UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT UNDER 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 Number 001-40679

Mercury Ecommerce Acquisition Corp.

(Exact name of registrant as specified in its charter)

Delaware		86-2365445
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

3737 Buffalo Speedway, Suite 1750

Houston, TX 77098

(Address of principal executive offices and zip code)

(713) 715-6820

(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 warrant	MEACU	The Nasdaq Stock Market LLC

Class A common stock, par value $0.0001 per share	MEAC	The Nasdaq Stock Market LLC

Warrants, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50 per share	MEACW	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 (Section 232.405 of this chapter) during the preceding 12 months (or 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 13, 2022, there were 18,041,500 shares of the registrant’s Class A common stock, par value $0.0001 per share, and 4,510,375 shares of the registrant’s Class B common stock, par value $0.0001 per share issued and outstanding.

MERCURY ECOMMERCE ACQUISITION CORP.

TABLE OF CONTENTS

			Page
PART 1 - FINANCIAL INFORMATION			1

Item 1.	CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

		Condensed Balance Sheet as of March 31, 2022 and December 31, 2021 (Audited)	1

		Condensed Statements of Operations for the three months ended March 31, 2022 and for the period from March 1, 2021 (inception) through March 31, 2021	2

		Condensed Statements of Changes in Stockholders' (Deficit) Equity for the three months ended March 31, 2022 and for the period from March 1, 2021 (inception) through March 31, 2021	3

		Condensed Statements of Cash Flows for the three months ended March 31, 2022 and for the period from March 1, 2021 (inception) through March 31, 2021	4

		Notes to Condensed Financial Statements	5

Item 2.		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	21

Item 3.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	24

Item 4.		CONTROLS AND PROCEDURES	24

PART II - OTHER INFORMATION			25

Item 1.		LEGAL PROCEEDINGS	25

Item 1A.		RISK FACTORS	25

Item 2.		UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	25

Item 3.		DEFAULTS UPON SENIOR SECURITIES	25

Item 4.		MINE SAFETY DISCLOSURES	25

Item 5.		OTHER INFORMATION	25

Item 6.		EXHIBITS	26

SIGNATURES			27

	March 31, 2022			December 31, 2021
	(Unaudited)			(Audited)
ASSETS
Current assets:
Cash	$	395,310		$	842,059
Prepaid expenses		426,056			465,183
Total current assets		821,366			1,307,242
Investments held in Trust Account		182,320,328			182,248,837
Total Assets	$	183,141,694		$	183,556,079

LIABILITIES, REDEEMABLE CLASS A COMMON STOCK AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued expenses	$	22,009		$	117,274
Franchise tax payable		50,000			167,123
Total current liabilities		72,009			284,397
Warrant liabilities		5,620,957			7,494,608
Deferred underwriting fee payable		6,314,525			6,314,525
Total Liabilities		12,007,491			14,093,530

Commitments and Contingencies (Note 6)
Class A common stock, $0.0001 par value, subject to possible redemption; 18,041,500 shares at redemption value of $10.10 per share and unrealized gain on investments held in Trust Account		182,320,328			182,248,837

Stockholders’ Deficit
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding		—			—
Class A common stock, $0.0001 par value; 150,000,000 shares authorized; no shares issued and outstanding (excluding 18,041,500 shares subject to possible redemption)		—			—
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 4,510,375 shares issued and outstanding		451			451
Additional paid-in capital		—			—
Accumulated deficit		(11,186,576	)		(12,786,739	)
Total Stockholders’ Deficit		(11,186,125	)		(12,786,288	)
TOTAL LIABILITIES, REDEEMABLE CLASS A COMMON STOCK AND STOCKHOLDERS’ DEFICIT	$	183,141,694		$	183,556,079

	For the Three Months Ended March 31, 2022			For the Period from March 1, 2021 (inception) Through March 31, 2021
Formation and operating costs	$	222,890		$	11,768
Franchise tax		50,598			—
Loss from operations		(273,488	)		(11,768	)

Other income (expense)
Realized gain on investments held in Trust Account		18,428			—
Unrealized gain on investments held in Trust Account		53,063			—
Change in fair value of warrant liabilities		1,873,651			—
Total other income, net		1,945,142			—

