| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 86-1418494 | |
(State or other jurisdiction of incorporation or organization) | ( Identification No.) |
100 Crosby Street, Suite 201 New York, New York | 10012 | |
(Address Of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Class A common stock, $0.0001 par value | LHAA | The Nasdaq Stock Market LLC |
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
| Emerging growth company | ☒ | |||||
LERER HIPPEAU ACQUISITION CORP.
Form
For the Quarterly Period Ended September 30, 2021
Table of Contents
Page | ||||||
Item 1. | ||||||
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| 1 | ||||||
| 2 | ||||||
| 3 | ||||||
| 4 | ||||||
| 5 | ||||||
Item 2. | ||||||
Item 3. | 22 | |||||
Item 4. | ||||||
| 23 | ||||||
Item 1. | 23 | |||||
Item | 23 | |||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |||||
| 24 | ||||||
Item | ||||||
| 25 | ||||||
Item 4. | 25 | |||||
Item 5. | 25 | |||||
Item 6. | 25 | |||||
| 27 | ||||||
September 30, 2022 | December 31, 2021 | |||||||||||
(Unaudited) | ||||||||||||
Assets: | ||||||||||||
Current assets: | ||||||||||||
Cash | $ | 648,377 | $ | 110,666 | $ | 625,442 | ||||||
Prepaid expenses | 663,020 | 209,549 | 530,528 | |||||||||
Total current assets | 1,311,397 | 320,215 | 1,155,970 | |||||||||
Investments held in Trust Account | 222,675,973 | 224,008,885 | 222,680,678 | |||||||||
Total Assets | $ | 223,987,370 | $ | 224,329,100 | $ | 223,836,648 | ||||||
Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit: | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable | $ | 8,387 | $ | 85,228 | $ | 46,685 | ||||||
Accrued expenses | 140,115 | 181,104 | 172,000 | |||||||||
Franchise tax payable | 143,562 | 164,982 | 194,023 | |||||||||
Income tax payable | 139,708 | — | ||||||||||
Convertible promissory note - related party | 350,000 | — | ||||||||||
Total current liabilities | 292,064 | 921,022 | 412,708 | |||||||||
Deferred underwriting commissions | 7,793,165 | 7,793,165 | 7,793,165 | |||||||||
Total liabilities | 8,085,229 | 8,714,187 | 8,205,873 | |||||||||
Commitments and Contingencies | 0 | |||||||||||
Class A common stock subject to possible redemption, $0.0001 par value; 22,266,185 shares issued and outstanding at a redemption value of $10.00 per share | 222,661,850 | |||||||||||
Class A common stock subject to possible redemption, $0.0001 par value; 22,266,185 shares issued and outstanding at redemption value of $10.03 and $10.00 per share at September 30, 2022 and December 31, 2021, respectively | 223,356,159 | 222,661,850 | ||||||||||
Stockholders’ Deficit: | ||||||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; NaN issued and outstanding | 0— | |||||||||||
Class A common stock, $0.0001 par value; 200,000,000 shares authorized; 685,324 non-redeemable shares issued and outstanding (excluding 22,266,185 shares subject to possible redemption) | 69 | |||||||||||
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 5,566,546 shares issued and outstanding | 557 | |||||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding at September 30, 2022 and December 31, 2021 | — | — | ||||||||||
Class A common stock, $0.0001 par value; 200,000,000 shares authorized; 685,324 shares issued and outstanding (excluding 22,266,185 shares subject to possible redemption) at September 30, 2022 and December 31, 2021 | 69 | 69 | ||||||||||
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 5,566,546 shares issued and outstanding at September 30, 2022 and December 31, 2021 | 557 | 557 | ||||||||||
Additional paid-in capital | 0 | — | — | |||||||||
Accumulated deficit | (6,760,335 | ) | (7,741,872 | ) | (7,031,701 | ) | ||||||
Total stockholders’ deficit | (6,759,709 | ) | (7,741,246 | ) | (7,031,075 | ) | ||||||
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit | $ | 223,987,370 | $ | 224,329,100 | $ | 223,836,648 | ||||||
For The Three Months Ended September 30, 2021 | For The Period From January 12, 2021 (inception) through September 30, 2021 | |||||||
General and administrative expenses | $ | 297,434 | $ | 562,691 | ||||
Administrative expenses — related party | 30,000 | 68,387 | ||||||
Franchise tax expenses | 50,411 | 143,562 | ||||||
Loss from operations | (377,845 | ) | (774,640 | ) | ||||
Gain on investments held in Trust Account | 2,865 | 14,123 | ||||||
Net loss | $ | (374,980 | ) | $ | (760,517 | ) | ||
Weighted average shares outstanding of Class A common stock, basic and diluted | 22,951,509 | 18,614,216 | ||||||
Basic and diluted net loss per share, Class A common stock | $ | (0.01 | ) | $ | (0.03 | ) | ||
Weighted average shares outstanding of Class B common stock, basic and diluted | 5,566,546 | 5,459,482 | ||||||
Basic and diluted net loss per share, Class B common stock | $ | (0.01 | ) | $ | (0.03 | ) | ||
For The Three Months Ended September 30, | For The Nine Months Ended September 30, 2022 | For The Period From January 12, 2021 (inception) through September 30, 2021 | ||||||||||||||
2022 | 2021 | |||||||||||||||
General and administrative expenses | $ | 238,674 | $ | 297,434 | $ | 892,618 | $ | 562,691 | ||||||||
