The Company established the initial fair value for the warrants on September 14, 2021, the date of the consummation of the Company's IPO. The Company used a lattice model and Monte Carlo simulation model to value the warrants. The Company allocated the proceeds received from (i) the sale of Units (which is inclusive of one share of Class A common stock and one-half of one Public Warrant), (ii) the sale of Private Placement Warrants, and (iii) the issuance of Class B common stock, first to the warrants based ...

For the quarterly period ended March 31, 2023 Delaware 86-2967193 (State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.) Securities registered pursuant to Section 12(g) of the Act: None Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☒ As of May 15, 2023, there were 4,128,024 shares of the Company's Class A common stock, par value $0.0001 per share, and 5,750,000 shares of the Company's Class B common stock, par value $0.0001, issued an ...

Title of each classTrading Symbol(s)Name of each exchange on which registered Units, each consisting of one share of Class A common stock, $0.0001 par value per share, and one-half of one redeemable warrant Shares of Class A common stock, par value $0.0001 per share FLAG NYSE American LLC FLAGW NYSE American LLC (Mark One) OR UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FLAGU NYSE American LLC Redeemable warrants included as part of the units, each whole warrant exercisable for on ...

Financial Performance - For the three months ended September 30, 2022, the company reported a net income of approximately $0.5 million, with general and administrative expenses of $0.7 million and a gain of $1.1 million on marketable securities held in the trust account [112]. - For the nine months ended September 30, 2022, the company achieved a net income of approximately $6.1 million, offset by $1.6 million in general and administrative expenses [114]. - The company had a net loss of approximately $0.8 million for the three months ended September 30, 2021, primarily due to general and administrative expenses of $1.1 million [113]. Cash and Capital Structure - As of September 30, 2022, the company had $39,944 in operating cash and a working capital deficit of $860,553 [116]. - The company raised approximately $230 million from its Initial Public Offering, with offering costs totaling approximately $22.5 million [108]. - The underwriter of the IPO is entitled to a deferred fee of $8,050,000, payable only upon the completion of a Business Combination [126]. - The company has no long-term debt or off-balance sheet arrangements as of September 30, 2022 [120]. Business Combination and Financing - The company has until December 14, 2022, to consummate a Business Combination, with the option to extend to September 14, 2023 [110]. - The company has incurred significant costs in pursuit of its financing and acquisition plans, with no formal agreement for additional funding, although the Sponsor is committed to extend Working Capital Loans as needed [118]. - The company entered into a forward purchase agreement with Franklin for the purchase of 5,000,000 shares of Class A common stock and 2,500,000 warrants for an aggregate price of $50 million [127]. Equity and Liabilities - Class A common stock subject to possible redemption is classified as temporary equity, with a redemption value presented outside of stockholders' equity as of September 30, 2022 [130]. - The net income (loss) per Class A redeemable common stock is calculated using an 80% allocation for Class A and 20% for non-redeemable common stock for the three and nine months ended September 30, 2022 [132]. - The company issued 14,897,155 warrants classified as liabilities, subject to re-measurement at each balance sheet date [133]. - The accounting treatment for warrants requires them to be recorded as liabilities at fair value, with changes recognized in the statement of operations [134]. Internal Controls - Management identified a material weakness in internal controls over financial reporting related to complex financial instruments as of September 30, 2022 [140]. - A remediation plan has been implemented to enhance processes for applying accounting requirements, though results may take time to materialize [142]. - No significant changes in internal control over financial reporting occurred during the fiscal quarter ended September 30, 2022 [143].

