Khosla Ventures Acquisition Co. - Quarter Report: 2022 March (Form 10-Q)

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation (§ 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 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 of the Exchange Act.

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

As of May 2022, 35,490,000 shares of Class A common stock, par value $0.0001 per share, 5,000,000 shares of Class B common stock, par value $0.0001 per share, and 5,000,000 shares of Class K common stock, par value $0.0001 per share were issued and outstanding, respectively.

		MARCH 31, 2022 (Unaudited)				DECEMBER 31, 2021
ASSETS
Cash		$	22,668			$	202,245
Prepaid expenses			657,731				663,974
Total current assets			680,399				866,219
Marketable securities held in Trust Account			345,045,187				345,017,029
Other non-current assets			—				112,785
Total Assets		$	345,725,586			$	345,996,033
LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION, AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable		$	168,288			$	189,136
Due to related party			78,667				600
Franchise tax payable			244,071				200,000
Accrued expenses			3,836,767				3,815,467
Total current liabilities			4,327,793				4,205,203
Deferred underwriting fees payable			12,075,000				12,075,000
Class K Founder Shares derivative liabilities			—				150,000
Total liabilities			16,402,793				16,430,203
Commitments and Contingencies (Note 5)
Class A common stock subject to possible redemption, 34,500,000 shares at $10.00 per share			345,045,187				345,017,029
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; 990,000 issued and outstanding (excluding 34,500,000 shares subject to possible redemption)			99				99
Class B common stock, $0.0001 par value; 30,000,000 shares authorized; 5,000,000 shares issued and outstanding			500				500
Additional paid-in capital			—				—
Accumulated deficit			(15,722,993	)			(15,451,798	)
Total stockholders’ deficit			(15,722,394	)			(15,451,199	)
Total Liabilities, Common Stock Subject to Possible Redemption, and Stockholders’ Deficit		$	345,725,586			$	345,996,033

		For The Three Months Ended March 31, 2022				For The Period From January 15, 2021 (Inception) Through March 31, 2021
Formation costs		$	—			$	30,000
General and administrative expenses			371,195				116,558
Franchise tax expenses			50,000				50,000
Loss from operations			(421,195	)			(196,558	)
Financing expenses on derivative classified instrument			—				(12,137,500	)
Change in fair value of derivative liabilities			150,000				9,000,000
Gain on marketable securities (net), dividends and interest, held in Trust Account			28,158				—
Net loss		$	(243,037	)		$	(3,334,058	)
Weighted average shares outstanding of Class A common stock subject to possible redemption, basic and diluted			34,500,000				11,040,000
Basic and diluted net loss per share, Class A subject to possible redemption		$	(0.01	)		$	(0.25	)
Weighted average shares outstanding of Class A non-redeemable common stock, basic and diluted			990,000				316,800
Basic and diluted net loss per share, Class A non-redeemable common stock		$	(0.01	)		$	(0.25	)
Weighted average shares outstanding of Class B non-redeemable common stock, basic and diluted			5,000,000				5,000,000
Basic and diluted net loss per share, Class B non-redeemable common stock		$	(0.01	)		$	(0.09	)

		Common Stock Subject to Possible Redemption
		Class A								Class A								Class B								Additional Paid-in Capital				Accumulated Deficit				Total Stockholders Deficit
		Shares				Amount				Shares				Amount				Shares				Amount
Balance as of January 1, 2022 (audited)			34,500,000			$	345,017.029				990,000			$	99				5,000,000			$	500			$	—			$	(15,451,798	)		$	(15,451,199	)
Accretion of Class A common stock to redemption value			—				28,158				—				—				—				—				—				(28,158	)			(28,158	)
Net loss			—				—				—				—				—				—				—				(243,037	)			(243,037	)
Balance as of March 31, 2022 (unaudited)			34,500,000			$	345,045,187				990,000			$	99				5,000,000			$	500			$	—			$	(15,722,993	)		$	(15,722,394	)
		Common Stock Subject to Possible Redemption
		Class A								Class A								Class B								Additional Paid-in Capital				Accumulated Deficit				Total Stockholders Deficit
		Shares				Amount				Shares				Amount				Shares				Amount
Balance as of January 15, 2021 (inception)			—			$	—				—			$	—				—			$	—			$	—			$	—			$	—
Issuance of common stock to Sponsor			—				—				—				—				5,000,000				500				12,000				—				12,500
Sale of Public Shares, net of $19,660,260 issuance costs			34,500,000				325,339,740				—				—				—				—				—				—				—
Sale of Private Placement Shares			—				—				990,000				99				—				—				9,899,901				—				9,900,000
Accretion of Class A Common Stock to redemption value			—				19,660,260				—				—				—				—				(9,911,901	)			(9,748,359	)			(19,660,260	)
Net loss			—				—				—				—				—				—				—				(3,334,058	)			(3,334,058	)
Balance as of March 31, 2021 (unaudited)			34,500,000			$	345,000,000				990,000			$	99				5,000,000			$	500			$	—			$	(13,082,417	)		$	(13,081,818	)

