Quarterly Report (10-q)

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q

(MARK ONE)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission File Number:

001-41143

TRAJECTORY ALPHA ACQUISITION CORP.

(Exact name of registrant as specified in its charter)


Delaware		86-1837862
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

99 Wall Street, #5801

New York, NY 10005

(Address of principal executive offices, including zip code)

(646)

450-2536

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units, each consisting of one share of Class A common stock and one-half of one redeemable public warrant	TCOA.U	New York Stock Exchange
Class A common stock, $0.0001 par value	TCOA	New York Stock Exchange
Public warrants, each public whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share	TCOA WS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “

Exchange Act

”), during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation

S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule

12b-2

of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule

12b-2

of the Exchange Act). Yes ☒ No ☐

As of November 9, 2022, there were 17,250,000 shares of Class A common stock, $0.0001 par value, and 4,312,500 shares of Class B common stock, $0.0001 par value, issued and outstanding.

TRAJECTORY ALPHA ACQUISITION CORP.

FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2022

TABLE OF CONTENTS


	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021		1
Unaudited Condensed Statements of Operations for the Three and Nine Months Ended September 30, 2022, For the Three Months Ended September 30, 2021 and For the Period From February 1, 2021 (Inception) to September 30, 2021		2
Unaudited Condensed Statements of Changes in Stockholders’ Equity (Deficiency) for the Three and Nine Months Ended September 30, 2022, For the Three Months Ended September 30, 2021 and For the Period From February 1, 2021 (Inception) to September 30, 2021		3
Unaudited Condensed Statement of Cash Flows for the Nine Months Ended September 30, 2022 and For the Period From February 1, 2021 (Inception) to September 30, 2021		4
Notes to the Condensed Financial Statements		5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		9
Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk		13
Item 4. Controls and Procedures		13

PART II. OTHER INFORMATION		16
Item 1. Legal Proceedings		16
Item 1A. Risk Factors		16
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		16
Item 3. Defaults Upon Senior Securities		16
Item 4. Mine Safety Disclosures		16
Item 5. Other Information		16
Item 6. Exhibits		16
Signatures		17

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Trajectory Alpha Acquisition Corp.

Condensed Balance Sheets


	September 30, 2022			December 31, 2021
	(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	721,489		$	2,300,375
Due from related party		—			14,775
Prepaid expenses and other current assets		350,834			25,111
Deferred tax asset		41,929			—

Total Current Assets		1,114,252			2,340,261
Cash and marketable securities held in Trust Account		174,762,347			174,234,709

Total Assets	$	175,876,599		$	176,574,970

LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ DEFICIENCY
Current Liabilities:
Accounts payable	$	22,800		$	23,903
Accrued expenses		156,887			—
Accrued offering costs		—			336,500
Franchise taxes payable		—			183,064
Due to related party		—			22,557

Total Current Liabilities		179,687			566,024
Deferred underwriters’ discount		6,262,500			6,262,500

Total Liabilities		6,442,187			6,828,524

Commitments and Contingencies
Class A common stock subject to possible redemption, $0.0001 par value; 17,250,000 shares at a redemption value of $10.12 and $10.10 per share as of September 30, 2022 and December 31, 2021, respectively		174,650,293			174,225,000
Stockholders’ Deficiency:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding as of September 30, 2022 and December 31, 2021		—			—
Class A common stock, $0.0001 par value; 500,000,000 shares authorized; none issued and outstanding as of September 30, 2022 and December 31, 2021 (excluding 17,250,000 Class A shares subject to redemption)		—			—
Class B common stock, $0.0001 par value; 100,000,000 shares authorized; 4,312,500 shares issued and outstanding as of September 30, 2022 and December 31, 2021		431			431
Additional paid-in capital		—			—
Accumulated deficit		(5,216,312	)		(4,478,985	)

Total Stockholders’ Deficiency		(5,215,881	)		(4,478,554	)

Total Liabilities, Redeemable Common Stock and Stockholders’ Deficiency	$	175,876,599		$	176,574,970

The accompanying notes are an integral part of these unaudited interim financial statements.

