UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(MARK ONE)
For the quarter ended
For the transition period from to
Commission file number:
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of August 5, 2022, there were
APOLLO STRATEGIC GROWTH CAPITAL II
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2022
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i
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
APOLLO STRATEGIC GROWTH CAPITAL II
(formerly known as APH I (Sub I), Ltd.)
CONDENSED BALANCE SHEETS
| June 30, | December 31, | ||||
2022 |
| 2021 | ||||
(unaudited) | ||||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | | $ | | ||
Prepaid expenses |
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Total current assets | | | ||||
Investments held in Trust Account | | | ||||
Other assets | — | | ||||
Total assets | $ | | $ | | ||
LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS’ DEFICIT |
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Current liabilities: | ||||||
Accounts payable and accrued expenses | $ | | $ | | ||
Note payable - Sponsor | | | ||||
Total current liabilities | | |||||
Derivative warrant liability |
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Deferred underwriting compensation |
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Total liabilities |
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Commitments and contingencies (Note 6) | ||||||
Temporary equity: | ||||||
Class A ordinary shares subject to possible redemption ( | | | ||||
Shareholders’ deficit: |
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Preferred shares, $ |
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Class A ordinary shares, $ |
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Class B ordinary shares, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Total shareholders’ deficit |
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Total liabilities, temporary equity and shareholders’ deficit | $ | | $ | |
See accompanying notes to unaudited condensed financial statements
1
APOLLO STRATEGIC GROWTH CAPITAL II
(formerly known as APH I (Sub I), Ltd.)
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Three Months Ended | For the Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
| 2022 |
| 2021 |
| 2022 |
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REVENUE | $ | — | $ | — | $ | — | $ | — | ||||
EXPENSES | ||||||||||||
Administrative fee - related party | | | | | ||||||||
General and administrative | | | | | ||||||||
TOTAL EXPENSES | | | | | ||||||||
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OTHER INCOME (EXPENSES) |
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Investment income from Trust Account | | | | | ||||||||
Interest expense | ( | ( | ( | ( | ||||||||
Transaction costs allocable to warrant liability | — | — | — | ( | ||||||||
Change in fair value of derivative warrants | | | | | ||||||||
TOTAL OTHER INCOME (EXPENSES) - NET | | | | | ||||||||
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Net income (loss) | | ( | $ | | $ | | ||||||
Weighted average number of Class A ordinary shares outstanding, basic and diluted |
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Basic and diluted net income (loss) per Class A ordinary share | | ( | | | ||||||||
Weighted average number of Class B ordinary shares outstanding, basic and diluted |
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Basic and diluted net income (loss) per Class B ordinary share | | ( | | |
See accompanying notes to unaudited condensed financial statements
2
APOLLO STRATEGIC GROWTH CAPITAL II
(formerly known as APH I (Sub I), Ltd.)
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
(UNAUDITED)
FOR THE THREE MONTHS ENDED JUNE 30, 2022
Class B | Additional | |||||||||||||
Ordinary Shares | Paid-in | Accumulated | Shareholders’ | |||||||||||
| Shares |
| Amount |
| Capital |
| Deficit |
| Deficit | |||||
Balance as of March 31, 2022 | | $ | | $ | | $ | ( | $ | ( | |||||
Accretion adjustment of Class A ordinary shares to redemption value | | | | ( | ( | |||||||||
Net income | |
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Balance as of June 30, 2022 | | $ | | $ | | $ | ( | $ | ( |
FOR THE THREE MONTHS ENDED JUNE 30, 2021
Class B | Additional |
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Ordinary Shares | Paid-in | Accumulated | Shareholders’ | |||||||||||
| Shares |
| Amount |
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| Deficit |
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Balance as of March 31, 2021 |
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Net income |
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Balance as of June 30, 2021 |
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FOR THE SIX MONTHS ENDED JUNE 30, 2022
Class B | Additional |
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Ordinary Shares | Paid-in | Accumulated | Shareholders’ | |||||||||||
| Shares |
| Amount |
| Capital |
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Balance as of January 1, 2022 |
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Accretion adjustment of Class A ordinary shares to redemption value | | | | ( | ( | |||||||||
Net income |
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Balance as of June 30, 2022 |
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FOR THE SIX MONTHS ENDED JUNE 30, 2021
Class B | Additional | |||||||||||||
Ordinary Shares | Paid-in | Accumulated | Shareholders’ | |||||||||||
| Shares |
| Amount |
| Capital |
| Deficit |
| Deficit | |||||
Balance as of December 31, 2020 | | $ | | $ | | $ | ( | $ | | |||||
Accretion of Class A ordinary shares subject to possible redemption amount | — | — | ( | ( | ( | |||||||||
Net income | — |
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Balance as of June 30, 2021 | | $ | | $ | — | $ | ( | $ | ( |
See accompanying notes to unaudited condensed financial statements
3
APOLLO STRATEGIC GROWTH CAPITAL II
(formerly known as APH I (Sub I), Ltd.)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Six Months Ended | ||||||
June 30, | ||||||
| 2022 |
| 2021 | |||
Cash Flows From Operating Activities: |
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Net income | $ | | $ | | ||
Adjustments to reconcile net income to net cash used in operating activities: |
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Investment income earned on investment held in Trust Account | ( | ( | ||||
Change in fair value of derivative warrant liabilities | ( | ( | ||||
Transaction costs allocable to warrant liability | — | | ||||
Changes in operating assets and liabilities: | ||||||
Prepaid expenses |
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Other assets | | — | ||||
Accounts payable and accrued expenses | | | ||||
Net Cash Used In Operating Activities |
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Cash Flows From Investing Activities: | ||||||
Cash deposited into Trust Account | — | ( | ||||
Net Cash Used In Investing Activities | — | ( | ||||
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Cash Flows From Financing Activities: |
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Proceeds from sale of Units in Public Offering, net of underwriting fee |
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Proceeds from sale of Private Placement Warrants | — | | ||||
Proceeds from Sponsor note | | | ||||
Repayment of advances from Sponsor |
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Net Cash Provided By Financing Activities |
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Net change in cash |
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Cash at beginning of period |
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Cash at end of period | $ | | $ | | ||
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Supplemental disclosure of non-cash financing activities: |
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Deferred underwriters’ commission charged to temporary equity in connection with the Public Offering | $ | — | $ | | ||
Operating costs paid by related party which were charged to additional paid-in capital | $ | — | $ | | ||
Deferred offering costs paid by related party | $ | — | $ | | ||
Remeasurement adjustment of Class A ordinary shares to redemption value | $ | | $ | — |
See accompanying notes to unaudited condensed financial statements
4
APOLLO STRATEGIC GROWTH CAPITAL II
(formerly known as APH I (Sub I), Ltd.)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 — DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN
Organizational and General
Apollo Strategic Growth Capital II (formerly known as APH I (Sub I), Ltd.) (the “Company”) was initially incorporated in Cayman Islands on October 10, 2008 under the name of APH I (Sub I), Ltd. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Initial Business Combination”). The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). On December 23, 2020, the Company formally changed its name to Apollo Strategic Growth Capital II.
At June 30, 2022, the Company had not commenced any operations. All activity for the period from October 10, 2008 through June 30, 2022 relates to the Company’s formation and the initial public offering (the “Public Offering”) described below and search for a target company. The Company will not generate any operating revenues until after completion of its Initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income on investments from the net proceeds derived from the Public Offering.
Sponsor and Public Offering
On February 12, 2021, the Company consummated the Public Offering of
The Company’s sponsor is APSG Sponsor II, L.P., a Cayman Islands limited partnership (the “Sponsor”). The Company intends to finance its Initial Business Combination with proceeds from the $
Simultaneously to the Public Offering the Sponsor purchased an aggregate of
The transaction costs amounted to $
5
Trust Account
The proceeds held in the Trust Account are invested only in U.S. government securities with a maturity of one hundred eighty (180) days or less or in money market funds that meet certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended (the “Investment Company Act”), and that invest only in direct U.S. government treasury obligations, as determined by the Company. Funds will remain in the Trust Account until the earlier of (i) the consummation of the Initial Business Combination or (ii) the distribution of the Trust Account proceeds as described below. The remaining proceeds outside the Trust Account may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. At June 30, 2022 and December 31, 2021, the proceeds of the Public Offering of $
The Company’s fourth amended and restated memorandum and articles of association provides that, other than the withdrawal of interest to pay our tax obligations (the “Permitted Withdrawals”), and up to $
Initial Business Combination
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering, although substantially all of the net proceeds of the Public Offering are intended to be generally applied toward consummating an Initial Business Combination. The Initial Business Combination must occur with one or more target businesses that together have a fair market value of at least
The Company, after signing a definitive agreement for an Initial Business Combination, will either (i) seek shareholder approval of the Initial Business Combination at a meeting called for such purpose in connection with which shareholders may seek to redeem their Public Shares, regardless of whether they vote for or against the Initial Business Combination, for cash equal to their pro rata share of the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Initial Business Combination, including interest not previously released to the Company to make Permitted Withdrawals or (ii) provide shareholders with the opportunity to sell their Public Shares to the Company by means of a tender offer (and thereby avoid the need for a shareholder vote) for an amount in cash equal to their pro rata share of the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Initial Business Combination, including interest not previously released to the Company to make Permitted Withdrawals. The decision as to whether the Company will seek shareholder approval of the Initial Business Combination or will allow shareholders to sell their Public Shares in a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek shareholder approval, unless a vote is required by law or under New York Stock Exchange (“NYSE”) rules. If the Company seeks shareholder approval, it will complete its Initial Business Combination only if a majority of the outstanding ordinary shares voted are voted in favor of the Initial Business Combination. In the event that the redemption of the Company’s Public Shares would cause its net tangible assets to be less than $
If the Company holds a shareholder vote or there is a tender offer for shares in connection with an Initial Business Combination, a shareholder will have the right to redeem his, her or its Public Shares for an amount in cash equal to his, her or its pro rata share of the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Initial Business Combination, including interest not previously released to make Permitted Withdrawals. As a result, such Public Shares are recorded at redemption amount and classified as temporary equity upon the completion of the Public Offering, in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity.”
6
Pursuant to the Company’s fourth amended and restated memorandum and articles of association, if the Company is unable to complete the Initial Business Combination within the Completion Window, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten (10) business days thereafter subject to lawfully available funds therefor, 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 make Permitted Withdrawals (less up to $
In the event of a liquidation, dissolution or winding up of the Company after an Initial Business Combination, the Company’s shareholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of ordinary share, if any, having preference over the ordinary shares. The Company’s shareholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the ordinary shares, except that the Company will provide its shareholders with the opportunity to redeem their Public Shares for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account, upon the completion of the Initial Business Combination, subject to the limitations described herein.
Going Concern Considerations, Liquidity and Capital Resources
As of June 30, 2022, we had investments held in the Trust Account of $
The Company does not have sufficient liquidity to meet its anticipated obligations over the next year from the date of issuance of these unaudited condensed financial statements. In connection with the Company’s assessment of going concern considerations in accordance with Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that if the Company is unsuccessful in consummating an Initial Business Combination, the mandatory liquidation and subsequent dissolution along with the liquidity concerns raise substantial doubt about the ability to continue as a going concern. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of these uncertainties. Management has determined that the Company has access to funds from the Sponsor that are sufficient to fund the working capital needs of the Company until a potential business combination or up to the mandatory liquidation as stipulated in the Company’s amended and restated memorandum and articles of association. The accompanying unaudited condensed financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern.
The Company intends to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account, excluding the deferred underwriting commissions, to complete its Initial Business Combination. To the extent that capital stock or debt is used, in whole or in part, as consideration to complete the Initial Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue growth strategies. If an Initial Business Combination agreement requires the Company to use a portion of the cash in the Trust Account to pay the purchase price or requires the Company to have a minimum amount of cash at closing, the Company will need to reserve a portion of the cash in the Trust Account to meet such requirements or arrange for third-party financing.
7
The Company is required to complete an Initial Business Combination within the Completion Window. If the Company is unable to complete an Initial Business Combination within this Completion Window, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten (10) business days thereafter, and subject to having lawfully available funds therefor, 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 Trust Account deposits (which interest shall be net of taxes payable and less up to $
The underwriters have agreed to waive their rights to their deferred underwriting commissions held in the Trust Account in the event the Company does not complete an Initial Business Combination within the Completion Window 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 Public Shares.
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements are presented in conformity with GAAP and pursuant to the rules and regulations of the SEC.
Certain information and note disclosures normally included in the unaudited financial statements prepared in accordance with GAAP have been condensed. As such, except as disclosed herein, the information included in these unaudited condensed financial statements should be read in conjunction with the audited condensed financial statements as of December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 17, 2022. In the opinion of the Company’s management, these unaudited condensed financial statements include all adjustments, which are only of a normal and recurring nature, necessary for a fair statement of the Company’s financial position as of June 30, 2022 and the Company’s results of operations and cash flows for the periods presented. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the full year ending December 31, 2022 or any future period.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s condensed financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
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Use of Estimates
The preparation of unaudited condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. 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. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times, may exceed the Federal Deposit Insurance Corporation coverage of $
Investments Held in Trust Account
The Company’s portfolio of investments held in the Trust Account is comprised of cash and U.S. treasury bills, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less. The Company’s investments held in the Trust Account are classified as trading securities. Trading securities 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 investments are included in net gain from investments held in Trust Account in the accompanying condensed statement of operations. The estimated fair values of investments held in the Trust Account are determined using available market information.
