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 September 30, 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. 001-40029

Evo Acquisition Corp.

(Exact name of registrant as specified in its charter)

Delaware		85-4030703
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

10 Stateline Road

Crystal Bay, Nevada 89402

(Address of Principal Executive Offices, including zip code)

(775) 624-9360

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, 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 and one-half of one Redeemable Warrant	EVOJU	The NASDAQ Stock Market LLC
Class A Common Stock, par value $0.0001 per share	EVOJ	The NASDAQ Stock Market LLC
Redeemable Warrants, each whole warrant exercisable for one share of Class A Common Stock	EVOJW	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 November 14, 2022, there were 12,500,500 shares of Class A common stock, par value $0.0001 per share, and 3,125,125 shares of Class B common stock, par value $0.0001 per share, of the registrant issued and outstanding.

EVO ACQUISITION CORP.

FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2022

TABLE OF CONTENTS

		Page
PART 1 – FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	1

	Balance Sheets as of September 30, 2022 (Unaudited) and December 31, 2021	1

	Statements of Operations for the three and nine months ended September 30, 2022 and 2021 (Unaudited)	2

	Statements of Changes in Stockholder’s Equity (Deficit) for the three and nine months ended September 30, 2022 and 2021 (Unaudited)	3

	Statements of Cash Flows for the nine months ended September 30, 2022 and 2021 (Unaudited)	4

	Notes to Condensed Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	21

Item 4.	Control and Procedures	21

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	22

Item 1A.	Risk Factors	22

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22

Item 3.	Defaults Upon Senior Securities	22

Item 4.	Mine Safety Disclosures	22

Item 5.	Other Information	22

Item 6.	Exhibits	23

SIGNATURES		24

GLOSSARY

Unless otherwise stated in this Report, or the context otherwise requires, references to:

●

“board of directors” or “board” are to the board of directors of the Company;

●

“Class A common stock” are to the shares of Class A common stock of the Company, par value $0.0001 per share;

●

“Class B common stock” are to the shares of Class B common stock of the Company, par value $0.0001 per share

●

“common stock” are to our Class A common stock and our Class B common stock, collectively;

●

“Continental” are to Continental Stock Transfer & Trust Company, as trustee of our Trust Account (as defined below) and warrant agent of our Public Warrants (as defined below);

●

“DGCL” are to the Delaware General Corporation Law;

●

“DWAC System” are to The Depository Trust Company’s Deposit/Withdrawal At Custodian System;

●

“Exchange Act” are to the Securities Exchange Act of 1934, as amended;

●

“FINRA” are to the Financial Industry Regulatory Authority;

●

“Founder Shares” are to shares of our Class B common stock initially purchased by our Sponsor in a private placement prior to our Initial Public Offering, and the shares of our Class A common stock issued upon the conversion thereof as provided herein;

●

“GAAP” are to the accounting principles generally accepted in the United States of America;

●

“IFRS” are to the International Financial Reporting Standards, as issued by the International Accounting Standards Board;

●

“Initial Business Combination” are to a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses;

●

“Initial Public Offering” are to the initial public offering that was consummated by the Company on February 11, 2021;

●

“Investment Company Act” are to the Investment Company Act of 1940, as amended;

●

“JOBS Act” are to the Jumpstart Our Business Startups Act of 2012;

●

“management” or our “management team” are to our officers and directors;

●

“Nasdaq” are to the Nasdaq Stock Market;

●

“PCAOB” are to the Public Company Accounting Oversight Board (United States);

●

“Private Placement Warrants” are to the Warrants initially issued to our Sponsor in a private placement simultaneously with the closing of our Initial Public Offering;

●

“Public Shares” are to shares of our Class A common stock sold as part of the units in our Initial Public Offering (whether they are purchased in our Initial Public Offering or thereafter in the open market);

●

“Public Stockholders” are to the holders of our Public Shares, including our initial stockholders and management team to the extent our initial stockholders and/or members of our management team purchase Public Shares, provided that each initial stockholder’s and member of our management team’s status as a “Public Stockholder” shall only exist with respect to such Public Shares;

●

“Public Warrants” are to our redeemable Warrants sold as part of the units in our Initial Public Offering (whether they are purchased in our Initial Public Offering or thereafter in the open market), to the Private Placement Warrants if held by third parties other than our Sponsor (or permitted transferees), and to any Private Placement Warrants issued upon conversion of working capital loans that are sold to third parties that are not initial purchasers or executive officers or directors (or permitted transferees), in each case, following the consummation of our Initial Business Combination;

●

“Registration Statement” are to the Form S-1 filed with the SEC January 20, 2021, as amended;

●

“Report” are to this Annual Report on Form 10-K for the fiscal year ended December 31, 2021;

●

“Sarbanes-Oxley Act” are to the Sarbanes-Oxley Act of 2002;

●

“SEC” are to the U.S. Securities and Exchange Commission;

●

“Securities Act” are to the Securities Act of 1933, as amended;

●

“Sponsor” is to Evo Sponsor LLC, a Delaware limited liability company;

●

“Trust Account” are to the trust account in which an amount of $125,005,000 ($10.00 per unit) from the net proceeds of the sale of the Units and Private Placement Units in the Initial Public Offering was placed following the closing of the Initial Public Offering;

●

“Units” are to the units sold in our Initial Public Offering, which consist of one Public Share and one-half of one Public Warrant;

●

“Warrants” are to our redeemable warrants, which includes the Public Warrants as well as the Private Placement Warrants to the extent they are no longer held by the initial purchasers of the Private Placement Warrants or their permitted transferees; and

●

“we,” “us,” “Company” or “our Company” are to Evo Acquisition Corp.

iii

Item 1. Financial Statements

EVO ACQUISITION CORP.

