Financial Position - As of September 30, 2022, the company had cash of approximately $1,073,000 and working capital of approximately $592,000[113]. - The company reported negative stockholders' equity due to accounting for Class A common stock as redeemable stock[115]. - As of September 30, 2022, the company had approximately $1,073,000 in cash and $592,000 in working capital, raising concerns about its ability to continue operations beyond one year without completing a Business Combination[141]. - The company has no long-term debt or capital lease obligations as of September 30, 2022[131]. Operational Performance - The company incurred a loss from operations of approximately $580,000 and $1,736,000 for the three and nine months ended September 30, 2022, respectively[116]. - The company has not generated any revenues to date and only incurs non-operating income from interest on cash and cash equivalents[114]. - Approximately $249,000 and $747,000 were charged for operations for the three and nine months ended September 30, 2022, respectively[132]. Income and Expenses - Other income for the three and nine months ended September 30, 2022, was approximately $3,539,000 and $14,726,000, respectively, primarily due to the reduction in fair value of warrant liability and interest income[118]. - The Company recorded income tax expense of approximately $300,000 for the three months ended September 30, 2022, compared to $0 for the same period in 2021[151]. - The effective tax rate for the three months ended September 30, 2022, was approximately 10%, while the nine-month effective tax rate was about 2%[151]. - As of September 30, 2022, the Company has a deferred tax asset of approximately $440,000, primarily related to start-up costs[151]. Initial Public Offering - The net proceeds from the initial public offering were approximately $343,940,000, with about $340,930,000 deposited into the Trust Account[119]. - The gross proceeds from the Public Offering amounted to $340,930,000, with Class A common stock subject to redemption valued at $342,171,000 as of September 30, 2022[156]. - The company incurred approximately $19,741,000 in costs related to its initial public offering, including $18,750,000 in underwriters' discount[149]. Business Combination - The company expects to use substantially all funds in the Trust Account to complete its initial Business Combination[120]. - The company has engaged in discussions with potential business combination partners but has not yet entered into a definitive agreement[110]. - The company anticipates significant costs in pursuing its initial Business Combination, which may affect its liquidity[124]. - If the company cannot complete a Business Combination before October 1, 2023, it may be forced to liquidate unless it receives shareholder approval for an extension[124]. - The company may need to seek additional financing to complete its initial Business Combination if the cash portion of the purchase price exceeds the amount available from the Trust Account[128]. Stock and Warrant Valuation - The estimated fair value of the warrant liability was determined using Level 3 inputs, with Public Warrants trading at $0.26 per warrant as of September 30, 2022[139][140]. - The fair value of the Warrants is estimated using a binomial lattice simulation approach, with changes recognized as a non-cash gain or loss on the statements of operations[158]. - The Company has 34,092,954 public shares that contain a redemption feature, which allows for redemption in connection with a business combination[154]. - Changes in the carrying amount of redeemable Class A common stock are affected by adjustments to additional paid-in capital[156]. Management Compensation - The company has agreed to compensate its President and Chief Operating Officer, as well as its Chief Financial Officer, $29,000 per month prior to the consummation of the initial Business Combination[132]. Tax Benefits - No unrecognized tax benefits were reported as of September 30, 2022, or December 31, 2021[152]. - The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense, with no amounts accrued for interest and penalties as of September 30, 2022[152]. Reporting Classification - The Company is classified as a smaller reporting company and is not required to provide additional market risk disclosures[160].
Hennessy Capital Investment VI(HCVI) - 2022 Q3 - Quarterly Report