NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note
1 - Description of Organization and Business Operations
FoxWayne
Enterprises Acquisition Corp. (the “Company” and “FoxWayne”) is a blank check company incorporated in Delaware
on September 17, 2020, for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization
or similar business combination with one or more businesses (the “Business Combination”). The Company is an emerging growth
company and, as such, the Company is subject to all of the risks associated with emerging growth companies.
As
of June 30, 2022, the Company had not commenced any operations. All activity for the period from September 17, 2020 (inception) through
June 30, 2022, relates to the Company’s formation and the initial public offering (the “Initial Public Offering”) described
below, and, subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not
generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates
non-operating income in the form of interest income on its investments held in the trust account from the proceeds of its Initial Public
Offering.
The
Company’s sponsor is FoxWayne Enterprises Acquisition Sponsor LLC, a Delaware limited liability company (the “Sponsor”).
The registration statement for the Company’s Initial Public Offering was declared effective on January 19, 2021. On January 22,
2021, the Company consummated its Initial Public Offering of 5,750,000 units (the “Units” and, with respect to the Class
A common stock included in the Units being offered, the “Public Shares”), which includes 750,000 additional Units to cover
over-allotments (the “Over-Allotment Units”), at $10.00 per Unit, generating gross proceeds of $57.5 million, and incurring
offering costs of approximately $4.2 million, of which approximately $2.0 million was for deferred underwriting commissions (see Notes
5).
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the private placement (“Private Placement”) of 2,800,000
warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price
of $1.00 per Private Placement Warrant to the Sponsor, generating proceeds of $2.8 million (see Note 4).
Upon
the closing of the Initial Public Offering and the Private Placement, approximately $58.1 million ($10.10 per Unit) of the net proceeds
of the Initial Public Offering and certain of the proceeds of the Private Placement was placed in a trust account (“Trust Account”)
located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and invested only in U.S. government
treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions
under Rule 2a-7 under the Investment Company Act of 1940, as amended (the “Investment Company Act”), as determined by the
Company, until the earlier of (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described
below.
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 the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward
consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully.
The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net
assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable) at the time of the agreement to
enter into the initial Business Combination. However, the Company will only complete a Business Combination if the post-business combination
company owns or acquires 50% or more of the voting securities of the target or otherwise acquires a controlling interest in the target
sufficient for it not to be required to register as an investment company under the Investment Company Act.
FOXWAYNE
ENTERPRISES ACQUISITION CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The
Company will provide its holders of the Public Shares (the “Public Stockholders”) with the opportunity to redeem all or a
portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called
to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder
approval of a 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 held in the Trust Account (initially anticipated
to be $10.10 per Public Share). The per-share amount to be distributed to Public Stockholders who redeem their Public Shares will not
be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 5). These Public Shares
are recorded at a redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance
with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing
Liabilities from Equity” (“ASC 480”). The Company will proceed with a Business Combination if a majority of the shares
voted are voted in favor of the Business Combination. The Company will not redeem the Public Shares in an amount that would cause its
net tangible assets to be less than $5,000,001. 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
(the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of
the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business
Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval
for business or legal 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. Additionally, each Public Stockholder may elect to redeem their Public Shares irrespective
of whether they vote for or against the proposed transaction. If the Company seeks stockholder approval in connection with a Business
Combination, the Initial Stockholders (as defined below) agreed to vote their Founder Shares (as defined below in Note 4) and any Public
Shares purchased during or after the Initial Public Offering in favor of a Business Combination. In addition, the Initial Stockholders
agreed to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of a
Business Combination.
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 Securities
Exchange Act of 1934, as amended (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 and the Company’s officers and directors (the “Initial Stockholders”) agreed not to propose an amendment to
the Amended and Restated Certificate of Incorporation to modify the substance or timing of the Company’s obligation to redeem 100%
of the Public Shares if the Company does not complete a Business Combination within 12 months from the closing of the Initial Public
Offering, or January 22, 2022, (or up to 18 months from the consummation of the Initial Public Offering, or July 22, 2022, if the Company
extends the period of time to consummate a Business Combination) (the “Combination Period”), or with respect to any other
material provisions 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.
Effective
as of April 15, 2022, the Board of Directors of the Company approved an extension of the time to consummate a Business Combination by
an additional three-month period from April 22, 2022 to July 22, 2022, and a loan in the amount of $ to the Company from the Sponsor,
a portion of which ($) was used to fund a cash contribution to the Trust Account, in an amount equal to $ for each share
unit issued in the Initial Public Offering, for the three month extension of the time to consummate a Business Combination.
In
the Amended and Restated Certificate of Incorporation (as amended), if a Business Combination has not been consummated within 18 months
from the closing of the Initial Public Offering, or July 22, 2022, or thereafter within 18 months from the closing of the Initial Public
Offering, or October 22, 2022 (the “Extended Date”), or thereafter within 24 months from the closing of the Initial Public
Offering, or January 22, 2023 (the “Additional Extension Date”), 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 taxes (less up to $50,000 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), subject to applicable law, and (iii)
as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Board of Directors, dissolve and liquidate, subject in the case to the Company’s obligations under Delaware law to provide for claims of
creditors and the requirements of other applicable law. On July 12, 2022, at the special meeting of stockholder to approve an amendment
to the Amended and Restated Certificate of Incorporation (the “Extension Amendment”), stockholders elected to redeem 4,406,322
shares of Common Stock, which represents approximately 77% of the shares that were part of the units that were sold in the Company’s
initial public offering. Following such redemptions, approximately $13.6 million remain in the trust account and 1,343,678 shares of
Common Stock will remain issued and outstanding.
