NOTES
TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2021
(Unaudited)
Note
1 — Organization and Business Operations
Agrico
Acquisition Corp (the “Company”) was incorporated as a Cayman Islands exempted company on July 31, 2020. The Company
was incorporated for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, reorganization or similar
business combination with one or more businesses (the “Business Combination”). The Company has not selected any specific
Business Combination target and it has not, nor has anyone on its behalf, initiated any substantive discussions, directly or indirectly,
with any Business Combination target.
As
of June 30, 2021, the Company had not commenced any operations. All activity through June 30, 2021 relates to the Company’s
formation and preparation for the Initial Public Offering (the “Public Offering” or “IPO”) as described
below. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest.
The Company generates non-operating income in the form of interest income and unrealized gains from the proceeds derived
from the Initial Public Offering as described below. The Company has selected December 31 as its fiscal year end.
The
Company’s sponsor is DJCAAC, LLC, a Delaware limited partnership (the “Sponsor”). The registration statement for the
Company’s IPO was declared effective on July 7, 2021 (the “Effective Date”). Subsequent to June 30, 2021, on July 12,
2021, the Company consummated the initial public offering (the “Public Offering” or “IPO”) of 14,375,000 units
(the “Units”), which includes the full exercise by the underwriters of the over-allotment option to purchase an additional
1,875,000 Units, at $10.00 per unit, generating gross proceeds of $143,750,000, which is discussed in Note 3. Simultaneously with the
closing of the IPO, the Company consummated the sale of 7,250,000 warrants to the Sponsor and Maxim Group LLC (“Maxim”),
the underwriter in this offering (the “Private Placement Warrants”), at a price of $1.00 per Private Placement Warrant, generating
gross proceeds of $7,250,000, which is discussed in Note 4. Each Private Placement Warrant is exercisable to purchase one Class A
ordinary share at $11.50 per share.
Transaction
costs of the IPO amounted to $9,998,781, comprised of $2,875,000 of underwriting fees, $5,031,250 of deferred underwriting fees, $655,031
of other offering costs, and $1,437,500 of the fair value of the representative shares, and was all charged to shareholders’ equity.
Following
the closing of the IPO on July 12, 2021, $146,625,000 (approximately $10.20 per Unit) from the net proceeds of the sale of the Units
in the IPO, including a portion of the proceeds from the sale of the Private Placement Warrants, was deposited in a trust account (“Trust
Account”), located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and may only
be invested in U.S. government securities, within the meaning set forth in 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. Except with respect to interest earned
on the funds held in the Trust Account that may be released to the Company to pay taxes, if any, the proceeds from the IPO and the sale
of the Private Placement Warrants will not be released from the Trust Account (1) to the Company, until the completion of the initial
Business Combination, or (2) to the public shareholders, until the earliest of (a) the completion of the initial Business Combination,
and then only in connection with those Class A ordinary shares that such shareholders properly elected to redeem, subject to the
limitations, (b) the redemption of any public shares properly tendered in connection with a (A) shareholder vote to amend the
amended and restated memorandum and articles of association 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 24 months from the closing
of the Initial public offering (the “Combination Period”), or (B) with respect to any other provision relating to the
rights of holders of the Class A ordinary shares or pre-initial business combination activity, and (c) the redemption
of the public shares if the Company has not consummated the initial Business Combination within 24 months from the closing of the Initial
public offering. Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in
clause (b) in the preceding sentence shall not be entitled to funds from the Trust Account upon the subsequent completion of an
initial Business Combination or liquidation if the Company has not consummated an initial Business Combination within the Combination
Period, with respect to such Class A ordinary shares so redeemed. The proceeds deposited in the Trust Account could become subject
to the claims of the Company’s creditors, if any, which could have priority over the claims of the public shareholders.
The
Company will provide its public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion
of the initial Business Combination either (i) in connection with a general meeting called to approve the initial Business Combination
or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a proposed initial
Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The shareholders will be entitled
to redeem their shares for a pro rata portion of the amount then on deposit in the Trust Account (initially approximately $10.20 per
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).
If
the Company is unable to complete a Business Combination within 12 months (or up to 21 months if the Company extends the period of time
to consummate a business combination by the full amount of time) from the closing of the Public Offering (the “Combination Period”)
or during any Extension 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 us to pay the Company’s franchise and income taxes (less up to $50,000 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 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 shareholders and
board of directors, liquidate and dissolve, subject in each case to the Company’s obligations under Cayman Islands law to provide
for claims of creditors and the requirements of other applicable law.
The
Sponsor, officers and directors have agreed to (i) waive their redemption rights with respect to their Founder Shares and Public
Shares in connection with the completion of the initial Business Combination, (ii) waive their redemption rights with respect to
their Founder Shares and Public Shares in connection with a shareholder vote to approve an amendment to the Company’s amended and
restated certificate memorandum and articles of association (A) that would modify the substance or timing of the Company’s
obligation to redeem 100% of the its Public Shares if the Company does not complete its initial Business Combination within the Combination
Period or (B) with respect to any other provision relating to shareholders’ rights or pre-initial Business Combination activity,
(iii) waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company
fails to complete an initial Business Combination within the Combination Period, although they will be entitled to liquidating distributions
from the Trust Account with respect to any Public Shares they hold if the Company fails to complete the initial Business Combination
within the prescribed timeframe, and (iv) vote their Founder Shares and Public Shares in favor of the Company’s 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 for services rendered or products
sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality
or similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00
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 $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such
liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to
the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s
indemnity of the underwriter of the Public Offering against certain liabilities, including liabilities under the Securities Act. However,
the Company has not asked its Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether
its Sponsor has sufficient funds to satisfy its indemnity obligations and believes that the Company’s Sponsor’s only assets
are securities of the Company. Therefore, the Company cannot assure that its Sponsor would be able to satisfy those obligations.
Liquidity
and Capital Resources
As
of June 30, 2021 the Company had $24,402 in cash and a working capital deficit of $292,535, excluding deferred offering costs. The Company’s
liquidity needs up to June 30, 2021 had been satisfied through a capital contribution from the Sponsor of $25,000 (see Note 5) for the
founder shares and the loan under an unsecured promissory note from the Sponsor of up to $300,000 (see Note 5).
After
consummation of the IPO on July 12, 2021, the Company had approximately $1.2 million in its operating bank account, and working capital
of approximately $0.9 million. In addition, in order to finance transaction costs in connection with a Business Combination, the Company’s
Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, provide
the Company Working Capital Loans (see Note 5). As of June 30, 2021 and December 31, 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.
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 unaudited condensed financial statements. The
unaudited condensed financial statements do not include any adjustments that might result from the outcome of this
uncertainty.
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 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 July 31, 2020 (inception) to December 31, 2020 as filed
with the SEC on July 12, 2021. The interim results for the three and six months ended June 30, 2021 and 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 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 financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement
and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgement.
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. 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 June 30, 2021 or December 31, 2020.
Deferred
Offering Costs
The
Company complies with the requirements of the ASC 340-10-S99-1. Offering costs consisted of legal, accounting, underwriting fees
and other costs incurred through the IPO that were directly related to the Public Offering. Offering costs amounted to $9,998,781
and were charged to shareholders’ equity upon the completion of the Initial Public Offering.
Net
Loss Per Ordinary Share
Net
loss per share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during the period, excluding
ordinary shares subject to forfeiture. At June 30, 2021 and December 31, 2020, 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.
Fair
Value of Financial Instruments
The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair
Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet, primarily due to their
short-term nature.
Ordinary
Shares Subject to Possible Redemption
As
of June 30, 2021 or December 31, 2020, there were no Class A ordinary shares issued or outstanding. The Company will account for its Class A ordinary
shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic
480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption will be classified as a
liability instrument and is measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that
features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain
events not solely within the Company’s control) will be classified as temporary equity. At all other times, ordinary shares
will be classified as shareholders’ equity. The Company’s ordinary shares features certain redemption rights that are
considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, ordinary
shares subject to possible redemption will presented at redemption value as temporary equity, outside of the shareholders’
equity section of the Company’s condensed balance sheets.
Income
Taxes
The
Company follows the asset and liability method of accounting for income taxes under FASB 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
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 June 30, 2021 and December 31, 2020, 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. As such, the Company’s
tax provision was zero for the periods presented.
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 Depository Insurance Company coverage of $250,000. The Company has not experienced losses on
these accounts and management believes the Company is not exposed to significant risks on such accounts.
Recent
Accounting Pronouncements
In
August 2020, the Financial Accounting Standards Board (“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,
with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU 2020-06 would
have on its financial position, results of operations or cash flows.
Management
does not believe that any other recently issued, but not effective, accounting standards, if currently adopted, would have a material
effect on the Company’s financial statements.
Note
3 — Initial Public Offering
On
July 12, 2021, the Company sold 14,375,000 Units, which includes the full exercise by the underwriters of the over-allotment option
to purchase an additional 1.875,000 Units, at a purchase price of $10.00 per Unit (see Note 8). Each Unit consists of one share of Class A
ordinary 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 (See Note 7).
Note
4 — Private Placement
Simultaneously
with the closing of the IPO, the Sponsor purchased an aggregate of 7,250,000 Private Placement Warrants at a price of $1.00 per
Private Placement Warrant, for an aggregate purchase price of $7,250,000, in a private placement. A portion of the proceeds from the
private placement was added to the proceeds from the IPO held in the Trust Account (see Note 8).
The
Private Placement Warrants are identical to the Public Warrants, except that the Private Warrants (i) will not be redeemable by the Company
and (ii) will not be transferable, assignable or salable until the completion of the initial Business Combination and (iii) may be exercised
for cash or a cashless basis at the holder’s option (see Note 7).
Note
5 — Related Party Transactions
Founder
Shares
On
January 25, 2021, the Sponsor was issued 5,000,000 Class B ordinary shares, par value $0.0001 per share (the “Founder Shares”)
for $25,000, or approximately $0.005 per share, which proceeds were used to reduce the amount due to a related party. On April 9, 2021,
the sponsor forfeited to the Company for no consideration an aggregate of 1,406,250 Founder Shares, which the Company cancelled, resulting
in a decrease in the total number of Founder Shares outstanding from 5,000,000 shares to 3,593,750 shares, which included up to 468,750
founder shares subject to forfeiture to the extent that the underwriter’s over-allotment option was not exercised in full or in
part. Due to the underwriters’ exercise of their full over-allotment on July 12, 2021, these 468,750 Founders Shares are no longer
subject to forfeiture (see Note 8).
The
Sponsor, officers and directors 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 sub-divisions, share
dividends, 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 (the “Lock-up”). Any permitted transferees would be subject to the same restrictions
and other agreements of our Sponsor, officers and directors with respect to any Founder Shares.
Promissory
Note — Related Party
On
January 22, 2021, the Sponsor agreed to loan the Company up to $200,000 to be used for a portion of the expenses of the IPO. This
loan is non-interest bearing and payable promptly after the date of the consummation of the Public Offering. As of June 30, 2021 and
December 31, 2020, the Company had borrowed $25,000 and $0, respectively.
Due
to Related Party
The
Sponsor has paid certain formation costs and deferred offering costs on behalf of the Company which are recorded as due to related party
in the amount of $146,046 as of June 30, 2021 and $56,266 as of December 31, 2020, and which is due upon demand. On January 25,
2021, the liability was reduced in exchange for the issuance of Founder Shares to the Sponsor.
Working
Capital Loans
In
addition, in order to finance transaction costs in connection with an intended 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 would repay the Working Capital Loans
out of the proceeds of the Trust Account released to it. Otherwise, the Working Capital Loans may be repaid only out of funds held outside
the Trust Account. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital
held outside the Trust Account to repay Working Capital Loans but no proceeds from the Trust Account would be used to repay the Working
Capital Loans. Up to $1,500,000 of the Working Capital Loans may be convertible into warrants of the post Business Combination entity
at a price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the Private Placement Warrants. Except
as set forth above, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect
to such loans. Prior to the completion of the initial Business Combination, the Company does not expect to seek loans from parties other
than the Sponsor, its affiliates or any members of the management team as the Company does not believe third parties will be willing
to loan such funds and provide a waiver against any and all rights to seek access to funds in the Company’s Trust Account. As of
June 30, 2021 and December 31, 2020, the Company had no borrowings under the working capital loans.
Administrative
Support Agreement
Commencing
on the date that the Company’s securities are first listed, the Company will reimburse an affiliate of the Sponsor for office space,
secretarial and administrative services provided to members of the management team, in the amount of $10,000 per month. Upon completion
of the initial Business Combination or the Company’s liquidation, it will cease paying these monthly fees. As of June 30, 2021
and December 31, 2020, no administrative fees had been recorded or paid.
Note
6 — Commitments and Contingencies
Registration
Rights
The
holders of the Founder Shares, Private Placement Warrants, Class A ordinary shares underlying the Private Placement Warrants and
securities that may be issued upon conversion of Working Capital Loans will have registration rights pursuant to a registration rights
agreement to be signed prior to or on the effective date of the Public Offering. The holders of these securities are entitled to make
up to three demands, excluding short form demands, that the Company register such securities under the Securities Act. In addition, the
holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion
of the Company’s initial Business Combination and rights to require the Company to register for resale such securities pursuant
to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not permit any registration
statement filed under the Securities Act to become effective until termination of the applicable lock-up period. Notwithstanding the
foregoing, the underwriter may not exercise its demand and “piggyback” registration rights after five (5) and seven
(7) years after the effective date of the registration statement for the initial public offering and may not exercise its demand rights
on more than one occasion. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting
Agreement
The
underwriter had a 45-day option from the date of the IPO to purchase up to an aggregate of 1,875,000 additional Units at the public offering
price less the underwriting commissions to cover over-allotments, if any. On July 12, 2021, the underwriter fully exercised its
over-allotment option (see Note 8).
The
underwriters are entitled to a deferred underwriting fee of 3.5% of the gross proceeds of the Public Offering, or $5,031,250 in the aggregate.
The deferred fee will be payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company
completes an initial Business Combination, subject to the terms of the underwriting agreement.
Note
7 — Shareholders’ Equity
Preferred
Shares — The Company is authorized to issue 1,000,000 preference shares with
a par value of $0.0001 and 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 June 30, 2021 and December 31, 2020, there were no preference shares issued or outstanding.
Class A
Ordinary Shares — The Company is authorized to issue 200,000,000 Class A
ordinary shares with a par value of $0.0001 per share. At June 30, 2021 and December 31, 2020, there were no shares issued and
outstanding.
Class B
Ordinary Shares — The Company is authorized to issue 20,000,000 Class B ordinary shares with a par value of $0.0001
per share. At December 31, 2020, there were no Class B ordinary shares issued or outstanding. On January 25, 2021, the Company
issued 5,000,000 Class B ordinary shares to its Sponsor. On April 9, 2021, the Sponsor forfeited to the Company for no consideration
an aggregate of 1,406,250 Class B ordinary shares, which the Company cancelled, resulting in a decrease in the total number of Class B
ordinary shares outstanding from 5,000,000 shares to 3,593,750 shares. As of June 30,
2021, there were 3,593,750 shares of Class B ordinary shares issued or outstanding, including up to 468,750 that were subject
to forfeiture to the extent that the underwriters’ over-allotment was not exercised in full or in part). As a result of the underwriters’
election to fully exercise of their over-allotment option on July 12, 2021, the 468,750 shares
were no longer subject to forfeiture (see Note 8).
Holders
are entitled to one vote for each Class B ordinary share. 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 the Company’s shareholders, except as
required by law. Unless specified in the Company’s amended and restated memorandum and articles of association, or as required
by applicable provisions of Cayman Islands law or applicable stock exchange rules, the affirmative vote of a majority of the ordinary
shares that are voted is required to approve any such matter voted on by the Company’s shareholders.
The
Class B ordinary shares will automatically convert into Class A ordinary shares at the time of the initial Business Combination
on a one-for-one basis (subject to adjustment for share sub-divisions, share dividends, reorganizations, recapitalizations and the
like). In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess
of the amounts offered in this prospectus and related to the closing of the initial Business Combination, the ratio at which Class B
ordinary shares shall convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the outstanding
Class B ordinary shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number
of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis,
20% of the sum of the total number of all ordinary shares outstanding upon completion of the Proposed Public Offering (not including
Class A ordinary shares issuable to Maxim) plus all Class A ordinary shares and equity-linked securities issued or deemed
issued in connection with the initial Business Combination (excluding any shares or equity-linked securities issued, or to be issued,
to any seller in the initial Business Combination, any private placement-equivalent securities issued to our sponsor or its affiliates
upon conversion of Working Capital loans).
Warrants
— As of June 30, 2021 and December 31, 2020, there were no warrants outstanding. 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 Public Warrants will become exercisable on the later of twelve months from the closing of the Public Offering and 30 days after
the completion of the initial Business Combination. Only a whole warrant may be exercised at a given time by a warrant holder. No fractional
warrants will be issued upon separation of the units and only whole warrants will trade. The warrants will expire five years after the
completion of a Business Combination or earlier upon redemption or liquidation.
The
Company has agreed that as soon as practicable, but in no event later than 30 calendar days after the closing of the initial Business
Combination, it will use commercially reasonable best efforts to file, and within 90 calendar days following the initial Business Combination
to have declared effective, a registration statement with the SEC covering the ordinary shares issuable upon exercise of the warrants,
to maintain a current prospectus relating to those ordinary shares until the warrants expire or are redeemed. If a registration statement
covering the ordinary shares issuable upon exercise of the warrants is not effective within the period specified above following the
consummation of the initial Business Combination, public holders of warrants 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 of 1933, as amended, or the Securities
Act, provided that such exemption is available. If the Company’s ordinary shares are at the time of any exercise of a warrant not
listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1)
of the Securities Act, the Company may, at its option, require holders of public warrants who exercise their warrants to do so on a “cashless
basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required
to file or maintain in effect a registration statement, but will be required to use its best efforts to register or qualify the shares
under applicable blue sky laws to the extent an exemption is not available. If that exemption, or another exemption, is not available,
holders will not be able to exercise their warrants on a cashless basis.
In
no event will the Company be required to net cash settle any warrant. In the event that a registration statement is not effective for
the exercised warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for
the Class A ordinary share underlying such unit.
Redemption
of Warrants for Cash When the Price per Class A Ordinary Share Equals or Exceeds $18.00.
Once
the warrants become exercisable, the Company may call the warrants for redemption (excluding the Private Placement 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 to each warrant holder; and
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if,
and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share sub-divisions,
share capitalizations, 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 notice of the redemption is given to the warrant holders (the “Reference Value”).
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In
addition, if (x) the Company issues additional ordinary shares or equity-linked securities for capital raising purposes in connection
with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per 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 or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates,
as applicable, 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 the 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 ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the
Company consummates its initial 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 higher of the Market Value and the Newly Issued
Price, and the $18.00 per share redemption trigger price described below under “Redemption” will be adjusted (to the nearest
cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
The
Private Placement Warrants are identical to the Public Warrants, except that the Private Warrants (i) will not be redeemable by the Company
and (ii) will not be transferable, assignable or salable until the completion of the initial Business Combination and (iii) may be exercised
for cash or a cashless basis at the holder’s option.
Note
8 — Subsequent Events
The
Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements
were issued. Based upon this review, other than as described below, the Company did not identify any subsequent events that would have
required adjustment or disclosure in the financial statements.
On
July 12, 2021, the Company consummated the IPO of 14,375,000 units (the “Units”), which includes the full exercise by the
underwriters of the over-allotment option to purchase an additional 1,875,000 Units, at $10.00 per unit, generating gross proceeds of
$143,750,000. Simultaneously with the closing of the IPO, the Company consummated the sale of 7,250,000 warrants to the Sponsor and Maxim
(the “Private Placement Warrants”), at a price of $1.00 per Private Placement Warrant, generating gross proceeds of $7,250,000.
Transaction costs of the IPO amounted to $9,998,781, comprised of $2,875,000 of underwriting fees, $5,031,250 of deferred underwriting
fees, $655,031 of other offering costs, and $1,437,500 of the fair value of the representative shares, and was all charged to shareholders’
equity.