NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE
1 – Description of Organization and Business Operations
Kismet
Acquisition One Corp (the “Company”) was newly incorporated in the British Virgin Islands on June 3, 2020 as a business company
with limited liability and formed for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation,
contractual control arrangement with, purchasing all or substantially all of the assets of, or engaging in any other similar initial
business combination with one or more businesses or entities (“Business Combination”). Although the Company is not limited
to a particular industry or geographic region for purposes of consummating a Business Combination, the Company intends to focus on companies
in the telecommunications infrastructure, internet and technology and consumer goods and services sectors operating in Russia. The Company
has neither engaged in any operations nor generated revenue to date. The Company is an “emerging growth company,” as defined
in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart our Business
Startups Act of 2012 (the “JOBS Act”).
All
activity for the period from June 3, 2020 (inception) through March 31, 2021 relates to the Company’s formation, the preparation
for its initial public offering (the “Initial Public Offering”), which is described below, and since the Initial Public Offering,
the search for a potential target. The Company will not generate any operating revenues until after the completion of its initial Business
Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from
the Initial Public Offering.
The
Company’s sponsor is Kismet Sponsor Limited, a business company incorporated in the British Virgin Islands with limited liability
(the “Sponsor”). The registration statement for the Company’s Initial Public Offering was declared effective on August
5, 2020. On August 10, 2020, the Company consummated its Initial Public Offering of 25,000,000 units (the “Units” and, with
respect to the ordinary shares included in the Units being offered, the “Public Shares”), at $10.00 per Unit, generating
gross proceeds of $250.0 million, and incurring offering costs of approximately $14.3 million, inclusive of approximately $8.8 million
in deferred underwriting commissions (Note 6). The Company granted the underwriter a 45-day option to purchase up to an additional 3,750,000
Units at the Initial Public Offering price to cover the over-allotment option, if any. The over-allotment option expired unexercised
on September 19, 2020.
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the private placement (“Private Placement”) of 6,750,000
warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”), at a price
of $1.00 per Private Placement Warrant to the Sponsor, generating gross proceeds of approximately $6.8 million, and incurring offering
costs of approximately $11,000 (Note 4).
Upon
the closing of the Initial Public Offering and the Private Placement in August 2020, $250.0 million ($10.00 per Unit) of the net
proceeds of the Initial Public Offering and certain of the proceeds of the Private Placement were placed in a trust account
(“Trust Account”) initially invested in cash and subsequently in U.S. “government securities” within the
meaning of Section 2(a)(16) of the Investment Company Act of 1940 (the “Investment Company Act”), having a maturity of
185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act
which invest only in direct U.S. government treasury obligations, until the earlier of: (i) the completion of a Business Combination
and (ii) the distribution of the Trust Account as described below.
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of its Initial Public Offering
and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward
consummating a Business Combination. The Company’s initial Business Combination must be with one or more operating businesses or
assets with a fair market value equal to at least 80% of the net assets held in the Trust Account (excluding the amount of the deferred
underwriting discount held in trust and taxes payable on the income earned on the Trust Account) at the time the Company signs a definitive
agreement in connection with the initial Business Combination. However, 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 1940,
as amended, or the Investment Company Act.
The
Company will provide its holders of the 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 shareholder 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 in the Trust Account (initially anticipated
to be $10.00 per 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). These Public Shares
have been recorded at a redemption value and classified as temporary equity on the condensed balance sheets in accordance with Accounting
Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” If the Company seeks shareholder
approval of a Business Combination, it will complete the Business Combination only if the Company has net tangible assets of at least
$5,000,001 upon such consummation of a Business Combination and a majority of the shares are voted in favor of the Business Combination.
