The accompanying notes are an integral part of
the unaudited condensed financial statements.
The accompanying notes are an integral part of
the unaudited condensed financial statements.
The accompanying notes are an integral part of
the unaudited condensed financial statements.
The accompanying notes are an integral part of
the unaudited condensed financial statements.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
NOTE 1. ORGANIZATION AND BUSINESS OPERATIONS
FTAC Zeus Acquisition Corp. (the “Company”)
is a blank check company incorporated in Delaware on December 11, 2020. The Company was formed 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 early stage and emerging growth company and, as such, the Company is subject
to all of the risks associated with early stage and emerging growth companies.
All activity for the period from December 11,
2020 (inception) through December 31, 2020 was de minimis and related only to the Company’s formation. All activity for the period
from January 1, 2021 (commencement of operations) through March 31, 2022 relates to the Company’s formation, Initial Public Offering
(as defined below), and efforts in identifying a target to consummate an initial 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 from the proceeds derived from the Initial Public Offering placed in the Trust Account (as defined
below).
The registration statements for the Company’s
Initial Public Offering were declared effective on November 18, 2021. On November 23, 2021, the Company consummated the Initial Public
Offering of 40,250,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units sold,
the “Public Shares”), which includes the full exercise by the underwriter of its over-allotment option in the amount of 5,250,000
Units, at $10.00 per Unit, generating gross proceeds of $402,500,000, which is described in Note 3.
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the sale of 1,778,750 units (each, a “Private Placement Unit”) at a price of $10.00
per Private Placement Unit in a private placement to FTAC Zeus Sponsor, LLC, a Delaware limited liability company (together with FTAC
Zeus Advisors, LLC, the “Sponsor”), generating gross proceeds of $17,787,500, which is described in Note 4.
Transaction costs amounted to $24,712,590, consisting
of $7,000,000 of underwriting fees, $17,150,000 of deferred underwriting fees, $6,860,000 of deferred advisory fees, and $3,362,590 of
other offering costs, which were offset by a $9,660,000 reimbursement for the financial advisory fee (see Note 6). In addition, cash of
$4,775,000 was held outside of the Trust Account (as defined below) and is available for the payment of offering costs and for working
capital purposes.
Following the closing of the Initial Public Offering
on November 23, 2021, an amount of $408,537,500 ($10.15 per Unit) from the net proceeds of the sale of the Units in the Initial Public
Offering and the sale of the Private Placement Units was placed in a trust account (the “Trust Account”), and was invested
in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the
“Investment Company Act”), with a maturity of 185 days or less, or in money market funds meeting certain conditions under
Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination
or (ii) the distribution of the funds in the Trust Account to the Company’s stockholders, as described below.
In accordance with the rules of Nasdaq, the initial
Business Combination must occur with one or more target businesses that together have a fair market value equal to at least 80% of the
balance in the Trust Account (less any deferred underwriting commissions and taxes payable on interest earned) at the time the Company
signs a definitive agreement for the initial Business Combination. The Company will only complete a Business Combination if the post-Business
Combination company owns or acquires 50% or more of the outstanding 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. There
is no assurance that the Company will be able to successfully effect a Business Combination.
Except for interest income released to the Company
for the payment of taxes or dissolution expenses, none of the funds held in the Trust Account will be released, subject to the requirements
of law, until the earlier of (i) the consummation of the initial Business Combination; (ii) the redemption of the Public Shares if the
Company is unable to consummate a Business Combination within 18 months from the closing of the Initial Public Offering, or 21 months
from the closing of the Initial Public Offering if the Company has executed a letter of intent, agreement in principle or definitive agreement
for the Business Combination within 18 months from the closing of the Initial Public Offering but has not completed the Business Combination
within such 18-month period to complete a Business Combination (the “Completion Window”) subject to applicable law; or (iii)
the redemption of any Public Shares properly tendered in connection with a stockholder vote to amend the Company’s 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 the initial Business Combination within the Completion Window; or (iv) otherwise upon the liquidation or
if the board of directors resolves to liquidate the Trust Account and ceases to pursue the consummation of a Business Combination prior
to the expiration of the Completion Window (the board of directors may determine to liquidate the Trust Account prior to such expiration
if it determines, in its business judgment, that it is improbable within the remaining time to identify an attractive Business Combination
or satisfy regulatory and other business and legal requirements to consummate a Business Combination). The proceeds deposited in the Trust
Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the
public stockholders.
