UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

(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, 2021

☐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 001-39677

CONX CORP.

(Exact name of registrant as specified in its charter)

Nevada		85-2728630
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

5701 S. Santa Fe Dr.

Littleton, CO 80120

(Address of principal executive offices including zip code)

(303) 472-1542

(Registrant’s telephone number, including area code)

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-fourth of one redeemable warrant	CONXU	The Nasdaq Stock Market LLC
Class A common stock, par value $0.0001 per share	CONX	The Nasdaq Stock Market LLC
Warrants, each whole warrant exercisable for one share of Class A common stock, each at an exercise price of $11.50 per share	CONXW	The Nasdaq Stock Market LLC

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 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 5, 2021, 75,030,000 shares of Class A common stock, par value $0.0001 per share, and 18,750,000 shares of Class B common stock, par value $0.0001 per share, were issued and outstanding.

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EXPLANATORY NOTE

CONX Corp. (the “Company”) is filing this Amendment No. 1 on Form 10-Q/A (“Amendment No. 1”) to amend certain items in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 (the “Original Form 10-Q”), originally filed with the U.S. Securities and Exchange Commission (the “SEC”) on November 5, 2021.

Background of Restatement

The Company historically classified a portion of the Company’s shares of redeemable Class A common stock (the “public shares”) as permanent equity to maintain stockholders’ equity in excess of $5,000,000 on the basis that the Company will consummate its initial business combination only if the Company has net tangible assets of at least $5,000,001. In connection with the preparation of the Original Form 10-Q, management re-evaluated the Company’s application of Accounting Standards Codification (“ASC”) 480-10-S99 with respect to the accounting classification of public shares and determined that the public shares include redemption provisions that require classification of all public shares as temporary equity, regardless of the minimum net tangible asset requirement discussed above. After further consideration, subsequent to the filing of the Original Form 10-Q, management re-evaluated the impact of the reclassification of a portion of the public shares on the Company’s previously issued financial statements and, in consultation with the audit committee of the Company’s board of directors (the “audit committee”), concluded that such reclassification was material with respect to certain of the Company’s previously issued financial statements, as further described below.

On January 20, 2022, the Company’s management and the audit committee concluded that (i) the Company’s previously issued audited financial statements as of December 31, 2020 and for the period from August 26, 2020 (inception) through December 31, 2020, as restated in Amendment No. 1 to the Company’s Annual Report on Form 10-K as of December 31, 2020 and for the period from August 26, 2020 (inception) through December 31, 2020, filed with the SEC on May 24, 2021 (the “Form 10-K/A”), (ii) the Company’s previously issued audited balance sheet as of as of November 3, 2020, as restated in the Form 10-K/A, (iii) the Company’s previously issued unaudited condensed financial statements as of and for the three months ended March 31, 2021, included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, filed with the SEC on May 24, 2021, (iv) the Company’s previously issued unaudited condensed financial statements as of and for the three and six months ended June 30, 2021, included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021, filed with the SEC on August 13, 2021, and (v) Note 1 to the Company’s previously issued unaudited condensed financial statements as of and for the three and nine months ended September 30, 2021, included in the Original Form 10-Q, respectively, should no longer be relied upon and should be restated due to the reclassification error described above. In connection with the restatement, the Company also corrected its earnings per share calculation to allocate income and losses shared pro rata between the Company’s two classes of shares.

Restatement of Previously Issued Financial Statements

As a result of the factors described above, the Company has restated in this Amendment No. 1: (i) the Company’s previously issued unaudited condensed financial statements as of and for the three months ended March 31, 2021, (ii) the Company’s previously issued unaudited condensed financial statements as of and for the three and six months ended June 30, 2021, and (iii) Note 1 to the Company’s previously issued unaudited condensed financial statements as of and for the three and nine months ended September 30, 2021, included in the Original Form 10-Q, to correct the classification error described above.

The Company’s previously issued audited financial statements as of December 31, 2020 and for the period from August 26, 2020 (inception) through December 31, 2020, and the Company’s previously issued audited balance sheet as of as of November 3, 2020 were restated in Amendment No. 2 on Form 10-K/A to the Company’s Annual Report on Form 10-K as of December 31, 2020 and for the period from August 26, 2020 (inception) through December 31, 2020, filed with the SEC on February 4, 2022.

The restatement of the financial statements had no impact on the Company’s liquidity or cash position. See Note 1 to the Notes to the Financial Statements included in Part I, Item 1 of this Amendment No. 1 for additional information on the restatement and the related financial statement effects.

Internal Control Considerations

As a result of the factors described above, the Company’s management has concluded that a material weakness existed in the Company’s internal control over financial reporting and that the Company’s disclosure controls and procedures were not effective. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected and corrected on a timely basis. For a discussion of management’s consideration of the material weakness identified, see Part I, Item 4A. Controls and Procedures included in this Amendment No. 1.

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Items Amended

The following items are amended in this Amendment: (i) Part I, Item 1. Financial Statements; (ii) Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations; (iii) Part I, Item 4. Controls and Procedures; (iv) Part II, Item 1A. Risk Factors; and (v) Part II, Item 6. Exhibits. Additionally, in accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended, the Company is including with this Amendment No. 1 currently dated certifications from its principal executive officer. These certifications are filed or furnished, as applicable, as Exhibits 31.1 and 32.1.

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CONX CORP.

