the Company’s Class A common stock will be issued upon exercise of a warrant in connection with a redemption. If, upon such exercise, a holder would be entitled to receive a fractional interest in a share, the Company will round down to the nearest whole number of the number of shares of its Class A common stock to be issued to the holder.

 

Pursuant to the warrant agreement, references above to Class A common stock shall include a security other than Class A common stock into which the Class A common stock has been converted or exchanged for in the event the Company is not the surviving company in the initial Business Combination.

 

Private Placement Warrants

 

The holders of the Private Placement Warrants and warrants that may be issued upon conversion of working capital loans (“Working Capital Warrants”), and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants or Working Capital Warrants, are subject to a lock-up period of 30 days after the completion of the Business Combination pursuant to a registration rights agreement.

 

The Private Placement Warrants will be non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees. If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants included in the Units sold in the IPO.

NOTE 8 – RECURRING FAIR VALUE MEASUREMENTS

 

The following table presents fair value information as of March 31, 2023 and December 31, 2022 of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

The following table sets forth by level within the fair value hierarchy the Company’s assets and liabilities that were accounted for at fair value on a recurring basis:

		As of March 31, 2023
		(Level 1)				(Level 2)				(Level 3)
Assets
Investment held in Trust Account		$	204,929,014			$	—			$	—
Liabilities
Public Warrants		$	3,170,000			$	—			$	—
Private Placement Warrants		$	—			$	—			$	2,409,000

		As of December 31, 2022
		(Level 1)				(Level 2)				(Level 3)
Assets
Investment held in Trust Account		$	202,945,447			$	—			$	—
Liabilities
Public Warrants		$	53,000			$	—			$	—
Private Placement Warrants		$	—			$	—			$	40,000

 

Investment Held in Trust Account

 

As of March 31, 2023, the assets held in the Trust Account were held in U.S. Treasury Bills with a maturity of 185 days or less. During the three months ended March 31, 2023 and March 31, 2022, the Company withdrew $75,995 and $18,919, respectively, of interest income from the Trust Account to pay its tax obligations.

 

The composition of the Company’s fair value of held to maturity securities is as follows:

		As of March 31, 2023				As of December 31, 2022
U.S. Treasury Securities		$	—			$	202,945,305
U.S. Money Market			204,929,014				—
Cash held in Trust Account			—				142
		$	204,929,014			$	202,945,447

Warrant Liabilities

 

Under the guidance in ASC 815-40, the Public Warrants and the Private Placement Warrants do not meet the criteria for equity treatment. As such, the Public Warrants and the Private Warrants must be recorded on the balance sheet at fair value. This valuation is subject to re-measurement at each balance sheet date. With each re-measurement, the valuations will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations.

 

The Company’s warrant liability is based on a valuation model utilizing management judgment and pricing inputs from observable and unobservable markets with less volume and transaction frequency than active markets. Significant deviations from these estimates and inputs could result in a material change in fair value.

 

The fair value of the Private Placement Warrant liability is classified within Level 3 of the fair value hierarchy. On November 22, 2021, the 52nd day following the date of the offering prospectus, the Public Shares and Public Warrants underlying the Units sold in the IPO became separately tradeable. Accordingly, an observable market was available for the Public Warrants and they were reclassified to a Level 1 classification.

Measurement

 

The Company established the initial fair value for the warrants on October 4, 2021, the date of the consummation of the Company’s IPO. The Company used a Black-Scholes-Merton formula model to value the warrants. The Company allocated the proceeds received from (i) the sale of Units (which is inclusive of one share of Class A common stock and one-half of one Public Warrant), (ii) the sale of Private Placement Warrants, and (iii) the issuance of Class B common stock, first to the warrants based on their fair values as determined at initial measurement, with the remaining proceeds allocated to Class A common stock subject to possible redemption (temporary equity), Class A common stock (permanent equity) and Class B common stock (permanent equity) based on their relative fair values at the initial measurement date.

 

As of March 31, 2023, the Public Warrants were publicly traded and their fair value was based on the market trade price on that date. The fair value for the Private Warrants was estimated using a Monte Carlo simulation model.

 

Transfers to/from Levels 1, 2, and 3 are recognized at the beginning of the reporting period. During the three months ended March 31, 2023 and for the three months ended March 31, 2022, there were no transfers between levels.

 

The Company’s warrant liabilities are based on a valuation model utilizing management judgement and pricing inputs from observable and unobservable markets with less volume and transaction frequency than active markets. Significant deviations from these estimates and inputs could result in a material change in fair value. The fair value of the Private Warrant liability is classified within Level 3 of the fair value hierarchy.

		Private Warrant Liability				Public Warrant Liability
Fair Value as of December 31, 2022		$	40,000			$	—
Change in fair value of warrant liabilities			2,369,000				—
Fair Value as of March 31, 2023			2,409,000				—

 

The key inputs into the Private Placement Warrants model were as follows for March 31, 2023 and December 31, 2022:

		March 31, 2023				December 31, 2022
Common stock price		$	10.19			$	10.03
Exercise price		$	11.50			$	11.50
Risk-free rate of interest			3.56	%			3.95	%
Volatility			0.001	%			0.001	%
Term			5.34				5.25
Dividend Yield			0	%			0	%

 

The following contains additional information regarding the inputs used in the pricing models:

 

•

Term – the expected life of the warrants was assumed to be equivalent to their remaining contractual term.

