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 No. 001-40418

MOUNTAIN CREST ACQUISITION CORP. III

(Exact name of registrant as specified in its charter)

Delaware

85-2412613

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

311 West 43rd Street, 12th Floor, New York, NY 10036

(Address of Principal Executive Offices, including zip code)

(646) 493-6558

(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
Common Stock	MCAE	The Nasdaq Stock Market LLC
Rights	MCAER	The Nasdaq Stock Market LLC
Units	MCAEU	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, 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 14, 2022, there were 7,051,084 shares of the Company’s common stock, including shares of common stock underlying the units, $0.0001 par value per share issued and outstanding.

Table of Contents

TABLE OF CONTENTS


		Page

PART 1 – FINANCIAL INFORMATION

Item 1.	FINANCIAL STATEMENTS	1

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

	Condensed Consolidated 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 March 2, 2021 (Inception) through September 30, 2021 (Unaudited)	2

	Condensed Consolidated 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 for the period from March 2, 2021 (Inception) through September 30, 2021 (Unaudited)	3

	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and for the period from March 2, 2021 (Inception) through September 30, 2021 (Unaudited)	5

	Notes to Condensed Consolidated Financial Statements (Unaudited)	6

Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	23

Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	29

Item 4.	CONTROLS AND PROCEDURES	29

PART II – OTHER INFORMATION

Item 1.	LEGAL PROCEEDINGS	31

Item 1A.	RISK FACTORS	31

Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	31

Item 3.	DEFAULTS UPON SENIOR SECURITIES	31

Item 4.	MINE SAFETY DISCLOSURES	31

Item 5.	OTHER INFORMATION	31

Item 6.	EXHIBITS	32

SIGNATURES		33

Table of Contents

PART 1 – FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

MOUNTAIN CREST ACQUISITION CORP. III

CONDENSED CONSOLIDATED BALANCE SHEETS


	September 30, 2022		December 31, 2021
	(Unaudited)		(Audited)

ASSETS
Current Assets
Cash	$	284	$	341,429
Prepaid expenses		35,506		28,750
Marketable securities held in Trust Account		54,438,427		54,174,163
TOTAL ASSETS	$	54,474,217	$	54,544,342

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued expenses	$	112,229	$	110,932
Income taxes payable		41,348		—
Convertible note - related party		100,000		—
Deferred underwriting fee payable		1,896,018		1,896,018
Total liabilities		2,149,595		2,006,950

COMMITMENTS AND CONTINGENCIES
Common stock subject to possible redemption, $0.0001 par value, 5,417,193 shares at redemption value of $10.03 per share at September 30, 2022 and $10.00 per share at December 31, 2021		54,327,479		54,171,930

STOCKHOLDERS’ DEFICIT
Common Stock; $0.0001 par value; 30,000,000 shares authorized; 1,633,891 shares issued and outstanding (excluding 5,417,193 shares subject to possible redemption), as of September 30, 2022 and December 31, 2021		163		163
Additional paid-in capital		—		—
Accumulated deficit		(2,003,020)		(1,634,701)
Total Stockholders’ Deficit		(2,002,857)		(1,634,538)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	54,474,217	$	54,544,342

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

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MOUNTAIN CREST ACQUISITION CORP. III

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


							For The Period from
							March 2, 2021
							(Inception)
	Three Months Ended				Nine Months Ended		Through
	September 30,				September 30,		September 30,
	2022		2021		2022		2021
General and administrative	$	211,469	$	117,631	$	494,293	$	211,655
LOSS FROM OPERATIONS		(211,469)		(117,631)		(494,293)		(211,655)

Other income:
Interest earned on marketable securities held in Trust Account		244,266		697		322,871		1,088

Income (Loss) before provision for income taxes		32,797		(116,934)		(171,422)		(210,567)
Provision for income taxes		(39,995)		—		(41,348)		—
Net loss	$	(7,198)	$	(116,934)	$	(212,770)	$	(210,567)

Weighted average shares outstanding of redeemable common stock		5,417,193		5,417,193		5,417,193		3,349,325
Basic and diluted net income (loss) per share, common stock	$	0.01	$	(0.02)	$	(0.02)	$	0.71

Weighted average shares outstanding of non-redeemable common stock		1,633,891		1,633,891		1,633,891		1,477,554
Basic and diluted net income (loss) per share, non-redeemable common stock	$	(0.02)	$	(0.02)	$	(0.05)	$	(1.74)

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

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MOUNTAIN CREST ACQUISITION CORP. III

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(UNAUDITED)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022


				Additional				Total
	Common stock			paid-in		Accumulated		Stockholders’
	Shares	Amount		capital		deficit		Deficit
Balance, January 1, 2022	1,633,891	$	163	$	—	$	(1,634,701)	$	(1,634,538)

Net loss	—		—		—		(166,086)		(166,086)

Balance, March 31, 2022	1,633,891		163		—		(1,800,787)		(1,800,624)

Net loss	—		—		—		(39,486)		(39,486)

Balance, June 30, 2022	1,633,891		163		—		(1,840,273)		(1,840,110)

Accretion for common stock to redemption amount	—		—		—		(155,549)		(155,549)

Net income	—		—		—		(7,198)		(7,198)

Balance, September 30, 2022	1,633,891	$	163	$	—	$	(2,003,020)	$	(2,002,857)

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FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021 AND

FOR THE PERIOD FROM MARCH 2, 2021 (INCEPTION) THROUGH SEPTEMBER 30, 2021


				Additional				Total
	Common Stock			paid-in		Accumulated		Stockholders’
	Shares	Amount		capital		deficit		Equity (Deficit)
Balance, March 2, 2021 (inception)	—	$	—	$	—	$	—	$	—

Issuance of common stock to Sponsor	1,437,500		144		24,856		—		25,000

Net loss	—		—		—		(1,000)		(1,000)

Balance, March 31, 2021	1,437,500		144		24,856		(1,000)		24,000

Measurement of redeemable shares under ASC 480-10-S99	—		—		4,604,614		—		4,604,614

Allocation of offering costs related to redeemable shares	—		—		3,597,356		—		3,597,356

Offering costs	—		—		(3,931,536)		—

SEC Form 10-Q filed by Mountain Crest Acquisition Corp. III