FOXWAYNE
ENTERPRISES ACQUISITION CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On
July 12, 2022, the Company filed a Certificate of Amendment (the “Amendment”) to its Second Amended and Restated Certificate
of Incorporation with the Delaware Secretary of State to (i) extend the date by which the Company has to consummate a Business Combination
for three months, from July 22, 2022 (the “Original Termination Date”) to October 22, 2022 (the “Extended Date”),
and (ii) allow the Company, without another stockholder vote, to elect to extend the date to consummate a Business Combination for three
months after the Extended Date, for a total of up to six months after the Original Termination Date. At the Company’s Annual Meeting
on July 12, 2022, the Company’s stockholders (i) approved the proposal to amend the Company’s Second Amended and Restated
Certificate of Incorporation to (A) extend the date by which the Company has to consummate a Business Combination for three months from
the Original Termination Date to the Extended Date and (B) allow the Company, without another stockholder vote, to elect to extend the
date to consummate a Business Combination for three months after the Extended Date, for a total of up to six months after the Original
Termination Date. In connection with the Amendment,
the Company has agreed that it will deposit (each deposit being referred to herein as a “Deposit”) into the trust account
up to $71,875 (or $0.0125 for each public share that is not redeemed) for each of the Extended Date and the Additional Extension Date,
if needed by the Company to complete an initial business combination (the “Additional Contributions”). The
amount of the Deposits will not bear interest and will be repayable by the Company to its Sponsor or its designees upon consummation of an initial
Business Combination. The Company’s Sponsor or its designees will have the sole discretion whether to continue extending for additional calendar
months until the Extended Date and the Additional Extension Date and if the Sponsor determines not to continue extending for the Extended
Date and the Additional Extension Date, its obligation to make Additional Contributions will terminate.
Effective
as of July 20, 2022, the Board of Directors of the Company approved an extension of the time to consummate a Business Combination by
an additional three-month period from July 22, 2022 to October 22, 2022. In connection with the extension, the Company funded a cash
contribution to the Trust Account in the amount of $16,796 (based on $0.0125 for each share unit issued in the Company’s initial
public offering that was outstanding at the time the extension was approved by the Board of Directors).
If
the Company is unable to complete a Business Combination within the Combination Period, 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 taxes (less up to $50,000 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), subject to applicable
law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and
the 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.
The
Initial Stockholders agreed to waive their rights to liquidating distributions from the Trust Account with respect to the Founder Shares
if the Company fails to complete a Business Combination within the Combination Period. However, if the Initial Stockholders acquire Public
Shares in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect
to such Public Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriters agreed
to waive their rights to the deferred underwriting commission (see Note 5) held in the Trust Account in the event the Company does not
complete a Business Combination within in the Combination Period 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 residual assets remaining available for distribution (including Trust Account assets) will be
only $10.15. In order to protect the amounts held in the Trust Account, the Sponsor agreed to be liable to the Company if and to the
extent any claims by a third party (except for the Company’s independent registered public accounting firm) for services rendered
or products sold to the Company, or a prospective target business with which the Company has entered into a letter of intent, confidentiality
or other similar agreement or business combination agreement (a “Target”), reduce the amount of funds in the Trust Account
to below the lesser of (i) $10.15 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date
of the liquidation of the Trust Account, if less than $10.15 per Public Share due to reductions in the value of the trust assets, less
taxes payable, provided that such liability will not apply to any claims by a third party or Target that executed a waiver of any and
all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply 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 of 1933, as amended (the “Securities Act”). 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.
FOXWAYNE
ENTERPRISES ACQUISITION CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Liquidity
and Going Concern Consideration
As
of June 30, 2022, the Company had cash of approximately $7,000 and a working capital deficit of approximately $2.1 million.
The
Company’s liquidity needs prior to the consummation of the Initial Public Offering were satisfied through the payment of $25,000
from the Sponsor to purchase Founder Shares (as defined in Note 4), and proceeds from an officer of the Company of $42,125 under the
Note (as defined in Note 4). The Company repaid $1,615 of the outstanding Note balance on December 31, 2020 and repaid the remaining
amount of $40,510 in full on January 26, 2021. Subsequent to the consummation of the Initial Public Offering, the Company’s liquidity
has been satisfied through the net proceeds from the consummation of the Initial Public Offering and the Private Placement held outside
of the Trust Account as well as from borrowings under non-convertible promissory notes issued to affiliates of the Sponsor, including
certain of the Company’s officers and directors, as described in Note 4. As of June 30, 2022 and December 31, 2021, there was approximately
$1.0 and $0.1 million, respectively outstanding under such promissory notes. In addition, in order to finance transaction costs in connection
with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may,
but are not obligated to, provide the Company with Working Capital Loans (as defined in Note 4) as may be required. As of June 30, 2022
and December 31, 2021, there were no amounts outstanding under any Working Capital Loans.
In
connection with the Amendment, the Company has agreed that it will deposit (each deposit being referred to herein as a
“Deposit”) into the trust account up to $71,875 (or
$0.0125 for
each public share that is not redeemed) for each of the Extended Date and the Additional Extension Date, if needed by the Company to
complete an initial business combination (the “Additional Contributions”). The
amount of the Deposits will not bear interest and will be repayable by the Company to its Sponsor or its designees upon consummation
of an initial Business Combination. The Company’s Sponsor or its designees will have the sole discretion whether to continue
extending for additional calendar months until the Extended Date and the Additional Extension Date and if the Sponsor determines not
to continue extending for the Extended Date and the Additional Extension Date, its obligation to make Additional Contributions will
terminate.