Table of Contents

Trajectory Alpha Acquisition Corp.

Condensed Statements of Operations

(unaudited)


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,			For the Period from February 1, 2021 (Inception) to September 30,
	2022			2021			2022			2021
Operating Expenses:
Formation and operating costs	$	358,223		$	—		$	901,080		$	587
Franchise tax expense		50,000			—			150,000			—

Total Operating Expenses		408,223			—			1,051,080			587

Loss From Operations		(408,223	)		—			(1,051,080	)		(587	)

Other Income:
Interest income		685,599			—			787,239			—

Total Other Income		685,599			—			787,239			—

Income (loss) before provision for income taxes		277,376			—			(263,841	)		—
Income tax benefit		41,929			—			41,929			—

Net Income (Loss)	$	319,305		$	—		$	(221,912	)	$	—

Basic and diluted weighted average shares outstanding, Class A common stock		17,250,000			—			17,250,000			—
Basic and diluted net income (loss) per common stock, Class A common stock	$	0.01		$	—		$	(0.01	)	$	—
Basic and diluted weighted average shares outstanding, Class B common stock		4,312,500			3,750,000	(1)		4,312,500			3,750,000	(1)
Basic and diluted net income (loss) per common stock, Class B common stock	$	0.01		$	—		$	(0.01	)	$	—

(1)	Excluded 562,500 shares of Class B common stock that were subject to forfeiture if the over-allotment option was not exercised in full or in part by the underwriters.

The accompanying notes are an integral part of these unaudited interim financial statements.

Table of Contents

Trajectory Alpha Acquisition Corp.

Condensed Statements of Changes in Stockholders’ Equity (Deficiency)

(unaudited)


	For the Nine Months Ended September 30, 2022
	Class B Common Stock				Additional Paid-In		Accumulated			Total Stockholders’
	Shares		Amount		Capital		Deficit			Deficiency
Balance - January 1, 2022		4,312,500	$	431	$	—	$	(4,478,985	)	$	(4,478,554	)
Accretion of Class A common stock subject to possible redemption		—		—		—		(90,122	)		(90,122	)
Net loss		—		—		—		(341,419	)		(341,419	)

Balance - March 31, 2022		4,312,500	$	431	$	—	$	(4,910,526	)	$	(4,910,095	)
Net loss		—		—		—		(199,798	)		(199,798	)

Balance - June 30, 2022		4,312,500	$	431	$	—	$	(5,110,324	)	$	(5,109,893	)
Accretion of Class A common stock subject to possible redemption		—		—		—		(425,293	)		(425,293	)
Net income		—		—		—		319,305			319,305

Balance - September 30, 2022		4,312,500	$	431	$	—	$	(5,216,312	)	$	(5,215,881	)


	For the Period From February 1, 2021 (Inception) to September 30, 2021
	Class B Common Stock				Additional Paid-In		Accumulated			Total Stockholders’
	Shares		Amount		Capital		Deficit			Equity
Balance - February 1, 2021 (Inception)		—	$	—	$	—	$	—		$	—
Class B ordinary share issued to initial shareholder		4,312,500		431		24,569		—			25,000
Net loss				—		—		(587	)		(587	)

Balance - March 31, 2021		4,312,500	$	431	$	24,569	$	(587	)	$	24,413
Net loss				—		—		—			—

Balance - June 30, 2021		4,312,500	$	431	$	24,569	$	(587	)	$	24,413
Net loss				—		—		—			—

Balance - September 30, 2021		4,312,500	$	431	$	24,569	$	(587	)	$	24,413

The accompanying notes are an integral part of these unaudited interim financial statements.

Table of Contents

Trajectory Alpha Acquisition Corp.

