Seaport Calibre Materials Acquisition Corp. - Quarter Report: 2022 June (Form 10-Q)

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

Seaport Calibre Materials Acquisition Corp.

(Exact name of registrant as specified in its charter)

001-40975

(Commission File Number)

Delaware

86-3426874

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

Identification No.)

360 Madison Avenue
23^rd Floor

New York, NY 10017

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: 212-616-7700

360 Madison Avenue 20th Floor New York, NY 10017

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units, each consisting of one share of Class A common stock and one-half of one redeemable warrant	SCMAU	The Nasdaq Stock Market LLC
Class A common stock, par value $0.0001 per share	SCMA	The Nasdaq Stock Market LLC
Warrants, each whole warrant exercisable for one share of Class A common stock, each at an exercise price of $11.50 per share	SCMAW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ◻ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ◻ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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

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

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

As of August 8, 2022, 3,250,000 shares of Class B common stock, par value $0.0001 per share, and 13,000,000 shares of Class A common stock, par value $0.0001 per share, were issued and outstanding.

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SEAPORT CALIBRE MATERIALS ACQUISITION CORP. (AS SUCCESSOR TO AMFCO-420 LLC)

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2022

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		Page
Part I. Financial Information

Item 1.	Financial Statements

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

	Statements of Operations for the three and six months ended June 30, 2022 and 2021 (unaudited)	2

	Statements of Changes in Redeemable Common Stock and Stockholders’ Deficit for the three and six months ended June 30, 2022 and 2021 (unaudited)	3

	Statement of Cash Flows for the six months ended June 30, 2022 and 2021 (unaudited)	4

	Notes to Financial Statements (unaudited)	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	26

Item 9A.	Controls and Procedures	26

Part II. Other Information		27

Item 1.	Legal Proceedings	27

Item 1A.	Risk Factors	27

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

Item 3.	Defaults Upon Senior Securities	27

Item 4.	Mine Safety Disclosures	27

Item 5.	Other Information	27

Item 6.	Exhibits	28

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PART I-FINANCIAL INFORMATION

Item 1. Financial Statements

SEAPORT CALIBRE MATERIALS ACQUISITION CORP. (AS SUCCESSOR TO AMFCO-420 LLC)

BALANCE SHEETS


	June 30, 2022		December 31, 2021
	(unaudited)
ASSETS
Current assets:
Cash	$	45,138	$	552,302
Prepaid expenses		540,259		616,779
Total current assets		585,397		1,169,081
Cash and securities held in Trust account		132,165,672		131,961,120
Other assets		—		202,347
Total assets	$	132,751,069	$	133,332,548

LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued expenses	$	137,193	$	64,292
Franchise tax payable		49,315		140,274
Total current liabilities		186,508		204,566
Business combination marketing fee payable		5,200,000		5,200,000
Warrant liability		1,580,552		5,583,535
Total liabilities		6,967,060		10,988,101

Commitments and contingencies (Note 7)
Class A common stock subject to possible redemption, 13,000,000 shares at redemption value of $10.15 per share		131,950,000		131,950,000

Stockholders’ Deficit:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized, none issued or outstanding		—		—
Class A common stock, $0.0001 par value; 200,000,000 shares authorized; none issued and outstanding excluding shares subject to possible redemption		—		—
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 3,250,000 issued and outstanding as of June 30, 2022, and December 31, 2021		325		325
Additional paid-in capital		—		—
Accumulated deficit		(6,166,316)		(9,605,878)
Total stockholders’ deficit		(6,165,991)		(9,605,553)
Total Liabilities, Redeemable Common Stock and Stockholders’ Deficit	$	132,751,069	$	133,332,548

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

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SEAPORT CALIBRE MATERIALS ACQUISITION CORP. (AS SUCCESSOR TO AMFCO-420 LLC)

STATEMENTS OF OPERATIONS

(unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Operating expenses:
General and administrative expenses	$	307,102	$	—	$	655,389	$	—
Formation and operating costs		—		6,512		—		6,512
Franchise tax expense		56,822		—		108,552		—
Loss from operations		(363,924)		(6,512)		(763,941)		(6,512)
Other income:
Change in fair value of warranty liability		1,377,720		—		4,002,983		—
Interest income earned on the balance in the Trust Account		187,870		—		204,552		—
Total other income		1,565,590		—		4,207,535		—

Income (loss) before provision for income taxes	$	1,201,666	$	(6,512)	$	3,443,594	$	(6,512)

Provision for income tax		4,032		—		4,032		—

Net income (loss)	$	1,197,634	$	(6,512)	$	3,439,562	$	(6,512)

Class A common stock subject to redemption, allocation of net income as adjusted	$	958,108	$	—	$	2,751,650	$	—
Class A common stock subject to redemption, weighted average shares outstanding, basic and diluted		13,000,000		—		13,000,000		—
Class A common stock subject to redemption, basic and diluted net income per common shares	$	0.07	$	—	$	0.21	$	—

Class B allocation of net income as adjusted	$	239,526	$	—	$	687,912	$	—
Class B weighted average shares outstanding, basic and diluted		3,250,000		4,612,637		3,250,000		2,319,061
Class B basic and diluted net income per common share	$	0.07	$	0.00	$	0.21	$	0.00

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

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SEAPORT CALIBRE MATERIALS ACQUISITION CORP. (AS SUCCESSOR TO AMFCO-420 LLC)

STATEMENTS OF CHANGES IN REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ DEFICIT

(Unaudited)


	Class A
	common stock						Additional				Total
	subject to possible redemption			Class B			paid-in				Stockholders’
	Shares	Amount		Shares	Amount		capital		Accumulated deficit		Deficit
Balance - December 31, 2020	—	$	—	—	$	—	$	479	$	(479)	$	—
Net income	—		—	—		—		—		—		—
Balance – March 31, 2021	—	$	—	—	$	—	$	479	$	(479)	$	—
Conversion to a Corporation	—		—	5,750,000	$	575		(479)		(96)		—
Net loss	—		—	—		—		—		(6,512)		(6,512)
Balance – June 30, 2021	—	$	—	5,750,000	$	575	$	—	$	(7,087)	$	(6,512)

