ShoulderUp Technology Acquisition (SUAC) - 2022 Q1 - Quarterly Report

Financial Position - As of March 31, 2022, total assets amounted to $307,076,925, a slight decrease from $307,327,601 as of December 31, 2021[10] - Cash and cash equivalents decreased to $586,500 from $790,770 at the beginning of the period, reflecting a net cash used in operating activities of $204,270[15] - Total current liabilities increased to $475,763 from $452,636, primarily due to an increase in accounts payable[10] - The company has a stockholders' deficit of $10,598,838 as of March 31, 2022, compared to $10,325,035 at the end of the previous year[10] - As of March 31, 2022, the Company had approximately $587,000 in its operating bank account and working capital of approximately $567,000[33] - The net proceeds from the IPO included $306,000,000 placed in the Trust Account and $1,656,890 held outside the Trust Account for working capital purposes[34] - The Company has not experienced losses on its cash account, which may exceed the FDIC coverage limit of $250,000[45] - The Company has no amounts outstanding under any Working Capital Loans as of March 31, 2022[35] - The Company has identified the United States as its only major tax jurisdiction and does not expect significant changes in unrecognized tax benefits over the next twelve months[59] IPO and Capital Structure - The IPO generated gross proceeds of $300,000,000 from the sale of 30,000,000 units at $10.00 per unit[20] - The Company completed its Initial Public Offering (IPO) on November 19, 2021, selling 30,000,000 Units at a price of $10.00 per Unit, raising gross proceeds of $300,000,000[62] - The Class A common stock subject to possible redemption was valued at $306,000,000, after accounting for offering costs and fair value adjustments[76] - The Company accounts for 30,000,000 shares of Class A common stock subject to possible redemption as temporary equity, presented at redemption value[49] - The Company has 15,675,000 warrants outstanding, each exercisable at $11.50 per share, with adjustments based on future capital raising activities[82] - The underwriters received cash commissions of $5,300,000 at the IPO and are entitled to a deferred commission of $11,200,000 upon completion of the initial Business Combination[74] - The company also completed a private placement of 1,350,000 shares for an aggregate purchase price of $13,500,000, bringing total proceeds to $313,500,000[120] Business Operations and Strategy - The company has not engaged in any operations or generated revenues since its inception on May 20, 2021, and all activities relate to its formation and IPO[18] - The company has not selected any specific Business Combination target and has not engaged in substantive discussions regarding potential targets[17] - The company must complete an initial Business Combination with a fair market value of at least 80% of the assets held in the Trust Account[23] - The Company has a Combination Period of 18 months from the IPO closing date, extendable by 3 months, to complete the initial Business Combination[30] - The Company has not generated any operating revenues as of March 31, 2022, and will only do so upon the completion of its initial business combination[97] Financial Performance - The company reported a net loss of $273,803 for the three months ended March 31, 2022, compared to a net loss of $9,726,215 accumulated as of December 31, 2021[12][13] - For the three months ended March 31, 2022, the Company reported a net loss allocation of $205,352 for Class A common stock and $68,451 for Class B common stock, resulting in a basic and diluted net loss per share of $(0.01) for both classes[55] - The Company incurred $30,000 in administrative service fees for the three months ended March 31, 2022, under an agreement with the Sponsor[71] - As of March 31, 2022, the Company reported a net loss of approximately $274,000, primarily due to general and administrative expenses of approximately $255,000 and franchise tax expense of approximately $50,000[98] Risks and Uncertainties - Management is evaluating the potential negative impact of the COVID-19 pandemic on the Company's financial position and search for a target company[36] - The Company has not included adjustments in its financial statements that might result from uncertainties related to the COVID-19 pandemic and geopolitical events[36][37] - The company faces risks related to the COVID-19 pandemic, which may adversely affect its ability to complete business combinations[116] - Increased competition among special purpose acquisition companies may lead to a scarcity of attractive targets and higher costs for initial business combinations[118] - The company may encounter challenges in raising equity and debt financing due to market volatility and geopolitical instability[117] - The ongoing geopolitical tensions, including the conflict between Russia and Ukraine, could further complicate the search for business combinations[119] - The company has not reported any material changes in risk factors since its last annual report[115] Management and Governance - The Company has not requested the Sponsor to reserve for indemnification obligations, raising concerns about the Sponsor's ability to satisfy these obligations[32] - The management has concluded that the disclosure controls and procedures were effective as of March 31, 2022[110] - The Company evaluated subsequent events and did not identify any that required adjustment or disclosure in the financial statements[90] - The Sponsor has agreed not to transfer its Founder Shares until certain conditions are met, including one year after the initial Business Combination[66]