Condensed Statements of Cash Flows

(unaudited)


	For the Nine Months Ended September 30, 2022			For the Period from February 1, 2021 (Inception) to September 30, 2021

Cash Flows from Operating Activities:
Net loss	$	(221,912	)	$	(587	)
Adjustments to reconcile net loss to net cash used in operating activities:
Formation costs paid by sponsor		—			537
Interest earned on cash held in Trust Account		(784,955	)		—
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(325,723	)		—
Deferred tax asset		(41,929	)
Accounts payable		(91,225	)		—
Accrued expenses		155,387			—
Franchise taxes payable		(183,064	)		—

Net Cash Used In Operating Activities		(1,493,421	)		(50	)

Cash Flows from Financing Activities:
Proceeds from related party		14,775			45,250
Payment of offering costs		(335,000	)		(45,195	)
Payments to related party		(22,557	)		—
Proceeds from Trust Account for franchise tax reimbursement		257,317			—

Net Cash (Used In) Provided By Financing Activities		(85,465	)		55

Net (Decrease) Increase in Cash and Cash Equivalents		(1,578,886	)		5
Cash and Cash Equivalents - Beginning of the Period		2,300,375			—

Cash and Cash Equivalents - End of the Period	$	721,489		$	5

Supplemental Disclosures of Cash Flow Information:
Non-cash investing and financing activities:
Accretion of Class A common stock subject to possible redemption	$	515,415		$	—
Deferred offering costs paid by Sponsor in exchange for issuance of Class B common stock	$	—		$	24,463
Deferred offering costs paid by borrowings from a related party	$	—		$	13,800
Deferred offering costs in accrued offering costs and expenses	$	—		$	231,500

The accompanying notes are an integral part of these unaudited interim financial statements.

Table of Contents

TRAJECTORY ALPHA ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Note 1 — Organization, Plan of Business Operations, Going Concern and Management’s Plans, Risks and Uncertainties and Basis of Presentation

Organization and Plan of Business Operations

Trajectory Alpha Acquisition Corp. (the “Company”) is a blank check company incorporated in the State of Delaware on February 1, 2021. The Company was formed for the purpose of effecting a merger, consolidation, 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.

All activity for the period from February 1, 2021 (inception) through September 30, 2022 relates to the Company’s formation, the IPO (as defined below) and, since the closing of the IPO, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate

non-operating

income in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO.

The Company’s sponsor is Trajectory Alpha Sponsor LLC, a Delaware limited liability company (the “Sponsor”).

On December 14, 2021, the Company’s completed the initial public offering (the “IPO”) of 17,250,000 units at $10.00 per unit (the “Units”), including the issuance of 2,250,000 Units as a result of the underwriter’s over-allotment option being exercised in full. Each Unit consists of one share of Class A common stock (the “Class A Common Stock”) and

one-half

of one redeemable public warrant (the “Public Warrants”). Each whole public warrant entitles the holder to purchase one share of Class A Common Stock at a price of $11.50 per share.

Simultaneously with the consummation of the IPO and the full exercise of the over-allotment option by the underwriter, the Company consummated the private placement of 5,725,000 private placement warrants (the “Private Placement Warrants”) to the Sponsor, at a price of $1.00 per Private Placement Warrants in a private placement transaction.

The Trust Account

The funds in the trust account (the “Trust Account”) will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule

2a-7

under the Investment Company Act which invest only in direct U.S. government obligations. Funds will remain in the Trust Account until the earlier of (i) the consummation of its first Business Combination and (ii) the distribution of the Trust Account as described below. The remaining proceeds outside the Trust Account may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses.

Business Combination

Following the closing of the IPO and full exercise of the over-allotment option by the underwriter on December 14, 2021, $174,225,000 ($10.10 per Unit) from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was deposited into the Trust Account.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPO, although substantially all of the net proceeds of the IPO are intended to be generally applied toward consummating a Business Combination with (or acquisition of) a Target Business. As used herein, “Target Business” must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of the Company’s signing a definitive agreement in connection with a Business Combination. Furthermore, there is no assurance that the Company will be able to successfully effect a Business Combination.

