10-Q 1 d272146d10q.htm 10-Q 10-Q
Table of Contents
falseQ3--12-310001848020TX 0001848020 2022-01-01 2022-09-30 0001848020 2022-09-30 0001848020 2021-12-31 0001848020 2021-02-10 2021-03-31 0001848020 2021-02-10 2021-09-30 0001848020 2021-10-22 2021-10-22 0001848020 2021-10-18 2021-10-18 0001848020 2021-02-10 2021-02-10 0001848020 2022-07-01 2022-09-30 0001848020 2021-07-01 2021-09-30 0001848020 2022-01-01 2022-03-31 0001848020 2021-10-22 0001848020 2022-04-01 2022-06-30 0001848020 2021-04-01 2021-06-30 0001848020 2021-02-09 0001848020 2021-09-30 0001848020 2021-06-30 0001848020 2021-03-31 0001848020 2022-06-30 0001848020 2022-03-31 0001848020 us-gaap:CommonClassAMember 2022-09-30 0001848020 us-gaap:CommonClassBMember 2022-09-30 0001848020 bmac:SponsorMember bmac:WorkingCapitalLoansMember 2022-09-30 0001848020 bmac:PublicWarrantsMember 2022-09-30 0001848020 bmac:SharePriceEqualsOrExceedsUsdEighteenPerShareMember 2022-09-30 0001848020 bmac:SharePriceEqualsOrExceedsUsdEighteenPerShareMember us-gaap:CommonClassAMember bmac:PublicWarrantsMember 2022-09-30 0001848020 bmac:SharePriceEqualOrLessNinePointTwoRupeesPerDollarMember us-gaap:CommonClassAMember 2022-09-30 0001848020 bmac:SponsorMember us-gaap:CommonClassBMember 2022-09-30 0001848020 bmac:PromissoryNoteMember bmac:SponsorMember 2022-09-30 0001848020 us-gaap:CommonStockMember us-gaap:CommonClassAMember us-gaap:IPOMember 2022-09-30 0001848020 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2022-09-30 0001848020 us-gaap:IPOMember 2022-09-30 0001848020 us-gaap:MoneyMarketFundsMember 2022-09-30 0001848020 bmac:BlackMountainLandCompanyLlcMember bmac:FlightExpensesMember 2022-09-30 0001848020 us-gaap:CommonClassAMember 2021-12-31 0001848020 us-gaap:CommonClassBMember 2021-12-31 0001848020 srt:MinimumMember 2021-12-31 0001848020 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2021-12-31 0001848020 us-gaap:MoneyMarketFundsMember 2021-12-31 0001848020 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2022-07-01 2022-09-30 0001848020 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2022-07-01 2022-09-30 0001848020 bmac:AdministrativeSupportServicesMember bmac:SponsorMember 2022-07-01 2022-09-30 0001848020 us-gaap:RetainedEarningsMember 2022-07-01 2022-09-30 0001848020 us-gaap:CommonClassAMember 2022-07-01 2022-09-30 0001848020 us-gaap:CommonClassBMember 2022-07-01 2022-09-30 0001848020 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2021-07-01 2021-09-30 0001848020 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2021-07-01 2021-09-30 0001848020 us-gaap:RetainedEarningsMember 2021-07-01 2021-09-30 0001848020 us-gaap:CommonClassAMember 2021-07-01 2021-09-30 0001848020 us-gaap:CommonClassBMember 2021-07-01 2021-09-30 0001848020 us-gaap:CommonClassBMember 2022-01-01 2022-09-30 0001848020 us-gaap:CommonClassAMember 2022-01-01 2022-09-30 0001848020 us-gaap:CommonClassBMember bmac:SponsorMember 2022-01-01 2022-09-30 0001848020 bmac:PromissoryNoteMember bmac:SponsorMember 2022-01-01 2022-09-30 0001848020 srt:MaximumMember us-gaap:CommonClassAMember us-gaap:OverAllotmentOptionMember 2022-01-01 2022-09-30 0001848020 us-gaap:CommonClassAMember bmac:SharePriceEqualOrLessNinePointTwoRupeesPerDollarMember 2022-01-01 2022-09-30 0001848020 bmac:SharePriceEqualOrExceedsEighteenRupeesPerDollarMember us-gaap:CommonClassAMember 2022-01-01 2022-09-30 0001848020 bmac:SharePriceEqualsOrExceedsUsdEighteenPerShareMember us-gaap:CommonClassAMember bmac:RedemptionOfWarrantsMember 2022-01-01 2022-09-30 0001848020 bmac:SharePriceEqualOrLessNinePointTwoRupeesPerDollarMember 2022-01-01 2022-09-30 0001848020 bmac:PublicWarrantsMember 2022-01-01 2022-09-30 0001848020 us-gaap:CapitalUnitsMember 2022-01-01 2022-09-30 0001848020 us-gaap:WarrantMember 2022-01-01 2022-09-30 0001848020 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2022-01-01 2022-09-30 0001848020 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2022-01-01 2022-09-30 0001848020 us-gaap:OverAllotmentOptionMember 2022-01-01 2022-09-30 0001848020 bmac:AdministrativeSupportServicesMember bmac:SponsorMember 2022-01-01 2022-09-30 0001848020 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2021-02-10 2021-09-30 0001848020 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2021-02-10 2021-09-30 0001848020 us-gaap:CommonClassAMember 2021-02-10 2021-09-30 0001848020 us-gaap:CommonClassBMember 2021-02-10 2021-09-30 0001848020 bmac:StockSubscriptionReceivableMember 2022-01-01 2022-03-31 0001848020 us-gaap:RetainedEarningsMember 2022-01-01 2022-03-31 0001848020 us-gaap:RetainedEarningsMember 2022-04-01 2022-06-30 0001848020 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2021-02-10 2021-03-31 0001848020 us-gaap:CommonStockMember us-gaap:CommonClassAMember 2021-02-10 2021-03-31 0001848020 us-gaap:AdditionalPaidInCapitalMember 2021-02-10 2021-03-31 0001848020 us-gaap:RetainedEarningsMember 2021-02-10 2021-03-31 0001848020 us-gaap:RetainedEarningsMember 2021-04-01 2021-06-30 0001848020 bmac:SponsorMember us-gaap:CommonClassBMember 2021-02-10 2021-02-10 0001848020 srt:DirectorMember bmac:MelG.RiggsCharlesW.YatesAndStephenStratyMember 2021-02-10 2021-02-10 0001848020 bmac:MelG.RiggsCharlesW.YatesAndStephenStratyMember 2021-02-10 2021-02-10 0001848020 bmac:SponsorMember bmac:AdministrativeSupportServicesMember 2021-02-10 2021-02-10 0001848020 bmac:FounderSharesMember 2021-02-10 2021-02-10 0001848020 us-gaap:CommonClassBMember bmac:SponsorMember 2021-02-10 0001848020 bmac:MelG.RiggsCharlesW.YatesAndStephenStratyMember srt:DirectorMember 2021-02-10 0001848020 bmac:FounderSharesMember 2021-02-10 0001848020 us-gaap:CommonClassBMember bmac:SponsorMember 2021-10-01 2021-10-31 0001848020 us-gaap:IPOMember 2021-10-18 2021-10-18 0001848020 bmac:InitialPrivatePlacementWarrantsMember bmac:SponsorMember 2021-10-18 2021-10-18 0001848020 us-gaap:CommonClassAMember bmac:PublicWarrantsMember 2021-10-18 2021-10-18 0001848020 us-gaap:OverAllotmentOptionMember 2021-10-18 2021-10-18 0001848020 us-gaap:IPOMember bmac:UnderwritersAgreementMember 2021-10-18 2021-10-18 0001848020 bmac:InitialPrivatePlacementWarrantsMember 2021-10-18 2021-10-18 0001848020 bmac:UnderwritingAgreementMember us-gaap:OverAllotmentOptionMember 2021-10-18 2021-10-18 0001848020 us-gaap:CommonClassAMember 2021-10-18 0001848020 us-gaap:CommonClassAMember bmac:PublicWarrantsMember 2021-10-18 0001848020 us-gaap:IPOMember 2021-10-18 0001848020 us-gaap:OverAllotmentOptionMember 2021-10-18 0001848020 bmac:InitialPrivatePlacementWarrantsMember bmac:SponsorMember 2021-10-18 0001848020 bmac:UnderwritersAgreementMember us-gaap:IPOMember 2021-10-18 0001848020 bmac:InitialPrivatePlacementWarrantsMember 2021-10-18 0001848020 us-gaap:OverAllotmentOptionMember 2021-10-22 2021-10-22 0001848020 bmac:SponsorMember bmac:AdditionalPrivatePlacementWarrantsMember 2021-10-22 2021-10-22 0001848020 bmac:AdditionalPrivatePlacementWarrantsMember 2021-10-22 2021-10-22 0001848020 bmac:UnderwritingAgreementMember us-gaap:OverAllotmentOptionMember 2021-10-22 2021-10-22 0001848020 bmac:PrivatePlacementWarrantsMember 2021-10-22 0001848020 us-gaap:OverAllotmentOptionMember 2021-10-22 0001848020 bmac:SponsorMember bmac:AdditionalPrivatePlacementWarrantsMember 2021-10-22 0001848020 us-gaap:IPOMember 2021-10-22 0001848020 bmac:AdditionalPrivatePlacementWarrantsMember 2021-10-22 0001848020 us-gaap:OverAllotmentOptionMember bmac:FounderSharesMember 2021-10-22 0001848020 bmac:SponsorMember bmac:FounderSharesMember us-gaap:OverAllotmentOptionMember 2021-10-22 0001848020 bmac:PublicWarrantsMember 2021-10-18 2021-10-22 0001848020 bmac:PrivatePlacementWarrantsMember 2021-10-18 2021-10-22 0001848020 bmac:IntialPublicOfferingIncludingOverAllotmentOptionMember 2021-10-18 2021-10-22 0001848020 us-gaap:IPOMember 2021-10-18 2021-10-22 0001848020 bmac:InitialPrivatePlacementWarrantsMember bmac:SponsorMember 2021-10-18 2021-10-22 0001848020 us-gaap:CommonClassAMember 2021-01-01 2021-12-31 0001848020 bmac:PrivatePlacementWarrantsMember us-gaap:CommonClassAMember 2021-10-08 0001848020 bmac:PromissoryNoteMember bmac:SponsorMember 2021-02-10 2021-06-30 0001848020 bmac:UnsecuredPromissoryNoteMember bmac:SponsorMember 2021-10-20 0001848020 bmac:SponsorMember us-gaap:CommonClassBMember 2022-09-30 2022-09-30 0001848020 us-gaap:CommonClassAMember 2022-11-10 0001848020 us-gaap:CommonClassBMember 2022-11-10 0001848020 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2022-09-30 0001848020 us-gaap:CommonStockMember us-gaap:CommonClassAMember 2022-09-30 0001848020 us-gaap:RetainedEarningsMember 2022-09-30 0001848020 bmac:StockSubscriptionReceivableMember 2022-09-30 0001848020 us-gaap:AdditionalPaidInCapitalMember 2022-09-30 0001848020 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2021-09-30 0001848020 us-gaap:CommonStockMember us-gaap:CommonClassAMember 2021-09-30 0001848020 us-gaap:RetainedEarningsMember 2021-09-30 0001848020 bmac:StockSubscriptionReceivableMember 2021-09-30 0001848020 us-gaap:AdditionalPaidInCapitalMember 2021-09-30 0001848020 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2021-12-31 0001848020 us-gaap:CommonStockMember us-gaap:CommonClassAMember 2021-12-31 0001848020 us-gaap:RetainedEarningsMember 2021-12-31 0001848020 bmac:StockSubscriptionReceivableMember 2021-12-31 0001848020 us-gaap:AdditionalPaidInCapitalMember 2021-12-31 0001848020 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2022-03-31 0001848020 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2022-03-31 0001848020 us-gaap:RetainedEarningsMember 2022-03-31 0001848020 bmac:StockSubscriptionReceivableMember 2022-03-31 0001848020 us-gaap:AdditionalPaidInCapitalMember 2022-03-31 0001848020 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2022-06-30 0001848020 us-gaap:CommonStockMember us-gaap:CommonClassAMember 2022-06-30 0001848020 us-gaap:RetainedEarningsMember 2022-06-30 0001848020 bmac:StockSubscriptionReceivableMember 2022-06-30 0001848020 us-gaap:AdditionalPaidInCapitalMember 2022-06-30 0001848020 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2021-02-09 0001848020 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2021-02-09 0001848020 us-gaap:RetainedEarningsMember 2021-02-09 0001848020 bmac:StockSubscriptionReceivableMember 2021-02-09 0001848020 us-gaap:AdditionalPaidInCapitalMember 2021-02-09 0001848020 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2021-03-31 0001848020 us-gaap:CommonStockMember us-gaap:CommonClassAMember 2021-03-31 0001848020 us-gaap:RetainedEarningsMember 2021-03-31 0001848020 bmac:StockSubscriptionReceivableMember 2021-03-31 0001848020 us-gaap:AdditionalPaidInCapitalMember 2021-03-31 0001848020 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2021-06-30 0001848020 us-gaap:CommonStockMember us-gaap:CommonClassAMember 2021-06-30 0001848020 us-gaap:RetainedEarningsMember 2021-06-30 0001848020 bmac:StockSubscriptionReceivableMember 2021-06-30 0001848020 us-gaap:AdditionalPaidInCapitalMember 2021-06-30 iso4217:USD xbrli:shares xbrli:pure utr:Month utr:Day utr:Year iso4217:USD xbrli:shares
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM
10-Q
 
