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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-39936

DIAMONDHEAD HOLDINGS CORP.

(Exact name of registrant as specified in its charter)

Delaware		85-3460766
(State or other jurisdiction of incorporation)		(IRS Employer Identification No.)


250 Park Ave. 7^th Floor, New York, New York		10177
(Address of principal executive offices)		(Zip Code)

(212) 572-6260

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units, each consisting of one share of Class A common stock, $0.0001 per value and one-fourth of one redeemable warrant	DHHCU	The Nasdaq Stock Market LLC
Class A common stock, par value $0.0001 per share	DHHC	The Nasdaq Stock Market LLC
Warrants, each whole warrant exercisable for one share of Class A common stock, each at an exercise price of $11.50 per share	DHHCW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐

As of May 16, 2022, 34,500,000 shares of Class A common stock, par value $0.0001 per share, and 8,625,000 shares of Class B common stock, par value $0.0001 per share, were issued and outstanding.


		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	2

	Condensed Balance Sheets as of March 31, 2022 (unaudited) and December 31, 2021	2

	Unaudited Condensed Statements of Operations for the Three Months Ended March 31, 2022 and 2021	3

	Unaudited Condensed Statements of Changes in Shareholders’ Equity (Deficit) for the Three Months Ended March 31, 2022 and 2021	4

	Unaudited Condensed Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021	5

	Notes to Unaudited Condensed Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23

Item 4.	Controls and Procedures	23

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	25

Item 1A.	Risk Factors	25

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities	25

Item 3.	Defaults Upon Senior Securities	25

Item 4.	Mine Safety Disclosures	25

Item 5.	Other Information	25

Item 6.	Exhibits	26

SIGNATURES


	March 31, 2022		December 31, 2021
	(unaudited)
Assets:
Current assets:
Cash	$	108,219	$	252,601
Prepaid expenses		233,404		240,075
Total current assets		341,623		492,676
Investments held in Trust Account		345,048,875		345,020,717
Total Assets	$	345,390,498	$	345,513,393

Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders' Deficit:
Current liabilities:
Accounts payable	$	109,842	$	54,391
Accrued expenses		50,000		120,000
Franchise tax payable		163,412		114,645
Total current liabilities		323,254		289,036
Deferred underwriting commissions		12,075,000		12,075,000
Derivative warrant liabilities		5,009,170		8,794,330
Total liabilities		17,407,424		21,158,366

Commitments and Contingencies (Note 6)

Class A common stock subject to possible redemption , $0.0001 par value; 34,500,000 shares at $10.00 per share redemption value at March 31, 2022 and December 31, 2021		345,000,000		345,000,000

Stockholders' Deficit:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; none issued or outstanding		—		—
Class A common stock, $0.0001 par value; 300,000,000 shares authorized; no non-redeemable shares issued or outstanding at March 31, 2022 and December 31, 2021		—		—
Class B common stock, $0.0001 par value; 10,000,000 shares authorized; 8,625,000 shares issued and outstanding at March 31, 2022 and December 31, 2021		863		863
Additional paid-in capital		—		—
Accumulated deficit		(17,017,789)		(20,645,836)
Total stockholders' deficit		(17,016,926)		(20,644,973)
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders' Deficit	$	345,390,498	$	345,513,393


	For the Three Months Ended March 31,
	2022		2021

General and administrative expenses	$	136,504	$	642,360
Franchise tax expense		48,767		48,269
Loss from operations		(185,271)		(690,629)
Change in fair value of derivative warrant liabilities		3,785,160		4,248,830
Financing costs - derivative warrant liabilities		—		(449,070)
Income from investments held in Trust Account		28,158		3,630
Net income	$	3,628,047	$	3,112,761

Weighted average shares outstanding of Class A common stock		34,500,000		24,150,000
Basic net income per share, Class A common stock	$	0.08	$	0.10
Diluted net income per share, Class A common stock	$	0.08	$	0.09

Basic weighted average shares outstanding of Class B common stock		8,625,000		8,287,500
Diluted weighted average shares outstanding of Class B common stock		8,625,000		8,625,000
Basic net income per share, Class B common stock	$	0.08	$	0.10
Diluted net income per share, Class B common stock	$	0.08	$	0.09


	Common Stock										Total
	Class A			Class B			Additional Paid-In		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Deficit
Balance - December 31, 2021	—	$	—	8,625,000	$	863	$	—	$	(20,645,836)	$	(20,644,973)
Net income	—		—	—		—		—		3,628,047		3,628,047
Balance - March 31, 2022 (unaudited)	—	$	—	8,625,000	$	863	$	—	$	(17,017,789)	$	(17,016,926)


	Common Stock						Additional				Total
	Class A			Class B			Paid-In		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Equity (Deficit)
Balance - December 31, 2020	—	$	—	8,625,000	$	863	$	24,137	$	(1,892)	$	23,108
Excess of cash received over fair value of private placement warrants	—		—	—		—		3,500,670		—		3,500,670
Accretion of Class A common stock to redemption amount	—		—	—		—		(3,524,807)		(23,352,185)		(26,876,992)
Net income	—		—	—		—		—		3,112,761		3,112,761
Balance - March 31, 2021 (unaudited)	—	$	—	8,625,000	$	863	$	—	$	(20,241,316)	$	(20,240,453)


	For the Three Months Ended				For the Three Months Ended
	March 31, 2022				March 31, 2021
	Class A		Class B		Class A		Class B
Basic and diluted net income per common stock:
Numerator:
Allocation of net income - Basic	$	2,902,438	$	725,609	$	2,317,478	$	795,283
Allocation of net income - Diluted	$	2,902,438	$	725,609	$	2,293,613	$	819,148
Denominator:
Basic weighted average common stock outstanding		34,500,000		8,625,000		24,150,000		8,287,500
Diluted weighted average common stock outstanding		34,500,000		8,625,000		24,150,000		8,625,000
Basic net income per common stock	$	0.08	$	0.08	$	0.10	$	0.10
Diluted net income per common stock	$	0.08	$	0.08	$	0.09	$	0.09


Gross Proceeds	$	345,000,000
Less:
Proceeds allocated to Public Warrants		(7,762,500)
Class A common stock issuance costs		(19,114,492)
Plus:
Accretion of carrying value to redemption value		26,876,992
Class A common stock subject to possible redemption	$	345,000,000


	Fair Value Measured as of March 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Investments held in Trust Account - Money Market Funds	$	345,048,875	$	—	$	—	$	345,048,875
Liabilities:
Derivative public warrant liabilities	$	2,932,500	$	—	$	—	$	2,932,500
Derivative private warrant liabilities	$	—	$	—	$	2,076,670	$	2,076,670


	Fair Value Measured as of December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets:
Investments held in Trust Account - Money Market Funds	$	345,020,717	$	—	$	—	$	345,020,717
Liabilities:
Derivative public warrant liabilities	$	5,175,000	$	—	$	—	$	5,175,000
Derivative private warrant liabilities	$	—	$	—	$	3,619,330	$	3,619,330

SEC Form 10-Q filed by DiamondHead Holdings Corp.