NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 1-Description of Organization, Business
Operations and Basis of Presentation
GO Acquisition Corp. (the “Company”)
is a blank check company incorporated in Delaware on June 12, 2020, for the purpose of effecting a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”).
The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated with emerging growth companies.
The Company has neither engaged in any operations nor generated revenue to date. 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”).
As of June 30, 2022, the Company had not commenced
any operations. All activity for the period from June 12, 2020 (inception) through June 30, 2022 relates to the Company’s formation,
the initial public offering (“Initial Public Offering”) described below, and, since the Initial Public Offering, the search
for a potential target business. The Company will not generate any operating revenues until after the completion of its initial Business
Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from
the Initial Public Offering.
The Company’s sponsor is GO Acquisition
Founder LLC, a Delaware corporation (the “Sponsor”). The registration statement for the Company’s Initial Public Offering
was declared effective on August 4, 2020. On August 7, 2020, the Company consummated its Initial Public Offering of 50,000,000 units
(the “Units”) at $10.00 per Unit, generating gross proceeds of $500.0 million, and incurring offering costs of approximately
$28.1 million, inclusive of $17.5 million in deferred underwriting commissions (Note 6). The Company granted the underwriters in the
IPO (the “Underwriters”) a 45-day option to purchase up to 7,500,000 additional Units to cover over-allotments, if any. The
Underwriters exercised the over-allotment option in full on September 21, 2020 and purchased an additional 7,500,000 Units (the “Over-Allotment
Units”), generating gross proceeds of $75.0 million (the “Over-Allotment”), and incurred additional offering costs
of approximately $4.1 million in underwriting fees (inclusive of approximately $2.6 million in deferred underwriting fees).
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the private placement (“Private Placement”) of 8,000,000 warrants (each, a “Private
Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant
to the Sponsor, generating proceeds of $12.0 million. Simultaneously with the closing of the Over-Allotment Units, on September 21, 2020,
the Company consummated the second closing of the Private Placement, resulting in the purchase of an aggregate of an additional 1,000,000
Private Placement Warrants by the Sponsor, generating gross proceeds to the Company of $1.5 million (Note 4).
Upon the closing of the Initial Public Offering,
the Over-Allotment and the Private Placement, $575.0 million ($10.00 per Unit) of the net proceeds of the sale of the Units in the Initial
Public Offering and of the Private Placement Warrants in the Private Placement were placed in a trust account (“Trust Account”)
located in the United States at JP Morgan Chase Bank, N.A. with Continental Stock Transfer & Trust Company acting as trustee, and
invested only in U.S. “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having
a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company
Act which invest only in direct U.S. government treasury obligations, as determined by the Company, until the earlier of: (i) the completion
of a Business Combination and (ii) the distribution of the Trust Account as described below.
The Company's management has broad discretion with respect to the specific
application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially
all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the
Company will be able to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations
having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (excluding the amount of the deferred
underwriting discounts held in trust) 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-business combination company owns or acquires 50% or more of the voting securities
of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment
company under the Investment Company Act of 1940, as amended(the "Investment Company Act").
The Company will provide the holders of the Company’s
outstanding shares of Class A common stock (the “Public Stockholders”), par value $0.0001 per share, sold in the Initial
Public Offering (the “Public Shares”) with the opportunity to redeem all or a portion of their Public Shares upon the completion
of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means
of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender
offer will be made by the Company, solely in its discretion. The Public Stockholders will be entitled to redeem their Public Shares for
a pro rata portion of the amount then held in the Trust Account (initially anticipated to be $10.00 per Public Share). The per-share
amount to be distributed to Public Stockholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions
the Company will pay to the underwriters (as discussed in Note 5). These Public Shares were recorded at a redemption value and classified
as temporary equity upon the completion of the Initial Public Offering in accordance with the Financial Accounting Standards Board’s
(“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.”
GO ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
If the Company seeks stockholder approval of
a Business Combination, it will consummate the Business Combination only if a majority of the shares voted are voted in favor of the
Business Combination. The Company will not redeem the Public Shares in an amount that would cause its net tangible assets to be less
than $5,000,001. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business
or other reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated
Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange
Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however,
stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal
reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant
to the tender offer rules. Additionally, each public stockholder may elect to redeem such stockholder’s Public Shares irrespective
of whether such stockholder votes for or against the proposed transaction. If the Company seeks stockholder approval in connection with
a Business Combination, the Sponsor and the Company’s officers and directors have agreed to vote any Founder Shares (as defined
below in Note 4) owned by them and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination.
In addition, the Sponsor and the Company’s officers and directors have agreed to waive their redemption rights with respect to
any Founder Shares and Public Shares owned by them in connection with the completion of a Business Combination.
The Amended and Restated Certificate of Incorporation
provides that a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is
acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares,
without the prior consent of the Company.