Administrative expenses - related party | 30,000 | 30,000 | 90,000 | 68,387 | ||||||||||||
Franchise tax expenses | 51,507 | 50,411 | 149,639 | 143,562 | ||||||||||||
Loss from operations | (320,181 | ) | (377,845 | ) | (1,132,257 | ) | (774,640 | ) | ||||||||
Gain on investments held in Trust Account | 1,005,089 | 2,865 | 1,328,207 | 14,123 | ||||||||||||
Interest expense | (1,086 | ) | — | (1,104 | ) | — | ||||||||||
Income (loss) before income taxes | 683,822 | (374,980 | ) | 194,846 | (760,517 | ) | ||||||||||
Income tax expense | (200,252 | ) | — | (210,708 | ) | — | ||||||||||
Net income (loss) | $ | 483,570 | $ | (374,980 | ) | $ | (15,862 | ) | $ | (760,517 | ) | |||||
Weighted average shares outstanding of Class A common stock, basic and diluted | 22,951,509 | 22,951,509 | 22,951,509 | 18,614,216 | ||||||||||||
Basic and diluted net income (loss) per share, Class A common stock | $ | 0.02 | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.03 | ) | |||||
Weighted average shares outstanding of Class B common stock, basic and diluted | 5,566,546 | 5,566,546 | 5,566,546 | 5,459,482 | ||||||||||||
Basic and diluted net income (loss) per share, Class B common stock | $ | 0.02 | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.03 | ) | |||||
Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Deficit | |||||||||||||||||||||||||
Class A | Class B | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance - December 31, 2021 | 685,324 | $ | 69 | 5,566,546 | $ | 557 | $ | — | $ | (7,031,701 | ) | $ | (7,031,075 | ) | ||||||||||||||
Net loss | — | — | — | — | — | (364,401 | ) | (364,401 | ) | |||||||||||||||||||
Balance - March 31, 2022 (Unaudited) | 685,324 | 69 | 5,566,546 | 557 | — | (7,396,102 | ) | (7,395,476 | ) | |||||||||||||||||||
Net loss | — | — | — | — | — | (135,031 | ) | (135,031 | ) | |||||||||||||||||||
Balance - June 30, 2022 (Unaudited) | 685,324 | $ | 69 | 5,566,546 | $ | 557 | $ | — | $ | (7,531,133 | ) | $ | (7,530,507 | ) | ||||||||||||||
| Increase in Class A common stock subject to possible redemption amount | — | — | — | — | — | (694,309 | ) | (694,309 | ) | |||||||||||||||||||
Net income | — | — | — | — | — | 483,570 | 483,570 | |||||||||||||||||||||
Balance - September 30, 2022 (Unaudited) | 685,324 | $ | 69 | 5,566,546 | $ | 557 | $ | — | $ | (7,741,872 | ) | $ | (7,741,246 | ) | ||||||||||||||
Common Stock | Total Stockholders’ Deficit | |||||||||||||||||||||||||||
Class A | Class B | Additional Paid-In Capital | Accumulated Deficit | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance — January 12, 2021 (inception) | 0— | $ | — | — | $ | $ | — | $ | — | $ | 0— | |||||||||||||||||
Issuance of Class B common stock to Sponsor | 0— | — | 5,750,000 | 575 | 24,425 | — | 25,000 | |||||||||||||||||||||
Sale of private placement shares to Sponsor in private placement | 685,324 | 69 | — | — | 6,853,171 | — | 6,853,240 | |||||||||||||||||||||
Forfeiture of Class B common stock | — | — | (183,454 | ) | (18 | ) | 18 | — | — | |||||||||||||||||||
Accretion of Class A common stock subject to possible redemption | — | — | — | — | (6,877,614 | ) | (5,999,818 | ) | (12,877,432 | ) | ||||||||||||||||||
Net loss | — | — | — | — | — | (118,595 | ) | (118,595 | ) | |||||||||||||||||||
Balance—March 31, 2021 (unaudited) (Restated, see Note 2) | 685,324 | 69 | 5,566,546 | 557 | — | (6,118,413 | ) | (6,117,787 | ) | |||||||||||||||||||
Net loss | — | — | — | — | — | (266,942 | ) | (266,942 | ) | |||||||||||||||||||
Balance—June 30, 2021 (unaudited) (Restated, see Note 2) | 685,324 | 69 | 5,566,546 | 557 | — | (6,385,355 | ) | (6,384,729 | ) | |||||||||||||||||||
Net loss | — | — | — | — | — | (374,980 | ) | (374,980 | ) | |||||||||||||||||||
Balance—September 30, 2021 (unaudited) | 685,324 | $ | 69 | 5,566,546 | $ | 557 | $ | — | $ | (6,760,335 | ) | $ | (6,759,709 | ) | ||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Deficit | |||||||||||||||||||||||||
Class A | Class B | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance - January 12, 2021 (inception) | — | $ | — | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Issuance of Class B common stock to Sponsor | — | — | 5,750,000 | 575 | 24,425 | — | 25,000 | |||||||||||||||||||||
Sale of private placement shares to Sponsor in private placement | 685,324 | 69 | — | — | 6,853,171 | — | 6,853,240 | |||||||||||||||||||||
Forfeiture of Class B common stock | — | — | (183,454 | ) | (18 | ) | 18 | — | — | |||||||||||||||||||
Accretion of Class A common stock subject to possible redemption | — | — | — | — | (6,877,614 | ) | (5,999,818 | ) | (12,877,432 | ) | ||||||||||||||||||
Net loss | — | — | — | — | — | (118,595 | ) | (118,595 | ) | |||||||||||||||||||
Balance - March 31, 2021 (Unaudited) | 685,324 | 69 | 5,566,546 | 557 | — | (6,118,413 | ) | (6,117,787 | ) | |||||||||||||||||||
Net loss | — | — | — | — | — | (266,942 | ) | (266,942 | ) | |||||||||||||||||||
Balance - June 30, 2021 (Unaudited) | 685,324 | 69 | 5,566,546 | 557 | — | (6,385,355 | ) | (6,384,729 | ) | |||||||||||||||||||