Balance - December 31, 2021	13,000,000	$	131,950,000	3,250,000	$	325	$	—	$	(9,605,878)	$	(9,605,553)
Net income	—		—	—		—		—		2,241,928		2,241,928
Balance - March 31, 2022	13,000,000	$	131,950,000	3,250,000	$	325	$	—	$	(7,363,950)	$	(7,363,625)
Net income	—		—	—		—		—		1,197,634		1,197,634
Balance – June 30, 2022	13,000,000	$	131,950,000	3,250,000	$	325	$	—	$	(6,166,316)	$	(6,165,991)

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

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SEAPORT CALIBRE MATERIALS ACQUISITION CORP. (AS SUCCESSOR TO AMFCO-420 LLC)

STATEMENT OF CASH FLOWS

(unaudited)


	Six Months Ended June 30,
	2022		2021

Cash flows from operating activities:
Net income (loss)	$	3,439,562	$	(6,512)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Change in fair value of warrant liability		(4,002,983)		—
Interest income earned on the balance in the Trust Account		(204,552)		—
Changes in operating assets and liabilities:
Prepaid expenses and other assets		278,867		(1,392)
Accounts payable and accrued expenses		72,901		—
Franchise tax payable		(90,959)		—
Net cash used in operating activities		(507,164)		(7,904)

Cash flows from financing activities:
Payment of offering costs		—		(199,425)
Proceeds from promissory note – related party		—		400,000
Net cash provided by financing activities		—		200,575

Net change in cash		(507,164)		192,671
Cash, beginning of period		552,302		—
Cash, end of period	$	45,138	$	192,671

Supplemental disclosure of non-cash investing and financing activities:
Offering costs included in accrued expenses		—		181,969

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

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SEAPORT CALIBRE MATERIALS ACQUISITION CORP. (AS SUCCESSOR TO AMFCO-420 LLC)

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

Note 1—Organization and Business Operations

Seaport Calibre Materials Acquisition Corp. (as successor to AMFCO-420 LLC, the “Initial LLC”) (the “Company”) is a blank check company incorporated as a Delaware corporation as a result of the conversion of a Limited Liability Company (“LLC”) in April 2021, whose business purpose is to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which is referred to throughout these notes as the “Business Combination.” On April 19, 2021 AMFCO-420 LLC, a Delaware Limited Liability Company, converted to a Delaware Corporation, and changed its name to “Seaport Calibre Materials Acquisition Corp.” AMFCO-420 LLC was originally incorporated on May 15, 2019. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

The activity through June 30, 2022 relates to the Company’s formation and the Initial Public Offering (“IPO”), which is described below, and identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from the IPO.

On November 1, 2021, the Company consummated the Initial Public Offering of 13,000,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), which did not include the full exercise by the underwriter of the overallotment option at $10.00 per Unit, generating gross proceeds of $130,000,000, which is described in Note 3.

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 4,700,000 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant in a private placement to Seaport Global Asset Management, LLC (“SGAM”) and Calibre Group, LLC (“Calibre Group”) (collectively, the “Sponsors”), generating gross proceeds of $7,050,000, which is described in Note 4.

In 2021, offering costs amounted to $8,710,365, of which $8,355,535 were charged to temporary equity upon the completion of the Initial Public Offering and $354,830 were expensed to the statement of operations as of and for the year ended December 31, 2021. There were no deferred offering costs incurred during the three month and six month periods ended June 30, 2022.

Following the closing of the IPO an amount of $131,950,000 ($10.15 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”) and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the funds in the Trust Account to the Company’s stockholders, as described below.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. NASDAQ rules provide that the Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (less any business combination marketing fees and taxes payable on interest earned on the Trust Account) at the time of the signing a definitive agreement to enter a Business Combination. The Company will only complete a Business Combination if the post-Business Combination 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, as amended. There is no assurance that the Company will be able to successfully effect a Business Combination.

The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) 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. In connection with a proposed Business Combination, the Company may seek stockholder approval of a Business Combination at a meeting called for such purpose at which stockholders

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may seek to redeem their shares, regardless of whether they vote for or against a Business Combination. The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 either immediately prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination.

If the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s Amended and Restated Certificate of Incorporation provides that, a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), will be restricted from seeking redemption rights with respect to 20% or more of the Public Shares without the Company’s prior written consent.

The public stockholders will be entitled to redeem their shares for a pro rata portion of the amount then in the Trust Account (initially $10.15 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 per-share amount to be distributed to stockholders who redeem their shares will not be reduced by the business combination marketing fees the Company will pay to the underwriter (as discussed in Note 7). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.

If a stockholder vote is not required and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation, offer such redemption pursuant to the tender offer rules of the Securities and Exchange Commission (the “SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination.

The Company’s Sponsors have agreed (a) to vote its Founder Shares (as defined in Note 5), and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination; (b) not to propose an amendment to the Company’s Amended and Restated Certificate of Incorporation with respect to the Company’s pre-Business Combination activities prior to the consummation of a Business Combination unless the Company provides dissenting public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment; (c) not to redeem any shares (including the Founder Shares) and Private Placement Warrants (including underlying securities) into the right to receive cash from the Trust Account in connection with a stockholder vote to approve a Business Combination (or to sell any shares in a tender offer in connection with a Business Combination if the Company does not seek stockholder approval in connection therewith) or a vote to amend the provisions of the Amended and Restated Certificate of Incorporation relating to stockholders’ rights of pre-Business Combination activity; and, (d) that the Founder Shares and Private Placement Warrants (including underlying securities) shall not participate in any liquidating distributions upon winding up if a Business Combination is not consummated. However, the Sponsors will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares purchased during or after the Initial Public Offering if the Company fails to complete its Business Combination.

If the Company is unable to complete a Business Combination by February 1, 2023 (or May 1, 2023 if the period of time to consummate a Business Combination is extended) (the “Combination Period”), the Company 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, 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 and not previously released to us to pay taxes (less 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 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 Company’s board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable law. The underwriter has agreed to waive its rights to the business combination marketing fees held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than $10.15 per Unit.

The Sponsors have agreed that they will be liable to the Company if and to the extent any claims by a third party 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 similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.15 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the day of

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liquidation of the Trust Account, if less than $10.15 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 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 underwriter of Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsors have sufficient funds to satisfy its indemnity obligations. Therefore, the Company cannot assure its stockholders that the Sponsors would be able to satisfy those obligations. 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. The Company will seek to reduce the possibility that the Sponsors will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

Liquidity, Capital Resources and Going Concern

The Company anticipates the liquid cash balance of $45,138 (held outside of the Trust Account) as of June 30, 2022, will not be sufficient to allow the Company to operate for at least the next 12 months from the issuance of the financial statements, assuming a Business Combination is not consummated. Until consummation of its Business Combination, the Company will be using the funds held in bank accounts and any future additional Working Capital Loans (as defined in Note 5) from the initial stockholders, the Company’s officers and directors, or their respective affiliates (which is described in Note 5), for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination.

