NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
NOTE 1. DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS, LIQUIDITY
AND GOING CONCERN
Better
World Acquisition Corp. (the “Company”) was incorporated in Delaware on August 5, 2020. The Company is a blank check company
formed 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”).
Although
the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company is focused
on target businesses in the healthy living industries that benefit from strong Environmental, Social and Governance (“ESG”)
profiles. The Company is an early stage and emerging growth company and, as such, the Company is subject to all the risks associated
with early stage and emerging growth companies.
As
of September 30, 2021, the Company had not commenced any operations. All activity for the period from August 5, 2020 (inception) through
September 30, 2021 relates to the Company’s formation, the initial public offering (“Initial Public Offering”), which
is described below, and identifying a target company for a Business Combination. The Company will not generate any operating revenues
until after the completion of a 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
registration statement for the Company’s Initial Public Offering was declared effective on November 12, 2020. On November 17, 2020,
the Company consummated the Initial Public Offering of 11,000,000 units (the “Units” and, with respect to the shares of common
stock included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $110,000,000, which
is described in Note 4.
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the sale of 4,800,000 warrants (the “Private Warrants”)
at a price of $1.00 per Private Warrant in a private placement to BWA Holdings LLC (the “Sponsor”) and EarlyBirdCapital,
Inc. (“EarlyBirdCapital”), generating gross proceeds of $4,800,000, which is described in Note 5.
Following
the closing of the Initial Public Offering on November 17, 2020, an amount of $111,100,000 ($10.10 per Unit) from the net proceeds of
the sale of the Units in the Initial Public Offering and the sale of the Private Warrants was placed in a trust account (the “Trust
Account”) located in the United States and 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 completion of a Business Combination
and (ii) the distribution of the funds in the Trust Account, as described below.
On
November 17, 2020, the underwriters notified the Company of their intention to partially exercise their over-allotment option on November
19, 2020. As such, on November 19, 2020, the Company consummated the sale of an additional 1,618,600 Units, at $10.00 per Unit, generating
gross proceeds of $16,186,000, and the sale of an additional 485,580 Private Warrants, at $1.00 per Private Warrant, generating gross
proceeds of $485,580. A total of $16,347,860 of the net proceeds was deposited into the Trust Account, bringing the aggregate proceeds
held in the Trust Account to $127,447,860.
Transaction
costs amounted to $2,880,354 consisting of $2,523,720 of underwriting fees and $356,634 of other offering costs.
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 the Private Warrants, although substantially all of the net proceeds are intended to be applied generally toward completing
a Business Combination. The Company must complete a Business Combination having an aggregate fair market value of at least 80% of the
assets held in the Trust Account (excluding taxes payable on income earned on the Trust Account) at the time of the agreement to enter
into an initial Business Combination. The Company will only complete a Business Combination if the post Business Combination company
owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target
sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that
the Company will be able to complete a Business Combination successfully.
The
Company will provide its holders of the outstanding Public Shares (“the public stockholders”) with the opportunity to redeem
all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting
called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder
approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. 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 $10.10 per Public
Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its
tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s
warrants.
BETTER
WORLD ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
The
Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 immediately prior to or
upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted
in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder
vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended
and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities
and Exchange Commission (“SEC”) and file tender offer documents with the SEC containing substantially the same information
as would be included in a proxy statement prior to completing a Business Combination. If, however, stockholder approval of the transaction
is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem
shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company
seeks stockholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in
Note 6), Representative Shares (as defined in Note 9) and any Public Shares purchased during or after the Initial Public Offering (a)
in favor of approving a Business Combination and (b) not to redeem any shares in connection with a stockholder vote to approve a Business
Combination or sell any shares to the Company in a tender offer in connection with a Business Combination. Additionally, each public
stockholder may elect to redeem their Public Shares, irrespective of whether they vote for or against the proposed Business Combination.
The
Sponsor has agreed (a) to waive its redemption rights with respect to the Founder Shares and Public Shares held by it in connection with
the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Certificate of Incorporation
that would affect a public stockholders’ ability to convert or sell their shares to the Company in connection with a Business Combination
or affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete
a Business Combination, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction
with any such amendment.