Net income (loss)	$	1,671,654		$	(11,768	)

Weighted average shares outstanding, Class A common stock subject to possible redemption		18,041,500			—
Basic and diluted net income per share, Class A common stock subject to possible redemption	$	0.07		$	—

Weighted average shares outstanding, Class B common stock⁽¹⁾		4,510,375			4,375,000
Basic and diluted net income (loss) per share, Class B common stock	$	0.07		$	(0.00	)

	For the Three Months Ended March 31, 2022
	Class A Common Stock				Class B Common Stock				Additional Paid-in Capital		Accumulated Deficit			Total Stockholders’ Deficit
	Shares		Amount		Shares		Amount		Additional Paid-in Capital		Accumulated Deficit			Total Stockholders’ Deficit
Balance as of December 31, 2021		—	$	—		4,510,375	$	451	$	—	$	(12,786,739	)	$	(12,786,288	)
Subsequent accretion of Class A common stock subject to redemption to redemption amount as of March 31, 2022		—		—		—		—		—		(71,491	)		(71,491	)
Net income		—		—		—		—		—		1,671,654			1,671,654
Balance as of March 31, 2022		—	$	—		4,510,375	$	451	$	—	$	(11,186,576	)	$	(11,186,125	)

	For the Period from March 1, 2021 (inception) Through March 31, 2021
	Class A Common Stock				Class B Common Stock				Additional Paid-in Capital		Accumulated Deficit			Total Stockholders’ Equity
	Shares		Amount		Shares		Amount		Additional Paid-in Capital		Accumulated Deficit			Total Stockholders’ Equity
Balance as of March 1, 2021 (inception)		—	$	—		—	$	—	$	—	$	—		$	—
Issuance of Class B common stock to Sponsor⁽¹⁾		—		—		5,031,250		503		24,497		—			25,000
Net loss		—		—		—		—		—		(11,768	)		(11,768	)
Balance as of March 31, 2021		—	$	—		5,031,250	$	503	$	24,497	$	(11,768	)	$	13,232

	For the Three Months Ended March 31, 2022			For the Period from March 1, 2021 (inception) Through March 31, 2021
Cash Flows from Operating Activities:
Net income (loss)	$	1,671,654		$	(11,768	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Realized gain on investments held in Trust Account		(18,428	)		—
Unrealized gain on investments held in Trust Account		(53,063	)		—
Change in fair value of warrant liabilities		(1,873,651	)		—
Changes in operating assets and liabilities:
Prepaid expenses		39,127			—
Accounts payable and accrued expenses		(95,265	)		800
Accounts payable - related party		—			10,000
Franchise tax payable		(117,123	)		—
Net cash used in operating activities		(446,749	)		(968	)

Cash Flows from Financing Activities:
Proceeds from promissory note - related party		—			60,000
Payment of deferred offering costs		—			(68,643	)
Proceeds from sale of Class B common stock to Sponsor		—			25,000
Net cash provided by financing activities		—			16,357

Net Change in Cash		(446,749	)		15,389
Cash - Beginning of period		842,059			—
Cash - End of period	$	395,310		$	15,389

Non-cash investing and financing activities
Subsequent accretion of Class A common stock subject to redemption to redemption amount as of March 31, 2022	$	71,491		$	—
Deferred offering costs included in accrued offering costs	$	—		$	275,179

Gross proceeds	$	180,415,000
Less:
Proceeds allocated to Public Warrants		(8,569,713	)
Issuance costs allocated to Class A common stock		(14,638,901	)
Plus:
Initial accretion of carrying value to redemption value		25,012,764
Subsequent accretion of carrying value to redemption value as of December 31, 2021		29,687
Class A common stock subject to possible redemption as of December 31, 2021		182,248,837
Subsequent accretion of carrying value to redemption value as of March 31, 2022		71,491
Class A common stock subject to possible redemption as of March 31, 2022	$	182,320,328