The Sponsor and the Company’s officers
and directors have agreed not to propose an amendment to the Amended and Restated Certificate of Incorporation to modify the substance
or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete a Business Combination
within the Combination Period (as defined below) or with respect to any other material provisions relating to stockholders’ rights
or pre-initial Business Combination activity, unless the Company provides the Public Stockholders with the opportunity to redeem their
Public Shares in conjunction with any such amendment.
If the Company is unable to complete a Business
Combination within 24 months from the closing of the Initial Public Offering, or August 7, 2022 (as may be extended by approval of the
Company’s stockholders, the “Combination Period”), the Company will (i) cease all operations except for the purpose
of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a
per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the
funds held in the Trust Account and not previously released to the Company to pay its taxes, if any (less up to $100,000 of interest
to pay dissolution expenses), divided by the number of the then outstanding Public Shares, which redemption will completely extinguish
Public Stockholders’ rights as stockholders (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 remaining stockholders
and the Company’s board of directors, liquidate and dissolve, subject in each case, to the Company’s obligations under Delaware
law to provide for claims of creditors and the requirements of other applicable law.
The Sponsor and the Company’s officers
and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to the Founder Shares
if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor or the Company’s
officers or directors acquire Public Shares after the Initial Public Offering, they will be entitled to liquidating distributions from
the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period.
The underwriters have agreed to waive their rights to the deferred underwriting commission held in the Trust Account in the event the
Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with
the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution,
it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets)
will be only $10.00. In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if
and to the extent any claims by a third party (except for the Company’s independent registered public accounting firm) for services
rendered or products sold to the Company, or a prospective target business with which the Company has entered into a letter of intent,
confidentiality or other similar agreement or business combination agreement (a “Target”), 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 Public 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 Target that executed a waiver
of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) not will it apply to any claims
under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities
under the Securities Act of 1933, as amended (the “Securities Act”). The Company will seek to reduce the possibility that
the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers,
prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any
right, title, interest or claim of any kind in or to monies held in the Trust Account.
GO ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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 interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X and pursuant
to the rules and regulations of the SEC. Accordingly, certain disclosures included in the annual financial statements have been condensed
or omitted from these financial statements as they are not required for interim financial statements under GAAP and the rules of the
SEC.. 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 period presented. Operating results for the three and
six months ended June 30, 2022 are not necessarily indicative of the results that may be expected through December 31, 2022 or any future
periods.
The accompanying unaudited condensed financial
statements should be read in conjunction with the audited financial statements and notes thereto included in the Annual Report on Form
10-K for the year ended December 31, 2021 filed by the Company with the SEC on March 30, 2022.
Emerging Growth Company
As an emerging growth company, the Company may
take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging
growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation
requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic
reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and
stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts
emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an
emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging
growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition
period, which means that when a standard is issued or revised and it has different application dates for public or private companies,
the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised
standard. This may make comparison of the Company’s financial statements with another public company that is neither an emerging
growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because
of the potential differences in accounting standards used.
GO ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Liquidity and Going Concern
At June 30, 2022, the Company had cash of approximately
$122,000 and working capital deficit of approximately $2.9 million.
The Company’s liquidity needs since inception
had been satisfied through the cash receipt of $25,000 from the Sponsor to purchase the Founder Shares and a loan of $200,000 pursuant
to the Note issued to the Sponsor (Note 4). Subsequent to Initial Public Offering, the Company’s liquidity needs had been satisfied
with the net proceeds from the consummation of the Private Placement not held in the Trust Account. The Note remains unpaid as of June
30, 2022 and is due on demand. In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor
may, but is not obligated to, provide the Company Working Capital Loans (see Note 4). As of June 30, 2022 and December 31, 2021, the
Company had $600,000 outstanding under the Working Capital Loans.
In connection with the Company’s assessment
of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”)
2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company had until
August 7, 2022 to consummate the proposed Business Combination. On August 5, 2022, the Company announced that it will redeem all of its
outstanding Class A common stock, effective as of the close of business on August 17, 2022, because the Company will not consummate an
initial business combination within the time period required by its Amended and Restated Certificate of Incorporation. The Company does
not have adequate liquidity to sustain operations, however, management believes that the Company has access to funds pursuant to a commitment
letter from the Sponsor that will enable it to sustain operations until the Company dissolves. Management has determined that the mandatory
liquidation, and subsequent dissolution, raises substantial doubt about the Company’s ability to continue as a going
concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate.
Note 2-Summary of Significant Accounting Policies
Use of Estimates
The preparation of the financial statements in
conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment.
It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at
the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one
or more future confirming events. Actual results can differ from those estimates. One of the more significant accounting estimates included
in these financial statements is the determination of the fair value of the warrant liability. Such estimates may be subject to change
as more current information becomes available and accordingly the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments
with an original maturity of three months or less when purchased to be cash equivalents. The Company had no cash equivalents as of June
30, 2022 and December 31, 2021.