As of June 30, 2022, $181,885 of the amount in the Trust Account was available to be withdrawn as described above.

As such, the possibility exists that within the coming 12 months the Company may need to raise additional capital through loans or additional investments from its Sponsor, stockholders, officers, directors, or third parties. In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the initial stockholders or their affiliates may, but are not obligated to, loan the Company funds as may be required. There is no guarantee the Company can obtain these loans at reasonable rates. If the Company successfully completes a Business Combination, it would repay such loaned amounts. In the event that a Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from the Company’s Trust Account would be used for such repayment. Up to $2,000,000 of such loans may be convertible into warrants identical to the Private Placement Warrants, at a price of $1.50 per warrant at the option of the lender.

Accordingly, 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 a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern through one year and one day from the date of issuance of the financial statements. 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.

In connection with our assessment of going concern considerations in accordance with the authoritative guidance in Financial Accounting Standard Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the mandatory liquidation and subsequent dissolution, should we be unable to complete a business combination, raises substantial doubt about the our ability to continue as a going concern. We have until February 1, 2023 to consummate a Business Combination (or May 1, 2023 if the period of time to consummate a business combination is extended). It is uncertain that we will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after February 1, 2023 (or May 1, 2023 if the period of time to consummate a business combination is extended).

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Risks and Uncertainties

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States and the World. As of the date the financial statement was issued, there was considerable uncertainty around the expected duration of this pandemic. The Company has concluded that while it is reasonably possible that COVID-19 could have a negative effect on identifying a target company for a Business Combination, the specific impact is not readily determinable as of the date of this financial statement. In addition, our search for a target company may be impacted by the current hostilities between Russia and Ukraine, inflationary effects, and other similar events and the status of debt and equity markets. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the SEC.

The accompanying unaudited financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Form 10-K filed by the Company with the SEC on March 31, 2022. In the opinion of management, the accompanying unaudited 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 period presented. 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

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 stockholder 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 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 the financial statement in conformity with 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 financial statement.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statement, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

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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.

Cash and Securities held in Trust Account

At June 30, 2022 and December 31, 2021, the assets held in the Trust Account were substantially held in U.S. Treasury Securities. During the three and six months ended June 30, 2022, the Company did not withdraw any of the interest income from the Trust Account to pay its tax obligations. The Company did not have assets held in the Trust Account as of or during the six months ended June 30, 2021.

The Company classifies its U.S. Treasury Securities as held-to-maturity in accordance with FASB ASC Topic 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts.

A decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment that reduces the carrying costs to such securities’ fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and the duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in.

Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest method. Such amortization and accretion is included in the “interest income” line item in the statements of operations. Interest income is recognized when earned.

Warrant Liability

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’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 are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded 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 are recognized as a non-cash gain or loss on the statements of operations.

Class A Common Stock Subject to Possible Redemption

The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable 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 the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the

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Company’s control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s balance sheet.

As of June 30, 2022 and December 31, 2021, the Class A ordinary shares, classified as temporary equity in the balance sheet, are reconciled in the following table:


Gross proceeds of initial public offering	$	128,410,911
Less:
Proceeds allocated to public warrants		(4,856,128)
Offering costs allocated to Class A ordinary shares subject to possible redemption		(8,355,535)
Plus:
Re-measurement on Class A ordinary shares subject to possible redemption		16,750,752
Class A ordinary shares subject to possible redemption	$	131,950,000

Offering Costs

In 2021, offering costs consist principally of professional and registration fees incurred that are related to the IPO. Offering costs amounted to $8,710,365, of which $8,355,535 were charged to temporary equity upon the completion of the IPO and $354,830 were expensed to the statement of operations as of and for the year ended December 31, 2021.

Income Taxes

The Company accounts for income taxes under 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 financial statement 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.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position 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. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2022 and December 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

The Company has identified the United States as its only “major” tax jurisdiction. The Company may be subject to potential examination by federal and state taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

Net Income Per Share of Common Stock

Net income per common share is computed by dividing net income by the weighted average number of common stock outstanding for the period. The Company applies the two-class method in calculating earnings per share. Shares of common stock subject to possible redemption at June 30, 2022, including all of the 13,000,000 Class A common shares issued and outstanding as of June 30, 2022, are included in the calculation of basic net income per common share since such shares participate in their pro rata share of the Trust Account. The Company has not considered the effect of warrants sold in the Initial Public Offering and the private placement to purchase an aggregate 4,700,000 shares of common stock in the calculation of diluted income per share, since the exercise of the warrants into shares of common stock is contingent upon the occurrence of future events. As a result, diluted net income per common share is the same as basic net income per common share for the period presented.

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Below is a reconciliation of net income per common share:


	For the three months ended				For the six months ended
	June 30,		June 30,		June 30,		June 30,
Basic and diluted net income per common share	2022		2021		2022		2021
Redeemable Class A common stock
Numerator: Net income allocable to Redeemable Class A common stock subject to possible redemption
Allocation of net income as adjusted	$	958,108	$	—	$	2,751,650	$	—
Denominator:
Basic and diluted weighted average shares outstanding		13,000,000		—		13,000,000		—
Basic and diluted net income per share, Redeemable Class A common stock	$	0.07	$	—	$	0.21	$	—
Non-Redeemable Class B common stock
Numerator: Net income allocable to Class B common stock
Allocation of net income as adjusted	$	239,526	$	—	$	687,912	$	—
Denominator
Basic and diluted weighted average shares outstanding		3,250,000		4,612,637		3,250,000		2,319,061
Basic and diluted net income per share, non-redeemable Class B common stock	$	0.07	$	—	$	0.21	$	—

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 Corporation limit of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.

Recent Accounting Standards

In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021, with early adoption permitted. The adoption of ASU 2019-12, effective January 1, 2022, did not have a material impact on the Company’s financial statements and related footnote disclosures.

The Company does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material impact on our financial statements.

Note 3 — Public Offering

Pursuant to the Initial Public Offering, on November 1, 2021, the Company sold 13,000,000 Units, at a purchase price of $10.00 per Unit. Each Unit consists of one share of the Company’s Class A common stock, $0.0001 par value, and one half of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 9).