 
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
OR
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission File
Number:
 
001-40907
 
 
BLACK MOUNTAIN ACQUISITION CORP.
(Exact Name of Registrant as Specified in its Charter)
 
 
 
Delaware
 
86-2013849
(State or Other Jurisdiction of
Incorporation or Organization)
 
(I.R.S. Employer
Identification No.)
   
425 Houston Street, Suite 4500
Fort Worth, TX
 
76102
(Address of Principal Executive Offices)
 
(Zip Code)
(817)
 
698-9901
Registrant’s telephone number, including area code
 
 
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, $0.0001 par value, and three quarters of one warrant
 
BMAC.U
 
The New York Stock Exchange
Class A common stock, par value $0.0001 per share
 
BMAC
 
The New York Stock Exchange
Warrants, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50 per share
 
BMAC WS
 
The New York Stock Exchange
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 file
s).    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 by Rule 12b-2 of the Exchange
Act).    Yes      No  ☐
As of November
10
, 2022, 27,600,000 shares of Class A common stock, par value $0.0001 per share, and 6,900,000 shares of Class B common stock, par value $0.0001 per share, were issued and outstanding.
 
 
 


Table of Contents

BLACK MOUNTAIN ACQUISITION CORP.

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

Table of Contents

 

         Page No.  

PART I-FINANCIAL INFORMATION

     1  

Item 1.

 

Financial Statements

     1  
 

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

     1  
 

Condensed Statements of Operations for the Three and Nine Months Ended September 30, 2022, for the Three Months Ended September 30, 2021 and for the Period from February 10, 2021 (Inception) Through September 30, 2021 (Unaudited)

  

 

2

 

 

Condensed Statements of Changes in Stockholders’ Deficit for the Three and Nine Months Ended September 30, 2022, for the Three Months Ended September 30, 2021 and for the Period from February 10, 2021 (Inception) through September 30, 2021 (Unaudited)

     3  
 

Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2022 and for the Period from February 10, 2021 (Inception) through September 30, 2021 (Unaudited)

     4  
 

Notes to Condensed Financial Statements (Unaudited)

     5  

Item 2.

 

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

     20  

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

     25  

Item 4.

 

Controls and Procedures

     25  

PART II-OTHER INFORMATION

     26  

Item 1.

 

Legal Proceedings

     26  

Item 1A.

 

Risk Factors

     26  

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

     27  

Item 3.

 

Defaults Upon Senior Securities

     28  

Item 4.

 

Mine Safety Disclosures

     28  

Item 5.

 

Other Information

     28  

Item 6.

 

Exhibits

     28  

 

i


Table of Contents
PART I-FINANCIAL INFORMATION
 
Item 1.
Financial Statements
BLACK MOUNTAIN ACQUISITION CORP.
CONDENSED BALANCE SHEETS
 
    
September 30,
   
December 31,
 
    
2022
   
2021
 
    
(Unaudited)
       
Assets
                
Current assets:
                
Cash
   $ 403,835     $ 899,056  
Prepaid expenses
     180,721       317,666  
    
 
 
   
 
 
 
Total current assets
  
 
584,556
 
 
 
1,216,722
 
Prepaid expenses, non – current
              84,065  
Investments held in Trust Account
     282,796,766       281,523,974  
    
 
 
   
 
 
 
Total Assets
  
$
283,381,322
 
 
$
282,824,761
 
    
 
 
   
 
 
 
Liabilities and Stockholders’ Deficit
                
Current liabilities:
                
Accrued offering costs and expenses
   $ 380,925     $ 559,557  
Income taxes payable
     184,548           
Due to related party
     6,825           
    
 
 
   
 
 
 
Total current liabilities
  
 
572,298
 
 
 
559,557
 
Deferred underwriting commissions
     9,660,000       9,660,000  
    
 
 
   
 
 
 
Total Liabilities
  
 
10,232,298
 
 
 
10,219,557
 
    
 
 
   
 
 
 
Commitments and Contingencies (Note 6)
                
Class A common stock subject to possible redemption, 27,600,000 shares at redemption value of $10.20 per share at September 30, 2022 and December 31, 2021, respectively
     282,603,269       281,520,000  
    
 
 
   
 
 
 
Stockholders’ Deficit:
                
Preferred stock, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding
                  
Class A common stock, $0.0001 par value; 500,000,000 shares authorized; none issued and outstanding, (excluding 27,600,000 shares subject to possible redemption)
                  
Class B common stock, $0.0001 par value; 50,000,000 shares authorized; 6,900,000 shares issued and outstanding at September 30, 2022 and December 31, 2021
     690       690  
Stock subscription receivable
              (240
Additional
paid-in
capital
                  
Accumulated deficit
     (9,454,935     (8,915,246
    
 
 
   
 
 
 
Total Stockholders’ Deficit
  
 
(9,454,245
 
 
(8,914,796
    
 
 
   
 
 
 
Total Liabilities and Stockholders’ Deficit
  
$
283,381,322
 
 
$
282,824,761
 
    
 
 
   
 
 
 
The accompanying Notes are an integral part of these financial statements
 
1

 
BLACK MOUNTAIN ACQUISITION CORP.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
 
    
For the Three Months Ended
September 30,
   
For the Nine
Months Ended
September 30,
   
For the Period
from February 10,
2021 (Inception)
Through
September 30,
 
    
2022
   
2021
   
2022
   
2021
 
Formation and operating costs
   $ 264,649     $ 298     $ 865,212     $ 1,142  
    
 
 
   
 
 
   
 
 
   
 
 
 
Loss from operations
  
 
(264,649
 
 
(298
 
 
(865,212
 
 
(1,142
    
 
 
   
 
 
   
 
 
   
 
 
 
Other income:
                                
Interest earned on marketable securities held in Trust Account
     1,272,095                1,695,340           
    
 
 
   
 
 
   
 
 
   
 
 
 
Other income
  
 
1,272,095
 
          
 
1,695,340
 
        
    
 
 
   
 
 
   
 
 
   
 
 
 
Income (Loss) before provision for income taxes
     1,007,446       (298     830,128       (1,142
Provision for income taxes
     (256,394              (286,548         
    
 
 
   
 
 
   
 
 
   
 
 
 
Net income (loss)
  
$
751,052
 
 
$
(298
 
$
543,580
 
 
$
(1,142
    
 
 
   
 
 
   
 
 
   
 
 
 
Weighted average shares outstanding of Class A common stock
     27,600,000                27,600,000           
    
 
 
   
 
 
   
 
 
   
 
 
 
Basic and diluted net income (loss) per share, Class A common stock
  
$
0.02
 
  $       
$
0.02
 
 
$
  
 
    
 
 
   
 
 
   
 
 
   
 
 
 
Weighted average shares outstanding of Class B common stock
     6,900,000       6,000,000       6,900,000       6,000,000  
    
 
 
   
 
 
   
 
 
   
 
 
 
Basic and diluted net income (loss) per share, Class B common stock
  
$
0.02
 
 
$
(0.00
 
$
0.02
 
 
$
(0.00
    
 
 
   
 
 
   
 
 
   
 
 
 
The accompanying Notes are an integral part of these financial statements
 
2

BLACK MOUNTAIN ACQUISITION CORP.
UNAUDITED CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022
 
    
Class A Common Stock
    
Class B Common Stock
    
Additional
Paid-in
    
Stock
Subscription
   
Accumulated
   
Total
Stockholders’
 
    
Shares
    
Amount
    
Shares
    
Amount
    
Capital
    
Receivable
   
Deficit
   
Deficit
 
Balance – December 31, 2021
  
 
  
 
  
$
  
    
 
6,900,000
 
  
$
690
 
  
$
  
 
  
$
(240
 
$
(8,915,246
 
$
(8,914,796
Stock Subscription Received from Issuance of Founder Shares to Directors
     —          —          —          —          —          240                240  
Net loss
     —          —          —          —          —          —         (311,622     (311,622
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
 
Balance – March 31, 2022
  
 
  
 
  
$
  
 
  
 
6,900,000
 
  
$
690
 
  
$
  
 
   $        
$
(9,226,868
 
$
(9,226,178
Remeasurement of Class A common stock to redemption value
     —          —          —          —          —          —         (118,237     (118,237
Net income
     —          —          —          —          —          —         104,150       104,150  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
 