GO ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Investments Held in the Trust Account
The Company’s portfolio of investments
is comprised solely of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act,
with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government securities, or a
combination thereof. The Company’s investments held in the Trust Account are classified as trading securities. Trading
securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the
change in fair value of these securities is included in net gain on investments held in the Trust Account in the accompanying
unaudited condensed statement of operations. The estimated fair values of investments held in the Trust Account are determined using
available market information.
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal
Deposit Insurance Corporation coverage limit 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.
Fair Value of Financial Instruments
Fair value is defined as the price that would
be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement
date. U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.
The hierarchy gives the highest priority to unadjusted
quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs
(Level 3 measurements). These tiers consist of:
| ● | Level 1, defined as observable
inputs such as quoted prices for identical instruments in active markets; |
| ● | Level 2, defined as inputs other
than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments
in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
| ● | Level 3, defined as unobservable
inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived
from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
In some circumstances, the inputs used to measure
fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is
categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
As of June 30, 2022 and December 31, 2021, the
carrying values of cash, prepaid expenses, accounts payable, accrued expenses, note payable - related party, franchise tax payable and
income tax payable, and working capital loan approximate their fair values due to the short-term nature of the instruments.
Offering Costs Associated with the Initial
Public Offering
Offering costs consisted of legal, accounting,
underwriting fees and other costs incurred that were directly related to the Initial Public Offering. Offering costs are allocated to
the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds
received. Offering costs associated with derivative warrant liabilities are expensed as incurred, presented as non-operating expenses
in the statement of operations. Offering costs associated with the Public Shares were charged against the carrying value of the Class
A common stock subject to redemption upon the completion of the Initial Public Offering. The Company classifies deferred underwriting
commissions as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require
the creation of current liabilities.
GO ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Derivative Warrant Liabilities
The Company does not use derivative instruments
to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including
issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives,
pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded
as liabilities or as equity, is re-assessed at the end of each reporting period.
The 19,166,667 warrants issued in connection with
the Initial Public Offering (the “Public Warrants”) and the 9,000,000 Private Placement Warrants are recognized as derivative
liabilities in accordance with ASC 815-40. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and
adjusts the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date
until exercised, and any change in fair value is recognized in the Company’s statement of operations. The fair value of the Public
Warrants issued in connection with the Public Offering and Private Placement Warrants were initially measured at fair value using a Monte
Carlo simulation model and subsequently, the fair value of the Private Placement Warrants have been estimated using a Monte Carlo simulation
model each measurement date. The fair value of Public Warrants issued in connection with the Initial Public Offering have subsequently
been measured based on the listed market price of such warrants.
Class A Common Stock Subject to Possible
Redemption
The Company accounts for its Class A common stock
subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.”
Shares of Class A common stock subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair
value. Shares of conditionally redeemable Class A common stock (including Class A common stock that feature redemption rights that are
either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s
control) are classified as temporary equity. At all other times, shares of Class A common stock are classified as stockholders’
equity. The Company’s Class A common stock features certain redemption rights that are considered to be outside of the Company’s
control and subject to the occurrence of uncertain future events. Accordingly, as of June 30, 2022 and December 31, 2021, 57,500,000 shares
of Class A common stock subject to possible redemption are presented as temporary equity, outside of the stockholders’ equity section
of the Company’s condensed balance sheets.
Under ASC 480-10-S99, the Company has elected
to recognize changes in the redemption value immediately as they occur and adjust the carrying value of the security to equal the redemption
value at the end of each reporting period. This method would view the end of the reporting period as if it were also the redemption date
for the security. Effective with the closing of the Initial Public Offering (including the consummation of the over-allotment option),
the Company recognized the accretion from initial book value to redemption amount, which resulted in charges against additional paid-in
capital (to the extent available) and accumulated deficit. Subsequently, the Company recognized changes in the redemption value
as a deemed dividend as reflected on the accompanying unaudited condensed statements of changes in stockholders’ deficit.
Net Income Per Common Share
The Company complies with accounting and disclosure
requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has two classes of shares, which are referred to as
Class A common stock and Class B common stock. Income and losses are shared pro rata between the two classes of shares, which assumes
a business combination as the most likely outcome. Net income per common share is calculated by dividing the net income by the weighted
average shares of common stock outstanding for the respective period.
The Company has not considered the effect of the
warrants sold in the Public Offering (including the consummation of the over-allotment) and Private Placement Warrants to purchase 28,166,667
shares of the Company’s Class A common stock in the calculation of diluted income per share, since the exercise of the warrants
and the conversion of the rights into shares of common stock is contingent upon the occurrence of future events. The initial accretion
associated with the redeemable Class A common stock was excluded from earnings per share as the redemption value approximated fair value. Changes
in redemption value in the subsequent periods is recognized as a deemed dividend to stockholders in the calculation of net income per
common share.