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Note 4 — Private Placement

Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 4,700,000 Private Placement Warrants at a price of $1.50 per Private Placement Warrant, or $7,050,000 in the aggregate. Each Private Placement Warrant is exercisable to purchase one share of Class A common stock at a price of $11.50 per share. The proceeds from the sale of the Private Placement Warrants were added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.

Note 5 – Related Party Transactions

Founder Shares

In connection with the formation of the Initial LLC in 2019, and for additional consideration in 2020, SGAM received 100% of its limited liability company interests for nominal consideration of $479. As part of the conversion of the Initial LLC in April 2021, the limited liability company interests held by SGAM were converted into 5,750,000 founder shares, of which 3,267,500 were transferred to Calibre Group and certain other initial stockholders in June 2021 (including the transfer of 287,500 shares to Stephen Smith) and 503,125 transferred to certain other initial stockholders in July 2021 for an aggregate purchase price of $27,019 (or $0.007 per share). In July 2021, our initial stockholders forfeited an aggregate of 1,437,500 shares (including the forfeiture of 71,875 shares by Stephen Smith), thereby resulting in 4,312,500 remaining founder shares. Subsequently, in September 2021, certain initial stockholders transferred an aggregate of 464,620 founder shares to Calibre Group and its controlled affiliates (including 31,110 shares transferred by Stephen Smith), resulting in 184,515 shares and 1,430,875 shares held by Stephen Smith and SGAM respectively. In October 2021, our initial stockholders forfeited an aggregate of 575,000 shares (including 51,252 shares by Stephen Smith), thereby resulting in 3,737,500 remaining Founder Shares. Also in October 2021, certain initial stockholders transferred an aggregate of 222,647 Founder Shares to Calibre Group and its controlled affiliates, (including 17,769 transferred by Stephen Smith), resulting in 115,494 shares and 1,231,730 shares held by Stephen Smith and SGAM, respectively. The underwriters did not exercise the over-allotment option, and as a result, 487,500 additional shares were forfeited, resulting in 3,250,000 Founder Shares outstanding, of which 100,429 and 1,071,070 shares are held by Stephen Smith and SGAM, respectively, as of both June 30, 2022 and December 31, 2021.

The initial stockholders have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination, or (B) the date on which the Company completes a liquidation, merger, capital stock exchange or similar transaction that results in the Company's stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, 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 any 30-trading day period commencing at least 150 days after the Business Combination, the Founder Shares will be released from the lock-up.

Promissory Note and Advances — Related Party

In May 2021, SGAM agreed to loan the Company an aggregate of up to $400,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the “Note”). The outstanding balance under the Note was repaid on November 1, 2021. At June 30, 2022 and at December 31, 2021, there were no borrowings outstanding.

Related Party Loans

In order to finance transaction costs in connection with a Business Combination, the Company’s Sponsor, an affiliate of the Sponsor, or the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $2,000,000 of notes may be converted upon consummation of a Business Combination into warrants at a price of $1.50 per warrant. The warrants will be identical to the Private Placement Warrants. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. At June 30, 2022 and December 31, 2021, no Working Capital Loans were outstanding.

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Administrative Services Agreement

The Company agreed to make payment to an affiliate of its sponsors of $10,000 per month, for up to 15 months (or up to 18 months if the period of time to consummate a business combination is extended), prior to the completion of the Company’s initial business combination, for office space, utilities and secretarial and administrative support. The amount expensed in the statement of operations for the three and six months ended June 30, 2022 was $30,000 and $60,000, respectively. The amount expensed in the statement of operations for the three and six months ended June 30, 2021 was $0.

Note 6 — Cash and Securities Held in Trust Account

As of June 30, 2022, the Company’s Trust Account consisted of $616 in Cash and Sweep Funds and $132,165,056 in U.S. Treasury Securities. As of December 31, 2021 the Company’s Trust Account consisted of $362 in Cash and Sweep Funds and $131,960,758 in U.S. Treasury Securities.

During the three months ended June 30, 2022, the Company's previously held U.S. Treasury Securities units of 131,983,000 matured on May 5, 2022. On the same date, 132,279,000 units of U.S. Treasury Securities were purchased and matured on August 4, 2022. On August 4, 2022, the Company invested $132,053,983 in three-month U.S. Treasury Securities to mature on November 3, 2022. On August 8, 2022 the Company withdrew $225,309 from its Trust Account to reimburse the Company for $197,145 in Delaware Franchise Taxes paid in 2022 and $28,164 to be paid on September 1, 2022.

The Company classifies its U.S. Treasury Securities as held-to-maturity in accordance with FASB ASC 320 “Investments — Debt and Equity Securities”. Held-to-maturity treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts. The held to maturity interest income was $204,552 for the six months ended June 30, 2022 and $187,871 for the three months ended June 30, 2022. The Company considers all investments with original maturities of more than three months but less than one year to be short-term investments. The carrying value approximates the fair value due to its short-term maturity.

The carrying value, excluding gross unrealized holding gains and fair value of held to maturity securities on June 30, 2022 and December 31, 2021 are as follows:


	Carrying						Fair
	Value as of		Gross		Gross		Value as of
	June 30,		Unrealized		Unrealized		June 30,
	2022		Gains		(Losses)		2022
U.S. Money Market	$	616	$	—	$	—	$	616
U.S. Treasury Securities		132,165,056		235,287		(53,401)		132,346,942
	$	132,165,672	$	235,287	$	(53,401)	$	132,347,558


	Carrying						Fair
	Value as of		Gross		Gross		Value as of
	December 31,		Unrealized		Unrealized		December 31,
	2021		Gains		(Losses)		2021
U.S. Money Market	$	362	$	—	$	—	$	362
U.S. Treasury Securities		131,960,758		11,753		(13,614)		131,958,897
	$	131,961,120	$	11,753	$	(13,614)	$	131,959,259

Note 7 — Commitments & Contingencies

Registration Rights

Pursuant to a registration rights agreement entered into on October 29, 2021, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of the Working Capital Loans (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to our Class A common stock). The holders of the majority of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation

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of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriters Agreement

The underwriter is entitled to a business combination marketing fee of $5,200,000 in the aggregate. This deferred fee will become payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. This payable amount is reflected as a liability in the balance sheet as of June 30, 2022 and December 31, 2021.

