UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission File Number 001-40248

AF ACQUISITION CORP.

(Exact name of registrant as specified in its charter)

Delaware

86-1456857

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

241 Bradley Place - Suite c

Palm Beach, Florida 33480

(Address of principal executive offices and zip code)

(561) 838-9494

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units, each consisting of one share of Class A Common Stock and one-third of one Redeemable Warrant	AFAQU	The Nasdaq Stock Market LLC

Class A Common Stock, par value $0.0001 per share	AFAQ	The Nasdaq Stock Market LLC

Warrants, each exercisable for one share of Class A Common Stock for $11.50 per share	AFAQW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:


Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐

As of November 21, 2022 there were 22,400,000 shares of the registrant’s Class A common stock, par value $0.0001 per share, issued and outstanding, and 5,600,000 shares of the registrant’s Class B common stock, par value $0.0001 per share, of the registrant issued and outstanding.

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AF ACQUISITION CORP.

TABLE OF CONTENTS

		Page
PART 1 - FINANCIAL INFORMATION		1

Item 1.	CONDENSED FINANCIAL STATEMENTS (UNAUDITED).	1

	Condensed Balance Sheets as of September 30, 2022 (Unaudited) and December 31, 2021 (Audited).	1

	Unaudited Condensed Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021.	2

	Unaudited Condensed Statements of Changes in Stockholders’ Deficit for the Three and Nine Months Ended September 30, 2022, for the three months ended September 30, 2021 and the period from January 12, 2021 (Inception) through September 30, 2021	3

	Unaudited Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2022 and for the period from January 12, 2021 (Inception) through September 30, 2021	4

	Notes to Unaudited Condensed Financial Statements.	5

Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	20

Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.	25

Item 4.	CONTROLS AND PROCEDURES.	25

PART II - OTHER INFORMATION		27

Item 1.	LEGAL PROCEEDINGS.	27

Item 1A.	RISK FACTORS.	27

Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.	29

Item 3.	DEFAULTS UPON SENIOR SECURITIES.	29

Item 4.	MINE SAFETY DISCLOSURES.	29

Item 5.	OTHER INFORMATION.	29

Item 6.	EXHIBITS.	30

SIGNATURES		31

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AF ACQUISITION CORP.

GLOSSARY OF TERMS

Unless otherwise stated in this Report (as defined below), or the context otherwise requires, references to:

●	“ASC” are to the FASB (as defined below) Accounting Standards Codification;

●	“ASC 480” are to ASC Topic 480, “Distinguishing Liabilities from Equity”;

●	“ASC 740” are to ASC Topic 740, “Income Taxes”;

●	“ASC 815” are to ASC Topic 815, “Derivatives and Hedging”;

●	“ASC 820” are to ASC Topic 820, “Fair Value Measurement”;

●	“board of directors,” “board” or “directors” are to the board of directors of the Company (as defined below);

●	“business combination” are to a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses;

●	“CFIUS” are to the Committee on Foreign Investment in the United States;

●	“Certificate of Incorporation” are to the second amended and restated Certificate of Incorporation of AF Acquisition Corp.;

●	“Certifying Officers” are to AF Acquisition Corp.’s Chief Executive Officers Andrew Z. Scharf and Jordan Gaspar, and our Chief Financial Officer, Christopher Bradley;

●	“Class A common stock” are to the shares of Class A common stock of the Company, par value $0.0001 per share;

●	“Class B common stock” are to the shares of Class B common stock of the Company, par value $0.0001 per share;

●	“Combination Period” are to the 24-month period, from the closing of the initial public offering (as defined below) to March 23, 2023, that the Company has to consummate an initial business combination;

●	“common stock” are to the Class A common stock and the Class B common stock;

●	“Company,” “our Company,” “we” or “us”, “AF” are to AF Acquisition Corp., a Delaware corporation;

●	“Continental” are to Continental Stock Transfer & Trust Company, trustee of our Trust Account (as defined below) and warrant agent of our public warrants (as defined below);

●	“Exchange Act” are to the Securities Exchange Act of 1934, as amended;