Table of Contents

The Company’s amended and restated certificate of incorporation provides that the Company will have (i) the

18-month

period from the closing of the IPO (which ends on June 14, 2023) in which the Company must complete a Business Combination, (ii) the

21-month

(which ends on September 14, 2023) or

24-month

(which ends on December 14, 2023), as applicable, period from the closing of the IPO in which the Company must complete a Business Combination if the Sponsor has extended the period of time for the Company to complete a Business Combination by purchasing additional Private Placement Warrants, or (iii) such other extended time period in which the Company must complete a Business Combination pursuant to an amendment to its amended and restated certificate of incorporation (the “Combination Period”). If the Company is unable to complete the initial Business Combination within the Combination Period, the Company will (1) cease all operations except for the purpose of winding up, (2) 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 (which interest shall be net of taxes payable, and 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 (3) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

Going Concern and Management’s Plans

As of September 30, 2022, the Company had $721,489 in its operating bank account and working capital of $1,046,619.

In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor, initial stockholders, officers, directors or their affiliates may, but are not obligated to, provide the Company with Working Capital Loans (as defined below) (see Note 3). As of September 30, 2022, there were no amounts outstanding under any Working Capital Loans.

Management has determined that the possibility that the Company may be unsuccessful in consummating an initial Business Combination within 18 months (or up to 24 months if the Company extends the period of time to consummate a business combination for total payment value of $3,450,000) from the closing of the Initial Public Offering, and thereby be required to cease all operations, redeem the public shares and thereafter liquidate and dissolve, raises substantial doubt about the ability to continue as a going concern for at least one year from the date these financial statements are issued. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Management has determined that the Company has funds that are sufficient to fund the working capital needs of the Company until the consummation of an initial Business Combination or the winding up of the Company as stipulated in the Company’s second amended and restated certificate of incorporation. The accompanying financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.

Risks and Uncertainties

Management is continuing to evaluate the impact of the

COVID-19

pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a Target Business, the specific impact is not readily determinable as of the date of this financial statement. The financial statement does not include any adjustments that might result from the outcome of this uncertainty.

non-U.S.

corporations beginning in 2023, with certain exceptions (the “Excise Tax”). Because the Company is a Delaware corporation and its securities trade on the NYSE, the Company is a “covered corporation” within the meaning of the Inflation Reduction Act. While not free from doubt, absent any further guidance from Congress or the U.S. Department of the Treasury, there is significant risk that the Excise Tax will apply to any redemptions of the Company’s common stock after December 31, 2022, including redemptions in connection with an initial business combination and any amendment to the Company’s certificate of incorporation to extend the time to consummate an initial business combination, unless an exemption is available. In addition, the Excise Tax may make a transaction with the Company less appealing to potential business combination targets, and thus, potentially hinder the Company’s ability to enter into and consummate an initial business combination. The specific impact of the Inflation Reduction Act of 2022 is not readily determinable as of the date of this financial statement and the financial statement does not include any adjustments that might result from the outcome of this uncertainty.

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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 (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the unaudited condensed financial statements of the Company as of September 30, 2022 and for the three and nine months ended September 30, 2022. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the operating results for the full year ending December 31, 2022 or any other period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and related disclosures as of December 31, 2021 and for the period from February 1, 2021 (inception) through December 31, 2021 which are included the Annual Report filed on Form

10-K

on March 30, 2022.

Note 2 — Significant Accounting Policies

There have been no material changes to the significant accounting policies included in the audited financial statements as of December 31, 2021 and for the year then ended, which were included the Annual Report filed on Form

10-K

on March 30, 2022, except as disclosed in this note.

Net Loss Per Common Stock

Net loss per common stock is computed by dividing net loss by the weighted average number of common stock for the period, excluding stock subject to forfeiture. The Company has two classes of stock, which are referred to as Class A common stock and Class B common stock. Earnings and losses are shared pro rata between the two classes of stock. The Company applies the

two-class

method in calculating earnings per share. Remeasurement adjustments associated with the redeemable Class A common stock are excluded from earnings per share as the redemption value approximates fair value.

The calculation of diluted loss per share does not consider the effect of the warrants outstanding during the three and nine months ended September 30, 2022 that were issued in connection with the IPO and the private placement because the warrants are contingently exercisable and the contingencies have not yet been met. The warrants are exercisable to purchase 14,350,000 Class A common stock in the aggregate. As of September 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 loss per common stock is the same as basic net loss per common stock for the periods presented.