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed financial statements, including balance sheets, statements of operations, changes in stockholders' deficit, cash flows, and comprehensive notes [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets%20as%20of%20June%2030%2C%202022%20%28unaudited%29%20and%20December%2031%2C%202021) The balance sheets reflect decreased operating cash and total liabilities, with Trust Account marketable securities slightly increasing from December 2021 to June 2022 Condensed Balance Sheet Highlights | Metric | June 30, 2022 | December 31, 2021 | Change | | :--------------------------------------- | :------------ | :---------------- | :----- | | Cash | $328,843 | $1,062,653 | $(733,810) | | Marketable securities in Trust Account | $230,183,554 | $230,004,784 | $178,770 | | Total Assets | $231,020,255 | $231,769,289 | $(749,034) | | Warrant Liability | $1,345,000 | $7,469,150 | $(6,124,150) | | Total Liabilities | $10,078,882 | $16,451,319 | $(6,372,437) | | Accumulated Deficit | $(9,242,756) | $(14,687,389) | $5,444,633 | | Total Stockholders' Deficit | $(9,242,181) | $(14,686,814) | $5,444,633 | [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202022%2C%20the%20three%20months%20ended%20June%2030%2C%202021%2C%20and%20for%20the%20period%20from%20March%2024%2C%202021%20%28inception%29%20through%20June%2030%2C%202021%20%28unaudited%29) The company reported net income for the three and six months ended June 30, 2022, a significant improvement driven by fair value gains on warrant and forward purchase unit liabilities Condensed Statements of Operations Highlights | Metric | 3 Months Ended June 30, 2022 | 3 Months Ended June 30, 2021 | 6 Months Ended June 30, 2022 | Inception Through June 30, 2021 | | :-------------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :------------------------------ | | Operating costs | $361,622 | $83,303 | $890,480 | $83,303 | | Net income (loss) | $4,161,210 | $(83,303) | $5,623,403 | $(83,303) | | Basic and diluted net income per share, redeemable Class A common stock | $0.15 | — | $0.20 | — | | Basic and diluted net income per share, non-redeemable Class B common stock | $0.14 | $(0.02) | $0.19 | $(0.02) | | Change in fair value of warrant liability | $4,029,850 | — | $6,124,150 | — | | Change in fair value of forward purchase unit liability | $332,983 | — | $210,963 | — | | Interest income on marketable securities | $159,999 | — | $176,504 | — | [Condensed Statements of Changes in Class A Common Stock Subject to Possible Redemption and Stockholders' Deficit](index=6&type=section&id=Condensed%20Statements%20of%20Changes%20in%20Class%20A%20Common%20Stock%20Subject%20to%20Possible%20Redemption%20and%20Stockholders%27%20Deficit%20for%20the%20six%20months%20ended%20June%2030%2C%202022%20and%20for%20the%20period%20from%20March%2024%2C%202021%20%28inception%29%20through%20June%2030%2C%202021%20%28unaudited%29) This statement details changes in Class A common stock subject to redemption and stockholders' deficit, reflecting net income and remeasurement adjustments Changes in Stockholders' Deficit (Six Months Ended June 30, 2022) | Metric | Amount | | :-------------------------------------------------- | :------------- | | Balance – December 31, 2021 | $(14,686,814) | | Remeasurement of Class A common stock to redemption value | $(178,770) | | Net income | $5,623,403 | | Balance – June 30, 2022 | $(9,242,181) | Changes in Stockholders' Deficit (Inception Through June 30, 2021) | Metric | Amount | | :-------------------------------------------------- | :------------- | | Balance – March 24, 2021 (inception) | $0 | | Issuance of Class B common stock to Sponsor | $20,025 | | Issuance of Class B common stock to Metric | $4,975 | | Net loss | $(83,303) | | Balance – June 30, 2021 | $(58,303) | [Condensed Statements of Cash Flows](index=7&type=section&id=Condensed%20Statements%20of%20Cash%20Flows%20for%20six%20months%20ended%20June%2030%2C%202022%20%28unaudited%29%20and%20for%20the%20period%20from%20March%2024%2C%202021%20%28inception%29%20through%20June%2030%2C%202021) The cash flow statement shows significant net cash outflow from operating activities for the six months ended June 30, 2022, decreasing the overall cash balance Condensed Statements of Cash Flows Highlights | Metric | 6 Months Ended June 30, 2022 | Inception Through June 30, 2021 | | :------------------------------------ | :--------------------------- | :------------------------------ | | Net cash used in operating activities | $(733,810) | $(118,804) | | Net cash from financing activities | — | $213,804 | | Net Change in Cash | $(733,810) | $95,000 | | Cash – Ending | $328,843 | $95,000 | [Notes to Interim Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Interim%20Condensed%20Financial%20Statements%20%28unaudited%29) These notes provide essential context and detailed explanations for the financial statements, covering the company's organization, accounting policies, and specific financial instruments [NOTE 1. Organization and Plans of Business Operations](index=8&type=section&id=NOTE%201.