The Company will provide the public stockholders
with the opportunity to redeem all or a portion of their Public Shares upon the completion of the initial Business Combination either
in connection with a stockholder meeting called to approve the Business Combination or by means of a tender offer. The decision as to
whether the Company will seek stockholder approval of an Initial Business Combination or conduct a tender offer will be made by the Company,
solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the
transaction would require the Company to seek stockholder approval under the law or stock exchange listing requirement. The Company’s
public stockholders are entitled to redeem their Public Shares at a per-share price, payable in cash, equal to the aggregate amount then
on deposit in the Trust Account as of two business days prior to the consummation of the initial Business Combination, divided by the
number of then outstanding Public Shares. The amount in the Trust Account was initially $10.15 per Public Share.
FTAC ZEUS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
The shares of common stock subject to redemption
are recorded at redemption value and classified as temporary equity in accordance with Financial Accounting Standards Board’s (“FASB”)
Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.” The Company will
proceed with a Business Combination if the Company’s Class A common stock is not a “penny stock” upon consummation of
a Business Combination and, if the Company seeks stockholder approval, a majority of the issued and outstanding shares voted are voted
in favor of the Business Combination.
The Company’s amended and restated certificate
of incorporation provides that the Company will have the Completion Window to consummate the initial Business Combination. If the Company
has not consummated a Business Combination within the Completion Window, the Company will: (i) cease all operations except for the purpose
of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem all Public Shares then outstanding
at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account and not previously released
to the Company to pay its taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding
Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive
further liquidation 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, officers and directors
have entered into a letter agreement with the Company, pursuant to which they have agreed: (1) to waive their redemption rights with respect
to any Founder Shares (as described in Note 5), placement shares and Public Shares held by them, as applicable, in connection with the
completion of the initial Business Combination; (2) to waive their redemption rights with respect to any Founder Shares, placement shares
and Public Shares held by them in connection with a stockholder vote to approve an amendment to the Company’s amended and restated
certificate of incorporation (A) to modify the substance or timing of the Company’s obligation to provide for the redemption of
the Public Shares in connection with an initial Business Combination or to redeem 100% of the Public Shares if the Company has not consummated
the initial Business Combination within the Completion Window or (B) with respect to any other provision relating to stockholders’
rights or pre-initial Business Combination activity; and (3) to waive their rights to liquidating distributions from the Trust Account
with respect to any Founder Shares or placement shares they hold if the Company fails to complete the initial Business Combination within
the Completion Window (although they will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares
they hold if the Company fails to complete the initial Business Combination within the Completion Window). If the Company submits the
initial Business Combination to the public stockholders for a vote, the initial stockholders, officers and directors have agreed to vote
any Founder Shares, any placement shares and any Public Shares held by them in favor of the initial Business Combination.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial
statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”)
for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain
information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or
omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information
and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management,
the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are
necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial
statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the period ended December 31, 2021, as
filed with the SEC on March 23, 2022. The interim results for the three months ended March 31, 2022 are not necessarily indicative of
the results to be expected for the year ending December 31, 2022 or for any future periods.
Emerging Growth Company Status
The Company is an “emerging growth company,”
as defined in Section 2(a) of the Securities Act of 1933, as amended (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 auditor 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised
financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply
with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected
not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application
dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private
companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public
company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition
period difficult or impossible because of the potential differences in accounting standards used.
FTAC ZEUS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
Use of Estimates
The preparation of the condensed financial statements
in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of 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 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
As of March 31, 2022 and December 31, 2021, the
Company had $2,696,822 and $3,474,184 in cash, respectively. 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 March 31, 2022 and December 31,
2021.
Investments Held in Trust Account
As of March 31, 2022 and December 31, 2021, the
Company had $408,582,511 and $408,541,371 in investments held in trust account which was invested in BLF Treasury Trust Fund, respectively.