Net loss | — | — | — | — | — | (374,980 | ) | (374,980 | ) | |||||||||||||||||||
Balance - September 30, 2021 (Unaudited) | 685,324 | $ | 69 | 5,566,546 | $ | 557 | $ | — | $ | (6,760,335 | ) | $ | (6,759,709 | ) | ||||||||||||||
Cash Flows from Operating Activities: | ||||
Net loss | $ | (760,517 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Gain on investments held in Trust Account | (14,123 | ) | ||
Changes in operating assets and liabilities: | ||||
Prepaid expenses | (663,020 | ) | ||
Accounts payable | 8,387 | |||
Accrued expenses | 70,115 | |||
Franchise tax payable | 143,562 | |||
Net cash used in operating activities | (1,215,596 | ) | ||
Cash Flows from Investing Activities | ||||
Cash deposited in Trust Account | (222,661,850 | ) | ||
Net cash used in investing activities | (222,661,850 | ) | ||
Cash Flows from Financing Activities: | ||||
Repayment of note pay able to related party | (65,093 | ) | ||
Proceeds from issuance of Class B common stock to Sponsor | 25,000 | |||
Proceeds received from initial public offering | 222,661,850 | |||
Proceeds received from private placement | 6,853,240 | |||
Offering costs paid | (4,949,174 | ) | ||
Net cash provided by financing activities | 224,525,823 | |||
Net increase in cash | 648,377 | |||
Cash — beginning of the period | 0— | |||
Cash — end of the period | $ | 648,377 | ||
Supplemental disclosure of noncash activities: | ||||
Offering costs included in accrued expenses | $ | 70,000 | ||
Offering costs paid by related party under promissory note | $ | 65,093 | ||
Deferred underwriting commissions in connection with the initial public offering | $ | 7,793,165 | ||
For The Nine Months Ended September 30, 2022 | For The Period From January 12, 2021 (inception) through September 30, 2021 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net loss | $ | (15,862 | ) | $ | (760,517 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Gain on investments held in Trust Account | (1,328,207 | ) | (14,123 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | 320,979 | (663,020 | ) | |||||
Accounts payable | 108,543 | 8,387 | ||||||
Accrued expenses | 9,104 | 70,115 | ||||||
Franchise tax payable | (29,041 | ) | 143,562 | |||||
Income tax payable | 139,708 | — | ||||||
Net cash used in operating activities | (794,776 | ) | (1,215,596 | ) | ||||
Cash Flows from Investing Activities | ||||||||
Cash deposited in Trust Account | — | (222,661,850 | ) | |||||
Cash used in investing activities | — | (222,661,850 | ) | |||||
Cash Flows from Financing Activities: | ||||||||
Repayment of note payable to related party | — | (65,093 | ) | |||||
Proceeds from issuance of Class B common stock to Sponsor | — | 25,000 | ||||||
Proceeds received from convertible promissory note | 350,000 | — | ||||||
Proceeds received from initial public offering | — | 222,661,850 | ||||||
Proceeds received from private placement | — | 6,853,240 | ||||||
Offering costs paid | (70,000 | ) | (4,949,174 | ) | ||||
Net cash provided by financing activities | 280,000 | 224,525,823 | ||||||
Net change in cash | (514,776 | ) | 648,377 | |||||
Cash - beginning of the period | 625,442 | — | ||||||
Cash - end of the period | $ | 110,666 | $ | 648,377 | ||||
Supplemental disclosure of noncash activities: | ||||||||
Offering costs included in accrued expenses | $ | — | $ | 70,000 | ||||
Offering costs paid by related party under promissory note | $ | — | $ | 65,093 | ||||
Deferred underwriting commissions in connection with the initial public offering | $ | — | $ | 7,793,165 | ||||
As of March 31, 2021 (unaudited) | As Reported | Adjustment | As Restated | |||||||||
Total assets | $ | 225,706,083 | $ | — | $ | 225,706,083 | ||||||
Total liabilities | $ | 9,162,020 | $ | — | $ | 9,162,020 | ||||||
Class A common stock subject to redemption at $10.00 per share | $ | 211,544,060 | $ | 11,117,790 | $ | 222,661,850 | ||||||
Preferred stock | 0— | — | — | |||||||||
Class A common stock | 180 | (111 | ) | 69 | ||||||||
Class B common stock | 557 | — | 557 | |||||||||
Additional paid-in capital | 5,117,861 | (5,117,861 | ) | — | ||||||||
Accumulated deficit | (118,595 | ) | (5,999,818 | ) | (6,118,413 | ) | ||||||
Total stockholders’ equity (deficit) | $ | 5,000,003 | $ | (11,117,790 | ) | $ | (6,117,787 | ) | ||||
Total Liabilities, Class A common stock Subject to Possible Redemption and Stockholders’ Equity (Deficit) | $ | 225,706,083 | $ | — | $ | 225,706,083 | ||||||
Shares of Class A common stock subject to redemption | 21,154,406 | 1,111,779 | 22,266,185 | |||||||||
Shares of Class A common stock | 1,797,103 | (1,111,779 | ) | 685,324 | ||||||||
Three months ended March 31, 2021 (unaudited) | ||||||||||||
Supplemental Disclosure of Noncash Financing Activities | ||||||||||||
Initial value of Class A common stock subject to possible redemption | $ | 211,596,640 | $ | (211,596,640 | ) | $ | — | |||||
Change in value of Class A common stock subject to possible redemption | $ | (52,580 | ) | $ | 52,580 | | $ | — | ||||
As of June 30, 2021 (unaudited) | As Reported | Adjustment | As Restated | |||||||||
