Item
1. Interim Financial Statements.
ALPINE
ACQUISITION CORPORATION
CONDENSED BALANCE SHEETS
| |
June 30,
2022 | | |
December 31,
2021 | |
| |
(Unaudited) | | |
(Audited) | |
ASSETS | |
| | |
| |
Current Assets | |
| | |
| |
Cash | |
$ | 145,411 | | |
$ | 367,110 | |
Due from Sponsor | |
| 25,000 | | |
| 25,000 | |
Prepaid
expenses and other current assets | |
| 609,153 | | |
| 354,559 | |
Total Current Assets | |
| 779,564 | | |
| 746,669 | |
Investments held in
Trust Account | |
| 109,303,241 | | |
| 109,141,622 | |
Prepaid
expenses-non-current | |
| - | | |
| 189,271 | |
Total
Assets | |
$ | 110,082,805 | | |
$ | 110,077,562 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS’
DEFICIT | |
| | | |
| | |
Current Liabilities | |
| | | |
| | |
Accounts payable and
accrued expenses | |
$ | 319,461 | | |
$ | 174,579 | |
Note payable - Sponsor at fair value (cost $800,000 and $0) | |
| 553,036 | | |
| - | |
Total Current Liabilities | |
| 872,497 | | |
| 174,579 | |
Deferred underwriting
fee payable | |
| 3,745,000 | | |
| 3,745,000 | |
Warrant
liability | |
| 1,155,275 | | |
| 5,144,250 | |
Total Liabilities | |
| 5,772,772 | | |
| 9,063,829 | |
| |
| | | |
| | |
Commitments and contingencies
(Note 6) | |
| | | |
| | |
| |
| | | |
| | |
Common stock subject to possible redemption at redemption value (10,700,000 shares at $10.20) | |
| 109,140,000 | | |
| 109,140,000 | |
| |
| | | |
| | |
Stockholders’ Deficit: | |
| | | |
| | |
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding | |
| - | | |
| - | |
Common stock, $0.0001 par value; 50,000,000 shares authorized; 2,850,000 shares issued and outstanding (excludes 10,700,000 shares subject to possible redemption) | |
| 286 | | |
| 286 | |
Additional paid-in capital | |
| - | | |
| - | |
Accumulated deficit | |
| (4,830,253 | ) | |
| (8,126,553 | ) |
Total
Stockholders’ Deficit | |
| (4,829,967 | ) | |
| (8,126,267 | ) |
Total
Liabilities and Stockholders’ Deficit | |
$ | 110,082,805 | | |
$ | 110,077,562 | |
See
accompanying notes to the unaudited condensed financial statements.
ALPINE
ACQUISITION CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
| |
| | |
| | |
| | |
For the | |
| |
| | |
| | |
| | |
period from | |
| |
For the
Three Months
Ended | | |
For the
Three Months
Ended | | |
For the
Six Months
Ended | | |
February
8,
2021
(inception)
through | |
| |
June
30,
2022 | | |
June
30,
2021 | | |
June
30,
2022 | | |
June
30,
2021 | |
| |
| | |
| | |
| | |
| |
Administrative fee - related party | |
$ | 30,000 | | |
$ | - | | |
$ | 60,000 | | |
$ | - | |
General and administrative expenses | |
| 619,972 | | |
| 525 | | |
| 1,041,257 | | |
| 3,300 | |
Total expenses | |
| (649,972 | ) | |
| (525 | ) | |
| (1,101,257 | ) | |
| (3,300 | ) |
| |
| | | |
| | | |
| | | |
| | |
Other income | |
| | | |
| | | |
| | | |
| | |
Interest income - Investments held in Trust Account | |
| 152,337 | | |
| - | | |
| 161,619 | | |
| - | |
Unrealized gain of fair value of Note payable - Sponsor | |
| 56,663 | | |
| - | | |
| 56,663 | | |
| - | |
Change in fair value of derivative warrant liability | |
| 840,200 | | |
| - | | |
| 3,988,975 | | |
| - | |
Total other income | |
| 1,049,200 | | |
| - | | |
| 4,207,257 | | |
| - | |
Net income (loss) | |
$ | 399,228 | | |
$ | (525 | ) | |
$ | 3,106,000 | | |
$ | (3,300 | ) |
Common stock subject to possible redemption - weighted average shares outstanding, basic and diluted | |
| 10,700,000 | | |
| - | | |
| 10,700,000 | | |
| - | |
Common stock subject to possible redemption - Basic and diluted net income (loss) per share | |
$ | 0.03 | | |
$ | (0.00 | ) | |
$ | 0.23 | | |
$ | (0.00 | ) |
Common stock not subject to possible redemption - weighted average shares outstanding, basic and diluted | |
| 2,850,000 | | |
| 2,500,000 | | |
| 2,850,000 | | |
| 2,500,000 | |
Common stock not subject to possible redemption - Basic and diluted net income (loss) per share | |
$ | 0.03 | | |
$ | (0.00 | ) | |
$ | 0.23 | | |
$ | (0.00 | ) |
See
accompanying notes to the unaudited condensed financial statements.
