References in this report (the “Quarterly Report”) to “we,” “us” or the
“Company” refer to
our “management team” refer to our officers and directors, and references to the
“Sponsor” refer to
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” 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 section of the Company’s final prospectus for its Initial Public
Offering (as defined below) filed with the
Commission
EDGAR section of the
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 in the
2021
exchange, asset acquisition, share purchase, reorganization or similar business
combination with one or more businesses. The Company is not limited to a
particular industry or geographic region for purposes of consummating a business
combination. The Company is an early stage and emerging growth company and, as
such, the Company is subject to all of the risks associated with early stage and
emerging growth companies.
Proposed Business Combination
On
company (“Artisan”), (ii)
company (“PubCo”), (iii)
and a direct wholly owned subsidiary of
Limited
of
(v)
entered into a Business Combination Agreement (as it may be amended,
supplemented or otherwise modified from time to time, the “BCA”).
The BCA and the transaction contemplated thereby were unanimously approved by
the board of directors of each of Artisan and
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The BCA provides for, among other things, the following transactions: (i)
Artisan will merge with and into Merger Sub 1, with Merger Sub 1 being the
surviving entity in the merger, and, after giving effect to such merger,
continuing as a wholly owned subsidiary of
(ii) following the Initial Merger, Merger Sub 2 will merge with and into
giving effect to such merger, continuing as a wholly owned subsidiary of
(the “Acquisition Merger”). The Initial Merger, the Acquisition Merger and the
other transactions contemplated by the BCA are hereinafter referred to as the
“Business Combination.”
The Business Combination
Subject to, and in accordance with, the terms and conditions of the BCA, in
connection with the Initial Merger, (i) every issued and outstanding Class A and
Class B ordinary share of Artisan will automatically be cancelled in exchange
for one PubCo Class A ordinary share and (ii) each issued and outstanding
warrant of Artisan will cease to exist and be assumed by
automatically into a warrant to purchase one PubCo Class A ordinary share on
substantially the same terms (the “Warrants”).
Subject to, and in accordance with, the terms and conditions of the BCA, in
connection with the Acquisition Merger, (i) (a) each issued and outstanding
ordinary share and preferred share in
the Acquisition Merger will automatically be cancelled in exchange for such
number of PubCo Class A ordinary shares that is equal to the Exchange Ratio (as
described below and more fully defined in the BCA) and (b) each issued and
outstanding ordinary share and preferred share in
Yeung
automatically be cancelled in exchange for such number of PubCo Class B ordinary
shares that is equal to the Exchange Ratio; and (ii) (a) each
restricted share unit (other than any
Mr.
Acquisition Merger will automatically be assumed by
award of
Class A Ordinary Shares under the Incentive Equity Plan (as defined below) equal
to the product of (x) the number of
prior to the effective time of the Acquisition Merger will automatically be
assumed by
representing the right to receive PubCo Class B Ordinary Shares under the
Incentive Equity Plan equal to the product of (x) the number of
ordinary shares subject to such
Exchange Ratio.
The “Exchange Ratio” is a number determined by dividing the Price per Share (as
described below and more fully defined in the BCA) by
defined in the BCA as the amount equal to
equal to (a) the aggregate number of
outstanding immediately prior to the effective time of Acquisition Merger and
(ii) that are issuable upon the exercise of all
units, options, warrants, convertible notes and other equity securities of
time of Acquisition Merger minus (b) the
any of its subsidiaries (if applicable) as treasury shares.
Holders of PubCo Class A ordinary shares will be entitled to one vote per share
and holders of the PubCo Class B ordinary shares will be entitled to 20 votes
per share. Each PubCo Class B ordinary share (x) is convertible into one PubCo
Class A ordinary share at any time by the holder thereof, and (y) will
automatically convert into one PubCo Class A ordinary share upon, among others
and subject to certain limitations, the sale, transfer or other disposal by the
holder thereof to any third party that is not a permitted transferee of such
holder, in each case of the foregoing (x) and (y), subject to the terms and
conditions of the amended and restated memorandum and articles of association of
of the Initial Merger (a form of which is attached to the BCA as an exhibit).