%20ORGANIZATION%20AND%20PLANS%20OF%20BUSINESS%20OPERATIONS) The company, a SPAC, completed its IPO in September 2021, placing $230 million in a Trust Account, but faces liquidity challenges and going concern doubts despite Sponsor loan commitments - The Company is a blank check company (SPAC) formed on March 24, 2021, for the purpose of entering into a business combination[28](index=28&type=chunk) - The IPO was consummated on September 14, 2021, raising **$230,000,000** from **23,000,000 Units** at **$10.00 per Unit**, with proceeds placed in a Trust Account[30](index=30&type=chunk)[31](index=31&type=chunk) - As of June 30, 2022, the Company had **$328,843** in operating cash and working capital of **$386,007**, which is insufficient to sustain operations for one year, raising substantial doubt about its ability to continue as a going concern[33](index=33&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) [NOTE 2. Summary of Significant Accounting Policies](index=9&type=section&id=NOTE%202.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note details the company's GAAP adherence, EGC status, and key accounting policies for cash, trust account investments, redeemable Class A common stock, and financial instrument fair value - The Company is an 'emerging growth company' and has elected not to opt out of the extended transition period for complying with new or revised financial accounting standards[39](index=39&type=chunk)[40](index=40&type=chunk) - Cash held in the Trust Account (**$230,183,554** as of June 30, 2022) is invested in U.S. government securities or money market funds, pending a business combination or redemption[44](index=44&type=chunk) - **Class A common stock** subject to possible redemption is classified as temporary equity and adjusted to redemption value at each reporting period, with changes reflected in additional paid-in capital or accumulated deficit[46](index=46&type=chunk)[47](index=47&type=chunk) - Warrants for the Company's common stock are accounted for as liabilities at fair value and re-valued at each reporting date, with changes recognized in the statements of operations[59](index=59&type=chunk) [NOTE 3. Initial Public Offering](index=14&type=section&id=NOTE%203.%20INITIAL%20PUBLIC%20OFFERING) The IPO, completed September 9, 2021, generated $230 million from 23 million Units at $10.00 each, with proceeds placed in the Trust Account and $22.5 million in transaction costs - The Company sold **23,000,000 Units** in its IPO at **$10.00 per Unit**, generating gross proceeds of **$230,000,000**[63](index=63&type=chunk) - **$230,000,000** of the IPO proceeds was placed in the Trust Account, with **$2,081,180** available for working capital[64](index=64&type=chunk)[65](index=65&type=chunk) - Total transaction costs for the IPO were **$22,517,064**, including underwriting discounts, deferred underwriting fees, and excess fair value of founder shares[65](index=65&type=chunk) [NOTE 4. Private Placement](index=14&type=section&id=NOTE%204.%20PRIVATE%20PLACEMENT) Concurrently with the IPO, the company sold 3,397,155 Private Placement Warrants for $5.1 million to the Sponsor and Metric, with proceeds added to the Trust Account and expiration contingent on a business combination - The Company sold **3,397,155 Private Placement Warrants** to the Sponsor and Metric for **$1.50** per warrant, generating **$5,095,733**[66](index=66&type=chunk) - Proceeds from the Private Placement Warrants were added to the Trust Account[66](index=66&type=chunk) [NOTE 5. Related Party Transactions](index=14&type=section&id=NOTE%205.%20RELATED%20PARTY%20TRANSACTIONS) Related party transactions include the Sponsor and Metric's purchase of 5,750,000 Founder Shares for $25,000, a repaid Sponsor promissory note, potential future Working Capital Loans, and a $10,000 monthly administrative support agreement - The Sponsor and Metric purchased **5,750,000 Founder Shares** for an aggregate of **$25,000**, representing **approximately 20%** of outstanding shares post-IPO[67](index=67&type=chunk) - The Sponsor loaned the Company **$188,804** via a non-interest bearing promissory note, which was repaid in full on September 14, 2021[72](index=72&type=chunk) - The Company has an optional agreement to pay an affiliate of the Sponsor **$10,000 per month** for administrative support[74](index=74&type=chunk) [NOTE 6. Stockholders' Equity](index=15&type=section&id=NOTE%206.