Effective
as of July 20, 2022, the Board of Directors of the Company approved an extension of the time to consummate a Business Combination by
an additional three-month period from July 22, 2022 to October 22, 2022. In connection with the extension, the Company funded a cash
contribution to the Trust Account in the amount of $16,796 (based on $0.0125 for each share unit issued in the Company’s initial
public offering that was outstanding at the time the extension was approved by the Board of Directors).
Until
the consummation of a Business Combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating
prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting
the target business to acquire, and structuring, negotiating and consummating the Business Combination. The Company will need to raise
additional capital through loans or additional investments from its Sponsor, stockholders, officers, directors, or third parties. The
Company’s officers, directors and Sponsor may, but are not obligated to, loan the Company funds from time to time or at any time,
in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs.
FOXWAYNE
ENTERPRISES ACQUISITION CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Although
management intends to diligently work towards identifying a target to consummate a Business Combination within the Combination
Period, no assurance can be provided that management will be successful in identifying a target and/or consummating a Business
Combination within the Combination Period. If the Company is unable to raise additional capital, it may be required to take
additional measures to conserve liquidity, which could include, but not necessarily be limited to, suspending the pursuit of a
Business Combination. Management cannot provide any assurance that new financing will be available to on commercially acceptable
terms, if at all. Further, management’s plans to raise capital and to consummate its initial business combination may not be
successful. These liquidity conditions and the mandatory liquidation date and subsequent dissolution raises substantial doubt about the Company’s
ability to continue as a going concern,
until the earlier of the consummation of the Business Combination or the date the Company is required to liquidate, October 22, 2022
(or January 22, 2023, if further extended). These condensed consolidated financial statements do not include any adjustments
relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company
be unable to continue as a going concern.
Note
2 - Basis of Presentation and Summary of Significant Accounting Policies
Basis
of Presentation
The
accompanying condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim
financial information and Article 8 of Regulation S-X. Accordingly, 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. In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair
presentation have been included. Operating results for the three and six months ended June 30, 2022 are not necessarily indicative
of the results that may be expected for the year ending December 31, 2022 or any future period.
The
accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report
on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 31, 2022, which contains the audited consolidated financial
statements and notes thereto. The financial information as of December 31, 2021, is derived from the audited consolidated financial statements
presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 31,
2022.
Certain
prior period amounts in the condensed consolidated financial statements have been reclassified to conform to the current presentation.
The reclassification has no impact on the total assets, total liabilities, stockholders’ deficit and net (loss) income for the period.
Principles
of Consolidation
The
accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary.
All significant intercompany accounts and transactions have been eliminated in consolidation.
Emerging
Growth Company
The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our
Business Startups Act of 2012 (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 an emerging growth 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 an 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.
FOXWAYNE
ENTERPRISES ACQUISITION CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
This
may make comparison of the Company’s unaudited condensed consolidated financial statements with another public company that is
neither an emerging growth company nor an emerging growth company that 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 unaudited condensed consolidated financial statements in conformity with GAAP requires the Company’s 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 unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses
during the reporting period. 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 unaudited condensed
consolidated financial statements, which management considered in formulating its estimate, could 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 had no cash equivalents as of June 30, 2022 and December 31, 2021.
Investments
Held in Trust Account
The
Company’s portfolio of investments is comprised of 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 investments in money market funds that invest in U.S. government
securities and generally have a readily determinable fair value, or a combination thereof. When the Company’s investments held
in the Trust Account are comprised of U.S. government securities, the investments are classified as trading securities. When the Company’s
investments held in the Trust Account are comprised of money market funds, the investments are recognized at fair value. Trading securities
and investments in money market funds are presented on the condensed consolidated balance sheets at fair value at the end of each reporting
period. Gains and losses resulting from the change in fair value of these securities are included in income from investments held in
the Trust Account in the accompanying unaudited condensed consolidated statements of operations. The estimated fair values of investments
held in the Trust Account are determined using available market information.
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution,
which, at times, may exceed the Federal Deposit Insurance Corporation coverage limit of $250,000. As of June 30, 2022 and December
31, 2021, the Company had not experienced losses on these accounts and management believes the Company is not exposed to significant
risks on such accounts.
Fair
Value of Financial Instruments
The
carrying value of the Company’s assets and liabilities recognized in the condensed consolidated balance sheets, which qualify as
financial instruments under the FASB ASC Topic 820, “Fair Value Measurements,” equals or approximates the fair values for
such assets and liabilities either because of the short-term nature of the instruments or because the instrument is recognized at fair
value.
Fair
Value Measurements
Fair
value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction
between market participants at the measurement date. U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs
used in measuring fair value.
FOXWAYNE
ENTERPRISES ACQUISITION CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The
hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements)
and the lowest priority to unobservable inputs (Level 3 measurements). These tiers consist of:
● |
Level
1, defined as observable inputs such as quoted prices for identical instruments in active markets; |
|
|
● |
Level
2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted
prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active;
and |
|
|
● |
Level
3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions,
such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
In
some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In
those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input
that is significant to the fair value measurement.
Derivative
Warrant Liabilities
The
Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates
all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain
features that qualify as embedded derivatives, pursuant to ASC 480 and FASB ASC Topic 815, “Derivatives and Hedging” (“ASC
815”). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as
equity, is re-assessed at the end of each reporting period.