	For the three months ended March 31, 2022			For the Period from March 1, 2021 (inception) Through March 31, 2021
Net income (loss)	$	1,671,654		$	(11,768	)
Accretion of Class A common stock to redemption amount		(71,491	)		—
Net income (loss) including accretion of temporary equity to redemption value	$	1,600,163		$	(11,768	)

	For the Three Months Ended March 31, 2022				For the Period from March 1, 2021 (inception) Through March 31, 2021
	Class A		Class B		Class A		Class B
Basic and diluted net income per share:
Numerator:
Net income (loss) including accretion of temporary equity to redemption value	$	1,280,131	$	320,032	$	—	$	(11,768	)
Accretion of Class A common stock to redemption amount		71,491		—		—		—
Net income (loss)	$	1,351,622	$	320,032	$	—	$	(11,768	)
Denominator:
Weighted Average Common Stock		18,041,500		4,510,375		—		4,375,000
Basic and diluted net income (loss) per common share	$	0.07	$	0.07	$	—	$	(0.00	)

	March 31, 2022			December 31, 2021
Deferred tax assets:
Start-up costs	$	187,314		$	140,508
Net operating loss carryforwards		45,722			35,096
Total deferred tax assets		233,036			175,604
Valuation allowance		(215,659	)		(169,370	)
Deferred tax liabilities:
Unrealized gain on investments		(17,377	)		(6,234	)
Total deferred tax liabilities		(17,377	)		(6,234	)
Deferred tax assets, net of allowance	$	—		$	—

Federal
Current	$	—
Deferred		(46,289	)

State
Current	$	—
Deferred		—
Change in valuation allowance		46,289
Income tax provision	$	—

	As of July 30, 2021 (Initial Measurement)
Stock price	$	9.47
Exercise price	$	11.50
Dividend yield		—	%
Expected term (in years)		5.5
Volatility		20.0	%
Risk-free rate		0.80	%
Fair value	$	0.95

	As of July 30, 2021 (Initial Measurement)
Stock price	$	9.47
Exercise price	$	11.50
Dividend yield		—	%
Expected term (in years)		5.5
Volatility		20.0	%
Risk-free rate		0.80	%
Fair value	$	0.95

Exhibit No.		Description
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*		XBRL Instance Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.SCH*		XBRL Taxonomy Extension Schema Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

	March 31, 2022			December 31, 2021
Statutory federal income tax rate		21.0	%		21.0	%
State taxes, net of federal tax benefit		0.0	%		0.0	%
Change in fair value of derivative warrant liabilities		(23.8	)%		(25.6	)%
Non-deductible transaction costs		—	%		2.3	%
Change in valuation allowance		2.8	%		2.3	%
Income tax provision		0.0	%		0.0	%

Description	Amount at Fair Value		Level 1		Level 2		Level 3
March 31, 2022
Assets
Investments held in Trust Account:
U.S. government treasury obligations	$	182,320,328	$	182,320,328	$	—	$	—
Liabilities
Warrant liability – Public Warrants	$	2,976,848	$	2,976,848	$	—	$	—
Warrant liability – Private Placement Warrants	$	2,644,109	$	—	$	2,644,109	$	—

Fair value as of March 1, 2021	$	—
Initial measurement of Public Warrants and Private Placement Warrants as of July 30, 2021		15,770,000
Initial measurement of Public Warrants and Private Placement Warrants upon exercise of over-allotment on August 20, 2021		411,541
Transfer of Public Warrants to Level 1 measurement		(4,780,998	)
Transfer of Private Placement Warrants to Level 2 measurement		(4,246,599	)
Change in fair value		(7,153,944	)
Fair value as of December 31, 2021	$	—
Change in fair value		—
Fair value as of March 31, 2022	$	—

	Mercury Ecommerce Acquisition Corp.

Date: May 13, 2022	By:	/s/ Andrew White
		Name: Andrew White
		Title: Chief Executive Officer

	Mercury Ecommerce Acquisition Corp.

Date: May 13, 2022	By:	/s/ Winston Gilpin
		Name: Winston Gilpin
		Title: Chief Financial Officer

SEC Form 10-Q filed by Mercury Ecommerce Acquisition Corp