Total assets | $ | 224,323,964 | $ | — | $ | 224,323,964 | ||||||
Total liabilities | $ | 8,046,843 | $ | — | $ | 8,046,843 | ||||||
Class A common stock subject to redemption at $10.00 per share | $ | 211,277,120 | $ | 11,384,730 | $ | 222,661,850 | ||||||
Preferred stock | 0— | — | — | |||||||||
Class A common stock | 182 | (113 | ) | 69 | ||||||||
Class B common stock | 557 | — | 557 | |||||||||
Additional paid-in capital | 5,384,799 | (5,384,799 | ) | — | ||||||||
Accumulated deficit | (385,537 | ) | (5,999,818 | ) | (6,385,355 | ) | ||||||
Total stockholders’ equity (deficit) | $ | 5,000,001 | $ | (11,384,730 | ) | $ | (6,384,729 | ) | ||||
Total Liabilities, Class A common stock Subject to Possible Redemption and Stockholders’ Equity (Deficit) | $ | 224,323,964 | $ | — | $ | 224,323,964 | ||||||
Shares of Class A common stock subject to redemption | 21,127,712 | 1,138,473 | 22,266,185 | |||||||||
Shares of Class A common stock | 1,823,797 | (1,138,473 | ) | 685,324 | ||||||||
Six months ended June 30, 2021 (unaudited) | ||||||||||||
Supplemental Disclosure of Noncash Financing Activities | ||||||||||||
Initial value of Class A common stock subject to possible redemption | $ | 211,596,640 | $ | (211,596,640 | ) | $ | — | |||||
Change in value of Class A common stock subject to possible redemption | $ | (319,520 | ) | $ | 319,520 | $ | — | |||||
Earnings (Loss) Per Share | ||||||||||||
As Reported | Adjustment | As Restated | ||||||||||
Three Months Ended March 31, 2021 (unaudited) | ||||||||||||
Net loss | $ | (118,595 | ) | $ | — | $ | (118,595 | ) | ||||
Weighted average shares outstanding - Class A common stock | 22,266,185 | (14,831,189 | ) | 7,434,996 | ||||||||
Basic and diluted earnings per share - Class A common stock | $ | — | $ | (0.01 | ) | $ | (0.01 | ) | ||||
Weighted average shares outstanding - Class B common stock | 5,405,535 | (222,006 | ) | 5,183,529 | ||||||||
Basic and diluted earnings per share - Class B common stock | $ | (0.02 | ) | $ | 0.01 | $ | (0.01 | ) | ||||
Earnings (Loss) Per Share | ||||||||||||
As Reported | Adjustment | As Restated | ||||||||||
Three Months Ended June 30, 2021 (unaudited) | ||||||||||||
Net loss | $ | (266,942 | ) | $ | — | $ | (266,942 | ) | ||||
Weighted average shares outstanding - Class A common stock | 22,266,185 | 685,324 | 22,951,509 | |||||||||
Basic and diluted earnings per share - Class A common stock | $ | — | $ | (0.01 | ) | $ | (0.01 | ) | ||||
Weighted average shares outstanding - Class B common stock | 6,251,870 | (685,324 | ) | 5,566,546 | ||||||||
Basic and diluted earnings per share - Class B common stock | $ | (0.04 | ) | $ | 0.03 | $ | (0.01 | ) | ||||
Earnings (Loss) Per Share | ||||||||||||
As Reported | Adjustment | As Restated | ||||||||||
Six Months Ended June 30, 2021 (unaudited) | ||||||||||||
Net loss | $ | (385,537 | ) | $ | — | $ | (385,537 | ) | ||||
Weighted average shares outstanding - Class A common stock | 22,266,185 | (6,115,123 | ) | 16,151,062 | ||||||||
Basic and diluted earnings per share - Class A common stock | $ | — | $ | (0.02 | ) | $ | (0.02 | ) | ||||
Weighted average shares outstanding - Class B common stock | 5,880,946 | (482,265 | ) | 5,398,681 | ||||||||
Basic and diluted earnings per share - Class B common stock | $ | (0.07 | ) | $ | 0.05 | $ | (0.02 | ) | ||||
For the Three Months Ended September 30, 2021 | For The Period From January 12, 2021 (inception) through September 30, 2021 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net loss per common share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net loss | $ | (301,786 | ) | $ | (73,194 | ) | $ | (588,045 | ) | $ | (172,472 | ) | ||||
Denominator: | ||||||||||||||||
Basic and diluted weighted average common shares outstanding | 22,951,509 | 5,566,546 | 18,614,216 | 5,459,482 | ||||||||||||
Basic and diluted net loss per common share | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.03 | ) | ||||
For The Three Months Ended September 30, | For The Nine Months | For The Period From January 12, 2021 (inception) | ||||||||||||||||||||||||||||||
2022 | 2021 | Ended September 30, 2022 | through September 30, 2021 | |||||||||||||||||||||||||||||
Class A | Class B | Class A | Class B | Class A | Class B | Class A | Class B | |||||||||||||||||||||||||
Basic and diluted net income (loss) per common share: | ||||||||||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||||||||||
Allocation of net income (loss) | $ | 389,180 | $ | 94,390 | $ | (301,786 | ) | $ | (73,194 | ) | $ | (12,766 | ) | $ | (3,096 | ) | $ | (588,045 | ) | $ | (172,472 | ) | ||||||||||
Denominator: | ||||||||||||||||||||||||||||||||
Basic and diluted weighted average common shares outstanding | 22,951,509 | 5,566,546 | 22,951,509 | 5,566,546 | 22,951,509 | 5,566,546 | 18,614,216 | 5,459,482 | ||||||||||||||||||||||||
Basic and diluted net income (loss) per common share | $ | 0.02 | $ | 0.02 | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.03 | ) | $ | (0.03 | ) | ||||||||||
Gross proceeds | $ | 222,661,850 | ||
Less: | ||||
Offering costs allocated to Class A common stock subject to possible redemption | (12,877,432 | ) | ||
