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 June 30, 2022

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

For the transition period from to

Commission File Number:

001-41246

LatAmGrowth SPAC

(Exact name of registrant as specified in its charter)


Cayman Islands	98-1605340
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

Pedregal 24 8^th Floor Molino del Rey Mexico City, Mexico	11000
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: +52 55 9178 9015 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 Class A ordinary share, $0.0001 par value, and one-half of one warrant	LATGU	The Nasdaq Stock Market LLC
Class A ordinary shares	LATG	The Nasdaq Stock Market LLC
Warrants	LATGW	The Nasdaq Stock Market LLC

Securities registered pursuant to section 12(g) of the Act: None

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 definition of “large accelerated filer”, “accelerated filer”, and “smaller reporting 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 the 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 August 15, 2022, there were 13,000,000 Class A ordinary shares, $0.0001 par value, and 3,250,000 Class B ordinary shares, $0.0001 par value, issued and outstanding.

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LATAMGROWTH SPAC

Form 10-Q for the Quarter Ended June 30, 2022

Table of Contents


		Page
PART I. FINANCIAL INFORMATION			1
Item 1.	Financial Statements		1
	Condensed Balance Sheets as of June 30, 2022 (Unaudited) and December 31, 2021		1
	Unaudited Condensed Statements of Operations for the three and six months ended June 30, 2022 and for the period from May 20, 2021 (Inception) through June 30, 2021		2
	Unaudited Condensed Statements of Changes in Shareholders’ Deficit for the three and six months ended June 30, 2022 and for the period from May 20, 2021 (Inception) through June 30, 2021		3
	Unaudited Condensed Statements of Cash Flows for the six months ended June 30, 2022 and for the period from May 20, 2021 (Inception) through June 30, 2021		4
	Notes to Condensed Financial Statements		5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.		22
Item 4.	Controls 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
PART III - SIGNATURES			27

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PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

LATAMGROWTH SPAC

CONDENSED BALANCE SHEETS


	June 30, 2022		December 31,
	(Unaudited)		2021
Assets
Current Assets:
Cash	$	1,257,680	$	—
Prepaid expenses		457,488		—
Total Current Assets		1,715,168		—
Marketable securities held in Trust Account		132,787,844		—
Deferred offering costs		—		438,499
Total Assets	$	134,503,012	$	438,499

Liabilities, Redeemable Ordinary Shares and Shareholders’ Deficit
Current Liabilities:
Accounts payable and accrued expenses	$	240,684	$	402,504
Promissory note - related party		—		101,530
Total Current Liabilities		240,684		504,034
Warrant liabilities		1,728,000		—
Deferred underwriting commissions		4,550,000		—
Total Liabilities		6,518,684		504,034

Commitments and Contingencies (Note 6)

Class A ordinary shares subject to possible redemption, 13,000,000 shares and 0 shares at redemption value of $10.21 and $10.20 at June 30, 2022 and December 31, 2021, respectively		132,787,844		—

Shareholders’ Deficit:
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding		—		—
Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; none issued and outstanding (excluding 13,000,000 and 0 shares subject to possible redemption) at June 30, 2022 and December 31, 2021, respectively		—		—
Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 3,250,000 and 3,737,500⁽¹⁾ shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively		325		374
Additional paid-in capital		—		24,626
Accumulated deficit		(4,803,841)		(90,535)
Total Shareholders’ Deficit		(4,803,516)		(65,535)
Total Liabilities, Redeemable Ordinary Shares and Shareholders’ Deficit	$	134,503,012	$	438,499

⁽¹⁾ This number includes up to 487,500 Class B ordinary shares subject to forfeiture if the over-allotment option was not exercised in full or in part by the underwriters (see Note 5). In March 2022, the sponsor effected a surrender of the 487,500 founder shares to the Company for no consideration upon expiration of the over-allotment option.