The warrants issued in connection with the Initial Public Offering (the
“Public Warrants”) and the Private Placement Warrants are recognized as derivative liabilities in accordance with ASC 815.
Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at
each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair
value is recognized in the Company’s unaudited condensed consolidated statements of operations. The fair value of the Public Warrants
issued in connection with the Public Offering and Private Placement Warrants was initially measured at fair value using a Monte Carlo
simulation model, and subsequently, the fair value of the Private Placement Warrants has been estimated using a Monte Carlo simulation
model each measurement date. The fair value of Public Warrants issued in connection with the Initial Public Offering has subsequently
been measured based on the listed market price of such warrants. The determination of the fair value of the warrant liability may be subject
to change as more current information becomes available and accordingly the actual results could differ significantly. Derivative warrant
liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets
or require the creation of current liabilities.
Offering
Costs Associated with the Initial Public Offering
Offering
costs consisted of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that were directly
related to the Initial Public Offering. Offering costs are allocated to the separable financial instruments issued in the Initial Public
Offering based on a relative fair value basis, compared to total proceeds received. Offering costs associated with warrant liabilities
are expensed as incurred, presented as non-operating expenses in the condensed consolidated statements of operations. Offering costs
associated with the Class A common stock are charged against their carrying value of the Class A common stock subject to possible redemption
upon the completion of the Initial Public Offering. The Company classified deferred underwriting commissions as non-current liabilities
as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
FOXWAYNE
ENTERPRISES ACQUISITION CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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 ASC 480. Class A common
stock subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable
Class A common stock (including shares of Class A common stock that feature redemption rights that are 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, Class A 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, as of June 30, 2022 and December 31, 2021, 5,750,000 shares of Class A common stock subject
to possible redemption at the redemption amount were presented at redemption value as temporary equity, outside of the stockholders’
deficit section of the Company’s condensed consolidated balance sheets.
Under
ASC 480, the Company has elected to recognize changes in the redemption value immediately as they occur and adjust the carrying value
of the security to equal the redemption value at the end of the reporting period. This method would view the end of the reporting period
as if it were also the redemption date of the security. Effective
with the closing of the Initial Public Offering (including exercise of the over-allotment option), the Company recognized the accretion
from initial book value to redemption amount. Subsequent changes result from Extension Payments deposited in the Trust Account. The
changes in the carrying value of the common stock, subject to possible redemption, result in charges against additional paid-in capital
(to the extent available) and accumulated deficit.
Net
Income (Loss) Per Share of Common Stock
The
Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has
two classes of shares, which are referred to as Class A common stock and Class B common stock. Income and losses are shared pro rata
between the two classes of shares. This presentation assumes a business combination as the most likely outcome. Net income (loss) per
common share is calculated by dividing the net income (loss) by the weighted average shares of common stock outstanding for the respective
period.
The
calculation of diluted net income (loss) per common stock does not consider the effect of the warrants issued in connection with the
Initial Public Offering and the Private Placement to purchase an aggregate of 8,550,000 shares of common stock in the calculation of
diluted income (loss) per share, because their exercise is contingent upon future events. Accretion associated with the redeemable Class
A common stock is excluded from earnings per share as the redemption value approximates fair value.
The
following tables reflects present a reconciliation of the numerator and denominator used to compute basic and diluted net income (loss)
per share for each class of common stock:
Schedule of Basic and Diluted Earning Per Common Share
| |
| | | |
| | | |
| | | |
| | |
| |
For the Three Months Ended
June 30, 2022 | | |
For the Three Months Ended
June 30, 2021 | |
| |
Class A | | |
Class B | | |
Class A | | |
Class B | |
Basic and diluted net loss per common stock: | |
| | | |
| | | |
| | | |
| | |
Numerator: | |
| | | |
| | | |
| | | |
| | |
Allocation of net loss | |
$ | (11,246 | ) | |
$ | (2,787 | ) | |
$ | (1,262,294 | ) | |
$ | (312,853 | ) |
| |
| | | |
| | | |
| | | |
| | |
Denominator: | |
| | | |
| | | |
| | | |
| | |
Basic and diluted weighted average common stock outstanding | |
| 5,800,000 | | |
| 1,437,500 | | |
| 5,800,000 | | |
| 1,437,500 | |
| |
| | | |
| | | |
| | | |
| | |
Basic and diluted net loss per common stock | |
$ | (0.00 | ) | |
$ | (0.00 | ) | |
$ | (0.22 | ) | |
$ | (0.22 | ) |
FOXWAYNE
ENTERPRISES ACQUISITION CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| |
| | | |
| | | |
| | | |
| | |
| |
For the Six Months Ended
June 30, 2022 | | |
For the Six Months Ended
June 30, 2021 | |
| |
Class A | | |
Class B | | |
Class A | | |
Class B | |
Basic and diluted net loss per common stock: | |
| | | |
| | | |
| | | |
| | |
Numerator: | |
| | | |
| | | |
| | | |
| | |
Allocation of net income (loss) | |
$ | 2,148,712 | | |
$ | 532,547 | | |
$ | (1,357,553 | ) | |
$ | (374,863 | ) |
| |
| | | |
| | | |
| | | |
| | |
Denominator: | |
| | | |
| | | |
| | | |
| | |
Basic and diluted weighted average common stock outstanding | |
| 5,800,000 | | |
| 1,437,500 | | |
| 5,127,072 | | |
| 1,415,746 | |
| |
| | | |
| | | |
| | | |
| | |
Basic and diluted net income (loss) per common stock | |
$ | 0.37 | | |
$ | 0.37 | | |
$ | (0.26 | ) | |
$ | (0.26 | ) |
Income
Taxes
The
Company follows the asset and liability method of accounting for income taxes under FASB ASC Topic 740, “Income Taxes”. Deferred
tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected
to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the
period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount
expected to be realized. There were no unrecognized tax benefits and no amounts accrued for interest and penalties at each period.