	For the Three Months Ended				For the Nine Months Ended
	September 30, 2022				September 30, 2022
	Class A		Class B		Class A			Class B
Basic and diluted net loss per share:
Numerator:
Allocation of net income (loss)	$	255,444	$	63,861	$	(177,530	)	$	(44,382	)
Denominator:
Weighted-average shares outstanding including common stock subject to redemption		17,250,000		4,312,500		17,250,000			4,312,500

Basic and diluted net loss per share	$	0.01	$	0.01	$	(0.01	)	$	(0.01	)

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 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.

At the end of each interim reporting period, the Company determines the income tax provision by using an estimate of the annual effective tax rate, adjusted for discrete items occurring in the quarter.

The Company’s effective tax rate for the three months and nine months ended September 30, 2022 was 6.0% and 15.9%, which differed from the federal statutory tax rate of 21% primarily due to the change in valuation allowance recognized against deferred tax assets in the U.S.

Judgment is required in determining whether deferred tax assets will be realized in full or in part. Management assesses the available positive and negative evidence on a jurisdictional basis to estimate if deferred tax assets will be recognized and when it is more likely than not that all or some deferred tax assets will not be realized, and a valuation allowance must be established. As of September 30, 2022, the Company continues to maintain a valuation allowance in U.S.

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 the Company’s financial statements.

Note 3 — Related Party Transactions

Due from Related Party

In December 2021 a related party loan was overpaid $14,775 in excess of amounts borrowed by the Company. This amount was repaid in February 2022.

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Due to Related Party

In order to facilitate payment of certain offering costs, an affiliate of the Sponsor or certain of the Company’s officers and directors may pay for costs on behalf of the Company. The borrowings are

non-interest

bearing and due on demand by the lender. On December 31, 2021, there was $22,557 outstanding. On September 30, 2022, there was $0 outstanding after $22,557 was repaid during the nine months ended September 30, 2022.

Working Capital Loans

In order to finance transaction costs in connection with an intended initial Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). If the Company completes an initial Business Combination, the Company would repay such loaned amounts out of the proceeds of the Trust Account released to the Company. Otherwise, such loans would be repaid only out of funds held outside the Trust Account. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used to repay such loaned amounts. Up to $2,000,000 of such loans may be convertible into warrants, at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants, including as to exercise price, exercisability and exercise period. At September 30, 2022 and December 31, 2021, no such Working Capital Loans were outstanding.

Administrative Services Agreement

We entered into an agreement, commencing on the effective date of the IPO, to pay the Sponsor $10,000 per month for office space and secretarial and administrative services provided to members of the Company’s management team. Upon completion of the initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. During the three and nine months ended September 30, 2022, the Company recognized $30,000 and $90,000 of such administrative support services expense, respectively. During the period from February 1, 2021 (inception) to September 30, 2021, the Company recognized $0 of such administrative support services expense.

Note 4 — Fair Value Measurements

Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. 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.

As of September 30, 2022, the investments in the Company’s Trust Account consisted of $1,094 in cash and $174,761,253 in U.S. Treasury Securities. As of December 31, 2021, the investments in the Company’s Trust Account consisted of $47 in cash and $174,234,662 in U.S. Treasury Securities. All of the U.S. Treasury Securities have maturities of 185 days or less. The Company classifies its United States Treasury securities

as held-to-maturity in

accordance with FASB ASC 320 “Investments — Debt and Equity

Securities.” Held-to-maturity treasury

securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts. The Company considers all investments with original maturities of more than three months but less than one year to be short-term investments. The carrying value approximates the fair value due to its short-term maturity (Level 1).