Note 8 — Stockholders’ Deficit

Preferred Stock — The Company is authorized to issue 1,000,000 shares of $0.0001 par value preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. There were no shares of preferred stock issued or outstanding at June 30, 2022 and December 31, 2021.

Class A Common Stock — The Company is authorized to issue up to 200,000,000 shares of Class A, $0.0001 par value common stock. Holders of the Company’s Class A common stock are entitled to one vote for each share. At June 30, 2022 and December 31, 2021, there were 0 shares of Class A common stock issued and outstanding, excluding 13,000,000 shares of Class A common stock subject to possible redemption.

Class B Common Stock — The Company is authorized to issue up to 20,000,000 shares of Class B, $0.0001 par value common stock. Holders of the Company’s Class B common stock are entitled to one vote for each share. At June 30, 2022 and December 31, 2021, there were 3,250,000 Class B common stock issued and outstanding.

The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of the Business Combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like. 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 Initial Public Offering and related to the closing of a 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, in the aggregate, on an as converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the completion of the Initial Public Offering plus all shares of Class A common stock and equity linked securities issued or deemed issued in connection with a Business Combination (excluding any shares or equity linked securities issued, or to be issued, to any seller in a Business Combination, and any private placement-equivalent warrants issued to the Sponsor or its affiliates upon conversion of loans made to the Company). The Company may issue additional common stock or preferred stock to complete its Business Combination or under an employee incentive plan after completion of its Business Combination.

Note 9 – Warrant Liability

The Company accounts for the warrants issued in connection with the Initial Public Offering in accordance with the guidance contained in ASC Topic 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Accordingly, the Company will classify each warrant as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations.

The Public Warrants will become exercisable 30 days after the consummation of a Business Combination. No Public Warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the common shares issuable upon exercise of the Public Warrants and a current prospectus relating to such common shares. Notwithstanding the foregoing, if a registration statement covering the Class A common shares issuable upon the exercise of the Public Warrants is not effective within 60 days from the consummation of a Business Combination, the holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise the Public Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. If an exemption from registration is

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not available, holders will not be able to exercise their Public Warrants on a cashless basis. The Public Warrants will expire five years from the consummation of a Business Combination or earlier upon redemption or liquidation.

Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00 — The Company may call the Public Warrants for redemption (excluding the Private Placement Warrants), in whole and not in part, at a price of $0.10 per warrant:

●

upon a minimum of 30 days prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the “fair market value” (as defined below) of our Class A common stock except as otherwise described below;

●

if, and only if, the closing price of our Class A common stock equals or exceeds $10.00 per public share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Redeemable Warrants — Public Stockholders’ Warrants — Anti-dilution adjustments”) for any 20 trading days within the 30-trading day period ending three trading days before we send the notice of redemption to the warrant holders; and

●

if the closing price of our Class A common stock for any 20 trading days within a 30-trading day period ending three trading days before we send notice of redemption to the warrant holders is less than $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Warrants — Public Stockholders’ Warrants — Anti-dilution Adjustments”), the private placement warrants must also be concurrently called for redemption on the same terms as the outstanding public warrants, as described above.

Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00 — The Company may call the Public Warrants for redemption (excluding the Private Placement Warrants), 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 to each Public Warrant holder,

●

if, and only if, the last sale price of the Company’s 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 a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.

The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.

In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination on the date of the consummation of such initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.

The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A common shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and will be non-

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redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

Note 10 – Income Tax

The Company’s net deferred tax assets are as follows:


	June 30, 2022		December 31, 2021
Deferred tax asset
Organizational costs/Startup expenses	$	271,499	$	133,840
Federal Net Operating loss		10,994		27,122
Total deferred tax asset		282,493		160,962
Valuation allowance		(282,493)		(160,962)
Deferred tax asset, net of allowance	$	—	$	—

The income tax provision consists of the following:


	June 30, 2022		June 30, 2021
Federal
Current	$	4,032	$	—
Deferred		(282,493)		—
State
Current		—		—
Deferred		—		—
Change in valuation allowance		282,493		—
Income tax provision	$	4,032	$	—

As of June 30, 2022, the Company had $52,354 of U.S. federal net operating loss carryovers available to offset future taxable income which do not expire.

In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the three months ended June 30, 2022, the valuation allowance increased by $41,031 and for the six months ended June 30, 2022 valuation allowance increased by $121,531. For the three and six months ended June 30, 2021 the change in valuation allowance was $0.

A reconciliation of the federal income tax rate to the Company’s effective tax rate for the six month periods ended June 30, 2022 and June 30, 2021 is as follows:


	2022		2021
Statutory federal income tax rate	21.0	%	—	%
Net Operating Loss Utilization	(0.5)	%	—	%
Permanent Book/Tax Differences	(24.4)	%	—	%
Change in valuation allowance	4.0	%	—	%
Income tax provision	0.1	%	—	%

The Company files income tax returns in the U.S. federal jurisdiction in various state and local jurisdictions and is subject to examination by the various taxing authorities.

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Note 11 — Fair Value Measurements

FASB ASC Topic 820 “Fair Value Measurements and Disclosures” (“ASC 820”) defines fair value, the methods used to measure fair value and the expanded disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between the buyer and the seller at the measurement date. In determining fair value, the valuation techniques consistent with the market approach, income approach and cost approach shall be used to measure fair value. ASC 820 establishes a fair value hierarchy for inputs, which represent the assumptions used by the buyer and seller in pricing the asset or liability. These inputs are further defined as observable and unobservable inputs. Observable inputs are those that buyer and seller would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the inputs that the buyer and seller would use in pricing the asset or liability developed based on the best information available in the circumstances.

The fair value hierarchy is categorized into three levels based on the inputs as follows:

Level 1 —

Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment.

Level 2 —

Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means.

Level 3 —

Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The fair value of the Company’s certain assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet. The fair values of cash and cash equivalents, prepaid assets, accounts payable and accrued expenses are estimated to approximate the carrying values as of June 30, 2022 and December 31, 2021 due to the short maturities of such instruments.

