UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ 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

Focus Impact Acquisition Corp.

(Exact name of registrant as specified in its charter)

Delaware		001-40977		86-2433757
(State or other jurisdiction of incorporation or organization)		(Commission File Number)		(I.R.S. Employer Identification Number)

250 Park Avenue Ste 911 New York, New York		10177
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (212) 213-0243

Not Applicable

(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, $0.0001 par value, and one-half of one redeemable warrant	FIACU	The Nasdaq Stock Market LLC
Shares of Class A common stock included as part of the units	FIAC	The Nasdaq Stock Market LLC
Redeemable warrants included as part of the units, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50	FIACW	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 (§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, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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

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

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

As of November 10, 2022, there were 23,000,000 shares Class A common stock, par value $0.0001 per share, and 5,750,000 shares of Class B common stock, par value $0.0001 per share, were issued and outstanding, respectively.

FOCUS IMPACT ACQUISITION CORP.

Quarterly Report on Form 10-Q

TABLE OF CONTENTS

		Page

PART I – FINANCIAL INFORMATION		1

Item 1.	Financial Statements	1

	Condensed Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021 (audited)	1

	Condensed Statements of Operations for the Three and Nine Months Ended September 30, 2022, for the Three Months Ended September 30, 2021 and for the Period from February 23, 2021 (Inception) Through September 30, 2021 (unaudited)	2

	Condensed Statements of Changes in Stockholders’ (Deficit) Equity for the Three and Nine Months Ended September 30, 2022, for the Three Months Ended September 30, 2021 and for the Period from February 23, 2021 (Inception) Through September 30, 2021 (unaudited)	3

	Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2022 and for the Period from February 23, 2021 (Inception) Through September 30, 2021 (unaudited)	4

	Notes to Condensed Financial Statements (unaudited)	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	23

Item 4.	Control and Procedures	23

PART II – OTHER INFORMATION		24

Item 1.	Legal Proceedings	24

Item 1A.	Risk Factors	24

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25

Item 3.	Defaults Upon Senior Securities	25

Item 4.	Mine Safety Disclosures	25

Item 5.	Other Information	25

Item 6.	Exhibits	26

SIGNATURES		27

	September 30, 2022 (Unaudited)			December 31, 2021 (Audited)
Assets:
Current assets:
Cash	$	949,402		$	1,393,939
Prepaid expenses		469,874			462,845
Total current asset		1,419,276			1,856,784

Prepaid expenses, non-current		32,101			356,689
Investment held in Trust Account		235,702,723			234,603,156
Total assets	$	237,154,100		$	236,816,629

Liabilities and Stockholders’ Deficit
Current liabilities:
Accrued offering costs and expenses	$	804,684		$	656,314
Franchise taxes payable		8,549			170,959
Income taxes payable		230,387			-
Total current liabilities		1,043,620			827,273

Warrant liability		2,043,000			11,804,000
Marketing agreement		150,000			-
Deferred underwriting commissions		8,650,000			8,650,000
Total liabilities		11,886,620			21,281,273

Commitments and Contingencies (Note 6)
Class A common stock subject to possible redemption, 23,000,000 shares at redemption value		235,634,747			234,600,000

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; 500,000,000 shares authorized; none issued and outstanding, (excluding 23,000,000 shares subject to possible redemption)		-			-
Class B common stock, $0.0001 par value; 50,000,000 shares authorized; 5,750,000 shares issued and outstanding		575			575
Additional paid-in capital		-			-
Accumulated deficit		(10,367,842	)		(19,065,219	)
Total stockholders’ deficit		(10,367,267	)		(19,064,644	)
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit	$	237,154,100		$	236,816,629

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,			For the Period from February 23, 2021 (Inception) Through September 30,
	2022			2021			2022			2021
Formation and operating costs	$	306,223		$	-		$	1,063,554		$	962
Marketing service fee		-			-			150,000			-
Loss from operations		(306,223	)		-			(1,213,554	)		(962	)

Other Income
Change in fair value of warrant liabilities		1,362,000			-			9,761,000			-
Operating account interest income		2,481			-			2,906			-
Income from trust account		1,059,933			-			1,412,159			-
Total other income		2,424,414			-			11,176,065			-

Income (Loss) before provision for income taxes		2,118,191			-			9,962,511			(962	)
Provision for income taxes		(212,593	)		-			(230,387	)		-
Net income (loss)	$	1,905,598		$	-		$	9,732,124		$	(962	)

Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption		23,000,000			-			23,000,000			-
Basic and diluted net income per share, Class A common stock subject to possible redemption	$	0.07		$	-		$	0.34		$	-
Basic and diluted weighted average shares outstanding, common stock		5,750,000			5,000,000			5,750,000			5,000,000
Basic and diluted net income (loss) per share, common stock	$	0.07		$	(0.00	)	$	0.34		$	(0.00	)

