NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2022
(Unaudited)
NOTE
1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
FTAC
Hera Acquisition Corp. (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on January
18, 2021. 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 or entities (the “Business Combination”).
The
Company is not limited to a particular industry or sector 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.
As
of September 30, 2022, the Company had not commenced any operations. All activity from inception through September 30, 2022 relates to
the Company’s formation, the initial public offering (“Initial Public Offering”), which is described below, and subsequent
to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating
revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income
in the form of interest income from the proceeds derived from the Initial Public Offering and placed in the Trust Account (defined below).
The
registration statement for the Company’s Initial Public Offering was declared effective on March 3, 2021. On March 8, 2021, the
Company consummated the Initial Public Offering of 80,000,000 units (the “Units” and, with respect to the Class A ordinary
shares included in the Units sold (the “Public Shares”)), at $10.00 per Unit, generating gross proceeds of $800,000,000,
which is described in Note 3.
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the sale of 1,920,000 units (the “Placement Units”)
at a price of $10.00 per Placement Unit in a private placement to FTAC Hera Sponsor, LLC and certain funds and accounts managed by subsidiaries
of Millennium Management LLC (“Millennium”), generating gross proceeds of $19,200,000, which is described in Note 4. The
manager of FTAC Hera Sponsor, LLC is Hera Sponsor Interests, LLC, which is controlled by Betsy Z. Cohen and Daniel Cohen.
Following the closing of the Initial Public Offering
on March 8, 2021, an amount of $800,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering
and the sale of the Placement Units was placed in a trust account (the “Trust Account”), located in the United States and
invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940,
as amended (the “Investment Company Act”), with a maturity of 185 days or less or in money market funds meeting certain conditions
under Rule 2a-7 of the Investment Company Act, which invest only in direct U.S. government treasury obligations, until the earlier of
(i) the completion of a Business Combination; (ii) the redemption of any Public Shares properly tendered in connection with
a shareholder vote to amend the Company’s Amended and Restated Memorandum and Articles of Association (A) to modify the substance
or timing of the Company’s obligation to redeem 100% of its Public Shares if it does not complete a Business Combination within
24 months from the closing of the Initial Public Offering or (B) with respect to any other provision relating to shareholders’
rights or pre-initial Business Combination activity and (iii) the distribution of the Trust Account, as described below, except
that interest earned on the Trust Account can be released to pay the Company’s tax obligations, if the Company is unable to complete
an initial Business Combination within 24 months from the closing of the Initial Public Offering or upon any earlier liquidation of the
Company.
On
March 9, 2021, the underwriters partially exercised their over-allotment option, resulting in an additional 5,147,760 Units issued for
an aggregate amount of $51,477,600. A total of $51,477,600 was deposited into the Trust Account, bringing the aggregate proceeds held
in the Trust Account to $851,477,600.
Transaction
costs amounted to $47,481,502, consisting of $16,000,000 in cash underwriting fees, $30,831,268 of deferred underwriting fees and $650,234
of other offering costs.
FTAC
HERA ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2022
(Unaudited)
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering
and the sale of the Placement Units, although substantially all of the net proceeds are intended to be applied generally toward consummating
a Business Combination. The Company must complete one or more initial Business Combinations having an aggregate fair market value of
at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on interest earned
on the Trust Account) at the time of the agreement to enter into the initial Business Combination. The Company will only complete a Business
Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise
acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment
Company Act. There is no assurance the Company will be able to complete a Business Combination successfully.
The
Company will provide holders of the outstanding Public Shares (the “Public Shareholders”) with the opportunity to redeem
all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a general meeting
called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek
shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public
Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then on deposit in the Trust Account
(initially $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released
to the Company to pay its tax obligations). The per-share amount to be distributed to Public Shareholders who redeem their Public Shares
will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 6). There
will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.