Amendment to Business Combination Agreement
On
Sub 2 and (v)
Agreement (the “BCA Amendment”) to the previously announced Business Combination
Agreement by and among Artisan,
(the “Original BCA”).
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The BCA Amendment provides, among other things, that (i) the exchange ratio at
which each Class A ordinary share, par value
an “Artisan Share”) issued and outstanding immediately prior to the effective
time of the Initial Merger (excluding Artisan Shares that are held by Artisan
shareholders that validly exercise their redemption rights, Artisan Shares that
are held by Artisan shareholders that exercise and perfect their relevant
dissenters’ rights and Artisan treasury shares) shall be cancelled in exchange
for the right to receive the number of newly issued PubCo Class A Ordinary
Shares equal to the Class A Exchange Ratio (as defined below); (ii) the number
of PubCo Class A Ordinary Shares issuable upon exercise of each
converted from each whole Artisan public warrant is amended from one to the
Class A Exchange Ratio; (iii) the “Price per Share” for the purpose of
calculating the exchange ratio at which
Class A Ordinary Shares in the Acquisition Merger is reduced to an amount equal
to (a) (x)
Fully-Diluted Company Shares (as defined below); and (iv) the size of the board
of directors of
will be reduced from six members to five members.
“Class A Exchange Ratio” is defined in the BCA Amendment as the lower of: (A)
1.29; and (B) (1) (x) the Post-Redemption SPAC Share Number (as defined below),
plus (y) 3,000,000, divided by (2) the Post-Redemption SPAC Share Number.
“Fully-Diluted Company Shares” is defined in the Original BCA to mean, without
duplication, (a) the aggregate number of
and outstanding immediately prior to the effective time of the Acquisition
Merger and (ii) that are issuable upon the exercise of all
share units, options, warrants, convertible notes and other equity securities of
time of the Acquisition Merger, including an aggregate of 776,432 shares to be
issued by
of
Share Number” is defined in the BCA Amendment as (a) the aggregate number of
Artisan Shares outstanding as of immediately prior to the Class
Recapitalization
Artisan and outstanding immediately prior to the Class
(c) the Artisan Shares subject to the redemptions outstanding immediately prior
to the Class
The foregoing description of the BCA Amendment does not purport to be complete
and is qualified in its entirety by the terms and conditions of the BCA
Amendment.
Representations and Warranties; Covenants
The BCA contains representations and warranties of the parties thereto that are
customary for transactions of this nature, including with respect to, among
other things: (i) organization, good standing and qualification; (ii)
authorization; (iii) capitalization; (iv) consents; no conflicts; (v) financial
statements; (vi) absence of certain changes; (vii) litigation; (viii) taxes;
(ix) data protection; (x) compliance with laws (including with respect to
permits and filings); (xi) material contracts; (xii) intellectual property;
(xiii) labor and employee matters and (xiv) proxy/registration statement. The
representations and warranties of the respective parties to the BCA will not
survive the closing of the transaction.
