PART I. FINANCIAL INFORMATION Unaudited Condensed Consolidated Financial Statements This section presents the company's unaudited financial statements as of March 31, 2022, detailing assets, liabilities, and performance, including a $3.3 million net income and going concern uncertainty Condensed Consolidated Balance Sheets As of March 31, 2022, the company reported total assets of $172.6 million, primarily held in a Trust Account, with total liabilities of $11.2 million and a stockholders' deficit of $11.0 million Condensed Consolidated Balance Sheet Highlights (Unaudited) | Financial Metric | March 31, 2022 (USD) | December 31, 2021 (USD) | | :--- | :--- | :--- | | Assets | | | | Cash | $19,401 | $116,140 | | Investments held in Trust Account | $172,500,855 | $172,543,076 | | Total Assets | $172,614,854 | $172,751,689 | | Liabilities & Stockholders' Deficit | | | | Total current liabilities | $2,160,061 | $1,920,993 | | Derivative warrant liabilities | $2,964,500 | $6,602,750 | | Total Liabilities | $11,162,061 | $14,561,243 | | Class A common stock subject to possible redemption | $172,500,000 | $172,500,000 | | Total stockholders' deficit | ($11,047,207) | ($14,309,554) | Unaudited Condensed Consolidated Statements of Operations For the three months ended March 31, 2022, the company reported a net income of $3.3 million, primarily from non-cash gains on derivative warrant liabilities, a decrease from $6.1 million in the prior year Condensed Consolidated Statements of Operations (Unaudited) | Metric | Three Months Ended March 31, 2022 (USD) | Three Months Ended March 31, 2021 (USD) | | :--- | :--- | :--- | | Total operating expenses | ($433,684) | ($215,123) | | Change in fair value of derivative warrant liabilities | $3,638,250 | $6,206,630 | | Income on investments held in Trust Account | $57,779 | $62,128 | | Net income | $3,262,347 | $6,051,134 | | Basic and diluted net income per share, Class A | $0.15 | $0.28 | | Basic and diluted net income per share, Class B | $0.15 | $0.28 | Unaudited Condensed Consolidated Statements of Changes in Stockholders' Deficit The stockholders' deficit improved from $(14.3) million to $(11.0) million during Q1 2022, driven by the period's net income - The stockholders' deficit decreased from $(14,309,985) at December 31, 2021, to $(11,047,638) at March 31, 2022, reflecting the net income of $3,262,347 for the quarter14 Unaudited Condensed Consolidated Statements of Cash Flows Net cash used in operating activities was $196,739 for Q1 2022, with the cash balance decreasing to $19,401 by period end Cash Flow Summary (Unaudited) | Metric | Three Months Ended March 31, 2022 (USD) | Three Months Ended March 31, 2021 (USD) | | :--- | :--- | :--- | | Net cash used in operating activities | ($196,739) | ($525,339) | | Net cash provided by investing activities | $100,000 | $0 | | Net change in cash | ($96,739) | ($525,339) | | Cash - beginning of the period | $116,140 | $941,242 | | Cash - end of the period | $19,401 | $415,903 | Notes to Unaudited Condensed Consolidated Financial Statements The notes detail the company's blank check status, the proposed TradeZero merger and subsequent litigation, and management's substantial doubt about going concern due to the impending business combination deadline - The company is a blank check company formed to effect a business combination and has not commenced any operations, with activities related to its formation, IPO, and search for a business combination2021 - The company must complete a business combination by June 22, 2022, or it will be required to cease operations, redeem public shares, and dissolve30 - On October 12, 2021, the company entered into a Merger Agreement with TradeZero Holding Corp, but subsequently filed a lawsuit against TradeZero on April 1, 2022, and on May 3, 2022, the Board of Directors changed its recommendation, now advising stockholders to vote against the business combination3345 - Management has determined that there is substantial doubt about the Company's ability to continue as a going concern due to the impending June 22, 2022, deadline to consummate a business combination54 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's blank check status, the TradeZero merger dispute, Q1 2022 net income of $3.3 million, and significant liquidity constraints raising going concern doubts - The company is a blank check company with a deadline of June 22, 2022, to complete a business combination, otherwise it will be forced to liquidate128132 - As of March 31, 2022, the company had approximately $19,000 in its operating bank account and a working capital deficit of approximately $1.8 million, raising substantial doubt about its ability to continue as a going concern139141 - For the three months ended March 31, 2022, net income was approximately $3.3 million, which consisted primarily of a $3.6 million non-operating gain from the change in fair value of derivative warrant liabilities146 - The company's warrants are accounted for as derivative liabilities at fair value, with changes in fair value reported in the statement of operations, representing a critical accounting policy that significantly impacts reported earnings168169 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is not required to provide market risk disclosures and has not engaged in hedging activities - As a smaller reporting company, Dune Acquisition Corporation is not required to provide quantitative and qualitative disclosures about market risk175 Controls and Procedures Management concluded that disclosure controls were ineffective as of March 31, 2022, due to a material weakness in accounting for complex financial instruments - Management concluded that disclosure controls and procedures were not effective as of March 31, 2022176 - The ineffectiveness is due to a material weakness in internal control over financial reporting concerning the accounting for complex equity and equity-linked instruments, which previously resulted in the restatement of financial statements176 PART II. OTHER INFORMATION Legal Proceedings On April 1, 2022, the company filed a lawsuit against TradeZero, and on May 3, 2022, the Board recommended stockholders vote against the proposed business combination - On April 1, 2022, the company filed a complaint in the Delaware Court of Chancery against the TradeZero Defendants, bringing claims for breach of contract, fraudulent inducement, fraudulent misrepresentation, and unjust enrichment182 - On May 3, 2022, the company's Board of Directors changed its recommendation and now unanimously recommends that stockholders vote against the business combination with TradeZero182 Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K filed on March 29, 2022 - As of the date of this report, there have been no material changes to the risk factors disclosed in the company's Annual Report on Form 10-K filed on March 29, 2022183 Unregistered Sales of Equity Securities and Use of Proceeds This section details the $172.5 million gross proceeds from the IPO and $4.85 million from a private placement, with $172.5 million placed in a trust account - The company completed a private sale of 4,850,000 Private Placement Warrants to its Sponsor at $1.00 per warrant, generating gross proceeds of $4,850,000184 - The initial public offering of 17,250,000 units at $10.00 per unit generated total gross proceeds of $172,500,000186 - Of the gross proceeds from the IPO and private placement, $172,500,000 was placed in a trust account189 Defaults Upon Senior Securities The company reports no defaults upon senior securities - None193 Mine Safety Disclosures This item is not applicable to the company - Not applicable195 Other Information The company reports no other information - None197 Exhibits This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, which include certifications from the Chief Executive Officer and Chief Financial Officer, as well as Inline XBRL documents - The report includes CEO and CFO certifications pursuant to SEC rules and the Sarbanes-Oxley Act, along with Inline XBRL data files201
Dune Acquisition (DUNE) - 2022 Q1 - Quarterly Report