Plus: | ||||
Accretion on Class A common stock subject to possible redemption amount | 12,877,432 | |||
Class A common stock subject to possible redemption | $ | 222,661,850 | ||
Gross proceeds | $ | 222,661,850 | ||
Less: | ||||
Offering costs allocated to Class A common stock subject to possible redemption | (12,877,432 | ) | ||
Plus: | ||||
Accretion on Class A common stock subject to possible redemption amount | 12,877,432 | |||
Class A common stock subject to possible redemption, December 31, 2021 | 222,661,850 | |||
| Increase in Class A common stock subject to possible redemption amount | 694,309 | |||
Class A common stock subject to possible redemption, September 30, 2022 | $ | 223,356,159 | ||
Description | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||
Funds that invest in U.S. Treasury Securities | $ | 222,675,973 | $ | 0— | $ | 0— | ||||||
Description | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||
Funds that invest in U.S. Treasury Securities | $ | 224,008,885 | $ | — | $ | — | ||||||
Description | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||
Funds that invest in U.S. Treasury Securities | $ | 222,680,678 | $ | — | $ | — | ||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
References to the “Company,” “Lerer Hippeau Acquisition Corp.,” “Lerer Hippeau,” “our,” “us” or “we” refer to Lerer Hippeau Acquisition Corp. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited interim condensed financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form10-Q/A
Overview
We are a blank check company incorporated in Delaware on January 12, 2021. We were formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). We are an emerging growth company and, as such, we are subject to all of the risks associated with emerging growth companies.
Our sponsor is LHAC Sponsor LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for our Initial Public Offeringinitial public offering (“IPO”) was declared effective on March 4, 2021. On March 9, 2021, we consummated our Initial Public OfferingIPO of 22,266,185 shares of Class A common stock, including the issuance of 2,266,185 shares of Class A common stock as a result of the underwriters’ partial exercise of their over-allotment option, (each, a “Public Share” and collectively, the “Public Shares”) at $10.00 per share, generating gross proceeds of approximately $222.7 million, and incurring offering costs of approximately $12.9 million, inclusive of approximately $7.8 million in deferred underwriting commissions.
Simultaneously with the closing of the Initial Public Offering,IPO, we consummated the private placement (“Private Placement”) of 685,324 shares of Class A common stock (each, a “Private Placement Share” and collectively, the “Private Placement Shares”), at a price of $10.00 per Private Placement Share to the Sponsor, generating proceeds of approximately $6.9 million.
Upon the closing of the Initial Public OfferingIPO and the Private Placement, approximately $222.7 million ($10.00 per share) of the net proceeds of the sale of the Public Shares in the Initial Public OfferingIPO and of the Private Placement Shares in the Private Placement were placed in a trust account (“Trust Account”) located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and will be invested only in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”) having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule
Our management has broad discretion with respect to the specific application of the net proceeds of the Initial Public OfferingIPO and the sale of Private Placement Shares, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that we will be able to complete a Business Combination successfully. We must complete one or more initial Business Combinations having an aggregate fair
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market value of at least 80% of the net assets held in the Trust Account (net of amounts disbursed to management for working capital purposes, if permitted, and excluding the amount of any deferred underwriting commissions) at the time of the agreement to enter into the initial Business Combination. However, we will only complete a Business Combination if the post-transaction 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.
If we are unable to complete a Business Combination within 24 months from the closing of the Initial Public Offering,IPO, or March 9, 2023, or during any extended period of time that we may have to consummate a Business Combination as a result of an amendment to our amended and restated certificate of incorporation (the “Combination Period”), we 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
Liquidity and Capital Resources
As of September 30, 2021,2022, we had approximately $648,000$111,000 in our operating bank account, and a working capital deficit of approximately $1.2 million$296,000 (not taking into account approximately $144,000$305,000 in income tax and franchise tax obligations that may be paid using investment income earned inon the Trust Account).