The
Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 either prior to or
upon consummation of a Business Combination and, if the Company seeks shareholder approval, it receives an ordinary resolution under
Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who attend
and vote at a general meeting of the Company. If a shareholder vote is not required by law and the Company does not decide to hold a
shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles
of Association (the “Amended and Restated Memorandum and Articles of Association”), conduct the redemptions pursuant to the
tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior
to completing a Business Combination. If, however, shareholder approval of the transaction is required by law, or the Company decides
to obtain shareholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation
pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks shareholder approval in connection with
a Business Combination, FTAC Hera Sponsor, LLC and FTAC Hera Advisors, LLC (collectively, the “Sponsor”) and the Company’s
officers and directors (the “Insiders”) have agreed to vote their Founder Shares (as defined in Note 5), the Class A
ordinary shares included in the Placement Units (the “Placement Shares”) and any Public Shares held by them in favor of approving
a Business Combination. Additionally, each Public Shareholder may elect to redeem their Public Shares irrespective of whether they vote
for or against the proposed transaction.
Notwithstanding
the foregoing, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the
tender offer rules, the Amended and Restated Memorandum and Articles of Association provides that a Public Shareholder, together with
any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as
defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted
from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the
Company.
FTAC
HERA ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2022
(Unaudited)
The
Insiders have agreed (a) to waive their redemption rights with respect to their Founder Shares, Placement Shares and Public Shares
held by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and
Restated Memorandum and Articles of Association (i) to modify the substance or timing of the Company’s obligation to redeem
100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to the other provisions relating
to shareholders’ rights or pre-business combination activity, unless the Company provides its Public Shareholders with the opportunity
to redeem their Class A ordinary shares upon approval of any such amendment.
The
Company will have until March 8, 2023 to complete a Business Combination (the “Combination Period”). If the Company is unable
to complete a Business Combination within the Combination Period, 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 business days thereafter, 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 (which
interest will be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then
issued and outstanding Public Shares, which redemption will completely extinguish Public Shareholders’ rights as shareholders (including
the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of the Company’s shareholders and board of directors, 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.
There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless
if the Company fails to complete a Business Combination within the Combination Period.
The
Insiders have agreed to waive their liquidation rights with respect to the Founder Shares and Placement Shares if the Company fails to
complete a Business Combination within the Combination Period. However, if the Insiders acquire Public Shares in or after the Initial
Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete
a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting
commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination
Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund
the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining
available for distribution will be less than the Initial Public Offering price per Unit ($10.00).
In
order to protect the amounts held in the Trust Account, FTAC Hera Sponsor, LLC has agreed to be liable to the Company if and to the extent
any claims by a third party (other than its registered public accounting firm) for services rendered or products sold to the Company,
or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds
in the Trust Account to below (i) $10.00 per Public Share or (ii) such lesser amount per Public Share held in the Trust Account
as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest
which may be withdrawn to pay taxes. This liability will not apply with respect to any claims by a third party who executed a waiver
of any and all rights to seek access to the Trust Account or to any claims under the Company’s indemnity of the underwriters of
the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities
Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, FTAC Hera Sponsor, LLC
will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that
FTAC Hera Sponsor, LLC will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service
providers (other than its registered public accounting firm), prospective target businesses or other entities with which the Company
does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the
Trust Account.
Going
Concern
In connection with the Company’s assessment
of going concern considerations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Update
2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has until
March 8, 2023 to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination
by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution
of the Company. Management has determined that the mandatory liquidation, should a Business Combination not occur, and potential subsequent
dissolution raises substantial doubt about the Company’s ability to continue as a going concern. Management intends to complete
a Business Combination by close of business on March 8, 2023. No adjustments have been made to the carrying amounts of assets or liabilities
should the Company be required to liquidate after March 8, 2023.
FTAC
HERA ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2022
(Unaudited)
NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted
in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form
10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements
prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial
reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position,
results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include
all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating
results and cash flows for the periods presented.
The
accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K
as filed with the SEC on March 17, 2022. The interim results for the three and nine months ended September 30, 2022 are not necessarily
indicative of the results to be expected for the year ending December 31, 2022 or for any future periods.
Emerging
Growth Company
The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our
Business Startups Act of 2012 (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 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 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 the 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 condensed financial statements and the reported amounts of revenues and 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 condensed financial statements, which management considered
in formulating its estimate, could change in the near term due to one or more future confirming events. One of the more significant accounting
estimates included in these 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.
Cash
and Cash Equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company did not have any cash equivalents as of September 30, 2022 and December 31, 2021.