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The carrying value, excluding gross unrealized holding losses and fair value of held to maturity securities as of September 30, 2022 and December 31, 2021 are as follows:


September 30, 2022	Amortized Cost and Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value as of September 30, 2022
Cash	$	1,094	$	—	$	—	$	1,094
U.S. Treasury Securities		174,761,253		384,238		—		175,145,491

	$	174,762,347	$	384,238	$	—	$	175,146,585


December 31, 2021	Amortized Cost and Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value as of December 31, 2021
Cash	$	47	$	—	$	—		$	47
U.S. Treasury Securities		174,234,662		—		(3,264	)		174,231,398

	$	174,234,709	$	—	$	(3,264	)	$	174,231,445

Note 5 — Subsequent Events

The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements other than noted below.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

References to the “Company,” “Trajectory Alpha Acquisition Corp.,” “our,” “us” or “we” refer to Trajectory Alpha Acquisition Corp., references to “management” or “management team” refer to the Company’s officers and directors and references to the “Sponsor” refer to Trajectory Alpha Sponsor, LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly 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 includes, and oral statements made from time to time by representatives of the Company may include, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act and are intended to be covered by the safe harbor created thereby. The Company has based these forward-looking statements on management’s current expectations, projections and forecasts about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about the Company that may cause its actual business, financial condition, results of operations, performance and/or achievements to be materially different from any future business, financial condition, results of operations, performance and/or achievements expressed or implied by these forward-looking statements. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in the Company’s other filings with the SEC. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “target,” “goal,” “shall,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. In addition, any statements that refer to expectations, projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements.

Overview

We are a blank check company incorporated as a Delaware corporation and formed for the purpose of effecting a merger, consolidation, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or entities. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us. We intend to effectuate our initial business combination using cash from the proceeds of the IPO and the sale of the private placement warrants, our capital stock, debt or a combination of cash, stock and debt.

On December 14, 2021, we consummated the initial public offering (the “IPO”) of 17,250,000 units (the “Units”), including the issuance of 2,250,000 Units as a result of the underwriters’ exercise of their over-allotment option in full. Each Unit consists of one share of our Class A common stock, par value $0.0001 per share (the “Class A common stock”), and one-half of one of our redeemable public warrants (each whole warrant, a “Public Warrant”), with each whole Public Warrant entitling the holder thereof to purchase one share of Class A common stock for $11.50 per share, subject to adjustment. The Units were sold at a price of $10.00 per Unit, generating gross proceeds of $172,500,000.

On December 14, 2021, simultaneously with the consummation of the IPO, we completed the private sale (the “Private Placement”) of an aggregate of 5,725,000 warrants (the “Private Placement Warrants”) to Trajectory Alpha Sponsor LLC at a purchase price of $1.00 per Private Placement Warrant, generating gross proceeds of $5,725,000.

The net proceeds from the IPO, together with certain of the proceeds from the Private Placement, $174,225,000 in the aggregate (the “Offering Proceeds”), were placed in a U.S.-based trust account maintained by Continental Stock Transfer & Trust Company, acting as trustee.

Transaction costs amounted to $22,323,737, consisting of $1,500,000 of cash underwriting commissions, $5,366,378 of fair value shares of Class B common stock issued to the underwriter, $6,262,500 of deferred underwriting commissions, $8,658,646 of the excess of fair value of the shares of Class B common stock acquired by Anchor Investors, and $536,213 of other offering costs.

As of September 30, 2022, the Company had $721,489 in our operating bank account and working capital of $1,046,619. Further, we expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful.

Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for the IPO. Following the IPO, we will not generate any operating revenues until after completion of our initial business combination. We will generate non-operating income in the form of interest income on cash and cash equivalents after the IPO. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our financial statements. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as expenses as we conduct due diligence on prospective business combination candidates.

For the three months ended September 30, 2022, we had a net income of $319,305, which consisted of $685,599 of interest income and an income tax benefit of $41,929, all partially offset by formation and operating costs of $358,223 and franchise tax expense of $50,000. For the three months September 30, 2021, we had a net loss of $0.

For the nine months ended September 30, 2022, we had a net loss of $221,912, which consisted of formation and operating costs of $901,080 and franchise tax expense of $150,000, partially offset by $787,239 of interest income and an income tax benefit of $41,929. For the period from February 1, 2021 (inception) to September 30, 2021, we had a net loss of $587, which consisted of formation and operating costs.

Liquidity and Capital Resources

As of September 30, 2022, the Company had $721,489 in its operating bank account and working capital of $1,046,619.