ALPINE
ACQUISITION CORPORATION
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
(UNAUDITED)
For
the Three and Six Months End June 30, 2022
| |
Common
Stock | | |
Additional
Paid-in | | |
Accumulated | | |
Total
Stockholders’ | |
| |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | |
Balance,
January 1, 2022 | |
| 2,850,000 | | |
$ | 286 | | |
$ | - | | |
$ | (8,126,555 | ) | |
$ | (8,126,269 | ) |
Net
income | |
| - | | |
| - | | |
| - | | |
| 2,706,772 | | |
| 2,706,772 | |
Balance,
March 31, 2022 | |
| 2,850,000 | | |
| 286 | | |
| - | | |
| (5,419,782 | ) | |
| (5,419,496 | ) |
Sponsor
Note Proceeds in excess of fair value | |
| - | | |
| - | | |
| 190,301 | | |
| - | | |
| 190,301 | |
Remeasurement
adjustment on Redeemable Class A ordinary shares | |
| | | |
| | | |
| (190,301 | ) | |
| 190,301 | | |
| - | |
Net
income | |
| - | | |
| - | | |
| - | | |
| 399,228 | | |
| 399,228 | |
Balance,
June 30, 2022 | |
| 2,850,000 | | |
$ | 286 | | |
$ | - | | |
$ | (4,830,253 | ) | |
$ | (4,829,967 | ) |
For
the three months ended June 30, 2021 and for the period from February 8, 2021 (Inception) through June 30, 2021
| |
Common Stock | | |
Additional
Paid-in | | |
Accumulated | | |
Total
Stockholders’ | |
| |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Equity | |
Balance, February 8, 2021 (inception) | |
| - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
Issuance of Common stock to Sponsor | |
| 2,875,000 | | |
| 288 | | |
| 24,712 | | |
| - | | |
| 25,000 | |
Net loss | |
| - | | |
| - | | |
| - | | |
| (2,775 | ) | |
| (2,775 | ) |
Balance, March 31, 2021 | |
| 2,875,000 | | |
| 288 | | |
| 24,712 | | |
| (2,775 | ) | |
| 22,225 | |
Net loss | |
| - | | |
| - | | |
| - | | |
| (525 | ) | |
| (525 | ) |
Balance, June 30, 2021 | |
| 2,875,000 | | |
$ | 288 | | |
$ | 24,712 | | |
$ | (3,300 | ) | |
$ | 21,700 | |
See
accompanying notes to the unaudited condensed financial statements.
ALPINE
ACQUISITION CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| |
For the Six Months Ended June 30, 2022 | | |
For the Period February 8, 2021 (Inception) to June 30, 2021 | |
Cash flows from operating activities: | |
| | |
| |
Net income (loss) | |
$ | 3,106,000 | | |
$ | (3,300 | ) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |
| | | |
| | |
Change in fair value of derivative warrant liability | |
| (3,988,975 | ) | |
| - | |
Unrealized gain of fair value of Note payable - Sponsor | |
| (56,663 | ) | |
| - | |
Interest earned on Trust assets | |
| (161,619 | ) | |
| - | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Due to Sponsor | |
| - | | |
| 2,775 | |
Prepaid expenses | |
| (65,322 | ) | |
| - | |
Accrued expenses | |
| 144,880 | | |
| - | |
Net cash used in operating activities | |
| (1,021,699 | ) | |
| (525 | ) |
| |
| | | |
| | |
Cash flows from financing activities: | |
| | | |
| | |
Reimbursement of deferred offering costs and formation costs paid by Sponsor | |
| - | | |
| (48,719 | ) |
Deferred offering costs paid | |
| - | | |
| (33,654 | ) |
Proceeds from Note payable -
Sponsor | |
| 800,000 | | |
| 150,000 | |
Net cash provided by financing activities | |
| 800,000 | | |
| 67,627 | |
| |
| | | |
| | |
Net change in cash | |
| (221,699 | ) | |
| 67,102 | |
Cash at beginning of period | |
| 367,110 | | |
| - | |
Cash at end of period | |
$ | 145,411 | | |
$ | 67,102 | |
| |
| | | |
| | |
Non-cash financing activities: | |
| | | |
| | |
Deferred offering costs paid by Sponsor in exchange for common stock | |
$ | - | | |
$ | 25,000 | |
Deferred offering costs paid by Sponsor | |
$ | - | | |
$ | 46,294 | |
See
accompanying notes to the unaudited condensed financial statements.
ALPINE
ACQUISITION CORPORATION
Notes to the UNAUDITED CONDENSED financial statements
NOTE
1 — DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN
Alpine
Acquisition Corporation (the “Company”, “we” or “us”) was incorporated in Delaware on February 8,
2021. 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 or entities (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.
On
May 18, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with AAC Merger Sub Inc.,
a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), and Two Bit Circus, Inc., a Delaware corporation
(“TBC”). Pursuant to the Merger Agreement, Merger Sub will merge with and into TBC, with TBC surviving the merger as a wholly-owned
subsidiary of Company (the “Merger”). As a result of the Merger, and upon consummation of the Merger and the other transactions
contemplated by the Merger Agreement including the Hotel Purchase (as defined below) (together with the Merger, the “Transactions”),
TBC will become a wholly-owned subsidiary of the Company and the stockholders of TBC will become stockholders of the Company. TBC is
a Los Angeles-based experiential entertainment company that is affiliated with certain members of Alpine’s management team.
Concurrently
with the execution of the Merger Agreement as contemplated therein, the Company entered into a Purchase and Sale Agreement (the “Hotel
Purchase Agreement” and collectively with the Merger Agreement the “Business Combination Agreements”) with Pool IV
Finance LLC, Pool IV TRS LLC and PHF II Stamford LLC (“Hotel Sellers”) pursuant to which the Company will purchase (the “Hotel
Purchase”) the Hilton Stamford Hotel & Executive Meeting Center and the Crowne Plaza Denver Airport Convention Center Hotel
(collectively, the “Hotels”).
The
Transactions are subject to adoption of the Business Combination Agreements and approval of the Transactions by the Company’s stockholders
and the fulfilment of certain other conditions set forth in the Business Combination Agreements as described therein.
As
of June 30, 2022, the Company had not commenced any operations. All activity for the period from February 8, 2021 (inception) through
June 30, 2022 relates to the Company’s formation, the initial public offering (“Initial Public Offering”), which is
described below, and thereafter searching for a Business Combination and in relation thereto entering into the Business Combination Agreements.
The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest.
The Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.
The Company has selected December 31 as its fiscal year end.
Transaction
costs amounted to $7,106,709 consisting of $1,337,500 of underwriting fees, $3,745,000 of deferred underwriting fees payable (which are
held in a trust account with Continental Stock Transfer and Trust Company acting as trustee (the “Trust Account”)), $1,632,750
for the fair value of underwriter shares and $391,459 of Initial Public Offering costs. These costs were charged to additional paid-in
capital upon completion of the Public Offering. As described in Note 6, the $3,745,000 deferred underwriting commission is contingent
upon the consummation of a Business Combination by September 2, 2022 (or March 2, 2023 if the Company extends the period to consummate
a Business Combination).