Investment
Held in Trust Account
The
Company’s portfolio of investments held in the Trust Account is comprised of U.S. government securities, within the meaning set
forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that
invest in U.S. government securities, or a combination thereof. At September 30, 2022 and December 31, 2021, the assets held in the Trust
Account were held in money market funds which are invested primarily in U.S. Treasury securities.
FTAC
HERA ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2022
(Unaudited)
Offering
Costs
Offering
costs consisted of legal, accounting and other expenses incurred through the closing date of the Initial Public Offering that were directly
related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public
Offering based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to warrant liabilities were
expensed as incurred in the statements of operations. Offering costs associated with the Class A ordinary shares issued amounting to
$45,855,782 were charged to temporary equity. Offering costs amounting to $1,625,720 were allocated to the warrant liabilities and were
expensed to the unaudited condensed statements of operations.
Warrant
Liabilities
The Company does not use derivative instruments
to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including
issued share purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives,
pursuant to Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity” (“ASC
480”), and FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). The Company accounts for the Public
Warrants and Placement Warrants (together with the Public Warrants, the “Warrants”) in accordance with the guidance contained
in ASC 815-40 under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly,
the Company classifies the Warrants as liabilities at their fair value and adjusts the Warrants to fair value at each reporting period.
This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in
the statements of operations. The Placement Warrants and the Public Warrants for periods where no observable traded price was available
are valued using a binomial lattice model. For periods subsequent to the detachment of the Public Warrants from the Units, the Public
Warrant quoted market price was used as the fair value as of each relevant date for both the Public and Placement Warrants. The determination
of the fair value of the warrant liability may be subject to change as more current information becomes available and accordingly the
actual results could differ significantly.
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. Class A ordinary
shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable
ordinary shares (including ordinary shares 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) 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 September 30, 2022 and December 31, 2021, 85,147,760 Class A ordinary shares subject to possible redemption are
presented as temporary equity, outside of the shareholders’ deficit section of the Company’s condensed balance sheets.
Under
ASC 480-10-S99, the Company has elected to recognize 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. This method would view the end of the
reporting period as if it were also the redemption date for the security. Immediately upon the closing of the Initial 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
September 30, 2022 and December 31, 2021, the Class A ordinary shares subject to possible redemption reflected in the condensed balance
sheets are reconciled in the following table:
Gross proceeds | |
$ | 851,477,600 | |
Less: | |
| | |
Proceeds allocated to Public Warrants | |
| (29,163,108 | ) |
Class A ordinary shares issuance costs | |
| (45,855,782 | ) |
Plus: | |
| | |
Accretion of carrying value to redemption value | |
| 75,018,890 | |
Class A ordinary shares subject to possible redemption, December 31, 2021 | |
| 851,477,600 | |
Plus: | |
| | |
Accretion of carrying value to redemption value | |
| 4,986,413 | |
Class A ordinary shares subject to possible redemption, September 30, 2022 | |
$ | 856,464,013 | |
FTAC
HERA ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2022
(Unaudited)
Income
Taxes
The
Company accounts for income taxes under ASC Topic 740, “Income Taxes,” which prescribes a recognition threshold and a measurement
attribute for the condensed 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 major tax jurisdiction. The Company recognizes
accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of September 30, 2022 and December 31,
2021, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of
any issues under review that could result in significant payments, accruals or material deviation from its position.
The
Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently
not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s
tax provision was zero for the periods presented. 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 Per Ordinary Share
The
Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income per
ordinary share is computed by dividing net income 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 net income per ordinary share does not consider the effect of the warrants issued in connection with the (i) Initial
Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events.
The warrants are exercisable to purchase 21,766,940 Class A ordinary shares in the aggregate. As of September 30, 2022 and
2021, the Company did not have any other 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 income per ordinary share is the same as basic
net income per ordinary share for the periods presented.