Balance – June 30, 2022
  
 
  
 
  
$
  
 
  
 
6,900,000
 
  
$
690
 
  
$
  
 
   $        
$
(9,240,955
 
$
(9,240,265
Remeasurement of Class A common stock to redemption value
  
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
—  
 
     —         (965,032     (965,032
Net income
     —          —          —          —          —          —         751,052       751,052  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
 
Balance – September 30, 2022
  
 
  
 
  
$
  
 
  
 
6,900,000
 
  
$
690
 
  
$
  
 
   $        
$
(9,454,935
 
$
(9,454,245
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
 
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021 AND FOR THE PERIOD FROM FEBRUARY 10, 2021 (INCEPTION) THROUGH SEPTEMBER 30, 2021
 
    
Class A Common Stock
    
Class B Common Stock
    
Additional
Paid-in
    
Stock
Subscription
    
Accumulated
   
Total
Stockholders’
 
    
Shares
    
Amount
    
Shares
    
Amount
    
Capital
    
Receivable
    
Deficit
   
Equity
 
Balance – February 10, 2021 (Inception)
             $                   $          $          $         $         $      
Issuance of Class B common stock to Sponsor
                         6,900,000        690        24,310        —          —         25,000  
Net loss
     —          —          —          —          —          —          (575     (575
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
   
 
 
 
Balance – March 31, 2021
  
 
  
 
  
$
  
 
  
 
6,900,000
 
  
$
690
 
  
$
24,310
 
   $        
$
(575
 
$
24,425
 
Net loss
     —          —          —          —          —          —          (269     (269
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
   
 
 
 
Balance – June 30, 2021
  
 
  
 
  
$
  
 
  
 
6,900,000
 
  
$
690
 
  
$
24,310
 
   $        
$
(844
 
$
24,156
 
Net loss
     —          —          —          —          —          —          (298     (298
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
   
 
 
 
Balance – September 30, 2021
  
 
  
 
  
$
  
 
  
 
6,900,000
 
  
$
690
 
  
$
24,310
 
   $        
$
(1,142
 
$
23,858
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
   
 
 
 
The accompanying Notes are an integral part of these financial statements
 
3

BLACK MOUNTAIN ACQUISITION CORP.
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
 
    
For the Nine
Months
Ended
September 30,
   
For the
Period from
February 10,
2021
(Inception)
through
September 30,
 
    
2022
   
2021
 
Cash Flows from Operating Activities:
                
Net income (loss)
   $ 543,580     $ (1,142
Adjustments to reconcile net income (loss) to net cash used in operating activities:
                
Interest earned on marketable securities held in Trust Account
     (1,695,340         
Changes in operating assets and liabilities:
                
Prepaid expenses
     221,010           
Due to related party
     6,825           
Accrued expenses
     (178,632     574  
Income taxes payable
     184,548           
    
 
 
   
 
 
 
Net cash used in operating activities
  
 
(918,009
    (568
 
  
 
 
 
 
 
 
 
Cash Flows from Investing Activities:
                
Cash withdrawn from Trust Account to pay for Franchise and Income Taxes
     422,548           
    
 
 
   
 
 
 
Net cash provided by investing activities
  
 
422,548
 
 
 
  
 
 
  
 
 
 
 
 
 
 
Cash Flows from Financing Activities:
                
Proceeds from issuance of Class B common stock to Independent Directors
     240           
Proceeds from issuance of promissory note to related party
              195,000  
Payment of deferred offering costs
              (184,399
    
 
 
   
 
 
 
Net cash provided by financing activities
  
 
240
 
 
 
10,601
 
    
 
 
   
 
 
 
Net Change in Cash
  
 
(495,221
 
 
10,033
 
Cash – Beginning of period
     899,056           
    
 
 
   
 
 
 
Cash – End of period
  
$
403,835
 
 
$
10,033
 
    
 
 
   
 
 
 
Non-Cash
investing and financing activities:
                
Remeasurement of Class A common stock to redemption value
   $ 1,083,269     $     
    
 
 
   
 
 
 
Deferred offering costs paid by Sponsor in exchange for issuance of Class B common stock
   $        $ 25,000  
    
 
 
   
 
 
 
Deferred offering costs included in accrued offering costs and expenses
  
$
  
 
  $ 324,426  
    
 
 
   
 
 
 
The accompanying Notes are an integral part of these financial statements
 
4

 
BLACK MOUNTAIN ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
A. Note 1 — Organization, Business Operations and Going Concern
A. Organization and General
Black Mountain Acquisition Corp. (the “Company”) was incorporated in Delaware on February 10, 2021. The Company was 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 (the “Initial Business Combination”). The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).
As of September 30, 2022, the Company had not commenced any operations. All activity for the period from February 10, 2021 (inception) to September 30, 2022 relates to the Company’s formation and the initial public offering (the “Initial Public Offering”) and pursuing a business combination described below. The Company will not generate any operating revenues until after completion of its Initial Business Combination, at the earliest. The Company will generate
non-operating
income in the form of interest income on cash and cash equivalents from the net proceeds derived from the Initial Public Offering. The Company has selected December 31st as its fiscal year end.
B. Sponsor and Financing
The Company’s sponsor is Black Mountain Sponsor LLC, a Delaware limited liability company (the “Sponsor”).
On February 10, 2021, 5,750,000 shares of the Company’s Class B common stock (the “Founder Shares”) were issued to the Sponsor in exchange for the payment of $25,000 of deferred offering costs on behalf of the Company, or approximately $0.004 per share. In October 2021, the Company effected a dividend of 1,150,000 of the Company’s Founder Shares, which resulted in an aggregate of 6,900,000 Founder Shares outstanding. All shares and associated amounts have been retroactively restated to reflect the share dividend. Up to 900,000
Founder Shares were subject to forfeiture to the extent that the over-allotment option is not exercised by the Underwriters (defined below). On October 22, 2021, the Underwriters fully exercised the over-allotment option; thus, Founder Shares are no longer subject to forfeiture.
The registration statement for the Company’s Initial Public Offering was declared effective on October 13, 2021 (the “Effective Date”). On October 18, 2021, the Company consummated its Initial Public Offering of 24,000,000 units (the “Units”). Each Unit consists of one share of Class A common stock of the Company, par value $0.0001 per share (the “Class A common stock”), and three quarters of one warrant of the Company (the “Public Warrants”), with each whole Public Warrant entitling the holder thereof to purchase one share of 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 $240,000,000 (see Note 3).
In connection with the Initial Public Offering, the
U
nderwriters were granted an option to purchase up to an additional 3,600,000 Units to cover over-allotments, if any. On October 21, 2021, the
U
nderwriters fully exercised their over-allotment option and, on October 22, 2021, the
U
nderwriters purchased 3,600,000 Units (the “Over-allotment Units”) at a price of $10.00 per unit, generating gross proceeds of $36,000,000.
On October 18, 2021, simultaneously with the closing of the Initial Public Offering and pursuant to the Private Placement Warrant Purchase Agreement, dated October 13, 2021, by and between the Company and the Sponsor (the “Private Placement Warrant Purchase Agreement”), the Company completed the private sale
of 11,600,000 warrants (the “Private Placement Warrants”) at a purchase price of $1.00 per Private Placement Warrant to the Sponsor, generating gross proceeds to the Company of $11,600,000 (such sale, the “Private Placement”). On October 22, 2021, simultaneously with the sale of the Over-allotment Units, the Company completed a private placement with the Sponsor for an additional 1,440,000 warrants at a price of $1.00 per warrant (the “Additional Private Placement Warrants” and, together with the Public Warrants and the Private Placement Warrants, the “Warrants”), generating gross proceeds to the Company of $1,440,000.
 
5

A total of $281,520,000, comprised of $270,480,000 of the net proceeds from the Initial Public Offering (including the Over-allotment Units ($10.00 per Unit)) and $11,040,000 of the proceeds of the sale of the Private Placement Warrants (including the Additional Private Placement Warrants) has been deposited in a U.S.-based trust account (the “Trust Account”) maintained by Continental Stock Transfer & Trust Company, acting as trustee.
Transaction costs amounted to $15,774,999 consisting of $5,520,000 of underwriting commissions, $9,660,000 of deferred underwriting commissions, and $594,999 of other offering costs.
C. Trust Account
Upon the closing of the Initial Public Offering and the private placement, $281,520,000 has been placed in a trust account (the “Trust Account”), representing the redemption value of the Class A common stock sold in the Initial Public Offering, at their redemption value of $10.20 per share.
The proceeds held in the Trust Account were invested only in U.S. government securities with a maturity of one hundred eighty-five (185) days or less or in money market funds that meet certain conditions under Rule
2a-7
under the Investment Company Act of 1940, as amended, and that invest only in direct U.S. government treasury obligations, as determined by the Company, or a combination thereof. Funds will remain in the Trust Account until the earlier of (i) the consummation of the Initial Business Combination or (ii) the distribution of the Trust Account proceeds as described below. The remaining proceeds outside the Trust Account may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses.
The Company’s certificate of incorporation provides that, other than the withdrawal of interest to pay taxes (less up to $100,000 to pay dissolution expenses), none of the funds held in the Trust Account will be released until the earliest of: (i) the completion of the Initial Business
Combination; (ii) t
he redemption of any shares of Class A common stock included in the Units (the “Public Shares”) sold in the Initial Public Offering that have been properly tendered in connection with a stockholder vote to amend the Company’s certificate of incorporation to affect the substance or timing of its obligation to redeem 100% of such Public Shares if it has not consummated an Initial Business Combination within 18 months from the closing of the Initial Public Offering; or (iii) the redemption of 100% of the Public Shares if the Company is unable to complete an Initial Business Combination within 18 months from the closing of the Initial Public Offering. The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Company’s holders (the “Public Stockholders”) of the Public Shares.
D. Initial Business Combination
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering, although substantially all of the net proceeds of the Initial Public Offering are intended to be generally applied toward consummating an Initial Business Combination. The Initial Business Combination must occur with one or more target businesses that together have a fair market value of at least 80% of the assets held in the Trust Account (net of amounts disbursed to management for working capital purposes and excluding the amount of any deferred underwriting discount held in trust) at the time of the agreement to enter into the Initial Business Combination. Furthermore, there is no assurance that the Company will be able to successfully effect an Initial Business Combination.
The Company, after signing a definitive agreement for an Initial Business Combination, will either (i) seek stockholder approval of the Initial Business Combination at a meeting called for such purpose in connection with which stockholders may seek to redeem their Public Shares, regardless of whether they vote for or against the Initial Business Combination, for cash equal to their pro rata share of the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Initial Business Combination, including interest not previously released to the Company to pay its taxes, or (ii) provide stockholders with the opportunity to sell their Public Shares to the Company by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount in cash equal to their pro rata share of the aggregate amount on deposit in the Trust Account as of two
 
