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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(State or other jurisdiction of incorporation or organization)
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(Commission File Number)
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(IRS Employer Identification No.)
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(Address Of Principal Executive Offices)
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(Zip Code)
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Title of each class
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Trading
Symbol(s)
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Name of each exchange on
which registered
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Large-accelerated filer
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☐ |
Accelerated filer
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☐ |
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☒
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Smaller reporting company
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Emerging growth company
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Page
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PART I. FINANCIAL INFORMATION
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Item 1.
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1
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1
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2
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3
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4
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5
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Item 2.
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21
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Item 3.
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26 | |
Item 4.
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26 | |
PART II. OTHER INFORMATION
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Item 1.
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28 | |
Item 1A.
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28 | |
Item 2.
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28 | |
Item 3.
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28 | |
Item 4.
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28
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Item 5.
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28 | |
Item 6.
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29 | |
Signature |
30 |
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September 30,
2022
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December 31, 2021
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||||||
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(Unaudited)
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|||||||
Assets:
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||||||||
Current assets:
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||||||||
Cash
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$
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$
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||||
Prepaid expenses
|
|
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||||||
Total current assets
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||||||
Investments held in Trust Account
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||||||
Total Assets
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$
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$
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||||
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||||||||
Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit:
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||||||||
Current liabilities:
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||||||||
Accounts payable
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$
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$
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||||
Accrued expenses
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||||||
Accrued expenses - related party
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|
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||||||
Total current liabilities
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||||||
Deferred underwriting commissions
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||||||
Warrant liabilities
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||||||
Total liabilities
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||||||
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||||||||
Commitments and Contingencies
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||||||||
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||||||||
Class A ordinary shares subject to possible redemption, $
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||||||
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||||||||
Shareholders’ Deficit:
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||||||||
Preference shares, $
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||||||
Class A ordinary shares, $
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||||||
Class B ordinary shares, $
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|
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||||||
Accumulated deficit
|
(
|
)
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(
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)
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||||
Total shareholders’ deficit
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(
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)
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(
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)
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||||
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit
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$
|
|
$
|
|
For the Three Months Ended
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For the Nine Months Ended
|
|||||||||||||||
September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | |||||||||||||
Operating expenses
|
||||||||||||||||
General and administrative expenses
|
$
|
|
$ |
$ |
$
|
|
||||||||||
Administrative fees - related party
|
||||||||||||||||
Loss from operations
|
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Other income (expenses):
|
||||||||||||||||
Change in fair value of warrant liabilities
|
||||||||||||||||
Loss on issuance of Private Placement Warrants
|
|
( |
) | |||||||||||||
Offering costs associated with issuance of warrants
|
( |
) | ||||||||||||||
Income from investments held in Trust Account
|
||||||||||||||||
Net income
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$ | $ |
$ |
$ | ||||||||||||
Weighted average shares outstanding of Class A ordinary shares, basic and diluted
|
|
|
||||||||||||||
Basic and diluted net income per Class A ordinary share
|
$
|
|
$ |
$ |
$
|
|
||||||||||
Weighted average shares outstanding of Class B ordinary shares, basic
|
|
|
||||||||||||||
Weighted average shares outstanding of Class B ordinary shares, diluted | ||||||||||||||||
Basic and diluted net income per Class B ordinary share
|
$
|
|
$ |
$ |
$
|
|
|
Ordinary Shares
|
Additional | Total | |||||||||||||||||||||||||
|
Class A
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Class B
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Paid-in | Accumulated | Shareholders’ | |||||||||||||||||||||||
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Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Deficit
|
|||||||||||||||||||||
Balance - December 31, 2021
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||||||||||||
Net income
|
-
|
|
-
|
|
|
|
|
|||||||||||||||||||||
Balance - March 31, 2022 (unaudited)
|
|
|
|
|
|
(
|
)
|
(
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)
|
|||||||||||||||||||
Increase in redemption value of Class A ordinary shares subject to possible redemption
|
- | - | ( |
) | ( |
) | ||||||||||||||||||||||
Net income
|
-
|
|
-
|
|
|
|
|
|||||||||||||||||||||
Balance - June 30, 2022 (unaudited)
|
|
|
|
|
|
(
|
)
|
(
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)
|
|||||||||||||||||||
Increase in redemption value of
Class A ordinary shares subject to possible redemption
|
- | - | ( |
) | ( |
) | ||||||||||||||||||||||
Net income |
- | - | ||||||||||||||||||||||||||
Balance - September 30, 2022 (unaudited)
|
$ |
$ |
$ |
$ |
( |
) | $ |
( |
) |
|
Ordinary Shares
|
Additional | Total | |||||||||||||||||||||||||
|
Class A
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Class B
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Paid-in | Accumulated | Shareholders’ | |||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Equity (Deficit)
|
|||||||||||||||||||||
Balance - December 31, 2020
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||||||||
Accretion on Class A ordinary shares subject to possible redemption amount
|
-
|
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-
|
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(
|
)