CONDENSED BALANCE SHEETS

	September 30, 2022			December 31, 2021
	(Unaudited)
Assets
Current Assets
Cash	$	178,184		$	402,215
Prepaid Expenses		14,875			9,050
Total Current Assets		193,059			411,265
Marketable securities held in Trust Account		125,801,792			125,032,679
Total Assets	$	125,994,851		$	125,443,944
Liabilities and Stockholders’ Equity (Deficit)
Current Liabilities
Accounts payable and accrued expenses	$	334,967		$	84,058
Promissory note – related party		750,000			-
Total Current Liabilities		1,084,967			84,058
Deferred underwriting fee		4,375,175			4,375,175
Public Warrants derivative liability		235,634			3,000,745
Private Placement Warrants derivative liability		160,229			2,046,099
Total Liabilities	$	5,856,005		$	9,506,077
Commitments and Contingencies
Class A common stock subject to possible redemption, 12,500,500 shares at redemption value at September 30, 2022 and December 31, 2021	$	125,801,792		$	125,032,679
Stockholders’ Equity (Deficit)
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding		-			-
Class A common stock, $0.0001 par value; 100,000,000 shares authorized		-			-
Class B common stock, $0.0001 par value; 10,000,000 shares authorized: 3,125,125 shares issued and outstanding at September 30, 2022 and December 31, 2021		313			313
Additional paid-in capital		-			-
Accumulated deficit		(5,663,259	)		(9,095,125	)
Total Stockholders’ Deficit	$	(5,662,946	)	$	(9,094,812	)
Total Liabilities and Stockholders’ Deficit	$	125,994,851		$	125,443,944

The accompanying notes are an integral part of these unaudited condensed financial statements.

EVO ACQUISITION CORP.

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

	Three months ended September 30,					Nine months ended September 30,
	2022			2021		2022		2021
Operating costs	$	172,930		$	9,357	$	496,209	$	14,526
Formation costs		-			-		-		351,766
Professional service fees		300,995			163,636		722,906		429,311
Decrease in the fair value of derivative warrant liabilities		339,479			670,016		4,650,981		8,737,315
Income (Loss) from operations	$	(134,446	)	$	497,023	$	3,431,866	$	7,941,712
Other Income (Loss) Offering costs associated with Public Warrants	$	-		$	-	$	-	$	(601,984	)
Gain (loss), net on marketable securities held in Trust Account		581,674			9,972		769,113		16,864
Total Other Income (Loss)	$	581,674		$	9,972	$	769,113	$	(585,120	)
Net Income	$	447,228		$	506,995	$	4,200,979	$	7,356,592
Basic and diluted weighted average shares outstanding - Class A common stock		12,500,500			12,500,500		12,500,500		10,577,346
Basic and diluted net income (loss) per share of common stock – Class A common stock	$	0.03		$	0.03	$	0.27	$	0.54
Basic and diluted weighted average shares outstanding - Class B common stock		3,125,125			3,125,125		3,125,125		3,125,125
Basic and diluted net income (loss) per share of common stock – Class B common stock	$	0.03		$	0.03	$	0.27	$	0.54

The accompanying notes are an integral part of these unaudited condensed financial statements.

EVO ACQUISITION CORP.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022

	Common Stock								Additional					Total Stockholders’
	Class A				Class B				Paid-In		Accumulated			Equity
	Shares		Amount		Shares		Amount		Capital		Deficit			(Deficit)
Balance as of December 31, 2021		-	$	-		3,125,125	$	313	$	-	$	(9,095,125	)	$	(9,094,812	)
Subsequent remeasurement under ASC 480-10-S99		-		-		-		-		-		(10,732	)		(10,732	)
Net Income		-		-		-		-		-		2,861,096			2,861,096
Balance as of March 31, 2022		-	$	-		3,125,125	$	313	$	-	$	(6,244,761	)	$	(6,244,448	)
Subsequent remeasurement under ASC 480-10-S99		-		-		-		-		-		(176,707	)		(176,707	)
Net Income		-		-		-		-		-		892,655			892,655
Balance as of June 30, 2022		-	$	-		3,125,125	$	313	$	-	$	(5,528,813	)	$	(5,528,500	)
Subsequent remeasurement under ASC 480-10-S99		-		-		-		-		-		(581,674	)		(581,674	)
Net Income		-		-		-		-		-		447,228			447,228
Balance as of September 30, 2022		-	$	-		3,125,125	$	313	$	-	$	(5,663,259	)	$	(5,662,946	)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021

	Common Stock										Additional						Total Stockholders’
	Class A						Class B				Paid-In			Accumulated			Equity
	Shares			Amount			Shares		Amount		Capital			Deficit			(Deficit)
Balance as of December 31, 2020		-		$	-			3,125,125	$	313	$	24,687		$	(21,211	)	$	3,789
Sale of 12,500,500 Class A common shares		12,500,500			1,250			-		-		-			-			1,250
Class A common shares subject to possible redemption		(12,500,500	)		(1,250	)		-		-		-			-			(1,250	)
Subsequent remeasurement under ASC 480-10-S99		-			-			-		-		(24,687	)		(17,010,158	)		(17,034,845	)
Net loss					-			-		-		-			(4,476,686	)		(4,476,686	)
Balance as of March 31, 2021		-		$	-			3,125,125	$	313	$	-		$	(21,508,055	)	$	(21,507,742	)
Net Income		-			-			-		-		-			11,326,283			11,326,283
Balance as of June 30, 2021		-		$	-			3,125,125	$	313	$	-		$	(10,181,772	)	$	(10,181,459	)
Subsequent remeasurement under ASC 480-10-S99		-			-			-		-		-			8,270			8,270
Net Income		-			-			-		-		-			506,995			506,995
Balance as of September 30, 2021		-		$	-			3,125,125	$	313	$	-		$	(9,683,047	)	$	(9,682,734	)

The accompanying notes are an integral part of these unaudited condensed financial statements.