Off-Balance Sheet Financing Arrangements

As of September 30, 2022 and December 31, 2021, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

Commitments and Contractual Obligations

Other than the below, we do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities.

Administrative Services Agreement

We entered into an agreement, commencing on the effective date of the IPO, to pay the Sponsor $10,000 per month for office space and secretarial and administrative services provided to members of our management team. Upon completion of the initial Business Combination or our liquidation, we will cease paying these monthly fees. During the three and nine months ended September 30, 2022, we recognized $30,000 and $90,000, respectively, of such administrative support services expense. During the period from February 1, 2021 (inception) to September 30, 2021, the Company recognized $0 of such administrative support services expense.

Registration and Stockholder Rights

The holders of the Class B common stock, 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 Class B common stock) are entitled to registration rights pursuant to a registration rights agreement entered into on the effective date of the IPO requiring us to register such securities for resale (in the case of the Class B common stock, only after conversion to shares of Class A common stock). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent our completion of the initial Business Combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that no sales of these securities will be effected until after the expiration of the applicable lock-up period, as described herein. We will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriting Agreement

The underwriter had a 45-day option from the date of the IPO to purchase up to an additional 2,250,000 Units to cover over-allotments. On December 14, 2021, the underwriter fully exercised its over-allotment option.

The underwriter was paid an underwriting commission of $0.10 per unit, or $1,500,000 in the aggregate, upon the closing of the IPO. The underwriter was also issued 662,434 shares of Class B Common Stock (as defined below) with a fair value of $5,366,378, or $8.10 per share. We valued those shares using a Black-Scholes Model. In addition, $6,262,500 is payable to the underwriter for deferred underwriting commissions. The deferred underwriting commission will become payable to the underwriter from the amounts held in the Trust Account solely in the event that we complete the Business Combination, subject to the terms of the underwriting agreement.

The underwriters have agreed (i) to waive their conversion rights (or right to participate in any tender offer) with respect to such shares in connection with the initial business combination and (ii) to waive their rights to liquidating distributions from the trust account with respect to such shares if we fail to complete the initial business combination within the completion window.

The Class B common stock received by the underwriter has been deemed compensation by FINRA and are therefore subject to a 180-day lock-up pursuant to FINRA Rule 5110(e)(1). Additionally, these Class B common stock may not be sold, transferred, assigned, pledged or hypothecated or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any person for a 180-day period following the effective date of this prospectus except to any selected dealer participating in the offering and the bona fide officers or partners of the underwriter and any such participating selected dealer. The underwriter has agreed that the Class B common stock they receive will not be sold or transferred by them (except to certain permitted transferees) until after we completed an initial Business Combination. We granted the holders of Class B common stock the registration rights. In compliance with FINRA Rule 5110, the underwriter’s registration rights are limited to demand and “piggy back” rights for periods of five and seven years, respectively, from the effective date of this prospectus with respect to the registration under the Securities Act of the Class B common stock.

Critical Accounting Policies and Estimates

The preparation of the financial statement in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement.

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 statement, 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. We have identified the following as our critical accounting policies:

Offering Costs

We comply with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering”. Offering costs consist of legal, accounting, underwriting fees and other costs incurred through the IPO date that are directly related to the IPO. Offering costs directly attributable to the issuance of an equity contract to be classified in equity are recorded as a reduction of equity. Offering costs for equity contracts that are classified as assets and liabilities are expensed immediately.

Class A Common Stock Subject to Possible Redemption

We account for our Class A common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Class A common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified in temporary equity. At all other times, common stock is classified as stockholders’ equity. Our Class A common stock feature certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, at September 30, 2022 and December 31, 2021, the 17,250,000 shares of Class A common stock is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of our balance sheets.

Net Loss per Common Share

We comply with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net loss per common stock is computed by dividing net loss by the weighted average number of common stock for the period. We have two classes of stock, which are referred to as Class A common stock and Class B common stock. Earnings and losses are shared pro rata between the two classes of stock. We apply the two-class method in calculating earnings per share. Remeasurement adjustments associated with the redeemable Class A common stock are excluded from earnings per share as the redemption value approximates fair value.

