References to the "Company," "us," "our" or "we" refer to Class Acceleration Corp. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed financial statements and related notes included herein.

Cautionary Note Regarding Forward-Looking Statements

All statements other than statements of historical fact included in this Report including, without limitation, statements under 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. When used in this Report, words such as "anticipate," "believe," "estimate," "expect," "intend" and similar expressions, as they relate to us or the Company's management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company's management. Actual results could differ materially from those contemplated by the forward- looking statements as a result of certain factors detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on the Company's behalf are qualified in their entirety by this paragraph.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.





Overview

We are an early-stage blank check company incorporated in Delaware on August 24, 2020 under the name "Class Acquisition Corporation," whose business purpose is to effect an initial business combination. On November 16, 2020, we changed our name to "Class Acceleration Corp."

Our management team has extensive experience with acquisitions and consummating business combinations. Led by Michael Moe, our Chief Executive Officer, our management team's shared vision is owning and building a market-dominant and agile education technology business. Private technology companies are changing the world at an unprecedented pace by establishing new markets, creating new experiences and disrupting legacy industries. This is happening at an accelerated pace in the digital learning industry, driven by the knowledge economy and most recently by COVID-19. We seek to acquire a digital learning leader that benefits from the dual tailwinds of the knowledge economy and the Internet. Digital economics reflect a disproportionate gain to the leaders of a category. Accordingly, we seek leading companies who we believe have both competitive and sustainable advantages. We believe our management team's significant operating and transaction experience and relationships will continue to provide us with a substantial number of potential initial business combination targets.

The underlying growth fundamentals in the digital learning industry has attracted substantial venture and growth capital over the past 10 years. In 2019, $7 billion was invested in private digital learning companies versus only $500 million in 2010, a 14x increase in nearly a decade. Moreover, globally there are currently approximately 30 privately held digital learning companies with valuations in excess of $1 billion, where none existed only five years ago. Our management team has been investing in the digital learning market for over 10 years, which is why we believe we will be able to identify and source several targets that will meet our stringent acquisition criteria.

Our efforts to identify a prospective initial business combination target are not limited to a particular industry, sector or geographic region. While we may pursue an initial business combination opportunity in any industry or sector, since our initial public offering, we have capitalized on the ability of our management team to identify, acquire and operate a business or businesses that can benefit from our management team's established global relationships and operating experience. Our management team has extensive experience in identifying and executing strategic investments globally and has done so successfully in a number of sectors, including media and entertainment.





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Results of Operations

Our entire activity since inception up to June 30, 2021 relates to our formation, the Initial Public Offering and, since the closing of the Initial Public Offering, a search for a Business Combination candidate. We will not be generating any operating revenues until the closing and completion of our initial Business Combination, at the earliest.

For the three months ended June 30, 2021, we had net loss of $4,077,527, which consisted of $292,250 in formation and operating costs and $3,789,264 in unrealized loss on change in fair value of warrants, offset by $3,933 in interest earned on marketable securities held in the Trust Account and $54 in interest earned on operating bank account.

For the six months ended June 30, 2021, we had net loss of $851,286, which consisted of $514,610 in formation and operating costs and $615,674 in transaction costs in connection with IPO, offset by $6,914 in interest earned on marketable securities held in the Trust Account, $54 in interest earned on operating bank account, and $272,030 in unrealized gain on change in fair value of warrants.

Liquidity and Capital Resources

As of June 30, 2021, we had approximately $0.9 million in our operating bank account, approximately $258.8 million in our Trust Account, and working capital of approximately $0.9 million.

Except with respect to interest earned on the funds held in the Trust Account that may be released to us to pay our taxes, if any, the funds held in the Trust Account will not be released until the earliest to occur of (a) the completion of the initial Business Combination, (b) the redemption of any public shares properly tendered in connection with a stockholder vote to amend our second amended and restated certificate of incorporation, and (c) the redemption of all of our public shares if we have not completed the initial Business Combination within 24 months from the closing of IPO, subject to applicable law. The proceeds deposited in the Trust Account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.

The following table provides a summary of our net cash flows from operating, investing, and financing activities for the six months ended June 30, 2021.