Offering Costs associated with a Public Offering
The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering.” Offering costs of $
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 480, “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption are classified as liability instruments and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that features 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, 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 occurrence of uncertain future events. Accordingly, at June 30, 2022 and December 31, 2021,
Effective with the closing of the Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable Class A ordinary shares resulted in charges against additional paid-in capital and accumulated deficit.
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At June 30, 2022 and December 31, 2021, the Class A ordinary shares reflected in the condensed balance sheets are reconciled in the following table:
Gross proceeds |
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Less: |
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Proceeds allocated to Public Warrants | ( | ||
Class A ordinary shares issuance costs | ( | ||
Plus: |
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Accretion of carrying value to redemption value | | ||
Class A ordinary shares subject to possible redemption - December 31, 2021 | $ | | |
Remeasurement adjustment of Class A ordinary shares to redemption value | | ||
Class A ordinary shares subject to possible redemption – June 30, 2022 | |
Income Taxes
ASC 740, “Income Taxes,” prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. There were
There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s unaudited condensed financial statements. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
Net Income (Loss) per Ordinary Share
The Company complies with accounting and disclosure requirements of ASC 260, “Earnings Per Share.” Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. Accretion associated with the redeemable Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value.
The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. As of June 30, 2022 and December 31, 2021, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted net loss per ordinary share is the same as basic net loss per ordinary share for the periods presented.
The following table reflects the calculation of basic and diluted net income (loss) per ordinary share for the three and six months ended June 30, 2022 and 2021:
| Three Months Ended |
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June 30, 2022 | June 30, 2021 | |||||||||||
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Basic and diluted net income (loss) per ordinary share |
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Allocation of net income (loss), as adjusted | $ | | $ | | $ | ( | $ | ( | ||||
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Basic and diluted weighted average shares outstanding |
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Basic and diluted net income (loss) per ordinary share | | | ( | ( |
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Six Months Ended | Six Months Ended | |||||||||||
June 30, 2022 | June 30, 2021 | |||||||||||
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Basic and diluted net income per ordinary share |
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Allocation of net income, as adjusted | $ | | $ | | $ | | $ | | ||||
Denominator: |
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Basic and diluted weighted average shares outstanding |
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Basic and diluted net income per ordinary share | | | | |
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC 815, “Derivatives and Hedging.” The Company’s derivative instruments are recorded at fair value as of the Public Offering (February 12, 2021) and re-valued at each reporting date, with changes in the fair value reported in the condensed statements of operations. Derivative assets and liabilities are classified on the condensed balance sheets as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The Company has determined the Warrants are a derivative instrument. As the Warrants meet the definition of a derivative the Warrants are measured at fair value at issuance and at each reporting date in accordance with ASC 820, “Fair Value Measurement,” with changes in fair value recognized in the statement of operations in the period of change.
Warrant Instruments
The Company accounts for the Warrants issued in connection with the Public Offering and Private Placement in accordance with the guidance contained in ASC 815, “Derivatives and Hedging,” whereby under that provision the Warrants do not meet the criteria for equity treatment and must be recorded as a liability. Accordingly, the Company classifies the Warrants as a liability at fair value and adjust the instrument to fair value at each reporting period. This liability will be re-measured at each balance sheet date until the Warrants are exercised or expire, and any change in fair value will be recognized in the Company’s statement of operations. Upon consummation of the Public Offering, the fair value of Warrants were estimated using a Monte Carlo simulation for the Public Warrants and a modified Black-Scholes model for the Private Placement Warrants. The valuation model utilizes inputs and other assumptions and may not be reflective of the price at which they can be settled. Such Warrant classification is also subject to re-evaluation at each reporting period. As of June 30, 2022 and December 31, 2021, the Public Warrants were valued using the publicly available price for the Warrants and are classified as Level 1 on the fair value hierarchy. As of June 30, 2022 and December 31, 2021, the Company used a modified Black-Scholes model to value the Private Placement Warrants and are classified as Level 3 on the fair value hierarchy.
Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or paid to 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 include:
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.
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As of June 30, 2022 and December 31, 2021, the carrying values of cash, prepaid expenses, deferred offering costs, accounts payable and accrued offering costs, and notes payable approximate their fair values primarily due to the short-term nature of the instruments, except for the derivative warrant liability (see Note 9). The Company’s investments held in Trust Account are comprised of investments in U.S. Treasury securities with an original maturity of 185 days or less or investments in money market funds that comprise only U.S. treasury securities and are recognized at fair value.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.
NOTE 3 — INITIAL PUBLIC OFFERING
Pursuant to the Public Offering, the Company sold
NOTE 4 — PRIVATE PLACEMENT
Simultaneously with the closing of the Public Offering, the Company consummated the Private Placement of an aggregate of
A portion of the proceeds from the Private Placement Warrants was added to the proceeds from the Public Offering held in the Trust Account. If the Company does not complete an Initial Business Combination within the Completion Window, the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will be worthless.
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.
NOTE 5 — RELATED PARTIES
Founder Shares
In October 2008, the Company was formed by Apollo Principal Holdings III, L.P. (“Holdings”), at which point, one ordinary share was issued in exchange for the payment of operating and formation expenses of the Company. In December 2020, Holdings transferred its ownership in the Company, consisting of one ordinary share, to the Sponsor for no consideration. On December 23, 2020, the Company completed a share split of its ordinary shares and, as a result,
The Founder Shares are identical to the Class A ordinary shares included in the Units sold in the Public Offering except that the Founder Shares are Class B ordinary shares which automatically convert into Class A ordinary shares at the time of the Company’s Initial Business Combination and are subject to certain transfer restrictions, as described in more detail below. The number of Founder Shares issued in the share split was determined based on the expectation that the total size of the Public Offering would be a maximum of
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The holders of the Founder Shares agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A)
In January 2020,
In June 2022, each of our
Related Party Loans
On December 28, 2020, the Sponsor agreed to loan the Company an aggregate of up to $
On March 1, 2021, the Sponsor agreed to loan the Company an aggregate of up to $
On September 14, 2021, the Sponsor executed an unsecured promissory note (the “September Note”) to loan the Company an aggregate principal amount of $
On May 9, 2022, the Sponsor executed an unsecured promissory note (the "May Note") to loan the Company an aggregate principal amount of $
On June 8, 2022, the Sponsor executed an unsecured promissory note (the "June Note") to loan the Company an aggregate principal amount of $
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Working Capital Loans
In order to finance transaction costs in connection with an Initial 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 an Initial Business Combination, the Company will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of the funds held outside the Trust Account. In the event that an Initial Business Combination does not close, the Company may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of an Initial Business Combination or, at the lenders’ discretion, up to $
Advances from Related Parties
Affiliates of the Sponsor paid certain administrative expenses and offering costs on behalf of the Company. These advances are due on demand and are non-interest bearing. From time to time, the related parties pay operating costs and other expenses on behalf of the Company. During the three months ended June 30, 2022 and 2021, the related parties paid
Administrative Service Fee
Commencing on the date the Units were first listed on the NYSE, the Company entered into an agreement with the Sponsor and has agreed to pay the Sponsor a total of $
NOTE 6 — COMMITMENTS AND CONTINGENCIES
Risks and Uncertainties
Management continues to evaluate the impact of the COVID-19 pandemic and the conflict in Ukraine and the surrounding region, and has concluded that while it is reasonably possible that these risks and uncertainties could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these unaudited condensed financial statements. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of these uncertainties.
Registration Rights
The holders of the Founder Shares, Private Placement Warrants and Public Warrants that may be issued upon conversion of Working Capital Loans, if any, (and any Class A ordinary shares issuable upon the exercise of the Public Warrants and Private Placement Warrants that may be issued upon conversion of Working Capital Loans) are entitled to registration rights pursuant to a registration rights agreement. The holders of these securities are entitled to demand that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of an Initial Business Combination. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
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Underwriting Agreement
The Company granted the underwriters a
Upon the closing of the IPO and the full over-allotment, the underwriters were entitled to an underwriting discount of $
NOTE 7 — SHAREHOLDERS’ DEFICIT
Preferred Shares
The Company is authorized to issue
Ordinary Shares
The authorized ordinary shares of the Company include up to
The Class B ordinary shares will automatically convert into our Class A ordinary shares at the time of completion of our Initial Business Combination on a one-for-one basis, subject to adjustment for share splits, dividends, reorganizations, recapitalizations and the like and subject to further adjustment as provided herein. In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts sold in the Public Offering and related to the closing of the Initial Business Combination, the ratio at which Class B ordinary shares will convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the outstanding Class B ordinary shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis,
NOTE 8 — WARRANTS
Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a)
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effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in accordance with the provisions of the warrant agreement. Notwithstanding the foregoing, if the Company’s ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under the Securities Act, the Company, at its option, may 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, the Company will not be required to file or maintain in effect a registration statement. The Public Warrants will expire
The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants and the ordinary shares issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of an Initial Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be non-redeemable so long as they are held by the initial purchasers or such purchasers’ permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
The Company may redeem the Public Warrants:
● | in whole and not in part; |
● | at a price of $ |
● | upon a minimum of |
● | if, and only if, the last reported closing price of the Company’s ordinary shares equals or exceeds $ |
If, and only if, there is a current registration statement in effect with respect to the ordinary shares underlying such warrants at the time of redemption and a current prospectus relating to those ordinary shares is available throughout the 30-day trading period referred to above.
If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.
The exercise price and number of the ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete an Initial Business Combination within the Completion Window 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.
The Company accounts for the
The accounting treatment of derivative financial instruments requires that the Company record a derivative liability upon the closing of the Public Offering. Accordingly, the Company classifies each warrant as a liability at its fair value and the warrants will be allocated a portion of the proceeds from the issuance of the Units equal to its fair value determined by the Monte Carlo simulation up until separation for the Public Warrants (subsequent to separation, the Public Warrants are valued using the publicly available trading price) and a modified Black-Scholes model for the Private Placement Warrants. This liability is subject to re-measurement at each balance sheet date.
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With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s condensed statements of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification.
NOTE 9 — FAIR VALUE MEASUREMENTS
The Company follows the guidance in ASC 820, “Fair Value Measurement,” for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
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 our assessment of the assumptions that market participants would use in pricing the asset or liability. |
The following table presents information about the Company’s assets and liabilities that are measured at fair value 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, |
| December 31, | ||||
Description | Level |
| 2022 | 2021 | ||||
Assets: |
|
|
|
| ||||
Marketable securities held in Trust Account |
| 1 | $ | | $ | | ||
Liabilities: |
|
|
|
| ||||
Warrant Liability – Private Placement Warrants | 3 | $ | | $ | | |||
Warrant Liability – Public Warrants |
| 1 | $ | | $ | |
The Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within liabilities on the 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.
Upon consummation of the Public Offering, the Company used a Monte Carlo simulation model to value the Public Warrants and a modified Black-Scholes model to value the Private Placement Warrants. At the initial measurement date, the Warrants were classified within Level 3 of the fair value hierarchy at the measurement dates due to the use of unobservable inputs.
As of June 30, 2022 and December 31, 2021, the Public Warrants were valued using the publicly available price for the Warrant and are classified as Level 1 on the fair value hierarchy. At June 30, 2022 and December 31, 2021, the Company used a modified Black-Scholes model to value the Private Placement Warrants. The Company relied upon the implied volatility of the Public Warrants and the closing stock price to estimate the volatility for the Private Placement Warrants. At June 30, 2022 and December 31, 2021, the Private Placement Warrants were classified within Level 3 of the fair value hierarchy at the measurement dates due to the use of unobservable inputs.
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The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three and six months ended June 30, 2022 and 2021:
Fair Value | |||
Measurement Using | |||
| Level 3 Inputs Total | ||
Balance, March 31, 2022 | $ | | |
Change in fair value of derivative liabilities | ( | ||
Balance, June 30, 2022 | $ | |
| Fair Value | ||
Measurement Using | |||
| Level 3 Inputs Total | ||
Balance, December 31, 2021 | $ | | |
| ( | ||
Balance, June 30, 2022 | $ | |
Fair Value | |||
Measurement | |||
Using Level 3 | |||
Inputs | |||
| Total | ||
Balance, March 31, 2021 | $ | | |
Transfer to Level 1 |
| ( | |
Change in fair value of derivative liabilities |
| ( | |
Balance, June 30, 2021 | $ | |
| Fair Value | ||
Measurement | |||
Using Level 3 | |||
Inputs | |||
Total | |||
Balance, December 31, 2020 | $ | — | |
Derivative liabilities recorded on issuance of derivative warrants |
| | |
Transfer to Level 1 | ( | ||
| ( | ||
Balance, June 30, 2021 | $ | |
As of June 30, 2022 and December 31, 2021, the fair value of the derivative feature of the Private Placement Warrants was calculated using the following weighted average assumptions:
| June 30, |
| December 31, | ||
2022 | 2021 | ||||
Risk-free interest rate | | % | % | ||
Expected life |
| | years | | years |
Expected volatility of underlying shares |
| | % | % | |
Dividends |
| | % | | % |
As of June 30, 2022 and December 31, 2021, the derivative liability was $
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NOTE 10 — SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the condensed balance sheet date through the date that the 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.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Apollo Strategic Growth Capital II. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to APSG Sponsor II, L.P. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the Securities and Exchange Commission (the “SEC”) on March 17, 2022 (the “Annual Report”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a blank check company incorporated as a Cayman Islands exempted company and formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or other similar business combination with one or more businesses. We intend to effectuate our Initial Business Combination using cash from the proceeds of the initial public offering (the “Public Offering”) and the sale of the Private Placement Warrants, our capital stock, debt or a combination of the foregoing.