GO ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The following table reflects the calculation of
basic and diluted net income per common share for the three and six months ended June 30, 2022 and 2021:
| | |
For the three months ended June 30, | |
| | |
2022 | | |
2021 | |
| | |
Class A | | |
Class B | | |
Class A | | |
Class B | |
| Numerator: | |
| | |
| | |
| | |
| |
| Allocation of net income (loss) | |
$ | 3,983,779 | | |
$ | 995,945 | | |
$ | (4,547,306 | ) | |
$ | (1,136,826 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Denominator: | |
| | | |
| | | |
| | | |
| | |
Basic and diluted weighted average common shares outstanding | |
| 57,500,000 | | |
| 14,375,000 | | |
| 57,500,000 | | |
| 14,375,000 | |
| | |
| | | |
| | | |
| | | |
| | |
Basic and diluted net income (loss) per common share | |
$ | 0.07 | | |
$ | 0.07 | | |
$ | (0.08 | ) | |
$ | (0.08 | ) |
| | |
For the six months ended June 30, | |
| | |
2022 | | |
2021 | |
| | |
Class A | | |
Class B | | |
Class A | | |
Class B | |
| Numerator: | |
| | |
| | |
| | |
| |
| Allocation of net income | |
$ | 14,604,714 | | |
$ | 3,651,179 | | |
$ | 9,027,345 | | |
$ | 2,256,836 | |
| | |
| | | |
| | | |
| | | |
| | |
| Denominator: | |
| | | |
| | | |
| | | |
| | |
Basic and diluted weighted average common shares outstanding | |
| 57,500,000 | | |
| 14,375,000 | | |
| 57,500,000 | | |
| 14,375,000 | |
| | |
| | | |
| | | |
| | | |
| | |
Basic and diluted net income per common share | |
$ | 0.25 | | |
$ | 0.25 | | |
$ | 0.16 | | |
$ | 0.16 | |
Income Taxes
The Company complies with the accounting and reporting
requirements of Financial Accounting Standards Board Accounting Standard Codification, or FASB ASC, 740, “Income Taxes,” which
requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred tax assets and liabilities are
recognized for the estimated future tax consequences attributable to differences between the financial statement 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. As of June 30, 2022 and
December 31, 2021, the Company had a full valuation allowance against the deferred tax assets.
There were no unrecognized tax benefits as of
June 30, 2022 and December 31, 2021. No amounts were accrued for the payment of interest and penalties at June 30, 2022 and December 31,
2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation
from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
FASB ASC 740 prescribes a recognition threshold
and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in
a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing
authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.
GO ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Recent Issued Accounting Standards
In June 2022, the FASB issued ASU 2022-03, ASC
Subtopic 820 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The ASU amends ASC 820
to clarify that a contractual sales restriction is not considered in measuring an equity security at fair value and to introduce new disclosure
requirements for equity securities subject to contractual sale restrictions that are measured at fair value. The ASU applies to both holders
and issuers of equity and equity-linked securities measured at fair value. The amendments in this ASU are effective for the Company in
fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted for both interim
and annual financial statements that have not yet been issued or made available for issuance. The Company is still evaluating the impact
of this pronouncement on the condensed financial statements.
The Company’s management does not believe
that any other recently issued, but not yet effective, accounting standards updates, if currently adopted, would have a material effect
on the accompanying financial statements.
Note 3-Initial Public Offering
On August 7, 2020, the Company consummated its
Initial Public Offering of 50,000,000 Units at $10.00 per Unit, generating gross proceeds of $500.0 million. The underwriters exercised
the over-allotment option in full and on September 21, 2020 purchased an additional 7,500,000 Over-Allotment Units, generating additional
gross proceeds of $75.0 million. The Company incurred offering costs of approximately $32.2 million, including approximately $20.1 million
in deferred underwriting commissions.
Each Unit consisted of one share of Class A common
stock and one-third of one redeemable warrant (each, a “Public Warrant”). Each whole Public Warrant entitles the holder to
purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 6).
Note 4-Related Party Transactions
Founder Shares
In June 2020, the Sponsor purchased 14,375,000
shares of the Company’s Class B common stock, par value $0.0001 per share (the “Founder Shares”), for an aggregate price
of $25,000. In July 2020, the Sponsor transferred 25,000 Founder Shares to each of the Company’s independent directors at their
original purchase price.