		For The Three Months Ended March 31, 2022				For The Period From January 15, 2021 (Inception) Through March 31, 2021
Cash Flows from Operating Activities
Net loss		$	(243,037	)		$	(3,334,058	)
Adjustments to reconcile net loss to net cash used in operating activities:
Finance expense on fair value instruments			—				12,137,500
Gain on marketable securities (net), dividends and interest, held in Trust Account			(28,158	)			—
Change in fair value of derivative liabilities			(150,000	)			(9,000,000	)
Changes in operating assets and liabilities:
Prepaid and other assets			119,028				(1,278,834	)
Accounts payable and accrued expenses			44,523				706,912
Net cash used in operating activities			(257,644	)			(768,480	)
Cash Flows from Investing Activities
Investment  of marketable securities held in Trust Account			—				(345,000,000	)
Net cash used in investing activities			—				(345,000,000	)
Cash Flows from Financing Activities
Proceeds from issuance of Class B and Class K common stock to Sponsor			—				25,000
Advances from (to) related party			78,067				(24,400	)
Proceeds from sale of Public Share, net of transaction costs			—				337,414,740
Proceeds from sale of Private Placement Shares			—				9,900,000
Net cash provided by financing activities			78,067				347,315,340
Net (decrease) increase in cash			(179,577	)			1,546,860
Cash - beginning of period			202,245				—
Cash - end of period		$	22,668			$	1,546,860
Supplemental disclosure of noncash investing and financing activities:
Initial class A shares subject to possible redemption		$	—			$	325,339,740
Accretion of Class A shares to redemption value		$	28,158			$	19,660,260
Offering costs included in accrued expenses		$	—			$	511,237
Deferred underwriting fees payable		$	—			$	12,075,000

As of March 31, 2022, the Company had not commenced any operations. All activity through March 31, 2022 relates to the Company’s formation, its initial public offering (the “IPO”), and the Company’s search for a target to consummate a Business Combination, which are all described below. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates income in the form of interest income on cash and cash equivalents from the proceeds derived from its initial public offering. The Company has selected December 31 as its fiscal year end.

Following the closing of the IPO on March 8, 2021, and the full exercise of the underwriters’ overallotment option on March 8, 2021, an amount of $345,000,000 ($10.00 per Public Share) of the proceeds from the IPO, including $12,075,000 of the underwriting fees payable was placed in a U.S.-based Trust Account at Goldman Sachs, maintained by Continental Stock Transfer & Trust Company, LLC, acting as trustee (“Trust Account”), and invested only in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 180 days or less or in money market funds meeting certain conditions under promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Except with respect to interest earned on the funds in the Trust Account that may be released to the Company to pay its franchise and income taxes and expenses relating to the administration of the Trust Account, the proceeds from the IPO, including proceeds from the sale of Private Placement Shares and forward purchase shares, which are held in the Trust Account will not be released until the earliest of (a) the completion of the Company’s initial Business Combination, (b) the redemption of any public shares properly tendered in connection with a stockholder vote to amend the Company’s Amended and Restated Certificate of Incorporation (i) to modify the substance or timing of its obligation to redeem 100% of its public shares if the Company does not complete its initial Business Combination within 24 months from the closing of the IPO or (ii) with respect to any other provisions relating to stockholders’ rights Business Combination activity, and (c) the redemption of all of the Company’s public shares if it is unable to complete its Business Combination within 24 months from the closing of the IPO, subject to applicable law.

The Company will provide its holders of the (the “Public Stockholders”) of the Company’s issued and outstanding Class A common stock, par value $0.0001 per share, sold in the IPO (the “Public Shares”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). The amount to be distributed to Public Stockholders who redeem their Public Shares will not be reduced by the deferred underwriting fees payable the Company will pay to the underwriters. These Public Shares were recorded at a redemption value and classified as temporary equity upon the completion of the IPO, in accordance with Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to the amended and restated certificate of incorporation, which was adopted by the Company upon the consummation of the IPO (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (the “SEC”), and file tender offer documents with the SEC prior to completing a Business Combination. If, however, a stockholder approval of the transactions is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each Public Stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the transaction. If the Company seeks stockholder approval in connection with a Business Combination, the holders of the Founder Shares (as defined below) prior to this IPO (the “Initial Stockholders”) have agreed to vote their Founder Shares and any Public Shares purchased during or after the IPO in favor of a Business Combination. In addition, the Initial Stockholders have agreed to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of a Business Combination.