The issuance of additional ordinary shares in connection with an Initial Business Combination to the owners of the target or other investors:
● | may significantly dilute the equity interest of existing investors, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares result in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares; |
● | may subordinate the rights of holders of our ordinary shares if preferred shares are issued with rights senior to those afforded our ordinary shares; |
● | could cause a change in control if a substantial number of ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; |
● | may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; and |
● | may adversely affect prevailing market prices for our Class A ordinary shares and/or warrants. |
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Similarly, if we issue debt securities or otherwise incur significant indebtedness to bank or other lenders or the owners of a target, it could result in:
● | default and foreclosure on our assets if our operating revenues after an Initial Business Combination are insufficient to repay our debt obligations; |
● | acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
● | our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand; |
● | our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding; |
● | our inability to pay dividends on our ordinary shares; |
● | using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our ordinary shares if declared, our ability to pay expenses, make capital expenditures and acquisitions and fund other general corporate purposes; |
● | limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
● | increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; |
● | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution of our strategy; and |
● | other purposes and other disadvantages compared to our competitors who have less debt. |
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to raise capital or to complete our Initial Business Combination will be successful.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities through June 30, 2022 were organizational activities, those necessary to prepare for the Public Offering, described below, and, after our Public Offering, day-to-day operations and identifying a target company for an Initial Business Combination. We do not expect to generate any operating revenues until after the completion of our Initial Business Combination. We generate non-operating income in the form of interest income on marketable securities held in the trust account (the “Trust Account”). We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
For the three months ended June 30, 2022, we had net income of $7,636,112, which consists of a change in fair value of derivative warrants liabilities of $7,983,595 and interest income on investments held in the Trust Account of $857,136, offset by operating costs of $1,200,520 and interest expense of $4,099.
For the three months ended June 30, 2021, we had net loss of $1,083,211, which consists of operating costs of $2,843,523 and interest expense of $542, offset by a change in fair value of the derivative warrant liabilities of $1,730,880 and interest income on investments held in the Trust Account of $29,974.
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For the six months ended June 30, 2022, we had net income of $14,922,729, which consists of a change in fair value of derivative warrants liabilities of $16,946,344 and interest income on investments held in the Trust Account of $1,069,215, offset by operating costs of $3,087,696 and interest expense of $5,134.
For the six months ended June 30, 2021, we had net income of $6,539,596, which consists of a change in fair value of the derivative warrant liabilities of $11,172,940 and interest income on investments held in the Trust Account of $54,126, offset by operating costs of $3,192,530, warrant-related expenses of $1,494,398 and interest expense of $542.
Liquidity and Capital Resources
Until the consummation of the Public Offering, our only source of liquidity was an initial purchase of Class B ordinary shares by the Sponsor and loans from our Sponsor.
On February 12, 2021, we consummated the Public Offering of 69,000,000 units (the “Units”), which includes the full exercise by the underwriters of the over-allotment option, at $10.00 per Unit, generating gross proceeds of $690,000,000. Simultaneously with the closing of the Public Offering, we consummated the sale of 10,400,000 Private Placement Warrants to the Sponsor at a price of $1.50 per warrant, generating gross proceeds of $15,600,000.
Following the Public Offering, the exercise of the over-allotment option and the sale of the Private Placement Warrants, a total of $690,000,000 was placed in the Trust Account. We incurred $39,065,920 in transaction costs, including $13,800,000 of underwriting fees, $24,150,000 of deferred underwriting fees and $1,115,920 of other costs.
For the six months ended June 30, 2022, cash used in operating activities was $2,588,170. For the six months ended June 30, 2022, net income of $14,922,729 was affected by a gain in fair value of derivative liabilities of $16,946,344, interest earned on marketable securities held in the Trust Account of $1,069,215, and changes in operating assets and liabilities, which provided $504,660 of cash from operating activities.
For the six months ended June 30, 2021, cash used in operating activities was $1,091,554. For the six months ended June 30, 2021, net income of $6,539,596 was affected by a gain in fair value of derivative liabilities of $11,172,940, interest earned on marketable securities held in the Trust Account of $54,126 and changes in operating assets and liabilities, which provided $2,101,518 of cash from operating activities. In addition, costs of $1,494,398 were allocated to the Public Warrants and Private Placement Warrants and were included in the statement of operations as a component of other income/(expenses).
As of June 30, 2022 and December 31, 2021, we had cash and U.S. treasury securities held in the Trust Account of $691,138,101 and $690,068,886, respectively. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less deferred underwriting commissions and income taxes payable), to complete our Initial Business Combination. We may withdraw interest to pay our tax obligations. During the six months ended June 30, 2022, we did not withdraw any interest earned on the Trust Account. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our Initial Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
As of June 30, 2022 and December 31, 2021, we had cash of $616,347 and $1,204,517, respectively, outside of the Trust Account. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete an Initial Business Combination.
In order to fund working capital deficiencies or finance transaction costs in connection with an Initial Business Combination, the initial shareholders or their affiliates may, but are not obligated to, loan us funds as may be required. If we complete an Initial Business Combination, we will repay such loaned amounts. In the event that an Initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants identical to the Private Placement Warrants, at a price of $1.50 per warrant at the option of the lender.
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Since March 2021, we executed a series of promissory notes in the aggregate amount of $5,000,000 with our Sponsor in order to satisfy working capital requirements. See “Related Party Loans” in Note 5 to our condensed financial statements.
If our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an Initial Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Initial Business Combination. Moreover, we may need to obtain additional financing either to complete our Initial Business Combination or because we become obligated to redeem a significant number of our public shares upon consummation of our Initial Business Combination, in which case we may issue additional securities or incur debt in connection with such Initial Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our Initial Business Combination. If we are unable to complete our Initial Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our Initial Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of June 30, 2022.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of the Sponsor a monthly fee of $16,667 for office space, utilities, secretarial support and administrative services. We began incurring these fees on February 10, 2021 and will continue to incur these fees monthly for up to 27 months until the earlier of the completion of the Initial Business Combination and our liquidation.
The underwriters are entitled to a deferred fee of $24,150,000 in the aggregate. The deferred fee will be waived by the underwriters in the event that we do not complete an Initial Business Combination, subject to the terms of the underwriting agreement.
Critical Accounting Policies
Accounting policies, methods and estimates are an integral part of the condensed financial statements prepared by management and are based upon management’s current judgments. These judgments are normally based on knowledge and experience regarding past and current events and assumptions about future events. Certain accounting policies, methods and estimates are particularly sensitive because of their significance to the condensed financial statements and because of the possibility that future events affecting them may differ from management’s current judgments. While there are a number of accounting policies, methods and estimates that affect our condensed financial statements, the areas that are particularly significant include use of estimates; Class A ordinary shares subject to possible redemption; net income (loss) per ordinary share; and the fair value of assets and liabilities.
Our significant accounting policies are summarized in Note 2 to our condensed financial statements.
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As of June 30, 2022, we were not subject to any market or interest rate risk. Following the consummation of our Public Offering, the net proceeds of our Public Offering, including amounts in the Trust Account, have been invested in U.S. government treasury bills, notes or bonds with a maturity of 185 days or less or in certain money market funds that invest solely in U.S. treasuries. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.
23
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of the Company’s management, including the Company’s principal executive officer and principal financial officer, the Company conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures as of the end of the fiscal quarter ended June 30, 2022, as such term is defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2022.
Disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in its reports filed with the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s principal executive officer, principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
Other than as described herein, there was no change in our internal control over financial reporting that occurred during the fiscal quarter ended June 30, 2022 covered by this Quarterly Report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
24
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors.
Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our Annual Report. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report, there has been no material changes with respect to those risk factors previously disclosed in our Annual Report, except we may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Unregistered Sales of Equity Securities
We have not sold any equity securities during the quarter ended June 30, 2022.
Use of Proceeds
On February 12, 2021, we consummated the Public Offering of 69,000,000 Units, each comprising of one Class A ordinary shares, $0.00025 par value per share and one-fifth of one public warrant, which includes the full exercise by the underwriters of their over-allotment option of 9,000,000 Units. The Units sold in the Public Offering, including pursuant to the over-allotment option, were sold at an offering price of $10.00 per unit, generating total gross proceeds of $690,000,000. Deutsche Bank Securities Inc., Barclays Capital Inc. and Credit Suisse Securities (USA) LLC acted as joint book-runners and Apollo Global Securities, LLC, RBC Capital Markets, LLC, Siebert Williams Shank & Co., LLC and Academy Securities, Inc. acted as co-bookrunners of the Public Offering. The securities in the offering were registered under the Securities Act on Registration Statements on Form S-1 (Registration No. 333-251920 and 333-252923) filed with the SEC (the “Registration Statements”). The SEC declared the Registration Statements effective on February 9, 2021.
We paid a total of $13,800,000 in underwriting discounts and commissions and $1,115,920 for other costs and expenses related to the Public Offering. In addition, the underwriters agreed to defer up to $24,150,000 in underwriting discounts and commissions.
Of the gross proceeds received from the Public Offering, $676,200,000 was placed in the Trust Account established in connection with the Public Offering.
There has been no material change in the planned use of proceeds from the Public Offering as described in our final prospectus dated February 9, 2021, which was filed with the SEC.
For a description of the use of the proceeds generated in our Public Offering, see Part I, Item 2 of this Quarterly Report.
Purchases of Equity Securities
We did not repurchase any shares of our equity securities during the quarter ended June 30, 2022.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not Applicable.
25
Item 5. Other Information.
Independent Director Compensation
On June 8, 2022, our Compensation Committee recommended, and our board of directors (acting through a special committee consisting of Scott Kleinman and Sanjay Patel) approved, changes in our compensation policy and arrangements for independent directors serving on our board of directors. Effective June 8, 2022, each independent director received for his or her respective service on our board of directors a one-time cash payment in the amount of $250,000, prorated should he or she not continue to serve on our board of directors during the entire period under consideration. Also on June 8, 2022, each independent director sold 25,000 Class B ordinary shares to the Sponsor in exchange for $54.35.
Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
No. |
| Description of Exhibit |
3.1 | Fourth Amended and Restated Articles of Association of the Registrant.(1) | |
4.1 | ||
4.2 | ||
4.3 | ||
10.1 | ||
10.2* | ||
10.3* | Engagement Letter, dated June 8, 2022, between the Company and Nathaniel Lipman. | |
10.4* | Engagement Letter, dated June 8, 2022, between the Company and Melvin Parker. | |
10.5* | Engagement Letter, dated June 8, 2022, between the Company and Angela Sun. | |
31.1* |
| |
31.2* |
| |
32.1* |
| |
32.2* |
| |
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 Labels Linkbase Document. |
101.PRE* |
| XBRL Taxonomy Extension Presentation Linkbase Document. |
104 | Cover Page Interactive Data File (embedded within the inline XBRL document) |
* | Filed herewith. |
(1) | Previously filed as an exhibit to our Current Report on Form 8-K filed on February 12, 2021 and incorporated by reference herein. |
(2) | Previously filed as an exhibit to our Registration Statement on Form S-1 on January 6, 2021 and incorporated by reference herein. |
(3) | Previously filed as an exhibit to our Quarterly Report on Form 10-Q on May 13, 2022 and incorporated by reference herein. |
26
PART III SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Apollo Strategic Growth Capital II | |||
Date: August 5, 2022 | By: | /s/ Sanjay Patel | |
Name: | Sanjay Patel | ||
Title: | Chief Executive Officer | ||
(Principal Executive Officer) | |||
Date: August 5, 2022 | By: | /s/ James Crossen | |
Name: | James Crossen | ||
Title: | Chief Financial Officer and Secretary | ||
(Principal Accounting Officer and Financial Officer) |
27
EXHIBIT 10.2
EXECUTION VERSION
THIS PROMISSORY NOTE (THIS “NOTE”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF REGISTRATION OF THE RESALE THEREOF UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY IN FORM, SCOPE AND SUBSTANCE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
PROMISSORY NOTE
Apollo Strategic Growth Capital II, a Cayman Islands exempted company, incorporated with limited liability (the “Maker”), promises to pay to the order of APSG Sponsor II, L.P., a Cayman Islands limited partnership, or its registered assigns or successors in interest (the “Payee”), or order, the principal sum of One Million Dollars ($1,000,000) or such lesser amount as shall have been advanced by Payee to Maker and shall remain unpaid under this Note on the Maturity Date (as defined below) in lawful money of the United States of America, on the terms and conditions described below. All payments on this Note shall be made by check or wire transfer of immediately available funds or as otherwise determined by the Maker to such account as the Payee may from time to time designate by written notice in accordance with the provisions of this Note. Maker and Payee are entering into this Note in connection with the Maker’s ongoing working capital needs.