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(
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)
|
(
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)
|
||||||||||||||||||
Net loss
|
-
|
|
-
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||
Balance - March 31, 2021 (unaudited)
|
|
|
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||
Net income
|
-
|
|
-
|
|
|
|
|
|||||||||||||||||||||
Balance - June 30, 2021 (unaudited)
|
|
|
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||
Net income |
- | - | ||||||||||||||||||||||||||
Balance - September 30, 2021 (unaudited)
|
$ | $ | $ | $ | ( |
) | $ | ( |
) |
|
For the Nine
Months Ended
|
|||||||
|
September 30, 2022
|
September 30, 2021
|
||||||
Cash Flows from Operating Activities:
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments to reconcile net income to net cash used in operating activities:
|
||||||||
Change in fair value of warrant liabilities
|
(
|
)
|
(
|
)
|
||||
Loss on issuance of Private Placement Warrants
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|
|
||||||
Income from investments held in Trust Account
|
(
|
)
|
(
|
)
|
||||
Offering costs associated with issuance of warrants
|
|
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Prepaid expenses
|
|
(
|
)
|
|||||
Accounts payable
|
|
|
||||||
Accrued expenses
|
|
|
||||||
Accrued expenses - related party
|
|
|
||||||
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
||||
|
||||||||
Cash Flows from Investing Activities:
|
||||||||
Cash deposited in Trust Account
|
|
(
|
)
|
|||||
Net cash used in investing activities
|
|
(
|
)
|
|||||
|
||||||||
Cash Flows from Financing Activities:
|
||||||||
Proceeds from note payable to related party
|
|
|
||||||
Repayment of note payable to related party
|
|
(
|
)
|
|||||
Proceeds received from initial public offering, gross
|
|
|
||||||
Proceeds received from private placement
|
|
|
||||||
Offering costs paid
|
(
|
)
|
(
|
)
|
||||
Net cash provided by (used in) financing activities
|
(
|
)
|
|
|||||
|
||||||||
Net change in cash
|
(
|
)
|
|
|||||
|
||||||||
Cash - beginning of the period
|
|
|
||||||
Cash - end of the period
|
$
|
|
$
|
|
||||
|
||||||||
Supplemental disclosure of noncash activities:
|
||||||||
Offering costs included in accrued expenses
|
$
|
|
$
|
|
||||
Deferred underwriting commissions
|
$
|
|
$
|
|
• |
Level 1, defined as observable inputs such as quoted prices (unadjusted) for
identical instruments in active markets;
|
• |
Level 2, defined as inputs other than quoted prices in active markets that are either
directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
|
• |
Level 3, defined as unobservable inputs in which little or no market data exists,
therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
|
|
|
For the Three Months Ended
September 30,
2022
|
|
|
For the Three Months Ended
September 30,
2021
|
|
||||||||||
|
|
Class A
|
|
|
Class B
|
|
|
Class A
|
|
|
Class B
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Allocation of net income
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average ordinary shares outstanding, basic and diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income per ordinary share
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
For the Nine Months Ended
September 30, 2022
|
For the Nine Months Ended
September 30, 2021
|
||||||||||||||
|
Class A
|
Class B
|
Class A
|
Class B
|
||||||||||||
|
||||||||||||||||
Numerator:
|
||||||||||||||||
Allocation of net income - basic
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Allocation of net income - diluted
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Denominator:
|
||||||||||||||||
Weighted average ordinary shares outstanding, basic
|
|
|
|
|
||||||||||||
Weighted average ordinary shares outstanding, diluted
|
|
|
|
|
||||||||||||
Basic net income per ordinary share
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Diluted net income per ordinary share
|
$
|
|
$
|
|
$
|
|
$
|
|
•
|
in whole and not in
part;
|
•
|
at a price of $
|
•
|
upon a minimum of
|
•
|
if, and only if, the
last reported sale price (the “closing price”) of Class A ordinary shares equals or exceeds $
|
• |
in whole and not in part;
|
• |
at $
|
• |
if, and only if, the
closing price of Class A ordinary shares equals or exceeds $
|
• |
if the closing price of
the Class A ordinary shares for any
|
Gross proceeds received from Initial Public Offering
|
$
|
|
||
Less:
|
||||
Fair value of Public Warrants at issuance
|
(
|
)
|
||
Offering costs allocated to Class A ordinary shares
|
(
|
)
|
||
Plus:
|
||||
Accretion on Class A ordinary shares to redemption value
|
|
|||
Class A ordinary shares subject to possible redemption as of December 31, 2021
|
|
|
||
Accretion on Class A ordinary shares subject to possible redemption
|
||||
Class A ordinary shares subject to possible redemption as of September 30, 2022 | $ |
Fair Value Measured as of September 30, 2022
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Assets
|
||||||||||||||||
Investments held in Trust Account - money market fund
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Liabilities:
|
||||||||||||||||
Warrant liabilities - public warrants
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Warrant liabilities - private placement warrants
|
$
|
|
$
|
|
$
|
|
$
|
|
Fair Value Measured as of December 31, 2021
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Assets
|
||||||||||||||||
Investments held in Trust Account - money market fund
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Liabilities:
|
||||||||||||||||
Warrant liabilities - public warrants
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Warrant liabilities - private placement warrants
|
$
|
|
$
|
|
$
|
|
$
|
|
Warrant liabilities at December 31, 2021
|
$ | |||
Change in fair value of warrant liabilities
|
( |
) | ||
Warrant liabilities at March 31, 2022
|
||||
Change in fair value of warrant liabilities | ( |
) | ||
Warrant liabilities at June 30, 2022
|
|
|||
Change in fair value of warrant liabilities
|
( |
) | ||
Warrant liabilities at September 30, 2022 |
$ |
Warrant liabilities at January 1, 2021
|
$
|
|
||
Issuance of Public and Private Placement Warrants
|
|
|||
Public Warrants transfer to Level 1
|
(
|
)
|
||
Change in fair value of warrant liabilities
|
(
|
)
|
||
Warrant liabilities at March 31, 2021
|
|
|||
Change in fair value of warrant liabilities
|
(
|
)
|
||
Warrant liabilities at June 30, 2021 | ||||
Change in fair value of warrant liabilities
|
( |
) | ||
Warrant liabilities at September 30, 2021 |
$ |
September 30, 2022
|
December 31, 2021
|
|||||||
Exercise price
|
$
|
|
$
|
|
||||
Stock Price
|
$
|
|
$
|
|
||||
Term (in years)
|
|
|
||||||
Volatility
|
|
%
|
|
%
|
||||
Risk-free interest rate
|
|
%
|
|
%
|
||||
Dividend yield
|
|
%
|
|
%
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4. |
Controls and Procedures
|
Item 1. |
Legal Proceedings
|
Item 1A. |
Risk Factors
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities
|
Item 3. |
Defaults upon Senior Securities
|
Item 4. |
Mine Safety Disclosures.
|
Item 5. |
Other Information.
|
Item 6. |
Exhibits.
|
Exhibit
Number
|
Description
|
Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
Certification of Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
|
|
Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Certification of Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
* |
These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended,
nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
|
Dated: November 14, 2022
|
KERNEL GROUP HOLDINGS, INC.
|
|
By:
|
/s/ Mark Gross
|
|
Name:
|
Mark Gross
|
|
Title:
|
Chief Executive Officer
|
1. |
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 of Kernel Group Holdings, Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the registrant and have:
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b. |
[Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313];
|
c. |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d. |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter
(the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s
auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely
affect the registrant’s ability to record, process, summarize and report financial information; and
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial
reporting.
|
Date: November 14, 2022
|
By:
|
/s/ Mark Gross
|
Mark Gross
|
||
Chief Executive Officer and Director
|
||
(Principal Executive Officer)
|
1. |
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 of Kernel Group Holdings, Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the registrant and have:
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b. |
[Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313];
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c. |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d. |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter
(the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s
auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely
affect the registrant’s ability to record, process, summarize and report financial information; and
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b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial
reporting.