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

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LATAMGROWTH SPAC

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS


					For the period from
					May 20, 2021
	For the three		For the six		(Inception)
	months ended		months ended		through
	June 30, 2022		June 30, 2022		June 30, 2021
Formation and operating costs	$	405,901	$	662,360	$	90,000
Loss from operations		(405,901)		(662,360)		(90,000)
Other income
Gain on change in fair value of warrants		1,839,500		9,216,000		—
Gain on expiration of overallotment option		—		390,000		—
Trust interest income		175,757		187,844		—
Warrant issuance costs		—		(335,231)		—
Total other income		2,015,257		9,458,613		—

Net income (loss)	$	1,609,356	$	8,796,253	$	(90,000)

Basic and diluted weighted average shares outstanding of Class A ordinary shares subject to possible redemption		13,000,000		11,071,429		—
Basic and diluted net income (loss) per share, Class A ordinary shares subject to possible redemption	$	0.10	$	0.61	$	—
Basic and diluted weighted average shares outstanding of Class B ordinary shares		3,250,000		3,250,000		3,250,000
Basic and diluted net income (loss) per share, Class B ordinary shares	$	0.10	$	0.61	$	(0.03)

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

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LATAMGROWTH SPAC

UNAUDITED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022


								Total
	Class B			Additional		Accumulated		Shareholders’
	Shares	Amount		Paid-In Capital		Deficit		Deficit
Balance as of December 31, 2021	3,737,500	$	374	$	24,626	$	(90,535)	$	(65,535)
Excess cash received over fair value of private placement warrants	—		—		1,896,000		—		1,896,000
Forfeiture of 487,500 Class B ordinary shares upon expiration of overallotment option	(487,500)		(49)		49		—		—
Remeasurement of Class A ordinary shares to redemption amount	—		—		(1,920,675)		(13,321,715)		(15,242,390)
Net income	—		—		—		7,186,897		7,186,897
Balance as of March 31, 2022 (unaudited)	3,250,000		325		—		(6,225,353)		(6,225,028)
Remeasurement of Class A ordinary shares to redemption amount	—		—		—		(187,844)		(187,844)
Net income	—		—		—		1,609,356		1,609,356
Balance as of June 30, 2022 (unaudited)	3,250,000	$	325	$	—	$	(4,803,841)	$	(4,803,516)

FOR THE PERIOD FROM MAY 20, 2021 (INCEPTION) THROUGH JUNE 30, 2021


								Total
	Class B			Additional		Accumulated		Shareholders’
	Shares	Amount		Paid-In Capital		Deficit		Deficit
Balance as of May 20, 2021 (inception)	—	$	—	$	—	$	—	$	—
Class B ordinary shares issued to Sponsor for payment of offering costs	3,737,500		374		24,626		—		25,000
Net loss	—		—		—		(90,000)		(90,000)
Balance as of June 30, 2021 (unaudited)	3,737,500	$	374	$	24,626	$	(90,000)	$	(65,000)

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

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LATAMGROWTH SPAC

UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS


			For the period from
			May 20, 2021
	For the six		(Inception)
	months ended		through
	June 30, 2022		June 30, 2021
Cash flows from operating activities:
Net income (loss)	$	8,796,253	$	(90,000)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Interest earned on marketable securities held in Trust Account		(187,844)		—
Warrant issuance costs		335,231		—
Unrealized gain on change in fair value of warrants		(9,216,000)		—
Gain on expiration of overallotment option		(390,000)		—
Changes in operating assets and liabilities:
Prepaid expenses		(457,488)		—
Accounts payable and accrued expenses		126,723		90,000
Net cash used in operating activities		(993,125)		—
Cash flows from investing Activities:
Principal deposited in Trust Account		(132,600,000)		—
Net cash used in investing activities		(132,600,000)		—

Cash flows from financing Activities:
Proceeds from initial public offering, net of underwriters’ discount		127,400,000		—
Proceeds from private placement		7,900,000		—
Payment of Sponsor promissory note		(142,350)		—
Payment of deferred offering costs		(306,845)		—
Net cash provided by financing activities		134,850,805		—

Net change in cash		1,257,680		—
Cash, beginning of the period		—		—
Cash, end of the period	$	1,257,680	$	—

Supplemental disclosure of cash flow information:
Deferred offering costs included in accounts payable and accrued offering costs and expenses	$	250	$	101,709
Deferred offering costs paid by Sponsor in exchange for issuance of Class B ordinary shares	$	—	$	25,000
Remeasurement of Class A ordinary shares to redemption amount	$	15,430,234	$	—
Deferred underwriting commissions payable charged to additional paid in capital	$	4,550,000	$	—
Deferred offering costs charged to additional paid in capital	$	497,620	$	—
Forfeiture of 487,500 founder shares on expiration of overallotment option	$	49	$	—
Initial fair value of warrant liability	$	10,944,000	$	—
Deferred offering costs charged to accumulated deficit	$	82,175	$	—

