References to the "company," "our," "us" or "we" refer to
Overview
We are a blank check company incorporated onFebruary 3, 2021 as aCayman Islands exempted company and formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this Annual Report on Form 10-K as our "initial business combination." We intend to effectuate our initial business combination using cash from the proceeds of the initial public offering and the private placement of the private placement warrants, the proceeds of the sale of our shares in connection with our initial business combination (pursuant to forward purchase agreements or backstop agreements we may enter into following the consummation of the initial public offering or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing. 56
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Our registration statement for our initial public offering ("initial public
offering") was declared effective on
Simultaneously with the closing of the initial public offering, we consummated
the private placement of 8,600,000 private placement warrants, at a price of
Upon the closing of the initial public offering, the private placement and the over-allotment option, approximately$227.2 million of the net proceeds of the initial public offering and certain of the proceeds of the private placement were placed in a trust account ("trust account") withContinental Stock Transfer & Trust Company acting as trustee and invested inUnited States "government securities" within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, or the Investment Company Act, having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in directU.S. government treasury obligations, as determined by the company, until the earlier of: (i) the completion of a business combination and (ii) the distribution of the trust account as described below.
If we are unable to complete an initial business combination within 18 months
from the closing of our initial public offering, or
Results of Operations
We have neither engaged in any operations nor generated any operating revenues to date. Our only activities for the period fromFebruary 3, 2021 (inception) throughDecember 31, 2021 were organizational activities, those necessary to prepare for the initial public offering, as described below, and since the closing of the initial public offering, the search for a prospective initial business combination. We will not be generating any operating revenues until the closing and completion of our initial business combination, at the earliest. We generate non-operating income in the form of interest income on cash and cash equivalents held after the initial public offering. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as due diligence expenses.
For the period from
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Liquidity and Capital Resources
As of
Our liquidity needs up to
For the period fromFebruary 3, 2021 (inception) throughDecember 31, 2021 , net cash used in operating activities was$1,099,296 , which was due to our net loss of$482,997 , realized gain on investments held in the trust account of$170 , unrealized gain on investments held in the trust account of$311 and changes in working capital of$959,817 , offset in part by a non-cash loss on the sale of private placement warrants of$343,999 .
For the period from
For the period from
Following our initial public offering, the closing of the over-allotment option
and the sale of the private placement warrants, a total of
As of
In order to finance transaction costs in connection with an intended 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. If the company completes an initial business
combination, the company may repay such loaned amounts out of the proceeds of
the trust account released to the company. Otherwise, such loans may be repaid
only out of funds held outside the trust account. In the event that we do not
consummate an initial business combination, the company may use a portion of the
working capital held outside the trust account to repay such loaned amounts but
no proceeds from the trust account would be used to repay such loaned amounts.
Up to
As of
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issuance date of the financial statements. The company has since completed its initial public offering at which time capital in excess of the funds deposited in the trust account and/or used to fund offering expenses was released to the company for general working capital purposes. Accordingly, management has since reevaluated the company's liquidity and financial condition and determined that sufficient capital exists to sustain operations one year from the date these financial statements are issued and therefore substantial doubt has been alleviated.
Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements as ofDecember 31, 2021 .
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 our sponsor a monthly fee of up to
Registration and Shareholder Rights Agreement
The holders of the founder shares, private placement warrants and warrants that may be issued upon conversion of working capital loans (and any Class A ordinary shares issuable upon the exercise of the private placement warrants and warrants issued upon conversion of the working capital loans) have registration and shareholder rights to require the company to register a sale of any of its securities held by them pursuant to a registration and shareholder rights agreement entered into on the date of the initial public offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the company register such securities. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent to the completion of an initial business combination. The company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
We granted the underwriters a 45-day option from the date of initial public
offering to purchase up to 3,000,000 additional units to cover over-allotments,
if any, at the initial public offering price less the underwriting discounts and
commissions. The underwriters partially exercised the over-allotment option on
The underwriter is entitled to a deferred fee of
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in
Warrant Classification
The company accounts for the warrants issued in connection with the initial public offering and the private placement in accordance with the guidance contained in ASC 815-40 under which the warrants meet the criteria for equity treatment and are recorded as equity.
Ordinary Shares Subject to Possible Redemption
All of the 22,500,000 Class A ordinary shares sold as part of the units in the initial public offering (and including the units sold in connection with the underwriters' partial exercise of the over-allotment option) contain a redemption feature which allows for the redemption of such public shares in connection with the company's liquidation, if there is a shareholder vote or tender offer in connection with the initial business combination and in connection with certain amendments to the amended and restated memorandum and articles of association. In accordance with ASC 480-10-S99, redemption provisions not solely within the control of the company require ordinary shares subject to redemption to be classified outside of permanent equity. Therefore, all Class A ordinary shares have been classified outside of permanent equity. 59
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The company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid-in capital and accumulated deficit.
Net Loss Per Ordinary Share
Net loss per ordinary share is computed by dividing net income (loss) by the weighted-average number of ordinary shares outstanding during the period. The company has not considered the effect of the warrants sold in the initial public offering as part of the units and the 9,350,000 private placement warrants in the calculation of diluted loss per share, because the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.
Recent Accounting Standards
InAugust 2020 , the FASB issued Accounting Standards Update ("ASU") 2020-06, Debt - Debt with Conversion and Other Options ( Subtopic 470-0) and Derivatives and Hedging - Contracts in Entity ' s Own Equity ( Subtopic 815-40) ("ASU 2020-06") to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity's own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity's own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective for the company onJanuary 1, 2024 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning onJanuary 1, 2021 . The company adopted ASU 2020-06 effectiveFebruary 3, 2021 using the full retrospective method of transition. The adoption of ASU 2020-06 did not have a material impact on the financial statements for the fiscal year endedDecember 31, 2021 .
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the company's financial statements.
JOBS Act
OnApril 5, 2012 , the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an "emerging growth company" and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an "emerging growth company," we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv)
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disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer's compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an "emerging growth company," whichever is earlier.
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