 

•

Risk-free rate – the risk-free interest rate is based on the U.S. treasury yield curve in effect on the date of valuation equal to the remaining expected life of the Warrants.

•

Volatility – the Company estimated the volatility of its common stock warrants based on implied volatility and actual historical volatility of a group of comparable publicly traded companies observed over a historical period equal to the expected remaining life of the Warrants.

 

•

Dividend yield – the dividend yield percentage is zero because the Company does not currently pay dividends, nor does it intend to do so during the expected term of the Private Placement Warrants.

NOTE 9 – SUBSEQUENT EVENTS

 

On April 12, 2023, the Company paid out the full amount of Stockholder Redemptions due in connection with the Special Meeting which reduced the balance in the Trust Account and removed the liability in Stockholder redemptions due.  Additionally, withdrawals of an aggregate of approximately $1.1 million to pay taxes were made on April 5, 2023 and April 13, 2023.  These disbursements left approximately $23.2 million remaining in the Trust Account.

•

may significantly dilute the equity interest of investors in the IPO, which dilution would increase if the anti-dilution provisions in our Class B common stock resulted in the issuance of our Class A common stock on a greater than one-to-one basis upon conversion of our Class B common stock;

•

may subordinate the rights of holders of our Class A common stock if shares of preferred stock are issued with rights senior to those afforded our Class A common stock;

•

could cause a change in control if a substantial number of shares of our Class A common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;

•

may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; and

•

may adversely affect prevailing market prices for our Class A common stock and/or warrants. Similarly, if we issue debt securities, or otherwise incur significant debt, it could result in:

•

default and foreclosure on our assets if our operating revenues after an initial Business Combination are insufficient to repay our debt obligations;

•

acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

•

our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;

•

our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;

•

our inability to pay dividends on our common or preferred stock;

•

using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions and fund other general corporate purposes;

•

limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;

•

increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and

•

limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements and execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

Item 1.

Legal Proceedings

Item 1A.

Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

Item 4.

Mine Safety Disclosures

Item 5.

Other Information

Item 6.

Exhibits

	Exhibit Number		Description
	2.1		Business Combination Agreement, dated as of March 19, 2023, by and among Home Plate Acquisition Corporation, Home Plate Sponsor LLC, Heidmar Marine Inc., HP Merger Subsidiary Corp., Heidmar Inc., and the Heidmar Shareholders. (Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on  Form 8-K (File No. 001-40844), filed with the SEC on March 20, 2023.)
	3.1		Amended and Restated Certificate of Incorporation of the Company (Incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q (File No. 001-40844), filed with the SEC on May 12, 2022.)
	3.2		Amendment to the Amended and Restated Certificate of Incorporation of the Company (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on  Form 8-K (File No. 001-40844), filed with the SEC on March 31, 2023.)
	3.3		Bylaws of the Company (Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 (File No. 333-259324), filed with the SEC on September 3, 2021.)
	10.1		Amendment No. 1 to the Investment Management Trust Agreement, dated March 30, 2023, entered into between the Company and Continental Stock Transfer & Trust Company. (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on  Form 8-K (File No. 001-40844), filed with the SEC on March 31, 2023.)
	10.2		Sponsor Support Agreement, dated as of March 19, 2023, by and among Home Plate Sponsor LLC, Home Plate Acquisition Corporation, and Heidmar Marine Inc. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on  Form 8-K (File No. 001-40844), filed with the SEC on March 20, 2023.)
	10.3		Form of Sponsor Lock-Up Agreement (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on  Form 8-K (File No. 001-40844), filed with the SEC on March 20, 2023.)

	Exhibit Number		Description
	10.4		Form of Heidmar Shareholder Lock-Up Agreement (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on  Form 8-K (File No. 001-40844), filed with the SEC on March 20, 2023.)
	10.5		Form of New Registration Rights Agreement (Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on  Form 8-K (File No. 001-40844), filed with the SEC on March 20, 2023.)
	10.6		Form of Warrant Assumption Agreement (Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on  Form 8-K (File No. 001-40844), filed with the SEC on March 20, 2023.)
	10.7		Form of Non-Redemption Agreement (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on  Form 8-K (File No. 001-40844), filed with the SEC on March 29, 2023.)
	31.1*		Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2*		Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1**		Certification of the 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 the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit Number		Description
101.INS*		Inline XBRL Instance Document—the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline SXRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*	Filed herewith.

**

This certification is being furnished solely to accompany this Quarterly Report on Form 10-Q and are not deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall they be deemed incorporated by reference into any filing under the Securities Act of the Exchange Act.

	HOME PLATE ACQUISITION CORPORATION
Date: May 11, 2023	By:	/s/ Daniel Ciporin
		Daniel Ciporin
		Chief Executive Officer and
		Chairman of the Board
		(Principal Executive Officer)

Date: May 11, 2023	By:	/s/ Jonathan Rosenzweig
		Jonathan Rosenzweig
		Chief Financial Officer
		(Principal Financial Officer and
		Principal Accounting Officer)