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

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LATAMGROWTH SPAC

NOTES TO CONDENSED FINANCIAL STATEMENTS

Note 1—Organization and Business Operation

LatAmGrowth SPAC (the “Company”) was incorporated as a Cayman Islands exempted company on May 20, 2021. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar Business Combination with one or more businesses or entities (the “Business Combination”). The Company has not selected any Business Combination target. The Company will not be limited to a particular industry or geographic region in its identification and acquisition of a target company, but the Company intends to focus its search on high growth companies in Latin America, including Brazil, as well as businesses located in the United States that cater to the Hispanic community: (1) with significant technological advantages, and/or (2) that are well positioned to benefit from the favorable structural and secular trends of the emerging middle class.

As of June 30, 2022, the Company had not commenced any operations. All activity for the period from May 20, 2021 (inception) through June 30, 2022 relates to the Company’s formation and IPO described below. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO (as defined below). The Company has selected December 31 as its fiscal year end.

The Company’s Sponsor is LatAmGrowth Sponsor LLC, a Delaware limited liability company (the “Sponsor”).

The registration statement for the Company’s initial public offering was declared effective on January 24, 2022 (the “Effective Date”). On January 27, 2022, the Company consummated the Public Offering of 13,000,000 units, (the “Units” and, with respect to the ordinary shares included in the Units being offered, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $130,000,000, which is discussed in Note 3.

Simultaneously with the closing of the IPO, the Company consummated the sale of 7,900,000 warrants (the “Private Placement Warrants”), at a price of $1.00 per Private Placement Warrant in a private placement to the Sponsor, generating gross proceeds of $7,900,000, which is discussed in Note 4.

Transaction costs amounted to $7,647,620 consisting of $2,600,000 of underwriting discount, $4,550,000 of deferred underwriting discount, and $497,620 of other offering costs. In addition, $2,494,203 of cash was held outside of the Trust Account (as defined below) and is available for working capital purposes.

The Company must complete one or more Business Combinations having an aggregate fair market value of at least 80% of the value of the assets held in the Trust Account (as defined below) (excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of the Company’s signing a definitive agreement in connection with the initial Business Combination. However, the Company will only complete such Business Combination if the post transaction 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 of 1940 (the “Investment Company Act”). There is no assurance that the Company will be able to complete a Business Combination successfully.

Following the closing of the IPO on January 27, 2022, an amount of $132,600,000 ($10.20 per Unit) from the net proceeds of the sale of the public units in the IPO and the sale of the Private Placement Warrants was placed in a Trust Account (“Trust Account”) and will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act that invest only in direct U.S. government treasury obligations. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its taxes, if any, the proceeds from the IPO and the sale of the Private Placement Warrants will not be released from the Trust Account until the earliest of (i) the completion of the initial Business Combination, (ii) the redemption of the public shares if the Company has not completed its initial Business Combination within 15 months from January 27, 2022 (or up to 21 months, if we extend the time to complete a business combination as described in the Company’s prospectus filed with the SEC on January 26, 2022 (the “Prospectus”) (the “Combination Period”), subject to applicable law, or (iii) the redemption of the public shares properly submitted in connection with a shareholder vote to amend the Company’s amended and restated memorandum and articles of association to (A) modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the public shares if the Company has not consummated an initial Business Combination within the Combination Period or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial Business Combination activity.

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The Company will provide its public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of the initial Business Combination either (i) in connection with a general meeting called to approve the initial Business Combination or (ii) without a shareholder vote by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a proposed initial Business Combination or conduct a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require the Company to seek shareholder approval under applicable law or stock exchange listing requirements.

The shareholders will be entitled to redeem their shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its taxes, divided by the number of then outstanding public shares, subject to the limitations and on conditions described in the Prospectus. The amount in the Trust Account is initially anticipated to be $10.20 per public share. The per-share amount the Company will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters.

Ordinary shares subject to redemption are recorded at redemption value and classified as temporary equity following the completion of the IPO, in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.”

The Company will have 15 months from January 27, 2022 (or up to 21 months, if we extend the time to complete a business combination as described in the Prospectus) to consummate the initial Business Combination. If the Company has not consummated the initial Business Combination within 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 shareholders’ rights as shareholders (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 Company’s remaining shareholders and the Company’s board of directors, liquidate and dissolve, subject, in each case, to the Company’s obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law.