6

business days prior to the consummation of the Initial Business Combination, including interest not previously released to the Company to pay its taxes. The decision as to whether the Company will seek stockholder approval of the Initial Business Combination or will allow stockholders to sell their Public Shares in a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek stockholder approval, unless a vote is required by law or under the NYSE rules. If the Company seeks stockholder approval, it will complete its Initial Business Combination only if a majority of the outstanding shares of common stock voted are voted in favor of the Initial Business Combination. However, in no event will the Company redeem its Public Shares in an amount that would cause its common stock to no longer qualify for exemption from the Securities and Exchange Commission’s (the “SEC”) “penny stock” rules. In such case, the Company would not proceed with the redemption of its Public Shares and the related Initial Business Combination, and instead may search for an alternate Initial Business Combination.
If the Company holds a stockholder vote or there is a tender offer for shares in connection with an Initial Business Combination, a stockholder will have the right to redeem his, her or its Public Shares for an amount in cash equal to his, her or its pro rata share of the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Initial Business Combination, including interest not previously released to the Company to pay its taxes. As a result, all such Public Shares are recorded at redemption amount and classified as temporary equity upon the completion of the Initial Public Offering, in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”).
Pursuant to the Company’s certificate of incorporation, if the Company is unable to complete the Initial Business Combination within 18 months from the closing of the Initial Public Offering (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 subject to lawfully available funds therefor, 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 the Company to pay the Company’s taxes (less up to $100,000 of such net 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), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, and subject in the case of clauses (ii) and (iii) to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Pursuant to the Company’s certificate of incorporation, the Sponsor and the Company’s officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares (defined below) held by them if the Company fails to complete the Initial Business Combination within the Combination Period. However, if the Sponsor or any of the Company’s directors, officers or affiliates acquires shares of Class A common stock in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete the Initial Business Combination within the prescribed time period.
In the event of a liquidation, dissolution or winding up of the Company after an Initial Business Combination, the Company’s stockholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the common stock. The Company’s stockholders have no
pre-emptive
or other subscription rights. There are no sinking fund provisions applicable to the common stock, except that the Company will provide its stockholders with the opportunity to redeem their Public Shares for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account, upon the completion of the Initial Business Combination, subject to the limitations described herein.
E. Going Concern and Liquidity
As of September 30, 2022, the Company had $403,835 in its operating bank account and working capital of $12,258.
The Company’s liquidity needs up to September 30, 2022 had been satisfied through a payment from the Sponsor of 
$25,000 
(see Note 5) for the founder shares to cover certain offering costs and the loan under an unsecured promissory note from the Sponsor o
f $195,000 
(see Note 5), and proceeds held outside of the Trust Account are available for working capital purposes. The promissory note was paid in full on October 20, 2021. In addition, in order to finance transaction costs in connection with a business combination, the Sponsor, initial shareholders, officers, directors or their affiliates may, but are not obligated to, provide the Company Working Capital Loans (defined below) (see Note 5). As of September 30, 2022, there we
re no amounts outstanding under any Working Capital Loans.
 
7

In connection with the Company’s assessment of going concern considerations in accordance with 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 Company has and will continue to incur significant costs in pursuit of its acquisition plans, which raises substantial doubt about the Company’s ability to continue as a going concern. Moreover, we may need to obtain additional financing either to complete our Initial Business Combination or because we become obligated to redeem a significant number of our Public Shares upon consummation of our Initial Business Combination, in which case we may issue additional securities or incur debt in connection with such business combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our Business Combination. If we are unable to complete our Initial Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our Initial Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
In connection with the Company’s assessment of going concern considerations in accordance with FASB ASC
205-40,
“Presentation of Financial Statements – Going Concern,” management has determined that if the Company is unable to complete a business combination by April 19, 2023 (the “Combination Period”), then the Company will cease all operations except for the purpose of liquidating. The date for mandatory liquidation and subsequent dissolution as well as the Company’s anticipated capital requirements raise substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after the Combination Period. The Company intends to complete a business combination before the mandatory liquidation date.
F. Risks and Uncertainties
In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result, various nations, including the United States, have imposed economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and the related sanctions on the world economy, and the specific impacts on the Company’s financial position, results of operations and its ability to identify and complete an Initial Business Combination are not determinable as of the date of these condensed financial statements.
Management continues to evaluate the impact of the
COVID-19
pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these unaudited condensed financial statements. These unaudited condensed financial statements do not include any adjustments that might result from the outcome of these uncertainties.
B. Note 2—Significant Accounting Policies
A. Basis of Presentation
The accompanying unaudited condensed financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP. In the opinion of management, the unaudited condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected through December 31, 2022.
The accompanying unaudited condensed 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 April 14, 2022.
B. Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by 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 independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, 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.
 
8

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 statement 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
dif
ferences in accounting standards used.
C. Use of Estimates
The preparation of the financial statements in conformity with US GAAP requires the Company’s 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 and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
D. 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 had cash of $403,835 and $899,056, and no cash equivalents as of September 30, 2022 and December 31, 2021, respectively.
E. Investments Held in Trust Account
As of September 30, 2022 and December 31, 2021, the assets held in the Trust Account were held in marketable securities. At September 30, 2022 and December 31, 2021, the Company had $282,796,766 and $281,523,974 in marketable securities held in the Trust Account, respectively.
F. Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal Deposit Insurance Corporation coverage limit of $250,000. As of September 30, 2022 and December 31, 2021, the Company had not experienced losses on this account and management believes the Company was not exposed to significant risks on such account.
G. Offering Costs Associated with the Initial Public Offering
The Company complies with the requirements of the ASC
340-10-S99-1.
Offering costs consisted of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that were directly related to the Initial Public Offering. The Company incurred offering costs amounting to $15,774,999 as a result of the Initial Public Offering consisting of $5,520,000 of underwriting commissions, $9,660,000 of deferred underwriting commissions, and $594,999 of other offering costs. The
o
ffering costs were charged to stockholders’ deficit upon the completion of the Initial Public Offering.
H. Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), approximates the carrying amounts represented in the balance sheet, primarily due to their short-term nature.
 
9

I. Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The Company’s financial instruments are classified as either Level 1, Level 2 or Level 3. These tiers include:
 
   
Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
 
   
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
 
   
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
J. Net Income Per Share of Common Stock
Net income per share of common stock is computed by dividing net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period, plus, to the extent dilutive, the incremental number of shares of common stock to settle warrants, as calculated using the treasury stock method. As of September 30, 2022 and 2021, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company under the treasury stock method. As a result, diluted income per share of common share is the same as basic income per share of common stock for the periods.
 
    
For the Three Months Ended
September 30, 2022
 
    
Class A
    
Class B
 
Basic net income per share:
                 
Numerator:
                 
Allocation of net income
   $ 600,842      $ 150,210  
Denominator:
                 
Weighted average shares outstanding
     27,600,000        6,900,000  
Basic net income per share
   $ 0.02      $ 0.02  
 
    
For the Nine Months Ended
September 30, 2022
 
    
Class A
    
Class B
 
Basic net income per share:
                 
Numerator:
                 
Allocation of net income
   $ 434,864      $ 108,716  
Denominator:
                 
Weighted average shares outstanding
     27,600,000        6,900,000  
Basic net income per share
   $ 0.02      $ 0.02  
 
 
  
For the Three Months Ended
September 30, 2021
 
 
  
Class A
 
  
Class B
 
Basic net loss per share:
        
  
     
Numerator:
        
  
     
Allocation of net loss
   $     
  
$ (298
Denominator:
        
  
     
Weighted average shares outstanding
       
 
  
 
 
 
 
6,900,000
 
Basic net loss per share
   $     
  
$
 
 
 
 
    
For the Period from February 10,
2021 (Inception) Through September
30, 2021
 
    
Class A
    
Class B
 
Basic net loss per share:
                 
Numerator:
                 
Allocation of net loss
   $         $ (1,142
Denominator:
                 
Weighted average shares outstanding
               6,900,000  
Basic net loss per share
   $         $
 
 
 
 
10

K. Income Taxes
The Company accounts for income taxes under FASB ASC 740, Income Taxes (“ASC 740”). ASC 740, requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the unaudited condensed financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. As of September 30, 2022 and December 31, 2021, the Company’s deferred tax asset had a full valuation allowance recorded against it. Our effective tax
rate was 25.45% and 0.00% for the three months ended September 30, 2022 and 2021, respectively, and 34.52% and 0.00% for the nine months ended September 30, 2022 and 2021, respectively. The effective tax rate differs from the statutory tax rate of 21% for the three and nine months ended September 30, 2022 and 2021, due to the valuation allowance on the deferred tax assets.
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.
While ASC 740 identifies usage of an effective annual tax rate for purposes of an interim provision, it does allow for estimating individual elements in the current period if they are significant, unusual or infrequent. Computing the effective tax rate for the Company is complicated due to the potential impact of the timing of any business combination expenses and the actual interest income that will be recognized during the year. The Company has taken a position as to the calculation of income tax expense in a current period based on ASC 740-270-25-3 which states, “If an entity is unable to estimate a part of its ordinary income (or loss) or the related tax (benefit) but is otherwise able to make a reasonable estimate, the tax (or benefit) applicable to the item that cannot be estimated shall be reported in the interim period in which the item is reported.” The Company believes its calculation to be a reliable estimate and allows it to properly take into account the usual elements that can impact its annualized book income and its impact on the effective tax rate. As such, the Company is computing its taxable income (loss) and associated income tax provision based on actual results through September 30, 2022.
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 September 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 is subject to income taxation by major taxing authorities since inception. These 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.
L. Common Stock Subject to Possible Redemption
All of the 27,600,000
shares of common stock sold as part of the Units in the Initial Public Offering contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, if there is a shareholder vote or tender offer in connection with the Initial Business Combination and in connection with certain amendments to the Company’s amended and restated certificate of incorporation. In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require common stock subject to redemption to be classified outside of permanent equity. Therefore, all shares of Class A common stock have been classified outside of permanent equity.
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are effected by charges against additional paid in capital and accumulated deficit.
M. Warrant Instruments
The Company accounts for its Public Warrants and Private Placement Warrants as equity-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in 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 stock, 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. In that respect, the Private Placement Warrants, as well as warrants underlying additional units the Company issued to the Sponsor, officers, directors, initial stockholders or their affiliates in payment of Working Capital Loans made to the Company are identical to the warrants underlying the Units being offered in the Initial Public
Offering.
 
 
11

N. Inflation Reduction Act of 2022
At this time, it has been determined that none of the Inflation Reduction Act of 2022 (the “IR Act”) tax provisions have an impact to the Company’s fiscal 2022 tax provision. The Company will continue to monitor for updates to the Company’s business along with guidance issued with respect to the IR Act to determine whether any adjustments are needed to the Company’s tax provision in future periods. For more information, please see “Risk Factors.”
O. Recent Accounting Pronouncements
In August 2020, FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU
2020-06
amends the diluted earnings per share guidance, including the requirement to use the
if-converted
method for all convertible instruments. ASU
2020-06
is effective January 1, 2022 and should be applied on a full or modified retrospective basis. On February 10, 2021 (inception), the Company adopted the new standard.
 