The holders of the Founder Shares (the “Initial
Stockholders”) agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier
to occur of: (a) one year after the completion of the initial Business Combination and (b) upon completion of the initial Business Combination,
(x) if the last reported sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock
capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing
at least 150 days after the initial Business Combination or (y) the date on which the Company completes a liquidation, merger, capital
stock exchange or other similar transaction after the initial Business Combination that results in all of the stockholders having the
right to exchange their Class A common stock for cash, securities or other property.
Private Placement Warrants
Simultaneously with the closing of the Initial
Public Offering and the Over-Allotment, on August 7, 2020 and September 21, 2020, respectively, the Company consummated the Private Placement
of 9,000,000 Private Placement Warrants in the aggregate at a price of $1.50 per Private Placement Warrant to the Sponsor, generating
proceeds of $13.5 million.
Each whole Private Placement Warrant is exercisable
for one whole share of Class A common stock at a price of $11.50 per share. A portion of the proceeds from the sale of the Private Placement
Warrants to the Sponsor was added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not
complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless. The Private Placement
Warrants will be non-redeemable for cash and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted
transferees.
The Sponsor and the Company’s officers and
directors agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants until 30 days
after the completion of the initial Business Combination.
GO ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Related Party Loans
On June 22, 2020, the Sponsor agreed to loan the
Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the “Note”).
This loan was non-interest bearing and payable upon the completion of the Initial Public Offering. As of June 30, 2022 and December 31,
2021, the balance of the loan was $200,000, and the Note is due on demand. This facility is no longer available to be withdrawn.
In addition, in order to finance transaction costs
in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and
directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company
completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released
to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that
a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital
Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms
of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working
Capital Loans would either be repaid upon consummation of a Business Combination or, at the lender’s discretion, up to $1.5 million
of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.50 per warrant.
The warrants would be identical to the Private Placement Warrants. As of June 30, 2022 and December 31, 2021, the Company had $600,000
outstanding under the Working Capital Loans.
The Sponsor, officers and directors, or any of
their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on the Company’s
behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. The Company’s
audit committee will review on a quarterly basis all payments that were made to the Sponsor, officers or directors, or their affiliates.
Due to related party
The Sponsor paid general and administrative expenses on behalf of the Company. An aggregate of $113,488 and $-0-,
as reflected in the accompanying condensed balance sheets is outstanding as of June 30, 2022 and December 31, 2021, respectively. These
amounts are due on demand and are non-interest bearing.
Note 5-Commitments and
Contingencies
Registration Rights
The holders of Founder Shares, Private Placement
Warrants and warrants that may be issued upon conversion of Working Capital Loans, if any (and any shares of Class A common stock issuable
upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon
conversion of the Founder Shares), are entitled to registration rights pursuant to a registration rights agreement. The holders of these
securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition,
the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the
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 the final prospectus relating to the Initial Public Offering to purchase up to 7,500,000 additional Units to cover over-allotments,
if any, at the Initial Public Offering price less the underwriting discounts and commissions. The underwriters fully exercised their over-allotment
option on September 21, 2020.
The underwriters were entitled to an underwriting discount of $0.20
per Unit, or $11.5 million in the aggregate, paid upon the closing of the Initial Public Offering and Over-Allotment. In addition, the
underwriters will be entitled to a deferred fee of $0.35 per Unit, or $20.1 million in the aggregate. The deferred fee will become payable
to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination,
subject to the terms of the underwriting agreement. Pursuant to the terms of the underwriting agreement, if the Company fails to consummate
its initial Business Combination by August 7, 2022, (i) the deferred fee will not be paid to the underwriters and will, instead, be included
in the liquidation distribution of the proceeds held in the Trust Account made to the holders of its Class A common stock and (ii) the
underwriters have agreed to forfeit any rights or claims to the deferred fee and waive all rights thereto.
GO ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Litigation
From time to time, the Company may be subject
to legal proceedings and claims that arise in the search for a potential target business; other than as described below, however, the
Company is not aware of any pending or threatened litigation affecting the Company.
On August 20, 2021, a purported stockholder of
the Company filed a complaint in the United States District Court for the Southern District of New York (the “Complaint”)
against the Company, the Sponsor the Company’s founders and the Company’s independent directors (collectively, the “Defendants”)
alleging breach of certain provisions of the Investment Company Act. The Complaint generally asserts that the Company is subject to the
Investment Company Act because, among other allegations, the Company invested the proceeds of the Initial Public Offering in securities
of the United States government and shares of money market mutual funds. Stemming from this assertion, the Complaint alleges that the
contracts pursuant to which certain Defendants purchased the Company’s securities violate the Investment Company Act and that such
purchases constitute payments that were in breach of the Defendants’ fiduciary duties under the Investment Company Act. The Complaint
generally seeks a declaratory judgment stating that the Company is an investment company under the Investment Company Act, rescission
of contracts whose formation and performance purportedly violate the Investment Company Act and unspecified damages for purported breach
of the Defendants’ fiduciary obligations under the Investment Company Act. The Defendants believe the claims asserted in the Complaint
are without merit and have filed a Motion to Dismiss the Complaint. The Defendants intend to continue to vigorously defend this action.