FASB
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
as income tax expense. 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.
Recent
Accounting Pronouncements
In
August 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-06, Debt-Debt with Conversion and Other Options
(Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments
and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments
by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required
for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation
in certain areas. The Company adopted ASU 2020-06 on January 1, 2022, using a modified retrospective application. Adoption of
the ASU did not impact the Company’s financial position, results of operations or cash flows.
The
Company’s management does not believe that any recently issued, but not yet effective, accounting standards updates, if currently
adopted, would have a material effect on the accompanying condensed consolidated financial statements.
Note
3 - Initial Public Offering
On
January 22, 2021, the Company consummated its Initial Public Offering of 5,750,000 Units, which includes 750,000 Over-Allotment Units,
at $10.00 per Unit, generating gross proceeds of $57.5 million, and incurring offering costs of approximately $4.2 million, of which
approximately $2.0 million was for deferred underwriting commissions.
Each
Unit consists of one share of Class A common stock and one redeemable warrant (each, a “Public Warrant”). Each whole Public
Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see
Note 8).
FOXWAYNE
ENTERPRISES ACQUISITION CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note
4 - Related Party Transactions
Founder
Shares
On
October 15, 2020, the Sponsor purchased 1,437,500 shares of the Company’s Class B common stock, par value $0.0001 per share (the
“Founder Shares”), for an aggregate price of $25,000. In October 2020, the Sponsor transferred 25,000 Founder Shares to each
of Messrs. Reavey, Pavell, Zippin and Agrawal and 180,000 Founder Shares to certain other Initial Stockholders. The per share purchase
price of the Founder Shares was determined by dividing the amount of cash contributed to the Company by the aggregate number of Founder
Shares issued. The Initial Stockholders agreed to forfeit up to 187,500 Founder Shares to the extent that the over-allotment option was
not exercised in full by the underwriters, so that the Founder Shares would represent 20.0% of the Company’s issued and outstanding
shares after the Initial Public Offering (excluding the Representative’s Shares, as defined in Note 5). The underwriter exercised
its over-allotment option in full on January 22, 2021; thus, these 187,500 Founder Shares are no longer subject to forfeiture.
The
Initial Stockholders agreed, subject to limited exceptions, not to transfer, assign or sell (i) with respect to 50% of Founder Shares,
for a period ending on the six-month anniversary of the date of the consummation of the initial Business Combination and (ii) with respect
to the remaining 50% of such shares, for a period ending on the one-year anniversary of the date of the consummation of the initial Business
Combination, or earlier, in either case, if, subsequent to the initial Business Combination, the Company completes a liquidation, merger,
capital stock exchange or other similar transaction that results in all of the Public Stockholders having the right to exchange their
shares of common stock for cash, securities or other property.
Private
Placement Warrants
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the Private Placement of 2,800,000 Private Placement Warrants
at a price of $1.00 per Private Placement Warrant to the Sponsor, generating proceeds of $2.8 million.
Each
whole Private Placement Warrant is exercisable for one whole share of Class A common stock at a price of $11.50 per share. A portion
of the proceeds from the sale of the Private Placement Warrants to the Sponsor was added to the proceeds from the Initial Public Offering
held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the Private Placement
Warrants will expire worthless. The Private Placement Warrants will be non-redeemable for cash and exercisable on a cashless basis so
long as they are held by the Sponsor or its permitted transferees.
The
Sponsor and the Company’s officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of
their Private Placement Warrants until 30 days after the completion of the initial Business Combination.
Related
Party Loans
On
September 30, 2020, affiliates of the Sponsor, including certain of the Company’s officers and directors, agreed to loan the Company
an aggregate of up to $150,000 pursuant to a promissory note (the “Note”). This loan was non-interest bearing and payable
upon the completion of the Initial Public Offering. The Company borrowed $42,125 under the Note. The Company repaid $1,615 of the outstanding
Note balance on December 31, 2020 and repaid the remaining amount of $40,510 in full on January 26, 2021.
Beginning
in September 2021, the Company issued promissory notes to affiliates
of the Sponsor, including certain of the Company’s officers and directors, to provide the
Company with additional working capital or to fund Extension Payments prior to the Company completing its initial Business Combination.
The promissory notes are non-interest bearing, non-convertible, and payable upon the consummation of the Company’s initial
Business Combination. If a Business Combination is not consummated, the promissory notes will not be repaid by the Company and all amounts
owed thereunder by the Company will be forgiven except to the extent that the Company has funds available to it outside of the Trust
Account. As of June 30, 2022 and December 31, 2021, the Company has borrowed $1,034,999 and $100,000, respectively, under such promissory
notes.
FOXWAYNE
ENTERPRISES ACQUISITION CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In
addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor,
or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working
Capital Loans”). If the Company completes a Business Combination, the Company will 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 a 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 a Business Combination or, at the lenders’
discretion, up to $1.5 million 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. As of June 30, 2022 and December
31, 2021, the Company had no outstanding borrowings under the Working Capital Loans.