Conditions to the Consummation of the Transaction
Consummation of the transactions contemplated by the BCA is subject to customary
closing conditions, including approval by the shareholders of Artisan and
the accuracy of representations and warranties to various standards, from no
materiality qualifier to a material adverse effect qualifier, (ii) the bringdown
to closing of a representation that no material adverse effect has occurred
(both for Artisan and
covenants, (iv) the delivery of customary closing certificates, (v) the absence
of a legal prohibition on consummating the transactions, (vi)
application with Nasdaq being approved, (vii) Artisan having at least
cash proceeds from the trust account established for the purpose of holding the
net proceeds of Artisan’s initial public offering, plus cash proceeds from the
PIPE Investments (as defined below), plus cash proceeds under the Forward
Purchase Agreements (as amended by the Deeds of Novation and Amendment), plus
any amount raised pursuant to permitted equity financings prior to closing of
the Acquisition Merger, minus the aggregate amount payable to SPAC shareholders
exercising their redemption rights, in the aggregate equaling no less than
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PIPE Subscription Agreements
Concurrently with the execution of the BCA, certain investors (the “
Investors
Subscription Agreement”), pursuant to which the
subscribe for and purchase PubCo Class A ordinary shares at
an aggregate purchase price of
PIPE Subscription Agreements, the obligations of the parties to consummate the
closing conditions of the respective parties, including, among others, (i) all
conditions precedent under the BCA having been satisfied or waived (other than
those to be satisfied at the closing of the Business Combination), (ii) the
accuracy of representations and warranties in all material respects and (iii)
material compliance with covenants.
Amendment to PIPE Subscription Agreements
Concurrently with the execution of the BCA Amendment, each PIPE Subscription
Agreement was amended pursuant to an amendment agreement (each a “PIPE Amendment
Agreement”) such that the
total of PubCo Class A Ordinary Shares in such number equal to the product of
(i) 6,000,000 multiplied by (ii) the Class A Exchange Ratio, for an aggregate
purchase price of
The foregoing description of the PIPE Amendment Agreements does not purport to
be complete and is qualified in its entirety by the terms and conditions of the
PIPE Amendment Agreements.
Deeds of Novation and Amendment to Forward Purchase Agreement
Prior to the initial public offering of Artisan, Artisan entered into forward
purchase agreements (each a “Forward Purchase Agreement”), pursuant to which the
anchor investors (each an “Anchor Investor”) agreed to purchase an aggregate of
6,000,000 Class A ordinary shares of Artisan plus 1,500,000 redeemable warrants
of Artisan, for a purchase price of
Artisan, as applicable, or
to close immediately prior to the closing of the initial business combination of
Artisan. Concurrently with the execution of the BCA, the
entered into deeds of novation and amendment (each a “Deed of Novation and
Amendment”), pursuant to which the
Copies commitments to purchase the Class A ordinary shares and warrants of
Artisan under the Forward Purchase Agreements with the commitment to purchase an
aggregate of 6,000,000 PubCo Class A ordinary shares plus 1,500,000 redeemable
as applicable, or
immediately prior to the closing of the Acquisition Merger.
Concurrently with the execution of the BCA Amendment, the Deeds of Novation and
Amendment were amended pursuant to deeds of amendment (each a “FPA Amendment
Deed”), which provide, among other things, that (i) immediately prior to the
consummation of the Initial Merger, the aggregate of 750,000 outstanding Founder
Shares held by the
750,000 Artisan Shares on an one-for-one basis (the “FPA Share Conversion”);
(ii) the
Ordinary Shares in such number equal to the product of (x) 6,000,000 multiplied
by (y) the Class A Exchange Ratio and (b) 1,500,000 redeemable
for an aggregate purchase price of
which the
otherwise disposing of any PubCo Class A Ordinary Shares acquired by the
Investors
from one year after the closing of Acquisition Merger to six months after the
closing of Acquisition Merger, subject to earlier release if certain criteria
are met.
