Fair Value Measurements

6 Months Ended

Jun. 30, 2022

NOTE 9. FAIR VALUE MEASUREMENTS

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:


		Level 1:		Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

		Level 2:		Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

		Level 3:		Unobservable inputs based on an assessment of the assumptions that market participants would use in pricing the asset or liability.

At June 30, 2022, assets held in the Trust Account were comprised of $309,898,791 of money market funds which are invested primarily in U.S. Treasury Securities. During the three and six months ended June 30, 2022, the Company did

t withdraw any interest income from the Trust Account.

At December 31, 2021, assets held in the Trust Account were comprised of $309,450,720 in a checking account held by Continental Stock Transfer and Trust Company. During the year ended December 31, 2021, the Company did not withdraw any interest income from the Trust Account.

The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis at June 30, 2022 and December 31, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:


	June 30, 2022				December 31, 2021
	Level		Amount		Level		Amount
Assets:		1	$	309,898,790.83		—		—
Investment held in Trust Account
Liabilities:
Warrant Liabilities – Public Warrants		1	$	754,028		1	$	5,207,024
Warrant Liabilities – Private Placement Warrants		2	$	447,811		2	$	3,092,410

The Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the Company’s accompanying June 30, 2022 and December 31, 2021 condensed balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the condensed statements of operations.

The Company established the initial fair value for the Warrants on March 4, 2021, the date of the Company’s Initial Public Offering, using a Monte Carlo Simulation for the Private Placement Warrants and the Public Warrants. The subsequent measurements of the Public Warrants after the detachment of the Public Warrants from the Units is classified as Level 1 due to the use of an observable market quote in an active market under the ticker DHCAW. The subsequent measurements of the Private Placement Warrants are classified as Level 2 due to the use of the closing price of the Public Warrants, an observable market quote for a similar asset in an active market. For June 30, 2022 and December 31, 2021, the Public Warrants have detached from the Units, and the closing price is utilized as the fair

value.

The following table presents the changes in the fair value of Level 3 warrant liabilities for the three and six months ended June 30, 2021:


	Private Placement		Public			Warrant Liabilities
Fair value as of January 1, 2021	$	—	$	—		$	—
Initial measurement on March 4, 2021 (IPO)		5,940,000		9,900,000			15,840,000
Initial measurement on March 5, 2021 (Over allotment)		124,750		311,874			436,624
Change in fair value		245,040		412,621			657,641

Fair value as of March 31, 2021	$	6,309,790	$	10,624,475		$	16,934,265
Change in fair value		—		(103,151	)		(103,151	)
Transfer to Level 1		—		(10,521,324	)		(10,521,324	)
Fair value as of June 30, 2021	$	6,309,790	$	—		$	6,309,790

Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs. The estimated fair value of the Public Warrants transferred from a Level 3 measurement to a Level 1 fair value measurement during the six months ended June 30, 2021 was $10,521,324. There were no transfers from Level 3 to Level 2 during the three and six months ended June 30, 2021.