Altitude Acquisition Corp. - Quarter Report: 2022 June (Form 10-Q)

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		For the three months ended June 30, 2022				For the three months ended June 30, 2021				For the six months ended June 30, 2022				For the six months ended June 30, 2021
Formation and operating costs		$	1,518,182			$	379,837			$	2,446,400			$	846,195
Loss from operations			(1,518,182	)			(379,837	)			(2,446,400	)			(846,195	)
Other income
Interest income			—				8				1				20
Interest income earned on Trust			304,269				6,828				311,869				13,075
Unrealized gain on change in fair value of warrants			987,781				19,441,877				10,525,589				13,445,689
Total other income			1,292,050				19,448,713				10,837,459				13,458,784
Income (loss) before income tax provision			(226,132	)			19,068,876				8,391,059				12,612,589
Income tax provision			(8,780	)			—				(8,780	)			—
Net income (loss)		$	(234,912	)		$	19,068,876			$	8,382,279			$	12,612,589
Basic and diluted weighted average shares outstanding, Class A common stock			25,339,955				30,000,000				27,657,104				30,000,000
Basic and diluted net income (loss) per share, Class A common stock		$	(0.01	)		$	0.51			$	0.24			$	0.34
Basic and diluted weighted average shares outstanding, Class B common stock			7,500,000				7,500,000				7,500,000				7,500,000
Basic and diluted net income (loss) per share, Class B common stock		$	(0.01	)		$	0.51			$	0.24			$	0.34

		Class A Common Stock								Class B Common Stock								Additional Paid-in Capital				Accumulated Deficit				Total Stockholders’ Deficit
		Shares				Amount				Shares				Amount
Balance as of December 31, 2021			—			$	—				7,500,000			$	750			$	—			$	(27,823,525	)		$	(27,822,775	)
Net income			—				—				—				—				—				8,617,191				8,617,191
Balance as of March 31, 2022 (unaudited)			—			$	—				7,500,000			$	750			$	—			$	(19,206,334	)		$	(19,205,584	)
Net loss			—				—				—				—				—				(234,912	)			(234,912	)
Accretion of Class A common stock to redemption value			—				—				—				—				—				(165,357	)			(165,357	)
Balance as of June 30, 2022 (unaudited)			—			$	—				7,500,000			$	750			$	—			$	(19,606,603	)		$	(19,605,853	)

		Class A Common Stock								Class B Common Stock								Additional Paid-in Capital				Accumulated Deficit				Total Stockholders’ Deficit
		Shares				Amount				Shares				Amount
Balance as of December 31, 2020			—			$	—				7,500,000			$	750			$	—			$	(43,049,354	)		$	(43,048,604	)
Net loss			—				—				—				—				—				(6,456,287	)			(6,456,287	)
Balance as of March 31, 2021 (unaudited)			—			$	—				7,500,000			$	750			$	—			$	(49,505,641	)		$	(49,504,891	)
Net income			—				—				—				—				—				19,068,876				19,068,876
Balance as of June 30, 2021 (unaudited)			—			$	—				7,500,000			$	750			$	—			$	(30,436,765	)		$	(30,436,015	)

		For the six months ended June 30, 2022				For the six months ended June 30, 2021
Cash Flows from Operating Activities:
Net income		$	8,382,279			$	12,612,589
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Interest income earned on Trust			(311,869	)			(13,075	)
Unrealized gain on change in fair value of warrants			(10,525,589	)			(13,445,689	)
Changes in current assets and current liabilities:
Prepaid expenses			88,250				220,835
Due to related party			60,000				59,205
Deferred legal fee			1,401,360				—
Income tax payable			8,780				—
Advances from Sponsor			788,423				—
Accounts payable and accrued expenses			148,363				9,440
Net cash provided by (used in) operating activities			39,997				(556,695	)
Cash Flows from Financing Activities:
Funds withdrawn from Trust Account			81,200				—
Net cash provided by investing activities			81,200				—
Net Change in Cash			121,197				(556,695	)
Cash-Beginning			43,054				764,329
Cash-Ending		$	164,251			$	207,634
Supplemental Disclosure of Non-cash Financing Activities:
Payment from Trust Account in connection with redemption of shares		$	249,614,847			$	—

		For the three months ended June 30, 2022								For the three months ended June 30, 2021
		Class A				Class B				Class A				Class B
Basic and diluted net income (loss) per share:
Numerator:
Allocation of net income (loss)		$	(181,263	)		$	(53,649	)		$	15,255,101			$	3,813,775
Denominator:
Weighted-average shares outstanding			25,339,955				7,500,000				30,000,000				7,500,000
Basic and diluted net income (loss) per share		$	(0.01	)		$	(0.01	)		$	0.51			$	0.51

		For the six months ended June 30, 2022								For the six months ended June 30, 2021
		Class A				Class B				Class A				Class B
Basic and diluted net income per share:
Numerator:
Allocation of net income		$	6,594,103			$	1,788,176			$	10,090,071			$	2,522,518
Denominator:
Weighted-average shares outstanding			27,657,104				7,500,000				30,000,000				7,500,000
Basic and diluted net income per share		$	0.24			$	0.24			$	0.34			$	0.34

•

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

•

“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

•

“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.