Risks and Uncertainties
Management continues to evaluate the impact of
the COVID-19 pandemic and has concluded that 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.
In February 2022, the Russian Federation and Belarus
commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have
instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on
the world economy are not determinable as of the date of these condensed financial statements and the specific impact on the Company’s
financial condition, results of operations, and cash flows is also not determinable as of the date of these condensed financial statements.
Note 6-Derivative Warrant Liabilities
As of June 30, 2022 and December 31, 2021, the
Company had 19,166,667 and 9,000,000 Public Warrants and Private Placement Warrants, respectively, outstanding.
Public Warrants may only be exercised for a whole
number of shares. No fractional Public Warrants will be issued upon separation of the Units and only whole Public Warrants will trade.
The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months
from the closing of the Initial Public Offering; provided in each case that the Company has an effective registration statement under
the Securities Act covering the shares of Class A common stock issuable upon exercise of the Public Warrants and a current prospectus
relating to them is available (or the Company permits holders to exercise their Public Warrants on a cashless basis and such cashless
exercise is exempt from registration under the Securities Act). The Company has agreed that as soon as practicable, but in no event later
than 20 business days after the closing of the initial Business Combination, it will use its commercially reasonable efforts to file with
the SEC and have an effective registration statement covering the shares of the Class A common stock issuable upon exercise of the warrants
and to maintain a current prospectus relating to those shares of the Class A common stock until the warrants expire or are redeemed. If
a registration statement covering the shares of the Class A common stock issuable upon exercise of the warrants is not effective by the
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.
GO ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The warrants have an exercise price of $11.50
per share, subject to adjustments, and will expire five years after the completion of a Business Combination or earlier upon redemption
or liquidation. In addition, if (x) the Company issues additional shares of the Class A common stock 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 of the Class A common stock (with such issue price or effective issue price to be determined in good faith by the
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 Initial Stockholders 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 completion of the initial Business Combination (net of redemptions),
and (z) the volume-weighted average trading price of the Class A common stock during the 20 trading day period starting on the trading
day prior to the day on which the Company completes 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 $10.00 and $18.00 per share redemption trigger prices described below under “Redemption
of warrants when the price per share of Class A common stock equals or exceeds $18.00” and “Redemption of warrants when the
price per share of Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to 100% and
180% of the higher of the Market Value and the Newly Issued Price, respectively.
The Private Placement Warrants are identical to
the Public Warrants, except that the Private Placement Warrants and the shares of Class A common stock issuable upon exercise of the Private
Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject
to certain limited exceptions. Additionally, the Private Placement Warrants will be non-redeemable so long as they are held by the Sponsor
or its permitted transferees. If the Private Placement Warrants are held by someone other than the Sponsor or its permitted transferees,
the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
Redemption of warrants when the price per share
of Class A common stock equals or exceeds $18.00:
Once the warrants become exercisable, the Company
may redeem the outstanding warrants for cash (except as described herein with respect to the Private Placement 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; and |
| ● | if, and only if, the last reported
sale price of the Class A common stock 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 (the “Reference Value”) equals or exceeds
$18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like). |
GO ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Redemption of warrants when the price per share
of Class A common stock equals or exceeds $10.00:
Once the warrants become exercisable, the Company
may redeem the outstanding warrants (except as described herein with respect to the Private Placement Warrants):
| ● | in whole and not in part; |
| ● | at $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 determined by reference to an agreed table based on the redemption date and the
“fair market value” of the Class A common stock; |
| ● | if, and only if, the Reference
Value equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, rights issuances, subdivisions, reorganizations,
recapitalizations and the like); and |
| ● | if the Reference Value is less
than $18.00 per share (as adjusted for stock splits, stock dividends, rights issuances, subdivisions, reorganizations, recapitalizations
and the like), the Private Placement Warrants must also concurrently be called for redemption on the same terms as the outstanding Public
Warrants, as described above. |
The “fair market value” of the Class
A common stock shall mean the volume-weighted average price of the Class A common stock for the ten trading days immediately following
the date on which the notice of redemption is sent to the holders of warrants. The Company will provide its warrant holders with the final
fair market value no later than one business day after the 10-day trading period described above ends. In no event will the warrants be
exercisable in connection with this redemption feature for more than 0.361 shares of the Class A common stock per warrant (subject to
adjustment).
If the Company calls the Public Warrants for redemption,
management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,”
as described in the warrant agreement.
In no event will the Company be required to net
cash settle any warrant. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates
the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they
receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly,
the warrants may expire worthless.
Note 7- Class A Common Stock Subject to Possible
Redemption
The Company’s Class A common stock feature
certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of future events.
