flme-10q_20220331.htm

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 March 31, 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 No. 001-40111

Flame Acquisition Corp.

(Exact name of registrant as specified in its charter)

Delaware

85-3514078

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

700 Milam Street Suite 3300 Houston, TX 77002

(Address of Principal Executive Offices, Zip Code)

(713) 579-6106

(Registrant’s telephone number, including area code)

N/A

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

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units, each consisting of one share of Class A common stock and one-half of one warrant	FLME.U	The New York Stock Exchange
Class A common stock, par value $0.0001 per share	FLME	The New York Stock Exchange
Warrants, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50 per share	FLME.WS	The New York Stock Exchange

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(§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 Rule12b-2 of the Exchange Act): Yes ☒ No ☐

As of May 12, 2022 there were 28,750,000 shares of Class A common stock, $0.0001 par value, and 7,187,500 shares of Class B common stock, $0.0001 par value, issued and outstanding.

		Page

PART 1 – FINANCIAL INFORMATION		2

Item 1.	Financial Statements

	Condensed Balance Sheets as of March 31, 2022 (unaudited) and December 31, 2021	2

	Condensed Statements of Operations for the three months ended March 31, 2022 and 2021 (unaudited)	3

	Condensed Statements of Changes in Stockholders’ Deficit for the three months ended March 31, 2022 and 2021 (unaudited)	4

	Condensed Statements of Cash Flows for the three months ended March 31, 2022 and 2021 (unaudited)	5

	Notes to Condensed Financial Statements (unaudited)	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	20

Item 4.	Controls and Procedures	21

PART II – OTHER INFORMATION		22

Item 1.	Legal Proceedings	22

Item 1A.	Risk Factors	22

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22

Item 3.	Defaults Upon Senior Securities	22

Item 4.	Mine Safety Disclosures	22

Item 5.	Other Information	22

Item 6.	Exhibits	23

SIGNATURES		24

PART I. FINANCIAL INFORMATION

FLAME ACQUISITION CORP.

CONDENSED BALANCE SHEETS

	March 31, 2022 (unaudited)			December 31, 2021
Assets
Current assets:
Cash	$	367,028		$	322,768
Prepaid expenses		473,663			521,878
Total current assets		840,691			844,646
Prepaid expenses – Non-Current		—			78,630
Investment held in Trust Account		287,512,337			287,516,153
Total assets	$	288,353,028		$	288,439,429
Liabilities and Stockholders’ Deficit
Accounts payable and accrued expenses	$	263,471		$	275,500
Convertible promissory notes – related parties, at fair value		1,266,600			956,115
Total current liabilities		1,530,071			1,231,615
Warrant Liabilities		5,788,500			12,647,250
Total liabilities		7,318,571			13,878,865
Commitments
Class A Common Stock subject to possible redemption; 28,750,000 shares at redemption value		287,500,000			287,500,000
Stockholders’ deficit:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding		—			—
Class A common stock, $0.0001 par value; 200,000,000 shares authorized; no shares issued and outstanding, excluding 28,750,000 shares subject to possible redemption at March 31, 2022 and December 31, 2021		—			—
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 7,187,500 shares issued and outstanding at March 31, 2022 and December 31 2021		719			719
Additional paid-in capital		—			—
Accumulated deficit		(6,466,262	)		(12,940,155	)
Total stockholders’ deficit		(6,465,543	)		(12,939,436	)
Total Liabilities and Stockholders’ Deficit	$	288,353,028		$	288,439,429

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

FLAME ACQUISITION CORP.

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the three months ended March 31, 2022			For the three months ended March 31, 2021
Formation and operating costs	$	424,493		$	105,227
Loss from operations		(424,493	)		(105,227	)
Other income (expenses)
Interest income from Trust Account		15,121			1,416
Change in fair value of convertible promissory notes – related parties		(27,611	)		—
Change in fair value of warrant liabilities		6,858,750			477,375
Offering costs allocated to warrants		—			(280,829	)
Total other income, net		6,846,260			197,962
Net income	$	6,421,767		$	92,735
Weighted average redeemable Class A common stock outstanding		28,750,000			9,691,011
Basic and diluted net income per share	$	0.18		$	0.01
Weighted average non-redeemable Class B common stock outstanding		7,187,500			6,566,011
Basic and diluted net income per Class B common share	$	0.18		$	0.01

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

FLAME ACQUISITION CORP.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(UNAUDITED)

	Common Stock				Additional						Total
	Class B				Paid-In			Accumulated			Stockholders’
	Shares		Amount		Capital			Deficit			Deficit
Balance as of December 31, 2021		7,187,500	$	719	$	—		$	(12,940,155	)	$	(12,939,436	)
Initial fair value adjustment of convertible promissory notes – related parties		—		—		—			52,126			52,126
Net income		—		—		—			6,421,767			6,421,767
Balance as of March 31, 2022		7,187,500	$	719	$	—		$	(6,466,262	)	$	(6,465,543	)

Balance as of December 31, 2020		7,187,500	$	719	$	24,281		$	(1,657	)	$	23,343
Proceeds received in excess of initial fair value of Private Placement Warrants		—		—		1,166,375			—			1,166,375
Remeasurement of Class A common stock to possible redemption		—		—		(1,190,656	)		(17,355,016	)		(18,545,672	)
Net income		—		—		—			92,735			92,735

Balance as of March 31, 2021		7,187,500	$	719	$	—		$	(17,263,938	)	$	(17,263,219	)

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

FLAME ACQUISITION CORP.

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Three Months Ended March 31, 2022			Three Months Ended March 31, 2021
Cash flows from operating activities:
Net income	$	6,421,767		$	92,735
Adjustments to reconcile net income to net cash used in operating activities:
Interest income from Trust Account		(15,121	)		(1,416	)
Change in fair value of convertible promissory note – related parties		27,611			—
Change in fair value of warrant liabilities		(6,858,750	)		(477,375	)
Offering costs allocated to warrants		—			280,829
Changes in current assets and current liabilities:
Prepaid expenses		126,845			(985,260	)
Accounts payable and accrued expenses		(12,029	)		701,878
Net cash used in operating activities		(309,677	)

SEC Form 10-Q filed by Flame Acquisition Corp.