The
registration statement for the Company’s Initial Public Offering was declared effective on August 30, 2021. On September 2, 2021,
the Company consummated the Initial Public Offering of 10,700,000 units (“Units” and, with respect to the common stock included
in the Units being offered, the “Public Shares”), including 700,000 units subject to the underwriters’ over-allotment
option, generating gross proceeds of $107,000,000, which is described in Note 3. In October 2021, the over-allotment option period closed
without the underwriters further exercising the option.
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the sale of 5,152,500 warrants (the “Private Placement
Warrants”) at a price of $1.00 per Private Placement Warrant in private placements to Alpine Acquisition Sponsor LLC (the “Sponsor”).
Following
the closing of the Initial Public Offering on September 2, 2021, an amount of $109,140,000 ($10.20 per Unit) from the net proceeds of
the sale of the Units in the Initial Public Offering and the Private Placement was placed in a trust account (“Trust Account”).
The funds held in the Trust Account may be 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
any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of 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 Trust Account, as described below.
ALPINE
ACQUISITION CORPORATION
Notes to the UNAUDITED CONDENSED financial statements
NOTE 1
— DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN (cont.)
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering
and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward
consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully.
The Company must complete one or more initial Business Combinations with one or more operating businesses or assets with a fair market
value equal to at least 80% of the net assets held in the Trust Account (as defined below) (excluding the deferred underwriting commissions
and taxes payable on the interest earned on the Trust Account). The Company will only complete a Business Combination if the post-transaction
company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest
in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act of
1940, as amended (the “Investment Company Act”). Upon the closing of the Initial Public Offering, management has agreed
that an amount equal to at least $10.20 per Unit sold in the Initial Public Offering, including proceeds of the Private Placement Warrants,
will be held in a trust account (“Trust Account”), located in the United States and invested only in 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 in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting certain conditions
of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business
Combination and (ii) the distribution of the funds held in the Trust Account, as described below.
The
Company has determined to provide the holders of the outstanding Public Shares (the “Public Stockholders”) with the opportunity
to redeem all or a portion of their Public Shares in connection with a stockholder meeting called to approve the Business Combination.
The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account
(initially anticipated to be $10.20 per Public Share, plus any pro rata interest then in the Trust Account, net of taxes payable). There
will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.
All
of the Public Shares 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 Company’s Business Combination and in connection
with certain amendments to the Company’s amended and restated certificate of incorporation (the “Certificate of Incorporation”).
In accordance with the rules of the U.S. Securities and Exchange Commission (the “SEC”) and its guidance on redeemable equity
instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of a company require common
stock subject to redemption to be classified outside of permanent equity. Given that the Public Shares were issued with other freestanding
instruments (i.e., public warrants), the initial carrying value of common stock classified as temporary equity was allocated proceeds
determined in accordance with ASC 470-20. The common stock is subject to ASC 480-10-S99. If it is probable that the equity instrument
will become redeemable, the Company has the option to either (i) accrete changes in the redemption value over the period from the date
of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption
date of the instrument or (ii) recognize changes in the redemption value immediately as they occur and adjust the carrying amount of
the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately.
The accretion or remeasurement will be treated as an adjustment to adjust the temporary equity to the redemption amount. While redemptions
cannot cause the Company’s net tangible assets to fall below $5,000,001, the Public Shares are redeemable and will be classified
as such on the balance sheet until such date that a redemption event takes place.
The
Company will not redeem Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001 (so that it does
not then become subject to the SEC’s “penny stock” rules). The Company will proceed with a Business Combination if
a majority of the outstanding shares voted are voted in favor of the Business Combination. The Sponsor has agreed to vote its Founder
Shares (as defined in Note 5) and any Public Shares it may hold in favor of approving a Business Combination, including the Transactions.
Additionally, each Public Stockholder may elect to redeem their Public Shares without voting, and if they do vote, irrespective of whether
they vote for or against the proposed transaction.
ALPINE
ACQUISITION CORPORATION
Notes to the UNAUDITED CONDENSED financial statements
NOTE 1 — DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN (cont.)
Notwithstanding
the foregoing, the Certificate of Incorporation provides that a Public Stockholder, together with any affiliate of such stockholder or
any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect
to more than an aggregate of 15% of the Public Shares, without the prior consent of the Company.
The
holders of the Founder Shares have agreed (a) to waive their redemption rights with respect to the Founder Shares and Public Shares
held by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Certificate
of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemptions in connection with
a Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination within the Combination
Period (as defined below) or (ii) with respect to any other provision relating to stockholders’ rights or pre-business combination
activity, unless the Company provides the Public Stockholders with the opportunity to redeem their Public Shares in conjunction with
any such amendment.
If
the Company has not completed a Business Combination within 12 months from the closing of the Initial Public Offering, or up to 18 months
from the closing of the Initial Public Offering if the Company extends the period of time to consummate a Business Combination (the “Combination
Period”) by resolution of our board if requested by us for a combination up to two times, each by an additional three months, the
Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not
more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount
then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to
pay 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
liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval
of the Company’s remaining stockholders and the Company’s 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.
There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless
if the Company fails to complete a Business Combination within the Combination Period.
The
holders of the Founder Shares have agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to
complete a Business Combination within the Combination Period. However, if the holders of Founder Shares acquire Public Shares in or
after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company
fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred
underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within
the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be
available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of
the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).
ALPINE
ACQUISITION CORPORATION
Notes to the UNAUDITED CONDENSED financial statements
NOTE 1 — DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN (cont.)