Our liquidity needs to date have been satisfied through a cash contribution of $25,000 from the Sponsor to purchase the Founder Shares (as defined in Note 4)4 to the accompanying condensed financial statements), the loan of approximately $65,000 from the Sponsor pursuant to thean initial Note (as defined in Note 4)4 to the accompanying condensed financial statements), and the proceeds from the consummation of the Private Placement not held in the Trust Account. The CompanyAccount, and the proceeds from a post-IPO convertible promissory note from our Sponsor (the “convertible promissory note - related party”) which is considered to be a Working Capital Loan (as defined in Note 4 to the accompanying condensed financial statements). We fully repaid the initial Note on March 11, 2021. In addition, in order to finance additional transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’sour officers and directors may, but are not obligated to, provide the Companyus with additional Working Capital LoansLoans.
On June 27, 2022, we issued the convertible promissory note - related party in the amount of up to $650,000 to our Sponsor. The proceeds of the convertible promissory note - related party, may be drawn down from time to time until the Maturity Date (as defined in Note 4).4 to the accompanying condensed financial statements), and will be used for costs and expenses related to a Business Combination transaction and for general working capital purposes. The convertible promissory note - related party bears interest at the lowest short-term Applicable Federal Rate (within the meaning of Internal Revenue Code Section 1274) in effect as of the date the convertible promissory note - related party was issued and is payable in full upon the Maturity Date. As of September 30, 2021, there2022, $350,000 was drawn under the convertible promissory note - related party. No other Working Capital Loans were outstanding as of September 30, 2022. There were no amounts outstanding under any Working Capital Loan.
We believe we may need to raise additional funds in order to meet the foregoing, management believes thatexpenditures required for operating the business. If our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial Business Combination is less than the actual amount necessary to do so, we willmay have sufficient workinginsufficient funds currently available to operate the business prior to the initial Business Combination. We may need to raise additional capital and borrowing capacitythrough additional loans or investments from our Sponsor, our officers or an affiliate of ourdirectors or their affiliates. Our Sponsor, or certain of our officers and directors, or their affiliates, may, but are not obligated to, loan us additional funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet our needs throughworking capital needs. Accordingly, we may not be able to obtain additional financing. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the earlierpursuit of a potential transaction, reducing overhead expenses, and extending the terms and due dates of certain accrued expenses and other liabilities. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all.
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In connection with our assessment of going concern considerations in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the liquidity condition and mandatory liquidation and subsequent dissolution raise substantial doubt about our ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should we be required to liquidate after March 9, 2023. The condensed financial statements do not include any adjustment that might be necessary if we are unable to continue as a going concern.
On November 4, 2022, we filed a Preliminary Proxy Statement on Schedule 14A (the “Proxy Statement”) relating to a special meeting of stockholders that is anticipated to be held in December 2022 to approve an amendment to our amended and restated certificate of incorporation (the “Charter Amendment”) which would, if implemented, allow us to unwind and redeem all of our outstanding public shares on such date (not later than December 30, 2022) as shall be determined by our Board of Directors and publicly announced by us (the “Amended Termination Date”), in advance of the consummationmandatory liquidation date of March 9, 2023. If implemented, the Charter Amendment would also allow us to remove the Redemption Limitation (as defined in the amended and restated certificate of incorporation) to allow us to redeem public shares notwithstanding the fact that such redemption would result in us having net tangible assets of less than $5,000,001, and to remove up to $100,000 of interest earned on the amount on deposit in the Trust Account prior to redeeming the public shares in connection with the special meeting in order to pay dissolution expenses. We will also seek stockholder approval to amend the Investment Management Trust Agreement, dated March 4, 2021, by and between us and Continental Stock Transfer & Trust Company to change the date on which the trustee must commence liquidation of the Trust Account to the Amended Termination Date.
Various social and political circumstances in the United States and around the world (including wars and other forms of conflict, including rising trade tensions between the United States and China, and other uncertainties regarding actual and potential shifts in the United States and foreign, trade, economic and other policies with other countries, terrorist acts, security operations and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health epidemics), may also contribute to increased market volatility and economic uncertainties or deterioration in the United States and worldwide. Specifically, the rising conflict between Russia and Ukraine, and resulting market volatility could adversely affect our ability to complete a Business Combination. In response to the conflict between Russia and Ukraine, the United States and other countries have imposed sanctions or other restrictive actions against Russia. Any of the above factors, including sanctions, export controls, tariffs, trade wars and other governmental actions, could have a material adverse effect on our ability to complete a Business Combination or one year from this filing. Over this time period, we will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.
Management continues to evaluate the impact of these types of risks (including the
On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. Any share redemption or other share repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. Whether and to what extent we would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise will depend on a number of factors, including (i) the fair market
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value of the redemptions and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by us and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Business Combination and in our ability to complete a Business Combination.
Results of Operations
Our entire activity from inception up to September 30, 2021,2022, was for our formation and the Initial Public OfferingIPO and, subsequent to the Initial Public Offering,IPO, the search for a target for our initial Business Combination. We will not be generating any operating revenues until the closing and completion of our initial Business Combination.