12

 
The Company’s management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the C
om
pany’s unaudited co
nde
nsed financial statements.
C. Note 3—Initial Public Offering
The Company consummated its Initial Public Offering of 24,000,000 Units on October 18, 2021. Each Unit consists of one Class A common stock and three quarters of one Public Warrant. Each whole Public Warrant entitles the holder to purchase one Class A common stock at an exercise price of $11.50 per share. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $240,000,000 and incurring $13,200,000 in underwriting fees comprised of an initial payment of $4,800,000 and $8,400,000 of deferred underwriting commissions. The Company granted the underwriters in the Initial Public Offering (the “Underwriters”) a
45-day
 
option
to purchase up to an aggregate of 3,600,000 additional Units to cover over-allotments, if any. On October 22, 2021, the Underwriters exercised the over-allotment option to purchase
the Over-allotment
Units, generating aggregate gross proceeds of $36,000,000 and incurring $1,980,000 in underwriting fees comprised of an initial payment of $720,000 and $1,260,000 of deferred underwriting commissions.
On October 18, 2021, simultaneously with the closing of the Initial Public Offering and pursuant to the Private
Placement
Warrant Purchase Agreement, the Company completed the Private Placement of 11,600,000 Private Placement Warrants at a purchase price of $1.00 per warrant to the Sponsor, generating gross proceeds to the Company of $11,600,000 (the “Private Placement Proceeds”). On October 22, 2021, simultaneously with the sale of the Over-allotment Units, the Company completed a private placement
 
with the Sponsor
of 1,440,000 Additional Private Placement Warrants, generating gross proceeds to the Company of $1,440,000. The Additional Private Placement Warrants are identical to the warrants included in the Units sold in the Initial Public Offering, except that the Additional Private Placement Warrants (i) will not initially be registered under the Securities Act of 1933 and therefore will not be eligible for offer, sale, transfer or other disposition unless and until so registered or an exemption from registration applies and (ii) will be subject to transfer restrictions pursuant to
lock-up
provisions in a letter agreement entered with the Company.
All of the 27,600,000
shares of Class A common stock sold as part of the Units in the Initial Public Offering contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer in connection with the Initial Business Combination and in connection with certain amendments to the Company’s certificate of incorporation. In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC
480-10-S99,
redemption provisions not solely within the control of the Company require common stock subject to redemption to be classified outside of permanent equity.
If it is probable that the equity instrument will become redeemable, the Company has the option to either accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company recognizes changes in redemption value immediately as they occur. Immediately upon the closing of the Initial Public Offering, the Company recognized the remeasurement from initial book value to redemption amount value. The change in the carrying value of redeemable common stock resulted in charges against additional
paid-in
capital and accumulated deficit.
As of September 30, 2022 and December 31, 2021, the shares of Class A common stock subject to possible redemption reflected on the balance sheet are reconciled in the following table:

 
Gross proceeds from
Initial Public Offering
   $ 276,000,000  
Less:
        
Proceeds allocated to Public Warrants
     (12,464,948
Common stock issuance costs
     (15,036,924
Remeasurement of carrying value to redemption value
     33,021,872  
    
 
 
 
Class A common stock subject to possible redemption, December 31, 2021
     281,520,000  
Remeasurement of carrying value to redemption value
     1,083,269  
    
 
 
 
Class A common stock subject to possible redemption, September 30, 2022
   $ 282,603,269  
    
 
 
 
 
13

D. Note 4—Private Placement
The Sponsor purchased an aggregate of 11,600,000 Private Placement Warrants for a purchase price of $11,600,000, or $1.00 per warrant, in a private placement that occurred simultaneously with the closing of the Initial Public Offering. Simultaneously with the
U
nderwriters’ exercise of the over-allotment option, the Sponsor purchased 1,440,000 Additional Private Placement Warrants for a purchase price of $1,440,000, or $1.00 per warrant. Each Private Placement Warrant entitles the holder thereof to purchase one share of the Company’s Class A common stock at a price of $11.50 per share, subject to adjustment, and will expire worthless if the Company does not complete the Initial Business Combination.
The Private Placement Warrants have terms and provisions that are identical to those of the warrants being sold as part of the Units in the Initial Public Offering, including as to exercise price, exercisability and exercise period, except that the Private Placement Warrants (i) will not initially be registered under the Securities Act and therefore will not be eligible for offer, sale, transfer or other disposition unless and until so registered or an exemption from registration applies and (ii) will be subject to transfer restrictions pursuant to
lock-up
provisions in a letter agreement with us to be entered into by the Sponsor and the Company’s officers and directors. The Private Placement Warrants will be redeemable by us in all redemption scenarios and exercisable by the holders on the same basis as the warrants included in the Units being sold in the Initial Public Offering. The issuance of the Private Placement Warrants was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
E. Note 5—Related Party Transactions
A. Founder Shares
On February 10, 2021, 5,750,000 shares of the Company’s Class B common stock (the “Founder Shares”) were issued to the Sponsor in exchange for the payment of $25,000 of expenses on behalf of the Company, or approximately $0.004 per share. In October 2021, the Company effected a dividend of 1,150,000 of the Company’s Founder Shares, which resulted in an aggregate of 6,900,000 Founder Shares outstanding. All share
s
and associated amounts have been retroactively restated to reflect the share dividend. Up to 900,000 Founder Shares were subject to forfeiture to the extent that the over-allotment option was not exercised by the
U
nderwriters. The
U
nderwriters’ over-allotment option would have been available for 45 days from the effective date of the registration statement.
On October 22, 2021, the Underwriters exercised the over-allotment option in full to purchase the Over-allotment Units. As a res
ult, 900,000 founder shares are no longer subject to forfeiture.
In connection with the Initial Public Offering, the Sponsor forfeited a total of 90,000 founder shares for no consideration, and 30,000 founder shares were purchased from the Company by each of the Company’s independent directors, Mel G. Riggs, Charles W. Yates and Stephen Straty, at their original purchase price (approximately $0.004 per share) or a total of $360. The excess of the fair value of the founder shares transferred ($515,340) over the original issuance price ($360)
will be accounted for as director’s compensation expense upon the initial business combination. The purchased shares shall vest upon the Company consummating an Initial Business Combination (the “Vesting Date”). If prior to the Vesting Date, the Director is removed from office or ceases to be a Director, the Director will forfeit their founder shares to the Company. The Directors have agreed, (1) the shares may not be sold or transferred, until six months after the consummation of a business combination, (2) the shares will not be entitled to redemption from the funds held in the trust account, or any liquidating distributions. The Company has 18 months from the date of the Initial Public Offering to consummate a business combination, and if a business combination is not consummated, the Company will liquidate, and the shares will become worthless.
The fair value of the founder shares at the grant dates was determined using an internal model using the issuance price of the Units in the Initial Public Offering as a proxy adjusting for the value of the warrants included in the Units, for the probability the Company will consummate an initial Business Combination and for holding costs and no rights of redemption. Valuation of the 90,000 founder shares granted to the directors is estimated to be $486,000 or $5.40
 
per share. The Company will record the fair value of the transferred shares in excess of the amount paid as director compensation expense upon consummation of an initial Business Combination, in accordance with the guidance in FASB ASC 718, Compensation-Stock Compensation (“ASC 718”), which requires deferral of the expense recognition until after the performance condition becomes probable of being achieved. If the performance condition is a business combination or similar liquidity event, the performance condition is not deemed to be probable until it is achieved.
 
14

The holders of the Founder Shares agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (i) 180 days after the completion of the Initial Business Combination or (ii) subsequent to the Initial Business Combination, the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.
B. Related Party Loans
On February 10, 2021, the Sponsor agreed to loan the Company an aggregate of up to $250,000 to cover expenses related to the Initial Public Offering pursuant to an unsecured promissory note (the “Note”). This Note was
non-interest
bearing and payable upon the earlier of (i) the date that is 180 days following the date of the Note and (ii) the closing date of the Initial Public Offering. As of October 18, 2021, the Company had borrowed $195,000, which would have been due upon demand. The aggregate amount of $195,000 was paid in full on October 20, 2021. As of September 30, 2022 and December 31, 2021 there is no amount due under related party loans.
In addition, in order to finance transaction costs in connection with an Initial Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds on a non-interest bearing basis as may be required (“Working Capital Loans”). If the Company completes an Initial Business Combination, the Company will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that an Initial 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. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of an Initial Business Combination or, at the lender’s discretion, up to
$1.5 million of such Working Capital Loans may be convertible into warrants of the post Initial Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants. To date, the Company had no borrowings under the Working Capital Loans.
C. Administrative Support Agreement and Other
Commencing on the date the Units are first listed on the New York Stock Exchange, the Company has agreed to pay an affiliate of the Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. For the three and nine months ended September 30, 2022, the Company has incurred $30,000 and $90,000 of administrative service fee
s
, respectively. For the three months ended September 30, 2021 and for the period from February 10, 2021 (inception) through September 30, 2021, the Company did not incur such fees.
In February 2022, Black Mountain Land Company LLC, a related party (“Black Mountain Land”), paid flight expenses of $15,524 on the Company’s behalf. The amount is recorded in Due to Related Party on the accompanying balance sheet.
F. Note 6—Commitments and Contingencies
A. Registration Rights
The holders of the Founder Shares, Private Placement Warrants and Warrants that may be issued upon conversion of
Working Capital Loans
, if any, (and any Class A common shares issuable upon the exercise of the Private Placement Warrants and Warrants that may be issued upon conversion of
Working Capital Loans
) will be entitled to registration rights pursuant to a registration rights agreement signed prior to or on the effective date of the Initial Public Offering. The holders of at least $25 million in value of these securities are entitled to demand that the Company file a registration statement covering such securities and to require the Company to effect up to an aggregate of three underwritten offerings of such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of an Initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
 