Administrative
Services Agreement
Commencing
on the date that the Company’s securities were first listed on Nasdaq through the earlier of consummation of the initial Business
Combination and the Company’s liquidation, the Company agreed to pay the Sponsor a total of $10,000 per month for office space,
utilities and secretarial and administrative services. Administrative expenses were included within general and administrative expenses
- related party in the condensed consolidated statements of operations. For the three months ended June 30, 2022 and 2021, the Company
incurred $30,000 in administrative expenses, which are classified as general and administrative expenses - related party in the accompanying
condensed consolidated statements of operations. For the six months ended June 30, 2022 and 2021, the Company incurred $60,000 in administrative
expenses, which are classified as general and administrative expenses - related party in the accompanying condensed consolidated statements
of operations. As of June 30, 2022 and December 31, 2021, $180,000 and $120,000 are accrued for such services, respectively, and included
in due to related party on the accompanying condensed consolidated balance sheets.
The
Company’s officers or directors will be reimbursed for any out-of-pocket expenses incurred in connection with activities on the
Company’s behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations.
The audit committee of the Company’s Board of Directors will review on a quarterly basis all payments that were made to the Sponsor,
officers, directors or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is
no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on the Company’s
behalf.
Due
to Related Party
Due
to related party consists of amounts due from the Company to Sponsor primarily for administrative services and including advances
from an officer of the Company. As of June 30, 2022 and December 31, 2021, the Company had amounts of approximately $180,000
and $133,000
outstanding, respectively, which are presented on the condensed consolidated balance sheets.
Note
5 - Commitments and Contingencies
Registration
and Stockholder Rights
The
holders of Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans or Extension
Loans, if any (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), are entitled to registration rights
pursuant to a registration rights agreement signed upon the consummation of the Initial Public Offering. The holders 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. The Company will bear the expenses incurred in connection with the filing of any such registration
statements.
FOXWAYNE
ENTERPRISES ACQUISITION CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Underwriting
Agreement
The
Company granted the underwriters a 45-day option from the date of Initial Public Offering to purchase up to 750,000 additional Units
to cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions. The underwriter
exercised its over-allotment option in full on January 22, 2021.
The
underwriters were entitled to an underwriting discount of $0.20 per Unit, or approximately $1.2 million in the aggregate, paid upon the
closing of the Initial Public Offering. In addition, the underwriters will be entitled to a deferred fee of $0.35 per Unit, or approximately
$2.0 million in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely
in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
The
Company issued EF Hutton (formerly Kingswood Capital Markets), division of Benchmark Investments, Inc. (“EF Hutton”), the
Representative of the underwriters (the “Representative”), and/or its designees, 50,000 shares of Class A common stock (the
“Representative’s Shares”) upon the consummation of the Initial Public Offering. EF Hutton agreed not to transfer,
assign or sell any such shares until the completion of the initial Business Combination. In addition, EF Hutton agreed (i) to waive its
redemption rights with respect to such shares in connection with the completion of the initial Business Combination and (ii) to waive
its rights to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete its initial
Business Combination within the Combination Period. The Company recorded the fair value of the 50,000 Representative Shares, $500,000,
charged as an offering cost to the Class A common stock subject to possible redemption.
Risks
and Uncertainties
In
February 2022, the Russian Federation and Belarus 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 is not determinable as of the date of these condensed consolidated
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 condensed consolidated financial statements.
Management
continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that
the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target
company, the specific impact is not readily determinable as of the date of these condensed consolidated financial statements. The condensed
consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Note
6 - Derivative Warrant Liabilities
As
of June 30, 2022 and December 31, 2021, the Company has an aggregate of 8,550,000 warrants outstanding, comprised of 5,750,000 and 2,800,000
Public Warrants and Private Placement Warrants, respectively.
Public
Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the Units
and only whole Public Warrants will trade. The Public Warrants will become exercisable on the later of (a) the completion of a Business
Combination or (b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company has an effective
registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the Public Warrants
and a current prospectus relating to them is available (or the Company permits holders to exercise their Public Warrants on a cashless
basis and such cashless exercise is exempt from registration under the Securities Act). The Company agreed that as soon as practicable,
but in no event later than 15 business days after the closing of the initial Business Combination, it will use its commercially reasonable
efforts to file with the SEC and have an effective registration statement covering the shares of the Class A common stock issuable upon
exercise of the warrants and to maintain a current prospectus relating to those shares of the Class A common stock until the warrants
expire or are redeemed. If a registration statement covering the shares of the Class A common stock issuable upon exercise of the warrants
is not effective by the 60th business day after the closing of the 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.
FOXWAYNE
ENTERPRISES ACQUISITION CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The warrants have an exercise price of $11.50 per
share, subject to adjustments, and will expire five years after the completion of a Business Combination or earlier upon redemption or
liquidation. 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 the 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 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 initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z) the
volume weighted average trading price of the Class A common stock during the 20 trading day 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, then 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 described below 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, except that the Private Placement Warrants and the shares of Class A common stock issuable upon exercise of the Private
Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject
to certain limited exceptions. Additionally, the Private Placement Warrants will be non-redeemable so long as they are held by the Sponsor
or its permitted transferees. If the Private Placement Warrants are held by someone other than the Sponsor or its 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.
Once the warrants become exercisable, the Company
may redeem the outstanding warrants (except as described herein with respect to the Private Placement Warrants):
● |
in whole and not in part; |
● |
at a price of $0.01 per warrant; |
● |
upon a minimum of 30 days’ prior written notice of redemption; and |
● |
if, and only if, the last sale price of 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 day period ending on the third day prior to the date on which the Company sends the notice of redemption to the warrant holders. |
The Company will not redeem the warrants as described
above unless a registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the
warrants is effective and a current prospectus relating to those shares of Class A common stock is available throughout the 30-day redemption
period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities
Act.
