ALPHA CAPITAL ACQUISITION CO Management report and analysis of the financial situation and operating results. (Form 10-Q)

References to the “Company”, “us”, “our” or “we” refer to Alpha Capital Acquisition Company. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited summary financial statements and accompanying notes contained elsewhere in this report. Certain information contained in the discussion and analysis presented below includes forward-looking statements that involve risks and uncertainties.

Caution Regarding Forward-Looking Statements

This Quarterly
Report on Form 10-Q includes forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). We have based these forward-looking statements on our current
expectations and projections about future events. These forward-looking
statements are subject to known and unknown risks, uncertainties and assumptions
about us that may cause our actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by such
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may," "should," "could," "would," "expect,"
"plan," "anticipate," "believe," "estimate," "continue," or the negative of such
terms or other similar expressions. Factors that might cause or contribute to
such a discrepancy include, but are not limited to, those described in our other
SEC filings.

Insight

We are a blank check company incorporated on December 10, 2020 like a Cayman Islands exempt company incorporated for the purpose of effecting a merger, stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. While we may pursue a primary focus of business combinations in any sector, we intend to focus our research on companies in the technology sector, primarily in Latin America. We intend to complete our initial business combination using cash from the proceeds of our initial public offering and the private placement of warrants from the private placement, proceeds from the sale of our shares under our initial business combination (pursuant to any forward purchase agreements or collateral agreements that we may enter into after completion of this offer or otherwise), shares issued to owners of the target, debt issued to the bank or to other lenders or the owners of the target, or a combination of the above.

Issuance of additional shares in a business combination to target owners or other investors:

     •    may significantly dilute the equity interest of investors in this
          offering, which dilution would increase if the anti-dilution provisions
          in the Class B ordinary shares resulted in the issuance of Class A
          ordinary shares on a greater than
          one-to-one
          basis upon conversion of the Class B ordinary shares;



     •    may subordinate the rights of holders of Class A ordinary shares if
          preferred shares are issued with rights senior to those afforded our
          Class A ordinary shares;



     •    could cause a change in control if a substantial number of our Class A
          ordinary shares are issued, 1,758,498 which may affect, among other
          things, our ability to use our net operating loss carry forwards, if any,
          and could result in the resignation or removal of our present officers
          and directors;



     •    may have the effect of delaying or preventing a change of control of us
          by diluting the share ownership or voting rights of a person seeking to
          obtain control of us; and



     •    may adversely affect prevailing market prices for our Class A ordinary
          shares and/or warrants.



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Similarly, if we issue debt or otherwise incur material debt from a bank or other lenders or owners of a target, it could result in:

     •    default and foreclosure on our assets if our operating revenues after an
          initial business combination are insufficient to repay our debt
          obligations;



     •    acceleration of our obligations to repay the indebtedness even if we make
          all principal and interest payments when due if we breach certain
          covenants that require the maintenance of certain financial ratios or
          reserves without a waiver or renegotiation of that covenant;



     •    our immediate payment of all principal and accrued interest, if any, if
          the debt security is payable on demand;



     •    our inability to obtain necessary additional financing if the debt
          security contains covenants restricting our ability to obtain such
          financing while the debt security is outstanding;



  •   our inability to pay dividends on our Class A ordinary shares;



     •    using a substantial portion of our cash flow to pay principal and
          interest on our debt, which will reduce the funds available for dividends
          on our Class A ordinary shares if declared, expenses, capital
          expenditures, acquisitions and other general corporate purposes;



     •    limitations on our flexibility in planning for and reacting to changes in
          our business and in the industry in which we operate;



     •    increased vulnerability to adverse changes in general economic, industry
          and competitive conditions and adverse changes in government regulation;
          and



     •    limitations on our ability to borrow additional amounts for expenses,
          capital expenditures, acquisitions, debt service requirements, execution
          of our strategy and other purposes and other disadvantages compared to
          our competitors who have less debt.

We expect to incur significant costs in pursuing our initial business combination. We cannot guarantee that our plans to raise capital or complete our first business combination will be successful.

In November 2021Alpha has entered into a definitive agreement for a business combination with Semantix Tecnologia em Sistema da Informação SA (“Semantix”), a data analytics company located in Brazil. Founded in 2010, with operations across Latin America and in United States, Semantix offers proprietary data-as-a-service (“SaaS”) solutions and third-party software licenses as well as complementary artificial intelligence (“AI”) and data analytics services to enable businesses to effectively manage data using by Semantix tools to extract business insights and apply AI automation. Semantix serves more than 300 companies in a wide range of sectors, including finance, retail, telecommunications, healthcare, industrial and agribusiness, among others, serving a diverse portfolio of clients from all sizes, from small businesses to large enterprises. The transaction is subject to Alpha shareholder approval and other customary closing conditions.

Operating results

All our activity since its creation until March 31, 2022 relates to our incorporation, the IPO and, since the closing of the IPO, the search for a candidate for the business combination. We will not generate any operating income until the earliest closing and completion of our first business combination.

For the three months ended March 31, 2022we had a net income of $3,242,343which consisted of $25,010 interest earned on marketable securities held in the trust account and $4,568,220 the change in fair value of warrants, offset by
$1,350,887 in training and operating costs.

For the three months ended March 31, 2021we had a net loss of $1,734,395which consisted of $296,128 in training and operating costs, $876,171 the change in the fair value of the warrants, and $568,614 issuance costs allocated to warrants, offset by $6,518 interest earned on marketable securities held in the trust account.