Gross proceeds from IPO		$	300,000,000
Less:
Proceeds allocated to Public Warrants			(19,987,400	)
Common stock issuance costs			(15,968,970	)
Payment from Trust Account in connection with redemption of shares			(249,614,847	)
Plus:
Accretion of carrying value to redemption value			36,121,727
Class A common stock subject to possible redemption		$	50,550,510

Gross proceeds from IPO		$	300,000,000
Less:
Proceeds allocated to Public Warrants			(19,987,400	)
Common stock issuance costs			(15,968,970	)
Plus:
Accretion of carrying value to redemption value			35,956,370
Class A common stock subject to possible redemption		$	300,000,000

•

in whole and not in part;

•

at a price of $0.01 per warrant;

•

upon not less than 30 days’ prior written notice of redemption (the“30-dayredemption period”) to each warrant holder; and

•

if, and only if, the reported last sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a30-tradingday period ending three business days before the Company send the notice of redemption to the warrant holders.

		June 30, 2022				Quoted Prices In Active Markets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Other Unobservable Inputs (Level 3)
Assets:
Mutual Funds held in Trust Account		$	50,642,618			$	50,642,618			$	—			$	—
		$	50,642,618			$	50,642,618			$	—			$	—
Liabilities:
Warrant Liability - Public Warrants		$	1,873,500			$	1,873,500			$	—			$	—
Warrant Liability - Private Placement Warrants		$	1,050,194			$	—			$	—			$	1,050,194
		$	2,923,694			$	1,873,500			$	—			$	1,050,194

The estimated fair value of the Private Placement Warrants on June 30, 2022 and December 31, 2021 is determined using Level 3 inputs. Inherent in a Monte Carlo simulation model are assumptions related to expected term, dividend yield and risk-free interest rate. The Company estimates the volatility of its common stock based on management’s understanding of the volatility associated with instruments of other similar entities. The risk-free interest rate is based on the U.S. Treasury Constant Maturity similar to the expected remaining life of the warrants. The expected life of the warrants is simulated based on management assumptions regarding the timing and likelihood of completing a business combination. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero. The assumptions used in calculating the estimated fair values represent the Company’s best estimate. However, inherent uncertainties are involved. If factors or assumptions change, the estimated fair values could be materially different.

to purchase up to an additional 3,915,000 Units to cover over-allotments, if any. On December 11, 2020, the underwriters partially exercised their over-allotment option and purchased an additional 3,900,000 Units. The unexercised portion of the over-allotment option was forfeited.

The Company’s initial stockholders have agreed not to transfer, assign or sell their Founder Shares until the earlier to occur of (A) one year after the completion of the Company’s initial Business Combination or (B) subsequent to the Company’s initial Business Combination, (x) if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within period commencing at least 150 days after the Company’s initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of its stockholders having the right to exchange their shares of common stock for cash, securities or other property. Any permitted transferees will be subject to the same restrictions and other agreements of the Company’s initial stockholders with respect to any Founder Shares.

The shares of Class B common stock will automatically convert into shares of the Company’s Class A common stock at the time of its initial Business Combination on a basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the IPO and related to the closing of the initial Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, the sum of the total number of all shares of common stock outstanding upon the completion of the IPO plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with the initial Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial Business Combination or any private placement-equivalent units issued to the Sponsor or its affiliates upon conversion of loans made to the Company).

We completed the sale of 30,000,000 units (the “Units”), with each Unit comprised of one share of Class A common stock (the “Public Shares”) and of one warrant (the “Public Warrants”), including the issuance of 3,900,000 Units as a result of the partial exercise of the underwriters’ over-allotment option, at $10.00 per Unit generating gross proceeds of $300,000,000. Simultaneous with the closing of the IPO, we completed the sale of 8,000,000 warrants (the “Private Warrants”) at a price of $1.00 per Private Warrant in a private placement to Altitude Acquisition Holdco, LLC (our “Sponsor”), generating gross proceeds to us of $8,000,000 (the “Private Placement”).