1. Principal. The entire unpaid principal balance of this Note shall be payable on the earlier of: (i) the date on which Maker consummates an initial business combination or (ii) the liquidation of the Maker in accordance with its amended and restated memorandum and articles of association (such earlier date, the “Maturity Date”). The principal balance may be prepaid at any time. Under no circumstances shall any individual, including but not limited to any officer, director, employee or shareholder of the Maker, be obligated personally for any obligations or liabilities of the Maker hereunder.
2. Drawdown Requests. Maker and Payee agree that Maker may request, from time to time, up to One Million Dollars ($1,000,000) in draw downs under this Note to be used for costs and expenses related to Maker’s initial public offering of its securities (the “IPO”), operating expenses or initial business combination. Principal of this Note may be drawn down from time to time prior to the Maturity Date upon written request from Maker to Payee (each, a “Drawdown Request”), provided that each such Drawdown Request is duly authorized by an executive officer of Maker. Each Drawdown Request must state the amount to be drawn down, and must not be an amount less than Ten Thousand Dollars ($10,000). Payee shall fund each Drawdown Request no later than three (3) business days after receipt of a Drawdown Request; provided, however, that the maximum amount of drawdowns outstanding under this Note at any time may not exceed One Million Dollars ($1,000,000). No fees, payments or other amounts shall be due to Payee in connection with, or as a result of, any Drawdown Request by Maker.
3. Interest. Interest shall accrue on the unpaid principal balance of this Note at a rate of 1.68% per annum.
4. Application of Payments. All payments shall be applied first to payment in full of any costs incurred in the collection of any sum due under this Note, including (without limitation) reasonable attorney’s fees, then to the payment in full of any late charges, then to accrued interest thereon to the date of such payment and finally to the reduction of the unpaid principal balance of this Note.
5. Events of Default. The following shall constitute an event of default (“Event of Default”):
(a) Failure to Make Required Payments. Failure by Maker to pay the principal amount and accrued interest due pursuant to this Note within five (5) business days of the Maturity Date.
(b) Voluntary Bankruptcy, Etc. The commencement by Maker of a voluntary case under any applicable bankruptcy, insolvency, reorganization, rehabilitation or other similar law, or the consent by it to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of Maker or for any substantial part of its
property, or the making by it of any assignment for the benefit of creditors, or the failure of Maker generally to pay its debts as such debts become due, or the taking of corporate action by Maker in furtherance of any of the foregoing.
(c) Involuntary Bankruptcy, Etc. The entry of a decree or order for relief by a court having jurisdiction in the premises in respect of Maker in an involuntary case under any applicable bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of Maker or for any substantial part of its property, or ordering the winding-up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days.
6. Remedies.
(a) Upon the occurrence of an Event of Default specified in Section 5(a) hereof, Payee may, by written notice to Maker, declare this Note to be due immediately and payable, whereupon the unpaid interest and principal amount of this Note, and all other amounts payable thereunder, shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the documents evidencing the same to the contrary notwithstanding.
(b) Upon the occurrence of an Event of Default specified in Sections 5(b) or 5(c), the unpaid principal balance of this Note, and all other sums payable with regard to this Note, shall automatically and immediately become due and payable, in all cases without any action on the part of Payee.
7. Waivers. Maker and all endorsers and guarantors of, and sureties for, this Note waive presentment for payment, demand, notice of dishonor, protest, and notice of protest with regard to the Note, all errors, defects and imperfections in any proceedings instituted by Payee under the terms of this Note, and all benefits that might accrue to Maker by virtue of any present or future laws exempting any property, real or personal, or any part of the proceeds arising from any sale of any such property, from attachment, levy or sale under execution, or providing for any stay of execution, exemption from civil process, or extension of time for payment; and Maker agrees that any real estate that may be levied upon pursuant to a judgment obtained by virtue hereof, on any writ of execution issued hereon, may be sold upon any such writ in whole or in part in any order desired by Payee.
8. Unconditional Liability. Maker hereby waives all notices in connection with the delivery, acceptance, performance, default, or enforcement of the payment of this Note, and agrees that its liability shall be unconditional, without regard to the liability of any other party, and shall not be affected in any manner by any indulgence, extension of time, renewal, waiver or modification granted or consented to by Payee, and consents to any and all extensions of time, renewals, waivers, or modifications that may be granted by Payee with respect to the payment or other provisions of this Note, and agrees that additional makers, endorsers, guarantors, or sureties may become parties hereto without notice to Maker or affecting Maker’s liability hereunder.
9. Notices. All notices, statements or other documents which are required or contemplated by this Agreement shall be in writing and delivered (i) personally or sent by first class registered or certified mail, overnight courier service, (ii) by facsimile to the number most recently provided to such party or such other address or fax number as may be designated in writing by such party or (iii) by electronic mail, to the electronic mail address most recently provided to such party or such other electronic mail address as may be designated in writing by such party. Any notice or other communication so transmitted shall be deemed to have been given on the day of delivery, if delivered personally, on the day of receipt of written confirmation, if sent by facsimile or electronic transmission, one (1) business day after delivery to an overnight courier service or five (5) days after mailing if sent by mail.
10. Construction. THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.
11. Severability. Any provision contained in this Note which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
12. Trust Waiver. Notwithstanding anything herein to the contrary, the Payee hereby waives any and all right, title, interest or claim of any kind (“Claim”) in or to any distribution of or from the trust account in which the proceeds of the IPO conducted by the Maker (including the deferred underwriters discounts and commissions) and the proceeds of the sale of the warrants issued in a private placement that occurred prior to the consummation of the IPO were deposited, as described in greater detail in the registration statement on Form S-1 (Reg. No. 333-251920) filed by the Maker with the Securities and Exchange Commission and declared effective on February 9, 2021, and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the trust account for any reason whatsoever.
13. Amendment; Waiver. Any amendment hereto or waiver of any provision hereof may be made with, and only with, the written consent of the Maker, Payee and APSG Sponsor II, L.P.
14. Assignment. No assignment or transfer of this Note or any rights or obligations hereunder may be made by any party hereto (by operation of law or otherwise) without the prior written consent of the other party hereto and any attempted assignment without the required consent shall be void.
[Signature page follows]
IN WITNESS WHEREOF, Maker, intending to be legally bound hereby, has caused this Note to be duly executed by the undersigned as of the day and year first above written.
| APOLLO STRATEGIC GROWTH CAPITAL II | |
| | |
| | |
| By: | /s/ James Crossen |
| | Name: James Crossen |
| | Title: Chief Financial Officer |
Accepted and agreed this 8th day of June, 2022 | | | |
| | | |
APSG SPONSOR II, L.P. | | | |
| | | |
By: | AP Caps II Holdings GP, LLC, its general partner | | |
| | | |
By: | Apollo Principal Holdings III, L.P., its managing member | | |
| | | |
By: | Apollo Principal Holdings III GP, Ltd., its general partner | | |
| | | |
By: | /s/ James Elworth | | |
Name: | James Elworth | | |
Title: | Vice President | | |
DRAWDOWN REQUEST
Dated: June 8, 2022
APSG Sponsor II, L.P., as Payee under that certain Promissory
Note referred to below
9 West 57th Street, 43rd Floor
New York, NY 10019
Ladies and Gentlemen:
The undersigned (the “Maker”), refers to the Promissory Note, dated as of June 8, 2022 (as amended, restated, modified and/or supplemented from time to time, the “Promissory Note”), made by the Maker in favor of APSG Sponsor II, L.P., and hereby gives you notice, irrevocably, pursuant to Section 9 of the Promissory Note, that the undersigned hereby requests a drawdown under the Promissory Note, and in that connection sets forth below the information relating to such borrowing (the “Borrowing”):
(i)The business day of the Borrowing is June 8, 2022.
(ii)The aggregate principal amount of the Borrowing is $1,000,000.00.
(iii)The proceeds from the Borrowing will be used as set forth in Section 2 of the Promissory Note.
The undersigned certifies that no Event of Default (as defined in the Promissory Note) has occurred and is continuing, or would result from such Borrowing or from the application of the proceeds thereof.
IN WITNESS WHEREOF, the undersigned hereby has executed this Drawdown Request as of the date first written above.
| Very truly yours, | |
| | |
| | |
| APOLLO STRATEGIC GROWTH CAPITAL II | |
| | |
| | |
| By: | /s/ James Crossen |
| | Name: James Crossen |
| | Title: Chief Financial Officer |
EXHIBIT 10.3
APOLLO STRATEGIC GROWTH CAPITAL II
9 West 57th Street, 42nd Floor
New York, NY 10019
Nathaniel Lipman
9 West 57th Street, 42nd Floor
New York, NY 10019
Dear Mr. Lipman,
As previously discussed, attached hereto as Annex A is a summary of the terms (the “Term Sheet”) in connection with your continued service as a director of Apollo Strategic Growth Capital II. This letter and Term Sheet memorialize our agreement and constitute a binding commitment on both parties. Please indicate your agreement with the foregoing, by signing this letter where indicated below.
| Very truly yours, | |
| | |
| | |
| APOLLO STRATEGIC GROWTH CAPITAL II | |
| | |
| | |
| By: | /s/ Sanjay Patel |
| | Name: Sanjay Patel |
| | Title: Chief Executive Officer |
Agreed to and accepted: | |
| |
| |
/s/ Nathaniel Lipman | |
Nathaniel Lipman | |
Dated: June 8, 2022 | |
Annex A
Summary of Terms for Director of Apollo Strategic Growth Capital II
Parties: | Company: Apollo Strategic Growth Capital II, a Cayman Islands exempted company incorporated with limited liability (the “Company”); and |
Director: Nathaniel Lipman (the “Director”).
Term: | Subject to the Director’s re-election, the Director will serve until such time that such Director’s successor is duly elected and qualified, or until such Director’s death or removal from office. |
The Director may be removed, with or without cause, at any time by the board of directors (the “Board”).
The Director will be automatically removed from the Board if such Director resigns such Director’s office by writing delivered to the Board.
Fees:One-time cash payment of $250,000, to be paid promptly following the date hereof.
If the Director resigns, other than in connection with the consummation of a “deSPAC” transaction, or is removed from the Board for cause, then the Director shall repay the Company an amount equal to (i) $250,000 minus (ii) the product of (A) $31,250 multiplied by (B) the number of full months that have elapsed from the commencement of the Director’s service on the Board through the date of such resignation or removal. Such repayment shall be made within 30 days following such resignation or removal.
CitizenshipThe Director confirms that he is a citizen of the United States.
Duties, Time andShall use reasonable best efforts to attend all convened meetings of the Board and,
Commitment: | if requested by the Board, meetings of the shareholders of the Company. |
Duties of committee members are as set forth in the committee charters and include attendance of committee meetings.
During the continuance of the Director’s appointment, the Director will be expected to:
(i) | faithfully, efficiently, competently and diligently perform the Director’s duties and exercise such powers as are appropriate to the Director’s role as a non-executive director; |
(ii) | in so far as reasonably possible, attend all meetings of the Board and of any committees of the Board of which the Director is a member; |
(iii) | promptly declare, so far as the Director is aware, the nature of any interest, whether direct or indirect, in any contract or proposed contract entered into by any member of the Company; |
(iv) | comply with all reasonable requests, instructions and regulations made or given by the Board (or by any duly authorized committee thereof) and give to the Board such explanations, information and assistance as the Board may reasonably require; |
(v) | act in the best interests of the Company; and |
(vi) | use commercially reasonable efforts to promote and extend the interests and reputation of the Company, including assisting the Board in relation to public and corporate affairs and bringing to bear for the benefit of the Board the Director’s particular knowledge and experience. |
Since the Director is classified as an independent director, the Director shall promptly inform the Board of any circumstances that would likely affect such independent status.
Miscellaneous | This letter does not create the relationship of employee and employer between the Director and the Company. |
This letter constitutes the entire agreement between the Director and the Company with respect to the subject matter hereof and supersedes any prior agreement or understanding among or between them with respect to such subject matter.
EXHIBIT 10.4
APOLLO STRATEGIC GROWTH CAPITAL II
9 West 57th Street, 42nd Floor
New York, NY 10019
Melvin Parker
9 West 57th Street, 42nd Floor
New York, NY 10019
Dear Mr. Parker,
As previously discussed, attached hereto as Annex A is a summary of the terms (the “Term Sheet”) in connection with your continued service as a director of Apollo Strategic Growth Capital II. This letter and Term Sheet memorialize our agreement and constitute a binding commitment on both parties. Please indicate your agreement with the foregoing, by signing this letter where indicated below.
| Very truly yours, | |
| | |
| | |
| APOLLO STRATEGIC GROWTH CAPITAL II | |
| | |
| | |
| By: | /s/ Sanjay Patel |
| | Name: Sanjay Patel |
| | Title: Chief Executive Officer |
Agreed to and accepted: | |
| |
| |
/s/ Melvin Parker | |
Melvin Parker | |
Dated: June 8, 2022 | |
Annex A
Summary of Terms for Director of Apollo Strategic Growth Capital II
Parties: | Company: Apollo Strategic Growth Capital II, a Cayman Islands exempted company incorporated with limited liability (the “Company”); and |
Director: Melvin Parker (the “Director”).