EVO ACQUISITION CORP.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine months ended September 30
	2022			2021
Cash Flows from Operating Activities
Net Income	$	4,200,979		$	7,356,592
Adjustments to reconcile net loss to cash used in operating activities:
Change in fair value of derivative warrant liabilities		(4,650,981	)		(8,737,315	)
Accretion of discount, net on marketable securities		(769,113	)		(16,864	)
Changes in current assets and current liabilities:
Accounts payable, accrued expenses and other assets		245,084			88,384
Cash used in operating activities	$	(974,031	)	$	(1,309,203	)
Cash Flows from Investing Activities
Acquisition of marketable securities	$	-		$	(125,005,000	)
Cash used in investing activities	$	-		$	(125,005,000	)
Cash Flows from Financing Activities
Proceeds from sale of Public Units	$	-		$	125,005,000
Proceeds from sale of Private Placement Warrants		-			4,250,100
Proceeds from promissory note – related party		750,000			200,000
Repayment of promissory note – related party		-			(300,000	)
Payment of offering costs		-			(2,275,660	)
Cash provided by financing activities	$	750,000		$	126,879,440
Change in Cash	$	(224,031	)	$	565,237
Cash – Beginning of period		402,215			59,900
Cash – End of period	$	178,184		$	625,137
Supplemental Disclosure of Non-cash Financing Activities
Deferred underwriting fee	$	-		$	4,375,175

The accompanying notes are an integral part of these unaudited condensed financial statements.

EVO ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

The Company is a blank check company incorporated in Delaware on November 20, 2020. The Company was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar Initial Business Combination with one or more businesses.

The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

As of September 30, 2022, the Company had not yet commenced operations. All activity for the period November 20, 2020 (inception) through September 30, 2022 relates to the Company’s formation and the Initial Public Offering. The Company will not generate any operating revenues until after the completion of an Initial Business Combination, at the earliest. The Company will generate non- operating income in the form of interest income from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end.

The registration statement for the Company’s Initial Public Offering was declared effective on February 8, 2021. On February 11, 2021, the Company consummated the Initial Public Offering of 12,500,500 Units, which includes the full exercise by the underwriter of its over-allotment option in the amount of 1,630,500 Units, at $10.00 per Unit, generating gross proceeds of $125,005,000, which is described in Note 3.

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 4,250,100 Private Placement Warrants at a price of $1.00 per Private Placement Warrant in a private placement to the Sponsor, generating gross proceeds of $4,250,100, which is described in Note 4.

Transaction costs amounted to $7,252,819, consisting of $2,500,100 of underwriting fees, $4,375,175 of deferred underwriting fees and $377,544 of other offering costs. Cash balances are held outside of the Trust Account (as defined below) and are available for the payment of offering costs and for working capital purposes.

Following the closing of the Initial Public Offering on February 11, 2021, an amount of $125,005,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a Trust Account, which may be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act of 1940, as determined by the Company, until the earlier of: (i) the consummation of an Initial Business Combination or (ii) the distribution of the funds in the Trust Account to the Company’s stockholders, as described below, except that the interest earned on the Trust Account can be released to the Company to pay its tax obligations.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of Private Placement Warrants, although substantially all the net proceeds are intended to be applied generally toward consummating an Initial Business Combination. There is no assurance that the Company will be able to complete an Initial Business Combination successfully. The Company must complete one or more Initial Business Combinations with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the Trust Account (as defined above) (excluding any deferred underwriting fees and taxes payable on the interest earned on the Trust Account) within 24 months of the Initial Public Offering to continue operations. The Company will only complete an Initial Business Combination if the post- transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect an Initial Business Combination.

The Company will provide its Public Stockholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of an Initial Business Combination either (i) in connection with a stockholder meeting called to approve the Initial Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of an Initial Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of an Initial Business Combination with respect to the Company’s Warrants.

The Company will proceed with an Initial Business Combination only if the Company has net tangible assets of at least $5,000,001 either prior to or upon such consummation of an Initial Business Combination and, if the Company seeks stockholder approval, a majority of the Public Shares and Founder Shares, voting together as a single class, are voted in favor of the Initial Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation then in effect (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the SEC and file tender offer documents with the SEC prior to completing an Initial Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with an Initial Business Combination, the Sponsor has agreed to vote its Founder Shares and any Public Shares purchased during or after the Initial Public Offering in favor of approving an Initial Business Combination. Additionally, each Public Stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the Initial Business Combination or don’t vote at all.

Notwithstanding the above, if the Company seeks stockholder approval of an Initial Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Amended and Restated Certificate of Incorporation provides that a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company.

The Sponsor has agreed (a) to waive its redemption rights with respect to its Founder Shares and Public Shares held by it in connection with the completion of an Initial Business Combination, (b) to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete an Initial Business Combination by February 11, 2023 and (c) not to propose an amendment to the Amended and Restated Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s Initial Business Combination or to redeem 100% of its Public Shares if the Company does not complete an Initial Business Combination or (ii) with respect to any other provision relating to stockholders’ rights or pre- Initial Business Combination activity, unless the Company provides the Public Stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.

The Company will have until February 11, 2023 to complete an Initial Business Combination (the “Combination Window”). If the Company is unable to complete a Business Combination within the Combination Window, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s Warrants, which will expire worthless if the Company fails to complete an Initial Business Combination within the Combination Window.

The Sponsor has agreed to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete an Initial Business Combination within the Combination Window. However, if the Sponsor acquires Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete an Initial Business Combination within the Combination Window. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Window and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).