Net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Units were placed in the Trust
Account which will only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the
Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated
under the Investment Company Act which invest only in direct U.S. government treasury obligations. The Company’s investments held
in the Trust Account are classified as trading securities. Trading securities are presented on the 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 interest on
investments held in trust account in the accompanying statements of operations. The estimated fair values of investments held in the Trust
Account are determined using available market information.
Offering Costs
The Company complies with the requirements of
the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering”. Offering
costs consist of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering date that are directly
related to the Initial Public Offering. Offering costs directly attributable to the issuance of an equity contract to be classified in
equity are recorded as a reduction of equity. Offering costs for equity contracts that are classified as assets and liabilities are expensed
immediately. As of March 31, 2022, the Company incurred offering costs amounting to $24,712,590, consisting of $7,000,000 of underwriting
fees, $17,150,000 of deferred underwriting fees, $6,860,000 of deferred advisory fees, $3,362,590 of other offering costs and a $9,660,000
reimbursement for the financial advisory fee. These offering costs are allocated between components of temporary and permanent equity
based on the relative fair value of these components.
Net Loss Per Common Stock
The Company has two classes of shares, which are
referred to as Class A common stock and Class B common stock. Earnings and losses are shared pro rata between the two classes of shares.
The Company has not considered the effect of the warrants sold in the Initial Public Offering and the Private Placement to purchase an
aggregate of 21,014,375 shares of its Class A common stock in the calculation of diluted loss per share, since their exercise is contingent
upon future events. As a result, diluted net loss per common stock is the same as basic net loss per common stock. The table below presents
a reconciliation of the numerator and denominator used to compute basic and diluted net loss per share for each class of common stock:
| |
Three Months Ended March 31, 2022 | | |
For the Period from January 1, 2021 (Commencement of Operations) through March 31, 2021 | |
| |
Class A | | |
Class B | | |
Class A | | |
Class B | |
Basic and diluted net loss per share | |
| | |
| | |
| | |
| |
Numerator: | |
| | |
| | |
| | |
| |
Allocation of net loss, as adjusted | |
$ | (557,507 | ) | |
$ | (185,836 | ) | |
$ | — | | |
$ | (1,381 | ) |
Denominator: | |
| | | |
| | | |
| | | |
| | |
Basic and diluted weighted average shares outstanding subject to redemption | |
| 42,028,750 | | |
| 14,009,583 | | |
| — | | |
| 15,133,333 | |
Basic and diluted net loss per share | |
$ | (0.01 | ) | |
$ | (0.01 | ) | |
$ | — | | |
$ | (0.00 | ) |
FTAC ZEUS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
Class A Common Stock Subject to Possible
Redemption
The Company accounts for its Class A common stock
subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing
Liabilities from Equity.” Class A common stock subject to mandatory redemption is classified as a liability instrument and is measured
at fair value. Conditionally redeemable common stock (including common stock that features 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 in temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Class
A common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence
of uncertain future events. Accordingly, at March 31, 2022 and December 31, 2021, the 40,250,000 shares of Class A common stock are presented
at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s balance sheets.
The Company recognizes changes in redemption value
immediately as they occur. This method would view the end of the reporting period as if it were also the redemption date for the security.
Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption
amount value. The change in the carrying value of redeemable common stock resulted in charges against additional paid-in capital and accumulated
deficit.
Fair Value of Financial Instruments
The fair value of the Company’s assets and
liabilities which qualify as financial instruments under the FASB ASC 820, “Fair Value Measurements and Disclosures,” approximate
the carrying amounts represented in the balance sheets, primarily due to its short-term nature.
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. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. 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). The Company’s financial instruments are classified as either Level 1,
Level 2 or Level 3. These tiers include:
|
● |
Level 1, defined as observable inputs such as quoted prices (unadjusted) 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. |
Warrant Classification
The Company accounts for the warrants issued in
connection with the Initial Public Offering and the private placement in accordance with the guidance contained in ASC 815-40 under which
the warrants meet the criteria for equity treatment and are recorded as equity.