15

B. Underwriting Agreement
The Company granted the
U
nderwriters a
45-day
 
option
to purchase up to 3,600,000 additional Units to cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions.
On October 22, 2021, the Underwriters exercised the over-allotment option in full to purchase the Over-allotment Units, at a purchase price of
$10.00 per Public Unit generating gross proceeds to the Company of $36,000,000 (see Note 3).
On October 18, 2021, the Company paid a cash underwriting commission of $0.20 per unit, or $4,800,000 and on October 22, 2021, paid an additional $720,000 or $0.20 per unit for an aggregate of $5,520,000.
The representatives of the
U
nderwriters are entitled to deferred underwriting commissions of $0.35 per unit, or $9,660,000 in the aggregate (including the commission related to the
U
nderwriters’ exercise of the over-allotment option). The deferred fee will become payable to the representatives of
U
nderwriters from the amounts held in the Trust Account solely in the event that the Company completes an Initial Business Combination, subject to the terms of the underwriting agreement for the offering.
G. Note 7—Stockholders’ Deficit
Preferred Stock
— The Company is authorized to issue 5,000,000 shares of preferred stock, par value $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of September 30, 2022 and December 31, 2021, there were no shares of preferred stock issued and outstanding.
Class
 A Common Stock
— The Company is authorized to issue 500,000,000 shares of Class A common stock with a par value of $0.0001 per share. As of September 30, 2022 and December 31, 2021, there were no shares of Class A common stock issued and outstanding, excluding 27,600,000 shares subject to possible redemption.
Class
 B Common Stock
— The Company is authorized to issue 50,000,000 shares of Class B common stock with a par value of $0.0001 per share. As of September 30, 2022 and December 31, 2021, there were 6,900,000 shares of Class B common stock issued and outstanding, which such amount having been restated to reflect the share dividend in October 2021 as discussed in Note 5. Of the 6,900,000 shares of Class B common stock outstanding, up to 900,000 shares of Class B common stock were subject to forfeiture to the Company by the initial stockholders for no consideration.
On October 22, 2021, the Underwriters exercised the over-allotment option in full to purchase the Over-allotment Units. As a re
sult, 900,000 founder shares are no longer subject to forfeiture.
Holders of the Class A common stock and holders of the Class B common stock will vote together as a single class on all matters submitted to a vote of the stockholders, except as required by law. Each share of common stock will have one vote on all such matters.
The Class B common stock will automatically convert into Class A common stock at the time of the Initial Business Combination on a
one-for-one
basis, subject to adjustment for redemptions, merger consideration, private placement warrants, and any securities issued to affiliates, and the like and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts sold in the Initial Public Offering and related to the closing of the Initial Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of our 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 the Initial Business Combination (after giving effect to any redemptions of shares of Class A common stock by public stockholders and excluding any shares or equity-linked securities issued, or to be issued, to any seller in the Initial Business Combination and any Private Placement Warrants issued to the Sponsor, officers and directors upon conversion of Working Capital Loans).

16

Warrants
— Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The warrants have an exercise price of $11.50 per share, subject to adjustments, and will expire five years after the completion of an Initial Business Combination or earlier upon redemption or liquidation. The warrants will become exercisable 30 days after the completion of an Initial Business Combination; provided that the Company has an effective registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their warrants on a “cashless basis” and such cashless exercise is exempt from registration under the Securities Act). The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of the Initial Business Combination, the Company will use its best efforts to file with the SEC a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed.
In addition, if (i) the Company issues additional Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of the Initial Business Combination at an issue price or effective issue price of less than
$9.20 per share (with such issue price or effective issue price to be determined in good faith by the 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”), (ii) the aggregate gross proceeds from such issuances represent more than 60%
of the total equity proceeds, and interest thereon, available for the funding of our Initial Business Combination on the date of the consummation of the Initial Business Combination (net of redemptions), and (iii) the volume weighted average trading price of our Class A common stock during the 20-day trading period starting on the trading day prior to the day on which we consummate our 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 greater of (A) the Market Value or (B) the Newly Issued Price, and the $18.00 per share redemption trigger price described under “Redemption of Warrants” will be adjusted (to the nearest cent) to be equal to 180% of the Newly Issued Price.
Notwithstanding the above, if the Company’s shares of Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required to file or maintain in effect a registration statement, but the Company will be required to use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
The Private Placement Warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in the Initial Public Offering, including as to exercise price, exercisability and exercise period, except that the Private Placement Warrants (i) will not initially be registered under the Securities Act and therefore will not be eligible for offer, sale, transfer or other disposition unless and until so registered or an exemption from registration applies and (ii) will be subject to transfer restrictions pursuant to
lock-up
provisions in a letter agreement with us to be entered into by the Sponsor and the Company’s officers and directors.
A. Redemption of Warrants
Once the warrants become exercisable, the Company may redeem the outstanding warrants:
 
   
in whole and not in part;
 
   
at a price of $0.01 per warrant;
 
   
upon a minimum of 30 days’ prior written notice of redemption, or the 30-day
 
redemption period, to each warrant holder; and
 
   
if, and only if, the reported last sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a
30-trading
 
day
period commencing once the warrants become exercisable and ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
 
17

The Company will not redeem the warrants as described above unless (i) a registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares of Class A common stock is available throughout the
30-day
redemption period or (ii) the Company has elected to require exercise of the warrants on a “cashless basis” as described below. If the foregoing conditions are satisfied and the Company issued a notice of redemption of the warrants, each warrant holder will be entitled to exercise its warrant prior to the scheduled redemption date. However, the price of the shares of Class A common stock may fall below the $18.00 redemption trigger price (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) as well as the $11.50 warrant exercise price (for whole shares) after the redemption notice is issued.
If the Company calls the warrants for redemption as described above, the Company’s management will have the option to require all, but not less than all, warrant holders to exercise their warrants on a “cashless basis.” In the event any warrants are exercised on a “cashless basis,” each exercising warrant holder would pay the exercise price by surrendering the warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (i) the product of (A) the number of shares of our Class A common stock underlying the warrants and (B) the excess of the “fair market value” (defined below) over the exercise price of the warrants by (ii) such fair market value. For purposes of this section, the “fair market value” shall mean the average last reported sale price of the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant holder or its securities broker or intermediary.
If and when the warrants become redeemable by the Company, it may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
In no event will the Company be required to net cash settle any warrant. If the Company is unable to complete an Initial 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 respect to such warrants. Accordingly, the warrants may expire without value to the holder.
H. Note 8. Fair Value Measurements
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.
At September 30, 2022 and December 31, 2021, assets held in the Trust Account were comprised of $282,796,766 and $281,523,974 in money market funds which are invested primarily in U.S. Treasury Securities. Through September 30, 2022, the Company has withdrawn $422,548.


18

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at September 30, 2022 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
 
    
September 30, 2022
 
    
Level
    
Amount
 
Assets:
                 
Marketable securities held in Trust Account
     1      $ 282,796,766  
The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at December 31, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
 
    
December 31, 2021
 
    
Level
    
Amount
 
Assets:
                 
Marketable securities held in Trust Account
     1      $ 281,523,974  
I. Note 9. Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the unaudited condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.
 
19


Table of Contents

BLACK MOUNTAIN ACQUISITION CORP.

 

Item 2.

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

References to the “Company,” “our,” “us” or “we” refer to Black Mountain Acquisition Corp., a blank check company incorporated on February 10, 2021 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, which we refer to throughout this Quarterly Report on Form 10-Q as our “Initial Business Combination.” References to our “Sponsor” refer to Black Mountain Sponsor LLC, a Delaware limited liability company. References to the “SEC” are to the U.S. Securities and Exchange Commission. References to our “Initial Public Offering” refers to our initial public offering, which closed on October 18, 2021 (the “Closing Date”). References to “public shares” are to shares of our Class A common stock sold as part of the units in our Public Offering. References to “public stockholders” are to the holders of our public shares. The following discussion should be read in conjunction with our unaudited condensed financial statements and related notes thereto included elsewhere in this report.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some statements contained in this Quarterly Report on Form 10-Q are forward-looking statements in nature. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the following risks, uncertainties and other factors:

 

   

our ability to complete our Initial Business Combination, particularly in light of disruption that may result from limitations imposed by the COVID-19 outbreak and other events (such as terrorist attacks, natural disasters or other significant outbreaks of infectious diseases);

 

   

our being a company with no operating history and no revenues;

 

   

our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our Initial Business Combination;

 

   

our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our Initial Business Combination, as a result of which they would then receive expense reimbursements;

 

   

our potential ability to obtain additional financing to complete our Initial Business Combination;

 

   

our pool of prospective target businesses;

 

   

our ability to select an appropriate target business or businesses;

 

   

our expectations around the performance of the prospective target business or businesses;

 

   

the ability of our officers and directors to generate a number of potential acquisition opportunities;

 

   

our public securities’ potential liquidity and trading;

 

20


Table of Contents
   

the lack of a market for our securities;

 

   

the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;

 

   

the trust account not being subject to claims of third parties;

 

   

our financial performance; or

 

   

the other risks and uncertainties discussed in “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q.

These risks and uncertainties include, but are not limited to, those factors described in the section entitled “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on April 14, 2022. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Overview

We are a blank check company incorporated on February 10, 2021 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.

In February 2021, we issued an aggregate of 5,750,000 shares of our Class B common stock (the “Founder Shares”) to our Sponsor in exchange for a capital contribution of $25,000, a purchase price of approximately $0.004 per share. The number of Founder Shares issued was determined based on the expectation that such Founder Shares would represent 20% of the outstanding shares upon completion of our Initial Public Offering. The per share purchase price of the Founder Shares was determined by dividing the amount of cash contributed to the Company by the aggregate number of Founder Shares issued. In October 2021, in connection with our Initial Public Offering, our Sponsor forfeited a total of 90,000 Founder Shares to us for no consideration, and we then issued 30,000 Founder Shares to each of our three independent directors at their original purchase price. Also in October 2021, in connection with our Initial Public Offering, we effected a stock dividend of 1,150,000 Founder Shares on the Founder Shares, which resulted in our Sponsor owning 6,810,000 Founder Shares. Such stock dividend has been accounted for retroactively to all periods. The holders of our Founder Shares prior to our Initial Public Offering are referred to in this Quarterly Report on Form 10-Q as our “initial stockholders.”

On the Closing Date, we consummated our Initial Public Offering of 24,000,000 Units and, on October 22, 2021, the Underwriters purchased the Over-allotment Units upon the full exercise of their over-allotment option, resulting in the sale of 27,600,000 Units in the aggregate. The Units were sold at a price of $10.00 per unit, generating gross proceeds to us of $276,000,000. Each Unit consists of one share of our Class A common stock and three quarters of one Public Warrant. Each whole Public Warrant entitles the holder thereof to purchase one whole share of our Class A common stock at a price of $11.50 per share, subject to adjustment, and only whole warrants are exercisable. The warrants will become exercisable on the 30th day after the completion of our Initial Business Combination and will expire five years after the completion of our Initial Business Combination or earlier upon redemption or liquidation.

On the Closing Date, simultaneously with the consummation of our Initial Public Offering, we completed a private placement of 11,600,000 private placement warrants (the “Private Placement Warrants”) at a purchase price of $1.00 per warrant to our Sponsor, generating gross proceeds to us of approximately $11,600,000 and, on October 22, 2021, simultaneously with the consummation of the over-allotment option, we completed the

 

21


Table of Contents

Private Placement. Each Private Placement Warrant entitles the holder to purchase one whole share of our Class A common stock at $11.50 per share. The Private Placement Warrants (including the Class A common stock issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder until 30 days after the completion of our Initial Business Combination.