The Company is authorized to issue 200,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of the Company’s
Class A common stock are entitled to one vote for each share. As of June 30, 2022, and December 31, 2021 there were 57,500,000 shares
of Class A common stock outstanding subject to possible redemption.
The Class A common stock subject to possible redemption
reflected on the condensed balance sheets is reconciled in the following table:
| Gross proceeds from Initial Public Offering | |
$ | 575,000,000 | |
| Less: | |
| | |
| Fair value of Public Warrants at issuance | |
| (22,859,790 | ) |
| Offering costs allocated to Class A common stock subject to possible redemption | |
| (30,966,946 | ) |
| Plus: | |
| | |
| Accretion on Class A common stock subject to possible redemption amount | |
| 53,826,736 | |
| Class A common stock subject to possible redemption, December 31, 2021 | |
| 575,000,000 | |
| Increase in redemption value of Class A common stock subject to possible redemption | |
| 112,000 | |
| Class A common stock subject to possible redemption, March 31, 2022 | |
| 575,112,000 | |
| Increase in redemption value of Class A common stock subject to possible redemption | |
| 383,198 | |
| Class A common stock subject to possible redemption, June 30, 2022 | |
$ | 575,495,198 | |
Note 8-Stockholders’ Deficit
Preferred Stock - The Company is
authorized to issue 1,000,000 shares of preferred stock, par value $0.0001 per share, with such designations, voting and other rights
and preferences as may be determined from time to time by the Company’s board of directors. As of June 30, 2022 and December 31,
2021, there were no shares of preferred stock issued or outstanding.
Class A Common Stock - The Company
is authorized to issue 200,000,000 shares of Class A common stock with a par value of $0.0001 per share. As of June 30, 2022 and December
31, 2021, there were 57,500,000 shares of Class A common stock issued and outstanding, all of which are subject to possible redemption
and therefore classified as temporary equity in the accompanying balance sheets (See Note 7).
GO ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Class B Common Stock - The Company
is authorized to issue 20,000,000 Class B common stock with a par value of $0.0001 per share. As of June 30, 2022 and December 31, 2021,
there were 14,375,000 shares of Class B common stock issued and outstanding (see Note 4).
Stockholders of record are entitled to one vote
for each share held on all matters to be voted on by stockholders. Holders of Class A common stock and holders of Class B common stock
will vote together as a single class on all matters submitted to a vote of the Company’s stockholders except as required by law.
The Class B common stock will automatically convert
into Class A common stock on the first business day following the completion of the initial Business Combination at a ratio such that
the number of shares of the Class A common stock issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted
basis, 20% of the sum of (i) the total number of shares of the Class A common stock and Class B common stock issued and outstanding upon
completion of the Initial Public Offering, plus (ii) the sum of (a) all shares of the Class A common stock issued or deemed issued or
issuable upon conversion or exercise of any equity-linked securities (as defined herein) or rights issued or deemed issued by the Company
in connection with or in relation to the completion of the initial Business Combination, excluding (1) any shares of the Class A common
stock or equity-linked securities exercisable or exchangeable for or convertible into shares of the Class A common stock issued, or to
be issued, to any seller in the initial Business Combination, and (2) any private placement warrants issued to the Sponsor or any of its
affiliates upon conversion of Working Capital Loans, minus (b) the number of Public Shares redeemed by Public Stockholders in connection
with the initial Business Combination. In no event will the shares of the Class B common stock convert into shares of the Class A common
stock at a rate of less than one-to-one.
Note 9-Fair Value Measurements
The following table presents information about
the Company’s assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021
and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value.
June 30, 2022
| Description | |
Quoted
Prices in
Active
Markets
(Level 1) | | |
Significant
Other
Observable
Inputs
(Level 2) | | |
Significant
Other
Unobservable
Inputs
(Level 3) | |
| Assets: | |
| | | |
| | | |
| | |
| Investments held in Trust Account | |
$ | 575,755,719 | | |
$ | - | | |
$ | - | |
| Derivative warrant liabilities | |
$ | - | | |
$ | - | | |
$ | - | |
December 31, 2021
| Description | |
Quoted
Prices in
Active
Markets
(Level 1) | | |
Significant
Other
Observable
Inputs
(Level 2) | | |
Significant
Other
Unobservable
Inputs
(Level 3) | |
| Assets: | |
| | |
| | |
| |
| Investments held in Trust Account | |
$ | 575,429,021 | | |
$ | - | | |
$ | - | |
| Liabilities: | |
| | | |
| | | |
| | |
| Derivative warrant liabilities - Public | |
$ | 12,650,000 | | |
$ | - | | |
$ | - | |
| Derivative warrant liabilities - Private | |
$ | - | | |
$ | - | | |
$ | 5,940,000 | |
Transfers to/from Levels 1, 2, and 3 are recognized
at the beginning of the reporting period. There was no transfer between levels during the six months ended June 30, 2022 and 2021.