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Date: November 14, 2022
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By:
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/s/ Rakesh Tondon
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Rakesh Tondon
|
||
Chief Financial Officer
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||
(Principal Financial and Accounting Officer)
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(1) |
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Mark Gross
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||
Name:
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Mark Gross
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Title:
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Chief Executive Officer and Director
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(Principal Executive Officer)
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(1) |
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Rakesh Tondon
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||
Name:
|
Rakesh Tondon
|
|
Title:
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|
Description of Organization, Business Operations and Going Concern |
9 Months Ended |
---|---|
Sep. 30, 2022 | |
Description of Organization, Business Operations and Going Concern [Abstract] | |
Description of Organization, Business Operations and Going Concern |
Note
1 - Description of Organization, Business Operations and Going Concern
Kernel Group Holdings, Inc. (the
“Company”) is a blank check company incorporated as a Cayman Islands exempted company on November 10, 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 that the Company has not yet identified (“Business Combination”).
As of September 30, 2022, the Company had not yet commenced operations. All activity for the period from November 10, 2020 (inception)
through September 30, 2022 relates to the Company’s formation and the
initial public offering (the “Initial Public Offering”), and since the closing of the Initial Public Offering, the search for an 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 generates non-operating income in the form of interest income on investments held in trust account from the proceeds derived from the Initial Public
Offering.
The Company’s sponsor is Kernel
Capital Holdings, LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for the Company’s Initial Public Offering was declared effective on February 2, 2021. On February 5, 2021, the Company consummated its
Initial Public Offering of 30,475,000 units (the “Units” and, with respect to the Class A ordinary shares included in the
Units being offered, the “Public Shares”), including 3,975,000 additional Units to cover the underwriters’ over-allotment (the
“Over-Allotment Units”), at $10.00 per Unit, generating gross proceeds of approximately $304.8 million, and incurring offering costs of approximately $17.4 million, of which approximately $10.7 million was for deferred underwriting commissions
(see Note 5).
Simultaneously with the closing of
the Initial Public Offering, the Company consummated the private placement (“Private Placement”) of 8,750,000 warrants (each,
a “Private Placement Warrant” and collectively, the “Private Placement Warrants”), at a price of $1.00 per Private Placement
Warrant with the Sponsor, generating gross proceeds of approximately $8.8 million (see Note 4).
Upon the closing of the Initial
Public Offering and the Private Placement, approximately $304.8 million ($10.00 per Unit) of the net proceeds of the Initial Public Offering and certain of the proceeds of the Private Placement were placed in a trust account (“Trust
Account”) with Continental Stock Transfer & Trust Company acting as trustee and has been invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940 (the “Investment
Company Act”), as amended, or 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 its Initial Public Offering 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’s initial Business Combination must be with one or more operating businesses
or assets with a fair market value equal to at least 80% of the net 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 the Company signs a definitive agreement in connection with 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 business or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act.
The Company will provide its
holders of the Public Shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a general meeting called to
approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company. The Public
Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 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 tax obligations). The per-share amount to be distributed to
Public Shareholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 5). These Public Shares will be recorded at a redemption value
and classified as temporary equity upon the completion of the Initial Public Offering, in accordance with Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” In such case, the Company will proceed
with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business
Combination and a majority of the shares voted are voted in favor of the Business Combination. If a shareholder vote is not required by applicable law or stock exchange listing requirements and the Company does not decide to hold a
shareholder vote for business or other reasons, the Company will, pursuant to the amended and restated memorandum and articles of association which will be adopted by the Company upon the consummation of the Initial Public Offering (the
“Amended and Restated Memorandum and Articles of Association”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (the “SEC”), and file tender offer documents with the SEC prior to
completing a Business Combination. If, however, a shareholder approval of the transactions is required by applicable law or stock exchange listing requirements, or the Company decides to obtain shareholder approval for business or other
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 Shareholder may elect to redeem their Public
Shares irrespective of whether they vote for or against the proposed transaction or whether they were a Public Shareholder on the record date for the general meeting held to approve the proposed transaction. If the Company seeks
shareholder approval in connection with a Business Combination, the holders of the Founder Shares (as defined in Note 4) prior to this Initial Public Offering (the “Initial Shareholders”) agreed to vote their Founder Shares and any Public
Shares purchased during or after the Initial Public Offering in favor of a Business Combination. In addition, the Initial Shareholders agreed to waive their redemption rights with respect to their Founder Shares and Public Shares in
connection with the completion of a Business Combination. In addition, the Company agreed not to enter into a definitive agreement regarding an initial Business Combination without the prior consent of the Sponsor.
Notwithstanding the foregoing, the
Company’s Amended and Restated Memorandum and Articles of Association will provide that a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder 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 Class A ordinary shares sold in the Initial Public Offering, without the prior consent of the Company.
The Company’s
Sponsor, officers and directors agreed not to propose 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 the redemption of
its Public Shares in connection with a Business Combination or to redeem 100% of its Public Shares if the Company does not
complete a Business Combination within 24 months from the closing of the Initial Public Offering, or February 5, 2023, (the
“Combination Period”) or (B) with respect to any other provisions relating to shareholders’ rights or pre-initial business combination activity, unless the Company provides the Public Shareholders with the opportunity to redeem their
Class A ordinary shares in conjunction with any such amendment.
If the
Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than
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
Shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders
and the board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.In connection with the redemption
of 100% of the Company’s outstanding Public Shares for a portion of the funds held in the Trust Account, each holder will
receive a full pro rata portion of the amount then in the Trust Account, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay the Company’s taxes payable (less taxes
payable and up to $100,000 of interest to pay dissolution expenses).
The Initial Shareholders agreed to
waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Initial Shareholders should acquire Public Shares in or 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
agreed to waive their rights to their deferred underwriting commission (see Note 5) 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 funds held in the Trust Account that will be available to fund the redemption of the Company’s Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets
remaining available for distribution in the Trust Account will be less than the $10.00 per share initially held in the Trust
Account. In order to protect the amounts held in the Trust Account, the Sponsor 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 Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities
Act”). In the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. 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 vendors, service providers (except the Company’s independent registered public accounting firm), prospective target
businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. There can be no guarantee that the
Company will be successful in obtaining such waivers from its targeted vendors and service providers.
Risks and
Uncertainties
Management continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of
its operations, and/or search for a target company, the specific impact is not readily determinable as of the date of this unaudited condensed financial statements. The unaudited condensed 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 is not determinable as of the date of these unaudited condensed financial statements. 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 unaudited condensed financial statements.
Going Concern
As of September 30, 2022, the Company had approximately $113,000 in its operating bank account and working capital deficit of
approximately $2.6 million.