The holders of the Founder Shares (the “Initial Stockholders”) have agreed not to propose an amendment to the Company’s Amended and Restated Certificate of Incorporation (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with a Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination within the Combination Period or (B) with respect to any other provision relating to stockholders’ rights Business Combination activity, unless the Company provides the Public Stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.

If the Company is unable to complete a Business Combination within 24 months from the closing of the IPO (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 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 and not previously released to the Company to pay its taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding Public Shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (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 remaining stockholders and the board of directors, liquidate and dissolve, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

As a result of the above, in connection with the Company’s assessment of going concern considerations in accordance with Accounting Standards Update of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the liquidity conditions raise substantial doubt about the Company’s ability to continue as a going concern through approximately one year from the date of filing. 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 the Company be unable to continue as a going concern.

Management continues to evaluate the impact of pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position and results of its operations, the specific impact is not readily determinable as of the date of the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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 and Article 8 of Regulation of the SEC. Certain information or footnote disclosures normally included in 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 statements, operating results and cash flows for the period presented.

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 an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply growth companies but any such an election to opt out is irrevocable.

The Class A common stock subject to possible redemption are subject to the subsequent measurement guidance in ASC Under such guidance, the Company must subsequently measure the shares to their redemption amount because, as a result of the allocation of net proceeds to transaction costs, the initial carrying amount of the common stock is less than $10.00 per share. In accordance with the guidance, the Company has elected to measure the common stock subject to possible redemption to their redemption amount (i.e., $10.00 per share) immediately as if the end of the first reporting period after the IPO, March 8, 2021, was the redemption date. Such changes are reflected in capital, or in the absence of capital, in accumulated deficit. For the three months ended March 31, 2022, the Company recorded an accretion of $28,158, of which $28,158 was recorded in accumulated deficit. For the period from January 15, 2021 (inception) through March 31, 2021, the Company recorded an accretion of $19,660,260, of which $9,911,901 was recorded in additional capital and $9,748,359 was recorded in accumulated deficit.

ASC Topic 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 to be sustained upon examination by taxing authorities. The Company’s management determined that the United States is the Company’s only major tax jurisdiction.

Class B Founder Shares and Private Placement Shares are included in the calculation loss per share.

The Company’s statements of operations include a presentation of loss per share for shares of common stock subject to possible redemption in a manner similar to the method of loss per share. With respect to the accretion of the Class A common stock subject to possible redemption and consistent with ASC the Company has treated the accretion in excess of fair value in the same manner as a dividend, to the extent the redemption value exceeds the fair value, in the calculation of the net income/(loss) per common stock. As of March 31, 2022 and December 31, 2021, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted income (loss) per share is the same as basic loss per share for the periods presented.

On January 19, 2021, the Company issued a promissory note (the “Promissory Note”) to the Sponsor and an affiliate of the Sponsor, pursuant to which the Company could borrow up to an aggregate principal amount of $300,000. The Promissory Note bearing and payable on the earlier of (i) December 31, 2021 and (ii) the completion of the IPO. The outstanding balance under the promissory note was repaid upon consummation of the IPO. The Company can no longer borrow under the Promissory Note.

An affiliate of the Sponsor paid certain operating costs on behalf of the Company. These advances are due on demand and bearing. During the three months ended March 31, 2022 and the period from January 15, 2021 (inception) through March 31, 2021, the related party paid $78,067 and $600 of operating costs on behalf of the Company, respectively. As of March 31, 2022 and December 31, 2021, the amount due to the related party was $78,667 and $600, respectively.

The Class B Founder Shares will automatically convert into shares of Class A common stock on the first business day following the completion of our initial Business Combination, at a ratio such that the number of shares of Class A common stock issuable upon conversion of all Class B Founder Shares will equal, in the aggregate on basis, 15% of the sum of (i) the total number of all shares of Class A common stock issued and outstanding upon completion of this offering (including any over-allotment shares if the underwriters exercise their overallotment option), plus (ii) the total number of shares of Class A common stock issued or deemed issued or issuable upon conversion of the Class B Founder Shares plus (iii) unless waived, the total number of shares of Class A common stock issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding (x) any shares of Class A common stock or equity-linked securities exercisable for or convertible into shares of Class A common stock issued, deemed issued, or to be issued, to any seller in the initial Business Combination, (y) any shares of Class A common stock issuable upon conversion of the Class K Founder Shares and (z) any Private Placement Shares. Prior to our initial Business Combination, only holders of shares of our Class B common stock will be entitled to vote on the appointment of directors.