%20STOCKHOLDERS%27%20EQUITY) The company is authorized to issue preferred, Class A, and Class B common stock, with 23 million Class A and 5.75 million Class B shares outstanding as of June 30, 2022, where Class B converts to Class A upon a business combination - The Company is authorized to issue **1,000,000 shares** of preferred stock (none outstanding), **300,000,000 shares** of **Class A common stock** (**23,000,000** subject to redemption outstanding), and **30,000,000 shares** of **Class B common stock** (**5,750,000** outstanding)[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk) - **Class B common stock** (**Founder Shares**) will automatically convert into **Class A common stock** on a one-for-one basis upon consummation of a Business Combination, subject to adjustment[78](index=78&type=chunk) [NOTE 7. Warrants](index=15&type=section&id=NOTE%207.%20WARRANTS) This note details Public and Private Placement Warrant terms, including exercisability, registration, and redemption conditions, with Private Placement Warrants being non-redeemable while held by initial purchasers - Public Warrants become exercisable on the later of **12 months** from IPO closing or **30 days** after a Business Combination[79](index=79&type=chunk) - The Company may redeem Public Warrants at **$0.01** per warrant if **Class A common stock** equals or exceeds **$18.00** for **20 trading days** within a **30-day** period[83](index=83&type=chunk) - Private Placement Warrants are identical to Public Warrants but are not transferable/saleable until **30 days** post-Business Combination and are non-redeemable while held by initial purchasers[87](index=87&type=chunk) - All **14,897,155 warrants** (Public and Private) are accounted for as derivative liabilities at fair value, with changes recognized in the statement of operations[88](index=88&type=chunk)[89](index=89&type=chunk) [NOTE 8. Commitments and Contingencies](index=17&type=section&id=NOTE%208.%20COMMITMENTS%20AND%20CONTINGENCIES) The company has commitments for registration rights, an $8.05 million deferred underwriting fee payable upon a business combination, and a forward purchase agreement with Franklin Strategic Series for $50 million in Class A common stock and warrants - Holders of **Founder Shares** and Private Placement Warrants are entitled to registration rights[90](index=90&type=chunk) - A deferred underwriting fee of **$8,050,000** is payable to the underwriter upon completion of a Business Combination[92](index=92&type=chunk) - The Company entered into a forward purchase agreement with Franklin Strategic Series to purchase **5,000,000 Class A common stock** and **2,500,000 warrants** for **$50,000,000**, contingent on closing an initial business combination[93](index=93&type=chunk) [NOTE 9. Fair Value Measurements](index=18&type=section&id=NOTE%209.%20FAIR%20VALUE%20MEASUREMENTS) The company measures warrant and forward purchase unit liabilities at fair value using a three-tier hierarchy, with warrant liability at $1.345 million and forward purchase unit liability at $310,221 as of June 30, 2022, reflecting reclassification due to increased input observability Fair Value of Warrant and Forward Purchase Unit Liabilities | Liability | June 30, 2022 | December 31, 2021 | | :-------------------------- | :------------ | :---------------- | | Warrant Liability | $1,345,000 | $7,469,150 | | Forward Purchase Unit Liability | $310,221 | $521,184 | - Public Warrants were transferred from Level 3 to Level 1, and Private Placement Warrants from Level 3 to Level 2, due to increased observability of valuation inputs[98](index=98&type=chunk) Changes in Fair Value of Derivative Warrant Liabilities (December 31, 2021 to June 30, 2022) | Metric | Public Warrants | Private Placement Warrants | Forward Purchase Units | | :------------------------------------------ | :-------------- | :------------------------- | :--------------------- | | Derivative warrant liabilities as of Dec 31, 2021 | $5,751,150 | $1,718,000 | $521,184 | | Change in fair value (Q1 2022) | $(1,612,300) | $(482,000) | $122,020 | | Derivative warrant liabilities as of Mar 31, 2022 | $4,138,850 | $1,236,000 | $643,204 | | Change in fair value (Q2 2022) | $(3,103,850) | $(926,000) | $(332,983) | | Derivative warrant liabilities as of Jun 30, 2022 | $1,035,000 | $310,000 | $310,221 | [NOTE 10. Income Tax](index=20&type=section&id=NOTE%2010.