On November 9, 2021, the Company’s board of
directors approved the extension of the date by which the Company has to consummate a Business Combination from November 17, 2021 to February
17, 2022. In connection with the extension, the Sponsor deposited into the Trust Account $0.10 for each of the 12,618,600 shares issued
in the Initial Public Offering, for a total of $1,261,860. The Company issued the Sponsor a non-interest bearing unsecured promissory
note in the principal amount of $1,261,860 which is payable by the Company upon the earlier of the consummation of the Business Combination
or the liquidation of the Company on or before February 17, 2022 (unless such date is extended by the Company’s board of directors
to May 17, 2022). The Note may be repaid in cash or convertible into Private Warrants at a price of $1.00 per Private Warrant. If the
Company anticipates that it may not be able to consummate a Business Combination by February 17, 2022, the Company may extend the period
of time to consummate a Business Combination by an additional three months (up to May 17, 2022) to complete a Business Combination (the
“Combination Period”). In order to extend the time available for the Company to consummate a Business Combination, the Sponsor
or its affiliate or designees must deposit into the Trust Account an additional $1,261,860 ($0.10 per Public Share ) on or prior to the
date of the applicable deadline, for the three month extension.
If
the Company is unable to complete a Business Combination within the Combination Period, 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 the Company to pay taxes, 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), subject to applicable law, 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.
The
Sponsor has agreed to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination
within the Combination Period. However, if the Sponsor acquires 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. 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 amount of funds deposited into the Trust Account ($10.10).
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 vendor 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 $10.10 per Public Share, except as to
any claims by a third party who executed a valid and enforceable agreement with the Company waiving any right, title, interest or claim
of any kind they may have in or to any monies held in the Trust Account and except as to any claims under the Company’s indemnity
of the underwriters of 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 Insiders 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 Insiders will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors,
service providers (except the Company’s independent registered public accounting firm), prospective target businesses or 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.
BETTER
WORLD ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
Risks
and Uncertainties
Management
continues 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 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.
Liquidity
and Going Concern
As
of September 30, 2021, the Company had $494,905 in its operating bank accounts, $127,515,836 in securities held in the Trust Account
to be used for a Business Combination or to repurchase or redeem its common stock in connection therewith. As of September 30, 2021,
approximately $67,976 of the amount on deposit in the Trust Account represented interest income, which is available to pay the Company’s
tax obligations.
Until
the consummation of a Business Combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating
prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting
the target business to acquire, and structuring, negotiating and consummating the Business Combination.
The
Company expects it will need to raise additional capital through loans or additional investments from its Sponsor, stockholders, officers,
directors, or third parties. The Company’s officers, directors and Sponsor may, but are not obligated to, loan the Company funds,
from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working
capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional
capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to,
curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide
any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial
doubt about the Company’s ability to continue as a going concern for a reasonable period of time, which is considered to be one
year from the issuance date of the financial statements.
In
connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s
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 mandatory liquidation and subsequent dissolution, should the Company be
unable to complete a business combination, raises substantial doubt about the Company’s ability to continue as a going concern.
No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after February
17, 2022.
NOTE 2. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL
STATEMENTS
In connection with the preparation of the Company’s financial
statements as of September 30, 2021, management determined it should restate its previously reported financial statements. The Company
determined that at the closing of the Initial Public Offering, it improperly valued its common stock subject to possible redemption. The
Company previously determined the common stock subject to possible redemption to be equal to the redemption value, while also taking into
consideration that a redemption cannot result in net tangible assets being less than $5,000,001. Management determined that the Public
Shares underlying the Units issued during the Initial Public Offering can be redeemed or become redeemable subject to the occurrence of
future events considered outside the Company’s control. Therefore, management concluded that the redemption value should include
all shares of common stock subject to possible redemption, resulting in the common stock subject to possible redemption being equal to
their redemption value. As a result, management has noted a reclassification error related to temporary equity and permanent equity. This
resulted in an adjustment to the initial carrying value of the common stock subject to possible redemption with the offset recorded to
additional paid-in capital (to the extent available), accumulated deficit and common stock.
In
connection with the change in presentation for the common stock subject to redemption, the Company also revised its income (loss) per
common share calculation to allocate net income (loss) evenly to all common shares. This presentation contemplates a Business Combination
as the most likely outcome, in which case, all common shares share pro rata in the income (loss) of the Company.
There
has been no change in the Company’s total assets, liabilities or operating results.
BETTER
WORLD ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
The impact of the restatement on the Company’s
financial statements is reflected in the following table.