The Class K Founder Shares will convert into shares of Class A common stock after the initial Business Combination only to the extent certain triggering events occur prior to the 10th anniversary of the initial Business Combination, including three equal triggering events based on our stock trading at $30.00, $40.00 and $50.00 per share following the first anniversary of the closing of our initial Business Combination and also upon specified strategic transactions, in each case, as described in this prospectus. The Class K Founder Shares will be convertible into shares of Class A common stock at a ratio such that the number of shares of Class A common stock issuable upon conversion of all Founder Shares (including both Class B Founder Shares and Class K Founder Shares) will equal, in the aggregate on an basis, 30% of the sum of (i) the total number of all shares of Class A common stock issued and outstanding upon completion of this offering (including any over-allotment shares if the underwriters exercise their overallotment option), plus (ii) the total number of shares of Class A common stock issued or deemed issued or issuable upon conversion of the Class B Founder Shares and Class K Founder Shares plus (iii) unless waived, the total number of shares of Class A common stock issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding (x) any shares of Class A common stock or equity-linked securities exercisable for or convertible into shares of Class A common stock issued, deemed issued, or to be issued, to any seller in the initial Business Combination and (y) any Private Placement Shares. Prior to our initial Business Combination, only holders of shares of our Class B common stock were entitled to vote on the appointment of directors.

The Company accounts for the Class K Founder Shares as equity linked instruments. Based on the guidance in ASC Topic 815, certain adjustments to the settlement amount of the Class K Founder Shares are based on a variable that is not an input to the fair value of a option as defined under ASC The Class K Founder Shares are recorded as liabilities as these shares are not considered indexed to the Company’s own stock and not eligible for an exception from derivative accounting.

The holders of the Founder Shares and Private Placement Shares are entitled to registration rights pursuant to the registration agreement signed prior to the consummation of the IPO. The holders are entitled to certain demand and “piggyback” registration rights. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statements to become effective until termination of the period.

The Company’s taxable income primarily consists of interest income on the Trust Account, less any franchise taxes. The Company’s formation costs are generally costs and are not currently deductible.

We recorded an income tax provision of $0 and $0 for the three months ended March 31, 2022, and for the period from January 15, 2021 (inception) through March 31, 2021, respectively. The effective income tax rate for the three months ended March 31, 2022, and for the period from January 15, 2021 (inception) through March 31, 2021 was 0% and 0%, respectively. The 0% effective income tax rate differs from the federal statutory rate of 21% as a result of  transaction costs, and the movement of the valuation allowance against our U.S. state and federal net deferred tax assets. As of March 31, 2022 and December 31, 2021, the Company had $204,813 and $182,971 of U.S. federal and state net operating loss carryovers available to offset future taxable income, respectively.

This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward- looking statements, please refer to the Risk Factors section of the Company’s final prospectus for its initial public offering (“IPO”) filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Upon the closing of the IPO and the private placement, the $345,000,000 of net proceeds from the IPO and certain of the proceeds of the private placement were placed in a Trust Account (“Trust Account”) located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and invested only in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 180 days or less or in money market funds meeting certain conditions under Rule promulgated under the Investment Company Act that invest only in direct U.S. government treasury obligations, as determined by us, until the earlier of: (i) the completion of a business combination and (ii) the distribution of the Trust Account.

If we are unable to complete a business combination by March 8, 2023 (24 months from the closing of the IPO), or June 8, 2023 (27 months from the closing of the IPO), if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination by March 8, 2023, and our stockholders have not amended the certificate of incorporation to extend such period, we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but no more than ten business days thereafter subject to lawfully available funds therefor, redeem the public shares, at a 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 and not previously released to us to pay our taxes as well as expenses relating to the administration of the Trust Account (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

We have neither engaged in any operations (other than searching for a business combination after our IPO) nor generated any revenues to date. Our only activities through March 31, 2022 were organizational activities and those necessary to prepare for the IPO and the proposed initial business combination. We do not expect to generate any operating revenues until after the completion of our business combination. We expect to generate income in the form of interest income on marketable securities held after the IPO. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

As a result of the above, in connection with the Company’s assessment of going concern considerations in accordance with Accounting Standards Update (“ASU”) “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the liquidity conditions raise substantial doubt about the Company’s ability to continue as a going concern through approximately one year from the date of filing. 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 the Company be unable to continue as a going concern.

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

Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended March 31, 2022, as such term is defined in Rules and under the Exchange Act.

Factors that could cause our actual results to differ materially from those in this report include the risk factors described in Part I, Item 1A “Risk Factors” in our Annual Report on Form for the year ended December 31, 2021. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in our Annual Report on Form for the year ended December 31, 2021.

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