The following tables present information about the Company’s assets and liabilities that were measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021 indicating the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

Trust Account


	June 30,
	2022		Level 1		Level 2		Level 3
Assets:
U.S. Money Market held in Trust Account	$	616	$	616	$	—	$	—
U.S. Treasury Securities held in Trust Account		132,165,056		132,165,056		—		—
	$	132,165,672	$	132,165,672	$	—	$	—


	December 31,
	2021		Level 1		Level 2		Level 3
Assets:
U.S. Money Market held in Trust Account	$	362	$	362	$	—	$	—
U.S. Treasury Securities held in Trust Account		131,960,758		131,960,758		—		—
	$	131,961,120	$	131,961,120	$	—	$	—

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Warrants


	June 30,
	2022		Level 1		Level 2		Level 3
Liabilities:
Warrant Liability – Public Warrants	$	910,000	$	910,000	$	—	$	—
Warrant Liability – Private Placement Warrants		670,552		—		—		670,552
	$	1,580,552	$	910,000	$	—	$	670,552


	December 31,
	2021		Level 1			Level 2	Level 3
Liabilities:
Warrant Liability – Public Warrants	$	3,218,150	$	3,218,150	$	—	$	—
Warrant Liability – Private Placement Warrants		2,365,385		—		—		2,365,385
	$	5,583,535	$	3,218,150	$	—	$	2,365,385

The warrant liabilities are measured at fair value at inception and remeasured at every measurement date, with changes in fair value shown in the statement of operations.

Initial Measurement

The Company established the initial fair value for the Public Warrants and Private Placement Warrants on November 1, 2021, the date the Company consummated its Initial Public Offering, using a Monte Carlo simulation model. The Company allocated the proceeds received from (i) the sale of Units (which is inclusive of one Class A common stock and one-half of one Public Warrant), (ii) the sale of Private Placement Warrants, and (iii) the issuance of shares of Class B common stock, first to the Warrants based on their fair values as determined at initial measurement, with the remaining proceeds allocated to Class A common stock subject to possible redemption, Class A common stock and Class B common stock based on their relative fair values at the initial measurement date.

As of November 1, 2021, the Public Warrants and Private Placement Warrants were determined to be $0.75 and $0.75 per warrant, respectively, for aggregate values of approximately $4.9 million and $3.5 million, respectively.

Subsequent Measurement

The key inputs into the Monte Carlo simulation model for the Public Warrants and Private Placement Warrants were as follows at subsequent measurement:


Input	December 31, 2021			June 30, 2022
Risk-free interest rate		1.35	%		3.02	%
Expected term (years)		5.94			5.83
Expected volatility		9.5	%		10.7	%
Stock price	$	9.72		$	9.99

As of December 31, 2021, the Public Warrants and Private Placement Warrants were determined to be $0.50 and $0.50 per warrant for aggregate values of approximately $3.2 million and $2.4 million, respectively.

As of June 30, 2022, the Public Warrants and Private Placement Warrants were determined to be $0.14 and $0.14 per warrant for aggregate values of approximately $0.9 million and $0.7 million, respectively.

The Warrants are measured at fair value on a recurring basis. The subsequent measurement of the Public Warrants as of June 30, 2022 is classified as Level 1 due to the use of an observable market quote in an active market and the subsequent measurement of the Private Placement Warrants as of June 30, 2022 is classified Level 3 due to the use of unobservable inputs.

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The following tables presents the changes in the fair value of warrant liabilities as of June 30, 2022 and December 31, 2021:


	Private				Total Warrant
	Placement		Public		Liabilities
Fair value as of November 1, 2021	$	3,539,089	$	4,856,128	$	8,395,217
Change in valuation inputs or other assumptions		(1,173,704)		(1,637,978)		(2,811,682)
Fair value as of December 31, 2021	$	2,365,385	$	3,218,150	$	5,853,535
Change in valuation inputs or other assumptions		(1,694,833)		(2,308,150)		(4,002,983)
Fair value as of June 30, 2022	$	670,552	$	910,000	$	1,580,552

Level 3 financial liabilities consist of the Private Placement Warrant liability for which there is no current market for these securities such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate.

Note 12 — Subsequent Events

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. The Company did not identify any other subsequent events that would have required adjustment or disclosure in the financial statements.

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

References to the “Company,” “our,” “us” or “we” refer to Seaport Calibre Materials Acquisition Corp. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q 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”). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Such statements include, but are not limited to, possible business combinations and the financing thereof, and related matters, as well as all other statements other than statements of historical fact included in this Form 10-Q. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission (“SEC”) filings.

Overview

We are a blank check company incorporated as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We intend to effectuate our initial business combination using cash from the proceeds of our IPO and the private placement of the Private Placement Warrants, the proceeds of the sale of our shares in connection with our initial business combination (pursuant to forward purchase agreements or backstop agreements we may enter into), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing.

The issuance of additional shares in connection with an initial Business Combination to the owners of the target or other investors:

●

may significantly dilute the equity interest of investors in our IPO, which dilution would increase if the anti-dilution provisions in the Class B common stock resulted in the issuance of Class A shares on a greater than one-to-one basis upon conversion of the Class B common stock;

●

may subordinate the rights of holders of our common stock if preferred stock is issued with rights senior to those afforded our common stock;

●

could cause a change in control if a substantial number of shares of our common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;

●

may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; and

●

may adversely affect prevailing market prices for our Class A common stock and/or warrants.

Similarly, if we issue debt securities or otherwise incur significant debt to bank or other lenders or the owners of a target, it could result in:

●

default and foreclosure on our assets if our operating revenues after an initial Business Combination are insufficient to repay our debt obligations;

●

acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

●

our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;

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●

our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;

●

our inability to pay dividends on our common stock;

●

using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund other general corporate purposes;

●

limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;

●

increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;

●

limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution of our strategy; and

●

other purposes and other disadvantages compared to our competitors who have less debt.

We expect to continue to incur significant costs in the pursuit of our initial Business Combination plans. We cannot assure you that our plans to raise capital or to complete our initial Business Combination will be successful.

On November 1, 2021, we completed our IPO of 13,000,000 units. The units were sold at a price of $10.00 per unit, generating gross proceeds to us of $130,000,000. We incurred offering costs of $8,710,365, inclusive of $5,200,000 for the business combination marketing fee.

On November 1, 2021, simultaneously with the consummation of our IPO, we completed the private sale of 4,700,000 private placement warrants at a purchase price of $1.50 per warrant to our sponsor, generating gross proceeds to us of $7,050,000.

Upon the closing of our IPO, an aggregate of $131,950,000 of the net proceeds from our IPO and the private placement was deposited in a trust account established for the benefit of our public stockholders.