Income Taxes
The Company accounts for income taxes under ASC
740, Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected
impact of differences between the financial statements and tax basis of assets and liabilities and for the expected future tax benefit
to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when
it is more likely than not that all or a portion of deferred tax assets will not be realized. The Company’s deferred tax assets
were deemed to be de minimis as of March 31, 2022 and December 31, 2021.
ASC 740 also clarifies the accounting for uncertainty
in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process
for financial statement recognition and measurement of a tax position 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. ASC 740 also provides
guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.
The Company has identified the United States as
its only “major” tax jurisdiction.
FTAC ZEUS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
The Company is subject to income tax examinations
by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus
of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect
that the total amount of unrecognized tax benefits will materially change over the next twelve months.
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal
Depository Insurance Corporation coverage limits of $250,000. At March 31, 2022 and December 31, 2021, the Company had not experienced
losses on this account and management believes the Company is not exposed to significant risks on such account.
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. ASU 2020-06 removes certain settlement conditions that
are required for equity contracts to qualify for the derivative scope exception, and it also simplifies the diluted earnings per
share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim
periods within those fiscal years, with early adoption permitted. The Company is currently assessing the impact, if any, that ASU
2020-06 would have on its financial position, results of operations or cash flows.
Management does not believe that any other recently
issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
Risks and Uncertainties
Management continues to evaluate the impact of
the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s
financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as
of the date of the financial statements. The financial statements do not include any adjustments that might result from the outcome of
this uncertainty.
In February 2022, the Russian Federation 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 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 financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering, the Company
sold 40,250,000 Units, which includes a full exercise by the underwriter of its over-allotment option in the amount of 5,250,000 Units,
at a purchase price of $10.00 per Unit. Each Unit consists of one share of Class A common stock and one-half of one redeemable warrant
(“public warrant”). Each whole public warrant entitles the holder to purchase one share of Class A common stock at an exercise
price of $11.50 per whole share, subject to adjustment (see Note 7).
All of the 40,250,000 shares of Class A common
stock sold as part of the Units in the Initial Public Offering contain a redemption feature which allows for the redemption of such Public
Shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer in connection with the Business
Combination and in connection with certain amendments to the Company’s amended and restated certificate of incorporation. In accordance
with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity”, and with the SEC and its staff’s guidance
on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the
Company require common stock subject to redemption to be classified outside of permanent equity.
As of March 31, 2022 and December 31, 2021, the
common stock reflected on the condensed balance sheets are reconciled in the following table:
Gross proceeds | |
$ | 402,500,000 | |
Less: | |
| | |
Proceeds allocated to public warrants | |
| (30,965,681 | ) |
Class A common stock issuance costs | |
| (22,811,367 | ) |
Plus: | |
| | |
Accretion of carrying value to redemption value | |
| 59,814,548 | |
Class A common stock subject to possible redemption | |
$ | 408,537,500 | |
FTAC ZEUS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial
Public Offering, the Sponsor purchased in a private placement 1,778,750 Private Placement Units at a price of $10.00 per unit, for a purchase
price of $17,787,500.
The Private Placement Units are identical to the
Units sold in the Initial Public Offering except that the placement warrants, so long as they are held by the initial purchasers or their
permitted transferees, (i) may not (including the Class A common stock issuable upon exercise of these warrants), subject to certain limited
exceptions, be transferred, assigned or sold until 30 days after the completion of the initial Business Combination, and (ii) are entitled
to registration rights.
The Private Placement Units (including the underlying
placement warrants, the placement shares and the shares of Class A common stock issuable upon exercise of the placement warrants) are
not transferable, assignable or salable until 30 days after the completion of the initial Business Combination.
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On February 16, 2021, the Sponsor paid $25,000
in exchange for 17,333,333 Class B shares. The number of Founder Shares was determined based on the expectation that the Founder Shares
would represent 25% of the aggregate of the Founder Shares, the placement shares and the issued and outstanding Public Shares after the
Initial Public Offering (assuming the initial stockholders did not purchase any Units in the offering). On October 28, 2021, the Sponsor
transferred back to the Company 5,302,500 Founder Shares for no consideration. On November 18, 2021, the Company effected a stock dividend
of 0.1644733 shares of Class B common stock for each share of Class B common stock outstanding before the dividend. The transfer and dividend
left a remaining Founder Share balance outstanding of 14,009,583, of which 1,776,250 Founder Shares were subject to forfeiture. As a result
of the underwriter’s election to fully exercise its over-allotment option at the closing of the Initial Public Offering, no Founder
Shares are subject to forfeiture.