The Company’s
liquidity needs to date have been satisfied through a contribution of $25,000 from Sponsor to cover for certain expenses in
exchange for the issuance of the Founder Shares, the loan of $77,000 from the Sponsor under the Note (see Note 4), and the
proceeds from the consummation of the Private Placement not held in the Trust Account. The Company repaid approximately $13,000
of the Note on February 5, 2021 and repaid the remaining amount due on the Note of approximately $64,000 on February 10, 2021.
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, provide the
Company Working Capital Loans (see Note 4). As of September 30, 2022 and December 31, 2021, there were no amounts outstanding under any Working Capital Loans.
Management has determined that the Company has access to funds from the Sponsor or an affiliate of the Sponsor, or certain of the
Company’s officers and directors 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. In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards
Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the liquidity condition, the date of 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 after February 5, 2023. The
unaudited condensed financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern. Management plans to complete a business combination prior to the mandatory
liquidation date.
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Summary of Significant Accounting Policies |
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Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies |
Note 2 - 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 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 unaudited condensed financial statements as they are not required for interim financial
statements under U.S. 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 nine months ended September 30, 2022, are not necessarily indicative of the results that may be expected through December 31, 2022, or any future
period.
The accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in
the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2022.
Emerging Growth Company
The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various
reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation
requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory
vote on executive compensation and 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 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.
Use of Estimates
The preparation of unaudited condensed financial statements in conformity with 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 revenues and expenses during the reporting periods. Making estimates requires management to
exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in
formulating its estimate, could change in the near term due to one or more future confirming events. One of the more significant accounting estimates included in these unaudited condensed financial statements is the
determination of the fair value of the warrant liability. Actual results could differ from those estimates.
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 and investments held in Trust Account. As of September 30, 2022 and December 31, 2021,
the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
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
September 30, 2022 and December 31, 2021.
Investments Held in Trust Account
The Company’s portfolio of
investments held in the Trust Account is comprised 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 and generally have a readily determinable fair value, or a combination thereof. When the Company’s investments held in the Trust Account are comprised of U.S. government securities, the
investments are classified as trading securities. When the Company’s investments held in the Trust Account are comprised of money market funds, the investments are recognized at fair value. Trading securities and investments in money
market funds are presented on the condensed balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities are included in net gain from investments held
in Trust Account in the accompanying unaudited condensed statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under
the ASC Topic 820, “Fair Value Measurements”, equals or approximates the carrying amounts represented in the condensed balance sheets, except for warrant liabilities (see Note 9).
Fair Value Measurements
Fair value is defined as the price that would be received for sale of an
asset or paid for transfer of a liability in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The
hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers consist of:
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.
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, “Derivatives and Hedging”. 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 warrants issued in connection with the Initial Public Offering and the
Private Placement Warrants are recognized as derivative liabilities in accordance with ASC 815. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjust the instruments to fair value at each
reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised. The fair value of warrants issued
in connection with the Private Placement has been estimated using a modified Black-Scholes model at each balance sheet date. The fair value of the warrants issued in connection with the Initial Public Offering was initially measured
using a Monte-Carlo simulation and subsequently been measured based on the market price at each measurement date when separately listed and traded. The determination of the fair value of the derivative liability may be subject to change as more current information becomes available and accordingly the actual results could
differ significantly. Derivative liabilities are classified 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.
Offering Costs Associated with the Initial Public Offering
Offering costs
consisted of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering 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 unaudited condensed statements of operations. Offering costs associated with the Class A ordinary shares issued were charged against the carrying value of Class A ordinary shares 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.
Class A Ordinary Shares Subject to Possible
Redemption
The Company accounts for its Class A ordinary shares subject to possible redemption in
accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value.
Conditionally redeemable Class A ordinary shares (including Class A ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not
solely within the Company’s control) are classified as temporary equity. At all other times, Class A ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are
considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, as of Initial Public Offering, the Company had 30,475,000 Class A ordinary shares subject to possible redemption that are presented as temporary equity, outside of the shareholders’ deficit 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, 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.
Net Income per Ordinary Shares
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 ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the
two classes of shares.This presentation assumes a business combination as the most likely outcome. Net income (loss) per ordinary share is calculated by dividing the net income (loss) by the weighted average number of ordinary shares
outstanding for the respective period.
The calculation of diluted net income per
ordinary share does not consider the effect of the warrants underlying the Units sold in the Initial Public Offering and the Private Placement Warrants to purchase 23,987,500 Class A ordinary shares in calculation of diluted income per ordinary share, because their exercise is contingent upon future events and their inclusion
would be anti-dilutive under the treasury stock method. As a result, diluted net income per ordinary share is the same as basic net income per ordinary share for the three and nine months ended September 30, 2022 and 2021. Accretion
associated with the redeemable Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value.
The Company has considered the effect of Class B ordinary shares that were excluded from weighted average number as they were
contingent on the exercise of over-allotment option by the underwriters. Since the contingency was satisfied, the Company included these shares in the weighted average number as of the beginning of the interim period to determine
the dilutive impact of these shares.
The tables below present a reconciliation of the numerator and
denominator used to compute basic and diluted net income per ordinary share for each class of ordinary shares:
Income Taxes
The Company complies with the accounting and reporting requirements
of ASC Topic 740, “Income Taxes”. ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For
those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company 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, 2022 and December 31, 2021. The Company’s management determined that the Cayman Islands is the Company’s only
major tax jurisdiction. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
There is currently no taxation imposed on income by the government
of the Cayman Islands. In accordance with Cayman federal income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s financial statement. The Company’s management
does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
Recent Accounting Pronouncements
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 unaudited 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 Company’s unaudited condensed financial statements.
|
Initial Public Offering |
9 Months Ended |
---|---|
Sep. 30, 2022 | |
Initial Public Offering [Abstract] | |
Initial Public Offering |
Note 3 -
Initial Public Offering
On February 5, 2021, the Company
consummated its Initial Public Offering of 30,475,000 Units, including 3,975,000 Over-Allotment Units, at $10.00 per Unit, generating
gross proceeds of approximately $304.8 million, and incurring offering costs of approximately $17.4 million, of which approximately $10.7
million was for deferred underwriting commissions.