The calculation of diluted loss per share does not consider the effect of the warrants issued in connection with the (i) IPO, and (ii) the private placement because the warrants are contingently exercisable, and the contingencies have not yet been met. The warrants are exercisable to purchase 14,350,000 Class A common stock in the aggregate. As of September 30, 2022 and December 31, 2021, 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 loss per common stock is the same as basic net loss per common stock for the periods presented.

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

Not applicable to smaller reporting companies.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer (who serves as our Principal Executive Officer) and Chief Financial Officer (who serves as our Principal Financial and Accounting Officer), as appropriate, to allow timely decisions regarding required disclosure.

As required by Rules 13a 15 and 15d 15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2022. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a 15(e) and 15d 15(e) under the Exchange Act) were effective as of September 30, 2022.

Remediation of Material Weakness

In response to the previously identified material weakness, the Company designed and implemented remediation measures to address the material weakness identified and enhanced its internal control over financial reporting. The Company has enhanced its financial reporting processes to better identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards that apply to its financial statements, including providing enhanced access to accounting literature, research materials and documents and increased communication among the Company’s personnel and third-party professionals with whom management consults regarding complex accounting applications. The Company has also engaged a new independent third party to provide consultation to the Company on any new accounting guidance. The foregoing actions, which we believe remediated the material weakness in internal control over financial reporting, were completed as of September 30, 2022.

Changes in Internal Control over Financial Reporting

Except as described above, there were no changes in our internal control over financial reporting during the quarter ending September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Management recognizes that a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

Factors that could cause the Company’s actual business, financial condition and/or results of operations to differ materially from those in this Quarterly Report are any of the risks factors described in the Registration Statement and the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 30, 2022 (the “Form 10-K”). Any of these risk factors could result in a significant or material adverse effect on the Company’s business, financial condition and/or results of operations. Additional risk factors not presently known to the Company or that the Company currently deems immaterial may also impair the Company’s business, financial condition and/or results of operations. As of the date of this Quarterly Report, except as disclosed below, there have been no material changes to the risk factors disclosed in the Form 10-K.

The Excise Tax included in the Inflation Reduction Act of 2022 may decrease the value of our securities, hinder our ability to consummate an initial business combination, and decrease the amount of funds available for distribution to our stockholders in the event of a liquidation or in 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, which, among other things, imposes a 1% excise tax on the fair market value of stock repurchased by publicly traded U.S. corporations and certain U.S. subsidiaries of publicly traded non-U.S. corporations beginning in 2023, with certain exceptions (the “Excise Tax”). Because we are a Delaware corporation and our securities trade on the NYSE, we are a “covered corporation” within the meaning of the Inflation Reduction Act. While not free from doubt, absent any further guidance from Congress or the U.S. Department of the Treasury, there is significant risk that the Excise Tax will 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 certificate of incorporation to extend the time to consummate an initial business combination, unless an exemption is available. In addition, the Excise Tax may make a transaction with us less appealing to potential business combination targets, and thus, potentially hinder our ability to enter into and consummate an initial business combination. Consequently, the value of your investment in our securities may decrease as a result of the Excise Tax. Further, the application of the Excise Tax in the event of a liquidation is uncertain and could impact the per-share amount that would otherwise be received by our stockholders in connection with our liquidation.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

There were no unregistered sales of equity securities during the three months ended September 30, 2022.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits


No.		Description of Exhibit

31.1*		Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*		XBRL Instance Document-the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH*		XBRL Taxonomy Extension Schema Document

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		XBRL Taxonomy Extension Labels Linkbase Document

101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

*	Filed herewith.

These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended, 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, except as shall be expressly set forth by specific reference in such filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	TRAJECTORY ALPHA ACQUISITION CORP.

Date: November 10, 2022	By:	/s/ Peter Bordes
		Name:	Peter Bordes
		Title:	Chief Executive Officer (Principal Executive Officer)

Date: November 10, 2022	By:	/s/ Michael E.S. Frankel
		Name:	Michael E.S. Frankel
		Title:	President and Chief Financial Officer (Principal Financial and Accounting Officer)