Approximately $281,520,000 of the net proceeds from our Initial Public Offering and the Private Placement has been deposited in the Trust Account.

We received gross proceeds from our Public Offering and the sale of the Private Placement Warrants of $276,000,000 and $13,040,000, respectively, for an aggregate of $289,040,000. $281,520,000 of the gross proceeds were deposited into the Trust Account. The $281,520,000 of net proceeds held in the Trust Account includes $9,660,000 of deferred underwriting discounts and commissions that will be released to the Underwriters upon completion of our Initial Business Combination. Of the gross proceeds from our Initial Public Offering and the sale of the Private Placement Warrants that were not deposited in the Trust Account, $5,520,000 was used to pay underwriting discounts and commissions in our Initial Public Offering approximately $195,000 was used to repay loans and advances from our Sponsor, and the balance was reserved to pay accrued offering and formation costs, business, legal and accounting due diligence expenses on prospective acquisitions and continuing general and administrative expenses.

The Founder Shares that we issued prior to the Closing Date will automatically convert into shares of our Class A common stock at the time of our initial 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 sold in our Initial Public Offering and related to the closing of the Initial Business Combination the ratio at which the shares of our Class B common stock will convert into shares of our Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of our 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 our Class A common stock issuable upon conversion of all issued and outstanding 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 our Initial Public Offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with the Initial Business Combination (after giving effect to any redemptions of shares of our Class A common stock by public stockholders and excluding any shares or equity-linked securities issued, or to be issued, to any seller in the business combination and any Private Placement Warrants issued to our Sponsor, any affiliate of our Sponsor or any of our officers or directors upon conversion of any Working Capital Loans).

On November 9, 2021, we announced that, commencing November 12, 2021, holders of the Units sold in our Initial Public Offering may elect to separately trade the shares of Class A common stock and Public Warrants included in the Units. The shares of Class A common stock and Public Warrants that are separated will trade on the New York Stock Exchange (“NYSE”) under the symbols “BMAC” and “BMAC WS,” respectively. Those Units not separated will continue to trade on the NYSE under the symbol “BMAC.U.”

Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our only activities from February 10, 2021 (inception) through September 30, 2022, were organizational activities, those necessary to prepare for the Initial Public Offering, described below, and identifying a target company for a business combination. We do not expect to generate any operating revenues until after the completion of our Initial Business Combination. We generate non-operating income in the form of interest income on marketable securities held in the Trust Account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

For the three months ended September 30, 2022, we had a net income of $751,052, which consisted of interest earned on funds held in Trust Account of $1,272,095, offset by formation and operating costs of $264,649 and provision for income taxes of $256,394.

For the nine months ended September 30, 2022, we had a net income of $543,580, which consisted of interest earned on funds held in Trust Account of $1,695,340, offset by formation and operating costs of $865,212 and provision for income taxes of $286,548.

For the three months ended September 30, 2021, we had a net loss of $298, which primarily consisted of formation and operating costs.

For the period from February 10, 2021 (inception) through September 30, 2021, we had a net loss of $1,142, which consisted of $1,142 in formation costs.

Liquidity, Capital Resources and Going Concern

As of September 30, 2022, we had $403,835 in cash and working capital of $12,258.

Our liquidity needs up to September 30, 2022 had been satisfied through a payment of $25,000 in offering costs by the Sponsor in exchange for the Founder Shares, and borrowings under the promissory note of $195,000 and funds held outside of the Trust Account. The promissory note was fully repaid on October 20, 2021 from the proceeds of the Initial Public Offering.

 

22


Table of Contents

In October 2021, we consummated our Initial Public Offering and the Private Placement. Of the net proceeds from our Initial Public Offering and Private Placements, $281,520,000 of cash was placed in the Trust Account and $1,960,476 of cash was held outside of the Trust Account and was available for working capital purposes.

In order to finance transaction costs in connection with a business combination our Sponsor or an affiliate of the Sponsor or certain of our officers and directors may, but are not obligated to, provide Working Capital Loans. As of September 30, 2022, there were no amounts outstanding under any Working Capital Loans.

In connection with the Company’s assessment of going concern considerations in accordance with ASU 2014-15, management has determined that the Company has and will continue to incur significant costs in pursuit of its acquisition plans which raises substantial doubt about the Company’s ability to continue as a going concern. Moreover, we may need to obtain additional financing either to complete our Initial Business Combination or because we become obligated to redeem a significant number of our Public Shares upon consummation of our Initial Business Combination in which case we may issue additional securities or incur debt in connection with such business combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our Initial Business Combination. If we are unable to complete our Initial Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our Initial Business Combination if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

In connection with the Company’s assessment of going concern considerations in accordance with ASC 204-40 management has determined that if the Company is unable to complete a business combination by April 19, 2023 (the “Combination Period”), then the Company will cease all operations except for the purpose of liquidating. The date for mandatory liquidation and subsequent dissolution as well as the Company’s working capital deficit raise substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after the Combination Period. The Company intends to complete a business combination before the mandatory liquidation date.

Related Party Transactions

Founder Shares

On February 10, 2021, our Sponsor acquired 5,750,000 founder shares in exchange for a capital contribution of $25,000. Prior to the initial investment in the Company of $25,000 by our Sponsor, the Company had no assets, tangible or intangible. The per share purchase price of the Founder Shares was determined by dividing the amount of cash contributed to the Company by the aggregate number of Founder Shares issued. In October, we effected a dividend of 1,150,000 of our Founder Shares, which resulted in our Sponsor owning 6,900,000 Founder Shares. In connection with our Initial Public Offering, our Sponsor forfeited a total of 90,000 Founder Shares, and 30,000 Founder Shares were then issued to each of the independent directors, Mel G. Riggs, Charles W. Yates and Stephen Straty, at their original purchase price.

The holders of the Founder Shares agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (i) 180 days after the completion of the Initial Business Combination or (ii) subsequent to the Initial Business Combination, the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.

Registration Rights

The holders of the Founder Shares, Warrants that may be issued upon conversion of Working Capital Loans (and any shares of Class A common stock issuable upon the exercise of the Warrants that may be issued upon conversion of Working Capital Loan and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement, requiring us 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 at least $25 million in value of these securities are entitled to demand that we file a registration statement covering such securities and to require us to effect up to an aggregate of three underwritten offerings of such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our Initial Business Combination.

Related Party Working Capital Loan

In addition, in order to finance transaction costs in connection with an Initial Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company a non-interest Working Capital Loans. If the Company completes an Initial Business Combination, the Company will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that the Initial 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. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of the Initial Business Combination or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into warrants of the post-Initial Business Combination entity at a price of $1.00 per warrant. Such warrants would be identical to the Private Placement Warrants. To date, the Company had no borrowings under the Working Capital Loans.

 

23


Table of Contents

Related Party Promissory Note

On February 10, 2021, the Sponsor agreed to loan the Company an aggregate of up to $250,000 to cover expenses related to the proposed public offering pursuant to an unsecured promissory note (the “Note”). This Note was non-interest bearing and payable upon the earlier of (i) the date that is 180 days following the date of the Note and (ii) the closing date of the Initial Public Offering. Prior to the consummation of the Initial Public Offering, the Company borrowed $195,000 under the Note. The Note was fully repaid on October 20, 2021 from the proceeds of the Initial Public Offering.

Administrative Support Agreement

Beginning on October 14, 2021, the Company has agreed to pay an affiliate of the Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support.

Critical Accounting Policies and Estimates

The preparation of unaudited condensed consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and expenses during the period reported. Actual results could materially differ from those estimates. We have identified the following critical accounting estimates affecting our financial statements:

Class A Common Stock Subject to Possible Redemption

As a result of the right of stockholders to redeem their Public Shares in connection with a tender offer for shares or an Initial Business Combination, all such Public Shares are recorded at redemption amount and classified as temporary equity upon the completion of the Initial Public Offering in accordance with ASC 480.

Offering Costs Associated with the Initial Public Offering

The Company complies with the requirements of the ASC 340-10-S99-1. Offering costs consisted of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that were directly related to the Initial Public Offering. The Company incurred offering costs amounting to $15,774,999 as a result of the Initial Public Offering consisting of $5,520,000 of underwriting commissions, $9,660,000 of deferred underwriting commissions, and $594,999 of other offering costs. The Offering costs were charged to stockholders’ deficit upon the completion of the Initial Public Offering.

Net Income per Share

Net income per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. We apply the two-class method in calculating earnings per share. Adjustment associated with the redeemable shares of Class A common stock is excluded from earnings per share as the redemption value approximates fair value.

Off-Balance Sheet Arrangements

As of September 30, 2022, we did not have any off-balance sheet arrangements as defined in Item 303(b)(1)(ii)(B) of Regulation S-K.

Contractual Obligations

As of September 30, 2022, we did not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities. Beginning on October 14, 2021, the Company has agreed to pay an affiliate of the Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. Upon completion of the Initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. As of September 30, 2022, we had $0 in accrued administrative support.

The Underwriters of the Initial Public Offering were entitled to underwriting discounts and commissions of 5.5%, of which 2% ($5,520,000) was paid at the closing of the Initial Public Offering and 3.5% ($9,660,000) was deferred. The deferred underwriting discounts and commissions will become payable to the Underwriters upon the consummation of the Initial Business Combination and will be paid from the amounts held in the Trust Account. The Underwriters are not entitled to any interest accrued on the deferred underwriting discounts and commissions.

 

24


Table of Contents

JOBS Act

The Jumpstart Our Business Startups Act of 2012 (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 will be 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 unaudited condensed financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (a) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the JOBS Act, (b) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (c) comply with any requirement that may be adopted by the Public Company Accounting and Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the unaudited condensed financial statements (auditor discussion and analysis) and (d) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of our Chief Executive Officer’s compensation to median employee compensation. These exemptions will apply for a period of five years following the closing of the Initial Public Offering or until we are no longer an “emerging growth company,” whichever is earlier.

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined in Item 10 of Regulation S-K and are not required to provide the information otherwise required by this item.

 

Item 4.

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 three months period ended September 30, 2022, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation our principal executive officer and principal financial and accounting officer (“Certifying Officers”) have concluded that during the period covered by this report, our disclosure controls and procedures were not effective over financial reporting relating to the classification of current and non-current assets, and insufficient controls related to the review during the financial close process. Additionally, we lack adequate resources to properly account for and report our transactions. Due to the impact on our financial statements, we determined that a material weakness exists.

Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Certifying Officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

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) as of the period ended September 30, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management has identified a material weakness in internal controls related relating to the classification of current and non-current assets, and insufficient controls related to the review during the financial close process and to properly account for and report our transactions to our auditors. In light of the material weakness identified, we have processes to identify and appropriately apply applicable accounting requirements. We plan to enhance our processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the accounting standards that apply to our financial statements. Our plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.

 

25


Table of Contents

PART II - OTHER INFORMATION

 

Item 1.