The Sponsor and each member of the management team have agreed to (i) waive their redemption rights with respect to their founder shares and public shares 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 shareholder vote to approve an amendment to the Company’s amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the public shares if the Company has not consummated an initial Business Combination within the Combination Period or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial Business Combination activity; (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, although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete its initial Business Combination within the prescribed time frame; and (iv) vote any founder shares held by them and any public shares purchased during or after the IPO (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 Marcum LLP, the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.20 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 $10.20 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor have the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and the Company believes that the Sponsor’s only assets are securities of the Company. Therefore, the Company cannot provide assurance that the Sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the Trust Account, the funds available for the initial Business Combination and redemptions could be reduced to less than

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$10.20 per public share. In such event, the Company may not be able to complete the initial Business Combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None of the Company’s officers or directors will indemnify the Company for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

Liquidity and Going Concern Considerations

As of June 30, 2022, the Company had $1,257,680 cash on hand and working capital of $1,474,484.

On January 27, 2022, the Company consummated its IPO of 13,000,000 units, at $10.00 per unit, generating gross proceeds of $130.0 million. Simultaneously with the closing of the Company’s IPO, it consummated the sale of 7,900,000 private placement warrants at a price of $1.00 per private placement warrant in a private placement to its Sponsor, generating gross proceeds of $7.9 million. Prior to the completion of the IPO, the Company lacked the liquidity it needed to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the unaudited condensed financial statements. At the IPO date, cash of $2,494,203 in excess of the funds deposited in the Trust Account and/or used to fund offering expenses was released to the Company for general working capital purposes.

The Company believes that the $1.26 million in cash held outside the trust account will be sufficient to allow the Company to operate until either the consummation of a business combination or the mandatory liquidation date; however, if the Company’s estimate of the costs of undertaking in-depth due diligence and negotiating the business combination are less than the actual amount necessary to do so, the Company may have insufficient funds available to operate its business prior to the business combination. As such, the Company cannot provide assurance that the cash held outside the trust account will be sufficient to meet its financial obligations over a period of one year from the issuance of its unaudited condensed financial statements. Until consummation of its initial Business Combination, the Company will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.

The Company can raise additional capital through Working Capital Loans from the Sponsor, an affiliate of the Sponsor, certain of the Company’s officers and directors, or through loans from third parties. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of its business plan, and reducing overhead expenses. The Company cannot provide assurance that new financing will be available to it on commercially acceptable terms, if at all.

The Company has until April 27, 2023 (with optional three-month extension periods up to October 27, 2023 which are conditional upon securing additional funding from the Sponsor) to consummate a business combination. It is uncertain that the Company will be able to consummate a business combination by April 27, 2023 or obtain additional funding to extend the deadline for consummating a business combination. The Company cannot provide assurance that the required funding will be made available to the Company to allow it to extend the business combination period beyond April 27, 2023. If a business combination is not consummated by the required date and the Company is unable to obtain the funding to extend the business combination period beyond the initial deadline, there will be a mandatory liquidation and subsequent dissolution. In connection with the Company’s assessment of going concern considerations in accordance with the authoritative guidance in FASB ASU 2014-15, management has determined that mandatory liquidation, and subsequent dissolution, should the Company be unable to complete a business combination, raises substantial doubt about the Company’s ability to continue as a going concern for the next twelve months from the issuance of these unaudited condensed financial statements.

Risks and Uncertainties

Management is currently evaluating the impact of the COVID-19 pandemic and Russia-Ukraine war and has concluded that while it is reasonably possible that the virus and war could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these unaudited condensed financial statements. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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Note 2—Significant Accounting Policies and Basis of Presentation

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 unaudited condensed 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.

The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Prospectus which contains the audited financial statements and notes thereto included in the Form 10-K annual report filed by the Company with the SEC on April 13, 2022. The interim results for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any future interim periods.

Emerging Growth Company Status

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 auditor 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 shareholder 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 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 unaudited condensed 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.

Use of Estimates

The preparation of unaudited condensed financial statements in conformity with US GAAP requires 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 unaudited condensed financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. One of the more significant accounting estimates included in the unaudited condensed financial statements is the determination of the fair value of the warrant liability. Such estimates may be subject to change as more current information becomes available and, accordingly, the actual results could differ significantly from those estimates.