If we are unable to complete our initial business combination by February 1, 2023 (or May 1, 2023 if the period of time to consummate a business combination is extended), we 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 and not previously released to us to pay our taxes (less 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 stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination by February 1, 2023 (or May 1, 2023 if the period of time to consummate a business combination is extended). The representative of the underwriters has agreed to waive its rights to the Marketing Fee held in the Trust Account in the event we do not complete our initial business combination by February 1, 2023 (or May 1, 2023 if the period of time to consummate a business combination is extended) and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the public shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than $10.15.

Our amended and restated certificate of incorporation provides that we will have only 15 months from the closing of our IPO, or 18 months if the period of time to consummate a business combination is extended (or until February 1, 2023, or May 1, 2023 if the period of time to consummate a Business Combination is extended) to complete our initial business combination. If we are unable to complete our initial business combination by February 1, 2023 (or May 1, 2023 if the period of time to consummate a Business Combination is extended), we 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 and not previously released to us to pay our taxes (less 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 stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or

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liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial Business Combination by February 1, 2023, (or May 1, 2023 if the period of time to consummate a Business Combination is extended).

Results of Operations and Known Trends or Future Trends

We have neither engaged in any significant operations nor generated any operating revenue to date. Our only activities from inception related to our formation and our IPO, and since the closing of IPO, the search for a prospective initial Business Combination. Although we have not generated operating revenue, we have generated non-operating income in the form of investment income from investments held in the trust account. We expect to incur increased expenses as a result of being a public company, as well as costs in the pursuit of an initial Business Combination.

We classify the warrants issued in connection with our IPO as liabilities at their fair value and adjust the warrant instrument to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations.

For the three months ended June 30, 2022, we had net income of $1,197,634, which consisted of $187,870 of interest earned on the balance of the trust account and $1,377,720 change in fair value of the warrants, offset by $307,102 in general and administrative expenses, $56,822 in franchise tax expense and $4,032 in income tax expense.

For the six months ended June 30, 2022, we had net income of $3,439,562, which consisted of $204,552 of interest earned on the balance of the trust account and $4,002,983 change in fair value of the warrants, offset by $655,389 in general and administrative expenses, $108,552 in franchise tax expense and $4,032 in income tax expense.

For the three and six months ended June 30, 2021, we had a net loss of $(6,512) consisting of formation and operating costs.

Liquidity, Capital Resources and Going Concern

On November 1, 2021, we consummated our initial public offering (“IPO”) of 13,000,000 units. Each unit consists of one share of Class A common stock of the Company, par value $0.0001 per share, and one half of one redeemable warrant of the Company, with each whole warrant entitling the holder thereof to purchase one Class A common stock for $11.50 per share. The units were sold at a price of $10.00 per unit, generating gross proceeds to the Company of $130,000,000. Underwriters were granted a 45-day option to purchase additional units that expired unexercised on December 11, 2021.

Simultaneously with the closing of the IPO, the Company consummated the sale of 4,700,000 warrants at a price of $1.50 per Private Placement Warrant in a private placement to SGAM and Calibre Group and certain of their controlled affiliates, generating gross proceeds of $7,050,000.

A total of $131,950,000 of the net proceeds from the IPO and the Private Placement was placed in a trust account established for the benefit of the Company’s public stockholders, with Continental Stock Transfer & Trust Company acting as trustee.

As of June 30, 2022, we had $45,138 in our operating account held outside of the Trust Account and working capital of $398,889 (including $49,315 of tax obligations).

Through June 30, 2022, our liquidity needs have been satisfied through $400,000 in loans from SGAM and the net proceeds from the private placement not held in the trust account. The balance of $400,000 in loans was paid in full at the closing of our IPO on November 1, 2021.

For the six months ended June 30, 2022, cash used in operating activities was $507,164, which was primarily a result of net income of $3,439,562, offset by interest earned on the balance of the Trust Account of ($204,552), change in fair value of warrant liabilities of ($4,002,983), and changes in operating assets and liabilities, which generated a positive offset of $260,809 of cash from operating activities.

The Company anticipates that the $45,138 outside of the Trust Account as of June 30, 2022, will not be sufficient to allow the Company to operate for at least the next 12 months from the issuance of these financial statements, assuming that a Business Combination is not consummated during that time. Until consummation of its Business Combination, the Company will be using the

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funds held in bank accounts and not held in the Trust Account, and any additional Working Capital Loans (as defined in Note 5) from the initial stockholders, the Company’s officers and directors, or their respective affiliates (which is described in Note 5), for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination.

As such, the possibility exists that within the coming 12 months the Company will need to raise additional capital through loans or additional investments from its Sponsor, stockholders, officers, directors, or third parties. In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the initial stockholders or their affiliates may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $2,000,000 of such loans may be convertible into warrants identical to the Private Placement Warrants, at a price of $1.50 per warrant at the option of the lender.

Accordingly, the Company may not be able to obtain additional financing if and when needed. 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 a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern through one year and one day from the date of issuance of these financial statements. These conditions raise substantial doubt about our ability to continue as a going concern. 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.

Related Party Transactions

Founder Shares

In connection with the formation of the Initial LLC in 2019, and for additional consideration in 2020, SGAM received 100% of its limited liability company interests for nominal consideration of $479. As part of the conversion of the Initial LLC in April 2021, the limited liability company interests held by SGAM were converted into 5,750,000 Founder Shares, of which 3,267,500 were transferred to Calibre Group and certain initial stockholders in June 2021 (including the transfer of 287,500 shares to Stephen Smith) and 503,125 transferred to certain other initial stockholders in July 2021 for an aggregate purchase price of $27,019 (or $0.007 per share). In July 2021, our initial stockholders forfeited an aggregate of 1,437,500 shares (including the forfeiture of 71,875 shares by Stephen Smith), thereby resulting in 4,312,500 remaining founder shares. Subsequently, in September 2021, certain initial stockholders transferred an aggregate of 464,620 founder shares to Calibre Group and its controlled affiliates (including 31,110 shares transferred by Stephen Smith), resulting in 184,515 shares and 1,430,875 shares held by Stephen Smith and SGAM respectively. In October 2021, our initial stockholders forfeited an aggregate of 575,000 shares (including 51,252 shares by Stephen Smith), thereby resulting in 3,737,500 remaining Founder Shares. Also in October 2021, certain initial stockholders transferred an aggregate of 222,647 Founder Shares to Calibre Group and its controlled affiliates (including 17,769 transferred by Stephen Smith), resulting in 115,494 shares and 1,231,730 shares held by Stephen Smith and SGAM, respectively. The underwriters did not exercise the over-allotment option, and as a result, 487,500 additional shares were forfeited, resulting in 3,250,000 Founder Shares outstanding, of which 100,429 and 1,071,070 shares are held by Stephen Smith and SGAM, respectively.