Legal Proceedings

None.

Item 1A. Risk Factors

Factors that could cause our actual results to differ materially from those in this Quarterly Report on Form 10-Q include the risks described in our Annual Report on Form 10-K filed with the SEC on April 14, 2022. Any of these factors could result in a significant or material adverse effect on our business, financial condition or future results. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business or results of operations. Except as disclosed below, there have been no material changes to the risks disclosed in our Annual Report on Form 10-K filed with the SEC on April 14, 2022.

We may be subject to a new 1% U.S. federal excise tax in connection with redemptions of our Class A Common Stock.

On August 16, 2022, the IR Act was signed into law. The IR Act provides for, among other things, a new 1% U.S. federal excise tax on certain repurchases (including redemptions) of stock by publicly traded U.S. corporations after December 31, 2022. The excise tax is imposed on the repurchasing corporation itself, not its stockholders from whom the shares are repurchased (although it may reduce the amount of cash distributable in a current or subsequent redemption). The amount of the excise tax is generally 1% of any positive difference between the fair market value of any shares repurchased by the repurchasing corporation during a taxable year and the fair market value of certain new stock issuances by the repurchasing corporation during the same taxable year. In addition, a number of exceptions apply to this excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out, and prevent the abuse or avoidance of, this excise tax, but it has not yet issued any guidance.

Although the application of this excise tax is not entirely clear, any redemption or other repurchase effected by us that occurs after December 31, 2022, in connection with a business combination, extension vote or otherwise, may be subject to this excise tax. Because any such excise tax would be payable by us and not by the redeeming holder, it could cause a reduction in the value of our Class A Common Stock or cash available for distribution in a subsequent liquidation. Whether and to what extent we would be subject to the excise tax in connection with a business combination will depend on a number of factors, including (i) whether the business combination closes after December 31, 2022, (ii) the structure of the business combination, (iii) the fair market value of the redemptions and repurchases in connection with the business combination, (iv) the nature and amount of any “PIPE” or other equity issuances in connection with the business combination (or any other equity issuances within the same taxable year of the business combination) and (v) the content of any regulations and other guidance issued by the Treasury. Further, the application of the excise tax in respect of distributions pursuant to a liquidation of a publicly traded U.S. corporation is uncertain and has not been addressed by the Treasury in regulations or other guidance, and it is possible that the proceeds held in the Trust Account could be used to pay any excise tax owed by us in the event we are unable to complete a business combination in the required time and redeem 100% of our remaining Class A Common Stock in accordance with our certificate of incorporation), in which case the amount that would otherwise be received by our Public Stockholders in connection with our liquidation would be reduced.

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination, and results of operations.

We are subject to laws and regulations enacted by national, regional and local governments. In particular, we are required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our Initial Business Combination, and results of operations.

On March 30, 2022, the SEC issued proposed rules relating to, among other items, enhancing disclosures in business combination transactions involving SPACs and private operating companies; amending the financial statement requirements applicable to transactions involving shell companies; effectively limiting the use of projections in SEC filings in connection with proposed business combination transactions; increasing the potential liability of certain participants in proposed business combination transactions; and the extent to which SPACs could become subject to regulation under the Investment Company Act. These rules, if adopted, whether in the form proposed or in revised form, may impact the involvement of target companies and other market participants, including investment banks, in the SPAC market, may materially adversely affect our ability to identify a target company and our ability to negotiate and complete our Initial Business Combination and, furthermore, may materially increase the costs and time related thereto.

Our search for a business combination, and any target business with which we may ultimately consummate our Initial Business Combination, may be materially adversely affected by the geopolitical conditions resulting from the recent invasion of Ukraine by Russia and subsequent sanctions against Russia, Belarus and related individuals and entities and the status of debt and equity markets, as well as protectionist legislation in our target markets.

United States and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the recent invasion of Ukraine by Russia in February 2022. In response to such invasion, the North Atlantic Treaty Organization (“NATO”) deployed additional military forces to eastern Europe, and the United States, the United Kingdom, the European Union and other countries have announced various sanctions and restrictive actions against Russia, Belarus and related individuals and entities, including the removal of certain financial institutions from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system. Certain countries, including the United States, have also provided and may continue to provide military aid or other assistance to Ukraine during the ongoing military conflict, increasing geopolitical tensions with Russia. The invasion of Ukraine by Russia and the resulting measures that have been taken, and could be taken in the future, by NATO, the United States, the United Kingdom, the European Union and other countries have created global security concerns that could have a lasting impact on regional and global economies. Although the length and impact of the ongoing military conflict in Ukraine is highly unpredictable, the conflict could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions. Additionally, Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets.

Any of the abovementioned factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian invasion of Ukraine and subsequent sanctions, could adversely affect our search for a business combination and any target business with which we may ultimately consummate our Initial Business Combination. The extent and duration of the Russian invasion of Ukraine, resulting sanctions and any related market disruptions are impossible to predict, but could be substantial, particularly if current or new sanctions continue for an extended period of time or if geopolitical tensions result in expanded military operations on a global scale. Any such disruptions may also have the effect of heightening many of the other risks described in the “Risk Factors” section of our Annual Report on Form 10-K. If these disruptions or other matters of global concern continue for an extensive period of time, our ability to consummate an Initial Business Combination, or the operations of a target business with which we may ultimately consummate our Initial Business Combination, may be materially adversely affected.

 

 

26


Table of Contents
Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales

On February 10, 2021, the Sponsor acquired 5,750,000 Founder Shares for an aggregate purchase price of $25,000, consisting of 5,750,000 shares of Class B common stock. Prior to the initial investment in the Company of $25,000 by the Sponsor, the Company had no assets, tangible or intangible. The per share purchase price of the Founder Shares was determined by dividing the amount of cash contributed to the Company by the aggregate number of Founder Shares issued. The number of Founder Shares issued was determined based on the expectation that such Founder Shares would represent 20% of the outstanding shares upon completion of the Initial Public Offering. In October 2021, we effected a dividend of 1,150,000 of our Founder Shares, which resulted in our Sponsor owning 6,900,000 Founder Shares. In connection with our Initial Public Offering, our Sponsor forfeited a total of 90,000 Founder Shares, and 30,000 Founder Shares were then issued to each of the independent directors, Mel G. Riggs, Charles W. Yates and Stephen Straty, at their original purchase price. The Founder Shares were issued in connection with our organization pursuant to an exemption from registration contained in Section 4(a)(2) of the Securities Act.

On October 18, 2021, simultaneously with the closing of the Initial Public Offering and pursuant to the Private Placement Warrant Purchase Agreement the Company completed the sale of 11,600,000 Private Placement Warrants at a purchase price of $1.00 per Private Placement Warrant to the Sponsor, generating gross proceeds to the Company of $11,600,000. On October 22, 2021, simultaneously with the sale of the Over-allotment Units, the Company completed a private placement with the Sponsor for 1,440,000 Additional Private Placement Warrants, generating gross proceeds to the Company of $1,440,000.

Use of Proceeds

On October 18, 2021, the Company consummated its Initial Public Offering of 24,000,000 Units. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $240,000,000. In connection with the Initial Public Offering, the Underwriters were granted an option to purchase up to an additional 3,600,000 Units to cover over-allotments, if any. October 21, 2021, the Underwriters fully exercised its over-allotment option and, on October 22, 2021, the Underwriters purchased the Over-allotment Units at a price of $10.00 per unit, generating proceeds of $36,000,000.

On October 18, simultaneously with the closing of the Initial Public Offering and pursuant to the Private Placement Warrant Purchase Agreement the Company completed the sale of 11,600,000 Private Placement Warrants at a purchase price of $1.00 per Private Placement Warrant to the Sponsor, generating gross proceeds to the Company of $11,600,000. On October 22, 2021, simultaneously with the sale of the Over-allotment Units, the Company completed a private placement with the Sponsor for 1,440,000 Additional Private Placement Warrants, generating gross proceeds to the Company of $1,440,000. A total of $281,520,000, comprised of $270,480,000 of the net proceeds from the Initial Public Offering (including the Over-allotment Units) and $11,040,000 of the proceeds of the sale of the Private Placement Warrants (including the Additional Private Placement Warrants) has been deposited in the Trust Account maintained by Continental Stock Transfer & Trust Company, acting as trustee.

EarlyBirdCapital, Inc. and Stephens Inc. served as representatives of the Underwriters. The securities sold in the Initial Public Offering were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-259469) (the “Registration Statement”) and on Form S-1 MEF (File No. 333-260233) (the “Additional Registration Statement”, and together with the Registration Statement, the “Registration Statements”). The SEC declared the Registration Statements effective on October 13, 2021.

From February 10, 2021 (inception) through the closing of the Initial Public Offering and the Underwriters’ full exercise of the over-allotment option, we incurred approximately $15,774,999 for costs and expenses related to the Initial Public Offering. In connection with the closing of the Initial Public Offering, we paid a total of approximately $5,520,000 million in underwriting discounts and commissions. In addition, the Underwriters agreed to defer approximately $9,660,000 in underwriting discounts and commissions, which amount will be payable upon consummation of the Initial Business Combination. There has been no material change in the planned use of proceeds from the Initial Public Offering as described in our final prospectus filed with the SEC on October 18, 2021.

After deducting the underwriting discounts and commissions (excluding the deferred portion of approximately $9,660,000, which amount will be payable upon consummation of the Initial Business Combination) and offering expenses, the total net proceeds from our Initial Public Offering and the Private Placement were approximately $289,040,000, of which approximately $281,520,000 (or $10.20 per Unit sold in the Initial Public Offering) was placed in the Trust Account.

 

27


Table of Contents
Item 3.

Defaults Upon Senior Securities

None.

 

Item 4.

Mine Safety Disclosures

Not applicable.

 

Item 5.

Other Information

None.

 

Item 6.

Exhibits

Exhibits designated by an asterisk (*) are filed herewith and those designated by two asterisks (**) are furnished herewith; all exhibits not so designated are incorporated by reference to a prior filing as indicated.

 

Exhibit

Number

   Description
3.1    Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (Commission File No. 001-40907), filed on October 19, 2021).
3.2    Bylaws of the Company (incorporated by reference to Exhibit 3.3 to the Company’s Registration Statement on Form S-1 (File No. 333-259469) filed with the SEC on September 10, 2021).
31.1*    Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*    Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**    Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**    Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*    Inline XBRL Instance Document—the XBRL 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 Label Linkbase Document
101.PRE*    Inline XBRL Taxonomy Extension Presentation Linkbase Document
104    Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

 

28


Table of Contents

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 on this 10th day of November 2022.

 

BLACK MOUNTAIN ACQUISITION CORP.

/s/ Rhett Bennett

Name:   Rhett Bennett
Title:   Chief Executive Officer

/s/ Jacob Smith

Name:   Jacob Smith
Title:   Chief Financial Officer, Chief Accounting Officer and Secretary

 

29