Each Unit consists of one Class A ordinary share and
of one redeemable warrant (“Public Warrant”). Each whole Public Warrant will entitle the holder to purchase one Class A
ordinary share at an exercise price of $11.50 per share, subject to adjustment (see Note 8). |
Related Party Transactions |
9 Months Ended |
---|---|
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions |
Note 4 -
Related Party Transactions
Founder
Shares
On November 19, 2020, the Sponsor
paid an aggregate of $25,000 for certain expenses on behalf of the Company in exchange for issuance of 5,750,000 Class B ordinary shares (the “Founder Shares”). On January 11, 2021, the Company effected a 1 for 1.25 forward stock split of the Founder Shares that increased the number of outstanding Founder Shares from 5,750,000 to 7,187,500 shares,
and the Sponsor transferred an aggregate of 75,000 Founder Shares to the independent directors and an aggregate of 50,000 Founder Shares to the advisors. On February 2, 2021, the Company effected a 1 for 1.06 forward stock split of the Founder Shares that increased the number of outstanding Founder Shares from 7,187,500 to 7,618,750 shares and resulted in the
Sponsor holding 7,493,750 Founder Shares. The Sponsor agreed to forfeit up to an aggregate of 993,750 Founder Shares to the extent that the option to purchase additional Units was not exercised in full by the underwriters or was
reduced, so that the Founder Shares would represent 20% of the Company’s issued and outstanding shares after the Initial
Public Offering. On February 5, 2021, the underwriter fully exercised its over-allotment option; thus, these 993,750 Founder
Shares are no longer subject to forfeiture.
The Initial Shareholders agreed
not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion
of the initial Business Combination and (B) subsequent to the initial Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period
commencing at least 150 days after the initial Business Combination, or (y) the date on which the Company completes a
liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Public Shareholders having the right to exchange their ordinary shares for cash, securities or other property.
Private
Placement Warrants
Simultaneously with the closing of
the Initial Public Offering, the Company consummated the Private Placement of 8,750,000 Private Placement Warrants, at a price
of $1.00 per Private Placement Warrant with the Sponsor, generating gross proceeds of approximately $8.8 million.
Each whole Private Placement
Warrant is exercisable for one whole Class A ordinary share 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 except 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.
Related Party
Loans
On November 19, 2020, the Sponsor
agreed to loan the Company up to $300,000 to be used for the payment of costs related to the Initial Public Offering pursuant
to a promissory note (the “Note”). The Note was non-interest bearing, unsecured and due upon the closing of the Initial Public Offering. The Company borrowed $77,000 outstanding under the Note. The Company repaid approximately $13,000 on February 5,
2021 and repaid the remaining amount of approximately $64,000 on February 10, 2021. Subsequent to the repayment, the facility was no longer available to the Company.
In addition, in order to fund
working capital deficiencies or 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 may repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the
Working Capital Loans may 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. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, 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 $1.00 per warrant. The warrants would be identical to the Private Placement Warrants. 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. As of September 30, 2022 and December 31, 2021, the Company had no borrowings under the Working Capital Loans.
Administrative
Services Agreement
Commencing on the date that the Company’s securities were first listed on Nasdaq through the earlier of consummation of the initial
Business Combination or its liquidation, the Company agreed to pay the Sponsor $10,000 per month for office space,
administrative and support services. For the three months ended September 30, 2022 and 2021, the Company incurred $30,000 for such services. For the nine months ended September 30, 2022 and 2021, the Company incurred $90,000
and $80,000 for such services, respectively. As of September 30, 2022 and December 31, 2021, $140,000 and $50,000 were
outstanding, respectively, and included in the related party accrued expenses as reflected in the accompanying condensed balance sheets.
In addition, 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 audit committee will review on a quarterly basis
all payments that were made by the Company to the Sponsor, officers or directors, or the Company’s or their affiliates. Any such payments prior to an initial Business Combination will be made from funds held outside the Trust Account.
For the three and nine months ended September 30, 2022 and 2021, the Company incurred approximately $14,000 and $0 expenses in connection with compliance services with related party, respectively. As of September 30, 2022, there was approximately $14,000 outstanding included in the related party accrued expenses as reflected in the accompanying condensed balance sheets.
|
Commitments and Contingencies |
9 Months Ended |
---|---|
Sep. 30, 2022 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies |
Note 5 -
Commitments and Contingencies
Registration
and Shareholder Rights
The holders of the Founder Shares,
Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon
conversion of Working Capital Loans) were entitled to registration rights pursuant to a registration and shareholder rights agreement signed upon the effective date of the Initial Public Offering. The holders of these securities were
entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition,
the holders will be entitled to certain demand and “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 date of the prospectus relating to the Initial Public Offering to purchase up to 3,975,000 additional Units at the Initial Public Offering price less the underwriting discounts and commissions. On February 5, 2021, the
underwriter fully exercised its over-allotment option.
The underwriters were entitled to
an underwriting discount of $0.20 per unit, approximately $6.1 million in the aggregate, paid upon the closing of the Initial Public Offering. In addition, $0.35 per unit, or approximately $10.7 million in the
aggregate will be payable to the underwriters for deferred underwriting commissions. 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.
|
Warrants |
9 Months Ended | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | |||||||||||||||||||||||||
Warrants [Abstract] | |||||||||||||||||||||||||
Warrants |
Note 6 -
Warrants
As of September 30, 2022 and
December 31, 2021, the Company had 15,237,500 Public Warrants and 8,750,000 Private Placement Warrants 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 and (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
Class A ordinary shares issuable upon exercise of the Public Warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of
the state of residence of the holder (or the Company permit holders to exercise their warrants on a cashless basis under certain circumstances). The Company agreed that as soon as practicable, but in no event later than twenty (20) business days after the closing of the initial Business Combination, the Company will use commercially reasonable efforts to file with the
SEC a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants and to maintain a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as
specified in the warrant agreement. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th 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 the 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, 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.
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 Class A ordinary shares or
equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per ordinary share (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 Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances
represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial Business
Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of 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, 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, the $18.00 per share redemption trigger price described 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 under “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 Private Placement Warrants are
identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except (i) that the Private Placement Warrants and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants will not be
transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited
exceptions, (ii) except as described below, the Private Placement Warrants will be non-redeemable so long as they are held by the Sponsor or such its permitted transferees and (iii) the Sponsor or its permitted transferees will have the
option to exercise the Private Placement Warrants on a cashless basis and have certain registration rights. 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 in all redemption scenarios and exercisable by such holders on the same basis as the Public Warrants.
Redemption of
warrants when the price per Class A ordinary share equals or exceeds $18.00:
Once the warrants become
exercisable, the Company may call the outstanding warrants (except as described herein with respect to the Private Placement Warrants):
The Company will not redeem the
warrants as described above unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants is then effective and a current prospectus relating to those
Class A ordinary shares is available throughout the 30-day redemption period.