FORM 10-Q

For the period ended September 30, 2021

INDEX


		Page
	PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements:
	Condensed Balance Sheets as of September 30, 2021 (unaudited) and December 31, 2020 (audited)	2
	Unaudited Condensed Statement of Operations for each of the periods ended September 30, 2021 and 2020	3
	Unaudited Condensed Statement of Changes in Stockholders’ Equity (Deficit) for each of the periods ended September 30, 2021 and 2020	4
	Unaudited Condensed Statement of Cash Flows for each of the periods ended September 30, 2021 and 2020	5
	Unaudited Notes to Condensed Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5.	Other Information	27
Item 6.	Exhibits	28
Signatures		29

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CONX CORP.

CONDENSED BALANCE SHEETS


	September 30, 2021		December 31,
	(unaudited)		2020
Assets:
Current assets:
Cash	$	866,309	$	1,211,837
Prepaid expenses		22,883		22,333
Other receivable		3,508		3,508
Total current assets		892,700		1,237,678
Investments held in trust account		750,061,652		750,005,343
Total assets		750,954,352		751,243,021
Liabilities and Stockholders’ Equity (Deficit):
Current liabilities:
Accounts payable		1,983		112,500
Accrued expenses		186,000		25,000
Income taxes payable		9,082		1,122
Total current liabilities		197,065		138,622
Deferred legal fees		275,000		275,000
Deferred underwriting fee payable		26,250,000		26,250,000
Derivative warrant liabilities		34,595,832		45,726,666
Total liabilities		61,317,897		72,390,288
Commitments and Contingencies
Class A common stock subject to possible redemption, 75,000,000 and 75,000,000 shares, respectively at $10.00 per share		750,000,000		750,000,000
Stockholders’ Equity (Deficit):
Preferred stock, $0.0001 par value; 20,000,000 shares authorized; none issued and outstanding		—		—
Class A common stock, $0.0001 par value, 500,000,000 shares authorized; 20,000 and 10,000 shares issued and outstanding, respectively		2		1
Class B common stock, $0.0001 par value; 50,000,000 shares authorized; 18,750,000 shares issued and outstanding		1,875		1,875
Additional paid-in capital		—		—
Retained earnings (accumulated deficit)		(60,365,422)		(71,149,143)
Total Stockholders’ Equity (Deficit)		(60,363,545)		(71,147,267)
Total Liabilities and Stockholders’ Equity (Deficit)		750,954,352		751,243,021

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

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CONX Corp.

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS


			Period from				Period from
			August 26,				August 26,
	For Three		2020				2020
	Months		(Inception) -		For Nine Months		(Inception) -
	Ended September 30,		September 30,		Ended		September 30,
	2021		2020		September 30, 2021		2020
General and administrative expenses	$	92,765	$	8,525	$	389,537	$	8,525
Loss from operations		(92,765)		(8,525)		(389,537)		(8,525)
Other income
Change in fair value of derivative warrant liabilities		6,016,667		—		11,130,834		—
Interest income on investments held in Trust Account		18,907		—		56,309		—
Total other income		59,428,109		—		10,797,606		—
Income (loss) before income tax expense		5,942,809		(8,525)		10,797,606		(8,525)
Income tax expense		4,420		—		13,885		—
Net income (loss)		5,938,389		(8,525)		10,783,721		(8,525)
Weighted average common shares outstanding, basic and diluted
Class A – Common stock		75,020,000		—		75,015,699		—
Class B – Common stock		18,750,000		18,750,000		18,750,000		18,750,000
Basic and diluted net (loss) income per common share
Class A – Common stock	$	0.06	$	—	$	0.12	$	—
Class B – Common stock	$	0.06	$	—	$	0.12	$	—

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

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CONX Corp.

UNAUDITED CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY ( DEFICIT)


	FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021
	Common Stock						Additional
	Class A			Class B			Paid-In		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Deficit
Balance—January 1, 2021	10,000	$	1	18,750,000	$	1,875	$	—	$	(71,149,143)	$	(71,147,267)
Issuance of Director Shares	10,000		1	—		—		—		—		1
Net income	—		—	—		—		—		8,671,529		8,671,529
Balance—March 31, 2021 (as restated, see Note 2)	20,000	$	2	18,750,000	$	1,875	$	—	$	(62,477,614)	$	(62,475,737)
Net loss	—		—	—		—		—		(3,826,197)		(3,826,197)
Balance—June 30, 2021 (as restated, see Note 2)	20,000	$	2	18,750,000	$	1,875	$	—	$	(66,303,811)	$	(66,301,934)
Net income	—		—	—		—		—		5,938,389		5,938,389
Balance—September 30, 2021	20,000	$	2	18,750,000	$	1,875	$	—	$	(60,365,422)	$	(60,363,545)


	FOR THE PERIOD FROM AUGUST 26, 2020 (INCEPTION) THROUGH SEPTEMBER 30, 2020
	Common Stock						Additional
	Class A			Class B			Paid-In		Accumulated		Stockholder’s
	Shares	Amount		Shares	Amount		Capital		Deficit		Equity
Balance—August 26, 2020 (inception)	—	$	—	—	$	—	$	—	$	—	$	—
Sale of common stock to Founders at $0.001 per share	—		—	21,562,500		2,156		22,844		—		25,000
Net loss	—		—	—		—		—		(8,525)		(8,525)
Balance—September 30, 2020	—	$	—	21,562,500	$	2,156	$	22,844	$	(8,525)	$	16,475

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

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CONX Corp.

UNAUDITED CONDENSED STATEMENT OF CASH FLOWS


				August 26,
		Nine Months		2020
		Ended		(Inception)-
		September 30,		September 30,
		2021		2020
Cash flows from Operating Activities:
Net income (loss)	$	10,783,721	$	(8,525)
Adjustments to reconcile net income to net cash provided by operating activities:
Interest earned on investments held in Trust Account		(56,309)		—
Change in fair value of derivative warrant liabilities		(11,130,83

SEC Form 10-Q/A filed by CONX Corp. (Amendment)