	Class B Common Stock
	Shares		Amount		Additional Paid-in Capital		Accumulated Deficit			Stockholders’ Deficit
Balance as of January 1, 2022		5,750,000	$	575	$	-	$	(19,065,219	)	$	(19,064,644	)
Net income		-		-		-		5,063,861			5,063,861
Balance as of March 31, 2022 (unaudited)		5,750,000	$	575	$	-	$	(14,001,358	)	$	(14,000,783	)
Accretion for Class A common stock to redemption amount		-		-		-		(63,360	)		(63,360	)
Net income		-		-		-		2,762,665			2,762,665
Balance as of June 30, 2022 (unaudited)		5,750,000	$	575	$	-	$	(11,302,053	)	$	(11,301,478	)
Accretion for Class A common stock to redemption amount		-		-		-		(971,387	)		(971,387	)
Net income		-		-		-		1,905,598			1,905,598
Balance as of September 30, 2022 (unaudited)		5,750,000	$	575	$	-	$	(10,367,842	)	$	(10,367,267	)

	For the Nine Months Ended September 30,			For the Period From February 23, 2021 (Inception) Through September 30,
	2022			2021
Cash flows from operating activities:
Net income (loss)	$	9,732,124		$	(962	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Change in fair value of warrant liability		(9,761,000	)		-
Income from investments held in Trust Account		(1,412,159	)		-
Changes in assets and liabilities:
Prepaid expenses		317,559			-
Accrued offering costs and expenses		148,370			962
Franchise tax payable		230,387			-
Marketing service fee		150,000			-
Income taxes payable		(162,410	)		-
Net cash used in operating activities		(757,129	)		-

Cash flows from investing activities:
Proceeds from Trust Account		312,592			-
Net cash provided by investing activities		312,592			-

Net change in cash		(444,537	)		-
Cash, beginning of the period		1,393,939			-
Cash, end of the period	$	949,402		$	-

Supplemental disclosure of cash flow information:
Accretion for Class A common stock to redemption amount	$	1,034,747		$	-
Deferred offering costs paid by Sponsor in exchange for issuance of Class B common stock	$	-		$	25,000
Deferred offering costs paid by Sponsor under the promissory note	$	-		$	74,991
Deferred offering costs included in accrued offerings costs and expenses	$	-		$	417,411

	For the Three Months Ended September 30,
	2022				2021
	Class A		Class B		Class A		Class B
Basic and diluted net income (loss) per share
Numerator:
Allocation of net income	$	1,524,478	$	381,120	$	-	$	-
Denominator:
Weighted average shares outstanding		23,000,000		5,750,000		-		5,000,000
Basic and diluted net income per share, redeemable common stock	$	0.07	$	0.07	$	-	$	0.00

	For the Nine Months Ended September 30,				For the Period from February 23, 2021 (Inception) Through September 30,
	2022				2021
	Class A		Class B		Class A		Class B
Basic and diluted net income (loss) per share
Numerator:
Allocation of net income (loss)	$	7,785,699	$	1,946,425	$	-	$	(962	)
Denominator:
Weighted average shares outstanding		23,000,000		5,750,000		-		5,000,000
Basic and diluted net income (loss) per share, redeemable common stock	$	0.34	$	0.34	$	-	$	(0.00	)

	September 30, 2022		December 31, 2021

As of beginning of the period	$	234,600,000	$	-
Gross proceeds from IPO		-		230,000,000
Less:
Proceeds allocated to Public Warrants		-		(8,395,000	)
Class A common stock issuance costs		-		(12,947,813	)
Plus:
Remeasurement adjustment of carrying value to redemption value		1,034,747		25,942,813
Class A common stock subject to possible redemption	$	235,634,747	$	234,600,000

	September 30, 2022
	Level 1		Level 2		Level 3
Assets
Investments held in Trust Account	$	235,702,723	$	-	$	-
Liabilities
Public Warrants	$	-	$	1,035,000	$	-
Private Warrants	$	-	$	-	$	1,008,000

	December 31, 2021
	Level 1		Level 2		Level 3
Assets
Investments held in Trust Account	$	234,603,156	$	-	$	-
Liabilities
Public Warrants	$	5,980,000	$	-	$	-
Private Warrants	$	-	$	-	$	5,824,000

Input	September 30, 2022			December 31, 2021
Risk-free interest rate		4	%		1.33	%
Expected term to initial Business Combination (years)		0.5			0.84
Expected volatility		de minimis	%		8.6	%
Common stock price	$	10.02		$	9.87

SEC Form 10-Q filed by Focus Impact Acquisition Corp.