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:
The “fair market value” of
Class A ordinary shares for the above purpose shall mean the volume weighted average price of Class A ordinary shares during the 10
trading days immediately following the date on which the notice of redemption is sent to the holders of warrants. In no event will the warrants be exercisable on a cashless basis in connection with this redemption feature for more than
0.361 Class A ordinary shares per warrant (subject to adjustment).
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.
|
Class A Ordinary Shares Subject to Possible Redemption |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
Class A Ordinary Shares Subject to Possible Redemption [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Class A Ordinary Shares Subject To Possible Redemption |
Note 7 - Class A Ordinary Shares Subject to Possible Redemption
The Company’s Class A ordinary shares feature certain redemption rights that are
considered to be outside of the Company’s control and subject to the occurrence of future events. The Company is authorized to issue 500,000,000
Class A ordinary shares with a par value of $0.0001 per share. Holders of the Company’s Class A ordinary shares are entitled to one vote for each share. As of September 30, 2022 and December 31, 2021, there were 30,475,000 Class A ordinary shares outstanding, which were all subject to possible redemption and are classified outside of permanent equity in the condensed balance sheets.
The Class A ordinary shares subject to possible redemption reflected on the
condensed balance sheets are reconciled on the following table:
|
Shareholders' Deficit |
9 Months Ended |
---|---|
Sep. 30, 2022 | |
Shareholders' Deficit [Abstract] | |
Shareholders' (Deficit) |
Note 8 -
Shareholders’ Deficit
Preference Shares-The Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001 per share. As of September 30, 2022 and December 31, 2021, there were no
preference shares issued or outstanding.
Class A Ordinary Shares-The Company is authorized to issue 500,000,000 Class A ordinary shares with a par value of $0.0001 per share. Holders of the Company’s Class A ordinary shares are entitled to one
vote for each share. As of September 30, 2022 and December 31,
2021, there were 30,475,000 Class A ordinary shares outstanding, all of which were subject to possible redemption and included as temporary equity (see Note 7).
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. On November 19, 2020, the Company issued 5,750,000
Class B ordinary shares to the Sponsor. On January 11, 2021, the Company effected a 1 for 1.25 forward stock split of the
Class B ordinary shares, resulting in an aggregate of 7,187,500 Class B ordinary shares outstanding. On February 2, 2021,
the Company effected a 1 for 1.06 forward stock split of the Class B ordinary shares that increased the number of
outstanding Class B ordinary shares from 7,187,500 to 7,618,750 shares. Of the 7,618,750 Class B ordinary shares
outstanding, up to 993,750 Class B ordinary shares were subject to forfeiture by the Sponsor to the extent that the
underwriters’ over-allotment option was not exercised in full or in part, so that the Class B ordinary shares would collectively represent 20%
of the Company’s issued and outstanding ordinary shares after the Initial Public Offering. On February 5, 2021, the underwriter fully exercised its over-allotment option; thus, these 993,750 Class B ordinary shares were no longer subject to forfeiture. There were 7,618,750 shares issued and outstanding as of September 30, 2022 and December 31, 2021.
Class A ordinary shareholders and
Class B ordinary shareholders of record are entitled to one vote for each share held on all matters to be voted on by
shareholders. Except as described below, holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the shareholders except as required by law.
The Class B ordinary shares will
automatically convert into Class A ordinary shares at the time of the initial Business Combination at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on
an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of the
Initial Public Offering, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities (as defined herein) or rights issued or deemed issued, by the
Company in connection with or in relation to the consummation of the initial Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued,
deemed issued, or to be issued, to any seller in the initial Business Combination and any Private Placement Warrants issued to the Sponsor, its affiliates or any member of the management team upon conversion of Working Capital Loans. In
no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one to one.
|
Fair Value Measurements |
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Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements |
Note 9 - Fair Value Measurements
The following tables present information about the Company’s assets and liabilities that are measured at fair value on a
recurring basis as of September 30, 2022 and December 31, 2021 and indicate the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value.
Transfers to/from Levels 1, 2, and 3 are recognized at the beginning of the reporting
period. The estimated fair value of the Public Warrants transferred from a Level 3 measurement to a Level 1 fair value measurement, upon trading of the Public Warrants in an active market in March 2021. There
were no transfers during the three and nine months ended September 30, 2022.
Level 1 assets include investments in money market funds that invest solely in U.S.
Treasury 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.
For periods where no observable traded price was available, the fair value of the
Public Warrants issued in connection with the Public Offering, the Company utilized a binomial Monte-Carlo simulation to estimate the fair value of the public warrants at each reporting period and Black-Scholes Option Pricing Model to estimate the
fair value of the private warrants at each reporting period, with changes in fair value recognized in the condensed statements of operations.
The change in the fair value of the derivative warrant liabilities, measured using Level 3 inputs, for nine months ended September 30, 2022 and 2021 is summarized
as follows:
The estimated fair value of the derivative warrant liabilities is determined using
Level 3 inputs. Inherent in a Monte-Carlo simulation and Black-Scholes Option Pricing model are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of
its ordinary shares based on historical volatility of select peer companies that matches the expected remaining life of the warrants. 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. Any changes in these assumptions can change the valuation significantly. Significant increases (decreases) in the expected volatility in isolation
would result in a significantly higher (lower) fair value measurement.
The following table provides quantitative information regarding Level 3 fair value
measurements inputs as their measurement dates:
|
Subsequent Events |
9 Months Ended |
---|---|
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events |
Note 10 -
Subsequent Events
The Company evaluated subsequent events and transactions that occurred up to the date unaudited condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent
events that would have required adjustment or disclosure in the unaudited condensed financial statements.
|
Summary of Significant Accounting Policies (Policies) |
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Summary of Significant Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation |
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 unaudited condensed financial statements as they are not required for interim financial
statements under U.S. 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 nine months ended September 30, 2022, are not necessarily indicative of the results that may be expected through December 31, 2022, or any future
period.
The accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in
the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2022.
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Use of Estimates |
Use of Estimates
The preparation of unaudited condensed financial statements in conformity with 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 revenues and expenses during the reporting periods. Making estimates requires management to
exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in
formulating its estimate, could change in the near term due to one or more future confirming events. One of the more significant accounting estimates included in these unaudited condensed financial statements is the
determination of the fair value of the warrant liability. Actual results could differ from those estimates.
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Concentration of Credit Risk |
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 and investments held in Trust Account. As of September 30, 2022 and December 31, 2021,
the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
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Cash and Cash Equivalents |
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
September 30, 2022 and December 31, 2021.