The
following table reflects the calculation of basic and diluted net income per ordinary share (in dollars, except share amounts):
| |
For the Three Months Ended September 30, 2022 | | |
For the Three Months Ended September 30, 2021 | | |
For the Nine Months Ended
September 30, 2022 | | |
For the Period from January 18, 2021 (Inception) Through September 30, 2021 | |
| |
Class A | | |
Class B | | |
Class A | | |
Class B | | |
Class A | | |
Class B | | |
Class A | | |
Class B | |
Numerator: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Allocation of net income | |
$ | 5,462,380 | | |
$ | 1,365,595 | | |
$ | 4,700,775 | | |
$ | 1,175,194 | | |
$ | 18,172,632 | | |
$ | 4,543,158 | | |
$ | 3,784,249 | | |
$ | 1,140,508 | |
Denominator: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Basic and diluted weighted average shares outstanding | |
| 87,067,760 | | |
| 21,766,940 | | |
| 87,067,760 | | |
| 21,766,940 | | |
| 87,067,760 | | |
| 21,766,940 | | |
| 70,337,092 | | |
| 21,187,296 | |
Basic and diluted net income per ordinary share | |
$ | 0.06 | | |
$ | 0.06 | | |
$ | 0.05 | | |
$ | 0.05 | | |
$ | 0.21 | | |
$ | 0.21 | | |
$ | 0.05 | | |
$ | 0.05 | |
Concentration
of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times may exceed the Federal
Deposit Insurance Corporation coverage limit 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.
FTAC
HERA ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2022
(Unaudited)
Fair
Value of Financial Instruments
The fair value of the Company’s assets
and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying
amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature, except for the Warrants (see
Note 9).
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.
NOTE
3. INITIAL PUBLIC OFFERING
Pursuant
to the Initial Public Offering, the Company sold 85,147,760 Units, which includes 5,147,760 Units sold pursuant to the partial exercise
of the over-allotment option, at a price of $10.00 per Unit. Each Unit consists of one Class A ordinary share and one-fourth of
one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one Class A ordinary
share at a price of $11.50 per share, subject to adjustment (see Note 8).
NOTE
4. PRIVATE PLACEMENT
Simultaneously
with the closing of the Initial Public Offering, FTAC Hera Sponsor, LLC and Millennium purchased in a private placement an aggregate
of 1,920,000 Placement Units at a price of $10.00 per Placement Unit, for an aggregate purchase price of $19,200,000. Each Placement
Unit consists of one Placement Share and one-fourth of one redeemable warrant (“Placement Warrant”). Each whole Placement
Warrant is exercisable to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment. The proceeds
from the Placement Units were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not
complete a Business Combination within the Combination Period, the proceeds from the sale of the Placement Units will be used to fund
the redemption of the Public Shares (subject to the requirements of applicable law), and the Placement Units and all underlying securities
will be worthless.
NOTE
5. RELATED PARTY TRANSACTIONS
Founder
Shares
In
January 2021, the Sponsor paid $25,000 to cover certain of the Company’s operating and formation costs in exchange for 22,012,500
Class B ordinary shares (the “Founder Shares”). On March 3, 2021, the Company effected a share capitalization pursuant to
which it issued an additional 1,467,500 Founder Shares, resulting in an aggregate of 23,480,000 Founder Shares outstanding. All share
and per share amounts have been retroactively restated for the share capitalization. Additionally, upon consummation of the Business
Combination, the Sponsor will transfer 3,840,000 Founder Shares to Millennium for the same price originally paid for such shares. The
Founder Shares included up to 3,000,000 shares subject to forfeiture to the extent that the underwriters’ over-allotment option
was not exercised in full or in part, so that the number of Founder Shares will represent 20% of the aggregate Founder Shares, Placement
Shares and issued and outstanding Public Shares after the Initial Public Offering. As a result of the underwriters’ election to
partially exercise their over-allotment option on March 9, 2021, a total of 1,286,940 shares are no longer subject to forfeiture and
1,713,060 shares were forfeited as the underwriters did not exercise their option in full.
The
Insiders and Millennium have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares (i) with
respect to 25% of such shares, until consummation of a Business Combination, (ii) with respect to 25% of such shares, when the closing
price of the Class A ordinary shares exceeds $12.00 for any 20 trading days within a 30-trading day period following the consummation
of a Business Combination, (iii) with respect to 25% of such shares, when the closing price of the Class A ordinary shares
exceeds $13.50 for any 20 trading days within a 30-trading day period following the consummation of a Business Combination, and (iv) with
respect to 25% of such shares, when the closing price of the Class A ordinary shares exceeds $17.00 for any 20 trading days within
a 30-trading day period following the consummation of a Business Combination or earlier, in any case, if, following a Business Combination,
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.
FTAC
HERA ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2022
(Unaudited)
Administrative
Services Agreement
The
Company has agreed, commencing on March 4, 2021, through the earlier of the Company’s consummation of a Business Combination or
its liquidation, to pay an affiliate of the Sponsor a total of $25,000 per month for office space, administrative and shared personnel
support services. On June 9, 2021, the administrative services agreement was amended and restated to increase the monthly charge from
$25,000 to $40,000. For the three and nine months ended September 30, 2022, the Company incurred and paid $120,000 and $360,000, respectively,
in fees for these services. For the three months ended September 30, 2021 and for the period from January 18, 2021 (inception) through
September 30, 2021, the Company incurred and paid $120,000 and $220,000, respectively, in fees for these services.
Promissory
Note — Related Party
On
January 22, 2021, the Company issued an unsecured promissory note (the “Promissory Note”) to FTAC Hera Sponsor, LLC, pursuant
to which the Company could borrow up to an aggregate of up to $300,000. The Promissory Note was non-interest bearing and payable on the
earlier of June 30, 2021 or the completion of the Initial Public Offering. The outstanding balance under the Promissory Note of $244,123
was repaid at the closing of the Initial Public Offering on March 8, 2021.
Related
Party Loans
In
order to finance transaction costs in connection with a 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 (the “Working
Capital Loans”). If the Company completes a Business Combination, the Company may repay the Working Capital Loans out of the proceeds
of the Trust Account released to the Company. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust
Account. In the event that a 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 a Business Combination or, at the lender’s
discretion, up to $2,000,000 of such Working Capital Loans may be convertible into units of the post-Business Combination entity at a
price of $10.00 per unit. The units would be identical to the Placement Units. As of September 30, 2022 and December 31, 2021, there
were no amounts outstanding under the Working Capital Loans.
NOTE
6. COMMITMENTS AND CONTINGENCIES
Risks
and Uncertainties
Management
continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus 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 condensed financial statements. The condensed financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
In February 2022, the Russian Federation and
Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States,
have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions
on the world economy is not determinable as of the date of these condensed financial statements. The specific impact on the Company’s
financial condition, results of operations, and cash flows is also not determinable as of the date of these condensed financial statements.
Registration
Rights
Pursuant
to a registration rights agreement entered into on March 3, 2021, the holders of the Founder Shares, Placement Units (including securities
contained therein) and warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable
upon the exercise of the Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans) are entitled to
registration rights to require the Company to register a sale of any securities held by them (in the case of the Founder Shares, only
after conversion to the Class A ordinary shares). The holders of a majority of these securities are entitled to make up to three
demands, excluding short form demands, that the Company register such securities for sale under the Securities Act. In addition, these
holders have “piggy-back” registration rights to include such securities in other registration statements filed by the Company
and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. 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.
FTAC
HERA ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2022
(Unaudited)
Underwriting
Agreement
The
underwriters are entitled to a deferred fee of (i) $0.35 per Unit on the initial 80,000,000 Units sold in the Initial Public Offering,
or $28,000,000 in the aggregate, and (ii) $0.55 per Unit sold pursuant to the over-allotment option, or $2,831,268, or $30,831,268
in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event
that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
NOTE
7. SHAREHOLDERS’ DEFICIT
Preference
Shares — The Company is authorized to issue 5,000,000 preference shares with a par value of $0.0001 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.
At September 30, 2022 and December 31, 2021, there were no preference shares issued or outstanding.
Class A
Ordinary Shares — The Company is authorized to issue 500,000,000 Class A ordinary shares with a par value of $0.0001
per share. Holders of Class A ordinary shares are entitled to one vote for each share. At September 30, 2022 and December 31, 2021,
there were 1,920,000 Class A ordinary shares issued and outstanding, excluding 85,147,760 Class A ordinary shares subject to possible
redemption which are presented as temporary equity.
Class B
Ordinary Shares — The Company is authorized to issue 50,000,000 Class B ordinary shares with a par value of $0.0001
per share. Holders of Class B ordinary shares are entitled to one vote for each share. At September 30, 2022 and December 31, 2021,
there were 21,766,940 Class B ordinary shares issued and outstanding.
Holders
of Class B ordinary shares will vote on the appointment of directors prior to the consummation of a Business Combination. Holders
of Class A ordinary shares and Class B ordinary shares will vote together as a single class on all other matters submitted
to a vote of shareholders except as required by law.
The
Class B ordinary shares will automatically convert into Class A ordinary shares at the time of a Business Combination on a
one-for-one basis, subject to adjustment. In the case that additional Class A ordinary shares, or equity-linked securities, are
issued or deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of a Business Combination,
the ratio at which Class B ordinary shares shall 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 all ordinary shares outstanding upon the completion of the Initial Public
Offering and the private placement plus all Class A ordinary shares and equity-linked securities issued or deemed issued in connection
with a Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in a Business Combination,
any private placement-equivalent shares and warrants underlying units issued to the Sponsor or its affiliates upon conversion of loans
made to the Company).
NOTE
8. WARRANT LIABILITIES
As
of September 30, 2022 and December 31, 2021, there were 21,286,940 Public Warrants outstanding. Public Warrants may only be exercised
for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade.
The Public Warrants will become exercisable 30 days after the completion of a Business Combination. The Public Warrants will expire
five years after the completion of a Business Combination or earlier upon redemption or liquidation.
The
Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a warrant and will have no obligation
to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A ordinary shares
underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations
with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue any Class A ordinary
shares upon exercise of a warrant unless the issuance of the shares upon such exercise is registered or qualified under the securities
laws of the state of the exercising holder, or an exemption is available.
FTAC
HERA ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2022
(Unaudited)
The
Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of a Business Combination,
the Company will use its best efforts to file, and within 60 business days following a Business Combination to have declared effective,
a registration statement covering the Class A ordinary shares issuable upon exercise of the 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 warrants in accordance with the provisions of the warrant agreement. Notwithstanding the
foregoing, if a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective
within a specified period following the consummation of a Business Combination, warrant holders may, until such time as there is an effective
registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise
warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption
is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless
basis.
Redemption
of warrants when the price per Class A ordinary share equals or exceeds $18.00. Once the Public Warrants become exercisable,
the Company may redeem the Public Warrants:
| ● | in
whole and not in part; |
| ● | at
a price of $0.01 per warrant; |
| ● | upon
not less than 30 days’ prior written notice of redemption to each warrant holder; and |
| ● | if,
and only if, the closing price of the Company’s Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for
share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading
day period ending on the third trading day prior to the date on which the notice of redemption is given to the warrant holders. |
If
and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register
or qualify the underlying securities for sale under all applicable state securities laws.
Redemption
of warrants for Class A ordinary shares when the price per Class A ordinary share equals or exceeds $10.00. Commencing
ninety days after the warrants become exercisable, the Company may redeem the Public Warrants:
| ● | in
whole and not in part; |
| ● | at
$0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise
their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the “fair
market value” of the Class A ordinary shares; |
| ● | if,
and only if, the closing price of the Class A ordinary shares equals or exceeds $10.00 per Public Share (as adjusted for share
sub-divisions, share dividends, reorganizations, reclassifications, recapitalizations and the like) on the trading day before the
Company sends the notice of redemption to the warrant holders; |
| ● | if,
and only if, the Placement Warrants are also concurrently called for redemption on the same terms as the outstanding Public
Warrants, as described above; and |
| ● | if,
and only if, there is an effective registration statement covering the issuance of Class A ordinary shares issuable upon exercise
of the warrants and a current prospectus relating thereto available throughout the 30-day period after written notice of redemption
is given. |
In
addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes
in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per ordinary share
(with such issue price or effective issue price to be determined in good faith by the Company and in the case of any such issuance to
the Insiders or their affiliates, without taking into account any Founder Shares held by the Insiders or such affiliates, as applicable,
prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more
than 50% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the completion
of a Business Combination (net of redemptions), and (z) the volume-weighted average trading price of the Class A ordinary shares
during the 20 trading day period starting on the trading day prior to the day on which the Company completes a Business Combination (such
price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest
cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $10.00 and $18.00 per share redemption
trigger prices will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the Market Value and the Newly Issued
Price, respectively.
FTAC
HERA ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2022
(Unaudited)
At
September 30, 2022 and December 31, 2021, there were 480,000 Placement Warrants outstanding. The Placement Warrants are identical to
the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Placement Warrants and the Class A
ordinary shares issuable upon the exercise of the Placement Warrants are not transferable, assignable or salable until 30 days after
the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Placement Warrants will be exercisable
on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees, subject
to certain limited exceptions. If the Placement Warrants are held by someone other than the initial purchasers or their permitted transferees,
the Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
NOTE
9. FAIR VALUE MEASUREMENTS
The
fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would
have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction
between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company
seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable
inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is
used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and
liabilities:
|
Level 1: |
Quoted
prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions
for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. |
|
Level 2: |
Observable
inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities
and quoted prices for identical assets or liabilities in markets that are not active. |
|
Level 3: |
Unobservable
inputs based on an assessment of the assumptions that market participants would use in pricing the asset or liability. |
At
September 30, 2022, assets held in the Trust Account were comprised of $856,464,013 in money market funds which are invested primarily
in U.S. Treasury securities. Through September 30, 2022, the Company has not withdrawn any interest earned on the Trust Account.
At
December 31, 2021, assets held in the Trust Account were comprised of $851,547,099 in money market funds which are invested primarily
in U.S. Treasury securities. Through December 31, 2021, the Company has not withdrawn any interest earned on the Trust Account.
The
following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring
basis at September 30, 2022 and December 31, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized
to determine such fair value:
Description | |
Level | | |
September 30, 2022 | | |
December 31, 2021 | |
Assets: | |
| | |
| | |
| |
Investment held in Trust Account – U.S. Treasury Securities Money Market Fund | |
| 1 | | |
$ | 856,464,013 | | |
$ | 851,547,099 | |
| |
| | | |
| | | |
| | |
Liabilities: | |
| | | |
| | | |
| | |
Warrant Liabilities – Public Warrants | |
| 1 | | |
$ | 1,822,162 | | |
$ | 20,209,821 | |
Warrant Liabilities – Placement Warrants | |
| 2 | | |
$ | 41,088 | | |
$ | 455,712 | |
FTAC
HERA ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2022
(Unaudited)
The
Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities in the accompanying
condensed balance sheets. The warrant liabilities are measured at fair value at issuance 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.
For
periods subsequent to the detachment of the Public Warrants from the Units, the Public Warrant quoted market price is used as the fair
value as of each relevant date to measure the Public Warrants. As of September 30, 2022 and December 31, 2021, the Public Warrant quoted
market price was used as the fair value to measure the Public Warrants. Because the underlying terms of the Placement Warrants are similar
in nature to the Public Warrants, the Public Warrant quoted market price was also used as the fair value for the Placement Warrants as
of the relevant dates.
The
following table presents the changes in the fair value of warrant liabilities for the three and nine months ended September 30, 2021:
| |
Placement | | |
Public | | |
Warrant
Liabilities | |
Fair value as of January 18, 2021 (inception) | |
$ | — | | |
$ | — | | |
$ | — | |
Initial measurement on March 8, 2021 | |
| 657,600 | | |
| 29,163,108 | | |
| 29,820,708 | |
Change in valuation inputs or other assumptions | |
| (9,600 | ) | |
| (425,739 | ) | |
| (435,339 | ) |
Fair value as of March 31, 2021 | |
| 648,000 | | |
| 28,737,369 | | |
| 29,385,369 | |
Change in valuation inputs or other assumptions | |
| (14,400 | ) | |
| (638,608 | ) | |
| (653,008 | ) |
Transfers to Level 1 | |
| — | | |
| (28,098,761 | ) | |
| (28,098,761 | ) |
Transfers to Level 2 | |
| (633,600 | ) | |
| — | | |
| (633,600 | ) |
Fair value as of September 30, 2021 | |
$ | — | | |
$ | — | | |
$ | — | |
There
were no transfers in or out of Level 3 from other levels in the fair value hierarchy during the three and nine months ended September
30, 2022.
NOTE
10. SUBSEQUENT EVENTS
The
Company evaluated subsequent events and transactions that occurred after the condensed balance sheet date up to 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.