%20INCOME%20TAX) The company recorded no income tax benefits for net operating losses due to realization uncertainty and established a full valuation allowance against net deferred tax assets - No income tax benefits were recorded for net operating losses due to uncertainty of realization[103](index=103&type=chunk) - A full valuation allowance was recorded against net deferred tax assets as of June 30, 2022, and December 31, 2021[104](index=104&type=chunk) [NOTE 11. Subsequent Events](index=20&type=section&id=NOTE%2011.%20SUBSEQUENT%20EVENTS) Subsequent to the balance sheet date, the company filed a preliminary proxy statement to extend the business combination deadline from September 14, 2022, to December 14, 2022, with potential for further extensions - The Company filed a preliminary proxy statement to extend the business combination deadline from September 14, 2022, to December 14, 2022, with options for up to three additional three-month extensions[106](index=106&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance and condition, covering its SPAC status, fair value-driven operations, going concern issues, key accounting policies, and contractual obligations [Overview](index=21&type=section&id=Overview) The company, a blank check company, completed its IPO in September 2021, raising $230 million for a Trust Account, and must complete a business combination by September 2022 or liquidate - The Company is a blank check company formed to effect a business combination[110](index=110&type=chunk) - The IPO on September 14, 2021, generated **$230 million**, with proceeds placed in a Trust Account[111](index=111&type=chunk)[113](index=113&type=chunk) - The Company has until September 14, 2022 (or March 14, 2023, with extensions) to consummate a Business Combination, or it will redeem public shares and liquidate[114](index=114&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) For the three and six months ended June 30, 2022, the company reported net income of approximately $4.2 million and $5.6 million, respectively, primarily due to fair value gains on warrant and forward purchase unit liabilities - Net income for the three months ended June 30, 2022, was approximately **$4.2 million**, primarily due to a **$4.0 million** gain on warrant liability and a **$0.3 million** gain on forward purchase unit liability[117](index=117&type=chunk) - Net income for the six months ended June 30, 2022, was approximately **$5.6 million**, driven by a **$6.1 million** gain on warrant liability and a **$0.2 million** gain on forward purchase unit liability[118](index=118&type=chunk) [Going Concern](index=22&type=section&id=Going%20Concern) As of June 30, 2022, the company had $328,843 in operating cash and $386,007 in working capital, raising substantial doubt about its ability to continue as a going concern despite Sponsor loan commitments - As of June 30, 2022, the Company had **$328,843** in operating cash and **$386,007** in working capital[119](index=119&type=chunk) - The Company lacks sufficient financial resources to sustain operations for one year, raising substantial doubt about its ability to continue as a going concern[121](index=121&type=chunk)[122](index=122&type=chunk) - The Sponsor is committed to extending Working Capital Loans as needed, though no formal agreement exists[121](index=121&type=chunk) [Off-Balance Sheet Arrangements](index=22&type=section&id=Off-Balance%20Sheet%20Arrangements) As of June 30, 2022, the company had no off-balance sheet arrangements, such as relationships with unconsolidated entities or special purpose entities - The Company had no off-balance sheet arrangements as of June 30, 2022[123](index=123&type=chunk) [Contractual Obligations](index=22&type=section&id=Contractual%20Obligations) The company's primary contractual obligations include a $10,000 monthly administrative fee to an affiliate of its Sponsor and an $8.05 million deferred underwriting discount, payable only upon a business combination - The Company has an agreement to pay an affiliate of its Sponsor **$10,000 per month** for office space and administrative support[124](index=124&type=chunk) - A deferred underwriting discount of **$8,050,000** is payable to the underwriter only if the Company completes a Business Combination[125](index=125&type=chunk) [Commitments and Contingencies](index=23&type=section&id=Commitments%20and%20Contingencies) The company has commitments related to registration rights for Founder Shares and Private Placement Warrants, and a forward purchase agreement with Franklin Strategic Series for $50 million in Class A common stock and warrants upon a business combination - Holders of **Founder