In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements are presented in conformity with GAAP and pursuant to the rules and regulations of the SEC for interim financial information and the instructions to Form 10-Q. Certain disclosures included in the annual financial statements have been condensed or omitted from these financial statements as they are not required for interim financial statements under GAAP and the rules of the SEC. These unaudited condensed financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim period presented. These adjustments are of a normal, recurring nature. Interim period operating results may not be indicative of the operating results for a full year.

The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, may be subject to change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2022 or December 31, 2021. The Company may maintain cash balances in various accounts, including the Trust Account, in excess of federally insured limits.

Marketable Securities Held in Trust Account

At September 30, 2022 and December 31, 2021, the assets held in the Trust Account were held in marketable U.S. government securities. These assets are classified as trading securities carried at fair value with unrealized gains/losses included in net income.

Deferred Offering Costs and Formation Costs

Deferred offering costs consisted of legal, accounting and other expenses incurred through the Initial Public Offering that are directly related to the Initial Public Offering. Offering costs amounting to $377,545 were charged to shareholders’ equity upon the completion of the Initial Public Offering on February 11, 2021. As of September 30, 2022 and December 31, 2021, there were no deferred offering costs recorded in the accompanying balance sheet other than the deferred underwriter’s fees, described below. Costs related to the formation of the Company have been expenses as incurred.

Class A Common Stock Subject to Possible Redemption

The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480-10-S99 “Classification and Measurement of Redeemable Securities.” Conditionally redeemable common stock (including common stock that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Class A common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at September 30, 2022 and December 31, 2021, Class A common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet.

Income Taxes

The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statements and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. As of September 30, 2022 and December 31, 2021, the Company’s deferred tax asset was fully offset by a valuation allowance.

ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2022 and December 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

Net Income Per Common Share

Net Income per common share is computed by dividing net income by the weighted average number of common shares outstanding with income allocated pro-rata between the classes. The calculation of diluted income per common share excludes the effect of the Warrants issued in connection with the Class A common stock since the warrant shares’ current market value is below exercise price and would be antidilutive. Accretion associated with the redeemable shares of Class A common stock is excluded from earnings per share as the redemption value approximates fair value. As a result, diluted income per common share is the same as basic income per common share.

	For the three months ended September 30,				For the nine months ended September 30,
Class A	2022		2021		2022		2021
Allocation of net income including common stock subject to possible redemption	$	357,782	$	405,596	$	3,360,783	$	5,678,773
Weighted Average Common Stock shares outstanding		12,500,500		12,500,500		12,500,500		10,577,346
Basic and Diluted net income per share	$	0.03	$	0.03	$	0.27	$	0.54

	For the three months ended September 30,				For the nine months ended September 30,
Class B	2022		2021		2022		2021
Allocation of net income including common stock subject to possible redemption	$	89,446	$	101,399	$	840,196	$	1,677,819
Weighted Average Common Stock shares outstanding		3,125,125		3,125,125		3,125,125		3,125,125
Basic and Diluted net income per share	$	0.03	$	0.03	$	0.27	$	0.54

Warrants

The Company accounts for the Public Warrants and Private Placement Warrants in accordance with ASC 815-40, “Derivatives and Hedging – Contracts in Entity’s Own Equity,” under which the Warrants do not meet the criteria for equity treatment. Accordingly, the Warrants are recorded as derivative liabilities on the Balance Sheet and are measured at fair value at inception and remeasured at each reporting date in accordance with ASC 820, “Fair Value Measurement,” with changes in fair value recognized in the Statement of Operations in the period of change.

Stock-Based Compensation Expense

The Company accounts for stock-based compensation expense in accordance with ASC 718, Compensation – Stock Compensation (“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date and recognized over the requisite service period. To the extent a stock-based award is subject to a performance condition, the amount of expense recorded in a given period, if any, reflects an assessment of the probability of achieving such performance condition, with compensation recognized once the event is deemed probable to occur. The fair value of equity awards has been estimated using a market approach. Forfeitures are recognized as incurred.

Any compensation expense related to the Founder Shares is recognized only when the performance condition is probable of occurrence. As of September 30, 2022, the Company determined that an Initial Business Combination is not yet considered probable, and, therefore, no stock-based compensation expense has been recognized. Stock-based compensation would be recognized at the date an Initial Business Combination is considered probable (i.e., upon consummation of an Initial Business Combination) in an amount equal to the number of Founder Shares that ultimately vest multiplied times the latest modification date fair value per share (unless subsequently modified) less the amount initially received for the purchase of the Founder Shares.

Fair Value of Financial Instruments

FASB ASC Topic 820 “Fair Value Measurements and Disclosures” (“ASC 820”) defines fair value, the methods used to measure fair value and the expanded disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between the buyer and the seller at the measurement date. In measuring fair value, the valuation techniques consistent with the market approach, income approach and cost approach shall be used. ASC 820 establishes a fair value hierarchy for inputs, which represent the assumptions used by the buyer and seller in pricing the asset or liability. These inputs are further defined as observable and unobservable inputs. Observable inputs are those that buyer and seller would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the inputs that the buyer and seller would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy is categorized into three levels based on the inputs as follows:

Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment.

Level 2 — Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means.

Level 3 — Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

Our policy is to recognize asset or liability transfers among Level 1, Level 2, and Level 3 as of the actual date of the events or change in circumstances that caused the transfer.

Recent Accounting Standards

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.

Risks and Uncertainties

Management is currently evaluating the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position and/or results of its operations, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

In February 2022, the Russian Federation commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy are not determinable as of the date of these unaudited condensed financial statements and the specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these unaudited condensed financial statements.

NOTE 3. INITIAL PUBLIC OFFERING

Pursuant to the Initial Public Offering, the Company sold 12,500,500 Units at a purchase price of $10.00 per Unit. Each Unit will consist of one share of the Company’s Class A common stock and one-half of one redeemable Public Warrant. Each Public Warrant will entitle the holder to purchase one share of Class A common stock at an exercise price of $11.50 per whole share (see Note 7).