For the three months ended September 30, 2021, we had a net loss of approximately $375,000, which consisted of approximately $297,000 in general and administrative expenses, approximately $30,000 in administrative expenses—relatedexpenses-related party, and approximately $50,000 in franchise tax expenses, partially offset by approximately $3,000 in gain on investments held in the Trust Account.
For the nine months ended September 30, 2022, we had a net loss of approximately $16,000, which consisted of approximately $893,000 in general and administrative expenses, $90,000 in administrative expenses-related party, approximately $150,000 in franchise tax expenses, and approximately $211,000 in income tax expense, partly offset by approximately $1.3 million in gain on investments held in the Trust Account.
For the period from January 12, 2021 (inception) through September 30, 2021, we had a net loss of approximately $761,000, which consisted of approximately $563,000 in general and administrative expenses, approximately $68,000 in administrative expenses—relatedexpenses-related party, and approximately $144,000 in franchise tax expenses, partially offset by approximately $14,000 in gain on investments held in Trust Account.
Contractual Obligations
Administrative Services Agreement
Commencing on the date that our securities were first listed on NASDAQNasdaq and continuing until the earlier of our consummation of a Business Combination or our liquidation, we agreed to pay the Sponsor a total of $10,000 per month for office space, secretarial and administrative services provided to members of our management team.
Our Sponsor, executive officers and directors, or any of their respective affiliates will be reimbursed for any
For the three months ended September 30, 2022 and 2021, we incurred expenses of approximately $30,000 under this agreement. For the nine months ended September 30, 2022 and for the period from January 12, 2021 (inception) through September 30, 2021, we incurred $30,000expenses of $90,000 and approximately $68,000, in expensesrespectively, under this agreement. As of September 30, 2022 and December 31, 2021, the amount due to the Sponsor for these services was $180,000 and approximately $90,000, respectively, which is included in administrative expenses—related party on the accompanying statement of operations. As of September 30, 2021, we had outstanding approximately $8,000 included inaccounts payable and accrued expenses on the unauditedaccompanying condensed balance sheet related to these expenses.sheets.
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Registration Rights
The holders of Founder Shares, Private Placement Shares and shares that may be issued upon conversion of Working Capital Loans (including the Conversion Shares (as defined below)), if any, are entitled to registration rights pursuant to a registration rights agreement signed upon the consummation of the Initial Public Offering.IPO. These holders are entitled to certain demand and “piggyback” registration rights. We will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
We granted the underwriters a
The underwriters were entitled to an underwriting discount of $0.20 per Public Share, or approximately $4.5 million in the aggregate, paid upon the closing of the Initial Public Offering.IPO. In addition, $0.35 per Public Share, or approximately $7.8 million in the aggregate, will be payable to the underwriters for deferred underwriting commissions. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.
Critical Accounting Estimates
This management’s discussion and analysis of our financial condition and results of operations is based on our condensed financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these condensed financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our condensed financial statements. On an ongoing basis,
Investments Held in the Trust Account
Our 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 our investments held in the Trust Account are comprised of U.S. government securities, the investments are classified as trading securities. When our 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 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 gain from investments held in the Trust Account in the accompanying unaudited condensed statementstatements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information.
Class A Common Stock Subject to Possible Redemption
Class A common stock subject to mandatory redemption (if any) are classified as liability instruments and are 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 our control) are classified as temporary equity. At all other times, Class A common stock are classified as stockholders’ equity. As part of the Private Placement, we issued 685,324 Private Placement Shares to the Sponsor. These Private Placement Shares will not be transferable, assignable or salable until 30 days after the completion of our initial Business Combination. They are also considered non-redeemable and are presented as permanent equity in our balance sheets. Our Class A common stock featuressold in the IPO feature certain
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redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, as of September 30, 2022 and December 31, 2021, 22,266,185 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’ equity section of our unaudited condensed balance sheet.
We recognize changes in redemption value immediately as they occur and adjustsadjust the carrying value of the Class A common stock subject to possible redemption to equal the redemption value at the end of each reporting period. Effective with the closing of the Initial Public Offering,IPO, we recognized the accretion from initial book value to redemption amount, which resulted in charges against additional
Net income loss(loss) per common shares
We comply with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” We have 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. Net income per common share is calculated by dividing the net income by the weighted average shares of common stock outstanding for the respective period. Accretion associated with the redeemable Class A common stock is excluded from earnings per share as the redemption value approximates fair value.
Recent Accounting Pronouncements
Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying unaudited condensed financial statements.
JOBS Act
The Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
We are a smaller reporting company as defined by Rule
The net proceeds of the Initial Public Offering,IPO, including amounts in the Trust Account, will beare invested in U.S. government securities with a maturity of 185 days or less or in money market funds that meet certain conditions under
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We have not engaged in any hedging activities since our inception, and we do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.
Item 4. | Controls and Procedures |
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended September 30, 2021,2022, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial officer hashave concluded that during the period covered by this report, our disclosure controls and procedures were not effective as of September 30, 2021, because of a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Specifically, the Company’s management has concluded that its control around the interpretation and accounting for certain complex features of the Class A common stock issued by the Company was not effectively designed or maintained. This material weakness resulted in the restatement of its interim financial statements for the quarters ended March 31, 2021, and June 30, 2021.
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended September 30, 2021,2022 covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting except for the below.