In
order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims
by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed
entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.20 per Public Share or (ii) such
lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.20
per public Share due to reductions in the value of the trust assets, in each case net of the amount of interest which may be withdrawn
to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account
and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities,
including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an
executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability
for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account
due to claims of creditors by endeavoring to have all vendors, service providers (except for the Company’s independent registered
accounting firm), prospective target businesses and other entities with which the Company does business, execute agreements with the
Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Going
Concern Consideration
In connection with the Company’s
assessment of going concern considerations in accordance with 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 Company
has incurred and expects to incur significant costs in pursuit of its acquisition plans. The Company lacks the financial resources it
needs to sustain operations for a reasonable period of time, which is considered to be one year from the date of the issuance of the financial
statements. Additionally, while the Company intends to complete a business combination by the end of the Combination Period, there are
no assurances that this will happen. If the Company is unable to complete a Business Combination by such date, it will be forced to dissolve
and liquidate unless stockholders otherwise approve an amendment to the Company’s charter to extend such period. These factors raise
substantial doubt about the Company’s ability to continue as a going concern.
Risks
and Uncertainties
Management
is currently evaluating 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, close of the Initial Public Offering and/or
search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE
2 — SUMMARY OF 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 condensed interim financial information and in accordance with the instructions
to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (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.
The
accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K
for the year ended December 31, 2021 as filed with the SEC on March 31, 2022, which contains the audited financial statements and notes
thereto. The financial information as of December 31, 2021 is derived from the audited financial statements presented in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2021.
ALPINE
ACQUISITION CORPORATION
Notes to the UNAUDITED CONDENSED financial statements
NOTE
2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
In
the opinion of the Company’s management, the unaudited financial statements as of June 30, 2022 include all adjustments, which
are only of a normal and recurring nature, necessary for a fair statement of the financial position of the Company as of June 30, 2022
and its results of operations and cash flows for the three and six months ended June 30, 2022. The results of operations for the three
and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the full fiscal year ending December
31, 2022 or any future interim period.
Emerging
Growth Company
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, as amended (the “JOBS Act”), and it may take
advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging
growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation
requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic
reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and
stockholder approval of any golden parachute payments not previously approved.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial
accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective
or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that 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.
Use
of Estimates
The
preparation of financial statements in conformity with US GAAP requires the Company’s management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the 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.
ALPINE
ACQUISITION CORPORATION
Notes to the UNAUDITED CONDENSED financial statements
NOTE
2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Cash
and cash equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company did not have any cash equivalents as of June 30, 2022.
Investments
held in trust
Investments held in trust of $109,303,241 and $109,141,622 at June
30, 2022 and December 31, 2021, respectively, and consisted of a Goldman Sachs Money Market Fund. The investments held in trust are accounted
for as trading securities with unrealized and realized gains losses recorded in the statement of operations.
Offering
Costs associated with a Public Offering
The
Company complies with the requirements of FASB ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A —
“Expenses of Offering.” Offering costs of $391,459 consist principally of costs incurred in connection with preparation
for the Public Offering. These costs, together with the underwriter discount of $1,337,500, deferred fee of $3,745,000 and fair value
of underwriter shares of $1,632,750 were allocated to the separable financial instruments issued in the Public Offering based on a relative
fair value basis, compared to total proceeds received. Of these costs, $2,188,378 of which was allocated to the Public Warrants and the
Private Placement Warrants, were expensed as incurred.
Common
stock subject to possible redemption
The
Company accounts for its common stock subject to possible redemption in accordance with the guidance enumerated in ASC 480 “Distinguishing
Liabilities from Equity”. Common stock subject to mandatory redemption are classified as a liability instrument
and are measured at fair value. Conditionally redeemable common stock (including common stock that feature redemption rights that are
either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s
control) are classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s
common stock feature certain redemption rights that are considered by the Company to be outside of the Company’s control and subject
to the occurrence of uncertain future events. Accordingly, at June 30, 2022 and December 31, 2021, the shares of common stock subject
to possible redemption in the amount of $109,140,000 are presented as temporary equity, outside of the stockholders’ equity section
of the Company’s balance sheet.
Income
Taxes
The
Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred
tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial
statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period
that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected
to be realized.
ASC
740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions
taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be
sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits
as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2022
and December 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals
or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
The
provision or benefit for income taxes was deemed to be de minimis for the six months ended June 30, 2022 and for the period from February
8, 2021 (inception) to June 30, 2021. The Company’s deferred tax assets were deemed to be de minimis as of June 30, 2022 and December
31, 2021.
ALPINE
ACQUISITION CORPORATION
Notes to the UNAUDITED CONDENSED financial statements
NOTE
2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Net
Loss per Common Share
The
Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss)
per share of common stock is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding
for the period. Remeasurement associated with the redeemable shares of common stock is excluded from income (loss) per common share as
the redemption value approximates fair value.
The
calculation of diluted income (loss) per share of common stock does not consider the effect of the warrants issued in connection with
the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence
of future events. As of June 30, 2022, the Company did not have any dilutive securities or other contracts that could, potentially, be
exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted net income (loss) per common
share is the same as basic net income (loss) per common share for the period presented.
The
following table reflects the calculation of basic and diluted net income (loss) per common share (in dollars, except per share amounts):
| |
For the Three Months | | |
For the Six Months | |
| |
Ended June 30, 2022 | | |
Ended June 30, 2022 | |
| |
Common stock subject to possible redemption | | |
Common stock not subject to possible redemption | | |
Common stock subject to possible redemption | | |
Common stock not subject to possible redemption | |
Basic and diluted net income per share | |
| | | |
| | | |
| | | |
| | |
Numerator: | |
| 315,258 | | |
| 83,970 | | |
| 2,452,708 | | |
| 653,292 | |
Allocation of net income | |
| | | |
| | | |
| | | |
| | |
Denominator: | |
| | | |
| | | |
| | | |
| | |
Basic and diluted weighted average shares outstanding | |
| 10,700,000 | | |
| 2,850,000 | | |
| 10,700,000 | | |
| 2,850,000 | |
Basic and diluted net income per share | |
$ | 0.03 | | |
$ | 0.03 | | |
$ | 0.23 | | |
$ | 0.23 | |
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution,
which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account.
ALPINE
ACQUISITION CORPORATION
Notes to the UNAUDITED CONDENSED financial statements
NOTE
2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Fair
Value of Financial Instruments
Fair
value is defined as the price that would be received for sale of an asset or paid to transfer of a liability, in an orderly transaction
between market participants at the measurement date. US 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). 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. |
Derivative
Financial Instruments
The
Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded
derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted
for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each
reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments,
including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.
Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion
of the instrument could be required within 12 months of the balance sheet date.
The
Company has determined that the conversion option of the Note payable - Sponsor is a derivative instrument. The Company has elected to
recognize the Note, including the conversion option, at fair value as permitted under ASC Topic 815. The Note is measured at fair value
at issuance and at each reporting date in accordance with ASC 820, with changes in fair value recognized in the statement of operations
in the period of change. The Company recognized proceeds in excess of fair value of Note of $190,301 as of date of issuance and an unrealized
gain of $56,663 for the period from the date of issuance through June 30, 2022.
Recent
Accounting Standards
Management
does not believe that any recently issued, but not yet effective, accounting standards except for the above, if currently adopted, would
have a material effect on the Company’s financial statements.
ALPINE ACQUISITION CORPORATION
Notes to the UNAUDITED CONDENSED financial statements
NOTE 3 — INITIAL PUBLIC OFFERING
Pursuant to the Initial Public
Offering, the Company sold 10,700,000 Units, including 700,000 units subject to the underwriters’ over-allotment option, at a price
of $10.00 per Unit generating gross proceeds to the Company in the amount of $107,000,000. Each Unit consists of one share of Common stock
and one-half of one redeemable warrant (“Public Warrant”). Each whole Public Warrant will entitle the holder to purchase one
share of Common stock at a price of $11.50 per share, subject to adjustment (see Note 8).
NOTE 4 — PRIVATE PLACEMENTS
The Sponsor purchased an
aggregate of 5,152,500 Private Placement Warrants, including 227,500 related to the over-allotment units, at a price of $1.00 per Private
Placement Warrant from the Company in private placements that occurred simultaneously with the closing of the Initial Public Offering.
Each Private Placement Warrant
is exercisable to purchase one share of Common Stock at a price of $11.50 per share, subject to adjustment (see Note 8). The proceeds
from the sale of the Private Placement Warrants will be added to the net proceeds from the Initial Public Offering held in the Trust Account.
If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement
Warrants held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable
law) and the Private Placement Warrants will expire worthless. The Private Placement Warrants (including the Common stock issuable upon
exercise of the Private Placement Warrants) will not be transferable, assignable or salable until after the completion of a Business Combination,
subject to certain exceptions.
NOTE 5 — RELATED PARTIES
Founder Shares
On March 1, 2021, the Sponsor
received 4,312,500 of the Company’s Common Stock ( the “Founder Shares”) for $25,000. In June 2021, the Sponsor contributed
an aggregate of 1,437,500 founder shares to the Company’s capital for no consideration. In July 2021, the Sponsor transferred an
aggregate of 45,000 shares to the Company’s advisors at the same price originally paid for such shares. In October 2021, the over-allotment
option period closed without the underwriters further exercising the option. As such, the 200,000 Founder Shares were forfeited in October
2021 resulting in the Sponsor holding an aggregate of 2,675,000 founder shares.
The holders of the Founder
Shares have agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur
of: (A) six months after the completion of a Business Combination and (B) subsequent to a Business Combination, the date on which the
Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of the Public Stockholders
having the right to exchange their shares of common stock for cash, securities or other property.
Promissory Note — Related Party
On March 1, 2021, the Sponsor
issued an unsecured promissory note to the Company (the “Promissory Note”), pursuant to which the Company may borrow up to
an aggregate principal amount of $150,000. The Promissory Note is non-interest bearing and payable on the earlier of (i) December
31, 2021 or (ii) the consummation of the Initial Public Offering. As of June 30, 2022 and December 31, 2021 there were no amounts
outstanding under the Promissory Note.
General and Administrative Services
The Company is obligated,
commencing on the effective date of the Initial Public Offering, to pay its Sponsor a monthly fee of $10,000 for general and administrative
services. As such, $60,000 of expense was incurred for the six months ended June 30, 2022 and $0 of expense was incurred for the period
from February 8, 2021 (inception) through June 30, 2021.
Related Party Loans
In order to finance
transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the
Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working
Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of
a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of the notes may be converted upon
completion of a Business Combination into warrants at a price of $11.50 per warrant. Such warrants would be identical to the Private
Placement Warrants. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside
the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working
Capital Loans. On May 2, 2022 and June 21, 2022, the Sponsor loaned to the Company $400,000 and $400,000. As of June 30, 2022 and
December 31, 2021, there was $553,036 and $0 outstanding under the Working Capital Loans.
ALPINE ACQUISITION CORPORATION
Notes to the UNAUDITED CONDENSED financial statements
NOTE 6 — COMMITMENTS AND CONTINGENCIES
Registration Rights
The holders of the Founder
Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any shares of common
stock issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and
upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed
prior to or on the effective date of Initial Public Offering requiring the Company to register such securities for resale (in the case
of the Founder Shares, only after conversion to shares of Common stock). The holders of these securities will be entitled to make up to
three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain
“piggy-back” registration rights with respect to registration statements filed subsequent to completion of a Business Combination
and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However,
the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration
statement to become effective until the securities covered thereby are released from their lock-up restrictions. The Company will bear
the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company granted the underwriters
a 45-day option from the date of Initial Public Offering to purchase up to 1,500,000 additional Units to cover over-allotments, if any,
at the Initial Public Offering price less the underwriting discounts and commissions. 700,000 Units were purchased through the over-allotment
and the balance expired unexercised.
In addition, the Company
issued to the underwriter or its designees 175,000 shares of common stock upon closing of the Initial Public Offering, at a price of $0.0001.
The underwriters were paid
a cash underwriting discount of $0.125 per Unit, or $1,337,500 in the aggregate, including $87,500 related to the over-allotment units.
In addition, the underwriters will be entitled to a deferred fee of $0.35 per Unit, or $3,745,000 in the aggregate. The deferred fee will
become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business
Combination, subject to the terms of the underwriting agreement.