Term: | Subject to the Director’s re-election, the Director will serve until such time that such Director’s successor is duly elected and qualified, or until such Director’s death or removal from office. |
The Director may be removed, with or without cause, at any time by the board of directors (the “Board”).
The Director will be automatically removed from the Board if such Director resigns such Director’s office by writing delivered to the Board.
Fees:One-time cash payment of $250,000, to be paid promptly following the date hereof.
If the Director resigns, other than in connection with the consummation of a “deSPAC” transaction, or is removed from the Board for cause, then the Director shall repay the Company an amount equal to (i) $250,000 minus (ii) the product of (A) $31,250 multiplied by (B) the number of full months that have elapsed from the commencement of the Director’s service on the Board through the date of such resignation or removal. Such repayment shall be made within 30 days following such resignation or removal.
CitizenshipThe Director confirms that he is a citizen of the United States.
Duties, Time andShall use reasonable best efforts to attend all convened meetings of the Board and,
Commitment: | if requested by the Board, meetings of the shareholders of the Company. |
Duties of committee members are as set forth in the committee charters and include attendance of committee meetings.
During the continuance of the Director’s appointment, the Director will be expected to:
(i) | faithfully, efficiently, competently and diligently perform the Director’s duties and exercise such powers as are appropriate to the Director’s role as a non-executive director; |
(ii) | in so far as reasonably possible, attend all meetings of the Board and of any committees of the Board of which the Director is a member; |
(iii) | promptly declare, so far as the Director is aware, the nature of any interest, whether direct or indirect, in any contract or proposed contract entered into by any member of the Company; |
(iv) | comply with all reasonable requests, instructions and regulations made or given by the Board (or by any duly authorized committee thereof) and give to the Board such explanations, information and assistance as the Board may reasonably require; |
(v) | act in the best interests of the Company; and |
(vi) | use commercially reasonable efforts to promote and extend the interests and reputation of the Company, including assisting the Board in relation to public and corporate affairs and bringing to bear for the benefit of the Board the Director’s particular knowledge and experience. |
Since the Director is classified as an independent director, the Director shall promptly inform the Board of any circumstances that would likely affect such independent status.
Miscellaneous | This letter does not create the relationship of employee and employer between the Director and the Company. |
This letter constitutes the entire agreement between the Director and the Company with respect to the subject matter hereof and supersedes any prior agreement or understanding among or between them with respect to such subject matter.
EXHIBIT 10.5
APOLLO STRATEGIC GROWTH CAPITAL II
9 West 57th Street, 42nd Floor
New York, NY 10019
Angela Sun
9 West 57th Street, 42nd Floor
New York, NY 10019
Dear Ms. Sun,
As previously discussed, attached hereto as Annex A is a summary of the terms (the “Term Sheet”) in connection with your continued service as a director of Apollo Strategic Growth Capital II. This letter and Term Sheet memorialize our agreement and constitute a binding commitment on both parties. Please indicate your agreement with the foregoing, by signing this letter where indicated below.
| Very truly yours, | |
| | |
| | |
| APOLLO STRATEGIC GROWTH CAPITAL II | |
| | |
| | |
| By: | /s/ Sanjay Patel |
| | Name: Sanjay Patel |
| | Title: Chief Executive Officer |
Agreed to and accepted: | |
| |
| |
/s/ Angela Sun | |
Angela Sun | |
Dated: June 8, 2022 | |
Annex A
Summary of Terms for Director of Apollo Strategic Growth Capital II
Parties: | Company: Apollo Strategic Growth Capital II, a Cayman Islands exempted company incorporated with limited liability (the “Company”); and |
Director: Angela Sun (the “Director”).
Term: | Subject to the Director’s re-election, the Director will serve until such time that such Director’s successor is duly elected and qualified, or until such Director’s death or removal from office. |
The Director may be removed, with or without cause, at any time by the board of directors (the “Board”).
The Director will be automatically removed from the Board if such Director resigns such Director’s office by writing delivered to the Board.
Fees:One-time cash payment of $250,000, to be paid promptly following the date hereof.
If the Director resigns, other than in connection with the consummation of a “deSPAC” transaction, or is removed from the Board for cause, then the Director shall repay the Company an amount equal to (i) $250,000 minus (ii) the product of (A) $31,250 multiplied by (B) the number of full months that have elapsed from the commencement of the Director’s service on the Board through the date of such resignation or removal. Such repayment shall be made within 30 days following such resignation or removal.
CitizenshipThe Director confirms that she is a citizen of the United States.
Duties, Time andShall use reasonable best efforts to attend all convened meetings of the Board and,
Commitment: | if requested by the Board, meetings of the shareholders of the Company. |
Duties of committee members are as set forth in the committee charters and include attendance of committee meetings.
During the continuance of the Director’s appointment, the Director will be expected to:
(i) | faithfully, efficiently, competently and diligently perform the Director’s duties and exercise such powers as are appropriate to the Director’s role as a non-executive director; |
(ii) | in so far as reasonably possible, attend all meetings of the Board and of any committees of the Board of which the Director is a member; |
(iii) | promptly declare, so far as the Director is aware, the nature of any interest, whether direct or indirect, in any contract or proposed contract entered into by any member of the Company; |
(iv) | comply with all reasonable requests, instructions and regulations made or given by the Board (or by any duly authorized committee thereof) and give to the Board such explanations, information and assistance as the Board may reasonably require; |
(v) | act in the best interests of the Company; and |
(vi) | use commercially reasonable efforts to promote and extend the interests and reputation of the Company, including assisting the Board in relation to public and corporate affairs and |
bringing to bear for the benefit of the Board the Director’s particular knowledge and experience.
Since the Director is classified as an independent director, the Director shall promptly inform the Board of any circumstances that would likely affect such independent status.
Miscellaneous | This letter does not create the relationship of employee and employer between the Director and the Company. |
This letter constitutes the entire agreement between the Director and the Company with respect to the subject matter hereof and supersedes any prior agreement or understanding among or between them with respect to such subject matter.
EXHIBIT 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Sanjay Patel, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Apollo Strategic Growth Capital II;
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 officer(s) 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 internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and
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 my 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 officer(s) 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 control over financial reporting.
Date: August 5, 2022 | By: | /s/ Sanjay Patel |
| | Name: Sanjay Patel |
| | Title: Chief Executive Officer and Director |
EXHIBIT 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, James Crossen, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Apollo Strategic Growth Capital II;
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 officer(s) 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 internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and
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 my 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 officer(s) 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 control over financial reporting.
Date: August 5, 2022 | By: | /s/ James Crossen |
| | Name: James Crossen |
| | Title: Chief Financial Officer and Secretary |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Apollo Strategic Growth Capital II (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2022, as filed with the Securities and Exchange Commission (the “Report”), I, Sanjay Patel, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as added by §906 of the Sarbanes-Oxley Act of 2002, that:
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.
Date: August 5, 2022 | By: | /s/ Sanjay Patel |
| | Name: Sanjay Patel |
| | Title: Chief Executive Officer and Director |
* The foregoing certification is being furnished solely pursuant to 18 U.S.C. §1350 and is not being filed as part of the Report or as a separate disclosure document.
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Apollo Strategic Growth Capital II (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2022, as filed with the Securities and Exchange Commission (the “Report”), I, James Crossen, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as added by §906 of the Sarbanes-Oxley Act of 2002, that:
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.
Date: August 5, 2022 | By: | /s/ James Crossen |
| | Name: James Crossen |
| | Title: Chief Financial Officer and Secretary |
* The foregoing certification is being furnished solely pursuant to 18 U.S.C. §1350 and is not being filed as part of the Report or as a separate disclosure document.
DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN |
6 Months Ended |
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Jun. 30, 2022 | |
DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN | |
DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN | NOTE 1 — DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN Organizational and General Apollo Strategic Growth Capital II (formerly known as APH I (Sub I), Ltd.) (the “Company”) was initially incorporated in Cayman Islands on October 10, 2008 under the name of APH I (Sub I), Ltd. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Initial Business Combination”). The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). On December 23, 2020, the Company formally changed its name to Apollo Strategic Growth Capital II. At June 30, 2022, the Company had not commenced any operations. All activity for the period from October 10, 2008 through June 30, 2022 relates to the Company’s formation and the initial public offering (the “Public Offering”) described below and search for a target company. The Company will not generate any operating revenues until after completion of its Initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income on investments from the net proceeds derived from the Public Offering. Sponsor and Public Offering On February 12, 2021, the Company consummated the Public Offering of 69,000,000 units (“Units” and, with respect to the Company’s Class A ordinary shares, $0.00025 par value per share included in the Units being offered, the “Public Shares”), including the issuance of 9,000,000 Units as a result of the underwriters’ full exercise of their over-allotment option, generating gross proceeds of $690,000,000, which is described in Note 3. The Company’s sponsor is APSG Sponsor II, L.P., a Cayman Islands limited partnership (the “Sponsor”). The Company intends to finance its Initial Business Combination with proceeds from the $690,000,000 Public Offering and the $15,600,000 private placement (Note 4). Upon the closing of the Public Offering and the private placement, $690,000,000 was placed in a trust account (the “Trust Account”) (discussed below). Simultaneously to the Public Offering the Sponsor purchased an aggregate of 10,400,000 warrants (the “Private Placement Warrants”) at a purchase price of $1.50 per warrant, or approximately $15,600,000 in the aggregate, in a private placement simultaneously with the closing of the Public Offering (the “Private Placement”). The transaction costs amounted to $40,561,088 consisting of $13,800,000 of underwriting fees, $24,150,000 of deferred underwriting fees payable (which are held in the Trust Account with Continental Stock Transfer and Trust Company acting as trustee) and $1,116,690 of Public Offering costs. Of these costs $39,066,690 were charged to temporary equity upon completion of the Public Offering. In addition, $1,494,398 were allocated to the Public Warrants and Private Placement Warrants and were included in the condensed statements of operations as a component of other income/(expenses). Cash of $616,347 was held outside of the Trust Account on June 30, 2022 and is available for working capital purposes. As described in Note 6, the $24,150,000 deferred underwriting fee payable is contingent upon the consummation of an Initial Business Combination by February 12, 2023 (or by May 12, 2023 if the Company has executed a letter of intent, agreement in principle or definitive agreement for the Initial Business Combination by February 12, 2023) (the “Completion Window”). Trust Account The proceeds held in the Trust Account are invested only in U.S. government securities with a maturity of one hundred eighty (180) days or less or in money market funds that meet certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended (the “Investment Company Act”), and that invest only in direct U.S. government treasury obligations, as determined by the Company. Funds will remain in the Trust Account until the earlier of (i) the consummation of the Initial Business Combination or (ii) the distribution of the Trust Account proceeds as described below. The remaining proceeds outside the Trust Account may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. At June 30, 2022 and December 31, 2021, the proceeds of the Public Offering of $691,138,101 and $690,068,886 were held in U.S. government securities, respectively, as specified above. The Company’s fourth amended and restated memorandum and articles of association provides that, other than the withdrawal of interest to pay our tax obligations (the “Permitted Withdrawals”), and up to $100,000 of interest to pay dissolution expenses none of the funds held in the Trust Account will be released until the earliest of: (i) the completion of the Initial Business Combination; (ii) the redemption of any Public Shares sold in the Public Offering that have been properly tendered in connection with a shareholder vote to amend the Company’s fourth amended and restated memorandum and articles of association to affect the substance or timing of its obligation to redeem 100% of such Public Shares if it has not consummated an Initial Business Combination within the Completion Window; or (iii) the redemption of 100% of the Public Shares if the Company is unable to complete an Initial Business Combination within the Completion Window. The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Company’s public shareholders. Initial Business Combination The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering, although substantially all of the net proceeds of the Public Offering are intended to be generally applied toward consummating an Initial Business Combination. The Initial Business Combination must occur with one or more target businesses that together have a fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting discounts and commissions and taxes payable on interest earned on the Trust Account) at the time of the agreement to enter into the Initial Business Combination. Furthermore, there is no assurance that the Company will be able to successfully effect an Initial Business Combination. The Company, after signing a definitive agreement for an Initial Business Combination, will either (i) seek shareholder approval of the Initial Business Combination at a meeting called for such purpose in connection with which shareholders may seek to redeem their Public Shares, regardless of whether they vote for or against the Initial Business Combination, for cash equal to their pro rata share of the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Initial Business Combination, including interest not previously released to the Company to make Permitted Withdrawals or (ii) provide shareholders with the opportunity to sell their Public Shares to the Company by means of a tender offer (and thereby avoid the need for a shareholder vote) for an amount in cash equal to their pro rata share of the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Initial Business Combination, including interest not previously released to the Company to make Permitted Withdrawals. The decision as to whether the Company will seek shareholder approval of the Initial Business Combination or will allow shareholders to sell their Public Shares in a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek shareholder approval, unless a vote is required by law or under New York Stock Exchange (“NYSE”) rules. If the Company seeks shareholder approval, it will complete its Initial Business Combination only if a majority of the outstanding ordinary shares voted are voted in