Shares** and Private Placement Warrants are entitled to registration rights, requiring the Company to register such securities for resale[126](index=126&type=chunk) - The Company is committed to filing a registration statement for a secondary offering of forward purchase securities within **30 calendar days** after the closing of an initial business combination[127](index=127&type=chunk) - A forward purchase agreement with Franklin Strategic Series commits Franklin to purchase **5,000,000 Class A common stock** and **2,500,000 warrants** for **$50,000,000** concurrently with the closing of an initial business combination[128](index=128&type=chunk) [Critical Accounting Policies and Estimates](index=23&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Management identifies critical accounting policies involving significant judgment and estimates, including accounting for redeemable Class A common stock, net income per common stock using the two-class method, and fair value measurement of warrant liabilities - **Class A common stock** subject to possible redemption is classified as temporary equity and measured at redemption value[131](index=131&type=chunk) - Net income per common stock is calculated using the two-class method, allocating income/loss based on an **80%** (**Class A**) to **20%** (**Class B**) ratio[133](index=133&type=chunk) - Warrants are classified as derivative liabilities at fair value, subject to re-measurement at each balance sheet date, with changes recognized in the statement of operations[134](index=134&type=chunk)[135](index=135&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that quantitative and qualitative disclosures about market risk are not required for the company as it qualifies as a smaller reporting company - Disclosure on quantitative and qualitative market risk is not required for smaller reporting companies[138](index=138&type=chunk) [Item 4. Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that the company's disclosure controls and procedures were not effective as of June 30, 2022, due to a material weakness in accounting for complex financial instruments [Evaluation of Disclosure Controls and Procedures](index=25&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) The CEO and CFO determined that the company's disclosure controls and procedures were not effective as of June 30, 2022, due to a material weakness in accounting for complex financial instruments - Disclosure controls and procedures were deemed not effective as of June 30, 2022[140](index=140&type=chunk) - The ineffectiveness is attributed to a material weakness in internal control over financial reporting related to accounting for complex financial instruments[140](index=140&type=chunk) [Previously Identified Material Weakness](index=25&type=section&id=Previously%20Identified%20Material%20Weakness) A material weakness in disclosure controls and procedures was previously identified as of December 31, 2021 - A material weakness in disclosure controls and procedures was previously identified as of December 31, 2021[141](index=141&type=chunk) [Remediation Activities](index=25&type=section&id=Remediation%20Activities) The company is implementing a remediation plan to improve its processes for identifying and applying accounting requirements for complex financial instruments, involving additional analyses - The Company is implementing a remediation plan to enhance processes for identifying and applying accounting requirements for complex financial instruments[142](index=142&type=chunk) [Changes in Internal Control over Financial Reporting](index=25&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) No other material changes in internal control over financial reporting occurred during the quarter ended June 30, 2022, beyond the previously discussed material weakness - No other material changes in internal control over financial reporting occurred during the quarter ended June 30, 2022[143](index=143&type=chunk) [PART II. OTHER INFORMATION](index=25&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=25&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no legal proceedings as of the reporting date - There are no legal proceedings[145](index=145&type=chunk) [Item 1A. Risk Factors](index=25&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the Annual Report on Form 10-K for risk factors and highlights new risks related to the proposed extension of the business combination deadline and potential adverse effects from changes in SPAC regulations - Reference is made to Part I Item 1A. Risk Factors in the Annual Report on Form 10-K for the year ended December 31, 