Filing identity and reporting period
The supplied filing is Fifth Wall Acquisition Corp. III’s unaudited Form 10-Q for the quarter ended March 31, 2022, not a filing for Mobile Infrastructure Corp. The company was a SPAC formed to pursue a business combination and had not commenced operating activities. Its fiscal year ends December 31.
Financial results and position
- Revenue: No operating revenue; management said operating revenue would not begin before completion of a business combination.
- Net loss: $352,885 for the quarter, comprising $329,666 of general and administrative expense, $30,000 of related-party expense, and $6,781 of trust-account investment income. Loss per Class A and Class B share was $0.01.
- Cash flow: Operating cash use was $73,645. Cash at quarter-end was $664,341.
- Liquidity and assets: Working capital was approximately $1.2 million. Total assets were $276.6 million, including $275.0 million held in the trust account.
- Liabilities: Total liabilities were $10.0 million, including $9.625 million of deferred underwriting commissions payable only if a business combination is completed. No working-capital loans were outstanding.
- Equity and share structure: Shareholders’ deficit was $8.4 million. Of 28.407 million Class A shares outstanding, 27.5 million were classified as subject to possible redemption at $10 per share; 6.875 million Class B shares were also outstanding.
Comparisons and material changes
The reported comparison is the period from inception on February 19, 2021 through March 31, 2021, rather than the same quarter in the prior year. That inception-period loss was $25,307, so it is not directly comparable to the full three-month 2022 result. The filing does not provide a clear same-quarter year-over-year comparison. Relative to December 31, 2021, cash declined from $737,986 to $664,341, while total liabilities rose from $9.925 million to $10.042 million; trust assets remained approximately $275.0 million.
Outlook, risks, and unusual items
- The SPAC was required to complete a business combination by May 27, 2023, or redeem public shares and wind up. Management said available working capital and potential sponsor or affiliate borrowing should meet needs through the earlier of a transaction or one year from the filing, but such loans were not committed.
- Management reported a material weakness in controls over accounting for complex Class A share features and earnings-per-share presentation. Disclosure controls were deemed ineffective at March 31, 2022; the weakness had previously led to a restatement of the June 2021 interim financial statements. Management said it was undertaking remediation and additional review.
- The company identified potential uncertainty from COVID-19 and the Russia-Ukraine conflict, with specific financial effects not determinable in the filing.
- The company noted that SEC SPAC rule proposals issued March 30, 2022, if adopted, could increase transaction costs and time and adversely affect its ability to complete a business combination.
- No legal proceedings or off-balance-sheet arrangements were reported. The filing states there were no other subsequent events requiring adjustment or disclosure.
Important facts for investors to verify
- Confirm the filing issuer: the supplied document is for Fifth Wall Acquisition Corp. III, not Mobile Infrastructure Corp.
- Review the status and remediation of the material weakness, including whether controls over complex financial instruments and EPS have become effective.
- Verify the SPAC’s business-combination progress, remaining time to the May 27, 2023 deadline, and any subsequent extensions or transaction announcements.
- Assess actual liquidity needs and whether sponsor or affiliate financing is available, since potential working-capital loans are discretionary.
- Review redemption terms, trust-account balance, deferred underwriting commissions, and potential dilution in any proposed transaction.