Level 1 assets and liabilities include investments
in mutual funds invested in government securities. The Company uses inputs such as actual trade data, benchmark yields, quoted market
prices from dealers or brokers, and other similar sources to determine the fair value of its investments.
The fair value of the Public Warrants issued in
connection with the Public Offering and Private Placement Warrants were initially measured at fair value using a Monte Carlo simulation
model and subsequently, the fair value of the Private Placement Warrants have been estimated using a Monte Carlo simulation model at each
measurement date. The fair value of Public Warrants issued in connection with the Initial Public Offering have been measured based on
the listed market price of such warrants, a Level 1 measurement, since September 2020.
GO ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
For the three months ended June 30, 2022 and
2021, the Company recognized a gain/(loss) to the statements of operations resulting from a decrease/(increase) in the fair value of
liabilities of approximately $5.1 million and approximately ($5.5 million), respectively, presented as change in fair value of derivative
warrant liabilities on the accompanying unaudited condensed statements of operations.
For the six months ended June 30, 2022 and 2021,
the Company recognized a gain to the statements of operations resulting from a decrease in the fair value of liabilities of approximately
$18.6 million and approximately $11.6 million, respectively, presented as change in fair value of derivative warrant liabilities on the
accompanying unaudited condensed statements of operations.
The estimated fair value of the Private Placement
Warrants are determined using Level 3 inputs. Inherent in a Monte Carlo simulation are assumptions related to expected stock-price volatility,
expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock warrants based on
implied volatility from the Company’s traded warrants and from historical volatility of select peer company’s common stock
that matches the expected remaining life of the warrants. Significant increases (decreases) in the expected volatility in isolation would
result in a significantly higher (lower) fair value measurement. The risk-free interest rate is based on the U.S. Treasury zero-coupon
yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants
is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company
anticipates remaining at zero.
The following table provides quantitative information
regarding Level 3 fair value measurements inputs at their measurement dates:
| | |
December 31,
2021 | |
| Volatility | |
| 10.7 | % |
| Stock price | |
$ | 9.84 | |
| Expected life of the options to convert | |
| 5.59 | |
| Risk-free rate | |
| 1.30 | % |
| Dividend yield | |
| 0.0 | % |
The change in the fair value of the derivative
warrant liabilities measured with Level 3 inputs for six months ended June 30, 2022 and 2021 is summarized as follows:
| Derivative warrant liabilities at December 31, 2021 | |
$ | 5,940,000 | |
| Change in fair value of derivative warrant liabilities | |
| (4,320,000 | ) |
| Derivative warrant liabilities at March 31, 2022 | |
| 1,620,000 | |
| Change in fair value of derivative warrant liabilities | |
| (1,620,000 | ) |
| Derivative warrant liabilities at June 30, 2022 | |
$ | - | |
| | |
| | |
| Derivative warrant liabilities - Level 3, at December 31, 2020 | |
$ | 13,895,050 | |
| Change in fair value of derivative warrant liabilities | |
| (5,736,610 | ) |
| Derivative warrant liabilities - Level 3, at March 31, 2021 | |
| 8,158,440 | |
| Change in fair value of derivative warrant liabilities | |
| 1,741,560 | |
| Derivative warrant liabilities - Level 3, at June 30, 2021 | |
$ | 9,900,000 | |
Note 10-Subsequent Events
The Company evaluated subsequent events and transactions that occurred
up to the date the condensed financial statements were issued. Based upon this review, except for the below, the Company did not identify
any other subsequent events that would have required adjustment or disclosure in the condensed financial statements.
On August 5, 2022, the Company's Board of Directors approved the plan to discontinue its pursuit of a Business Combination and allowed
redemption of the Company's Class A common stock.
On August 5, 2022, in connection with the Company’s
liquidation and redemption of all of its outstanding shares of Class A common stock, the Company determined to issue additional shares
of Class B common stock to its sponsor in consideration of full payment and satisfaction of an aggregate of $800,000 due and payable
to its sponsor under its initial public offering and working capital promissory notes. On August 17, 2022, the Company redeemed all of
its outstanding shares of Class A common stock for a per-share redemption price of approximately $10.01.
As noted above, on August 20, 2021, a purported stockholder of the Company (the “Plaintiff”) filed a complaint in the United
States District Court for the Southern District of New York (the “Complaint”) against the Company, the Sponsor, the Company’s
founders and the Company’s independent directors (collectively, the “Defendants”) alleging breach of certain provisions
of the Investment Company Act. The Plaintiff and the Defendants have agreed to the dismissal of the Complaint with prejudice, and on August
19, 2022 therefore filed a stipulation and proposed order to dismiss the action in its entirety with the United States District Court
for the Southern District of New York.