If the Company is unable to complete a Business Combination
within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any
of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the
Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
FOXWAYNE
ENTERPRISES ACQUISITION CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note
7 - Class A Common Stock Subject to Possible Redemption
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 the occurrence of future events. The Company is authorized to issue 50,000,000 shares of Class A common stock with a par
value of $0.0001 per share. Holders of the Company’s Class A common stock are entitled to one vote for each share. As of June 30,
2022 and December 31, 2021, there were 5,800,000 shares of Class A common stock outstanding, 5,750,000 shares of which were subject to
possible redemption and are classified outside of permanent equity in the condensed consolidated balance sheets.
The
Class A common stock subject to possible redemption reflected on the condensed consolidated balance sheets is reconciled on the following
table:
Schedule
of Redemption of Condensed Balance Sheet
Gross proceeds received from Initial
Public Offering | |
$ | 57,500,000 | |
Less: | |
| | |
Fair value of Public Warrants
at issuance | |
| (3,105,000 | ) |
Class A common stock issuance
costs | |
| (3,998,225 | ) |
Plus: | |
| | |
Accretion
on Class A common stock to redemption value | |
| 7,678,225 | |
Class A common stock subject
to possible redemption, December 31, 2021 | |
$ | 58,075,000 | |
Accretion on Class A common stock to redemption value | |
| 287,500 | |
Class
A common stock subject to possible redemption, June 30, 2022 | |
$ | 58,362,500 | |
Note
8 - Stockholders’ Deficit
Preferred
Stock - The Company is authorized to issue 1,000,000 shares of preferred stock, par value $0.0001 per share, with such designations,
voting and other rights and preferences as may be determined from time to time by the Company’s Board of Directors. As of June
30, 2022 and December 31, 2021, there were no shares of preferred stock issued or outstanding.
Class
A Common Stock - The Company is authorized to issue 50,000,000 shares of Class A common stock with a par value of $0.0001 per
share. As of June 30, 2022 and December 31, 2021, there were 5,800,000 shares of Class A common stock issued or outstanding, 5,750,000
shares of which were subject to possible redemption and are classified outside of permanent equity in the condensed consolidated balance
sheets (see Note 7).
Class
B Common Stock - The Company is authorized to issue 2,000,000 shares of Class B common stock with a par value of $0.0001 per
share. As of June 30, 2022 and December 31, 2021, there were 1,437,500 shares of Class B common stock issued and outstanding, of which
an aggregate of up to 187,500 shares of Class B common stock were subject to forfeiture to the extent that the underwriters’ over-allotment
option was not exercised in full or in part, so that the Initial Stockholders will collectively own 20% of the Company’s issued
and outstanding common stock after the Initial Public Offering (excluding the Representative’s Shares). The underwriter exercised
its over-allotment option in full on January 22, 2021; thus, these 187,500 Founder Shares are no longer subject to forfeiture.
Holders
of the Class A common stock and holders of the Class B common stock will vote together as a single class on all matters submitted to
a vote of the stockholders, except as required by law. Each share of common stock will have one vote on all such matters. However, the
holders of the Founder Shares have the right to elect all of the Company’s directors prior to the initial Business Combination.
FOXWAYNE
ENTERPRISES ACQUISITION CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The
Class B common stock will automatically convert into Class A common stock at the closing of the initial Business Combination on a one-for-one
basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and subject to further
adjustment as provided herein. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed
issued in connection with the initial Business Combination, the number of shares of Class A common stock issuable upon conversion of
all Founder Shares 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 the completion of the Initial Public Offering, plus the total number of shares of Class A common stock issued,
or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company
in connection with or in relation to the consummation of the initial Business Combination, excluding any shares of Class A common stock
or equity-linked securities exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller
in the initial Business Combination and any private placement-equivalent warrants issued to the Sponsor, officers or directors upon conversion
of Working Capital Loans or Extension Loans; provided that such conversion of Founder Shares will never occur on a less than one for
one basis.
Note
9 - Fair Value Measurements
The
following tables presents information about the Company’s financial assets and liabilities that are measured at fair value on a
recurring basis as of June 30, 2022 and December 31, 2021.
Schedule of Fair Value Measurement of Financial Assets and Liabilities
June
30, 2022
| |
| | | |
| | | |
| | |
Description | |
Quoted
Prices in Active Markets (Level 1) | | |
Significant
Other Observable Inputs (Level 2) | | |
Significant
Other Unobservable Inputs (Level 3) | |
Assets: | |
| | | |
| | | |
| | |
Investments held in Trust Account | |
$ | 58,447,230 | | |
$ | - | | |
$ | - | |
Liabilities: | |
| | | |
| | | |
| | |
Derivative warrant liabilities - Public warrants | |
$ | 287,500 | | |
$ | - | | |
$ | - | |
Derivative warrant liabilities - Private placement
warrants | |
$ | - | | |
$ | - | | |
$ | 140,000 | |
December
31, 2021
| |
| | | |
| | | |
| | |
Description | |
Quoted
Prices in Active Markets
(Level 1) | | |
Significant
Other Observable Inputs
(Level 2) | | |
Significant
Other Unobservable Inputs
(Level 3) | |
Assets: | |
| | | |
| | | |
| | |
Investments held in Trust Account | |
$ | 58,080,426 | | |
$ | - | | |
$ | - | |
Liabilities: | |
| | | |
| | | |
| | |
Derivative warrant liabilities - Public warrants | |
$ | 2,357,500 | | |
$ | - | | |
$ | - | |
Derivative warrant liabilities - Private placement
warrants | |
$ | - | | |
$ | - | | |
$ | 1,148,000 | |
Transfers
to/from Levels 1, 2, and 3 are recognized at the beginning of the reporting period. The estimated fair value of the Public Warrants transferred
from a Level 3 fair value measurement to a Level 1 fair value measurement, when the Public Warrants were separately listed and traded
in February 2021.