The Public Warrants issued as part of the Units are accounted for as liabilities as there are terms and features that do not qualify for equity classification in ASC 815-40. The fair value of the Public Warrants at issuance resulted in a liability of $10,375,415. At December 31, 2021, the fair value has decreased to $3,000,745. At September 30, 2022, the fair value has decreased to $235,634. The change in fair value of Public Warrants for the period from December 31, 2021 to September 30, 2022 of $2,765,111 is included in the decrease in the fair value of derivative warrant liabilities on the Statement of Operations.

All of the 12,500,500 Class A Common Stock sold as part of the Units in the Initial Public Offering contain a redemption feature, which allows for the redemption of such public shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer in connection with the Initial Business Combination and in connection with certain amendments to the Company’s certificate of incorporation. In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require common stock subject to redemption to be classified outside of permanent equity. Given that the Class A Common Stock was issued with other freestanding instruments (i.e., Public Warrants), the initial carrying value of Class A Common Stock classified as temporary equity is the allocated proceeds based on the guidance in ASC 470-20.

The Class A Common Stock is subject to SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99. If it is probable that the equity instrument will become redeemable, the Company has the option to either accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately. The accretion or remeasurement is treated as a deemed dividend (i.e., a reduction to retained earnings, or in absence of retained earnings, additional paid-in capital).

As of September 30, 2022, the Class A Common Stock reflected on the balance sheet are reconciled in the following table:

Gross proceeds from public issuance	$	125,005,000
Less:
Proceeds allocated to Public Warrants		(10,375,415	)
Class A shares issuance costs		(6,650,835	)
Plus:
Accretion of carrying value to redemption value		17,823,042
Contingently redeemable Class A Common Stock	$	125,801,792

NOTE 4. PRIVATE PLACEMENT WARRANTS

Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 4,250,100 Private Placement Warrants at a price of $1.00 per Private Placement Warrant. Each Private Placement Warrant is exercisable to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment. The proceeds from the sale of the Private Placement Warrants were added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete an Initial Business Combination within the Combination Window, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.

The Private Placement Warrants are accounted for as derivative liabilities as there are terms and features that do not qualify for equity classification in ASC 815-40. The fair value of the Private Placement Warrants at issuance resulted in a liability of $7,830,832. At December 31, 2021, the fair value had decreased to $2,046,099. At September 30, 2022, the fair value has decreased to $160,229. The change in fair value of Private Placement Warrants for the period from December 31, 2021 to September 30, 2022 of $1,885,870 is included in the decrease in the fair value of derivative warrant liabilities on the Statement of Operations.

NOTE 5. RELATED PARTY TRANSACTIONS

Founder Shares

On December 10, 2020, the Sponsor paid $25,000 to cover certain offering costs of the Company in consideration for 3,125,125 Founder Shares (as adjusted from 2,875,000 shares as a result of a stock dividend occurring in February 2021) of Class B common stock. The Founder Shares included an aggregate of up to 407,625 shares (as adjusted from 375,000 shares due to a stock dividend occurring in February 2021) that were subject to forfeiture by the Sponsor to the extent that the underwriter’s over-allotment was not exercised in full or in part, so that the Sponsor will collectively own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Sponsor did not purchase any Public Shares in the Initial Public Offering). As a result of the underwriters’ election to fully exercise their over-allotment option, no Founder Shares are currently subject to forfeiture.

The Sponsor has agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (A) one year after the completion of an Initial Business Combination or (B) subsequent to an Initial Business Combination, (x) if the last sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 trading days period commencing at least 150 days after an Initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.

Administrative Support Agreement

The Company agreed, commencing on February 8, 2021, to pay the Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support services. These fees were suspended as of February 28, 2022.

Related Party Loans

In order to finance transaction costs in connection with an Initial Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s directors and officers may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes an Initial Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that an Initial Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of an Initial Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into Warrants of the post-Business Combination entity at a price of $1.00 per warrant. The Warrants would be identical to the Private Placement Warrants. On April 6, 2022, the Sponsor agreed to loan the Company an aggregate of $1,500,000 to cover expenses pursuant to a promissory note (the “Note”). The Note does not bear interest and is payable upon the completion of an Initial Business Combination. As of September 30, 2022, there was $750,000 outstanding on this Note.

NOTE 6. COMMITMENTS

Registration Rights

Pursuant to a registration rights agreement entered into on February 8, 2021, the holders of the Founder Shares, Private Placement Warrants and any Warrants that may be issued upon conversion of the Working Capital Loans (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and Warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration and shareholder rights agreement to be signed prior to or on the effective date of the Initial Public Offering, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to our Class A common stock). The holders of the majority of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of the Initial Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statement.

Deferred Underwriter’s Fees Agreement

The underwriter is entitled to a deferred fee of $0.35 per Unit, or $4,375,175 in the aggregate. The deferred fee will become payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes an Initial Business Combination, subject to the terms of the underwriting agreement. Because management believes it is probable that this fee will be paid, a liability has been recorded on the balance sheet in the amount of $4,375,175 as of September 30, 2022.

NOTE 7. STOCKHOLDER’S EQUITY

Preferred Stock — The Company is authorized to issue 1,000,000 shares of $0.0001 par value preferred stock. At September 30, 2022, there were no shares of preferred stock issued or outstanding.

Class A Common Stock — The Company is authorized to issue up to 100,000,000 shares of Class A, $0.0001 par value common stock. Holders of the Company’s common stock are entitled to one vote for each share. At September 30, 2022, there were 12,500,500 shares of Class A common stock issued and subject to possible redemption. The Class A common stock is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the balance sheet.