|
|
As Previously
Reported
|
|
|
Adjustment
|
|
|
As Restated
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet as of December 31, 2020
|
|
|
|
|
|
|
|
|
|
Common stock subject to possible redemption
|
|
$
|
116,958,505
|
|
|
$
|
10,489,355
|
|
|
$
|
127,447,860
|
|
Common stock
|
|
$
|
453
|
|
|
$
|
(104
|
)
|
|
$
|
349
|
|
Additional paid-in capital
|
|
$
|
9,187,275
|
|
|
$
|
(9,187,275
|
)
|
|
$
|
—
|
|
Accumulated deficit
|
|
$
|
(4,187,718
|
)
|
|
$
|
(1,301,976
|
)
|
|
$
|
(5,489,694
|
)
|
Total Stockholders’ Equity (Deficit)
|
|
$
|
5,000,010
|
|
|
$
|
(10,489,355
|
)
|
|
$
|
(5,489,345
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet as of March 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock subject to possible redemption
|
|
$
|
117,791,159
|
|
|
$
|
9,656,701
|
|
|
$
|
127,447,860
|
|
Common stock
|
|
$
|
444
|
|
|
$
|
(95
|
)
|
|
$
|
349
|
|
Additional paid-in capital
|
|
$
|
8,354,630
|
|
|
$
|
(8,354,630
|
)
|
|
$
|
—
|
|
Accumulated deficit
|
|
$
|
(3,355,072
|
)
|
|
$
|
(1,301,976
|
)
|
|
$
|
(4,657,048
|
)
|
Total Stockholders’ Equity (Deficit)
|
|
$
|
5,000,002
|
|
|
$
|
(9,656,701
|
)
|
|
$
|
(4,656,699
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet as of June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock subject to possible redemption
|
|
$
|
117,690,037
|
|
|
$
|
9,757,823
|
|
|
$
|
127,447,860
|
|
Common stock
|
|
$
|
445
|
|
|
$
|
(96
|
)
|
|
$
|
349
|
|
Additional paid-in capital
|
|
$
|
8,455,751
|
|
|
$
|
(8,455,751
|
)
|
|
$
|
—
|
|
Accumulated deficit
|
|
$
|
(3,456,190
|
)
|
|
$
|
(1,301,976
|
)
|
|
$
|
(4,758,166
|
)
|
Total Stockholders’ Equity (Deficit)
|
|
$
|
5,000,006
|
|
|
$
|
(9,757,823
|
)
|
|
$
|
(4,757,817
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Operations for the Period Ended December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption
|
|
|
11,919,886
|
|
|
|
(8,190,283
|
)
|
|
|
3,729,603
|
|
Basic and diluted net loss per share, Common stock subject to possible redemption
|
|
$
|
0.00
|
|
|
|
(0.60
|
)
|
|
$
|
(0.60
|
)
|
Basic and diluted weighted average shares outstanding, Non-redeemable common stock
|
|
|
3,383,106
|
|
|
|
(185,853
|
)
|
|
|
3,197,253
|
|
Basic and diluted net loss per share, Non-redeemable common stock
|
|
$
|
(1.24
|
)
|
|
$
|
0.64
|
|
|
$
|
(0.60
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Operations for the Three Months Ended March 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption
|
|
|
11,710,163
|
|
|
|
908,437
|
|
|
|
12,618,600
|
|
Basic and diluted net income per share, Common stock subject to possible redemption
|
|
$
|
0.00
|
|
|
|
0.05
|
|
|
$
|
0.05
|
|
Basic and diluted weighted average shares outstanding, Non-redeemable common stock
|
|
|
4,525,620
|
|
|
|
(1,038,550
|
)
|
|
|
3,487,070
|
|
Basic and diluted net income per share, Non-redeemable common stock
|
|
$
|
0.18
|
|
|
$
|
(0.13
|
)
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Operations for the Three Months Ended June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption
|
|
|
11,662,491
|
|
|
|
956,109
|
|
|
|
12,618,600
|
|
Basic and diluted net loss per share, Common stock subject to possible redemption
|
|
$
|
0.00
|
|
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
Basic and diluted weighted average shares outstanding, Non-redeemable common stock
|
|
|
4,443,179
|
|
|
|
(956,109
|
)
|
|
|
3,484,070
|
|
Basic and diluted net loss per share, Non-redeemable common stock
|
|
$
|
(0.02
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Operations for the Six Months Ended June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption
|
|
|
11,686,062
|
|
|
|
932,538
|
|
|
|
12,618,000
|
|
Basic and diluted net income per share, Common stock subject to possible redemption
|
|
$
|
0.00
|
|
|
$
|
0.05
|
|
|
$
|
0.05
|
|
Basic and diluted weighted average shares outstanding, Non-redeemable common stock
|
|
|
4,484,172
|
|
|
|
(997,102
|
)
|
|
|
3,484,070
|
|
Basic and diluted net income per share, Non-redeemable common stock
|
|
$
|
0.16
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Cash Flows for the Period Ended December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial classification of common stock subject to possible redemption
|
|
$
|
121,133,939
|
|
|
$
|
6,313,921
|
|
|
$
|
127,447,860
|
|
Change in value of common stock subject to possible redemption
|
|
$
|
(4,175,434
|
)
|
|
$
|
4,175,434
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Cash Flows for the Three Months Ended March 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in value of common stock subject to possible redemption
|
|
$
|
832,654
|
|
|
$
|
(832,654
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Cash Flows for the Six Months Ended June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in value of common stock subject to possible redemption
|
|
$
|
(101,122
|
)
|
|
$
|
101,122
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Changes in Stockholders’ (Deficit) Equity for the Period from August 5, 2020 (Inception) through December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of 12,618,600 Units, net of underwriting discounts and offering expenses
|
|
$
|
120,832,987
|
|
|
$
|
(120,832,987
|
)
|
|
$
|
—
|
|
Common stock subject to redemption
|
|
$
|
(116,958,505
|
)
|
|
$
|