favor of the Initial Business Combination. In the event that the redemption of the Company’s Public Shares would cause its net tangible assets to be less than $5,000,001, the Company would not proceed with the redemption of its Public Shares. If the Company holds a shareholder vote or there is a tender offer for shares in connection with an Initial Business Combination, a shareholder will have the right to redeem his, her or its Public Shares for an amount in cash equal to his, her or its pro rata share of the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Initial Business Combination, including interest not previously released to make Permitted Withdrawals. As a result, such Public Shares are recorded at redemption amount and classified as temporary equity upon the completion of the Public Offering, in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity.” Pursuant to the Company’s fourth amended and restated memorandum and articles of association, if the Company is unable to complete the Initial Business Combination within the Completion Window, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten (10) business days thereafter subject to lawfully available funds therefor, 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 make Permitted Withdrawals (less up to $100,000 of such net interest to pay dissolution expenses and net of taxes payable), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and the Company’s board of directors (the “Board”), dissolve and liquidate, subject in each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. The Sponsor and the Company’s officers and directors have entered into a letter agreement with the Company, pursuant to which they have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares (as defined below in Note 5) held by them if the Company fails to complete the Initial Business Combination within the Completion Window. However, if the Sponsor or any of the Company’s directors, officers or affiliates acquires Class A ordinary shares in or after the Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete the Initial Business Combination within the prescribed time period. In the event of a liquidation, dissolution or winding up of the Company after an Initial Business Combination, the Company’s shareholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of ordinary share, if any, having preference over the ordinary shares. The Company’s shareholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the ordinary shares, except that the Company will provide its shareholders with the opportunity to redeem their Public Shares for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account, upon the completion of the Initial Business Combination, subject to the limitations described herein. Going Concern Considerations, Liquidity and Capital Resources As of June 30, 2022, we had investments held in the Trust Account of $691,138,101 principally invested in U.S. government securities. Interest income on the balance in the Trust Account may be used by us to pay taxes, and to pay up to $100,000 of any dissolution expenses. The Company does not have sufficient liquidity to meet its anticipated obligations over the next year from the date of issuance of these unaudited condensed financial statements. In connection with the Company’s assessment of going concern considerations in accordance with Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that if the Company is unsuccessful in consummating an Initial Business Combination, the mandatory liquidation and subsequent dissolution along with the liquidity concerns raise substantial doubt about the ability to continue as a going concern. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of these uncertainties. Management has determined that the Company has access to funds from the Sponsor that are sufficient to fund the working capital needs of the Company until a potential business combination or up to the mandatory liquidation as stipulated in the Company’s amended and restated memorandum and articles of association. The accompanying unaudited condensed financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern. The Company intends to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account, excluding the deferred underwriting commissions, to complete its Initial Business Combination. To the extent that capital stock or debt is used, in whole or in part, as consideration to complete the Initial Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue growth strategies. If an Initial Business Combination agreement requires the Company to use a portion of the cash in the Trust Account to pay the purchase price or requires the Company to have a minimum amount of cash at closing, the Company will need to reserve a portion of the cash in the Trust Account to meet such requirements or arrange for third-party financing. The Company is required to complete an Initial Business Combination within the Completion Window. If the Company is unable to complete an Initial Business Combination within this Completion Window, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten (10) business days thereafter, and subject to having lawfully available funds therefor, 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 Trust Account deposits (which interest shall be net of taxes payable and less up to $100,000 to pay dissolution expenses), divided by the number of then-outstanding Public Shares, which redemption will completely extinguish the public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and the Board dissolve and liquidate, subject in each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. The underwriters have agreed to waive their rights to their deferred underwriting commissions held in the Trust Account in the event the Company does not complete an Initial Business Combination within the Completion Window 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 Public Shares. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed financial statements are presented in conformity with GAAP and pursuant to the rules and regulations of the SEC. Certain information and note disclosures normally included in the unaudited financial statements prepared in accordance with GAAP have been condensed. As such, except as disclosed herein, the information included in these unaudited condensed financial statements should be read in conjunction with the audited condensed financial statements as of December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 17, 2022. In the opinion of the Company’s management, these unaudited condensed financial statements include all adjustments, which are only of a normal and recurring nature, necessary for a fair statement of the Company’s financial position as of June 30, 2022 and the Company’s results of operations and cash flows for the periods presented. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the full year ending December 31, 2022 or any future period. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s condensed financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of unaudited condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. 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. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times, may exceed the Federal Deposit Insurance Corporation coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. Investments Held in Trust Account The Company’s portfolio of investments held in the Trust Account is comprised of cash and U.S. treasury bills, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less. The Company’s investments held in the Trust Account are classified as trading securities. Trading securities 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 investments are included in net gain from investments held in Trust Account in the accompanying condensed statement of operations. The estimated fair values of investments held in the Trust Account are determined using available market information. Offering Costs associated with a Public Offering The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering.” Offering costs of $1,116,690 consist principally of costs incurred in connection with formation and preparation for the Public Offering. These costs, together with the underwriter discount of $37,950,000, were charged to temporary equity upon completion of the Public Offering. Of these costs amounts allocated to the Public Warrants and Private Placement Warrants totaling $1,494,398 were included in the condensed statement of operations as a component of other income/(expenses). 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 480, “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption are classified as liability instruments and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that features 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, 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 occurrence of uncertain future events. Accordingly, at June 30, 2022 and December 31, 2021, 69,000,000 Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ equity section of the Company’s condensed balance sheets. Effective with the closing of the Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable Class A ordinary shares resulted in charges against additional paid-in capital and accumulated deficit. At June 30, 2022 and December 31, 2021, the Class A ordinary shares reflected in the condensed balance sheets are reconciled in the following table:
Income Taxes ASC 740, “Income Taxes,” prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. There were no unrecognized tax benefits as of June 30, 2022 and December 31, 2021. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. 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 income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s unaudited condensed financial statements. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. Net Income (Loss) per Ordinary Share The Company complies with accounting and disclosure requirements of ASC 260, “Earnings Per Share.” Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. Accretion associated with the redeemable Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. As of June 30, 2022 and December 31, 2021, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted net loss per ordinary share is the same as basic net loss per ordinary share for the periods presented. The following table reflects the calculation of basic and diluted net income (loss) per ordinary share for the three and six months ended June 30, 2022 and 2021:
Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC 815, “Derivatives and Hedging.” The Company’s derivative instruments are recorded at fair value as of the Public Offering (February 12, 2021) and re-valued at each reporting date, with changes in the fair value reported in the condensed statements of operations. Derivative assets and liabilities are classified on the condensed balance sheets as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The Company has determined the Warrants are a derivative instrument. As the Warrants meet the definition of a derivative the Warrants are measured at fair value at issuance and at each reporting date in accordance with ASC 820, “Fair Value Measurement,” with changes in fair value recognized in the statement of operations in the period of change. Warrant Instruments The Company accounts for the Warrants issued in connection with the Public Offering and Private Placement in accordance with the guidance contained in ASC 815, “Derivatives and Hedging,” whereby under that provision the Warrants do not meet the criteria for equity treatment and must be recorded as a liability. Accordingly, the Company classifies the Warrants as a liability at fair value and adjust the instrument to fair value at each reporting period. This liability will be re-measured at each balance sheet date until the Warrants are exercised or expire, and any change in fair value will be recognized in the Company’s statement of operations. Upon consummation of the Public Offering, the fair value of Warrants were estimated using a Monte Carlo simulation for the Public Warrants and a modified Black-Scholes model for the Private Placement Warrants. The valuation model utilizes inputs and other assumptions and may not be reflective of the price at which they can be settled. Such Warrant classification is also subject to re-evaluation at each reporting period. As of June 30, 2022 and December 31, 2021, the Public Warrants were valued using the publicly available price for the Warrants and are classified as Level 1 on the fair value hierarchy. As of June 30, 2022 and December 31, 2021, the Company used a modified Black-Scholes model to value the Private Placement Warrants and are classified as Level 3 on the fair value hierarchy. Fair Value Measurements Fair value is defined as the price that would be received for sale of an asset or paid to 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 include: 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. As of June 30, 2022 and December 31, 2021, the carrying values of cash, prepaid expenses, deferred offering costs, accounts payable and accrued offering costs, and notes payable approximate their fair values primarily due to the short-term nature of the instruments, except for the derivative warrant liability (see Note 9). The Company’s investments held in Trust Account are comprised of investments in U.S. Treasury securities with an original maturity of 185 days or less or investments in money market funds that comprise only U.S. treasury securities and are recognized at fair value. Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements. |
INITIAL PUBLIC OFFERING |
6 Months Ended |
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Jun. 30, 2022 | |
INITIAL PUBLIC OFFERING. | |
INITIAL PUBLIC OFFERING | NOTE 3 — INITIAL PUBLIC OFFERING Pursuant to the Public Offering, the Company sold 69,000,000 Units at a purchase price of $10.00 per Unit, including the issuance of 9,000,000 Units as a result of the underwriters’ full exercise of their over-allotment option, generating gross proceeds to the Company in the amount of $690,000,000. Each Unit consists of one share of the Company’s Class A ordinary shares, par value $0.00025 per share (the “Class A ordinary shares”), and -fifth of one redeemable warrant of the Company (each whole warrant, a “Public Warrant”), with each Public Warrant entitling the holder thereof to purchase one whole Class A ordinary share at a price of $11.50 per share, subject to adjustment. |
PRIVATE PLACEMENT |
6 Months Ended |
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Jun. 30, 2022 | |
PRIVATE PLACEMENT. | |
PRIVATE PLACEMENT | NOTE 4 — PRIVATE PLACEMENT Simultaneously with the closing of the Public Offering, the Company consummated the Private Placement of an aggregate of 10,400,000 Private Placement Warrants to the Sponsor at a purchase price of $1.50 per Private Placement Warrant, generating gross proceeds to the Company in the amount of $15,600,000. A portion of the proceeds from the Private Placement Warrants was added to the proceeds from the Public Offering held in the Trust Account. If the Company does not complete an Initial Business Combination within the Completion Window, the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will be worthless. 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 PARTIES |
6 Months Ended |
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Jun. 30, 2022 | |
RELATED PARTIES | |