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Investments Held in Trust Account |
Investments Held in Trust Account
The Company’s portfolio of
investments held in the Trust Account is comprised 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 and generally have a readily determinable fair value, or a combination thereof. When the Company’s investments held in the Trust Account are comprised of U.S. government securities, the
investments are classified as trading securities. When the Company’s investments held in the Trust Account are comprised of money market funds, the investments are recognized at fair value. Trading securities and investments in money
market funds are presented on the condensed balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities are included in net gain from investments held
in Trust Account in the accompanying unaudited condensed statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information.
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Fair Value of Financial Instruments |
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under
the ASC Topic 820, “Fair Value Measurements”, equals or approximates the carrying amounts represented in the condensed balance sheets, except for warrant liabilities (see Note 9).
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Fair Value Measurements |
Fair Value Measurements
Fair value is defined as the price that would be received for sale of an
asset or paid for transfer of a liability in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The
hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers consist of:
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.
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Derivative Warrant Liabilities |
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, “Derivatives and Hedging”. 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 warrants issued in connection with the Initial Public Offering and the
Private Placement Warrants are recognized as derivative liabilities in accordance with ASC 815. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjust the instruments to fair value at each
reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised. The fair value of warrants issued
in connection with the Private Placement has been estimated using a modified Black-Scholes model at each balance sheet date. The fair value of the warrants issued in connection with the Initial Public Offering was initially measured
using a Monte-Carlo simulation and subsequently been measured based on the market price at each measurement date when separately listed and traded. The determination of the fair value of the derivative liability may be subject to change as more current information becomes available and accordingly the actual results could
differ significantly. Derivative liabilities are classified 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.
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Offering Costs Associated with the Initial Public Offering |
Offering Costs Associated with the Initial Public Offering
Offering costs
consisted of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering 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 unaudited condensed statements of operations. Offering costs associated with the Class A ordinary shares issued were charged against the carrying value of Class A ordinary shares 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.
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Class A Ordinary Shares Subject to Possible Redemption |
Class A Ordinary Shares Subject to Possible
Redemption
The Company accounts for its Class A ordinary shares subject to possible redemption in
accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value.
Conditionally redeemable Class A ordinary shares (including Class A ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not
solely within the Company’s control) are classified as temporary equity. At all other times, Class A ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are
considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, as of Initial Public Offering, the Company had 30,475,000 Class A ordinary shares subject to possible redemption that are presented as temporary equity, outside of the shareholders’ deficit 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, 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.
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Net Income per Ordinary Shares |
Net Income per Ordinary Shares
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 ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the
two classes of shares.This presentation assumes a business combination as the most likely outcome. Net income (loss) per ordinary share is calculated by dividing the net income (loss) by the weighted average number of ordinary shares
outstanding for the respective period.
The calculation of diluted net income per
ordinary share does not consider the effect of the warrants underlying the Units sold in the Initial Public Offering and the Private Placement Warrants to purchase 23,987,500 Class A ordinary shares in calculation of diluted income per ordinary share, because their exercise is contingent upon future events and their inclusion
would be anti-dilutive under the treasury stock method. As a result, diluted net income per ordinary share is the same as basic net income per ordinary share for the three and nine months ended September 30, 2022 and 2021. Accretion
associated with the redeemable Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value.
The Company has considered the effect of Class B ordinary shares that were excluded from weighted average number as they were
contingent on the exercise of over-allotment option by the underwriters. Since the contingency was satisfied, the Company included these shares in the weighted average number as of the beginning of the interim period to determine
the dilutive impact of these shares.
The tables below present a reconciliation of the numerator and
denominator used to compute basic and diluted net income per ordinary share for each class of ordinary shares:
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Income Taxes |
Income Taxes
The Company complies with the accounting and reporting requirements
of ASC Topic 740, “Income Taxes”. ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For
those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company 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, 2022 and December 31, 2021. The Company’s management determined that the Cayman Islands is the Company’s only
major tax jurisdiction. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
There is currently no taxation imposed on income by the government
of the Cayman Islands. In accordance with Cayman federal income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s financial statement. The Company’s management
does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
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Recent Accounting Pronouncements |
Recent Accounting Pronouncements
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 unaudited 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 Company’s unaudited condensed financial statements.
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Summary of Significant Accounting Policies (Tables) |
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Summary of Significant Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic and Diluted Net Income per Share of Ordinary Share |
The tables below present a reconciliation of the numerator and
denominator used to compute basic and diluted net income per ordinary share for each class of ordinary shares:
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Class A Ordinary Shares Subject to Possible Redemption (Tables) |
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Class A Ordinary Shares Subject to Possible Redemption [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Class A Ordinary Shares Subject to Possible Redemption |
The Class A ordinary shares subject to possible redemption reflected on the
condensed balance sheets are reconciled on the following table:
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Fair Value Measurements (Tables) |
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on Recurring Basis |
The following tables present information about the Company’s assets and liabilities that are measured at fair value on a
recurring basis as of September 30, 2022 and December 31, 2021 and indicate the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value.