The Sponsor has agreed not to transfer, assign
or sell any of its Founder Shares (i) with respect to 25% of such shares, until consummation of the initial Business Combination, (ii)
with respect to 25% of such shares, until the closing price of the Class A common stock exceeds $12.00 for any 20 trading days within
a 30-trading day period following the consummation of the initial Business Combination, (iii) with respect to 25% of such shares, until
the closing price of the Class A common stock exceeds $13.50 for any 20 trading days within a 30-trading day period following the consummation
of the initial Business Combination, and (iv) with respect to 25% of such shares, until the closing price of the Class A common stock
exceeds $15.00 for any 20 trading days within a 30-trading day period following the consummation of the initial Business Combination or
earlier, in any case, if, following a Business Combination, the Company completes a liquidation, merger, capital stock exchange or other
similar transaction that results in all of the stockholders having the right to exchange their shares of common stock for cash, securities
or other property. Any permitted transferees would be subject to the same restrictions and other agreements of the initial stockholders
with respect to any Founder Shares.
Promissory Note — Related Party
On February 12, 2021, the Sponsor agreed to loan
the Company up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the “Note”).
The Note was subsequently amended on June 23, 2021 to extend the maturity date to September 30, 2021, and the Note was further amended
on October 28, 2021 to extend the maturity date to March 31, 2022. This loan was non-interest bearing and payable on the earlier of March
31, 2022 or the completion of the Initial Public Offering. As of March 31, 2022 and December 31, 2021, the Company had no outstanding
borrowings under the Note. The outstanding balance under the Note of $122,926 was paid in full on November 23, 2021 and the Note was terminated.
Related Party Loans
In order to finance transaction costs in connection
with an intended initial 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 (the “Working Capital Loans”). If the Company
completes the initial Business Combination, the Company expects to repay such loaned amounts out of the proceeds of the Trust Account
released to the Company. In the event that the initial Business Combination does not close, the Company may use a portion of the working
capital held outside the Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used to repay such
loaned amounts. Up to $2,000,000 of all loans made to the Company by the Sponsor, an affiliate of the Sponsor or the officers and directors
may be convertible into units at a price of $10.00 per unit at the option of the lender at the time of the Business Combination. The units
would be identical to the Private Placement Units. At March 31, 2022 and December 31, 2021, no such Working Capital Loans were outstanding.
FTAC ZEUS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
Administrative Services Agreement
On November 18, 2021, the Company entered into
an agreement pursuant to which it will pay the Sponsor or an affiliate of the Sponsor $40,000 per month for office space, administrative
and shared personnel support services. Upon completion of a Business Combination or its liquidation, the Company will cease paying these
monthly fees. For the three months ended March 31, 2022, the Company incurred and paid $120,000 in fees for these services. For the period
from January 1, 2021 (commencement of operations) through March 31, 2021, the Company did not incur any fees for these services.
Due to Related Party
As of March 31, 2022, due to related party amounted
to $21,935 which consists of accrued administrative services fees. As of December 31, 2021, due to related party amounted to $22,380 which
consists of accrued administrative services fees of $21,935 and $445 of formation costs.
NOTE 6. COMMITMENTS AND CONTINGENCIES
Registration Rights
Pursuant to a registration rights agreement entered
into on November 18, 2021, the holders of the Founder Shares, Private Placement Units (including securities contained therein) and warrants
that may be issued upon conversion of loans made by the Sponsor or one of its affiliates have registration rights to require the Company
to register a sale of any of its securities held by them (in the case of the founder shares, only after conversion to the Class A common
stock). These holders are entitled to make up to three demands, excluding short form registration demands, that the Company registers
such securities for sale under the Securities Act. In addition, these holders have “piggy-back” registration rights to include
such securities in other registration statements filed by the Company and rights to require the Company to register for resale such securities
pursuant to Rule 415 under the Securities Act.