Hotel Representation Agreement
The Company has a buyer representation agreement
with Hodges Ward Elliott, LLC (“Broker”). Upon closing of a potential Business Combination and associated acquisition of
the Hotels, Broker shall have earned and Company shall pay to Broker an associated fee based on the acquisition price of the Hotels.
The fee depends on the amount of the acquisition price and is calculated between 1.5% and 2.0% for the price of the Hotels.
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. As of June 30, 2022 and
December 31, 2021, there were no shares of preferred stock issued or outstanding.
Common Stock —
The Company is authorized to issue 50,000,000 shares of Common stock with a par value of $0.0001 per share. Holders of Common stock are
entitled to one vote for each share. In June 2021, the Sponsor contributed an aggregate of 1,437,500 founder shares to the Company’s
capital for no consideration, resulting in the Sponsor holding an aggregate of 2,850,000 founder shares. As of June 30, 2022 and December
31, 2021, there were 2,850,000 shares of Common stock issued and outstanding, of which an aggregate of up to 200,000 shares of Common
stock are subject to forfeiture to the extent that the underwriters’ over-allotment option is not exercised in full or in part so
that the number of Founder Shares will equal 20% of the Company’s issued and outstanding common stock after the Initial Public Offering.
In October 2021, the over-allotment option period closed without the underwriters further exercising the option. As such, the 200,000
Founder Shares were forfeited in October 2021.
ALPINE ACQUISITION CORPORATION
Notes to the UNAUDITED CONDENSED financial statements
NOTE 7 — STOCKHOLDERS’ DEFICIT (cont.)
Our public stockholders will
have the same voting and redemption rights with respect to any business combination including with Two Bit Circus as are applicable to
a business combination which does not include Two Bit Circus.
NOTE 8 — WARRANTS
Public Warrants may only
be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants
will trade. The Public Warrants will become exercisable 30 days after the completion of a Business Combination. The Public Warrants
will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
The Company will not be obligated
to deliver any shares of Common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise
unless a registration statement under the Securities Act covering the issuance of the shares of Common stock issuable upon exercise of
the warrants is then effective and a current prospectus relating to those shares of Common stock is available, subject to the Company
satisfying its obligations with respect to registration, or a valid exemption from registration is available. No warrant will be exercisable
for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants,
unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of residence of
the exercising holder, or an exemption from registration is available.
The Company has agreed that
as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, the Company will use
its commercially reasonable efforts to file, and within 60 business days following a Business Combination to have declared effective,
a registration statement covering the issuance of the shares of Common stock issuable upon exercise of the warrants and to maintain a
current prospectus relating to those shares of Common stock until the warrants expire or are redeemed. Notwithstanding the above, if the
Common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition
of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders
of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the
Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration
statement, but will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent
an exemption is not available.
Redemption of Warrants —
Once the warrants become exercisable, the Company may redeem the outstanding Public Warrants:
| ● | in whole and not in part; |
| ● | at a price of $0.01 per Public
Warrant; |
| ● | upon a minimum of 30 days’
prior written notice of redemption, or the 30-day redemption period to each warrant holder; and |
| ● | if, and only if, the last reported
sale price of the Common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganization, recapitalizations
and the like) for any 20 trading days within a 30-trading day period commencing once the Warrants become exercisable and ending
on the third trading day prior to the date on which the Company sends the notice of redemption to warrant holders. |
If and when the warrants
become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying
securities for sale under all applicable state securities laws.
ALPINE ACQUISITION CORPORATION
Notes to the UNAUDITED CONDENSED financial statements
NOTE 8 — WARRANTS (cont.)
If the Company calls the
Public Warrants for redemption, as described above, its management will have the option to require any holder that wishes to exercise
the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of
common stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a stock
dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the
Public Warrants will not be adjusted for issuances of common stock at a price below its exercise price. Additionally, in no event will
the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the
Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of
such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside
of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.
The Private Placement Warrants
will be identical to the Public Warrants underlying the Units being sold in the Initial Public Offering except that the holders of the
Private Placement Warrants have agreed that the Private Placement Warrants and the Common stock issuable upon the exercise of the Private
Placement Warrants will not be transferable, assignable or saleable until 30 days after the completion of a Business Combination,
subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable,
except as described above, so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement
Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be
redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants
The Company accounts for
the 10,502,500 warrants issued in connection with the Initial Public Offering (including 5,350,000 Public Warrants and 5,152,500 Private
Placement Warrants) in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet
the criteria for equity treatment thereunder, each warrant must be recorded as a liability.
The accounting treatment
of derivative financial instruments requires that the Company record a derivative liability upon the closing of the Initial Public Offering.
Accordingly, the Company classified each warrant as a liability at its fair value and the warrants were allocated a portion of the proceeds
from the issuance of the Units equal to its fair value determined by the Monte Carlo simulation. This liability is subject to re-measurement
at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair
value recognized in the Company’s statement of operations. The Company will reassess the classification at each balance sheet date.
If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that
causes the reclassification.
NOTE 9 — FAIR VALUE MEASUREMENTS
The Company follows the guidance
in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial
assets and liabilities that are re-measured and reported at fair value at least annually.
The fair value of the Company’s
financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with
the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants
at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the
use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions
about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities
based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
|
Level 1: |
Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. |
|
|
|
|
Level 2: |
Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. |
|
|
|
|
Level 3: |
Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. |
The following table presents
information about the Company’s assets and liabilities that are measured at fair value at June 30, 2022 and December 31, 2021,
and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
Description | |
Level | |
June 30, 2022 | | |
December 31, 2021 | |
Assets: | |
| |
| | |
| |
Investments held in trust | |
1 | |
$ | 109,303,241 | | |
$ | 109,140,492 | |
Liabilities: | |
| |
| | | |
| | |
Note payable - Sponsor | |
3 | |
$ | 553,036 | | |
$ | - | |
Public Warrant liability | |
1 | |
$ | 588,500 | | |
$ | 2,568,000 | |
Private Warrant liability | |
3 | |
$ | 566,775 | | |
$ | 2,576,250 | |
ALPINE ACQUISITION CORPORATION
Notes to the UNAUDITED CONDENSED financial statements
NOTE 9 — FAIR VALUE MEASUREMENTS (cont.)