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. The Company has not experienced losses on this account.

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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 did not have any cash equivalents as of June 30, 2022 and December 31, 2021. The Company held cash of $1,257,680 and $0 as of June 30, 2022 and December 31, 2021, respectively.

Marketable Securities Held in Trust Account

At June 30, 2022 and December 31, 2021, the Company held $132,787,844 and $0 in the Trust Account which consisted entirely of funds which invest only in cash and U.S. Treasury securities. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Dividend income from securities in the Trust Account is included in interest earned on marketable securities held in Trust Account in the accompanying condensed statements of operations. Unrealized gains and losses resulting from the change in fair value of investments held in Trust Account are included in the accompanying condensed statements of operations. The estimated fair values of investments held in Trust Account are determined using available market information.

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the condensed balance sheets, primarily due to its short-term nature.

Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The Company’s financial instruments are classified as either Level 1, Level 2 or Level 3. These tiers include:

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Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

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Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

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Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Derivative Financial Instruments and Warrant and Over-allotment Liability

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity and measurement of fair value is re-assessed at the end of each reporting period. In accordance with ASC 825-10 “Financial Instruments”, offering costs attributable to the issuance of the derivative warrant liabilities and overallotment option have been allocated based on their relative fair value of total proceeds and are recognized in the condensed statements of operations as incurred. Derivative warrant liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or the creation of current liabilities.

The Company accounts for warrants and over-allotment as either equity-classified or liability-classified instruments based on an assessment of the warrant and over-allotment option’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants and over-allotment option are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants and over-allotment option meet all of the requirements for equity classification under ASC 815, including whether the warrants and over-allotment option are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This

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assessment is conducted at the time of warrant and over-allotment option issuance and as of each subsequent quarterly period end date while the warrants and over-allotment option are outstanding.

For warrants and over-allotment option that meet all of the criteria for equity classification, they are recorded as a component of additional paid-in capital at the time of issuance. For warrants and over-allotment that do not meet all the criteria for equity classification, they are required to be recorded as a liability at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants and over-allotment option are recognized as a non-cash gain or loss on the condensed statements of operations.

The Company accounted for the Public Warrants (see Note 3), Private Placement Warrants (see Note 4) (together with the Public Warrants, the “Warrants”) and over-allotment option (Note 6) in accordance with the guidance contained in ASC 815-40. The Warrants and over-allotment are not considered indexed to the Company’s own ordinary shares, and as such, they do not meet the criteria for equity treatment and are recorded as liabilities.

Income Taxes

The Company accounts for income taxes under FASB 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 unaudited condensed financial statements 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.

FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions 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. There were no unrecognized tax benefits as of June 30, 2022 and December 31, 2021. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of June 30, 2022 and December 31, 2021, there were no unrecognized tax benefits and no amounts were accrued for the payment of interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s unaudited condensed financial statements.

Net Income Per Share

We comply with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net income per share is computed by dividing net income by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture by the Sponsor. At June 30, 2022 and December 31, 2021, weighted average shares were reduced for the effect of an aggregate of 487,500 Class B ordinary shares that were subject to forfeiture if the over-allotment option was not exercised by the underwriters. At June 30, 2022 and December 31, 2021, we did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in our earnings. As a result, diluted income per share is the same as basic income per share for the period presented.

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The table below presents a reconciliation of the numerator and denominator used to compute basic and diluted net income per share for each class of ordinary shares:


	For the Three				For the Six
	Months Ended				Months Ended
	June 30, 2022				June 30, 2022
	Class A		Class B		Class A		Class B
Basic and diluted net income per share:
Numerator:
Allocation of net income	$	1,287,485	$	321,871	$	6,800,096	$	1,996,157
Denominator:
Weighted average shares outstanding		13,000,000		3,250,000		11,071,429		3,250,000
Basic and diluted net income per share	$	0.10	$	0.10	$	0.61	$	0.61


	For the period from
	May 20, 2021
	(Inception)
	through
	June 30, 2021
	Class A		Class B
Basic and diluted net loss per share:
Numerator:
Allocation of net loss	$	—	$	(90,000)
Denominator:
Weighted average shares outstanding		—		3,250,000
Basic and diluted net loss per share