Liquidity and going concern

From March 31, 2021we have had $69,403 in our operating bank account, and a working capital deficit of $1,758,498.

Our cash requirements up to February 23, 2021 have been satisfied thanks to the payment by the sponsor of $25,000 to cover our offering costs in exchange for the issuance of the Founder Units, the loan under an unsecured promissory note from the sponsor of $170,000and payment of our certain costs of $18,694 by our officer. We have fully repaid the promissory note and the amount due to the officer in February 2021. Following the completion of the initial public offering and the private placement, our liquidity needs have been met with the proceeds from the completion of the private placement which are not held in the trust account.

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Additionally, in order to fund transaction costs associated with a business combination, our sponsor or an affiliate of the sponsor, or certain of our officers and directors may, but are not obligated to, provide us with loans of funds rolling. To date, there were no amounts outstanding under the working capital loans.

On March 4, 2022, we issued an unsecured promissory note in the amount of up to
$500,000 to the Sponsor. The promissory note
was non-interest bearing
and payable on the earlier of (i) June 30, 2022 or (ii) the date on which the
Company consummates a Business Combination. As of March 31, 2022, there was
$150,000 outstanding under the note.

Based on the foregoing, management believes that we will have sufficient working capital and borrowing capacity with the sponsor or an affiliate of the sponsor, or certain of our offices and directors to meet our needs until the completion of a business combination or one year from this filing. However, as part of our assessment of going concern considerations in accordance with FASB Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern” , management has determined that the condition of liquidity and the date of mandatory liquidation and dissolution raise substantial doubts as to our ability to continue our business until February 23, 2023, the expected liquidation date if we do not complete a Business Combination before that date. These unaudited condensed financial statements do not include any adjustments related to the recovery of recognized assets or the classification of liabilities that may be necessary if we are unable to continue our business. Management plans to dispel the above doubt by completing a business combination before February 23, 2023.

Significant Accounting Policies and Estimates

The preparation of unaudited condensed financial statements in accordance with United States GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the condensed financial statements. unaudited and reported amounts of income and expenses during the reporting period. Actual results could differ from these estimates. We have identified the following as our significant accounting policies:

Derivative financial instruments

We evaluate our 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". Derivative instruments
are recorded at fair value on the grant date and
re-valued
at each reporting date, with changes in the fair value reported in the
statements of operations. Derivative assets and liabilities are classified on
the balance sheets 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. We have determined the warrants are a derivative
instrument.

Ordinary Shares Subject to Possible Redemption

We account for our Class A ordinary shares subject to possible redemption in
accordance with the guidance in Accounting Standards Codification ("ASC") Topic
480-10-S99
"Classification and Measurement of Redeemable Securities." Conditionally
redeemable ordinary shares (including ordinary shares that features redemption
rights that is 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, ordinary shares are
classified as shareholders' deficit. Our Class A ordinary shares feature certain
redemption rights that are considered to be outside of our control and subject
to occurrence of uncertain future events. Accordingly, at March 31, 2022 and
December 31, 2021, 23,000,000 Class A ordinary shares subject to possible
redemption is presented at redemption value as temporary equity, outside of the
shareholders' deficit section of our
condensed
balance sheets.

Net earnings (loss) per common share

We have two classes of shares, called Class A common shares and Class B common shares. Gains and losses are shared pro rata between the two classes of shares. The 18,500,000 potential common shares for outstanding warrants to purchase our shares have been excluded from diluted earnings per share for the three months ended March 31, 2022 and March 31, 2021 because the Warrants are exercisable and the contingencies have not yet been satisfied. Accordingly, diluted net income (loss) per common share is the same as basic net income (loss) per common share for the periods.

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Off-balance sheet arrangements

As of March 31, 2022, we did
not have any off-balance sheet arrangements.

Employment Act

The JOBS Act contains provisions that, among other things, relax certain
reporting requirements for qualifying public companies. We will qualify as an
"emerging growth company" and under the JOBS Act will be allowed to comply with
new or revised accounting pronouncements based on the effective date for private
(not publicly traded) companies. We are electing to delay the adoption of new or
revised accounting standards, and as a result, we may not comply with new or
revised accounting standards on the relevant dates on which adoption of such
standards is required for
non-emerging
growth companies. As a result, our unaudited condensed financial statements may
not be comparable to companies that comply with new or revised accounting
pronouncements as of public company effective dates.

Additionally, we are in the process of evaluating the benefits of relying on the
other reduced reporting requirements provided by the JOBS Act. Subject to
certain conditions set forth in the JOBS Act, if, as an "emerging growth
company," we choose to rely on such exemptions we may not be required to, among
other things, (i) provide an independent registered public accounting firm's
attestation report on our system of internal controls over financial reporting
pursuant to Section 404, (ii) provide all of the compensation disclosure that
may be required of
non-emerging
growth public companies under the Dodd-Frank Wall Street Reform and Consumer
Protection Act, (iii) comply with any requirement that may be adopted by the
PCAOB regarding mandatory audit firm rotation or a supplement to the report of
the independent registered public accounting firm providing additional
information about the audit and the financial statements (auditor discussion and
analysis), and (iv) disclose certain executive compensation related items such
as the correlation between executive compensation and performance and
comparisons of the CEO's compensation to median employee compensation. These
exemptions will apply for a period of five years following the completion of
this offering or until we are no longer an "emerging growth company," whichever
is earlier.

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