Class B Common Stock — The Company is authorized to issue up to 10,000,000 shares of Class B, $0.0001 par value common stock. Holders of the Company’s common stock are entitled to one vote for each share. At September 30, 2022, there were 3,125,125 shares of Class B common stock issued and outstanding.

Only holders of Class B common stock will have the right to vote on the election of directors prior to the Initial Business Combination. Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of shareholders, except as required by law.

The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of an Initial Business Combination on a one-for-one basis (subject to adjustment). In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of an Initial Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon completion of the Initial Public Offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with an Initial Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in a Business combination, and any private placement-equivalent Warrants issued to the Sponsor or its affiliates upon conversion of loans made to the Company). The Company cannot determine at this time whether a majority of the holders of the Class B common stock at the time of any future issuance would agree to waive such adjustment to the conversion ratio.

Warrants — Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the consummation of an Initial Business Combination or (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years from the consummation of a Business Combination or earlier upon redemption or liquidation.

The Company will not be obligated to deliver any Class A common stock pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A common stock issuable upon exercise of the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue shares of Class A common stock upon exercise of a warrant unless Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the Warrants.

The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of an Initial Business Combination, it will use its best efforts to file with the SEC a registration statement covering the shares of Class A common stock issuable upon exercise of the Warrants, to cause such registration statement to become effective and to maintain a current prospectus relating to those shares of Class A common stock until the Warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the shares of Class A common stock issuable upon exercise of the Warrants is not effective by the 60th business day after the closing of an Initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise Warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the foregoing, if a registration statement covering the Class A common stock issuable upon exercise of the Warrants is not effective within a specified period following the consummation of an Initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise Warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act of 1933, as amended, or the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their Warrants on a cashless basis.

Once the Warrants become exercisable, the Company may call the Warrants for redemption (except as described with respect to the Private Placement Warrants):

●

in whole and not in part;

●

at a price of $0.01 per warrant;

●

upon not less than 30 days prior written notice of redemption to each warrant holder; and

●

if, and only if, the reported last sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading days period ending three business days before the Company sends the notice of redemption to the warrant holders.

If and when the Warrants become redeemable by the Company, the Company may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws.

If the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of Class A common stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances, including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete an Initial Business Combination within the Combination Window and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.

In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of its Initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s Initial Business Combination on the date of the consummation of such Initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading days period starting on the trading day prior to the day on which the Company consummates its Initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the Warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater of the Market Value and the Newly Issued Price and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the greater of the Market Value and the Newly Issued Price.

The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the common shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of an Initial Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and will be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

NOTE 8. FAIR VALUE MEASUREMENT

The Company uses available market pricing to value the Public Warrants and a Black Scholes Option pricing model to value the Private Placement Warrants. The Warrants were valued at issuance and at period end, with changes in fair value recognized in the statement of operations. The key assumptions in the option pricing model utilized are assumptions related to expected volatility, expected term, risk-free interest rate and dividend yield. The expected volatility was derived from observable implied volatility on comparable ‘blank-check’ companies’ Warrants and the implied volatility of certain stock indexes. The risk-free interest rate is based on the interpolated U.S. Constant Maturity Treasury yield. The expected term of the Warrants is assumed to be the contractual five-year term or representative holding period. The dividend yield is based on the historical rate, which the Company anticipates to remain at zero.

The Private Placement Warrants are classified as Level 3 at September 30, 2022.

The key inputs into the option pricing model for the Private Warrants were as follows as of September 30, 2022 and December 31, 2021:

	September 30, 2022			December 31, 2021
Implied Volatility		1.0	%		10.2	%
Risk-free interest rate		4.06	%		1.26	%
Warrant exercise price	$	11.50		$	11.50
Expected term Years		5.0			5.0
Dividend Yield		0.0	%		0.0	%

The following table presents the changes in the fair value of level 3 financial instruments:

	Private Placement Warrants
As of December 31, 2021	$	2,046,099
Change in fair value		(1,885,870	)
Fair value at September 30, 2022	$	160,229

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

			Quoted Prices in Active Markets		Significant Other Observable Inputs		Significant Other Unobservable Inputs
September 30, 2022	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Marketable Securities held in Trust Account	$	125,801,792	$	125,801,792	$	-	$	-
	$	125,801,792	$	125,801,792	$	-	$	-
Liabilities:
Public Warrants	$	235,634	$	235,634	$	-	$	-
Private Placement Warrants		160,229		-		-		160,229
	$	395,863	$	235,634	$	-	$	160,229

December 31, 2021	Total		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Assets:
Marketable Securities held in Trust Account	$	125,032,679	$	125,032,679	$	-	$	-
	$	125,032,679	$	125,032,679	$	-	$	-
Liabilities:
Public Warrants	$	3,000,745	$	3,000,745	$	-	$	-
Private Placement Warrants		2,046,099		-		-		2,046,099
	$	5,046,844	$	3,000,745	$	-	$	2,046,099

NOTE 9. SUBSEQUENT EVENTS

On October 18, 2022, the Company entered into a business combination agreement (the “Business Combination Agreement”) with 20Cube Logistics PTE. Ltd., a Singapore-based software-enabled international supply chain orchestrator. Pursuant to the Business Combination Agreement, the parent company of the combined company following the consummation of the Business Combination will be a new Singapore holding company to be called 20Cube Logistics Solutions Ltd.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

References in this Quarterly Report on Form 10-Q (this “Quarterly Report”) to “we,” “us,” “our” or the “Company” are to Evo Acquisition Corp. References to our “management” or our “management team” refer to our officers and directors. The following discussion and analysis should be read in conjunction with our condensed financial statements and related notes thereto included elsewhere in this Quarterly Report.