●

“founder shares” are to the shares of Class B common stock initially purchased by our Sponsor (as defined below) in the private placement (as defined below) and the shares of Class A common stock that will be issued upon the automatic conversion of the shares of Class B common stock at the time of our business combination as described herein (for the avoidance of doubt, such Class A common stock will not be “public shares” (as defined below);

●	“GAAP” are to the accounting principles generally accepted in the United States of America;

●	“IR Act” are to the Inflation Reduction Act of 2022;

●	“initial public offering” or “IPO” are to the initial public offering that was consummated by the Company on March 18, 2022;

●	“initial stockholders” are to holders of our founder shares prior to our initial public offering;

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●	“Investment Company Act” are to the Investment Company Act of 1940, as amended;

●	“JOBS Act” are to the Jumpstart Our Business Startups Act of 2012;

●	“management” or our “management team” are to AF Acquisition Corp.’s officers and directors;

●	“March 2021 Balance Sheet” are to AF Acquisition Corp.’s audited balance sheet as of March 23, 2021;

●	“Market Value” are to the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination;

●

“Newly Issued Price” are to the price of the Company issued additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per share of 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 Sponsor or such affiliates, as applicable, prior to such issuance);

●	“private placement” are to the private placement of warrants that occurred simultaneously with the closing of our initial public offering;

●	“private placement warrants” are to the warrants issued to our Sponsor in the private placement;

●	“public shares” are to the shares of Class A common stock sold as part of the units in our initial public offering (whether they were purchased in our initial public offering or thereafter in the open market);

●

“public stockholders” are to the holders of our public shares, including our initial stockholders and management team to the extent our initial stockholders and/or members of our management team purchase public shares, provided that each initial stockholder’s and member of our management team’s status as a “public stockholder” will only exist with respect to such public shares;

●	“public warrants” refer to the redeemable warrants sold as part of the units in our initial public offering (whether they were subscribed for in our initial public offering or purchased in the open market);

●	“Registration Statement” are to the Registration Statement on Form S-1 initially filed with the SEC (as defined below) on February 25, 2021, as amended, and declared effective on March 18, 2021 (File No. 333-253544);

●	“Report” or “Quarterly Report” are to this Quarterly Report on Form 10-Q for the quarter ended June 30, 2022;

●	“SPACs” are to special purpose acquisition companies;

●	“Sarbanes-Oxley Act” are to the Sarbanes-Oxley Act of 2002;

●	“SEC” are to the U.S. Securities and Exchange Commission;

●	“Securities Act” are to the Securities Act of 1933, as amended;

●	“Sponsor” are to AF Sponsor LLC, a Delaware limited liability company;

●	“Treasury Department” are to the U.S. Department of the Treasury;

●	“Trust Account” are to the U.S.-based trust account in which an amount of $224,000,000 from the net proceeds of the sale of the units in the initial public offering and the private placement warrants was placed following the closing of the initial public offering;

●	“units” are to the units sold in our initial public offering, which consist of one public share of Class A Common Stock and one-third of one public warrant; and

●	“Working Capital Loans” are to funds that, in order to finance transaction costs in connection with a business combination, the initial stockholders or an affiliate of the initial stockholders or certain of the Company’s directors and officers may, but are not obligated to, loan the Company.

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PART 1 – FINANCIAL INFORMATION

Item 1. CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

AF ACQUISITION CORP.

CONDENSED BALANCE SHEETS


	September 30,		December 31,
	2022		2021
Assets:	(Unaudited)		(Audited)
Current assets:
Cash	$	66,851	$	781,302
Prepaid expenses, current		96,833		210,000
Total current assets		163,684		991,302
Investments held in Trust Account		225,378,078		224,039,393
Prepaid expenses, non-current		—		44,333
Total Assets	$	225,541,762	$	225,075,028

Liabilities, Redeemable Class A Common Stock, and Stockholders' Deficit:
Current liabilities:
Accrued expenses - related party	$	21,667	$	6,667
Accounts payable and accrued expenses		86,757		25,875
Income taxes payable		221,839		—
Franchise tax payable		71,045		193,425
Convertible promissory note - related party		17,300		—
Total current liabilities		418,608		225,967
Warrant liabilities

SEC Form 10-Q filed by AF Acquisition Corp.