|
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Change in Fair Value of Derivative Warrant Liabilities |
The change in the fair value of the derivative warrant liabilities, measured using Level 3 inputs, for nine months ended September 30, 2022 and 2021 is summarized
as follows:
|
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Level 3 Fair Value Measurement Inputs |
The following table provides quantitative information regarding Level 3 fair value
measurements inputs as their measurement dates:
|
Description of Organization, Business Operations and Going Concern, Liquidity and Capital Resources (Details) - USD ($) |
9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Feb. 10, 2021 |
Feb. 05, 2021 |
Nov. 19, 2020 |
Feb. 10, 2020 |
Feb. 05, 2020 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
Liquidity and Capital Resources [Abstract] | ||||||||
Cash | $ 112,580 | $ 474,945 | ||||||
Working capital deficit | (2,600,000) | |||||||
Contribution from sale of founder shares | 25,000 | |||||||
Proceeds from related party | 0 | $ 37,000 | ||||||
Repayment to related party | 0 | $ 77,000 | ||||||
Sponsor [Member] | Promissory Note [Member] | ||||||||
Liquidity and Capital Resources [Abstract] | ||||||||
Proceeds from related party | $ 77,000 | 77,000 | ||||||
Repayment to related party | $ 64,000 | $ 13,000 | $ 64,000 | $ 13,000 | ||||
Sponsor [Member] | Working Capital Loans [Member] | ||||||||
Liquidity and Capital Resources [Abstract] | ||||||||
Borrowings outstanding | $ 0 | $ 0 |
Summary of Significant Accounting Policies, Cash and Cash Equivalents (Details) - USD ($) |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Cash and Cash Equivalents [Abstract] | ||
Cash equivalents | $ 0 | $ 0 |
Summary of Significant Accounting Policies, Class A Ordinary Shares Subject to Possible Redemption (Details) - shares |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Ordinary Shares Subject to Possible Redemption [Abstract] | ||
Class A ordinary shares subject to possible redemption (in shares) | 30,475,000 | 30,475,000 |
Summary of Significant Accounting Policies, Income Taxes (Details) - USD ($) |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Income Taxes [Abstract] | ||
Unrecognized tax benefits | $ 0 | $ 0 |
Accrued interest and penalties | $ 0 | $ 0 |
Related Party Transactions, Private Placement Warrants (Details) - USD ($) $ / shares in Units, $ in Millions |
9 Months Ended | |
---|---|---|
Feb. 05, 2021 |
Sep. 30, 2022 |
|
Private Placement [Abstract] | ||
Exercise price of warrant (in dollars per share) | $ 11.5 | |
Private Placement [Member] | ||
Private Placement [Abstract] | ||
Gross proceeds from issuance of warrants | $ 8.8 | |
Private Placement [Member] | Private Placement Warrants [Member] | ||
Private Placement [Abstract] | ||
Warrants issued (in shares) | 8,750,000 | |
Share price (in dollars per share) | $ 1 | |
Exercise price of warrant (in dollars per share) | $ 11.5 | |
Holding period for transfer, assignment or sale of warrants | 30 days | |
Private Placement [Member] | Class A Common Stock [Member] | ||
Private Placement [Abstract] | ||
Number of shares issued upon exercise of warrant (in shares) | 1 |
Related Party Transactions, Related Party Loans (Details) - USD ($) |
9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Feb. 10, 2021 |
Feb. 05, 2021 |
Nov. 19, 2020 |
Feb. 10, 2020 |
Feb. 05, 2020 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
Related Party Loans [Abstract] | ||||||||
Proceeds from related party | $ 0 | $ 37,000 | ||||||
Repayment to related party | 0 | $ 77,000 | ||||||
Sponsor [Member] | Promissory Note [Member] | ||||||||
Related Party Loans [Abstract] | ||||||||
Loan commitment amount | $ 300,000 | |||||||
Proceeds from related party | $ 77,000 | 77,000 | ||||||
Repayment to related party | $ 64,000 | $ 13,000 | $ 64,000 | $ 13,000 | ||||
Sponsor [Member] | Working Capital Loans [Member] | ||||||||
Related Party Loans [Abstract] | ||||||||
Borrowings | 0 | $ 0 | ||||||
Sponsor, Affiliate of Sponsor, or Certain Company Officers and Directors [Member] | Working Capital Loans [Member] | ||||||||
Related Party Loans [Abstract] | ||||||||
Loans that can be converted into Warrants at lenders' discretion | $ 1,500,000 | |||||||
Conversion price (in dollars per share) | $ 1 | |||||||
Borrowings | $ 0 | $ 0 |
Related Party Transactions, Administrative Services Agreement (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
Administrative Services Agreement [Abstract] | |||||
Accrued expenses | $ 153,852 | $ 153,852 | $ 50,000 | ||
Administrative Services Agreement [Member] | |||||
Administrative Services Agreement [Abstract] | |||||
Fees incurred paid | 30,000 | $ 30,000 | 90,000 | $ 80,000 | |
Accrued expenses | 14,000 | 14,000 | |||
Sponsor [Member] | Administrative Services Agreement [Member] | |||||
Administrative Services Agreement [Abstract] | |||||
Monthly expenses | 10,000 | ||||
Fees incurred paid | 14,000 | $ 0 | 14,000 | $ 0 | |
Accrued expenses | $ 140,000 | $ 140,000 | $ 50,000 |
Commitments and Contingencies (Details) |
Feb. 05, 2021
USD ($)
Demand
$ / shares
shares
|
Sep. 30, 2022
USD ($)
|
Dec. 31, 2021
USD ($)
|
---|---|---|---|
Underwriting Agreement [Abstract] | |||
Term of option for underwriters to purchase additional Units to cover over-allotments | 45 days | ||
Additional Units that can be purchased to cover over-allotments (in shares) | shares | 3,975,000 | ||
Underwriting discount (in dollars per share) | $ / shares | $ 0.2 | ||
Underwriting discount | $ | $ 6,100,000 | ||
Deferred underwriting commissions per Unit (in dollars per share) | $ / shares | $ 0.35 | ||
Deferred underwriting commissions | $ | $ 10,700,000 | $ 10,666,250 | $ 10,666,250 |
Maximum [Member] | |||
Registration and Shareholder Rights [Abstract] | |||
Number of demands eligible security holder can make | Demand | 3 | ||
Over-Allotment Option [Member] | |||
Underwriting Agreement [Abstract] | |||
Units issued (in shares) | shares | 3,975,000 |
Fair Value Measurements, Change in Fair Value of Derivative Warrant Liabilities (Details) - Level 3 [Member] - Derivative Warrant Liabilities [Member] - USD ($) |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
|
Unobservable Input Reconciliation [Roll Forward] | ||||||
Beginning balance | $ 700,000 | $ 2,187,500 | $ 4,550,000 | $ 9,187,500 | $ 13,737,500 | $ 0 |
Issuance of Public and Private Placement Warrants | 37,835,375 | |||||
Public Warrants transfer to Level 1 | (23,922,875) | |||||
Change in fair value of warrant liabilities | (437,500) | (1,487,500) | (2,362,500) | (4,025,000) | (4,550,000) | (175,000) |
Ending balance | $ 262,500 | $ 700,000 | $ 2,187,500 | $ 5,162,500 | $ 9,187,500 | $ 13,737,500 |
Fair Value Measurements, Level 3 Fair Value Measurement Inputs (Details) - Warrants [Member] |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Fair Value Measurements [Abstract] | ||
Term | 5 years 4 months 6 days | 4 years 10 months 6 days |
Exercise Price [Member] | ||
Fair Value Measurements [Abstract] | ||
Measurement input | 11.5 | 11.5 |
Stock Price [Member] | ||
Fair Value Measurements [Abstract] | ||
Measurement input | 9.92 | 9.75 |
Volatility [Member] | ||
Fair Value Measurements [Abstract] | ||
Measurement input | 0.015 | 0.107 |
Risk Free Rate [Member] | ||
Fair Value Measurements [Abstract] | ||
Measurement input | 0.0404 | 0.0124 |
Dividend Rate [Member] | ||
Fair Value Measurements [Abstract] | ||
Measurement input | 0 | 0 |
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