Bite Acquisition (BITE) - 2022 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents the company's unaudited condensed financial statements, including balance sheets, statements of operations, changes in stockholders' (deficit)/equity, and cash flows, along with detailed notes explaining the company's organization, accounting policies, and specific financial instruments Condensed Balance Sheets Table: Balance Sheet Data | Metric | September 30, 2022 | December 31, 2021 | | :--------------------------- | :----------------- | :---------------- | | Cash | $256,488 | $89,393 | | Investment in Trust Account | $200,845,193 | $200,011,361 | | Total Current Liabilities | $928,524 | $506,427 | | Total Liabilities | $945,024 | $652,177 | | Total Stockholders' Deficit | $(363,229) | $(141,101) | Unaudited Condensed Statements of Operations Table: Statements of Operations Data | Metric | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :---------------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net Income (Loss) after taxes | $621,727 | $(140,520) | $426,142 | $(388,124) | | Investment income from Trust | $885,025 | $3,021 | $1,159,936 | $7,342 | | Basic and diluted net income (loss) per Common Stock | $0.02 | $(0.01) | $0.02 | $(0.02) | Unaudited Condensed Statements of Changes in Stockholders' (Deficit)/Equity Table: Stockholders' Equity Data | Metric | As of Dec 31, 2021 | As of Sep 30, 2022 | | :-------------------------------------- | :----------------- | :----------------- | | Total Stockholders' Deficit | $(141,101) | $(363,229) | | Net income (9 months ended Sep 30, 2022)| N/A | $426,142 | | Remeasurement to shares subject to possible redemption (9 months ended Sep 30, 2022) | N/A | $(648,270) | Unaudited Condensed Statements of Cash Flows Table: Cash Flow Data | Metric | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :---------------------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $426,142 | $(388,124) | | Net cash used in operating activities | $(734,009) | $(907,061) | | Net cash used in investing activities | $326,104 | $(200,000,000) | | Net cash provided by financing activities | $575,000 | $201,000,487 | | Net Change in Cash | $167,095 | $93,426 | | Cash - end of the period | $256,488 | $126,382 | Notes to Unaudited Condensed Financial Statements Note 1 - Organization, Business Operations and Going Concern - Bite Acquisition Corp. is a blank check company (SPAC) incorporated on September 29, 2020, formed for the purpose of effecting a business combination[15] - The company has not commenced any operations as of September 30, 2022, with all activity related to its formation and initial public offering (IPO)[17] - The IPO, consummated on February 17, 2021, generated gross proceeds of $175,000,000, with an additional $25,000,000 from an over-allotment option[19][22] - A total of $200,000,000 was placed in a Trust Account, from which $326,104 was withdrawn during the three and nine months ended September 30, 2022, for tax payments[24] - The company faces a mandatory liquidation date of February 17, 2023, if a business combination is not completed, raising substantial doubt about its ability to continue as a going concern[34] - The Sponsor (Smart Dine, LLC) has agreed to provide necessary financial support through Working Capital Loans, up to $1,500,000, to meet financial obligations until a business combination or liquidation[31] Note 2 - Significant Accounting Policies - Unaudited condensed financial statements are prepared in accordance with GAAP for interim financial information and SEC rules, with certain disclosures condensed or omitted[39] - Common stock subject to possible redemption is classified as temporary equity and presented at redemption value, as redemption rights are outside the company's control[44] - Derivative warrant liabilities are recognized at fair value and re-measured at each balance sheet date, with changes recognized in the statement of operations, using Monte-Carlo simulations for valuation[53] - The company elected the fair value option for its convertible promissory note, recording it at initial fair value and adjusting for subsequent changes in fair value in the statement of operations[51] Table: Effective Tax Rate | Metric | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :----------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Effective Tax Rate | 21.0% | 0.0% | 28.8% | 0.0% | - The Inflation Reduction Act of 2022, effective January 1, 2023, introduces a new 1% excise tax on certain stock repurchases, which could reduce cash available for a business combination[64][65] Note 3 - Initial Public Offering - On February 17, 2021, the company sold 17,500,000 Units at $10.00 per Unit in its IPO, with an additional 2,500,000 Units purchased by underwriters via over-allotment on February 25, 2021[69][70] - Each Unit consists of one share of common stock and one-half of one Public Warrant, with each whole warrant exercisable at $11.50 per share[69][71] - Warrants become exercisable 30 days after the initial business combination and expire five years thereafter, or earlier upon redemption or liquidation[71][74] - The company may call warrants for redemption at $0.01 per warrant if the common stock price equals or exceeds $18.00 for 20 trading days within a 30-trading day period[77] Note 4 - Private Placement - Simultaneously with the IPO, the Sponsor and EarlyBirdCapital, Inc. purchased 500,000 Private Units at $10.00 per unit, generating $5,000,000[79] - An additional 50,000 Private Units were sold at $10.00 per unit concurrently with the over-allotment exercise, generating $500,000[80] - Private Units are identical to Public Units but lack redemption rights or liquidating distributions from the Trust Account for private shares or warrants[81] Note 5 - Related