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Sponsor Support Agreement
Concurrently with the execution of the BCA, the Sponsor, Artisan,
certain directors and officer of Artisan listed thereto entered into a Sponsor
support agreement and deed (the “Sponsor Support Agreement”), pursuant to which
the Sponsor has agreed to, among other things, (i) vote all Artisan shares held
by Sponsor in favor of the transactions contemplated by the BCA and the other
transaction documents and the related transaction proposals, (ii) vote against
any proposals that would or would be reasonably likely to in any material
respect impede the transactions contemplated by the BCA or any related
transaction proposal, (iii) not transfer any share of Artisan until termination
of the Sponsor Support Agreement, (iv) waive or not otherwise perfect any
anti-dilution or similar protection with respect to any Class B ordinary shares
of Artisan, (v) not elect to have any share of Artisan redeemed in connection
with the Business Combination, and (vi) release Artisan,
their respective subsidiaries from and against any and all actions, obligations,
agreements, debts and liabilities whatsoever, whether known or unknown, both at
law and in equity, which Artisan or any of its affiliates now has, has ever had
or may hereafter have against Artisan,
subsidiaries arising on or prior to the closing or on account of or arising out
of any matter occurring on or prior to the closing, except for claims with
respect to the BCA, the ancillary documents to the BCA, and certain rights to
indemnification or fee reimbursement. Each of the Sponsor and the independent
directors of Artisan has also agreed, within certain periods of time from the
closing of the Business Combination and subject to certain exceptions, not to
sell, transfer, tender, grant, pledge, assign or otherwise dispose of (including
by gift, tender or exchange offer, merger or operation of law), encumber, hedge
or utilize a derivative to transfer the economic interest in any of the PubCo
Class A ordinary shares and PubCo Warrants (as applicable) acquired in
connection with the Initial Merger and PubCo Class A ordinary shares received
upon the exercise of any
Concurrently with the execution of the BCA Amendment, parties to the Sponsor
Support Agreement entered into a deed of amendment to the Sponsor Support
Agreement (the “Amendment to Sponsor Support Agreement”), which provides, among
other things, that (i) the period during which the Sponsor is contractually
restricted from transferring or otherwise disposing of 50% of the PubCo Class A
Ordinary Shares acquired by it in the Initial Merger by virtue of holding
Artisan Shares is reduced from one year after the closing of Acquisition Merger
to 6 months after the closing of Acquisition Merger; and (ii) the period during
which the Sponsor is contractually restricted from transferring or otherwise
disposing of the remaining 50% of the PubCo Class A Ordinary Shares acquired by
it in the Initial Merger by virtue of holding Artisan Shares is reduced from 18
months after the closing of Acquisition Merger to 12 months after the closing of
Acquisition Merger, in each case subject to earlier release if certain criteria
are met.
Concurrently with the entry into the BCA Amendment,
the Sponsor and the Artisan independent directors entered into a Sponsor
Forfeiture and Conversion Agreement (the “Sponsor Agreement”), pursuant to and
subject to the terms of which, among other things, immediately prior to the
consummation of the Initial Merger, (i) all 9,133,558 outstanding Class B
ordinary shares, par value of
Founder Share”) held by Sponsor shall be exchanged and converted into the number
of Artisan Shares equal to (x) 6,933,558, divided by (y) the Class A Exchange
Ratio; (ii) the aggregate of 100,000 outstanding Director Founder Shares held by
the Artisan independent directors shall be exchanged and converted into the
number of Artisan Shares equal to (x) 100,000, divided by (y) the Class A
Exchange Ratio; and (iii) the Sponsor shall automatically irrevocably surrender
and forfeit to Artisan for no consideration, as a contribution to capital, the
number of Artisan private placement warrants equal to (x) 5,857,898, minus (y)
the quotient obtained by dividing 5,857,898 by the Class A Exchange Ratio (the
foregoing transactions described in (i) through (iii), together with the FPA
Share Conversion (as defined below), collectively, the “Class
Recapitalization
Shareholder Support Agreements
Concurrently with the execution of the BCA, Artisan,
certain shareholders of
and deeds (the “Shareholder Support Agreements”), pursuant to which each such
shareholder of
contemplated by the BCA and the other transaction documents, (ii) vote against
any proposals that would or would be reasonably likely to in any material
respect impede the transactions contemplated by the BCA, (iii) not transfer any
share of
(iv) within certain periods of time from the closing of the Business Combination
and subject to certain exceptions, not sell, transfer, tender, grant, pledge,
assign or otherwise dispose of (including by gift, tender or exchange offer,
merger or operation of law), encumber, hedge or utilize a derivative to transfer
the economic interest in any of the shares of
the Acquisition Merger or upon settlement of the restricted share units of
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Concurrently with the execution of the BCA Amendment, parties to the Shareholder
Support Agreement entered into a deed of amendment to the Shareholder Support
Agreement (the “Amendment to Shareholder Support Agreement”), which provides,
among other things, that (i) the period during which
restricted from transferring or otherwise disposing of 50% of the equity
securities of
holding equity securities of
closing of Acquisition Merger to 6 months after the closing of Acquisition
Merger; and (ii) the period during which
from transferring or otherwise disposing of the remaining 50% of the equity
securities of
holding equity securities of
closing of Acquisition Merger to 12 months after the closing of Acquisition
Merger, in each case subject to earlier release if certain criteria are met.
Assignment, Assumption and Amendment Agreement
Concurrently with the execution of the BCA, Artisan,
Transfer & Trust Company
“Assignment, Assumption and Amendment Agreement”) to that certain warrant
agreement, dated
“Existing Warrant Agreement”), to be effective upon closing pursuant to which,
among other things, Artisan will agree to assign all of its right, title and
interest in the Existing Warrant Agreement to
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities for the three months ended
from
activities, those necessary to prepare for our initial public offering,
described below, and, after our initial public offering, identifying a target
company for a 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 investments held
in our trust account 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 for due diligence expenses.
For the three months ended
which resulted from a change in the fair value of warrant liabilities of
liability of
account of
For the period from
a net loss of
Liquidity and Capital Resources
For the three months ended
was
liabilities of
agreement derivative liability of
held in the trust account of
For the period from
cash used in operating activities was
Net cash provided by financing activities for the for the three months ended
promissory note – related party and
related party.
On
Each unit consists of one share of one Class A ordinary share of the Company,
par value
Company, with each whole warrant entitling the holder thereof to purchase one
Class A ordinary shares for
Company granted the underwriters a 45-day option to purchase up to 4,500,000
additional units solely to cover over-allotments.
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Table of Contents
Simultaneously with the consummation of the initial public offering, we
completed the private sale of 5,333,333 warrants to our Sponsor, at a purchase
price of
proceeds of
warrants were added to the net proceeds from the initial public offering held in
a trust account. If we do not complete our initial business combination within
24 months from the closing of the initial public offering, the proceeds from the
sale of the private placement warrants will be used to fund the redemption of
the Public Shares (subject to the requirements of applicable law) and the
private placement warrants will expire worthless.
On
and purchased an additional 3,934,235 units, generating gross proceeds of
Simultaneously with the closing of the exercise of the over-allotment option, we
consummated the sale of 524,565 additional private placement warrants at a
purchase price of
our Sponsor, generating gross proceeds of
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
taxes payable and deferred underwriting commissions), to complete our initial
business combination. We may withdraw interest income (if any) to pay income
taxes, if any. Our annual income tax obligations will depend on the amount of
interest and other income earned on the amounts held in the trust account. We
expect the interest income earned on the amount in the trust account (if any)
will be sufficient to pay our income taxes. To the extent that our equity 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.
Prior to the completion of our initial business combination and subsequent to
our initial public offering, we will use the proceeds from the initial public
offering held outside the trust account, as well as have access to certain funds
from loans from the Sponsor, its affiliates or our officer or directors. We will
use these funds 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 a business
combination.
We have incurred and expect to continue to incur significant costs in pursuit of
our acquisition plans. We may have insufficient funds available to operate our
business prior to our initial business combination. In order to finance
transaction costs in connection with an intended initial business combination,
the Sponsor, its affiliates, our officer or certain to our directors may, but
are not obligated to, loan us funds as may be required. If we complete our
initial business combination, we may repay such loaned amounts out of the
proceeds of the trust account released to us. In the event that our 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
loans may be convertible into warrants of the post-business combination entity
at a price of
be identical to the private placement warrants. Except for the foregoing, the
terms of such loans, if any, have not been determined and no written agreements
exist with respect to such loans. Prior to the completion of our initial
business combination, we do not expect to seek loans from parties other than the
Sponsor, its affiliates or our officer and directors as we do not believe third
parties will be willing to loan such funds and provide a waiver against any and
all rights to seek access to funds in our trust account.
Moreover, we may need to obtain additional financing to complete our initial
business combination, either because the transaction requires more cash than is
available from the proceeds held in our trust account, or because we become
obligated to redeem a significant number of our public shares upon the
completion of the business combination, in which case we may issue additional
securities or incur debt in connection with such business combination. If we
have not consummated our initial business combination within the required time
period because we do not have sufficient funds available to us, we will be
forced to cease operations and liquidate the trust account.
Off-Balance Sheet Arrangements
As ofMarch 31, 2022 andDecember 31, 2021 , we did not have any off-balance sheet arrangements. 34 Table of Contents Contractual Obligations Registration Rights
Pursuant to a registration rights agreement entered into on
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. 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.
Pursuant to the Forward Purchase Agreements, we have agreed that we will use our
reasonable best efforts (i) to file within 30 days after the closing of the
initial business combination (and, with respect to (ii)(B) below, within 30 days
following announcement of the results of the shareholder vote relating to our
initial business combination or the results of our offer to shareholders to
redeem their Class A ordinary shares in connection with our initial business
combination (whichever is later), which we refer to as the “disclosure date”) a
registration statement with the
purchase securities, Class A ordinary shares underlying the forward purchase
warrants and the Class A ordinary shares into which the anchor investors’
founder shares are convertible, (B) any other Class A ordinary shares or
warrants acquired by the anchor investors any time after we complete our initial
business combination, and (C) any other equity security of the Company issued or
issuable with respect to the securities referred to in (i)(A) and (i)(B) by way
of a share capitalization or share sub-division or in connection with a
combination of shares, recapitalization, merger, consolidation or
reorganization, (ii) to cause such registration statement to be declared
effective promptly thereafter, but in no event later than 60 days after the
closing of the initial business combination, and (iii) to maintain the
effectiveness of such registration statement until the earliest of (A) the date
on which the anchor investor or its assignee ceases to hold the securities
covered thereby and (B) the date all of the securities covered thereby can be
sold publicly without restriction or limitation under Rule 144 under the
Securities Act and without the requirement to be in compliance with Rule
144(c)(1) under the Securities Act, subject to certain conditions and
limitations set forth in the forward purchase agreements.
Concurrently with the execution of the BCA, Artisan,
certain securityholders of
registration rights agreement (the “Registration Rights Agreement”), pursuant to
which, among other things,
registration obligations in accordance with the
amended (the “Securities Act”) and the Sponsor and the Prenetics Holders have
been granted customary demand and piggyback registration rights.
Promissory Notes –
On
“Promissory Note”), pursuant to which we could borrow up to
expenses related to our initial public offering. The Promissory Note was
non-interest bearing and was payable on the earlier of
consummation of our initial public offering. On
outstanding balance under the Promissory Note of
On
“Second Promissory Note”), pursuant to which we may borrow up to an aggregate
principal amount of
and payable upon the consummation of our initial business combination. As of
Second Promissory Note, respectively.
Advance from
As of
operating costs on behalf of the Company.
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Underwriters Agreement
On
Securities LLC
offering and the partial exercise of the over-allotment option, the underwriters
were paid a cash underwriting discount of
aggregate. In addition, the underwriters will be entitled to a deferred fee of
underwriting agreement, (i) the deferred fee has been placed in the trust
account and released to the underwriters only upon the completion of our initial
business combination and (ii) the deferred fee will be waived by the
underwriters in the event that we do not complete our initial business
combination.
Administrative Services Agreement
The Company entered into an agreement, commencing on
Sponsor a total of
administrative services. Upon the completion of a business combination or
liquidation, the Company will cease paying these monthly fees. As of
2022
recorded in accrued expenses – related party on the condensed balance sheets,
respectively.
Forward Purchase Agreement
On
Sponsor and the anchor investors, which were subsequently amended in connection
with the execution of the BCA.
Placement Fees
On
assist in raising the funds in the PIPE financing. The agreement calls for the
PIPE Placement Agents to receive a contingent fee equal to 1.5% (or
the gross proceeds received by the Company from the PIPE financing.
On
investment banks (the “FPA Placement Agents”) pursuant to which the FPA
Placement Agents will receive a contingent fee equal to 3.5% (or
the gross proceeds received by the Company from the Forward Purchase Agreements
for services in connection with raising the funds to be received pursuant to the
Forward Purchase Agreements.
Merger and Acquisition Advisory Agreement
On
(the “M&A Advisor”) for advisory services such as analyzing, structuring,
negotiating, and effecting the Business Combination. In exchange for such
services, the Company will pay the M&A Advisor a contingent fee of
which is due and payable only in the event that the Company consummates its
initial business combination.
Critical Accounting Policies
The preparation of condensed financial statements and related disclosures in
conformity with accounting principles generally accepted in
America
reported amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the condensed financial statements, and income and
expenses during the periods reported. Actual results could materially differ
from those estimates. We have identified the following critical accounting
policies:
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Table of Contents
Class A Ordinary Shares Subject to Possible Redemption
All of the 33,934,235 Class A ordinary shares sold as part of the units in our
initial public offering and subsequent partial exercise of the underwriters’
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 our initial
business combination and in connection with certain amendments to our amended
and restated memorandum and articles of association. In accordance with
its staff’s guidance on redeemable equity instruments, which has been codified
in ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”), 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.
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.
Warrant Liabilities
The Company accounts for warrants as either equity-classified or
liability-classified instruments based on an assessment of the warrant’s
specific terms and applicable authoritative guidance in ASC 480 and ASC 815,
Derivatives and Hedging (“ASC 815”). The assessment considers whether the
warrants are freestanding financial instruments pursuant to ASC 480, meet the
definition of a liability pursuant to ASC 480, and whether the warrants meet all
of the requirements for equity classification under ASC 815, including whether
the warrants are indexed to the Company’s own common stock, among other
conditions for equity classification. This assessment, which requires the use of
professional judgment, is conducted at the time of warrant issuance and as of
each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity
classification, the warrants are required to be recorded as a component of
additional paid-in capital at the time of issuance. For issued or modified
warrants that do not meet all the criteria for equity classification, the
warrants are required to be recorded at their initial fair value on the date of
issuance, and each balance sheet date thereafter. Changes in the estimated fair
value of the warrants are recognized as a non-cash gain or loss on the condensed
statements of operations. The initial fair value of the public warrants was
estimated using a Black-Scholes Option Pricing Method – Barrier Option and the
fair value of the private placement warrants was estimated using a Modified
Black-Scholes Option Pricing Method.
Net Income (Loss) Per Ordinary Share
Net income (loss) per ordinary share is computed by dividing net income (loss)
by the weighted-average number of ordinary shares outstanding during the period.
The remeasurement adjustment associated with the redeemable Class A ordinary
shares is excluded from net income (loss) per share as the redemption value
approximates fair value. Therefore, the earnings per share calculation allocates
income and losses shared pro rata between Class A and Class B ordinary shares.
As a result, the calculated net loss per share is the same for Class A and Class
B ordinary shares. The Company has not considered the effect of the public
warrants and private placement warrants to purchase an aggregate of 17,169,310
shares in the calculation of diluted net income (loss) per share, since the
exercise of the warrants is contingent upon the occurrence of future events.
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 condensed financial statements.
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