Warrant Amendments
The warrant agreement provides that the terms
of the warrants may be amended without the consent of any stockholder or warrant holder to cure any ambiguity or correct any defective
provision or to make any amendments that are necessary in the good faith determination of the board of directors of the Company (taking
into account then existing market precedents) to allow for the warrants to continue to be classified as equity in the Company’s
financial statements, but requires the approval by the holders of at least 50% of the then outstanding public warrants to make any change
that adversely affects the interests of the registered holders of public warrants. Accordingly, the Company may amend the terms of the
public warrants (i) in a manner adverse to a holder of public warrants if holders of at least 50% of the then outstanding public warrants
approve of such amendment or (ii) to the extent necessary for the warrants in the good faith determination of the board of directors of
the Company (taking into account then existing market precedents) to allow for the warrants to continue to be classified as equity in
the Company’s financial statements without the consent of any stockholder or warrant holder. Although the Company’s ability
to amend the terms of the public warrants with the consent of at least 50% of the then outstanding public warrants is unlimited, examples
of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into
cash or shares, shorten the exercise period or decrease the number of shares of Class A common stock purchasable upon exercise of a warrant.
Underwriting Agreement
The underwriter agreed to defer until consummation
of the Business Combination $17,150,000 of its underwriting commissions, which equals 4.0% of the gross proceeds from the Units sold to
the public, excluding any Units purchased pursuant to the underwriter’s overallotment option, and 6.0% of the gross proceeds from
the Units sold to the public pursuant to the underwriter’s overallotment option. This amount was placed in the Trust Account and
will be released to the underwriter only on completion of an initial Business Combination.
Financial Advisory Fee
The Company engaged Cohen & Company Capital
Markets, a division of J.V.B. Financial Group, LLC (“CCM”), to provide financial advisory services in connection with the
Initial Public Offering. The Company paid CCM a fee in an amount equal to 0.8% of the aggregate proceeds of the Initial Public Offering
(excluding the proceeds of the exercise of the overallotment option) net of underwriter’s expenses, upon the closing of the Initial
Public Offering. The Company also engaged CCM to act as an advisor in connection with the Business Combination for which it will earn
an advisory fee of 1.6% of the proceeds of the Initial Public Offering (excluding the proceeds of the exercise of the overallotment option)
payable at closing of the Business Combination. CCM is also entitled to an advisory fee equal to 2.4% of the aggregate proceeds of the
exercise of the overallotment option, payable at the closing of the Business Combination. The underwriter has agreed to reimburse the
Company for the fee to CCM as it becomes payable out of the underwriting commissions, including the deferred underwriting commissions
payable at closing of the Business Combination. Accordingly, $2,800,000 was received by the Company upon closing of the Initial Public
Offering and a reimbursement receivable and deferred advisory fee of $6,860,000 has been reflected in the accompanying balance sheets
as of March 31, 2022 and December 31, 2021.
FTAC ZEUS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
NOTE 7. STOCKHOLDERS’ DEFICIT
Preferred Stock
The Company is authorized to issue 1,000,000 shares
of preferred stock with a par value of $0.0001 per share. At March 31, 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 150,000,000
shares of Class A common stock with a par value of $0.0001 per share. Holders of Class A common stock are entitled to one vote for each
share. At March 31, 2022 and December 31, 2021, there were 1,778,750 shares of Class A common stock issued and outstanding, excluding
40,250,000 shares of Class A common stock subject to redemption, which are classified as temporary equity (see Note 3).
Class B Common Stock
The Company is authorized to issue 20,000,000
shares of Class B common stock with a par value of $0.0001 per share. Holders of the Class B common stock are entitled to one vote for
each share. Holders of Class B common stock will vote on the election of directors prior to the consummation of a Business Combination.
Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote
of stockholders except as required by law. At March 31, 2022 and December 31, 2021, there were 14,009,583 shares of Class B common stock
issued and outstanding.