Party Transactions - The Sponsor purchased 4,312,500 Founder Shares for $25,000, with 31,250 shares subsequently forfeited due to the partial exercise of the underwriters' over-allotment option[82] Table: Related Party Balances | Metric | September 30, 2022 | December 31, 2021 | | :----------------------------------- | :----------------- | :---------------- | | Due to related party (accrued administrative service fee) | $197,857 | $107,857 | - The company issued a convertible promissory note to the Sponsor, amended on June 21, 2022, to increase the maximum principal value to $700,000, with $575,000 outstanding as of September 30, 2022[86][87] - The principal balance of the convertible note may be converted into units at $10.00 per unit upon consummation of an initial business combination[87] Note 6 - Commitments and Contingencies - Holders of founder shares, Private Units, and units from Working Capital Loans have registration rights[90] - Underwriters received a cash underwriting discount of $3,500,000 (2.0% of IPO gross proceeds) and an additional $500,000 for the over-allotment option[91][92] - EarlyBirdCapital, as an advisor for the business combination, will receive a cash fee up to 3.5% of the gross proceeds of the offering upon consummation of the initial business combination[93] - 90,000 representative shares were issued to EarlyBirdCapital designees, valued at $859,500, subject to transfer restrictions and waiver of redemption/liquidation rights[94][95] Note 7 - Fair Value Measurements Table: Fair Value Measurements Summary | Description | September 30, 2022 (Level 1) | September 30, 2022 (Level 3) | | :-------------------------- | :--------------------------- | :--------------------------- | | Investments in Trust Account| $200,845,193 | — | | Warrant liabilities | — | $16,500 | | Convertible promissory note | — | $377,675 | - Investments held in the Trust Account, approximately $200.8 million as of September 30, 2022, are in a 100% U.S. Treasury Securities Money Market Fund and classified as Level 1[99] - Private warrant liabilities are classified as Level 3, with fair value determined using a Monte Carlo simulation model, and decreased by $129,250 for the nine months ended September 30, 2022[100][101][102] Table: Warrant Liability Valuation Inputs | Level 3 Input (Warrant Liability) | Sep 30, 2022 | Dec 31, 2021 | | :-------------------------------- | :----------- | :----------- | | Exercise price | $11.50 | $11.50 | | Share price | $9.84 | $9.72 | | Volatility | 1.4% | 10.0% | | Expected life (years) | 3.5 | 5.5 | | Risk-free rate | 4.2% | 1.31% | | Dividend yield | —% | —% | Table: Convertible Note Valuation Inputs | Level 3 Input (Convertible Note) | Sep 30, 2022 | | :------------------------------- | :----------- | | Conversion price | $10.00 | | Share price | $9.84 | | Volatility | 1.4% | | Expected life (years) | 0.25 | | Risk-free rate | 3.30% | Note 8 – Stockholders' Equity (Deficit) - The company is authorized to issue 1,000,000 shares of preferred stock ($0.0001 par value), with no shares issued or outstanding as of September 30, 2022[105] - The company is authorized to issue 100,000,000 shares of common stock ($0.0001 par value), with 5,640,000 shares issued and outstanding (excluding 20,000,000 shares subject to redemption) as of September 30, 2022, and December 31, 2021[106] Note 9 - Subsequent Events - The company evaluated subsequent events through November 14, 2022, and identified no events requiring adjustment or disclosure in the financial statements[107] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results of operations, highlighting the transition from net loss to net income driven by trust investment income, discussing liquidity challenges, and outlining critical accounting policies Overview - Bite Acquisition Corp. is a blank check company (SPAC) formed on September 29, 2020, to effect a business combination[110] - All activities through September 30, 2022, relate to the company's formation, initial public offering, and the search for a prospective initial business combination target[111] - The company has not generated any operating revenues to date and does not expect to until after the completion of its business combination[112] Results of Operations Three months ended September 30, 2022 compared to the three months ended September 30, 2021 Table: Results of Operations Summary | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | Change ($) | | :----------------------------------- | :-------------------------- | :-------------------------- | :--------- | | Net Income (Loss) | $621,727 | $(140,520) | $762,247 | | Investment income from Trust | $885,025 | $3,021 | $882,004 | | Formation and operating costs | $199,261 | $157,578 | $41,683 | | Franchise tax | $50,000 | $21,163 | $28,837 | | Change in fair value of private warrants | $8,250 | $35,200 | $(26,950) | | Change in fair value of convertible promissory notes | $142,690 | — | $142,690 | Nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 Table: Results of Operations Summary | Metric | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | Change ($) | | :----------------------------------- | :-------------------------- | :-------------------------- | :--------- | | Net Income (Loss) | $426,142 | $(388,124) | $814,266 | | Investment income from Trust | $1,159,936 | $7,342 | $1,152,594 | | Formation and operating costs | $738,046 | $418,546 | $319,500 | | Franchise tax | $150,000 | $72,620 | $77,380 | | Change in fair value of private warrants | $129,250 | $95,700 | $33,550 | | Change in fair value of convertible promissory notes | $197,325 | — | $197,325 | Liquidity and Capital Resources Table: Liquidity and Capital Resources Summary | Metric | September 30, 2022 | | :----------------------------------- | :----------------- | | Cash | $256,488 | | Working Capital Deficit (excl. taxes)| $(346,729) | - Substantially all funds in the trust account, including interest earned (net of taxes), are intended for the initial business combination[116] - The Sponsor or its affiliates may provide non-interest-bearing Working Capital Loans, up to $2,000,000, convertible into warrants, to fund transaction costs or working capital deficiencies[118] - Failure to raise additional funds or complete a business combination due to insufficient funds could lead to cessation of operations and liquidation of the trust account[119] Off-Balance Sheet Arrangements - The company did not have any off-balance sheet arrangements as of September 30, 2022[120] Contractual Obligations - The company does not have any long-term debt, capital lease obligations, operating lease obligations, or long-term liabilities[121] Critical Accounting Policies - Common stock subject to possible redemption is classified as temporary equity at redemption value, as redemption rights are outside the company's control[121] - Derivative warrant liabilities are recognized at fair value and re-measured at each reporting period, with changes recognized in the statement of operations[122] - The convertible promissory note is accounted for using the fair value option, recorded at initial fair value, with subsequent changes recognized in the statement of operations[123] Recent Accounting Standards - Management does not believe that any recently issued, but not yet effective, accounting standards would have a material effect on the company's condensed financial statements if currently adopted[124] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Bite Acquisition Corp. is exempt from providing quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[125] Item 4. Controls and Procedures Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of September 30, 2022, and a previously disclosed material weakness regarding redeemable common stock classification has been alleviated Evaluation of Disclosure Controls and Procedures - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of September 30, 2022[126] - A previously disclosed material weakness related to the classification of redeemable common stock has been alleviated by implementing new procedures[126] Management's Report on Internal Controls Over Financial Reporting - This Quarterly Report does not include a report of management's assessment or an attestation report from the independent registered public accounting firm regarding internal control over financial reporting, due to a transition period for newly public companies[128] Changes in Internal Control over Financial Reporting - Other than the alleviation of the previously discussed material weakness, there have been no material changes in internal control over financial reporting during the quarter ended September 30, 2022[128] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company reported no legal proceedings - The company is not involved in any legal proceedings[130] Item 1A. Risk Factors The company refers to the risk factors disclosed in its Annual Report on Form 10-K, with no material changes except for an amended and restated risk factor concerning changes in laws or regulations, specifically highlighting proposed SEC rules impacting SPAC business combinations - No material changes to the risk factors disclosed in the Annual Report on Form 10-K, except for an amended and restated risk factor regarding changes in laws or regulations[131] - Proposed SEC rules, if adopted, could materially adversely affect the company's business, including its ability to negotiate and complete an initial business combination, and may increase related costs and time[133] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This item details the issuance of Founder Shares to the Sponsor, the Initial Public Offering of units, and subsequent private placements of units to the Sponsor and underwriters, outlining the proceeds generated and their deposit into the trust account - The Sponsor purchased 4,312,500 Founder Shares for $25,000, with 31,250 shares subsequently forfeited[134] - The Initial Public Offering on February 17, 2021, involved the sale of 17,500,000 Units at $10.00 per Unit, generating $175,000,000[135] - An additional 2,500,000 Units were purchased by underwriters on February 25, 2021, generating $25,000,000 from the over-allotment option[136] - Private placements included an initial 500,000 units and an additional 50,000 units, each at $10.00, generating total gross proceeds of $5,500,000[137] - A total of $200,000,000 from the IPO and private placement proceeds was deposited into a trust account for public stockholders[138] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities - There were no defaults upon senior securities[139] Item 4. Mine Safety Disclosures This item is not applicable to the company - Mine Safety Disclosures are not applicable to the company[139] Item 5. Other Information The company reported no other information - No other information was reported under this item[139] Item 6. Exhibits This section lists the exhibits filed as part of or incorporated by reference into the Quarterly Report, including certifications, XBRL documents, and corporate governance documents - Exhibits include certifications (31.1*, 31.2*, 32.1**, 32.2**), Inline XBRL Instance Document (101.INS), Inline XBRL Taxonomy Extension Schema Document (101.SCH), Calculation Linkbase Document (101.CAL), Definition Linkbase Document (101.DEF), Label Linkbase Document (101.LAB), Presentation Linkbase Document (101.PRE), and Cover Page Interactive Data File (104)[141] - Corporate governance documents such as the Amended and Restated Certificate of Incorporation (3.1) and Bylaws (3.2) are incorporated by reference[141]