116,958,505
|
|
|
$
|
—
|
|
Accretion for common stock to redemption amount
|
|
$
|
—
|
|
|
$
|
(6,614,873
|
)
|
|
$
|
(6,614,873
|
)
|
Total shareholders’ (deficit) equity
|
|
$
|
5,000,010
|
|
|
$
|
(10,489,355
|
)
|
|
$
|
(5,489,345
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Changes in Stockholders’ (Deficit) Equity for the Three Months ended March 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock subject to redemption
|
|
$
|
(832,654
|
)
|
|
$
|
832,654
|
|
|
$
|
—
|
|
Total shareholders’ (deficit) equity
|
|
$
|
5,000,002
|
|
|
$
|
(9,656,701
|
)
|
|
$
|
(4,656,699
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Changes in Stockholders’ (Deficit) Equity for the Three Months ended June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock subject to redemption
|
|
$
|
101,122
|
|
|
$
|
(101,122
|
)
|
|
$
|
—
|
|
Total shareholders’ (deficit) equity
|
|
$
|
5,000,006
|
|
|
$
|
(9,757,823
|
)
|
|
$
|
(4,757,817
|
)
|
BETTER
WORLD ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
NOTE
3. 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 interim financial information and in accordance with the instructions to Form
10-Q and Article 8 of Regulation S-X of 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. In the opinion of management, the accompanying unaudited condensed financial statements include
all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating
results and cash flows for the periods presented.
The accompanying unaudited condensed financial
statements should be read in conjunction with the Company’s Amendment No. 1 to the Annual Report on Form 10-K/A for the period ended
December 31, 2020, as filed with the SEC on December 14, 2021. The interim results for the three and nine months ended September 30, 2021
are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future periods.
Emerging
Growth Company
The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our
Business Startups Act of 2012 (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 the condensed financial statements in conformity with 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 revenues and 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. One of the more significant accounting estimates
included in these condensed financial statements is the determination of the fair value of the warrant liabilities. Such estimates may
be subject to change as more current information becomes available and accordingly the actual results could differ significantly from
those estimates.
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 September 30, 2021 and December 31, 2020, respectively.
Cash and Marketable Securities Held in Trust
Account
At
September 30, 2021 and December 31, 2020, respectively, substantially all of the assets held in the Trust Account were held in U.S. Treasury
securities. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading securities
are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in
fair value of investments held in the Trust Account are included in interest earned on marketable securities held in the Trust Account
in the accompanying condensed statements of operations. The estimated fair values of investments held in the Trust Account are determined
using available market information.
BETTER
WORLD ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
Common
Stock Subject to Possible Redemption
The
Company accounts for its common stock subject to possible redemption 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 is measured at fair value. Conditionally redeemable common stock (including common stock 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 the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’
equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s
control and subject to occurrence of uncertain future events. Accordingly, as of September 30, 2021 and December 31, 2020, respectively,
common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’
equity section of the Company’s condensed balance sheets.
The
Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to
equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock
are affected by charges against additional paid in capital and accumulated deficit.
At
September 30, 2021 and December 31, 2020, the common stock reflected in the condensed balance sheets are reconciled in the following
table:
Gross proceeds
|
|
$
|
127,447,860
|
|
Less:
|
|
|
|
|
Common stock issuance costs
|
|
$
|
(5,353,012
|
)
|
Amount placed in Trust Account in excess of IPO proceeds
|
|
|
(1,261,861
|
)
|
Plus:
|
|
|
|
|
Accretion of carrying value to redemption value
|
|
$
|
6,614,873
|
|
|
|
|
|
|
Common stock subject to possible redemption
|
|
$
|
128,709,721
|
|
Warrant
Liabilities
The
Company accounts for the Private Warrants in accordance with the guidance contained in ASC 815-40-15-7D and 7F under which the Private
Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Private
Warrants as liabilities at their fair value and adjusts the Private Warrants to fair value at each reporting period. This liability is
subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statements of
operations. The Private Warrants for periods where no observable traded price was available are valued using a binomial lattice simulation
model.