The Public Warrants and
the Private Placement Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within liabilities
on the condensed balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with
changes in fair value presented within change in fair value of warrant liabilities in the statements of operations.
The Company used a Monte
Carlo simulation model to value the Public Warrants at September 2, 2021 and a Black-Scholes model to value the Private Placement Warrants
at September 2, 2021 and December 31, 2021. The Company allocated the proceeds received from (i) the sale of Units (which is inclusive
of one share of Common Stock and one-half of one Public Warrant), (ii) the sale of Private Warrants, and (iii) the issuance of Common
Stock, first to the warrants based on their fair values as determined at initial measurement, with the remaining proceeds allocated to
Common Stock subject to possible redemption (temporary equity), Common Stock (permanent equity) and Common Stock (permanent equity) based
on their relative fair values at the initial measurement date. At June 30, 2022 and December 31, 2021 the Company use the quoted market
price for the Public Warrants as they were actively traded at that time. The Private Placement Warrants were classified within Level 3
of the fair value hierarchy at June 30, 2022 and December 31, 2021 due to the use of unobservable inputs. The Public Warrants were classified
within Level 1 of the fair value hierarchy at December 31, 2021 due to the use of quoted prices in active markets for identical assets.
The key inputs into the Monte
Carlo simulation model and the Black-Scholes model were as follows:
| |
June 30,
2022 | | |
December 31,
2021 | | |
September 2,
2021 | |
Risk-free interest rate | |
| 3.01 | % | |
| 1.26 | % | |
| 0.77 | % |
Expected life of grants (years) | |
| 5.25 | | |
| 6.2 | | |
| 7.0 | |
Expected volatility of underlying stock | |
| 3.00 | % | |
| 8.75 | % | |
| 13-24.4 | % |
Dividends | |
| 0 | | |
| 0 | | |
| 0 | |
Probability of Business Combination | |
| 19 | % | |
| 90 | % | |
| 90 | % |
The fair value of the convertible notes is estimated using the Monte
Carlo simulation method. Significant inputs included a risk-free rate of 3.01%, volatility of 3.00% and 70% probability of the business
combination. If the business combination occurs, the private warrants are valued using the Black-Scholes Option Pricing Model.
NOTE 10 — SUBSEQUENT EVENTS
The Company evaluated
subsequent events and transactions that occurred after the balance sheet date through the filing date of our Form 10-Q for the
quarter ended June 30, 2022. Based upon this review, except as noted below, the Company did not identify any subsequent events that
would have required adjustment or disclosure in the financial statements.
On July 15, 2022, the Sponsor loaned to the Company an aggregate of $100,000 for working capital
purposes. The loan is evidenced by a promissory note (the “Note”) which is non-interest bearing and payable upon the
consummation by the Company of a merger, share exchange, asset acquisition, or other similar business combination with one or more businesses
or entities (a “Business Combination”). Upon consummation of a Business Combination, the Sponsor will have the option,
but not the obligation, to convert the principal balance of the Note, in whole or in part, into warrants (the “Warrants”)
of the Company, with each Warrant entitling the holder to purchase one share of the Company’s common stock at an exercise price
of $11.50 per share. The Warrants issued as a result of conversion of the Note will be identical to the warrants included in the units
issued by the Company in its initial public offering.
If the
Company does not consummate a Business Combination the Note will not be repaid and all amounts owed under the Note will be forgiven except
to the extent that the Company has funds available to it outside of its trust account established in connection with the initial public
offering (the “Trust Account”).
If
the Business Combination is consummated, the Company will issue a dividend of $0.665 per share to holders of shares of common stock sold
in the Company’s initial public offering (the “IPO” and the shares issued in the IPO, the “public shares”)
who do not seek redemption of their public shares in connection with the Business Combination for a pro rata portion of the funds held
in the trust account established in connection with the IPO.
Item 2. Management’s Discussion and Analysis
of Financial Condition and Results of Operations
References in this report (the “Quarterly
Report”) to “we,” “us” or the “Company” refer to Alpine Acquisition Corporation References to
our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor”
refer to Alpine Acquisition Sponsor LLC. The following discussion and analysis of the Company’s financial condition and results
of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly
Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve
risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking
statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act that are not historical
facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All
statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” regarding the completion of the Proposed Business Combination
(as defined below), the Company’s financial position, business strategy and the plans and objectives of management for future operations,
are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,”
“estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking
statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs,
based on information currently available. A number of factors could cause actual events, performance or results to differ materially from
the events, performance and results discussed in the forward-looking statements, including that the conditions of the Proposed Business
Combination are not satisfied. For information identifying important factors that could cause actual results to differ materially from
those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s Annual Report on
Form 10-K for the year ended December 31, 2021 filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s
securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable
securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result
of new information, future events or otherwise.
Overview
We are a blank check company formed under the
laws of the State of Delaware on February 8, 2021 for the purpose of entering into a merger, share exchange, asset acquisition, stock
purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities (the “Business
Combination”). We intend to effectuate our Business Combination using cash from the proceeds of the Initial Public Offering and
the sale of the Private Placement Units, our capital stock, debt or a combination of cash, stock and debt.
On May 18, 2022, we entered into an Agreement
and Plan of Merger (the “Merger Agreement”) with AAC Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of
ours (“Merger Sub”), and Two Bit Circus, Inc., a Delaware corporation (“TBC”). Pursuant to the Merger Agreement,
Merger Sub will merge with and into TBC, with TBC surviving the merger as a wholly-owned subsidiary of ours (the “Merger”).
As a result of the Merger, and upon consummation of the Merger and the other transactions contemplated by the Merger Agreement including
the Hotel Purchase (as defined below) (together with the Merger, the “Transactions”), TBC will become a wholly-owned subsidiary
of ours and the stockholders of TBC will become stockholders of ours. TBC is a Los Angeles-based experiential entertainment company that
is affiliated with certain members of our management team.