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Our initial stockholders have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of (A) one year after the completion of our initial business combination or (B) subsequent to our initial business combination, (x) if the last reported sale price of our 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 any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of our 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 our initial stockholders with respect to any Founder Shares.

Private Placement Warrants

Simultaneously with the consummation of our IPO, we completed the Private Placement of warrants to our sponsors, generating gross proceeds of $7,050,000. Each Private Placement Warrant is exercisable for one share of our Class A common stock at an exercise price of $11.50 per share. A portion of the purchase price of the Private Placement Warrants was added to the proceeds from our initial public offering held in the trust account. If our initial business combination is not completed by February 1, 2023 (or May 1, 2023 if the period of time to consummate a Business Combination is extended), the proceeds from the sale of the Private Placement Warrants held in the trust account will be used to fund the redemption of the public shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless. The Private Placement Warrants will be non-redeemable for cash and exercisable on a cashless basis so long as they are held by the sponsor or its permitted transferees.

Our sponsors agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants until 30 days after the completion of our initial business combination.

Promissory Note – Related Party

In May 2021, SGAM agreed to loan the Company an aggregate of up to $400,000 to cover expenses related to the IPO pursuant to a promissory note. The non-interest bearing Note was repaid upon completion of the IPO on November 1, 2021.

Administrative Support Agreement

We agreed to pay $10,000 a month for office space, utilities, and secretarial and administrative support to an affiliate of our sponsors. Services commenced on the date the securities were first listed on the Nasdaq and will terminate upon the earlier of our initial business combination or our liquidation. The amount expensed in the statement of operations for the three and six months ended June 30, 2022 was $30,000 and $60,000, respectively.

Critical Accounting Policies and Estimates

Investments Held in Trust Account

Our portfolio of investments held in Trust Account are comprised mainly of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, classified as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. The fair value for trading securities is determined using quoted market prices in active markets.

Class A Common Stock Subject to Possible Redemption

The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Conditionally redeemable common stock (including common stock that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ deficit. The Company’s common stock feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at June 30, 2022, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s balance sheet.

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Warrant Liability

Recent Accounting Pronouncements

In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021, with early adoption permitted. The adoption of ASU 2019-12, effective January 1, 2022, did not have a material impact on the Company’s financial statements and related footnote disclosures.

We do not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material impact on our financial statements.

Off-Balance Sheet Arrangements; Commitments and Contractual Obligations

We did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K, as of June 30, 2022. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

JOBS Act

On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” and 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 non-emerging growth companies. As a result, our financial statements may not be comparable to those of companies that comply with new or revised accounting pronouncements as of public company effective dates.

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following November 26, 2024, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A common stock that is held by non-affiliates exceeds $700 million as of the prior June 30^th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

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Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Through June 30, 2022, our efforts have been limited to organizational activities, activities relating to our initial public offering and since the initial public offering, the search for a target business with which to consummate an initial business combination. We have engaged in limited operations and have not generated any revenues. We have not engaged in any hedging activities during the three and six months ended June 30, 2022. We do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.

The net proceeds of the IPO and the sale of the private placement warrants held in the trust account have been invested in U.S. government treasury bills 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 which invest only in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.

Item 8. Financial Statements and Supplementary Data

Reference is made to pages 1-4 comprising a portion of this Quarterly Report on Form 10-Q.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

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 June 30, 2022, as such term is defined in Rules 13a-15I and 15d-15(e) under the Exchange Act.

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Management recognizes that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2022, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures have been implemented that remediated the material weakness.

Remediated Material Weakness

The Company had a material weakness in its policies and procedures over financial period closure and financial statement preparation which was identified during the September 2021 Quarterly Report on Form 10-Q. Prior to establishing certain controls implemented, the previous policies and procedures were not sufficiently documented and formalized to ensure that financial information and financial statements could be prepared accurately, efficiently and timely in accordance with U.S. GAAP and the SEC’s reporting requirements.

Remedial Actions Implementation

The Company developed a correction action plan. Effective the beginning of fiscal year 2022, the Company enhanced processes, policies and procedures regarding financial period closure and financial statement preparation. This includes: formalizing standard operating procedures of the Company’s process activities; increasing communication among our personnel and third-party professionals and enhancing reviews over the financial reporting. These procedures have been implemented and have remediated the material weakness.

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Management’s Report on Internal Controls Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in the Exchange Act Rule 13a-15(f). Our internal control over financial reporting is designed to provide reasonable assurance to our management and board of directors regarding the preparation and fair presentation of published financial statements. A control system, no matter how well designed and operated, can only provide reasonable, not absolute, assurance that the objectives of the control system are met. Because of these inherent limitations, management does not expect that our internal control over financial reporting will prevent all error and all fraud. Management conducted an evaluation of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission (the “2013 Framework”). Based on our evaluation under the 2013 Framework, management concluded that our internal control over financial reporting was effective as of June 30, 2022.

This report does not include an attestation report of our independent registered public accounting firm due to a transition period established by the rules of the SEC for newly public companies.

Changes in Internal Control over Financial Reporting

Except as described above, there were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.)

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors.

As of the date of this Quarterly Report, except the following, there have been no material changes with respect to those risk factors previously disclosed in our Registration Statement and Annual Report on Form 10-K filed with the SEC. 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.

Previously, we identified a material weakness in our internal control over financial reporting. The Company took remedial action and implemented controls such that our results of operations and financial condition are accurately presented in a timely manner in accordance with U.S. GAAP and the SEC’s reporting requirements. These actions and procedures remediated the material weakness.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

Exhibit No.		Description
31.1*		Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).
31.2*		Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).
32.1**		Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.
32.2**		Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.
101.INS		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		Inline XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit).

*	Filed herewith.

**	Furnished.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	SEAPORT CALIBRE MATERIALS ACQUISITION CORP.

	By:	/s/ James Tumulty
		Name:	James Tumulty
		Title:	Chief Executive Officer (principal executive officer)

	By:	/s/ Edward Siegel
		Name:	Edward Siegel
		Title:	Chief Financial Officer (principal financial officer and principal accounting officer)

Dated August 10, 2022