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 September 30,
2021 and December 31, 2020, respectively. 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 effective tax rate differs from the statutory tax rate of 21% for the three and nine months ended September 30,
2021, respectively, due to the valuation allowance recorded on the Company’s net operating losses and the permanent difference
arising from the income recorded due to the change in fair value of the Company’s warrant liabilities.
BETTER
WORLD ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
Net
Income (Loss) Per Common Share
The
Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss)
per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period.
The Company applies the two-class method in calculating income (loss) per common share. Accretion associated with the redeemable common
shares is excluded from income (loss) per common share as the redemption value approximates fair value.
The
calculation of diluted income (loss) per share 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.
The warrants are exercisable to purchase 17,904,180 common shares in the aggregate. As of September 30, 2021 and December 31, 2020, 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.
The
following table reflects the calculation of basic and diluted net income (loss) per common share (in dollars, except per share amounts):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Period from
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
August 5, 2020
(Inception)
Through
|
|
|
|
September 30, 2021
|
|
|
September 30, 2021
|
|
|
September 30, 2020
|
|
|
|
Redeemable
|
|
|
Non-redeemable
|
|
|
Redeemable
|
|
|
Non-redeemable
|
|
|
Non-redeemable
|
|
|
|
common stock
|
|
|
common stock
|
|
|
common stock
|
|
|
common stock
|
|
|
common stock
|
|
Basic and diluted net loss per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocation of net income (loss), as adjusted
|
|
$
|
1,156,217
|
|
|
$
|
319,513
|
|
|
$
|
1,729,360
|
|
|
$
|
477,898
|
|
|
$
|
(725
|
)
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average shares outstanding
|
|
|
12,618,600
|
|
|
|
3,487,070
|
|
|
|
12,618,600
|
|
|
|
3,487,070
|
|
|
|
3,082,420
|
|
Basic and diluted net income (loss) per common share
|
|
$
|
0.09
|
|
|
$
|
0.09
|
|
|
$
|
0.14
|
|
|
$
|
0.14
|
|
|
$
|
(0.00
|
)
|
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution,
which, at times may exceed the Federal Deposit Insurance Corporation maximum coverage of $250,000. The Company has not experienced losses
on these accounts.
Fair
Value of Financial Instruments
The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value
Measurement,” approximates the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their
short-term nature, except for warrant liabilities (see Note 10).
BETTER
WORLD ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
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.
|
In
some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In
those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input
that is significant to the fair value measurement.
Recent
Accounting Standards
In
August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives
and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an
Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major
separation models required under current GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts
to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas.
ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with
early adoption permitted. The Company is currently assessing the impact, if any, that ASU2020-06 would have on its financial position,
results of operations and cash flows.
Management
does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material
effect on the Company’s condensed financial statements.
NOTE
4. PUBLIC OFFERING
Pursuant
to the Initial Public Offering, the Company sold 11,000,000 Units at a price of $10.00 per Unit. Each Unit consists of one share of common
stock and one redeemable warrant (“Public Warrant”). In connection with the underwriters’ partial exercise of the over-allotment
option on November 19, 2020, the Company sold an additional 1,618,600 Units, at a purchase price of $10.00 per Unit. Each Public Warrant
entitles the holder to purchase one share of common stock at an exercise price of $11.50 per share (see Note 9).
NOTE
5. PRIVATE PLACEMENT
Simultaneously
with the closing of the Initial Public Offering, the Sponsor and EarlyBirdCapital purchased an aggregate of 4,800,000 Private Warrants
at a price of $1.00 per Private Warrant for an aggregate purchase price of $4,800,000. The Sponsor purchased 3,975,000 Private Warrants
and EarlyBirdCapital purchased 825,000 Private Warrants. In connection with the underwriters’ partial exercise of the over-allotment
option on November 19, 2020, the Sponsor and EarlyBirdCapital purchased an additional 485,580 Private Warrants, at a purchase price of
$1.00 per Private Warrant, for an aggregate purchase price of $485,580. Each Private Warrant entitles the holder to purchase one share
of common stock at a price of $11.50 per full share, subject to adjustment (see Note 9). The proceeds from the Private Warrants were
added to the 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 Warrants will be used to fund the redemption of the Public Shares
(subject to the requirements of applicable law).