RELATED PARTIES | NOTE 5 — RELATED PARTIES Founder Shares In October 2008, the Company was formed by Apollo Principal Holdings III, L.P. (“Holdings”), at which point, one ordinary share was issued in exchange for the payment of operating and formation expenses of the Company. In December 2020, Holdings transferred its ownership in the Company, consisting of one ordinary share, to the Sponsor for no consideration. On December 23, 2020, the Company completed a share split of its ordinary shares and, as a result, 11,500,000 shares of the Company’s Class B ordinary shares, par value $0.0000625 per share, were outstanding (the “Founder Shares”). In February 2021, the Company subdivided its authorized and outstanding Founder Shares, resulting in 17,250,000 shares of the Company’s Class B ordinary shares outstanding. The share amounts have been retroactively restated to account for the share split. The Founder Shares represent 20.0% of the Company’s issued and outstanding shares. The Founder Shares are identical to the Class A ordinary shares included in the Units sold in the Public Offering except that the Founder Shares are Class B ordinary shares which automatically convert into Class A ordinary shares at the time of the Company’s Initial Business Combination and are subject to certain transfer restrictions, as described in more detail below. The number of Founder Shares issued in the share split was determined based on the expectation that the total size of the Public Offering would be a maximum of 69,000,000 Units if the underwriters’ over-allotment option was exercised in full, and therefore that such Founder Shares would represent 20% of the issued and outstanding ordinary shares after the Public Offering. The holders of the Founder Shares agreed, subject to limited exceptions, 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 or (B) subsequent to the Initial Business Combination, (x) if the last sale price of the Company’s Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the Company’s shareholders having the right to exchange their ordinary shares for cash, securities or other property. In January 2020, 25,000 Founder Shares were purchased by each of our three independent directors at a purchase price of $0.002174 per share. The independent directors paid $163.05 in the aggregate for 75,000 shares. On February 3, 2021, our Sponsor surrendered 8,550,000 Founder Shares to continue to hold 14,300,000 Founder Shares and each of our independent directors surrendered 25,000 Founder Shares to continue to hold 25,000 Founder Shares. On February 12, 2021, the Company also subdivided our authorized and outstanding Founder Shares and the Sponsor surrendered 11,425,000 Founder Shares to continue to hold 17,175,000 Founder Shares while each of our independent directors surrendered 25,000 Founder Shares to continue to hold 25,000 shares. In June 2022, each of our three independent directors sold 25,000 Founder Shares to our Sponsor at a purchase price of $0.002174 per share. Our Sponsor paid $163.05 in the aggregate for 75,000 shares. As a result, our Sponsor currently holds 17,250,000 shares while our independent directors no longer holder any Founder Shares. Related Party Loans On December 28, 2020, the Sponsor agreed to loan the Company an aggregate of up to $750,000 to cover expenses related to the proposed Public Offering pursuant to an unsecured promissory note (the “Promissory Note”). This Promissory Note bore interest at a rate of 0.15% per annum and was payable on September 30, 2021. The Company had not borrowed on the Promissory Note and the Promissory Note expired upon the closing of the Public Offering on February 12, 2021. On March 1, 2021, the Sponsor agreed to loan the Company an aggregate of up to $1,500,000 to cover expenses related to the Public Offering pursuant to an unsecured promissory note (the “March Note”). The March Note bears interest at a rate of 0.11% per annum and is payable on the date of an Initial Business Combination or the liquidation of the Company. As of June 30, 2022 and December 31, 2021, the outstanding balance under the March Note was $1,500,000. Up to $1,500,000 of the March Note may be convertible into warrants identical to the Private Placement Warrants at a price of $1.50 per warrant at the option of the Sponsor. On September 14, 2021, the Sponsor executed an unsecured promissory note (the “September Note”) to loan the Company an aggregate principal amount of $1,500,000. The September Note bears interest at a rate of 0.17% per annum and is payable on the earlier of an Initial Business Combination or the liquidation of the Company. As of June 30, 2022 and December 31, 2021, the outstanding balance on the September Note was $1,500,000. On May 9, 2022, the Sponsor executed an unsecured promissory note (the "May Note") to loan the Company an aggregate principal amount of $1,000,000. The May Note bears interest at a rate of 1.40% per annum and is payable on the earlier of an Initial Business Combination or the liquidation of the Company. As of June 30, 2022, the outstanding balance on the May Note was $1,000,000. On June 8, 2022, the Sponsor executed an unsecured promissory note (the "June Note") to loan the Company an aggregate principal amount of $1,000,000. The June Note bears interest at a rate of 1.68% per annum and is payable on the earlier of an Initial Business Combination or the liquidation of the Company. As of June 30, 2022, the outstanding balance on the June Note was $1,000,000. Working Capital Loans In order to finance transaction costs in connection with an Initial 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 an Initial Business Combination, the Company will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of the funds held outside the Trust Account. In the event that an Initial Business Combination does not close, the Company may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of an Initial Business Combination or, at the lenders’ discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants. The Company did not have any outstanding balance on the Working Capital Loans as of June 30, 2022 and 2021. Advances from Related Parties Affiliates of the Sponsor paid certain administrative expenses and offering costs on behalf of the Company. These advances are due on demand and are non-interest bearing. From time to time, the related parties pay operating costs and other expenses on behalf of the Company. During the three months ended June 30, 2022 and 2021, the related parties paid no offering costs and other expenses on behalf of the Company. During the six months ended June 30, 2022 and 2021, the related parties paid $0 and $248,921 of offering costs and other expenses on behalf of the Company, respectively. As of June 30, 2022 and December 31, 2021, there was $0 due to the related parties. Administrative Service Fee Commencing on the date the Units were first listed on the NYSE, the Company entered into an agreement with the Sponsor and has agreed to pay the Sponsor a total of $16,667 per month for office space, utilities and secretarial and administrative support for up to 27 months. Upon completion of the Initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. During the three months ended June 30, 2022 and 2021, the Company recorded $50,001 pursuant to this agreement. During the six months ended June 30, 2022 and 2021, the Company recorded $100,002 and $76,787 pursuant to this agreement, respectively. |
COMMITMENTS AND CONTINGENCIES |
6 Months Ended |
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Jun. 30, 2022 | |
COMMITMENTS AND CONTINGENCIES. | |
COMMITMENTS AND CONTINGENCIES | NOTE 6 — COMMITMENTS AND CONTINGENCIES Risks and Uncertainties Management continues to evaluate the impact of the COVID-19 pandemic and the conflict in Ukraine and the surrounding region, and has concluded that while it is reasonably possible that these risks and uncertainties could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these unaudited condensed financial statements. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of these uncertainties. Registration Rights The holders of the Founder Shares, Private Placement Warrants and Public Warrants that may be issued upon conversion of Working Capital Loans, if any, (and any Class A ordinary shares issuable upon the exercise of the Public Warrants and Private Placement Warrants that may be issued upon conversion of Working Capital Loans) are entitled to registration rights pursuant to a registration rights agreement. The holders of these securities are entitled to demand that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of an Initial Business Combination. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period. 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 30-day option from the date of the final prospectus to purchase up to 9,000,000 additional Units to cover over-allotments, if any, at the Public Offering price less the underwriting discounts and commissions. The underwriters elected to exercise the over-allotment at closing. Upon the closing of the IPO and the full over-allotment, the underwriters were entitled to an underwriting discount of $0.20 per unit, or $13,800,000, after the underwriters’ exercised their over-allotment option in full, which was paid in the aggregate upon the closing of the Public Offering. In addition, the underwriters are entitled to an underwriting discount of $0.35 per unit, or $24,150,000 in the aggregate, for deferred underwriting commissions. The deferred fee becomes payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes an Initial Business Combination, subject to the terms of the underwriting agreement for the offering. |
SHAREHOLDERS' DEFICIT |
6 Months Ended |
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Jun. 30, 2022 | |
SHAREHOLDERS' DEFICIT | |
SHAREHOLDERS' DEFICIT | NOTE 7 — SHAREHOLDERS’ DEFICIT Preferred Shares The Company is authorized to issue 1,000,000 preferred shares with a par value of $0.00025 per share with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of June 30, 2022 and December 31, 2021, there were no preferred shares issued or outstanding. Ordinary Shares The authorized ordinary shares of the Company include up to 180,000,000 Class A ordinary shares and 46,000,000 Class B ordinary shares. If the Company enters into an Initial Business Combination, it may (depending on the terms of such an Initial Business Combination) be required to increase the number of Class A ordinary shares which the Company is authorized to issue at the same time as the Company’s shareholders vote on the Initial Business Combination to the extent the Company seeks shareholder approval in connection with the Initial Business Combination. Holders of the Company’s ordinary shares are entitled to one vote for each ordinary share. As of June 30, 2022 and December 31, 2021, there were 69,000,000 Class A ordinary shares subject to possible redemption that were classified as temporary equity in the accompanying condensed balance sheets. The Class B ordinary shares will automatically convert into our Class A ordinary shares at the time of completion of our Initial Business Combination on a one-for-one basis, subject to adjustment for share splits, dividends, reorganizations, recapitalizations and the like and subject to further adjustment as provided herein. In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts sold in the Public Offering and related to the closing of the Initial Business Combination, the ratio at which Class B ordinary shares will convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the outstanding Class B ordinary shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all ordinary shares outstanding upon the completion of the Public Offering plus all Class A ordinary shares and equity-linked securities issued or deemed issued in connection with the Initial Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the business combination). As of June 30, 2022 and December 31, 2021, there were 17,250,000 Class B ordinary shares issued and outstanding. |
WARRANTS |
6 Months Ended | ||||||||||||
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Jun. 30, 2022 | |||||||||||||
WARRANTS. | |||||||||||||
WARRANTS | NOTE 8 — WARRANTS Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of an Initial Business Combination or (b) 12 months from the closing of the Public Offering; provided in each case that the Company has an effective registration statement under the Securities Act covering the ordinary shares issuable upon exercise of the Public Warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their Public Warrants on a cashless basis and such cashless exercise is exempt from registration under the Securities Act). The Company has agreed that as soon as practicable, but in no event later than fifteen (15) business days after the closing of an Initial Business Combination, the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the ordinary shares issuable upon exercise of the Public Warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in accordance with the provisions of the warrant agreement. Notwithstanding the foregoing, if the Company’s ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under the Securities Act, the Company, at its option, may 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, the Company will not be required to file or maintain in effect a registration statement. The Public Warrants will expire five years after the completion of an Initial Business Combination or earlier upon the Company’s redemption or liquidation. The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants and the ordinary shares issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of an Initial Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be non-redeemable so long as they are held by the initial purchasers or such purchasers’ permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The Company may redeem the Public Warrants:
If, and only if, there is a current registration statement in effect with respect to the ordinary shares underlying such warrants at the time of redemption and a current prospectus relating to those ordinary shares is available throughout the 30-day trading period referred to above. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of the ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete an Initial Business Combination within the Completion Window 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. The Company accounts for the 24,200,000 warrants issued in connection with the Public Offering and concurrent Private Placement (including 13,800,000 Public Warrants and 10,400,000 Private Placement Warrants) in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Upon issuance of the derivative warrants the Company recorded a liability of $22,527,182 on the balance sheet. The accounting treatment of derivative financial instruments requires that the Company record a derivative liability upon the closing of the Public Offering. Accordingly, the Company classifies each warrant as a liability at its fair value and the warrants will be allocated a portion of the proceeds from the issuance of the Units equal to its fair value determined by the Monte Carlo simulation up until separation for the Public Warrants (subsequent to separation, the Public Warrants are valued using the publicly available trading price) and a modified Black-Scholes model for the Private Placement Warrants. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s condensed statements of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification. |
FAIR VALUE MEASUREMENTS |
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FAIR VALUE MEASUREMENTS | NOTE 9 — FAIR VALUE MEASUREMENTS The Company follows the guidance in ASC 820, “Fair Value Measurement,” for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. 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:
The following table presents information about the Company’s assets and liabilities that are measured at fair value 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:
The Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within liabilities on the 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. Upon consummation of the Public Offering, the Company used a Monte Carlo simulation model to value the Public Warrants and a modified Black-Scholes model to value the Private Placement Warrants. At the initial measurement date, the Warrants were classified within Level 3 of the fair value hierarchy at the measurement dates due to the use of unobservable inputs. As of June 30, 2022 and December 31, 2021, the Public Warrants were valued using the publicly available price for the Warrant and are classified as Level 1 on the fair value hierarchy. At June 30, 2022 and December 31, 2021, the Company used a modified Black-Scholes model to value the Private Placement Warrants. The Company relied upon the implied volatility of the Public Warrants and the closing stock price to estimate the volatility for the Private Placement Warrants. At June 30, 2022 and December 31, 2021, the Private Placement Warrants were classified within Level 3 of the fair value hierarchy at the measurement dates due to the use of unobservable inputs. The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three and six months ended June 30, 2022 and 2021:
As of June 30, 2022 and December 31, 2021, the fair value of the derivative feature of the Private Placement Warrants was calculated using the following weighted average assumptions:
As of June 30, 2022 and December 31, 2021, the derivative liability was $6,075,125 and $23,021,469, respectively. In addition, for the three months ended June 30, 2022 and 2021, the Company recorded $7,983,595 and $1,730,880, respectively, as a gain on the change in fair value of the derivative warrants on the condensed statements of operations. For the six months ended June 30, 2022 and 2021, the Company recorded $16,946,344 and $11,172,940, respectively, as a gain on the change in fair value of the derivative warrants on the condensed statements of operations. Upon issuance of the Private Placement Warrants, the Company recorded a loss of $4,680,000 for the excess fair value of the over the proceeds received from the sale of the Private Placement Warrants which is included in the change in fair value of the derivative liabilities on the condensed statements of operations. |
SUBSEQUENT EVENTS |
6 Months Ended |
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Jun. 30, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 10 — SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the condensed balance sheet date through the date that the 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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed financial statements are presented in conformity with GAAP and pursuant to the rules and regulations of the SEC. Certain information and note disclosures normally included in the unaudited financial statements prepared in accordance with GAAP have been condensed. As such, except as disclosed herein, the information included in these unaudited condensed financial statements should be read in conjunction with the audited condensed financial statements as of December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 17, 2022. In the opinion of the Company’s management, these unaudited condensed financial statements include all adjustments, which are only of a normal and recurring nature, necessary for a fair statement of the Company’s financial position as of June 30, 2022 and the Company’s results of operations and cash flows for the periods presented. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the full year ending December 31, 2022 or any future period. |