2021[146](index=146&type=chunk) - New risks include uncertainties regarding the approval and effectiveness of the extension request for the business combination deadline[147](index=147&type=chunk)[149](index=149&type=chunk) - Changes in laws or regulations, particularly proposed SEC rules relating to SPACs, may adversely affect the company's ability to complete a business combination and increase associated costs and time[151](index=151&type=chunk)[152](index=152&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=27&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported the unregistered sale of 3,397,155 Private Placement Warrants to the Sponsor and Metric for $5.1 million, which occurred simultaneously with the IPO - On September 14, 2021, **3,397,155 Private Placement Warrants** were sold to the Sponsor and Metric for **$1.50** per warrant, generating **$5,095,733**[153](index=153&type=chunk) - The issuance was exempt from registration under Section 4(a)(2) of the Securities Act of 1933[153](index=153&type=chunk) - Private Placement Warrants are not transferable/saleable until **30 days** after a Business Combination and are non-redeemable while held by initial purchasers[154](index=154&type=chunk) [Item 3. Defaults Upon Senior Securities](index=27&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - There are no defaults upon senior securities[155](index=155&type=chunk) [Item 4. Mine Safety Disclosures](index=27&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reported no mine safety disclosures - There are no mine safety disclosures[156](index=156&type=chunk) [Item 5. Other Information](index=27&type=section&id=Item%205.%20Other%20Information) The company reported no other information - There is no other information to report[157](index=157&type=chunk) [Item 6. Exhibits](index=27&type=section&id=Item%206.%20Exhibits) This section provides an index of exhibits filed with or incorporated by reference into the Form 10-Q, including the Amended and Restated Certificate of Incorporation, Bylaws, CEO/CFO certifications, and XBRL documents - The exhibit index includes the Amended and Restated Certificate of Incorporation, Bylaws, CEO/CFO certifications, and various Inline XBRL documents[159](index=159&type=chunk)

Financial Performance - The company had a net income of approximately $1.5 million for the three months ended March 31, 2022, consisting of $0.5 million in general and administrative expenses and a $0.1 million loss on the change in the fair value of the forward purchase unit liability, offset by a $2.1 million gain on the change in the fair value of warrant liability [108]. - The company generated gross proceeds of approximately $230 million from its Initial Public Offering, with offering costs amounting to approximately $22.5 million [103]. - As of March 31, 2022, the company had $597,522 in operating cash and working capital of $645,674 [109]. Business Combination - The company has until September 14, 2022, to consummate a Business Combination, with a potential extension to March 14, 2023 [106]. - The company has entered into a forward purchase agreement with Franklin Strategic Series for the purchase of 5,000,000 shares of Class A common stock and 2,500,000 forward purchase warrants for an aggregate purchase price of $50 million [119]. - The company incurred a deferred discount of $8,050,000 to the underwriter of the IPO, which will be payable only upon the completion of a Business Combination [116]. Financial Position and Resources - The company lacks sufficient financial resources to sustain operations for a reasonable period, raising substantial doubt about its ability to continue as a going concern [113]. - The company has no long-term debt or capital lease obligations as of March 31, 2022, but incurs a monthly fee of $10,000 for office space and administrative support [115]. - The company has no off-balance sheet arrangements as of March 31, 2022 [114]. Accounting Standards - FASB issued ASU No. 2020-06 to simplify accounting for convertible instruments, effective for fiscal years beginning after December 15, 2023 [126]. - ASU 2020-06 removes certain settlement conditions for equity contracts and simplifies diluted earnings per share calculation [126]. - The company is currently assessing the impact of ASU 2020-06 on its financial position, results of operations, or cash flows [126]. - Management does not believe that other recently issued accounting pronouncements would materially affect the balance sheet [127]. Market Risk Disclosures - Quantitative and qualitative disclosures about market risk are not required for smaller reporting companies [128].