BETTER
WORLD ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
NOTE
6. RELATED PARTY TRANSACTIONS
Founder
Shares
On
August 5, 2020, the Sponsor paid $25,000 to cover certain offering costs of the Company in consideration for 3,593,750 shares of common
stock (the “Founder Shares”). On November 9, 2020, the Sponsor returned to the Company for cancellation, at no cost, an aggregate
of 718,750 Founder Shares, resulting in an aggregate of 2,875,000 Founder Shares outstanding and held by the Sponsor. On November 12,
2020, the Company effected a stock dividend of 0.1 shares for each share of common stock outstanding, resulting in an aggregate of 3,162,500
Founder Shares outstanding and held by the Sponsor. The Founder Shares included, after giving retroactive effect to the share surrender
and stock dividend, an aggregate of up to 412,500 shares subject toforfeiture to the extent that the underwriters’ over-allotment
was not exercised in full or in part, so that the Sponsor would collectively own 20% of the Company’s issued and outstanding shares
after the Initial Public Offering (assuming the Sponsor did not purchase any Public Shares in the Initial Public Offering). In connection
with the underwriters’ partial exercise of the over-allotment option and the forfeiture of the remaining over-allotment option,
7,850 Founder Shares were forfeited and 404,650 Founder Shares are no longer subject to forfeiture resulting in an aggregate of 3,154,650
Founder Shares outstanding at September 30, 2021.
The
Sponsor has agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until (1) with respect
to 50% of the Founder Shares, the earlier of one year after the completion of a Business Combination and the date on which the closing
price of the common stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations
and the like) for any 20 trading days within any 30-trading day period commencing after a Business Combination and (2) with respect to
the remaining 50% of the Founder Shares, one year after the completion of a Business Combination, or earlier, in either case, if, subsequent
to a Business Combination, the Company completes a liquidation, merger, stock exchange or other similar transaction which results in
all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.
Due
from Sponsor
At the closing of the Initial Public Offering
on November 17, 2020, an aggregate amount of $25,038 was due to the Company. Such amount remains outstanding as of September 30, 2021.
Administrative
Support Agreement
The
Company has agreed, commencing on November 12, 2020 through the earlier of the Company’s consummation of a Business Combination
and its liquidation, to pay an affiliate of the Company’s management a total of $10,000 per month for office space, utilities and
secretarial support. For the three and nine months ended September 30, 2021, the Company incurred $30,000 and $90,000 in fees for these
services, respectively. For the period from August 5, 2020 (inception) through September 30, 2020, the Company did not incur any fees
for these services. At September 30, 2021 and December 31, 2020, fees of $40,000 and $20,000 are included in accounts payable and accrued
expenses in the accompanying condensed balance sheets, respectively.
Promissory
Note — Related Party
On
August 5, 2020, the Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which
the Company could borrow up to an aggregate principal amount of $300,000. The Promissory Note was non-interest bearing and payable on
the earlier of (i) March 31, 2021, (ii) the consummation of the Initial Public Offering or (iii) the date on which the Company determined
not to proceed with the Initial Public Offering. The outstanding balance under the Promissory Note was repaid subsequent to the Initial
Public Offering. As of September 30, 2021 and December 31, 2020, respectively, no balance is outstanding under the Promissory Note. Borrowings
under the Promissory Note are no longer available.
BETTER
WORLD ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
Related
Party Loans
In
addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or certain of the Company’s
officers and directors or their affiliates may, but are not obligated to, loan the Company funds as may be required (“Working Capital
Loans”). Each loan would be evidenced by promissory note. 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 notes may be converted upon completion of a Business Combination
into warrants at a price of $1.00 per warrant. Such warrants would be identical to the Private 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.
Related
Party Extension Loans
As
discussed in Note 1, the Company may extend the period of time to consummate a Business Combination up to two times, each by an additional
three months (up to May 17, 2022 to complete a Business Combination). In order to extend the time available for the Company to consummate
a Business Combination, the Sponsor or its affiliates or designees must deposit into the Trust Account $1,261,860 ($0.10 per Public Share
), on or prior to the date of the applicable deadline, for each three month extension. Any such payments would be made in the form of
a non-interest bearing, unsecured promissory note. Such notes would either be paid upon consummation of a Business Combination, or, at
the relevant insider’s discretion, converted upon consummation of a Business Combination into additional Private Warrants at a
price of $1.00 per Private Warrant. The Sponsor and its affiliates or designees are not obligated to fund the Trust Account to extend
the time for the Company to complete a Business Combination.
NOTE
7. COMMITMENTS
Registration
Rights
Pursuant
to a registration rights agreement entered into on November 12, 2020, the holders of the Founder Shares and Representative Shares (as
defined in Notes 6 and 9, respectively), as well as the holders of the Private Warrants (and underlying securities) and any warrants
issued in payment of Working Capital Loans made to Company (and underlying securities) will be entitled to registration rights. The holders
of a majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of the
majority of the Founder Shares can elect to exercise these registration rights at any time commencing three months prior to the date
on which these shares of common stock are to be released from escrow. The holders of a majority of the Representative Shares, Private
Warrants and warrants issued in payment of working capital loans made to the Company (or underlying securities) can elect to exercise
these registration rights at any time after the Company consummates a Business Combination. Notwithstanding anything to the contrary,
EarlyBirdCapital may only make a demand on one occasion and only during the five-year period beginning on the effective date of the registration
statement of which this prospectus forms a part. In addition, the holders have certain “piggy-back” registration rights with
respect to registration statements filed subsequent to consummation of a Business Combination; provided, however, that EarlyBirdCapital
may participate in a “piggy-back” registration only during the seven-year period beginning on the effective date of the registration
statement of which this prospectus forms a part. The registration rights agreement does not contain liquidating damages or other cash
settlement provisions resulting from delays in registering the Company’s securities. 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 the Initial Public Offering to purchase up to 1,650,000 additional
Units to cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions. On November 19,
2020, the underwriters partially exercised their over-allotment option to purchase an additional 1,618,600 Units at $10.00 per Unit and
forfeited the remaining over-allotment option.
BETTER
WORLD ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
Business
Combination Marketing Agreement
The
Company has engaged EarlyBirdCapital as an advisor in connection with a Business Combination to assist the Company in holding meetings
with its stockholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company
to potential investors that are interested in purchasing the Company’s securities in connection with a Business Combination, assist
the Company in obtaining stockholder approval for the Business Combination and assist the Company with its press releases and public
filings in connection with the Business Combination. The Company will pay EarlyBirdCapital a cash fee for such services upon the consummation
of a Business Combination in an amount equal to 3.5% of the gross proceeds of the Initial Public Offering, or $4,416,510, (exclusive
of any applicable finders’ fees which might become payable); provided that up to 30% of the fee may be allocated at the Company’s
sole discretion to other FINRA members that assist the Company in identifying and consummating a Business Combination.
Additionally,
the Company will pay EarlyBirdCapital a cash fee equal to 1.0% of the total consideration payable in a Business Combination if EarlyBirdCapital
introduces the Company to the target business with which the Company completes a Business Combination.
NOTE
8. STOCKHOLDERS’ (DEFICIT) EQUITY
Preferred
Stock — The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with
such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors.
At September 30, 2021 and December 31, 2020, respectively, 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. At
September 30, 2021 and December 31, 2020, there were 3,487,070 shares of common stock issued and outstanding, excluding 12,618,600 shares
of common stock subject to possible redemption which are presented as temporary equity.
NOTE
9. WARRANTS
Warrants
— The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination
or (b) 12 months from the closing of the Initial Public Offering. No warrants will be exercisable for cash unless the Company has an
effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current
prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of
common stock issuable upon exercise of the Public Warrants is not effective within a specified period following the consummation of a
Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when
the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the
exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another
exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. The Public Warrants will expire
five years after the completion of a Business Combination or earlier upon redemption or liquidation.
The
Company may redeem the Public Warrants (excluding the Private Warrants and any warrants underlying units issued upon conversion of the
Working Capital Loans):
|
●
|
in whole and not in part;
|
|
|
|
|
●
|
at a price of $0.01 per warrant;
|
|
|
|
|
●
|
upon not less than 30 days’ prior written notice of redemption 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, reorganizations, recapitalizations and the like), for any 20 trading days within a 30 trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
|
BETTER
WORLD ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
If
the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the
Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares
of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend,
or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for
issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle
the 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 warrants will not receive any of such funds with respect to their warrants, nor will they
receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly,
the warrants may expire worthless.
In
addition, if (x) the Company issues additional common stock or equity-linked securities for capital raising purposes in connection with
the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per common stock (with such issue
price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such
issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as
applicable, prior to such issuance), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity
proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination
(net of redemptions), and (z) the volume weighted average trading price of its common stock during the 20 trading day period starting
on the trading day prior to the day on which the Company consummates its Business Combination (such price, the “Market Value”)
is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater
of (i) Market Value or (ii) the price at which the Company issue the additional shares of common stock or equity-linked securities.
The
Private Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private
Warrants and the shares of common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or saleable
until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will
be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial
purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted
transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
BETTER
WORLD ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
Representative
Shares
On
August 5, 2020, the Company issued to EarlyBirdCapital 377,750 shares of common stock (the “Representative Shares”). On November
9, 2020, EarlyBirdCapital returned to the Company for cancellation, at no cost, an aggregate of 75,550 Representative Shares, resulting
in an aggregate of 302,200 Representative Shares outstanding and held by EarlyBirdCapital. On November 12, 2020, the Company effected
a stock dividend of 0.1 shares for each share of common stock outstanding, resulting in EarlyBirdCapital holding an aggregate of 332,420
Representative Shares. The Company accounted for the Representative Shares as an offering cost of the Initial Public Offering, with a
corresponding credit to stockholders’ equity. The Company estimated the fair value of Representative Shares to be $2,666 based
upon the price of the Founder Shares issued to the Sponsor. The holders of the Representative Shares have agreed not to transfer, assign
or sell any such shares until the completion of a Business Combination. In addition, the holders have agreed (i) to waive their redemption
rights with respect to such shares in connection with the completion of a Business Combination and (ii) to waive their rights to liquidating
distributions from the Trust Account with respect to such shares if the Company fails to complete a Business Combination within the Combination
Period.
The
Representative Shares have been deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days immediately
following the effective date of the registration statement related to the Initial Public Offering pursuant to Rule 5110(g)(1) of FINRA’s
NASD Conduct Rules. Pursuant to FINRA Rule 5110(g)(1), these securities will not be sold during the Initial Public Offering, or 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 period of 180 days immediately following the effective
date of the Initial Public Offering, except to any underwriter and selected dealer participating in the Initial Public Offering and their
bona fide officers or partners, provided that all securities so transferred remain subject to the lockup restriction above for the remainder
of the time period.
NOTE
10. 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 that are measured at fair value on a recurring basis at September
30, 2021 and December 31, 2020, respectively, and indicates the fair value hierarchy of the valuation inputs the Company utilized to
determine such fair value:
Description
|
|
Level
|
|
September 30,
2021
|
|
|
December 31,
2020
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
Marketable securities
held in Trust Account
|
|
|
1
|
|
$
|
127,515,836
|
|
|
$
|
127,462,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Warrant liabilities –
Private Warrants
|
|
|
3
|
|
|
3,251,206
|
|
|
|
6,554,119
|
|
The
Private Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant 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 condensed statements of operations.
BETTER
WORLD ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
The
Private Warrants are valued using a binomial lattice model. The Company allocated the proceeds received from (i) the sale of Units (which
is inclusive of one share of common stock and one Public Warrant) and (ii) the sale of Private Warrants, 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. The Warrants were classified as Level 3 at the initial measurement date due to the use of unobservable inputs.
The
following are the inputs used by the Company in establishing the fair value of its Private Warrants at September 30, 2021 and December
31, 2020.
Input
|
|
December 31,
2020
|
|
|
September 30,
2021
|
|
Risk-free interest
rate
|
|
|
0.40
|
%
|
|
|
0.89
|
%
|
Trading days per year
|
|
|
252
|
|
|
|
252
|
|
Expected volatility
|
|
|
17.9
|
%
|
|
|
11.5
|
%
|
Exercise price
|
|
$
|
11.50
|
|
|
$
|
11.50
|
|
Stock Price
|
|
$
|
10.15
|
|
|
$
|
10.08
|
|
On
December 31, 2020 and September 30, 2021, the Private Warrants were determined to be $1.24 per warrant and $0.62 per warrant, respectively,
for an aggregate value of $6.55 million and $3.25 million, respectively.
The
following table presents the changes in the fair value of the warrant liabilities:
|
|
Private
Placement
|
|
Fair value as of December 31, 2020
|
|
$
|
6,554,119
|
|
Change
in valuation inputs or other assumptions
|
|
|
(3,302,913
|
)
|
Fair value as of September
30, 2021
|
|
$
|
3,251,206
|
|
NOTE
11. SUBSEQUENT EVENTS
On November 9, 2021, the Company’s board of
directors approved the extension of the date by which the Company has to consummate a Business Combination from November 17, 2021 to February
17, 2022. In connection with the extension, the Sponsor deposited into the Trust Account $0.10 for each of the 12,618,600 shares issued
in the Initial Public Offering, for a total of $1,261,860. The Company issued the Sponsor a non-interest bearing unsecured promissory
note in the principal amount of $1,261,860 which is payable by the Company upon the earlier of the consummation of the Business Combination
or the liquidation of the Company on or before February 17, 2022 (unless such date is extended by the Company’s board of directors
to May 17, 2022). The Note may be repaid in cash or convertible into Private Warrants at a price of $1.00 per Private Warrant.
The Company evaluated subsequent events and transactions
that occurred after the balance sheet date up to the date that the condensed financial statements were issued. Based upon this review,
the Company did not identify any subsequent events other than the event set forth above that would have required adjustment or disclosure
in the condensed financial statements.