Net cash used in operating activities $ (788,204 ) Net cash used in investing activities (258,750,000 ) Net cash provided by financing activities 260,323,457 Net change in cash

                                 785,253
Cash, beginning of the period                       76,602
Cash, end of the period                     $      861,855

Prior to the completion of the Initial Public Offering, our liquidity needs had been satisfied through a payment from the Sponsor of $25,000 for the founder shares, the loan under an unsecured promissory note from the Sponsor of $105,230, and advances from related party of $100. We fully paid the note to the Sponsor and the related party advances on January 29, 2021.

On January 20, 2021, we consummated the IPO of 25,875,000 Units, including 3,375,000 Units pursuant to the exercise of the underwriters' over-allotment option in full at $10.00 per Unit, generating gross proceeds of $258,750,000. Simultaneously with the closing of the IPO, we consummated the sale of 7,175,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant in a private placement to the Sponsor, generating total gross proceeds of $7,175,000.

Subsequent to the consummation of the Initial Public Offering and Private Placement, our liquidity needs have been satisfied through the proceeds from the consummation of the Private Placement not held in the Trust Account.

In addition, in order to finance transaction costs in connection with a Business Combination, our Sponsor or an affiliate of the Sponsor or certain of our officers and directors may, but are not obligated to, provide us Working Capital Loans. To date, there were no amounts outstanding under any Working Capital Loans.

Based on the foregoing, management believes that we will have sufficient working capital and borrowing capacity to meet our needs through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, we will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.





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Critical Accounting Policies and Estimates

The preparation of the unaudited condensed financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. We have identified the following as our critical accounting policies:

Class A Common Stock Subject to Possible Redemption

The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification ("ASC") Topic 480 "Distinguishing Liabilities from Equity." Class A common stock subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable Class A common stock (including common stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company's control) is classified as temporary equity. At all other times, Class A common stock is classified as stockholders' equity. The Company's Class A common stock feature certain redemption rights that is considered to be outside of the Company's control and subject to the occurrence of uncertain future events. Accordingly, Class A common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders' equity section of the Company's balance sheet.

Net Income (Loss) Per Common Share

Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common stock outstanding for each of the periods.

The Company's condensed statements of operations include a presentation of income per share for Class A common stock subject to possible redemption in a manner similar to the two-class method of income (loss) per common share. Net income per common share, basic and diluted, for redeemable Class A common stock is calculated by dividing the interest income earned on the Trust Account (less any amounts utilized for taxes), by the weighted average number of Class A redeemable common stock outstanding since original issuance. Net loss per common share, basic and diluted, for Class B and non-redeemable Class A common stock is calculated by dividing the net loss, adjusted for income attributable to Class A redeemable common stock, by the weighted average number of Class B and non-redeemable Class A common stock outstanding for the periods. Class B common stock includes the founder shares as these shares do not have any redemption features and do not participate in the income earned on the Trust Account.

The calculation of diluted net income (loss) per common share does not consider the effect of the warrants issued in connection with the (i) IPO, (ii) exercise of overallotment option granted in connection with the IPO and (iii) Private Placement since the exercise price of the warrants is higher than the market price.





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Warrant Liabilities

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, "Derivatives and Hedging". We account for the Public and Private Placement warrants (collectively "Warrants"), as either equity or liability classified instruments based on an assessment of the specific terms of the Warrants and the applicable authoritative guidance. The assessment considers whether the Warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to our own stock and whether the warrant holders could potentially require "net cash settlement" in a circumstance outside of our control.

Derivative instruments are recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified on the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

The Company accounted for the 20,112,500 warrants issued in connection with the IPO and Private Placement in accordance with the guidance contained in FASB 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.

Off-Balance Sheet Arrangements

As of June 30, 2021, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

Recent Accounting Pronouncements

We do not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on our unaudited condensed financial statement.





Contractual Obligations



Administrative Service Fee

We have agreed to pay our Sponsor, commencing on the date of the consummation of the IPO, a total of $10,000 per month for office space and administrative support services. Upon completion of the Business Combination or liquidation, we will cease paying these monthly fees.





Underwriters Agreement

The underwriters will be entitled to a deferred underwriting discount of 3.5% of the gross proceeds of the IPO, or $9,056,250, held in the Trust Account upon the completion of the initial Business Combination subject to the terms of the underwriting agreement.





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