Forward-Looking Statements

This Quarterly Report includes forward-looking statements. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. We have based these forward-looking statements on our current expectations and projections about future events. Forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in the Risk Factors section of our final prospectus for our Initial Public Offering and in our other “SEC” filings. Except as expressly required by applicable securities law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Overview

We are a blank check company incorporated as a Delaware corporation and formed for the purpose of effecting an Initial Business Combination.

We intend to effectuate an Initial Business Combination using cash from the proceeds of our Initial Public Offering that closed on February 11, 2021 (the “Closing Date”) and the placement of “the Private Placement Warrants” that closed on the Closing Date, and from additional issuances of, if any, our capital stock and our debt, or a combination of cash, stock and debt.

At September 30, 2022, we had current assets of $193,059 and current liabilities of $1,084,967. Further, we expect to continue to incur significant costs in the pursuit of our acquisition plans. We have reviewed, and continue to review, opportunities to enter into an Initial Business Combination with operating businesses.

Proposed Business Combination

On October 18, 2022, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”), with 20Cube Logistics Solutions Pte. Ltd., a Singapore exempt private company limited by shares (“Pubco”), Hollis Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Pubco (“Merger Sub”), 20Cube Logistics Pte. Ltd., a Singapore private company limited by shares (“20Cube”), and certain holders of the Company’s outstanding shares (the “Signing Sellers”).

Pursuant to the Business Combination Agreement, subject to the terms and conditions set forth therein, at the closing of the transactions contemplated by the Business Combination Agreement (the “Closing”), (a) Merger Sub will merge with and into the Company, with the Company continuing as the surviving company (the “Merger”), as a result of which, (i) the Company will become a wholly-owned subsidiary of Pubco, (ii) each issued and outstanding security of the Company immediately prior to the effective time of the Merger will no longer be outstanding and will be cancelled, in exchange for the right of the holder thereof to receive a substantially equivalent security to be issued by Pubco, and (b) Pubco will (i) acquire the issued and outstanding ordinary shares of 20Cube from the Signing Sellers and each additional holder of 20Cube shares that becomes a party to the Business Combination Agreement (together with the Signing Sellers, the “Sellers”) in exchange for ordinary shares of Pubco (the “Pubco Ordinary Shares”), (ii) all outstanding in-the-money vested options exercisable for 20Cube ordinary shares will be cancelled and extinguished and automatically converted into the right to receive Pubco Ordinary Shares at the exchange ratio applicable to subsection (b)(i) of this paragraph less the exercise price for such option, and (iii) all outstanding unvested options exercisable for ordinary shares in the Company will be assumed by Pubco (the “Assumed Options”) and replaced with options exercisable for Pubco Ordinary Shares, all upon the terms and subject to the conditions set forth in the Business Combination Agreement and in accordance with the provisions of applicable law (together with the Merger and the other transactions contemplated by the Business Combination Agreement, the “Transactions”).

The security holders of 20Cube will collectively be entitled to receive an aggregate number of Pubco Ordinary Shares and Assumed Options with an aggregate value equal to Two Hundred Sixty Million U.S. Dollars ($260,000,000) (the “Exchange Consideration”), payable to each Seller in a number of Pubco Ordinary Shares equal to (a) (i) the sum of (x) the Exchange Consideration plus (y) the aggregate amount of the exercise prices for all ordinary shares of 20Cube under in-the-money vested and unvested 20Cube options (assuming no cashless exercise), divided by (ii) the total number of issued and outstanding ordinary shares of 20Cube (treating all outstanding in-the-money 20Cube options as fully vested and exercised (assuming no cashless exercise)), divided by (b) the price at which each share of Evo common stock (or after the Merger, each Pubco Ordinary Share) is redeemed or converted pursuant to the redemption of their shares in accordance with the provisions of the Company’s organizational documents.

Results of Operations

For the three months ended September 30, 2022, we had a net income of $447,228, of which $339,479 is related to the change in fair value of the warrant liability. For the nine months ended September 30, 2022, we had a net income of $4,200,979, of which $4,650,981 is related to the change in fair value of the warrant liabilities.

Our business activities from inception to September 30, 2022 consisted primarily of our formation and completing our Initial Public Offering, and since the offering, our activity has been limited to identifying and evaluating prospective acquisition targets for an Initial Business Combination.

Liquidity and Capital Resources

Prior to the closing of the Initial Public Offering, our only source of liquidity was an initial sale of “Founder Shares” of Class B common stock, par value $0.0001 per share, to our Sponsor, Evo Sponsor LLC, a Delaware limited liability company, and the proceeds of a promissory note from the Sponsor, in the amount of $300,000. The note was repaid upon the closing of the Initial Public Offering.

On April 6, 2022, the Sponsor agreed to loan the Company an aggregate of up to $1,500,000 to cover expenses pursuant to a promissory note (the “Note”). The Note does not bear interest and is payable upon the completion of an Initial Business Combination. As of September 30, 2022, there was $750,000 outstanding on this Note.

The registration statement relating to our Initial Public Offering was declared effective by the SEC on February 8, 2021. On February 9, 2021, the underwriters exercised their option to purchase additional units. Our Initial Public Offering of 12,500,500 Units, including 1,630,500 Units pursuant to the underwriters’ exercise of such option, closed on February 11, 2021. Simultaneously with the closing of the Initial Public Offering, we closed the private placement of an aggregate of 4,250,100 Private Placement Warrants, each exercisable to purchase one share of our Class A common stock, par value $0.0001 per share, at an exercise price of $11.50 per share, to the Sponsor, at a price of $1.00 per Private Placement Warrant, generating proceeds of $4,250,100. On the Closing Date, we placed $125,005,000 of proceeds (including $4,375,175 of deferred underwriting discount) from the Initial Public Offering and the Private Placement Warrants into a U.S.-based Trust Account, with Continental Stock Transfer & Trust Company acting as trustee.