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Emerging Growth Company | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s condensed financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. |
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Use of Estimates | Use of Estimates The preparation of unaudited condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. 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. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. |
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Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times, may exceed the Federal Deposit Insurance Corporation coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. |
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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 cash and U.S. treasury bills, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less. The Company’s investments held in the Trust Account are classified as trading securities. Trading securities 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 investments are included in net gain from investments held in Trust Account in the accompanying condensed statement of operations. The estimated fair values of investments held in the Trust Account are determined using available market information. |
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Offering Costs associated with a Public Offering | Offering Costs associated with a Public Offering The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering.” Offering costs of $1,116,690 consist principally of costs incurred in connection with formation and preparation for the Public Offering. These costs, together with the underwriter discount of $37,950,000, were charged to temporary equity upon completion of the Public Offering. Of these costs amounts allocated to the Public Warrants and Private Placement Warrants totaling $1,494,398 were included in the condensed statement of operations as a component of other income/(expenses). |
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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 480, “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption are classified as liability instruments and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that features 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, 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 occurrence of uncertain future events. Accordingly, at June 30, 2022 and December 31, 2021, 69,000,000 Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ equity section of the Company’s condensed balance sheets. Effective with the closing of the Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable Class A ordinary shares resulted in charges against additional paid-in capital and accumulated deficit. At June 30, 2022 and December 31, 2021, the Class A ordinary shares reflected in the condensed balance sheets are reconciled in the following table:
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Income Taxes | Income Taxes ASC 740, “Income Taxes,” prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. There were no unrecognized tax benefits as of June 30, 2022 and December 31, 2021. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. 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 income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s unaudited condensed financial statements. 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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Net Income (Loss) per Ordinary Share | Net Income (Loss) per Ordinary Share The Company complies with accounting and disclosure requirements of ASC 260, “Earnings Per Share.” Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. Accretion associated with the redeemable Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. As of June 30, 2022 and December 31, 2021, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted net loss per ordinary share is the same as basic net loss per ordinary share for the periods presented. The following table reflects the calculation of basic and diluted net income (loss) per ordinary share for the three and six months ended June 30, 2022 and 2021:
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Derivative Financial Instruments | Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC 815, “Derivatives and Hedging.” The Company’s derivative instruments are recorded at fair value as of the Public Offering (February 12, 2021) and re-valued at each reporting date, with changes in the fair value reported in the condensed statements of operations. Derivative assets and liabilities are classified on the condensed balance sheets as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The Company has determined the Warrants are a derivative instrument. As the Warrants meet the definition of a derivative the Warrants are measured at fair value at issuance and at each reporting date in accordance with ASC 820, “Fair Value Measurement,” with changes in fair value recognized in the statement of operations in the period of change. |
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Warrant Instruments | Warrant Instruments The Company accounts for the Warrants issued in connection with the Public Offering and Private Placement in accordance with the guidance contained in ASC 815, “Derivatives and Hedging,” whereby under that provision the Warrants do not meet the criteria for equity treatment and must be recorded as a liability. Accordingly, the Company classifies the Warrants as a liability at fair value and adjust the instrument to fair value at each reporting period. This liability will be re-measured at each balance sheet date until the Warrants are exercised or expire, and any change in fair value will be recognized in the Company’s statement of operations. Upon consummation of the Public Offering, the fair value of Warrants were estimated using a Monte Carlo simulation for the Public Warrants and a modified Black-Scholes model for the Private Placement Warrants. The valuation model utilizes inputs and other assumptions and may not be reflective of the price at which they can be settled. Such Warrant classification is also subject to re-evaluation at each reporting period. As of June 30, 2022 and December 31, 2021, the Public Warrants were valued using the publicly available price for the Warrants and are classified as Level 1 on the fair value hierarchy. As of June 30, 2022 and December 31, 2021, the Company used a modified Black-Scholes model to value the Private Placement Warrants and are classified as Level 3 on the fair value hierarchy. |
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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 to 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 include: 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. As of June 30, 2022 and December 31, 2021, the carrying values of cash, prepaid expenses, deferred offering costs, accounts payable and accrued offering costs, and notes payable approximate their fair values primarily due to the short-term nature of the instruments, except for the derivative warrant liability (see Note 9). The Company’s investments held in Trust Account are comprised of investments in U.S. Treasury securities with an original maturity of 185 days or less or investments in money market funds that comprise only U.S. treasury securities and are recognized at fair value. |
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Recent Accounting Standards | Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of reconciliation of common stock subject to possible redemption | At June 30, 2022 and December 31, 2021, the Class A ordinary shares reflected in the condensed balance sheets are reconciled in the following table:
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Reconciliation of net income per ordinary share | The following table reflects the calculation of basic and diluted net income (loss) per ordinary share for the three and six months ended June 30, 2022 and 2021:
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FAIR VALUE MEASUREMENTS (Tables) |
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Schedule of Company's assets and liabilities that are measured at fair value on a recurring basis | The following table presents information about the Company’s assets and liabilities that are measured at fair value 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:
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Schedule of the changes in fair value, including net transfers in all financial assets and liabilities | The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three and six months ended June 30, 2022 and 2021:
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Schedule of the fair value of the derivative feature of the private placement warrants | As of June 30, 2022 and December 31, 2021, the fair value of the derivative feature of the Private Placement Warrants was calculated using the following weighted average assumptions:
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DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN - Trust Account (Details) |
6 Months Ended | |
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Jun. 30, 2022
USD ($)
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Dec. 31, 2021
USD ($)
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Trust Account | ||
Marketable securities held in Trust Account | $ 691,138,101 | $ 690,068,886 |
Maximum amount of interest income which may be used for payment of dissolution expenses | $ 100,000 | |
Condition for future business combination use of proceeds percentage | 100 | |
Condition for future business combination threshold Percentage Ownership | 100 | |
US Government Securities | ||
Trust Account | ||
Marketable securities held in Trust Account | $ 691,138,101 | $ 690,068,886 |
DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN - Initial Business Combination (Details) |
6 Months Ended |
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Jun. 30, 2022
USD ($)
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Initial Business Combination | |
Redemption Limit Percentage Without Prior Consent | 80 |
Condition for future business combination threshold Net Tangible Assets | $ 5,000,001 |
Maximum amount of interest income which may be used for payment of dissolution expenses | $ 100,000 |
DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN - Going Concern (Details) - USD ($) |
6 Months Ended | |
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Jun. 30, 2022 |
Dec. 31, 2021 |
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Going Concern Considerations, Liquidity and Capital Resources | ||
Marketable securities held in Trust Account | $ 691,138,101 | $ 690,068,886 |
Maximum amount of interest income which may be used for payment of dissolution expenses | 100,000 | |
US Government Securities | ||
Going Concern Considerations, Liquidity and Capital Resources | ||
Marketable securities held in Trust Account | $ 691,138,101 | $ 690,068,886 |
INITIAL PUBLIC OFFERING (Details) - USD ($) |
Feb. 12, 2021 |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Class A ordinary shares not subject to possible redemption | |||
INITIAL PUBLIC OFFERING | |||
Ordinary shares, par value, (in dollars per share) | $ 0.00025 | $ 0.00025 | |
Initial Public Offering, including Over-Allotment Option | |||
INITIAL PUBLIC OFFERING | |||
Proceeds from issuance initial public offering | $ 690,000,000 | ||
Initial Public Offering | |||
INITIAL PUBLIC OFFERING | |||
Number of units issued | 69,000,000 | ||
Purchase price, per unit | $ 10.00 | ||
Initial Public Offering | Public Warrants | |||
INITIAL PUBLIC OFFERING | |||
Number of warrants in a unit | 0.2 | ||
Number of shares issuable per warrant | 1 | ||
Exercise price of warrants | $ 11.50 | ||
Initial Public Offering | Class A ordinary shares not subject to possible redemption | |||
INITIAL PUBLIC OFFERING | |||
Ordinary shares, par value, (in dollars per share) | $ 0.00025 | ||
Over-allotment option | |||
INITIAL PUBLIC OFFERING | |||
Number of units issued | 9,000,000 | ||
Number of shares in a unit | 9,000,000 |
PRIVATE PLACEMENT (Details) - USD ($) |
6 Months Ended | |
---|---|---|
Feb. 12, 2021 |
Jun. 30, 2021 |
|
PRIVATE PLACEMENT | ||
Number of warrants to purchase shares issued | 24,200,000 | |
Aggregate purchase price | $ 15,600,000 | |
Private Placement Warrants | ||
PRIVATE PLACEMENT | ||
Number of warrants to purchase shares issued | 10,400,000 | |
Private Placement | ||
PRIVATE PLACEMENT | ||
Aggregate purchase price | $ 15,600,000 | |
Private Placement | Private Placement Warrants | ||
PRIVATE PLACEMENT | ||
Number of warrants to purchase shares issued | 10,400,000 | |
Price of warrants | $ 1.50 |
RELATED PARTIES - Additional Information (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Feb. 12, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
|
Advances From Related Parties | ||||||
RELATED PARTIES | ||||||
Offering costs and other expenses paid by a related party on behalf of the Company | $ 0 | $ 0 | $ 0 | $ 248,921 | ||
Due to Related Parties | 0 | 0 | $ 0 | |||
Administrative Services Agreement | Sponsor. | ||||||
RELATED PARTIES | ||||||
Monthly expenses | $ 16,667 | |||||
Term of administrative services agreement | 27 months | |||||
Expenses incurred | $ 50,001 | $ 50,001 | $ 100,002 | $ 76,787 |
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) |
6 Months Ended | |
---|---|---|
Feb. 12, 2021 |
Jun. 30, 2022 |
|
Additional underwriter's option after exercise of full over-allotment | ||
COMMITMENTS AND CONTINGENCIES | ||
Deferred fee per unit | $ 0.35 | |
Aggregate deferred underwriting fee payable | $ 24,150,000 | |
Over-allotment option | ||
COMMITMENTS AND CONTINGENCIES | ||
Underwriter option period (in days) | 30 days | |
Number of units issued | 9,000,000 | |
Initial Public Offering | ||
COMMITMENTS AND CONTINGENCIES | ||
Number of units issued | 69,000,000 | |
Underwriting cash discount per unit | $ 0.20 | |
Aggregate underwriter cash discount | $ 13,800,000 |
SHAREHOLDERS' DEFICIT - Preferred Stock Shares (Details) - $ / shares |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
SHAREHOLDERS' DEFICIT | ||
Preference stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, par value, (per share) | $ 0.00025 | $ 0.00025 |
Preferred shares, shares issued | 0 | 0 |
Preferred shares, shares outstanding | 0 | 0 |
SHAREHOLDERS' DEFICIT - Ordinary Shares (Details) |
Jun. 30, 2022
Vote
shares
|
Dec. 31, 2021
shares
|
---|---|---|
SHAREHOLDERS' EQUITY | ||
Ordinary shares, votes per share | Vote | 1 | |
Converted basis of ordinary shares outstanding | 20.00% | |
Class A ordinary shares subject to possible redemption | ||
SHAREHOLDERS' EQUITY | ||
Class A common stock subject to possible redemption, outstanding (in shares) | 69,000,000 | 69,000,000 |
Class A ordinary shares not subject to possible redemption | ||
SHAREHOLDERS' EQUITY | ||
Ordinary shares, shares authorized | 180,000,000 | 180,000,000 |
Ordinary shares, shares issued | 0 | 0 |
Ordinary shares, shares outstanding | 0 | 0 |
Class B ordinary shares | ||
SHAREHOLDERS' EQUITY | ||
Ordinary shares, shares authorized | 46,000,000 | 46,000,000 |
Ordinary shares, shares issued | 17,250,000 | 17,250,000 |
Ordinary shares, shares outstanding | 17,250,000 | 17,250,000 |
WARRANTS (Details) - USD ($) |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2022 |
Dec. 31, 2021 |
Feb. 12, 2021 |
|
WARRANTS | |||
Public Warrants exercisable term from the closing of the initial public offering | 12 months | ||
Public Warrants Expire | 30 days | ||
Number of warrants to purchase shares issued | 24,200,000 | ||
Derivative warrant liability | $ 6,075,125 | $ 23,021,469 | $ 22,527,182 |
Weighted average trading days | 20 days | ||
Ordinary shares exercisable | $ 18.00 | ||
Minimum | |||
WARRANTS | |||
Weighted average trading days | 30 days | ||
Public Warrants | |||
WARRANTS | |||
Public Warrants exercisable term after the completion of a business combination | 30 days | ||
Threshold period for filling registration statement after business combination | 15 days | ||
Public Warrants Expire | 5 years | ||
Redemption price of warrants | $ 0.01 | ||
Number of warrants to purchase shares issued | 13,800,000 | ||
Private Placement Warrants | |||
WARRANTS | |||
Number of warrants to purchase shares issued | 10,400,000 |
FAIR VALUE MEASUREMENTS - Fair value hierarchy (Details) - USD ($) |
Jun. 30, 2022 |
Dec. 31, 2021 |
Feb. 12, 2021 |
---|---|---|---|
Liabilities: | |||
Warrant Liability | $ 6,075,125 | $ 23,021,469 | $ 22,527,182 |
Recurring | Level 1 | |||
Assets: | |||
Marketable securities held in Trust Account | 691,138,101 | 690,068,886 | |
Recurring | Level 1 | Public Warrants | |||
Liabilities: | |||
Warrant Liability | 3,450,000 | 13,110,000 | |
Recurring | Level 3 | Private Placement Warrants | |||
Liabilities: | |||
Warrant Liability | $ 2,625,125 | $ 9,911,469 |
FAIR VALUE MEASUREMENTS - Change in the Fair Value of the Warrant Liabilities (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Changes in fair value | ||||
Fair Value, Net Derivative Asset (Liability), Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Fair Value Adjustment of Warrants | Fair Value Adjustment of Warrants | ||
Level 3 | ||||
Changes in fair value | ||||
Beginning Balance | $ 6,054,720 | $ 32,470,400 | $ 9,911,469 | |
Transfer to Level 1 | (17,388,000) | $ (17,388,000) | ||
Change in fair value of derivative warrants | (3,429,595) | (1,730,880) | (7,286,344) | (15,852,940) |
Derivative liabilities recorded on issuance of derivative warrants | 46,592,460 | |||
Ending Balance | $ 2,625,125 | $ 13,351,520 | $ 2,625,125 | $ 13,351,520 |
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