Level
1 assets include investments in money market funds that invest in U.S. Treasury securities. The Company uses inputs such as actual trade
data, quoted market prices from dealers or brokers, and other similar sources to determine the fair value of its investments.
Subsequent
to the Public Warrants being separately listed and traded, their value is based on their observable listed trading price, a Level 1 measurement.
FOXWAYNE
ENTERPRISES ACQUISITION CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Level
3 instruments are comprised of derivative warrant liabilities measured at fair value using a Monte Carlo simulation model. The estimated
fair value of the Private Placement Warrants and the Public Warrants, prior to the Public Warrants being traded in an active market,
was determined using Level 3 inputs. Inherent in a Monte Carlo simulation model are assumptions related to expected stock-price volatility,
expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock warrants based on
implied volatility from the Company’s traded warrants and from historical volatility of select peer company’s common stock
that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield
curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed
to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates
remaining at zero.
The primary significant
unobservable input used in the fair value measurement of the Company’s Private Placement Warrants is the expected volatility of
the common stock. Significant increases (decreases) in the expected volatility in isolation would result in a significantly higher (lower)
fair value measurement.
The
following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates:
Schedule of Fair Value Input Measurements
| |
| | | |
| | |
| |
As of
June 30, 2022 | | |
As of
December 31, 2021 | |
Option term (in years) | |
| 5.32 | | |
| 5.25 | |
Volatility | |
| 7.60 | % | |
| 8.00 | % |
Risk-free interest rate | |
| 3.01 | % | |
| 1.28 | % |
Expected dividends | |
| 0.00 | % | |
| 0.00 | % |
Stock price | |
$ | 10.14 | | |
$ | 9.94 | |
The
change in the fair value of the derivative warrant liabilities, measured using Level 3 inputs, for the six months ended June 30, 2022
and 2021, is summarized as follows:
Schedule of Changes in Derivative Warrant Liabilities
Derivative warrant liabilities at January 1, 2022 | |
$ | 1,148,000 | |
Change
in fair value of derivative warrant liabilities | |
| (952,000 | ) |
Derivative warrant liabilities at March 31,
2022 | |
$ | 196,000 | |
Change
in fair value of derivative warrant liabilities | |
| (56,000 | ) |
Derivative warrant liabilities
at June 30, 2022 | |
$ | 140,000 | |
| |
| | |
Derivative warrant liabilities at January 1,
2021 | |
$ | - | |
Issuance of Public and
Private Warrants | |
| 4,589,000 | |
Transfer of Public Warrants
to a Level 1 measurement | |
| (3,105,000 | ) |
Change
in fair value of derivative warrant liabilities | |
| (84,000 | ) |
Derivative warrant liabilities at March 31,
2021 | |
$ | 1,400,000 | |
Change
in fair value of derivative warrant liabilities | |
| 448,000 | |
Derivative warrant liabilities
at June 30, 2021 | |
$ | 1,848,000 | |
Note
10 - Subsequent Events
The
Company evaluated subsequent events and transactions that occurred up to the date unaudited condensed consolidated financial statements
were available to be issued. Based upon this review the Company did not identify any subsequent events other than noted above, that would
have required adjustment or disclosure in the unaudited condensed consolidated financial statements.
FOXWAYNE
ENTERPRISES ACQUISITION CORP.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On
July 12, 2022, the Company filed a Certificate of Amendment (the “Amendment”) to its Second Amended and Restated Certificate
of Incorporation with the Delaware Secretary of State to (i) extend the date by which the Company has to consummate a Business Combination
for three months, from July 22, 2022 (the “Original Termination Date”) to October 22, 2022 (the “Extended Date”),
and (ii) allow the Company, without another stockholder vote, to elect to extend the date to consummate a Business Combination for three
months after the Extended Date, for a total of up to six months after the Original Termination Date. At the Company’s Annual Meeting
on July 12, 2022, the Company’s stockholders (i) approved the proposal to amend the Company’s Second Amended and Restated
Certificate of Incorporation to (A) extend the date by which the Company has to consummate a Business Combination for three months from
the Original Termination Date to the Extended Date and (B) allow the Company, without another stockholder vote, to elect to extend the
date to consummate a Business Combination for three months after the Extended Date, for a total of up to six months after the Original
Termination Date.
On
July 20, 2022, stockholders holding 4,406,322 shares
of the Company’s Class A common stock exercised their right to redeem such shares
for a pro rata portion of the funds in the Company’s Trust Account.
On
July 20, 2022, the Company’s Board of Directors
approved the extension (the “Extension”) of the time for the Company to consummate a business combination by an additional
three-month period from July 22, 2022 to October 22, 2022 pursuant to the Company’s Second Amended and Restated Certificate of
Incorporation. In connection with the Extension, the Company funded a cash contribution to the Trust Account in the amount of $16,796
(the “Deposit”) (based on $0.0125 for each share unit issued in the Company’s initial public offering that was outstanding
at the time the Extension was approved by the Board).