At September 30, 2022, we had cash held in a custodian account of $178,184 and working capital of ($891,908).

We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business prior to our Initial Business Combination apart from making additional drawdowns on the Note. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an Initial Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Initial Business Combination. Moreover, we may need to obtain additional financing either to complete our Initial Business Combination or because we become obligated to redeem a significant number of our shares of Class A common stock upon completion of our Initial Business Combination, in which case we may issue additional securities or incur debt in connection with such Initial Business Combination (including from our affiliates or affiliates of our Sponsor).

Off-Balance Sheet Arrangements

We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.

We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered into any non-financial agreements involving assets.

Contractual Obligations

At September 30, 2022, we did not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities. On February 8, 2021, we entered into an administrative support agreement pursuant to which we have agreed to pay the Sponsor a total of $10,000 per month for office space, administrative and support services. Upon the earlier of the completion of the Initial Business Combination and the Company’s liquidation, we will cease paying these monthly fees. These fees were suspended as of the end of February 2022. For the nine months ended September 30, 2022, the Company incurred expenses of $20,000 under this agreement.

The underwriters of the Initial Public Offering are entitled to underwriting discounts and commissions of 5.5%, of which 2.0% ($2,500,100) was paid at the closing of the Initial Public Offering and 3.5% ($4,375,175) was deferred. The deferred underwriting discount will be paid to the underwriters upon the completion of the Initial Business Combination.

Critical Accounting Policies/Estimates

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed financial statements, and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following as our critical accounting policies:

Net Income Per Common Share

Net income per share of common stock is computed by dividing net income by the weighted average number of common shares outstanding during the period. We apply the two-class method in calculating earnings per share. Accretion associated with the redeemable shares of Class A common stock is excluded from earnings per share as the redemption value approximates fair value.

As of September 30, 2022, we had outstanding Warrants to purchase up to 10,500,350 shares of Class A common stock. The weighted average of these shares was excluded from the calculation of diluted net income per share of common stock since the exercise of the Warrants is contingent upon the occurrence of future events. As of September 30, 2022, we did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into shares of common stock and then share in our earnings. As a result, diluted net income per common share is the same as basic net income per common share for the periods.

Redeemable Shares of Class A Common Stock

All of the 12,500,500 shares of Class A common stock sold as parts of the Units in the Initial Public Offering contain a redemption feature. In accordance with the Accounting Standards Codification 480-10-S99 (“ASC 480”), “Classification and Measurement of Redeemable Securities,” redemption provisions not solely within the control of the Company require the security to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of ASC 480. The Company classifies all shares of Class A common stock as redeemable.

Warrant Liability

We account for the Warrants in accordance with the guidance contained in Accounting Standards Codification 815 (“ASC 815”), “Derivatives and Hedging”, under which the Warrants do not meet the criteria for equity treatment and must be recorded as derivative liabilities. Accordingly, we classify the Warrants as liabilities at their fair value and adjusts the Warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until the Warrants are exercised, and any change in fair value is recognized in our statement of operations. The fair value of the Private Placement Warrants has been estimated using a Black-Scholes model and Public Warrants have been estimated using the current market price.

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required for smaller reporting companies.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended September 30, 2022, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that during the period covered by this report, our disclosure controls and procedures were effective as of September 30, 2022. During a previous period, the Chief Executive Officer and Chief Financial Officer identified a material weakness related to the accounting for certain complex financial instruments, specifically the Private Placement Warrants and Public Warrants. In response to this material weakness, we implemented new procedures and controls, including the engagement of accounting advisors to assist management in its review the accounting for complex financial instruments. As a result, we believe this material weakness has been remediated as of September 30, 2022.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended September 30, 2022 covered by this Quarterly Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

To the knowledge of our management team, there is no litigation currently pending or contemplated against us, any of our officers or directors in their capacity as such or against any of our property.

Item 1A. Risk Factors.

As of the date of this Report, other than as set forth below, there have been no material changes to the risk factors disclosed in (i) our final prospectus dated February 8, 2021 and (ii) our Form 10-Q for the Quarterly Periods ended March 31, 2022 and June 30, 2022. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risks could arise that may also affect our business or ability to consummate an Initial Business Combination. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None. For a description of the use of proceeds generated in our Initial Public Offering and private placement, see Part II, Item 2 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the SEC on March 31, 2021. There has been no material change in the planned use of proceeds from the Company’s Initial Public Offering and private placement as described in the Registration Statement.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

None.

Item 6. Exhibits

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

No.		Description of Exhibit
2.1		Business Combinations Agreement, dated as of May 17, 2022, by and among Evo Acquisition Corp, 20Cube Logistics Solutions Pte. Ltd., Hollis Merger Sub, Inc., 20CubeLogistics Pte. Ltd. and certain holders of outstanding shares of 20Cube Logistics Pte. Ltd. ***
10.1		Form of Lock-Up Agreement***
10.2		Form of Registration Rights Agreement***
10.3		Amendment No. 1 to Warrant Agreement***
31.1*		Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		Inline XBRL Instance Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.SCH*		Inline XBRL Taxonomy Extension Schema Document.
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*		Inline XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*	Filed herewith.

**	Furnished herewith.

***	Incorporated by reference to the File 8-K filed by the Company on October 24, 2022.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	EVO ACQUISITION CORP.

Date: November 14, 2022	By:	/s/ Richard Chisholm
	Name:	Richard Chisholm
	Title:	Chief Executive Officer (Principal Executive Officer)
		Chief Executive Officer (Principal Executive Officer)

Date: November 14, 2022	By:	/s/ Adrian Brindle
	Name:	Adrian Brindle
	Title:	Chief Financial Officer (Principal Financial and Accounting Officer)

SEC Form 10-Q filed by Evo Acquisition Corp.