Company Formation and Financial Overview - The company was formed as a blank check company on March 24, 2021, with no operations or identified business combination partner as of December 31, 2021[18]. - The company raised approximately $230 million from its Initial Public Offering, placing the net proceeds in a trust account[28]. - The company completed a private placement of 3,397,155 warrants at $1.50 each, generating gross proceeds of approximately $5.1 million[27]. - The net proceeds from the Initial Public Offering and related sales amount to up to $221,950,000 for completing the initial business combination[184]. Target Markets and Growth Potential - The target markets include aerospace, space, microelectronics, cybersecurity, power & energy, and autonomy & mobility, with significant growth potential[31]. - The U.S. space economy is projected to grow from approximately $385 billion in 2018 to about $1.5 trillion by 2040, representing an annual growth rate of approximately 6%[31]. - Global cybersecurity spending is expected to exceed $140 billion in 2021, driven by ongoing data protection initiatives[32]. Business Combination Strategy - The company aims to identify technology-enabled solutions with high-growth applications in government and commercial markets[19]. - The company is focused on acquiring companies with proprietary technologies and strong management teams that can benefit from its operational expertise[35]. - The initial business combination must involve target businesses with a fair market value equal to at least 80% of the assets held in the Trust Account[37]. - The company intends to use cash from the Initial Public Offering and private placement proceeds to effectuate the initial business combination, which may involve financially unstable or early-stage businesses[42]. Stockholder Rights and Redemption - Public stockholders will have the opportunity to redeem shares of Class A common stock at a per-share price of approximately $10.00, based on the amount in the Trust Account[67]. - The company will not redeem public shares if it would cause net tangible assets to fall below $5,000,001 upon consummation of the initial business combination[69]. - A majority of the outstanding shares must be voted in favor of the business combination for it to be approved, requiring at least 8,625,001 public shares or 37.5% of the 23,000,000 public shares sold[75]. - The company has a restriction on public stockholders redeeming more than 15% of their public shares without prior consent, aimed at preventing stockholders from blocking business combinations[80]. Risks and Challenges - The company may not have the ability to diversify operations and may focus on a single industry, which could expose it to significant risks[52]. - There is no assurance that key personnel will remain in senior management positions post-business combination, and additional managers may need to be recruited[55]. - The company has identified a material weakness in internal control over financial reporting, which could adversely affect investor confidence and financial results[122]. - The company may face challenges in completing a business combination due to the impact of COVID-19 and market conditions[130]. Regulatory and Compliance Issues - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements, which may affect the attractiveness of its securities to investors[113]. - The company is also a "smaller reporting company," which allows for reduced disclosure obligations, potentially complicating comparisons with other public companies[116]. - Compliance with laws and regulations may be difficult and costly, potentially affecting the ability to negotiate and complete the initial business combination[169]. Competition and Market Conditions - Intense competition is expected from other blank check companies, private equity groups, and operating businesses, which may limit the company's ability to acquire larger target businesses[110]. - The company may face intense competition for business combination opportunities, which could hinder the completion of its initial business combination[151]. Financial and Operational Considerations - The company may need to seek stockholder approval for its initial business combination, which could influence the public float of Class A common stock[144][146]. - If the company fails to complete a business combination within the specified time frame, it will cease operations except for winding up and redeeming public shares[142][143]. - The company may face difficulties in maintaining or obtaining the quotation or listing of its securities on a national exchange due to reduced public float from potential share purchases[146][148]. Future Plans and Considerations - The company may continue to seek a different target for the initial business combination if the first proposed combination is not completed[88]. - The company plans to redeem public shares promptly after the 12-month period from the initial public offering, subject to stockholder approval and applicable law[103]. - The company may pursue acquisition opportunities outside of the FLAG team's area of expertise, potentially impacting the evaluation of significant risk factors[178].

Financial Performance - The company incurred a net loss of approximately $1.2 million for the three months ended September 30, 2021, and a total net loss of approximately $1.1 million from inception through September 30, 2021, primarily due to general and administrative expenses[121]. - The company has incurred significant costs related to its financing and acquisition plans and lacks sufficient financial resources to sustain operations for a reasonable period, raising substantial doubt about its ability to continue as a going concern[124]. Initial Public Offering - The company completed its Initial Public Offering on September 14, 2021, raising approximately $230 million from the sale of 23,000,000 units at $10.00 per unit, with offering costs of approximately $22.5 million[115]. - The underwriter of the IPO is entitled to a deferred discount of $0.35 per unit, totaling $8,050,000, which will be payable only if a Business Combination is completed[128]. Financial Position - As of September 30, 2021, the company had $1,197,342 in operating cash and working capital of $1,957,037[122]. - The company has no long-term debt or capital lease obligations as of September 30, 2021, but has a monthly fee agreement of $10,000 for office space and administrative services[126]. - The company has no off-balance sheet arrangements or obligations as of September 30, 2021[141]. Business Combination - The company has until September 14, 2022, to complete a Business Combination, with the possibility of extending this period to March 14, 2023[118]. - The company has entered into a forward purchase agreement with Franklin Strategic Series for the purchase of 5,000,000 shares of Class A common stock and 2,500,000 warrants for an aggregate price of $50 million[132]. Warrants - The company has issued 14,897,155 warrants, which are classified as liabilities and subject to re-measurement at each balance sheet date[139].