Concurrently with the execution of the Merger
Agreement as contemplated therein, we entered into a Purchase and Sale Agreement (the “Hotel Purchase Agreement” and collectively
with the Merger Agreement the “Business Combination Agreements”) with Pool IV Finance LLC, Pool IV TRS LLC and PHF II Stamford
LLC (“Hotel Sellers”) pursuant to which the Company will purchase (the “Hotel Purchase”) the Hilton Stamford Hotel
& Executive Meeting Center and the Crowne Plaza Denver Airport Convention Center Hotel (collectively, the “Hotels”).
The Transactions are subject to adoption of the
Business Combination Agreements and approval of the Transactions by our stockholders and the fulfilment of certain other conditions set
forth in the Business Combination Agreements as described therein.
We expect to continue to incur significant costs
in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.
Results of Operations
We have neither engaged in any operations nor
generated any revenues to date. Our only activities from February 8, 2021 (inception) through June 30, 2022 were organizational activities,
those necessary to prepare for the Initial Public Offering, described below, identifying a target company for a Business Combination and
entering into the Business Combination Agreements. We do not expect to generate any operating revenues until after the completion of our
Business Combination. We generate non-operating income in the form of interest income on marketable securities held in the Trust Account.
We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well
as for due diligence expenses.
For the three months ended June 30, 2022, we
had net income of $399,227, consisting primarily of general and administrative expenses of $619,973 offset by change in fair value
of derivative warrant liability of $840,200 and interest income
of $152,337.
For the six months ended June 30, 2022, we
had net income of $3,106,000, consisting primarily of general and administrative expenses of $1,101,257 offset by change in fair
value of derivative warrant liability of $3,988,975 and
interest income of $161,619.
Liquidity and Capital Resources
As of June 30, 2022, we had cash of $145,411.
For the six months ended June 30, 2022, the net decrease in cash was
$221,699. Cash used in operating activities was $1,021,699 and primarily the result of change in the fair value of warrant liabilities
of $3,988,975 partially offset by net income of $3,296,301.
On September 2, 2021, the Company consummated
the Initial Public Offering of 10,700,000 units (“Units” and, with respect to the common stock included in the Units being
offered, the “Public Shares”), including 700,000 units subject to the underwriters’ over-allotment option, generating
gross proceeds of $107,000,000.
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the sale of 5,152,500 warrants (the “Private Placement Warrants”) at a price of $1.00
per Private Placement Warrant in private placements to Alpine Acquisition Sponsor LLC (the “Sponsor”).
The Initial Public Offering and sale of the Private
Placement Warrants generated approximately $1,461,000 of cash available for the general use of the Company.
Going Concern
In connection with the Company’s assessment of going concern
considerations in accordance with 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 Company has incurred and expects
to incur significant costs in pursuit of its acquisition plans. The Company lacks the financial resources it needs to sustain operations
for a reasonable period of time, which is considered to be one year from the date of the issuance of the financial statements. Additionally,
while the Company intends to complete a business combination by the end of the Combination Period, there are no assurances that this will
happen. If the Company is unable to complete a Business Combination by such date, it will be forced to dissolve and liquidate unless stockholders
otherwise approve an amendment to the Company’s charter to extend such period. As a result, there is substantial doubt that the
Company can sustain operation for a period of at least one-year from the issuance date of these financial statements.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities,
which would be considered off-balance sheet arrangements as of June 30, 2022. We do not participate in transactions that create relationships
with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established
for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements,
established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual obligations
We do not have any long-term debt, capital lease
obligations, operating lease obligations or long-term liabilities, other than an agreement to pay the Sponsor a total of up to $10,000
per month for office space, utilities and secretarial support services. We will continue to incur these fees monthly until the earlier
of the completion of the Business Combination and our liquidation.
Critical Accounting Policies
The preparation of condensed financial statements
and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities
at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from
those estimates. We have identified the following critical accounting policies:
Net Loss per Common Share
The Company complies with accounting and disclosure
requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per share of common stock is computed by dividing
net income (loss) by the weighted average number of shares of common stock outstanding for the period. Remeasurement associated with the
redeemable shares of common stock is excluded from income (loss) per common share as the redemption value approximates fair value.
The calculation of diluted income (loss) per share
of common stock does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private
placement since the exercise of the warrants is contingent upon the occurrence of future events. As of June 30, 2022, the Company did
not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share
in the earnings of the Company. As a result, diluted net income (loss) per common share is the same as basic net income (loss) per common
share for the periods presented.
Fair Value of Financial Instruments
Fair value is defined as the price that would
be received for sale of an asset or paid to transfer of a liability, in an orderly transaction between market participants at the measurement
date. US 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). 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. |
Derivative Financial Instruments
The Company evaluates its financial instruments
to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic
815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities, the derivative
instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the
fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments
should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified
in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required
within 12 months of the balance sheet date.
Warrant Liability
We account for the 10,502,500 warrants issued
in connection with the Initial Public Offering (including 5,350,000 Public Warrants and 5,152,500 Private Placement Warrants) in accordance
with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment
thereunder, each warrant must be recorded as a liability.
The accounting treatment of derivative financial
instruments requires us to record a derivative liability upon the closing of the Initial Public Offering. Accordingly, we classified each
warrant as a liability at its fair value and the warrants were allocated a portion of the proceeds from the issuance of the Units equal
to its fair value determined by the Monte Carlo simulation. This liability is subject to re-measurement at each balance sheet date. With
each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in our statement
of operations. We will reassess the classification at each balance sheet date. If the classification changes as a result of events during
the period, the warrants will be reclassified as of the date of the event that causes the reclassification.
Common Stock Subject to Possible Redemption
We account for our common stock subject to possible
conversion in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities
from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and 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 our control) is classified as temporary equity. At all other times,
common stock is classified as stockholders’ equity. Our common stock features certain redemption rights that are considered to be
outside of our control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption
is presented at redemption value as temporary equity, outside of the stockholders’ equity section of our condensed balance sheets.
Recent Accounting Standards
Management does not believe that any recently
issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements.