Item 1. Financial Statements.
SCION TECH GROWTH I
CONDENSED BALANCE SHEETS
|
|
September 30,
2021
|
|
|
December 31,
2020
|
|
|
|
(unaudited)
|
|
|
(as restated) (1)
|
|
Assets
|
|
|
|
|
|
|
Current asset – Cash
|
|
$
|
297,788
|
|
|
$
|
1,425,919
|
|
Prepaid assets
|
|
|
494,533
|
|
|
|
554,000
|
|
Total current assets
|
|
|
792,321
|
|
|
|
1,979,919
|
|
Prepaid assets, non-current
|
|
|
106,712
|
|
|
|
382,986
|
|
Cash and securities held in Trust Account
|
|
|
575,168,945
|
|
|
|
575,009,968
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
576,067,978
|
|
|
$
|
577,372,873
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Deficit
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accrued offering costs and expenses
|
|
$
|
26,255
|
|
|
$
|
956,417
|
|
Due to related party
|
|
|
95,162
|
|
|
|
5,162
|
|
Total current liabilities
|
|
|
121,417
|
|
|
|
961,579
|
|
Warrant liability
|
|
|
26,821,667
|
|
|
|
30,461,667
|
|
Deferred underwriting discount
|
|
|
20,125,000
|
|
|
|
20,125,000
|
|
Total liabilities
|
|
|
47,068,084
|
|
|
|
51,548,246
|
|
|
|
|
|
|
|
|
|
|
Commitments
|
|
|
|
|
|
|
|
|
Class A ordinary shares subject to possible redemption, 57,500,000 shares at redemption value
|
|
|
575,168,945
|
|
|
|
575,009,968
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ Deficit:
|
|
|
|
|
|
|
|
|
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding
|
|
|
-
|
|
|
|
-
|
|
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none issued and outstanding (excluding 57,500,000 shares subject to possible redemption)
|
|
|
-
|
|
|
|
-
|
|
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 14,375,000 shares issued and outstanding
|
|
|
1,438
|
|
|
|
1,438
|
|
Additional paid-in capital
|
|
|
-
|
|
|
|
-
|
|
Accumulated deficit
|
|
|
(46,170,489
|
)
|
|
|
(49,186,779
|
)
|
Total shareholders’ deficit
|
|
|
(46,169,051
|
)
|
|
|
(49,185,341
|
)
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Shareholders’ Deficit
|
|
$
|
576,067,978
|
|
|
$
|
577,372,873
|
|
|
(1)
|
As restated for Class A ordinary shares subject to redemption
(see Note 2).
|
The accompanying notes are an integral part of
these unaudited condensed financial statements.
SCION TECH GROWTH I
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
|
|
Three months
ended
|
|
|
Nine months
ended
|
|
|
|
September 30,
2021
|
|
|
September 30,
2021
|
|
|
|
|
|
|
|
|
Formation and operating costs
|
|
$
|
194,853
|
|
|
$
|
623,749
|
|
Loss from operations
|
|
|
(194,853
|
)
|
|
|
(623,749
|
)
|
|
|
|
|
|
|
|
|
|
Other income:
|
|
|
|
|
|
|
|
|
Bank interest income
|
|
|
9
|
|
|
|
39
|
|
Unrealized gain on change in fair value of warrants
|
|
|
9,753,333
|
|
|
|
3,640,000
|
|
Trust interest income
|
|
|
49,114
|
|
|
|
158,977
|
|
Total other income
|
|
|
9,802,456
|
|
|
|
3,799,016
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
9,607,603
|
|
|
|
3,175,267
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding of Class A common stock
|
|
|
57,500,000
|
|
|
|
57,500,000
|
|
Basic and diluted net income per share, Class A common stock
|
|
$
|
0.13
|
|
|
$
|
0.04
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding of Class B common stock
|
|
|
14,375,000
|
|
|
|
14,375,000
|
|
Basic and diluted net income per share, Class B common stock
|
|
$
|
0.13
|
|
|
$
|
0.04
|
|
The accompanying notes are an integral part of
these unaudited condensed financial statements.
SCION TECH GROWTH I
UNAUDITED CONDENSED STATEMENTS OF CHANGES IN
SHAREHOLDERS’ DEFICIT
|
|
Class A
Ordinary Shares
|
|
|
Class B
Ordinary Shares
|
|
|
Additional
Paid-in
|
|
|
Accumulated
|
|
|
Total Shareholders’
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Deficit
|
|
Balance as of December 31, 2020, as restated
|
|
|
-
|
|
|
$
|
-
|
|
|
|
14,375,000
|
|
|
$
|
1,438
|
|
|
$
|
-
|
|
|
$
|
(49,186,779
|
)
|
|
$
|
(49,185,341
|
)
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,671,965
|
)
|
|
|
(1,671,965
|
)
|
Remeasurement in Class A ordinary shares subject to possible redemption
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(79,888
|
)
|
|
|
(79,888
|
)
|
Balance as of March 31, 2021, as restated (1)
|
|
|
-
|
|
|
$
|
-
|
|
|
|
14,375,000
|
|
|
$
|
1,438
|
|
|
$
|
-
|
|
|
$
|
(50,938,632
|
)
|
|
$
|
(50,937,194
|
)
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,760,371
|
)
|
|
|
(4,760,371
|
)
|
Remeasurement in Class A ordinary shares subject to possible redemption
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(29,275
|
)
|
|
|
(29,275
|
)
|
Balance as of June 30, 2021, as restated (1)
|
|
|
-
|
|
|
$
|
-
|
|
|
|
14,375,000
|
|
|
$
|
1,438
|
|
|
$
|
-
|
|
|
$
|
(55,728,978
|
)
|
|
$
|
(55,727,540
|
)
|
Net income
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
9,607,603
|
|
|
|
9,607,603
|
|
Remeasurement in Class A ordinary shares subject to possible redemption
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(49,114
|
)
|
|
|
(49,114
|
)
|
Balance as of September 30, 2021
|
|
|
-
|
|
|
$
|
-
|
|
|
|
14,375,000
|
|
|
$
|
1,438
|
|
|
$
|
-
|
|
|
$
|
(46,170,489
|
)
|
|
$
|
(46,169,051
|
)
|
|
(1)
|
As restated for Class A ordinary shares subject to redemption
(see Note 2).
|
The accompanying notes are an integral part of
these unaudited condensed financial statements.
SCION TECH GROWTH I
UNAUDITED CONDENSED STATEMENT OF CASH FLOWS
|
|
For the
nine months ended
September 30,
2021
|
|
|
|
|
|
Cash flows from Operating Activities:
|
|
|
|
Net income
|
|
$
|
3,175,267
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
|
Interest earned on treasury securities held in Trust Account
|
|
|
(158,977
|
)
|
Unrealized gain on change in fair value of warrants
|
|
|
(3,640,000
|
)
|
Changes in current assets and current liabilities:
|
|
|
|
|
Prepaid assets
|
|
|
335,741
|
|
Due to related party
|
|
|
90,000
|
|
Accounts payable
|
|
|
(930,162
|
)
|
Net cash used in operating activities
|
|
|
(1,128,131
|
)
|
|
|
|
|
|
Net change in cash
|
|
|
(1,128,131
|
)
|
Cash – beginning of the period
|
|
|
1,425,919
|
|
Cash – end of the period
|
|
$
|
297,788
|
|
|
|
|
|
|
Supplemental Disclosure of Non-cash Financing Activities:
|
|
|
|
|
Remeasurement in Class A ordinary shares subject to possible redemption
|
|
$
|
158,977
|
|
The accompanying notes are an integral part of
these unaudited condensed financial statements.
SCION TECH GROWTH I
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 1 — Organization and Business
Operations
Organization and General
ScION Tech Growth I (the “Company”)
was incorporated as a Cayman Islands exempted company on October 7, 2020. The Company was incorporated for the purpose of effecting a
merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses
(the “Business Combination”). The Company is an “emerging growth company”, as defined in Section 2(a) of the
Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012
(the “JOBS Act”). The Company’s efforts to identify a prospective target business will not be limited to a particular
industry or geographic location.
The Company has selected December 31 as its fiscal
year end.
As of September 30, 2021, the Company had not
yet commenced any operations. All activity for the period from October 7, 2020 (inception) through September 30, 2021 relates to the
Company’s formation and the Initial Public Offering (“IPO”) described below, and since the closing of the IPO, the
search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion
of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income
on cash and cash equivalents from the proceeds derived from the IPO and will recognize changes in the fair value of warrant liability
as other income (expense).
The Company’s sponsor is ScION 1 Sponsor LLC, a Delaware limited
liability company (the “Sponsor”).
Financing
The registration statement for the Company’s
IPO was declared effective on December 16, 2020 (the “Effective Date”). On December 21, 2020, the Company consummated the
IPO of 57,500,000 units, including the issuance of 7,500,000 units as a result of the underwriters’ full exercise
of the over-allotment option (the “Units” and, with respect to the ordinary shares included in the Units being offered, the
“Public Shares”), at $10.00 per Unit, generating gross proceeds of $575,000,000, which is discussed in Note 4.
Simultaneously with the closing of the IPO, the
Company consummated the sale of 9,000,000 warrants (the “Private Placement Warrants”) at a price of $1.50 per
Private Placement Warrant in a private placement to the Sponsor, generating gross proceeds of $13,500,000, which is discussed in Note 5.
Offering costs amounted to $32,212,884 consisting
of $11,500,000 of underwriting discount, $20,125,000 of deferred underwriting discount, and $587,884 of other offering
costs.
Trust Account
Following the closing of the IPO on December
21, 2020, $575,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO and the sale of the Private
Placement Warrants was placed in a Trust Account, which can 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 its taxes, if any,
the proceeds from the IPO and the sale of the Private Placement Warrants will not be released from the Trust Account until the earliest
of (i) the completion of the Business Combination, (ii) the redemption of the Company’s Public Shares if the Company is unable
to complete the initial Business Combination within 24 months from December 21, 2020 (the “Combination Period”), the closing
of the IPO, subject to applicable law, or (iii) the redemption of the Company’s Public Shares properly submitted in connection
with a shareholder vote to amend the Company’s amended and restated memorandum and articles of association to (A) modify the substance
or timing of the Company’s obligation to allow redemption in connection with its initial Business Combination or to redeem 100%
of the Public Shares if the Company has not consummated an initial Business Combination within the Combination Period, or (B) with respect
to any other material provisions relating to shareholders’ rights or pre-initial Business Combination activity.
Initial Business Combination
The Company’s management has broad discretion
with respect to the specific application of the net proceeds of the IPO and the sale of Private Placement Warrants, although substantially
all of the net proceeds are intended to be applied generally toward consummating a Business Combination.
The Company must complete one or more initial
Business Combinations having an aggregate fair market value of 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 agreement to
enter into the initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction 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 1940, as amended (the “Investment
Company Act”). There is no assurance that the Company will be able to complete a Business Combination successfully.
The Company will provide its 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) without a shareholder vote 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 $10.00 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 taxes).
The ordinary shares subject to redemption will
be recorded at a redemption value and classified as temporary equity upon the completion of the IPO, in accordance with Financial Accounting
Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities
from Equity.” The Company will not redeem the Public Shares in an amount that would cause the Company to have less than $5,000,001
of net tangible assets.
If the Company seeks shareholder approval of
a Business Combination and the Company does not conduct redemptions in connection with the Business Combination pursuant to the tender
offer rules, the Company’s amended and restated memorandum and articles of association provide that a public shareholder, together
with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert as a “group” (as
defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate
of 15% of the shares sold in the IPO without the Company’s prior consent, which the Company refers to as the “Excess
Shares.” However, the Company would not restrict their shareholders’ ability to vote all of their shares (including Excess
Shares) for or against the Business Combination.
If the Company is unable to complete the initial
Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii)
as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable
in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust
Account (less tax payable and 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), 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 the Company’s 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 other requirements of 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 memorandum and articles of association, (iii)
waive their rights to liquidating distributions from the Trust Account with respect to their founder shares if the Company fails to complete
the initial Business Combination within the Combination Period, 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 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 other 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 underwriters of the IPO
against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). However,
the Company has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether
the Sponsor has sufficient funds to satisfy its indemnity obligations and the Company believes that the Sponsor’s only assets are
securities of the Company. Therefore, the Company cannot assure that the Sponsor would be able to satisfy those obligations. None of
the Company’s officers or directors will indemnify the Company for claims by third parties including, without limitation, claims
by vendors and prospective target businesses.
On February 1, 2021, the Company announced that,
commencing on February 5, 2021, the holders of Units may elect to separately trade the Class A ordinary shares and warrants included
in the Units. The Units not separated will continue to trade on the NASDAQ Capital Market under the symbol “SCOAU.” Class
A ordinary shares and warrants will separately trade on The Nasdaq Capital Market under the symbols “SCOA” and “SCOAW”,
respectively.
Liquidity and Capital Resources
As of September 30, 2021, the Company had approximately
$0.3 million in its operating bank account and working capital of approximately $0.7 million.
Prior to the completion of the IPO, the Company’s
liquidity needs were satisfied through a capital contribution from the Sponsor of $25,000, to cover certain offering costs, for the founder
shares (see Note 6), and the loan under an unsecured promissory note from the Sponsor of $222,583 (see Note 6). The promissory note
from the Sponsor was paid in full on December 22, 2020. Subsequent to the consummation of the IPO and Private Placement, the Company’s
liquidity needs have been satisfied through the proceeds from the consummation of the Private Placement not held in the Trust Account.
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 6). To date, 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 — Restatement of Previously Issued Financial
Statements
In connection with the preparation of the Company’s
financial statements as of September 30, 2021, management determined it should restate its previously reported financial statements. The
Company previously determined that the Public Shares subject to possible redemption were equal to their redemption value of $10.00 per
Public Share while also taking into consideration the requirement under the Company’s amended and restated memorandum and articles
of association that the Company’s redemption of Public Shares cannot result in the Company’s net tangible assets being less
than $5,000,001. Upon review of its financial statements for the period ended September 30, 2021, the Company reevaluated the classification
of the Public Shares and determined that the Public Shares can be redeemed or become redeemable subject to the occurrence of future events
considered outside the Company’s control under ASC 480-10-S99. Therefore, management concluded that the carrying value should include
all Public Shares subject to possible redemption, resulting in all of the Public Shares being classified outside of permanent equity.
As a result, management has noted a reclassification adjustment related to temporary equity and permanent equity. This resulted in an
adjustment to the initial carrying value of the Public Shares with the offset recorded to additional paid-in capital (to the extent available),
accumulated deficit and Public Shares. See Note 3, “Ordinary Shares Subject to Possible Redemption.”
In connection with the change in presentation
for the Public Shares, the Company also restated its earnings per share calculation to allocate net income (loss) evenly to the Public
Shares and Class B ordinary shares. This presentation contemplates a Business Combination as the most likely outcome, in which case, both
classes of ordinary shares share pro rata in the income (loss) of the Company.
There has been no change in the Company’s
total assets, liabilities or operating results.
The impact of the restatement on the Company’s
financial statements is reflected in the following table.
|
|
As Previously
Reported
|
|
|
Adjustments
|
|
|
As Restated
|
|
Balance Sheet at December
21, 2020
|
|
|
|
|
|
|
|
|
|
Class A ordinary
shares subject to possible redemption
|
|
$
|
524,514,210
|
|
|
$
|
50,485,790
|
|
|
$
|
575,000,000
|
|
Class A ordinary shares
|
|
|
505
|
|
|
|
(505
|
)
|
|
|
-
|
|
Additional paid-in capital
|
|
|
5,825,357
|
|
|
|
(5,825,357
|
)
|
|
|
-
|
|
Accumulated deficit
|
|
$
|
(827,293
|
)
|
|
$
|
(44,659,928
|
)
|
|
$
|
(45,487,221
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet at December
31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A ordinary shares subject
to possible redemption
|
|
$
|
520,824,620
|
|
|
$
|
54,185,348
|
|
|
$
|
575,009,968
|
|
Class A ordinary shares
|
|
|
542
|
|
|
|
(542
|
)
|
|
|
-
|
|
Additional paid-in capital
|
|
|
9,514,909
|
|
|
|
(9,514,909
|
)
|
|
|
-
|
|
Accumulated deficit
|
|
$
|
(4,516,882
|
)
|
|
$
|
(44,669,897
|
)
|
|
$
|
(49,186,779
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Operations
for the period from October 7, 2020 (inception) through December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted
average shares outstanding, ordinary shares subject to redemption
|
|
|
-
|
|
|
|
6,764,706
|
|
|
|
6,764,706
|
|
Basic and diluted net loss
per share
|
|
$
|
-
|
|
|
$
|
(0.23
|
)
|
|
$
|
(0.23
|
)
|
Basic and diluted weighted average shares outstanding,
ordinary shares
|
|
|
14,968,950
|
|
|
|
(2,248,362
|
)
|
|
|
12,720,588
|
|
Basic and diluted net loss
per share
|
|
$
|
(0.30
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.23
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement
of Shareholders’ Equity for the period from October 7, 2020 (inception) through December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Remeasurement in Class A
ordinary shares to redemption value
|
|
$
|
(520,824,620
|
)
|
|
$
|
474,851,161
|
|
|
$
|
(45,973,459
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement
of Cash Flows for the period from October 7, 2020 (inception) through December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial value of Class A
ordinary shares subject to possible redemption
|
|
$
|
524,514,210
|
|
|
$
|
4,522,299
|
|
|
$
|
529,036,509
|
|
Remeasurement in Class A
ordinary shares to redemption value
|
|
$
|
(3,689,590
|
)
|
|
$
|
49,663,049
|
|
|
$
|
45,973,459
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet at March 31,
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A ordinary shares subject
to possible redemption
|
|
$
|
519,152,660
|
|
|
$
|
55,937,196
|
|
|
$
|
575,089,856
|
|
Class A ordinary shares
|
|
|
558
|
|
|
|
(558
|
)
|
|
|
-
|
|
Additional paid-in capital
|
|
|
11,186,853
|
|
|
|
(11,186,853
|
)
|
|
|
-
|
|
Accumulated deficit
|
|
$
|
(6,188,847
|
)
|
|
$
|
(44,749,785
|
)
|
|
$
|
(50,938,632
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Operations
for the three months ended March 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted
average shares outstanding, ordinary shares subject to redemption
|
|
|
-
|
|
|
|
57,500,000
|
|
|
|
57,500,000
|
|
Basic and diluted net loss
per share
|
|
$
|
-
|
|
|
$
|
(0.02
|
)
|
|
$
|
(0.02
|
)
|
Basic and diluted weighted average shares outstanding,
ordinary shares
|
|
|
19,792,538
|
|
|
|
(5,417,538
|
)
|
|
|
14,375,000
|
|
Basic and diluted net loss
per share
|
|
$
|
(0.09
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Shareholders’
Equity for the three months ended March 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Remeasurement in Class A
ordinary shares to reredemption value redemption redemption value
|
|
$
|
1,671,960
|
|
|
$
|
(1,751,848
|
)
|
|
$
|
(79,888
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Cash Flows
for the three months March 31, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial value of Class A
ordinary shares subject to possible redemption
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Remeasurement in Class A
ordinary shares redemption value redemption value
|
|
$
|
(1,671,960
|
)
|
|
$
|
1,751,848
|
|
|
$
|
79,888
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet at June 30,
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A ordinary shares subject
to possible redemption
|
|
$
|
514,392,290
|
|
|
$
|
60,727,541
|
|
|
$
|
575,119,831
|
|
Class A ordinary shares
|
|
|
606
|
|
|
|
(606
|
)
|
|
|
-
|
|
Additional paid-in capital
|
|
|
15,947,175
|
|
|
|
(15,947,175
|
)
|
|
|
-
|
|
Accumulated deficit
|
|
$
|
(10,949,218
|
)
|
|
$
|
(44,779,760
|
)
|
|
$
|
(55,728,978
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Operations
for the three months ended June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted
average shares outstanding, ordinary shares subject to redemption
|
|
|
-
|
|
|
|
57,500,000
|
|
|
|
57,500,000
|
|
Basic and diluted net loss
per share
|
|
$
|
-
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.07
|
)
|
Basic and diluted weighted average shares outstanding,
ordinary shares
|
|
|
19,959,734
|
|
|
|
(5,584,734
|
)
|
|
|
14,375,000
|
|
Basic and diluted net loss
per share
|
|
$
|
(0.24
|
)
|
|
$
|
0.17
|
|
|
$
|
(0.07
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Operations
for the six months ended June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted
average shares outstanding, ordinary shares subject to redemption
|
|
|
-
|
|
|
|
57,500,000
|
|
|
|
57,500,000
|
|
Basic and diluted net loss
per share
|
|
$
|
-
|
|
|
$
|
(0.09
|
)
|
|
$
|
(0.09
|
)
|
Basic and diluted weighted average shares outstanding,
ordinary shares
|
|
|
19,876,598
|
|
|
|
(5,501,598
|
)
|
|
|
14,375,000
|
|
Basic and diluted net loss
per share
|
|
$
|
(0.33
|
)
|
|
$
|
0.24
|
|
|
$
|
(0.09
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Shareholders’
Equity for the three months ended June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Remeasurement in Class
A ordinary shares to redemption value
|
|
$
|
4,760,370
|
|
|
$
|
(4,790,345
|
)
|
|
$
|
(29,975
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Shareholders’
Equity for the six months ended June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Remeasurement in Class A
ordinary shares to redemption value
|
|
$
|
6,432,330
|
|
|
$
|
(6,542,193
|
)
|
|
$
|
(109,863
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Cash Flows
for the six months ended June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial value of Class A
ordinary shares subject to possible redemption
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Remeasurement in Class A
ordinary shares to redemption value
|
|
$
|
(6,432,330
|
)
|
|
$
|
6,542,193
|
|
|
$
|
109,863
|
|
Note 3 — Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed financial
statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America
(“GAAP”) for financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include
all of the information and footnotes required by GAAP. In the opinion of management, the unaudited condensed financial statements reflect
all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the
periods presented. Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results
that may be expected through December 31, 2021.
The accompanying unaudited condensed financial
statements should be read in conjunction with the audited financial statements and notes thereto included in the Form 10-K/A filed by
the Company with the SEC on May 17, 2021.
Emerging Growth Company Status
The Company is an “emerging growth company,”
as defined in Section 2(a) of the Securities Act of 1933, as amended, (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 unaudited condensed 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 unaudited condensed 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 unaudited condensed financial statements and the
reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments
with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents
as of September 30, 2021 and December 31, 2020.
Cash and Securities Held in Trust Account
Securities held in Trust Account consist of United
States Treasury securities. The Company classifies its United States Treasury securities as held-to-maturity in accordance with FASB
ASC Topic 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company
has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost and adjusted for
the amortization or accretion of premiums or discounts.
A decline in the market value of held-to-maturity
securities below cost that is deemed to be other than temporary, results in an impairment that reduces the carrying costs to such securities’
fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment
is other than temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery
and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered
in this assessment includes the reasons for the impairment, the severity and the duration of the impairment, changes in value subsequent
to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee
operates in.
Premiums and discounts are amortized or accreted
over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest method. Such amortization
and accretion are included in the “interest income” line item in the statements of operations. Interest income is recognized
when earned.
Fair Value Measurements
FASB ASC Topic 820 “Fair Value Measurements
and Disclosures” (“ASC 820”) defines fair value, the methods used to measure fair value and the expanded disclosures
about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between the buyer and the seller at the measurement date. In determining fair value, the valuation techniques consistent
with the market approach, income approach and cost approach shall be used to measure fair value. ASC 820 establishes a fair value hierarchy
for inputs, which represent the assumptions used by the buyer and seller in pricing the asset or liability. These inputs are further
defined as observable and unobservable inputs. Observable inputs are those that buyer and seller would use in pricing the asset or liability
based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about
the inputs that the buyer and seller would use in pricing the asset or liability developed based on the best information available in
the circumstances.
The fair value hierarchy is categorized into
three levels based on the inputs as follows:
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.
The fair value of the Company’s certain
assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,”
approximates the carrying amounts represented in the balance sheet. The fair values of cash and cash equivalents, prepaid assets, accounts
payable and accrued expenses, due to related parties are estimated to approximate the carrying values as of September 30, 2021 and December
31, 2020 due to the short maturities of such instruments.
The Company’s warrant liability is based
on a valuation model utilizing management judgment and pricing inputs from observable and unobservable markets with less volume and transaction
frequency than active markets. Significant deviations from these estimates and inputs could result in a material change in fair value.
See Note 7 for additional information on assets and liabilities measured at fair value.
Derivative Financial Instruments
The Company evaluates its financial instruments
to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic
815, “Derivatives and Hedging”. Derivative instruments are recorded at fair value on the grant date and re-valued at each
reporting date, with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified
on the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required
within 12 months of the balance sheet date. The Company has determined the warrants are a derivative instrument.
FASB ASC 470-20, Debt with Conversion and Other
Options addresses the allocation of proceeds from the issuance of convertible debt into its equity and debt components. The Company applies
this guidance to allocate IPO proceeds from the Units between Class A ordinary shares and warrants, using the residual method by allocating
IPO proceeds first to fair value of the warrants and then the Class A ordinary shares.
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 Coverage of $250,000. At September 30, 2021 and December 31, 2020, the Company has not experienced losses on these
accounts and management believes the Company is not exposed to significant risks on such accounts.
Ordinary Shares Subject to Possible Redemption
All of the 57,500,000 Public Shares contain a
redemption feature which allows for their redemption in connection with the Company’s liquidation, if there is a shareholder vote
or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s amended
and restated memorandum and articles of association. In accordance with SEC and its staff’s guidance on redeemable equity instruments,
which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require ordinary shares
subject to redemption to be classified outside of permanent equity. Therefore, all Public Shares have been classified outside of permanent
equity.
In accordance with ASC
480-10-S99-3A(15), there are two alternative methods that an entity can apply when subsequently measuring redeemable public shares:
|
1.
|
Remeasure
the redeemable public shares to their redemption amount immediately as if the end of the
first reporting period after the IPO was the redemption date.
|
|
2.
|
Accrete
changes in the difference between the initial carrying amount and the redemption amount from
the IPO date to the redemption date.
|
The Company has decided to apply the first method
above. As of September 30, 2021, the Class A ordinary shares reflected on the balance sheet are reconciled in the following table:
Gross proceeds from IPO
|
|
$
|
575,000,000
|
|
Less:
|
|
|
|
|
Proceeds allocated to Public Warrants
|
|
|
(14,566,667
|
)
|
Class A ordinary shares issuance costs
|
|
|
(31,396,824
|
)
|
Plus:
|
|
|
|
|
Accretion of carrying value to redemption value
|
|
|
46,132,436
|
|
Class A ordinary shares subject to possible redemption
|
|
$
|
575,168,945
|
|
Net Income per Ordinary Share
The
Company has two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Earnings and losses are
shared pro rata between the two classes of shares. The 28,166,667 potential ordinary shares for outstanding warrants to purchase
the Company’s shares were excluded from diluted earnings per share for the three and nine months ended September 30, 2021 because
the warrants are contingently exercisable, and the contingencies have not yet been met. As a result, diluted net income per ordinary share
is the same as basic net income per ordinary share for the periods. The table below presents a reconciliation of the numerator and
denominator used to compute basic and diluted net income per share for each class of ordinary shares:
|
|
For the Three Months Ended September 30, 2021
|
|
|
For the Nine Months Ended September 30, 2021
|
|
|
|
Class A
|
|
|
Class B
|
|
|
Class A
|
|
|
Class B
|
|
Basic and diluted net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocation of net income
|
|
$
|
7,686,082
|
|
|
$
|
1,921,521
|
|
|
$
|
2,540,214
|
|
|
$
|
635,053
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding
|
|
|
57,500,000
|
|
|
|
14,375,000
|
|
|
|
57,500,000
|
|
|
|
14,375,000
|
|
Basic and diluted net income per share
|
|
$
|
0.13
|
|
|
$
|
0.13
|
|
|
$
|
0.04
|
|
|
$
|
0.04
|
|
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”. Offering costs
consist principally of professional and registration fees incurred through the balance sheet date that are related to the IPO. Offering
costs are allocated to the separable financial instruments issued in the IPO based on a relative fair value basis compared to total proceeds
received. Offering costs associated with warrant liabilities is expensed, and offering costs associated with the Class A ordinary share
are charged to the shareholders’ equity.
Income Taxes
The Company accounts for income taxes under 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 condensed 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 740 also clarifies the accounting for uncertainty
in income taxes recognized in an enterprise’s unaudited condensed financial statements and prescribes a recognition threshold and
measurement process for financial statement recognition and measurement of a tax position 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.
ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and
transition.
The Company recognizes accrued interest and penalties
related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest
and penalties as of September 30, 2021 and December 31, 2020. The Company is currently not aware of any issues under review that could
result in significant payments, accruals or material deviation from its position.
The Company is a Cayman Islands exempted company
and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States.
Risks and Uncertainties
Management continues to evaluate the impact of
the COVID-19 pandemic on the Company’s 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 the financial statements. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
Recent Accounting Pronouncements
Management does not believe that any recently
issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed
financial statements.
Note 4 — Initial Public Offering
Pursuant to the IPO, the Company sold 57,500,000 Units,
including 7,500,000 Units as a result of the underwriters’ full exercise of the over-allotment option, at a price of $10.00 per
Unit. Each Unit consists of one Class A ordinary share and one-third of one redeemable warrant. Each whole 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 and will expire
five years after the completion of the initial Business Combination or earlier upon redemption or liquidation.
Warrants
Each whole warrant entitles the holder to purchase
one Class A ordinary share at a price of $11.50 per share, subject to adjustment as discussed herein. In addition, if (x) the
Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing
of the initial Business Combination (excluding any issuance of forward purchase securities) at an issue price or effective issue 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 Company’s initial shareholders or their affiliate, without taking
into account any founder shares held by the Company’s initial shareholders 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 (including from such issuances, the IPO and the sale of the forward purchase units), 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 Class A 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, then 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 prices described below under “Redemption
of warrants when the price per Class A ordinary share equals or exceeds $18.00” and “Redemption of warrants when the price
per Class A ordinary share equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of
the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described adjacent to the caption “Redemption
of warrants when the price per Class A ordinary share equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal
to the higher of the Market Value and the Newly Issued Price.
The warrants will become exercisable on the later
of 12 months from the closing of the IPO or 30 days after the completion of its initial Business Combination and will expire five years
after the completion of the Company’s initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption
or liquidation.
The Company will not be obligated to deliver any
Class A ordinary shares pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration
statement under the Securities Act with respect to Class A ordinary shares underlying the warrants is then effective and a prospectus
relating thereto is current. No warrant will be exercisable, and the Company will not be obligated to issue a Class A ordinary share upon
exercise of a warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered, qualified or deemed to
be exempt under the securities laws of the state of residence of the registered holder of the warrants. 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 When the Price per Class
A Ordinary Share Equals or Exceeds $18.00
Once the warrants become exercisable, the Company
may redeem the outstanding warrants:
|
●
|
in whole and not in part;
|
|
●
|
at a price of $0.01 per warrant; upon a minimum of 30 days’ prior written notice of redemption (the “30-day redemption period”); and
|
|
●
|
if, and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00 per share, subject to adjustment, for any 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrant holders.
|
Redemption of Warrants When the Price per Class
A Ordinary Share Equals or Exceeds $10.00
Once the warrants become exercisable, the Company
may redeem the outstanding warrants:
|
●
|
in whole and not in part;
|
|
●
|
at a price of $0.10 per warrant; upon a minimum of 30 days’ prior written notice of redemption; provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares, based on the redemption date and the “fair market value” (as defined below) of Class A ordinary shares except as otherwise described below; and
|
|
●
|
if, and only if, the closing price of Class A ordinary shares equals or exceeds $10.00 per share, subject to adjustment, for any 20 trading days within the 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders; and
|
|
●
|
if the closing price of the Class A ordinary shares for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders is less than $18.00 per share, subject to adjustment, the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding warrants sold as part of the units in our initial public offering (whether they are were purchased in our initial public offering or thereafter in the open market) (the “Public Warrants”), as described above.
|
In addition, if a registration statement covering
the Class A ordinary shares issuable upon exercise of the warrants is not effective by the sixtieth (60th) business day after the closing
of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any
period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis”
in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if Class A ordinary shares are
at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy 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, and in the event the Company does not
so elect, it will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is
not available. In such event, each holder would pay the exercise price by surrendering each such warrant for that number of shares of
the Company’s Class A ordinary shares equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number
of Class A ordinary shares underlying the warrants, multiplied the excess of the “fair market value” over the exercise price
of the warrants by (y) the fair market value and (B) 0.361. The “fair market value” shall mean the average reported closing
price of the Class A ordinary shares for the 10 trading days ending on the third trading day prior to the date on which the notice of
warrant exercise is sent to the warrant agent.
Note 5 — Private Placement
Simultaneously with the closing of the IPO, the
Sponsor purchased an aggregate of 9,000,000 Private Placement Warrants at a price of $1.50 per Private Placement Warrant,
for an aggregate purchase price of $13,500,000, in a private placement. The proceeds from the Private Placement Warrants were added to
the proceeds from the IPO held in the Trust Account.
The Private Placement warrants are identical to
the warrants sold in the IPO, except that the Private Placement Warrants, so long as they are held by the Sponsor or its permitted transferees,
(i) will not be redeemable by the Company, (ii) may not (including the Class A ordinary shares issuable upon exercise of these warrants),
subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30 days after the completion of the Company’s
initial Business Combination, (iii) may be exercised by the holders on a cashless basis and (iv) will be entitled to certain registration
rights.
The Private Placement Warrants will be non-redeemable
and exercisable on a cashless basis so long as they are held by the Sponsor. If the Private Placement Warrants are held by holders other
than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the
holders on the same basis as the warrants included in the units being sold in the IPO.
The Sponsor has agreed to (i) waive its redemption
rights with respect to its founder shares and Public Shares in connection with the completion of the initial Business Combination, (ii)
waive its redemption rights with respect to its founder shares and Public Shares in connection with a shareholder vote to approve an amendment
to the Company’s amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s
obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Company’s Public
Shares if the Company has not consummated its initial Business Combination within the Combination Period or (B) with respect to any other
material provisions relating to shareholders’ rights or pre-initial Business Combination activity, (iii) waive its rights to liquidating
distributions from the Trust Account with respect to its founder shares if the Company fails to complete its initial Business Combination
within the Combination Period, and (iv) vote any founder shares held by the Sponsor 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.
Note 6 — Related Party Transactions
Founder Shares
On October 7, 2020, the Sponsor paid $25,000,
or approximately $0.002 per share, to cover certain offering costs in consideration for 14,375,000 Class B ordinary shares,
par value $0.0001 (the founder Shares). Up to 1,875,000 founder shares are subject to forfeiture by the Sponsor depending
on the extent to which the underwriters’ over-allotment option is exercised. In connection with the underwriters’ full exercise
of their over-allotment option on December 21, 2020, the 1,875,000 shares were no longer subject to forfeiture.
The initial shareholders have agreed not to transfer,
assign or sell any of their founder shares and any Class A ordinary shares issuable upon conversion thereof until the earlier to occur
of: (i) one year after the completion of the initial Business Combination, or (ii) the date on which the Company completes a liquidation,
merger, share exchange or other similar transaction after the initial Business Combination that results in all of the Company’s
shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property; except to certain permitted
transferees and under certain circumstances (the “lock-up”). Notwithstanding the foregoing, if (1) the closing price of Class
A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, 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 (2) if the Company consummates a transaction after the initial Business Combination which results in the Company’s
shareholders having the right to exchange their shares for cash, securities or other property, the founder shares will be released from
the lock-up.
Promissory Note — Related Party
On October 9, 2020, the Sponsor agreed to loan
the Company up to $300,000 to be used for a portion of the expenses of the IPO. These loans are non-interest bearing, unsecured and
are due at the earlier of December 31, 2021 or the closing of the IPO. The loan will be repaid upon the closing of the IPO out of the
$1,000,000 of offering proceeds that has been allocated to the payment of offering expenses As of December 21, 2020, the Company
had borrowed $222,583 under the promissory note. The promissory note from the Sponsor was paid in full on December 22, 2020.
Due to Related Parties
The balance of $95,162 and $5,162, respectively,
represents the amount accrued for the administrative support services provided by Sponsor as of September 30, 2021 and December 31, 2020.
Related Party Loans
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
the initial Business Combination, the Company would repay the Working Capital Loans. 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 the 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 such Working Capital
Loans may be convertible into warrants at a price of $1.50 per warrant at the option of the lender. Such warrants would be identical
to the Private Placement Warrants. As of September 30, 2021 and December 31, 2020, the Company had no borrowings under the Working Capital
Loans.
Administrative Service Fee
Commencing on the Effective Date of the registration
statement, the Company has agreed to pay the Sponsor $10,000 per month for office space, utilities, secretarial and administrative
support services provided to members of the Company’s management team. Upon completion of the initial Business Combination or the
Company’s liquidation, the Company will cease paying these monthly fees. During the three and nine months ended September 30, 2021,
the Company incurred $30,000 and $90,000, respectively, of administrative services under this arrangement. Upon completion of the initial
Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees.
Forward Purchase Agreement
On December 16, 2020, the Company entered into
a forward purchase agreement pursuant to which an affiliate of the Sponsor committed that it will purchase from the Company 10,000,000 forward
purchase units, or at its option up to an aggregate maximum of 30,000,000 forward purchase units, each consisting of one Class
A ordinary share, or a forward purchase share, and one-third of one warrant (the “Forward Purchase Warrant”) to purchase one
Class A ordinary share, or a Forward Purchase Warrant, for $10.00 per unit, or an aggregate amount of $100,000,000, or at the purchaser’s
option up to an aggregate amount of $300,000,000, in a private placement that will close concurrently with the closing of the Company’s
initial Business Combination. The proceeds from the sale of these forward purchase units, together with the amounts available to the Company
from the Trust Account (after giving effect to any redemptions of Public Shares) and any other equity or debt financing obtained by the
Company in connection with the Business Combination, will be used to satisfy the cash requirements of the Business Combination, including
funding the purchase price and paying expenses and retaining specified amounts to be used by the post-Business Combination company for
working capital or other purposes. The forward purchase shares will be identical to the Class A ordinary shares included in the units
being sold in the IPO, except that they will be subject to transfer restrictions and registration rights. The Forward Purchase Warrants
will have the same terms as the Private Placement Warrants so long as they are held by the purchaser or its permitted assignees and transferees.
Note 7 — Recurring Fair Value Measurements
Securities Held in Trust Account
As of September 30, 2021 and December 31, 2020,
investment in the Company’s Trust Account consisted of $1,789 and $632, respectively, in U.S. Money Market and $575,167,156 and
$575,009,336, respectively, in U.S. Treasury Securities. The Company classifies its United States Treasury securities as held-to-maturity
in accordance with FASB ASC 320 “Investments — Debt and Equity Securities”. Held-to-maturity treasury securities are
recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts. The Company considers all investments
with original maturities of more than three months but less than one year to be short-term investments. The carrying value approximates
the fair value due to its short-term maturity.
The carrying value, excluding gross unrealized
holding gain and fair value of held to maturity securities on September 30, 2021 are as follows:
|
|
Carrying
Value/Amortized
Cost
|
|
|
Gross
Unrealized
Gains
|
|
|
Gross
Unrealized
Losses
|
|
|
Fair Value
as of
September 30, 2021
|
|
U.S. Money Market
|
|
$
|
1,789
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,789
|
|
U.S. Treasury Securities
|
|
|
575,167,156
|
|
|
|
3,092
|
|
|
|
-
|
|
|
|
575,170,248
|
|
|
|
$
|
575,168,945
|
|
|
$
|
3,092
|
|
|
$
|
-
|
|
|
$
|
575,172,037
|
|
The carrying value, excluding gross unrealized
holding gain and fair value of held to maturity securities on December 31, 2020 are as follows:
|
|
Carrying
Value/Amortized
Cost
|
|
|
Gross
Unrealized
Gains
|
|
|
Gross
Unrealized
Losses
|
|
|
Fair Value
as of
December 31,
2020
|
|
U.S. Money Market
|
|
$
|
632
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
632
|
|
U.S. Treasury Securities
|
|
|
575,009,336
|
|
|
|
6,895
|
|
|
|
-
|
|
|
|
575,016,231
|
|
|
|
$
|
575,009,968
|
|
|
$
|
6,895
|
|
|
$
|
-
|
|
|
$
|
575,016,863
|
|
Warrant Liability
At September 30, 2021 and December 31, 2020, the
Company’s warrants liability was valued at $26,821,667 and $30,461,667, respectively. Under the guidance in ASC 815-40 the
warrants do not meet the criteria for equity treatment. As such, the warrants must be recorded on the balance sheet at fair value. This
valuation is subject to re-measurement at each balance sheet date. With each re-measurement, the warrant valuation will be adjusted to
fair value, with the change in fair value recognized in the Company’s statement of operations.
Recurring Fair Value Measurements
The following tables present information about
the Company’s assets and liabilities that were measured at fair value on a recurring basis as of September 30, 2021 and December
31, 2020 and indicate the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
|
|
September 30,
|
|
|
Quoted
Prices In
Active
Markets
|
|
|
Significant
Other
Observable
Inputs
|
|
|
Significant
Other
Unobservable
Inputs
|
|
|
|
2021
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Money Market held in Trust Account
|
|
$
|
1,789
|
|
|
$
|
1,789
|
|
|
$
|
-
|
|
|
$
|
-
|
|
U.S. Treasury Securities held in Trust Account
|
|
|
575,167,156
|
|
|
|
575,167,156
|
|
|
|
-
|
|
|
|
-
|
|
|
|
$
|
575,168,945
|
|
|
$
|
575,168,945
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private Placement Warrants
|
|
|
6,930,000
|
|
|
|
-
|
|
|
|
6,930,000
|
|
|
$
|
-
|
|
Public Warrants
|
|
|
14,758,334
|
|
|
$
|
14,758,334
|
|
|
|
-
|
|
|
|
-
|
|
Forward Purchase Warrants
|
|
|
5,133,333
|
|
|
|
-
|
|
|
|
5,133,333
|
|
|
$
|
-
|
|
Warrant Liability
|
|
$
|
26,821,667
|
|
|
$
|
14,758,334
|
|
|
$
|
12,063,333
|
|
|
$
|
-
|
|
|
|
December 31,
|
|
|
Quoted
Prices In
Active
Markets
|
|
|
Significant
Other
Observable
Inputs
|
|
|
Significant
Other
Unobservable
Inputs
|
|
|
|
2020
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Money Market held in Trust Account
|
|
$
|
632
|
|
|
$
|
632
|
|
|
$
|
-
|
|
|
$
|
-
|
|
U.S. Treasury Securities held in Trust Account
|
|
|
575,009,336
|
|
|
|
575,009,336
|
|
|
|
-
|
|
|
|
-
|
|
|
|
$
|
575,009,968
|
|
|
$
|
575,009,968
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private Placement Warrants
|
|
|
7,920,000
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
7,920,000
|
|
Public Warrants
|
|
|
16,675,000
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
16,675,000
|
|
Forward Purchase Warrants
|
|
|
5,866,667
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
5,866,667
|
|
Warrant Liability
|
|
$
|
30,461,667
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
30,461,667
|
|
Warrants
The Warrants (Public, Private and FPA) are accounted
for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the Balance Sheets. The warrant liabilities
are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of
warrant liabilities in the Statement of Operations.
The mid-point of the Forward Purchase Agreement
($200 million) has been used as an estimate for the purpose of deriving the associated warrant liability; this estimate is reassessed
at each reporting period.
Initial Measurement
The Company established the initial fair value
for the Warrants on December 16, 2020, the date of the Company’s Initial Public Offering, using a Monte Carlo simulation model for
the Public Warrants, and the Black-Sholes Model for Private Placement Warrants and Forward Purchase Warrants based on their relative fair
values at the initial measurement date. The Warrants were classified as Level 3 at the initial measurement date due to the use of unobservable
inputs.
The key inputs into the Monte Carlo simulation
model and Black-Scholes Model were as follows:
Input
|
|
December 16,
2020
(Initial
Measurement)
|
|
Risk-free interest rate
|
|
|
0.47
|
%
|
Expected term (years)
|
|
|
5.75
|
|
Expected volatility
|
|
|
15.0
|
%
|
Exercise price
|
|
$
|
11.50
|
|
Input
|
|
December 31, 2020
|
|
Risk-free interest rate
|
|
|
0.46
|
%
|
Expected term (years)
|
|
|
5.71
|
|
Expected volatility
|
|
|
15.0
|
%
|
Exercise price
|
|
$
|
11.50
|
|
Subsequent Measurement
As at September 30, 2021, the Public Warrants
are measured at the observable quoted price in active markets for Public Warrants. The Private Placement Warrants and Forward Purchase
Warrants were measured at the Observable Quoted Price in active markets for Public Warrants.
The change in the fair value of the derivative warrant liabilities
measured utilizing Level 1 and Level 3 inputs for the nine months ended September 30, 2021 is summarized as follows:
Derivative warrant liabilities at January 1, 2021 - Level 3
|
|
$
|
30,461,667
|
|
Issuance of Derivative Warrants - Level 3
|
|
|
-
|
|
Transfer of Public Warrants to Level 1
|
|
|
(17,633,334
|
)
|
Transfer of Private Placement Warrants and Forward Purchase Warrants to Level 2
|
|
|
(12,828,333
|
)
|
Change in fair value of derivative warrant liabilities - Level 3
|
|
|
-
|
|
Derivative warrant liabilities at March 31, 2021 - Level 3
|
|
$
|
-
|
|
Change in fair value of derivative warrant liabilities - Level 3
|
|
|
-
|
|
Derivative warrant liabilities at June 30, 2021 - Level 3
|
|
$
|
-
|
|
Change in fair value of derivative warrant liabilities - Level 3
|
|
|
-
|
|
Derivative warrant liabilities at September 30, 2021 - Level 3
|
|
$
|
-
|
|
Note 8 — Commitments
Registration Rights
The holders of the founder shares, Private Placement
Warrants, the forward purchase warrants which will be issued in a private placement concurrently with the closing of the initial Business
Combination and the Class A ordinary shares underlying such Private Placement Warrants and forward purchase securities, and Private Placement
Warrants, Forward Purchase Warrants and warrants that may be issued upon conversion of Working Capital Loans will have registration rights
to require the Company to register a sale of any of its securities held by them pursuant to a registration rights agreement signed on
December 16, 2020. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company
registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration
statements filed subsequent to the Company’s completion of the initial Business Combination. The Company will bear the expenses
incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company granted the underwriters a 45-day
option from December 21, 2020 to purchase up to an additional 7,500,000 units to cover over-allotments. On December 21, 2020,
the underwriters fully exercised the over-allotment option.
On December 21, 2020, the Company paid a fixed
underwriting discount of $11,500,000. Additionally, the underwriters will be entitled to a deferred underwriting discount of 3.5%
of the gross proceeds of the IPO held in the Trust Account, or $20,125,000, upon the completion of the Company’s initial Business
Combination.
Note 9 — Shareholders’ Equity
Preference shares—The Company
is authorized to issue 5,000,000 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. As of September 30, 2021 and
December 31, 2020, 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. As of September
30, 2021 and December 31, 2020, as revised, there were no Class A ordinary shares issued and outstanding, excluding 57,500,000 Class
A ordinary shares subject to possible redemption.
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. Holders are entitled
to one vote for each share of Class B ordinary shares. On October 7, 2020, the Sponsor paid $25,000, or approximately $0.002 per
share, to cover certain offering costs in consideration for 14,375,000 Class B ordinary shares, par value $0.0001 (the
founder shares). Up to 1,875,000 founder shares are subject to forfeiture by the Sponsor depending on the extent to which the
underwriters’ over-allotment option is exercised. In connection with the underwriters’ full exercise of their over-allotment
option on December 21, 2020, the 1,875,000 shares were no longer subject to forfeiture. At September 30, 2021 and December 31,
2020, there were 14,375,000 Class B ordinary shares issued and outstanding.
Holders of the Class A ordinary shares and holders
of the Class B ordinary shares will vote together as a single class, with each share entitling the holder to one vote, on any other matter
submitted to a vote of the Company’s shareholders, including any vote in connection with the Company’s initial Business Combination,
except as required by law; provided that only holders of the Class B ordinary shares have the right to appoint directors in any election
held prior to or in connection with the completion of the initial Business Combination.
The Class B ordinary shares will automatically
convert into Class A ordinary shares concurrently with or immediately following the consummation of the initial Business Combination on
a one-for-one basis, subject to adjustment for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the
like, and subject to further adjustment as provided herein. In the case that additional Class A ordinary shares or equity-linked securities
are issued or deemed issued in connection with the initial Business Combination, the number of Class A ordinary shares issuable upon conversion
of all founder shares will equal, in the aggregate, 20% of the total number of Class A ordinary shares outstanding after such conversion
(after giving effect to any redemptions of Class A ordinary shares by public shareholders), including the total number of Class A ordinary
shares issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued,
by the Company in connection with or in relation to the consummation of the initial Business Combination (including the forward purchase
shares but not the Forward Purchase Warrants), excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible
into Class A ordinary shares issued, or to be issued, to any seller in the initial Business Combination and any Private Placement Warrants
issued to the Sponsor, officers or directors upon conversion of Working Capital Loans; provided that such conversion of founder shares
will never occur on a less than one-for-one basis.
Note 10 — Subsequent Events
The Company evaluated subsequent events and transactions
that occurred after the balance sheet date up to the date that the unaudited condensed financial statements were issued. The Company did
not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements.
Item 2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations.
References to the “Company,” “ScION
Tech Growth I,” “our,” “us” or “we” refer to ScION Tech Growth I. The following discussion and
analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements
and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below
includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and projections
about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that
may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels
of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as “may,” “should,” “could,” “would,” “expect,”
“plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of
such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to,
those described in our other SEC filings.
Overview
We are a blank check company incorporated on October
7, 2020 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase,
reorganization or similar Business Combination with one or more businesses. We have not selected any specific Business Combination target
and we have not, nor has anyone on our behalf, engaged in any substantive discussions directly or indirectly, with any Business Combination
target with respect to an initial Business Combination with us. While we may pursue an initial Business Combination target in any industry,
we intend to focus our search on global technology, software and FinTech opportunities businesses. We intend to effectuate our initial
Business Combination using cash from the proceeds of the initial public offering, the private placement of the Private Placement Warrants
and the forward purchase securities, the proceeds of the sale of our shares in connection with our initial Business Combination (pursuant
to forward purchase agreements or backstop agreements we may enter into following the consummation of the initial public offering or otherwise),
shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, other securities issuances,
or a combination of the foregoing.
The issuance of additional shares in connection
with a Business Combination to the owners of the target or other investors, including the forward purchase securities:
|
●
|
may significantly dilute the equity interest of investors in the IPO, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares;
|
|
●
|
may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded our Class A ordinary shares;
|
|
●
|
could cause a change in control if a substantial number of our Class A ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
|
|
●
|
may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; and
|
|
●
|
may adversely affect prevailing market prices for our Class A ordinary shares and/or warrants. Similarly, if we issue debt securities or otherwise incur significant debt to bank or other lenders or the owners of a target, it could result in:
|
|
●
|
default and foreclosure on our assets if our operating revenues after an initial Business Combination are insufficient to repay our debt obligations;
|
|
●
|
acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
|
|
●
|
our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;
|
|
●
|
our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;
|
|
●
|
our inability to pay dividends on our Class A ordinary shares;
|
|
●
|
using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
|
|
●
|
limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
|
|
●
|
increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
|
|
●
|
limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
|
We expect to continue to incur significant costs in
the pursuit of our initial Business Combination. We cannot assure you that our plans to complete a Business Combination will be successful.
Results of Operations
Our entire activity since inception up to September
30, 2021 relates to our formation, the IPO and, since the closing of the IPO, a search for a Business Combination candidate. We will not
be generating any operating revenues until the closing and completion of our initial Business Combination, at the earliest.
For the three months ended September 30, 2021,
we had net income of $9,607,603, which consisted of $194,853 in general and administrative expenses and $9,753,333 in unrealized gain
on change in fair value of warrants, $49,114 other income earned from investments held in the Trust Account and $9 from bank interest.
For the nine months ended September 30, 2021,
we had net income of $3,175,267, which consisted of $623,749 in general and administrative expenses and $3,640,000 in unrealized gain
on change in fair value of warrants, $158,977 other income earned from investments held in the Trust Account and $39 from bank interest.
Liquidity and Capital Resources
As of September 30, 2021, we had approximately
$0.3 million in our operating bank account, and working capital of approximately $0.7 million.
Prior to the completion of the IPO, our liquidity
needs were satisfied through a capital contribution from the Sponsor of $25,000, to cover certain offering costs, for the founder shares,
and the loan under an unsecured promissory note from the Sponsor of $222,583. The promissory note from the Sponsor was paid in full on
December 22, 2020. Subsequent to the consummation of the IPO and Private Placement, our liquidity needs have been satisfied through the
proceeds from the consummation of the Private Placement not held in the Trust Account.
In addition, in order to finance transaction costs
in connection with a Business Combination, our Sponsor or an affiliate of the Sponsor, or certain of our officers and directors may, but
are not obligated to, provide us Working Capital Loans. To date, there were no amounts outstanding under any Working Capital Loans.
Based on the foregoing, management believes that
we will have sufficient working capital and borrowing capacity to meet our needs through the earlier of the consummation of a Business
Combination or one year from this filing. Over this time period, we 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.
Critical Accounting Policies and Estimates
The preparation of the unaudited condensed 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 unaudited condensed financial statements and the
reported amounts of expenses during the reporting period. Actual results could differ from those estimates. We have identified the following
as our critical accounting policies:
Ordinary Shares Subject to Possible Redemption
All of the 57,500,000 Class A ordinary shares
sold as part of the Units in the IPO contain a redemption feature which allows for the redemption of such public shares in connection
with the Company’s liquidation, if there is a shareholder vote or tender offer in connection with the Business Combination and in
connection with certain amendments to the Company’s amended and restated memorandum and articles of association. In accordance with
SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions
not solely within the control of the Company require ordinary shares subject to redemption to be classified outside of permanent equity.
Therefore, all Class A ordinary shares have been classified outside of permanent equity.
The Company recognizes changes in redemption value
immediately as they occur and adjusts the carrying value of redeemable 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.
Net Income per Ordinary Share
The Company has two classes of shares, which
are referred to as Class A ordinary shares and Class B ordinary shares. Earnings and losses are shared pro rata between the two classes
of shares. The 28,166,667 potential ordinary shares for outstanding warrants to purchase the Company’s shares were excluded from
diluted earnings per share for the three and nine months ended September 30, 2021 because the warrants are contingently exercisable,
and the contingencies have not yet been met. As a result, diluted net income per ordinary share is the same as basic net income per ordinary
share for the periods.
Derivative Financial Instruments
The Company evaluates its financial instruments
to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic
815, “Derivatives and Hedging”. Derivative instruments are recorded at fair value on the grant date and re-valued at each
reporting date, with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified
on the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required
within 12 months of the balance sheet date. The Company has determined the warrants are derivative instruments.
Off-Balance Sheet Arrangements
As of September 30, 2021, we did not have any
off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
JOBS Act
The JOBS Act contains provisions that, among other
things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” and
under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly
traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with
new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies.
As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as
of public company effective dates.
Additionally, we are in the process of evaluating
the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth
in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among
other things, (i) provide an independent registered public accounting firm’s attestation report on our system of internal controls
over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging
growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may
be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the report of the independent registered public accounting
firm providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose
certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of
the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion
of our IPO or until we are no longer an “emerging growth company,” whichever is earlier.