In connection with the shareholder vote to approve an amendment to the Company’s Amended and Restated Certificate of Incorporation to extend the Combination Period, on June 7, 2022 and June 10, 2022, the Company and Gary Teplis, the Company’s Chief Executive Officer, entered into agreements (collectively, the Agreements”) with certain Company stockholders (the Stockholders”) holding an aggregate of approximately 1.4 million shares of Class A common stock. Pursuant to the Agreements, the Stockholders agreed to (a) not redeem any shares of Class A common stock held by them on the date of the Agreements in connection with the vote to approve the extension to the Combination Period, (b) vote all of such shares in favor of the extension to the Combination Period and any initial business combination presented by the Company for approval by its stockholders, and (c) not Transfer (as such term is defined in the Agreements) any of such shares until the earlier of the October 11, 2022 and consummation of the Company’s initial business combination (the “Termination Date”). In connection with the Agreements, Mr. Teplis agreed to pay to each Stockholder $0.033 per share subject to the Agreement in cash per month through the Termination Date.

As of June 30, 2022, we have not commenced any operations. All activity for the period from August 12, 2020 (inception) through June 30, 2022 relates to our formation and IPO, and, since the completion of the IPO, our searching for a target to consummate a Business Combination. We will not generate any operating revenues until after the completion of a Business Combination, at the earliest. We generate income in the form of interest income from the proceeds derived from the IPO and placed in the Trust Account.

On June 2, 2021, we issued an unsecured promissory note to the Sponsor for an aggregate available principal amount of $300,000 to be used for a portion of the expenses of the Business Combination. This loan is bearing, unsecured and due at the earlier of December 31, 2021 or the closing of the Business Combination. We had no borrowings under the promissory note.

On November 16, 2021, January 18, 2022, February 1, 2022, April 25, 2022, May 2, 2022, May 13, 2022, June 3, 2022, June 6, 2022, and June 16, 2022, we received $100,000, $100,000, $250,000, $50,000, $100,000, $20,000, $25,000, $177,423 and $66,000 advances from our Sponsor or its affiliates to be used for working capital purposes, respectively. The advances are bearing and due on demand. As of June 30, 2022 and December 31, 2021, we owed the Sponsor or its affiliates $888,423 and $100,000 related to these advances, respectively.

As a result of the above, in connection with our assessment of going concern considerations in accordance with FASB’s Accounting Standards Update (“ASU”) of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management determined that these conditions raise substantial doubt about our ability to continue as a going concern through October 11, 2022, the scheduled liquidation date. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should us be unable to continue as a going concern.

We did not have any sheet arrangement as of June 30, 2022.

We evaluate our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “”. Derivative instruments are recorded at fair value on the grant date and at each reporting date, with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified on the balance sheet as current or based on whether or not settlement or conversion of the instrument could be required within 12 months of the balance sheet date. We have determined the warrants are a derivative instrument.

FASB ASC Debt with Conversion and Other Options addresses the allocation of proceeds from the issuance of convertible debt into its equity and debt components. We apply this guidance to allocate IPO proceeds from the Units between Class A common stock and warrants, using the residual method by allocating IPO proceeds first to fair value of the warrants and then the Class A common stock.

We account for our Class A common stock subject to possible redemption in accordance with the guidance in ASC Topic 480 “.” Common stock subject to mandatory redemption (if any) is classified as liability instruments and is measured at fair value. Conditionally redeemable Class A common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. Our Class A common stock features certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, at June 30, 2022 and December 31, 2021, 5,055,051 and 30,000,000 shares of Class A common stock subject to possible redemption are presented as temporary equity, outside of the stockholders’ deficit section of our balance sheets, respectively.

In August 2020, the FASB issued ASU Debt-Debt with Conversion and Other Options (Subtopic and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for scope exception, and it simplifies the diluted earnings per share calculation in certain areas. ASU is effective January 1, 2024 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. We are currently assessing the impact, if any, that ASU would have on its financial position, results of operations or cash flows.

The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” under the JOBS Act and are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an independent registered public accounting firm’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the independent registered public accounting firm’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation.

We are a smaller reporting company as defined by Rule of the Exchange Act and are not required to provide the information otherwise required under this item.

Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our Annual Report on Form filed with the SEC on March 29, 2022. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.

This Quarterly Report on Form contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.” As of June 30, 2022, we had cash outside the Trust Account of $164,251 available for working capital needs and a negative working capital of $745,832. Further, we expect to incur significant costs in pursuit of our initial Business Combination. Management’s plans to address this need for capital are discussed in Note 1 to our Financial Statements. We cannot assure you that our plans to raise capital or to consummate an initial Business Combination will be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern through October 11, 2022, our scheduled liquidation date, if we do not complete a Business Combination prior to such date. The condensed financial statements contained in this Quarterly Report on Form do not include any adjustments that might result from our inability to continue as a going concern.

As of the date of this Quarterly Report on Form there have been no other material changes to the risk factors disclosed in our Annual Report on Form filed with the SEC on March 29, 2022. However, we may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form