The Sponsor has agreed not to transfer, assign
or sell any of its Founder Shares (i) with respect to 25% of such shares, until consummation of the initial Business Combination, (ii)
with respect to 25% of such shares, until the closing price of the Class A common stock exceeds $12.00 for any 20 trading days within
a 30-trading day period following the consummation of the initial Business Combination, (iii) with respect to 25% of such shares, until
the closing price of the Class A common stock exceeds $13.50 for any 20 trading days within a 30-trading day period following the consummation
of the initial Business Combination, and (iv) with respect to 25% of such shares, until the closing price of the Class A common stock
exceeds $15.00 for any 20 trading days within a 30-trading day period following the consummation of the initial Business Combination or
earlier, in any case, if, following a Business Combination, the Company completes a liquidation, merger, capital stock exchange or other
similar transaction that results in all of the stockholders having the right to exchange their shares of common stock for cash, securities
or other property. Any permitted transferees would be subject to the same restrictions and other agreements of the initial stockholders
with respect to any Founder Shares.
The shares of Class B common stock will automatically
convert into shares of Class A common stock at the time of the initial Business Combination on a one-for-one basis, subject to 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 excess of the amounts sold in the Initial Public Offering and related to the closing of the initial Business Combination, the ratio
at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority
of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance)
so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the
aggregate, on an as-converted basis, 25% of the sum of the total number of all shares of common stock issued and outstanding upon completion
of the Initial Public Offering, including placement shares, plus all shares of Class A common stock and equity-linked securities issued
or deemed issued in connection with the initial Business Combination, excluding any shares or equity-linked securities issued, or to be
issued, to any seller in the initial Business Combination and any private placement-equivalent securities issued to the Sponsor or its
affiliates upon conversion of loans made to the Company.
Warrants
As of March 31, 2022 and December 31, 2021, there
were 20,125,000 public warrants and 889,375 placement warrants outstanding. Each whole warrant entitles the holder to purchase one share
of the Company’s Class A common stock at a price of $11.50 per share, subject to adjustment, at any time commencing 30 days after
the completion of the initial Business Combination. The warrants will expire five years after the completion of the initial Business Combination,
at 5:00 p.m., New York City time, 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 (with such issue price or effective issue
price to be determined in good faith by the Company and in the case of any such issuance to the Sponsor or its affiliates, without taking
into account any Founder Shares held by the initial stockholders 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 completion of the initial Business Combination
(net of redemptions), and (z) the volume-weighted average trading price of the shares of Class A common stock during the 20 trading day
period starting on the trading day prior to the day on which the Company completes the initial Business Combination (such price, the “Market
Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115%
of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the
nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
FTAC ZEUS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
Redemption of warrants
Redemption of Warrants. Once
the warrants become exercisable, the Company may redeem the outstanding 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, or the 30-day redemption period; and |
| ● | if, and only if, the last sale price of the Class A common stock (or the closing bid price of the Class A common stock in the event the shares of Class A common stock are not traded on any specific trading day) equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and the like) for any 20 trading days within a 30 trading day period ending on the third trading day before the Company sends the notice of redemption to the warrant holders. |
NOTE 8. FAIR VALUE MEASUREMENTS
The following table presents information about
the Company’s assets that are measured at fair value on March 31, 2022 and December 31, 2021, and indicates the fair value hierarchy
of the valuation inputs the Company utilized to determine such fair value:
| |
March 31, 2022 | | |
Quoted Prices In Active Markets (Level 1) | | |
Significant Other Observable Inputs (Level 2) | | |
Significant Other Unobservable Inputs (Level 3) | |
Asset: | |
| | |
| | |
| | |
| |
Investments held in Trust Account | |
$ | 408,582,511 | | |
$ | 408,582,511 | | |
$ | — | | |
$ | — | |
| |
December 31,
2021 | | |
Quoted Prices In Active Markets (Level 1) | | |
Significant Other Observable Inputs (Level 2) | | |
Significant Other Unobservable Inputs (Level 3) | |
Asset: | |
| | |
| | |
| | |
| |
Investments held in Trust Account | |
$ | 408,541,371 | | |
$ | 408,541,371 | | |
$ | — | | |
$ | — | |
There were no transfers between Levels 1, 2 and
3 for the three months ended March 31, 2022 and for the period from January 1, 2021 (commencement of operations) through December 31,
2021.
NOTE 9. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions
that occurred after the balance sheet date up to the date that the condensed financial statements were issued. Based upon this review,
the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements.