The accompanying notes are an integral part of
these unaudited condensed financial statements.
The accompanying notes are an integral part of
these unaudited condensed financial statements.
The accompanying notes are an integral part of
these unaudited condensed financial statements.
The accompanying notes are an integral part of
these unaudited condensed financial statements.
NOTES TO UNAUDITED CONDENSED UNAUDITED FINANCIAL
STATEMENTS
SEPTEMBER 30, 2021
Note 1 — Organization and Business Operations
Organization
and General
Onyx Acquisition
Co. I (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on February 2, 2021. The
Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share 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.
As of September
30, 2021, the Company had not commenced any operations. All activity for the period from February 2, 2021 (inception) through September
30, 2021 relates to the Company’s formation and the initial public offering (“IPO”), which is described below. 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 has selected December 31 as its fiscal year end.
Sponsor
and Financing
The Company’s
sponsor is Onyx Acquisition Sponsor, LLC, a Cayman Islands limited liability company (the “Sponsor”).
The registration
statement for the Company’s IPO was declared effective on November 2, 2021 (the “Effective Date”). On November 5, 2021,
the Company consummated its IPO of 26,450,000 units (the “Units”), which includes the exercise of the underwriter’s
option to purchase up to an additional 3,450,000 Units at the IPO price to cover over-allotments. Each Unit consists of one Class A ordinary
share, $0.0001 par value per share (the “Class A ordinary shares” and shares thereof sold in the IPO, “Public Shares”),
and one-half of one redeemable warrant (the “Public Warrants”), each whole Public Warrant entitling the holder thereof to
purchase one Class A ordinary share at an exercise price of $11.50 per share, subject to adjustment. The Units were sold at an offering
price of $10.00 per Unit, generating gross proceeds of $264,500,000 (see Note 3).
Simultaneous
with the consummation of the IPO and the issuance and sale of the Units, the Company consummated the private placement of 12,190,000 warrants
(the “Private Placement Warrants”) (including 690,000 Private Placement Warrants purchased in connection with the exercise
of the underwriter’s over-allotment option) at a price of $1.00 per Private Placement Warrant, generating total proceeds of $12,190,000.
The Private Placement Warrants, 11,040,000 of which were purchased by the Sponsor and 1,150,000 of which were purchased by BTIG, LLC (“BTIG”),
are identical to the Public Warrants, except that if held by the Sponsor or BTIG or their permitted transferees, they are, subject to
certain limited exceptions, subject to transfer restrictions until 30 days following the consummation of the Company’s initial business
combination. Additionally, the Private Placement Warrants held by BTIG are subject to the lock-up and registration rights limitations
imposed by FINRA Rule 5110 and may not be exercised after five years from November 2, 2021.
Offering
costs amounted to $16,549,000 consisting of $4,600,000 of underwriting commissions, $11,270,000 of deferred underwriting commissions,
and $679,000 of other offering costs, and was all charged to shareholders’ deficit.
The Company’s
management has broad discretion with respect to the specific application of the net proceeds of the IPO and sale of the Private Placement
Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination.
Nasdaq rules provide that the Business Combination must be with one or more target businesses that together have a fair market value equal
to at least 80% of the value of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable
on the interest earned on the Trust Account) at the time of the Company signing a definitive agreement in connection with the 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 of 1940, as amended (the “Investment Company Act”).
There is no assurance that the Company will be able to successfully effect a Business Combination.
Upon the
closing of the IPO and the simultaneous private placement, a total of $269,790,000, consisting of $10.20 per Unit sold in the IPO and
a portion of the proceeds from the sale of the Private Placement Warrants, was placed in a trust account (the “Trust Account”)
located in the United States, with Continental Stock Transfer & Trust Company acting as trustee, and invested only in United States
“government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days
or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest
only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other
securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring
and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity
fund), the Company intends to avoid being deemed an “investment company” within the meaning of the Investment Company Act.
The IPO is not intended for persons who are seeking a return on investments in government securities or investment securities. The Trust
Account is intended as a holding place for funds pending the earliest to occur of either: (i) the completion of the initial Business Combination;
(ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend the Company’s amended
and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to provide
holders of the Class A ordinary shares the right to have their shares redeemed in connection with the initial Business Combination or
to redeem 100% of the public shares if the Company does not complete the initial Business Combination within 15 months from the closing
of the IPO or (B) with respect to any other provision relating to the rights of holders of the Class A ordinary shares; or (iii) absent
the completing an initial Business Combination within 15 months from the closing of the IPO, the return of the funds held in the Trust
Account to the public shareholders as part of the redemption of the public shares. If the Company does not invest the proceeds as discussed
above, the Company may be deemed to be subject to the Investment Company Act. If the Company is deemed to be subject to the Investment
Company Act, compliance with these additional regulatory burdens would require additional expenses for which the Company has not allotted
funds and may hinder the ability to complete a Business Combination. If the Company has not consummated the initial Business Combination
within the required time period, the public shareholders may receive only approximately $10.20 per public share, or less than such amount
in certain circumstances, on the liquidation of the Trust Account, and the warrants will expire worthless.
The Company
will provide holders of Public Shares (“Public Shareholders”) 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 general meeting called to approve the Business Combination
or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or
conduct a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing
of the transaction and whether the terms of the transaction would require the Company to seek shareholder approval under applicable law
or stock exchange listing requirement. The Public Shareholders will be entitled to redeem their Public Shares for a pro rata portion of
the amount then in the Trust Account (initially anticipated to be $10.20 per Public Share).
The per-share
amount to be distributed to Public Shareholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions
the Company will pay to the underwriter (as discussed in Note 5). These Public Shares will be classified as temporary equity upon the
completion of the IPO in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification
(“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a Business
Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and a majority
of the shares voted are voted in favor of the Business Combination.
The Company
will have only 15 months from the closing of the IPO to consummate the initial Business Combination (the “Combination Period”).
If the Company fails to consummate an initial Business Combination during 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 income taxes, if any (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 Shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any) and (iii)
as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the board of directors,
liquidate and dissolve, subject, in the case of clauses (ii) and (iii), to the Company’s obligations under Cayman Islands law to
provide for claims of creditors and in all cases subject to the requirements of other applicable law. There will be no redemption rights
or liquidating distributions with respect to the warrants, which will expire worthless if the Company fails to complete its initial Business
Combination within the Combination Period.
The Sponsor
and each member of the Company’s management team have agreed to (i) waive their redemption rights with respect to their Founder
Shares (as defined below), (ii) waive their redemption rights with respect to their Founder Shares and any Class A ordinary shares in
connection with a shareholder vote to approve an amendment to the Company’s amended and restated memorandum and articles of association
(A) that would modify the substance or timing of the Company’s obligation to provide holders of the Class A ordinary shares the
right to have their shares redeemed in connection with the initial Business Combination or to redeem 100% of the public shares if the
Company does not complete the initial Business Combination within 15 months from the closing of the IPO or (B) with respect to any other
provision relating to the rights of holders of the Class A ordinary shares and, (iii) waive their rights to liquidating distributions
from the Trust Account with respect to their founder shares if the Company fails to consummate an initial Business Combination within
15 months from the closing of the IPO (although they will be entitled to liquidating distributions from the Trust Account with respect
to any public shares they hold if the Company fail to complete the initial Business Combination within the prescribed time frame), and
(iv) vote any founder shares held by them and any public shares purchased during or after the IPO (including in open market and privately-negotiated
transactions) in favor of the initial Business Combination.
The Sponsor
has agreed that it will be liable to the Company if and to the extent any claims by a third-party (other than the Company’s independent
auditors) 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 amounts in the Trust Account to below the lesser of (i) $10.20 per public share and
(ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account if less than
$10.20 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to
pay the Company’s tax obligations, provided that such liability will not apply to any claims by a third-party or prospective target
business that executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under the indemnity
of the underwriter of the IPO against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities
Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third-party, the Sponsor will not
be responsible to the extent of any liability for such third-party claims.
Risks and Uncertainties
Management is continuing to evaluate the impact
of the COVID-19 pandemic on its financial statements 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 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 Capital Resources
As of September
30, 2021, and prior to the completion of the IPO, the Company lacked the liquidity it needed to sustain operations for a reasonable period
of time, which is considered to be one year from the issuance date of the financial statements.
The Company
has since completed its IPO, as described above, and had approximately $2.3 million in cash and approximately $1.2 million in working
capital immediately after consummation of the IPO. In addition, the Company’s liquidity needs up to September 30, 2021 have been
satisfied through a payment from the Sponsor of $25,000 (see Note 5) for the founder shares to cover certain offering costs and the loan
under an unsecured promissory note from the Sponsor of $40,288 (see Note 5). On November 18, 2021, the Company fully repaid the promissory
note to the Sponsor for $104,808. In order to finance transaction costs in connection with a Business Combination, the Sponsor, initial
shareholders, officers, directors or their affiliates may, but are not obligated to, provide the Company Working Capital Loans (as defined
below) (see Note 5). As of September 30, 2021, there were no amounts outstanding under any Working Capital Loans.
Based on
the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity to meet its needs through
the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, the Company will be using
these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing
due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire,
and structuring, negotiating and consummating the Business Combination.
Note 2 — 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 Securities and Exchange Commission (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 Prospectus, which contains the initial audited financial statements
and notes thereto for the period from February 2, 2021 (inception) to February 19, 2021, as filed with the SEC on November 4, 2021, and
the Company’s report on Form 8-K, which contains the Company’s audited balance sheet and notes thereto as of November 5, 2021,
as filed with the SEC on November 12, 2021. The interim results for the three months ended September 30, 2021 and for the period from
February 2, 2021 (inception) through September 30, 2021 are not necessarily indicative of the results to be expected for the year ending
December 31, 2021 or for any future interim periods.
Emerging Growth Company Status
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 auditor 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 shareholder
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 Securities Exchange Act of 1934, as amended) are required to comply with the new or revised financial accounting standards.
The JOBS Act provides that an emerging growth 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 an 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 the comparison of the Company’s financial statements with those of another public
company that is neither an emerging growth company nor an emerging growth company that 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 financial statement 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 statement and the reported amounts of
expenses during the reporting period. Actual results could differ from those estimates.
Net Loss Per Ordinary Share
Net loss per ordinary share is computed by dividing
net loss by the weighted average number of ordinary shares issued and outstanding during the period, excluding ordinary shares subject
to surrender by the Sponsor. Weighted average shares were reduced for the effect of an aggregate of 862,500 Class B ordinary shares, $0.0001
par value per share (“Class B ordinary shares” or “Founder Shares”) that are subject to surrender if the over-allotment
option was not exercised by the underwriters. At September 30, 2021, the Company did not have any dilutive securities and other contracts
that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted
loss per share is the same as basic loss per share for the period presented.
Deferred Offering Costs
The Company complies with the requirements of
the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering”. Deferred
offering costs consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly
related to the IPO. Offering costs that are directly related to the IPO will be charged to shareholder’s equity upon the completion
of the IPO. Had the IPO proved to be unsuccessful, these deferred costs, as well as additional expenses incurred, would have been charged
to operations.
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 had no cash and cash equivalents
as of September 30, 2021.
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentration of credit risk consist of a cash account in a financial institution which, at times, may exceed the Federal
depository insurance coverage of $250,000. As of September 30, 2021, the Company had not experienced losses on this account, and management
believes the Company was not exposed to significant risks on such account.
Fair Value of Financial Instruments
The fair value of the Company’s assets and
liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates
the carrying amounts represented in the balance sheet, primarily due to its short-term nature.
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—Valuations based on unadjusted quoted
prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block
discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market,
valuation of these securities does not entail a significant degree of judgment.
Level 2—Valuations based on (i) quoted prices
in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets,
(iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated
by market through correlation or other means.
Level 3—Valuations based on inputs that
are unobservable and significant to the overall fair value measurement.
Financial Instruments
The Company will account for warrants as either
equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative
guidance in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC
815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition
of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including
whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require
“net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification.
This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent
quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity
classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued
or modified warrants that do not meet all of the criteria for equity classification, the warrants are required to be recorded at their
initial fair value on the date of issuance and each balance sheet date thereafter. There were no outstanding warrants at September 30,
2021. The Company accounts for its outstanding warrants issued subsequent to September 30, 2021, in conjunction with the IPO, as equity-classified.
Income Taxes
The Company accounts for income taxes under FASB
ASC 740, “Income Taxes.” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities
for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected
future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be
established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC Topic 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’s management determined that the Cayman Islands is the Company’s major tax jurisdiction.
The Company recognizes accrued interest and penalties
related to unrecognized tax benefits as income tax expense. As of September 30, 2021, there were no unrecognized tax benefits and no amounts
accrued for interest and penalties. 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’s management does not expect that the total amount of unrecognized
tax benefits will materially change over the next twelve months.
The Company is considered to be an exempted Cayman
Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing
requirements in the Cayman Islands or the United States. The Company’s deferred tax assets and liabilities are immaterial as of
September 30, 2021.
Ordinary Shares Subject to Possible Redemption
The Company accounts for its ordinary shares subject
to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Ordinary
shares subject to mandatory redemption (if any) are classified as a liability instrument and measured at fair value. Conditionally redeemable
ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject
to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity.
At all other times, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature
certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain
future events.
The Company recognizes changes in redemption value
immediately as they occur and adjusts the carrying value of Class A ordinary shares to equal the redemption value at the end of each reporting
period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in
capital and accumulated deficit.
Recent Accounting Pronouncements
In August 2020, FASB issued Accounting Standards
Update (“ASU”) 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) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU
2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments
and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity.
The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled
in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted
method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective
basis. On February 2, 2021, the date of the Company’s inception, the Company adopted the new standard.
The Company’s management does not believe
that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on
the Company’s financial statements.
Note 3 — Initial
Public Offering
Subsequent to September
30, 2021, on November 5, 2021, the Company sold 26,450,000 Units at a purchase price of $10.00 per Unit. Each Unit had an offering price
of $10.00 and consists of one Class A ordinary share of the Company, par value $0.0001 per share, and one-half of one redeemable warrant.
Each whole Public Warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment.
The warrants will become exercisable on the later of 30 days after the completion of the initial Business Combination or 12 months from
the closing of the IPO.
Following the closing
of the IPO on November 5, 2021, a total of $269,790,000, consisting of $10.20 per Unit sold in the
IPO and a portion of the proceeds from the sale of the Private Placement Warrants, was deposited into the Trust Account. The net
proceeds deposited into the Trust Account will be invested in United States “government securities” within the meaning of
Section 2(a)(16) of the Investment Company Act with a maturity of 185 days or less or in money market funds meeting certain conditions
under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations.
Note 4 — Private
Placement
On November 5, 2021, simultaneously with the closing
of the IPO, the Company completed the private sale of 12,190,000 Private Placement Warrants at a purchase price of $1.00 per Private Placement
Warrant to the Sponsor and BTIG, generating gross proceeds to the Company of $12,190,000. Each Private Placement Warrant entitles the
holder thereof to purchase one Class A ordinary share at $11.50 per share, subject to adjustment (see Note 8).
A portion of the proceeds from the Private Placement
Warrants has been added to the proceeds from the IPO to be held in the Trust Account. If the Company does not complete a Business Combination
within the Combination Period, the proceeds of the sale of the Private Placement Warrants will be used to fund the redemption of the public
shares (subject to the requirements of applicable law), and the Private Placement Warrants will expire worthless.
Note
5 — Related Party Transactions
Founder
Shares
On
February 19, 2021, the Sponsor paid $25,000, or approximately $0.002 per share, to cover certain offering costs in consideration for
10,062,500 Founder Shares.
On
July 2, 2021, the Sponsor surrendered 4,312,500 Founder Shares to the Company for no consideration resulting in 5,750,000 Class B ordinary
shares outstanding.
On
November 2, 2021, the Company issued an additional 862,500 Founder Shares to the Sponsor by way of the application of amounts standing
to the credit of the share premium account of the Company, resulting in there being an aggregate of 6,612,500 Founder Shares outstanding,
so that the initial shareholders will collectively own 20% of the Company’s issued and outstanding ordinary shares after the Initial
Public Offering. All share and per share amounts have been restated.
The
Sponsor and the Company’s directors and officers have agreed not to transfer, assign or sell any of their founder shares until
the earliest of (A) one year after the completion of the initial Business Combination and (B) subsequent to the initial Business Combination,
(x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share
capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing
at least 150 days after the initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, share
exchange or other similar transaction that results in all of the public shareholders having the right to exchange their ordinary shares
for cash, securities or other property. Any permitted transferees would be subject to the same restrictions and other agreements of the
Sponsor and our directors and officers with respect to any founder shares.
Promissory
Note — Related Party
On
February 19, 2021, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the IPO pursuant
to a promissory note (the “Note”). This Note was non-interest bearing and payable on the earlier of June 30, 2021 or the
completion of the IPO. This Note matured undrawn on June 30, 2021.
On
July 27, 2021, the Sponsor agreed to loan the Company up to $300,000 to cover expenses related to the IPO pursuant to a promissory note
(the “New Note”). This New Note is non-interest bearing and payable on the earlier of December 31, 2021 or the completion
of the IPO. On September 30, 2021, the outstanding balance was $40,288. Subsequent to the IPO, on November 18, 2021, the outstanding
balance of $104,808 was repaid in full.
Working
Capital Loans
In
order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of
the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital
Loans”). If the Company completes a Business Combination, the Company will repay the Working Capital Loans out of the proceeds
of the Trust Account released to the Company. In the event that a Business Combination does not close, the Company may use a portion
of the 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. Up to $1,500,000 of such Working Capital 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. The terms of such Working Capital Loans by our officers and directors, if any, have not been
determined and no written agreements exist with respect to such Working Capital Loans. Except for the foregoing, the terms of such Working
Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. To date, the Company had
no borrowings under the Working Capital Loans.
Administrative
Fees
Commencing
on the date of the Company’s prospectus, an affiliate of the Sponsor will provide to members of the management team office space,
secretarial and administrative services at no cost.
Note
6 — Commitments and Contingencies
Registration
and Shareholder Rights
The
holders of Founder Shares, Private Placement Warrants and securities included in private placement units that may be issued upon conversion
of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that
may be issued upon conversion of Working Capital Loans) will be entitled to registration rights pursuant to a registration rights agreement
to be signed upon consummation of the IPO. These holders will be entitled to make up to three demands, excluding short form demands,
that the Company register such securities. In addition, these holders will have certain “piggy-back” registration rights
with respect to registration statements filed after the completion of the initial Business Combination. The Company will bear the expenses
incurred in connection with the filing of any such registration statements.
Underwriter
Agreement
The
underwriters had a 45-day option from the date of the IPO to purchase up to an additional 3,450,000 Units to cover over-allotments, if
any. The underwriters’ fully exercised their over-allotment option at the time of the IPO.
The
underwriters were paid underwriting commission of $0.20 per Unit (excluding Units sold pursuant to the underwriters’ over-allotment
option), or $4,600,000 in the aggregate, upon the closing of the IPO. In addition, the underwriters are entitled to an additional $0.40
per Unit (or $0.60 per Unit sold pursuant to the underwriters’ over-allotment option), or $11,270,000, payable to the underwriters
from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms
of the underwriting agreement for the offering.
Note
7— Shareholders’ Equity
Preference
shares — The Company is authorized to issue 5,000,000 preference shares, 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, there were no preference shares issued or outstanding.
Class
A ordinary shares — The Company is authorized to issue 500,000,000 Class A ordinary shares with a par value of $0.0001 per
share. At September 30, 2021, there were no Class A ordinary shares issued or outstanding.
Class
B ordinary shares — The Company is authorized to issue 50,000,000 Class B ordinary shares with a par value of $0.0001 per share.
As of September 30, 2021, there were 6,612,500 Class B ordinary shares issued and outstanding as restated, of which up to 862,500 shares
are subject to surrender to the Company by the Sponsor for no consideration to the extent that the underwriter’s over-allotment
option is not exercised in full or in part. The underwriters’ fully exercised their over-allotment
option at the time of the IPO, resulting in no shares subject to surrender.
Ordinary
shareholders of record are entitled to one vote for each share held on all matters to be voted on by shareholders. Holders of the Class
A ordinary shares and holders of the Class B ordinary shares will vote together as a single class on all matters submitted to a vote
of shareholders, except as required by law.
The
founder shares are designated as Class B ordinary shares and will automatically convert into Class A ordinary shares, which such Class
A ordinary shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions if the Company
does not consummate an initial Business Combination, at the time of the initial Business Combination or earlier at the option of the
holders thereof at a ratio such that the number of Class A ordinary shares issuable upon conversion of all founder shares will equal,
in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion
of the IPO plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any
equity-linked securities (as defined herein) or rights issued or deemed issued, by the Company in connection with or in relation to the
consummation of the initial Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or
convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial Business Combination and
any Private Placement Warrants issued to the Sponsor, its affiliates or any member of the Company’s management team upon conversion
of Working Capital Loans. Any conversion of Class B ordinary shares described herein will take effect as a compulsory redemption of Class
B ordinary shares and an issuance of Class A ordinary shares as a matter of Cayman Islands law. In no event will the Class B ordinary
shares convert into Class A ordinary shares at a rate of less than one-to-one.
Warrants
— Public Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon
separation of the Units and only whole Public Warrants will trade. 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 IPO; provided in each case that the Company
has an effective registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise
of the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration
under the securities, or blue sky, laws of the state of residence of the holder.
The
Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation
to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A ordinary shares
underlying the warrants is then effective and a prospectus relating thereto is current, subject to our satisfying our obligations described
below with respect to registration, or a valid exemption from registration is available. No warrant will be exercisable for cash, and
the Company will not be obligated to issue any Class A ordinary shares to holders seeking to exercise their warrants, unless the issuance
of the Class A ordinary shares upon such exercise is registered or qualified under the securities laws of the state of the exercising
holder, or an exemption is available.
Once
the warrants become exercisable, the Company may redeem the outstanding warrants:
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in
whole and not in part;
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at
a price of $0.01 per warrant;
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upon
a minimum of 30 days’ prior written notice of redemption; and
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if, and only if, the last reported sale price (the “closing price”) of our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders.
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The
Company will not redeem the warrants unless an effective registration statement under the Securities Act covering the Class A ordinary
shares issuable upon exercise of the warrants is effective and a current prospectus relating to those Class A ordinary shares is available
throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt
from registration under the Securities Act. The Company may not redeem the warrants when a holder may not exercise such warrants.
If
the Company calls the warrants for redemption as described above, management will have the option to require all holders that wish to
exercise warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering
the warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class
A ordinary shares underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair
market value” (defined below) by (y) the fair market value. The “fair market value” means the average reported last
sale price of the Class A ordinary shares for the five trading days ending on the third trading day prior to the date on which the notice
of redemption is sent to the holders of warrants.
The
exercise price and number of Class A ordinary shares issuable on exercise of the warrants may be adjusted in certain circumstances, including
in the event of a stock dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation. However, except
as described below, the warrants will not be adjusted for issuances of Class A ordinary shares at a price below their respective exercise
prices.
In
addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities in connection with the closing of
an initial Business Combination at a Newly Issued Price of less than $9.20 per Class A ordinary share (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,
initial shareholders or their affiliates, without taking into account any founder shares held by them prior to such issuance) (the “Newly
Issued Price”), (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 an initial Business Combination on the date of the consummation of the initial Business
Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s Class A ordinary share during
the 20 trading day period starting on the trading day after the day on which the Company completes a Business Combination (such price,
the “Market Value”) is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent)
to be equal to 115% of the greater of (i) the Market Value or (ii) the Newly Issued Price, and the $18.00 per share redemption trigger
price of the warrants will be adjusted (to the nearest cent) to be equal to 180% of the greater of (i) the Market Value or (ii) the Newly
Issued Price.
The
Private Placement Warrants are identical to the Public Warrants underlying the Units to be sold in the IPO, except that the Private Placement
Warrants and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants will not be transferable, assignable
or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions.
Note
8 — Subsequent Events
On
November 2, 2021, the Company issued an additional 862,500 Founder Shares to the Sponsor by way of the application of amounts standing
to the credit of the share premium account of the Company, resulting in there being an aggregate of 6,612,500 Founder Shares outstanding.
On
November 5, 2021, the Company consummated the IPO of 26,450,000 Units, including an additional 3,450,000 Units as a result of the underwriter’s
exercise of its over-allotment option, at an offering price of $10.00 per Unit, generating gross proceeds of $264,500,000.
On
November 5, 2021, simultaneous with the consummation of the IPO, the Company consummated the private placement with the Sponsor and BTIG
of an aggregate of 12,190,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, generating gross proceeds
of $12,190,000.
On
November 18, 2021, the Company fully repaid the promissory note due to the Sponsor for $104,808.