PART II-OTHER INFORMATION
| Item 1. | Legal Proceedings |
None.
| Item 1A. | Risk Factors |
Factors that could cause our actual results to the accounting for certain complex featuresdiffer materially from those in this Quarterly Report on Form 10-Q are any of the Class A common stock. The Company’s management has expended, and will continue to expend,risks described in our Annual Report on Form 10-K filed with the SEC on March 29, 2022. Any of these factors could result in a substantial amount of effort and resources for the remediation and improvement of our internal control over financial reporting. While we have processes to properly identify and evaluate the appropriate accounting technical pronouncements and other literature for all significant or unusual transactions,material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we have expanded and will continue to improve these processes to ensure that the nuancescurrently deem immaterial may also impair our business or results of such transactions are effectively evaluated in the context of the increasingly complex accounting standards.
Changes in whichlaws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial Business Combination, and results of operations.
We are subject to laws and regulations enacted by national, regional and local governments. In particular, we invest the funds held in the trust account could bear a negative rateare required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, interest, which could reduce the value of the assets held in trust such that the
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On March 30, 2022, the SEC issued proposed rules relating to, among other items, enhancing disclosures in business combination transactions involving special purpose acquisition companies and private operating companies; amending the trust account will be invested onlyfinancial statement requirements applicable to transactions involving shell companies; the potential liability of certain participants in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule
We may be subject to the Excise Tax included in the Inflation Reduction Act of 2022 in the event of a liquidation or makein connection with redemptions of our common stock after December 31, 2022.
On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (H.R. 5376) (the “IRA”), which, among other things, imposes a 1% excise tax on any domestic corporation that repurchases its stock after December 31, 2022 (the “Excise Tax”). The Excise Tax is imposed on the fair market value of the repurchased stock, with certain amendmentsexceptions. Because we are a Delaware corporation and our securities trade on Nasdaq, we are a “covered corporation” within the meaning of the IRA. While not free from doubt, absent any further guidance from Congress, the Excise Tax may apply to any redemptions of our common stock after December 31, 2022, including redemptions in connection with an initial Business Combination and any amendment to our amended and restated certificate of incorporation to extend the time to consummate an initial Business Combination, unless an exemption is available. Issuances of securities in connection with our Public Stockholdersinitial Business Combination transaction (including any PIPE transaction at the time of our initial Business Combination) are entitledexpected to receive their
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
On March 9, 2021, we consummated our Initial Public OfferingIPO of 22,266,185 shares of Class A common stock, including the issuance of 2,266,185 shares of Class A common stock as a result of the underwriters’ partial exercise of their over-allotment option, at $10.00 per share, generating gross proceeds of approximately $222,661,850.
The securities sold in our Initial Public OfferingIPO were registered under the Securities Act on a registration statement on Form
Of the gross proceeds received from the Initial Public OfferingIPO and the partial exercise of the option to purchase additional shares, $222,661,850 was placed in the Trust Account. The net proceeds of the Initial Public OfferingIPO and certain proceeds from the Private Placement are invested in U.S. government treasury bills with a maturity of 185 days or less and in money market funds meeting certain conditions under Rule
Barclays Capital Inc. acted as the book running manager and Code Advisors LLC and Drexel Hamilton, LLC also served as underwriters in the Initial Public Offering.
We paid a total of approximately $5.1 million in underwriting discounts and commissions and other offering costs related to the Initial Public Offering.IPO. In addition, the underwriters agreed to defer approximately $7.8 million in underwriting discounts and commissions.
For a description of the use of proceeds generated in our Initial Public Offering,IPO, see Part I, Item 2 of this Form
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On June 27, 2022, we issued the convertible promissory note - related party in the amount of up to $650,000 to our Sponsor (the “Payee”). The proceeds of the convertible promissory note - related party, which may be drawn down from time to time until the Maturity Date, will be used for costs and expenses related to a Business Combination transaction and for general working capital purposes.
The convertible promissory note—related party bears interest at the lowest short-term Applicable Federal Rate (within the meaning of Internal Revenue Code Section 1274) in effect as of the date the note was issued and is payable in full upon the Maturity Date. A failure to pay the principal amount outstanding and any and all interest earned thereon (the “Full Balance”) on the Maturity Date or the commencement of a voluntary or involuntary bankruptcy action will be deemed an event of default, in which case the convertible promissory note—related party may be accelerated. Prior to our first payment of all or any portion of the Full Balance of the convertible promissory note—related party in cash, the Payee has the option to convert all, but not less than all, of the Full Balance of the convertible promissory note—related party into private placement shares (the “Conversion Shares”), equal to: (x) the Full Balance of the convertible promissory note—related party being converted, divided by (y) $10.00, rounded up to the nearest whole number of shares. The Conversion Shares would be identical to the Private Placement Shares. The Payee would be entitled to certain registration rights relating to the Conversion Shares. The Conversion Shares that may be issued pursuant to the convertible promissory note—related party would not be registered under the Securities Act and would be issued in reliance on the exemption from registration requirements thereof provided by Section 4(a)(2) of the Securities Act.
Item 3. | Defaults upon Senior Securities |
None.
Item 4. | Mine Safety Disclosures. |
Not applicable.
Item 5. | Other Information. |
None.
Item 6. | Exhibits. |
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| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |
| * | These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: | LERER HIPPEAU ACQUISITION CORP. | |||||
| By: | /s/ Eric Hippeau | |||||
| Name: | Eric Hippeau | |||||
| Title: | Chief Executive Officer | |||||
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