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
(the “SEC”), and file tender offer documents with the SEC prior to completing a Business Combination. If, however, a shareholder
approval of the transactions 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. Additionally, each Public Shareholder may elect to redeem such shareholder’s Public Shares irrespective of
whether such shareholder votes for or against the proposed transaction. If the Company seeks shareholder approval in connection with
a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 5) and the Sponsor and the Company’s
officers and directors have agreed to vote any Public Shares purchased during or after the Initial Public Offering in favor of a Business
Combination. In addition, the Sponsor has agreed to waive its redemption rights with respect to its Founder Shares and the Sponsor and
the Company’s officers and directors have agreed to waive their redemption rights with respect to any Public Shares owned by them
in connection with the completion of a Business Combination.
Notwithstanding
the foregoing, the Company’s Amended and Restated Memorandum and Articles of Association provide 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 20% or more of the ordinary shares sold in the Initial Public Offering,
without the prior consent of the Company.
The
Sponsor and the Company’s officers and directors have agreed not to propose an amendment to the Company’s Amended and Restated
Memorandum and Articles of Association that would affect the substance or timing of the Company’s obligation to provide for the
redemption of its Public Shares in connection with a Business Combination or to redeem 100% of its Public Shares if the Company does
not complete a Business Combination, unless the Company provides the Public Shareholders with the opportunity to redeem their ordinary
shares in conjunction with any such amendment.
If
the Company is unable to complete a Business Combination within 24 months from the closing of the Initial Public Offering, or August
10, 2022 (as may be extended by approval of the Company’s shareholders, 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 earned on the funds held in the Trust Account and not previously released to the Company to pay its
taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares,
which redemption will completely extinguish Public Shareholders’ rights as shareholders (including the right to receive further
liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of the remaining shareholders and the Company’s board of directors, commence a voluntary liquidation and
thereby a formal dissolution of the Company, subject in each case to the Company’s obligations under British Virgin Islands law
to provide for claims of creditors and the requirements of other applicable law.
In
connection with the redemption of 100% of the Company’s outstanding Public Shares for a portion of the funds held in the Trust
Account, each holder will receive a full pro rata portion of the amount then in the Trust Account, plus any pro rata interest earned
on the funds held in the Trust Account and not previously released to the Company to pay the Company’s taxes payable (less up to
$100,000 of interest to pay dissolution expenses).
The
Sponsor has agreed to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination
within the Combination Period. However, if the Sponsor should acquire Public Shares after the Initial Public Offering, it will be entitled
to liquidating distributions from the Trust Account with respect to such Public Shares 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 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 funds held in the Trust Account that will be available to fund the redemption of the Company’s
Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets remaining available
for distribution (including Trust Account assets) will be only $10.00 per share initially held in the Trust Account. In order to protect
the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the Company if and to the extent any claims by
a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has entered
into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds
in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust
Account as of the date of the liquidation of the Trust Account, if less than $10.00 per share due to reductions in the value of the trust
assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business
who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will
it apply 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. In the event that an executed waiver is deemed to be unenforceable against a third party,
the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility
that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have vendors, service providers
(except the Company’s independent 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.
Proposed
Business Combination
On
January 31, 2021, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”) with Nexters
Inc., a British Virgin Islands business company (“Pubco”), the Company’s Sponsor, solely in its capacity as the Purchaser
Representative, Nexters Global Ltd. (“Nexters Global”), a private limited liability company domiciled in Cyprus, Fantina
Holdings Limited, a private limited liability company domiciled in Cyprus, solely in its capacity as the Nexters Global Shareholders
Representative, and the shareholders of Nexters Global. Pursuant to the Business Combination Agreement, among other things, the Company
agreed to combine with Nexters Global in a business combination whereby the Company will merge with and into Pubco and Pubco will purchase
all shares of Nexters Global, making Nexters Global a direct wholly-owned subsidiary of Pubco (the “Merger”). Pubco is a
newly formed entity that was formed for the sole purpose of entering into and consummating the transactions set forth in the Business
Combination Agreement.
Pursuant
to the terms, and subject to the conditions, contained in the Business Combination Agreement, the parties to the Business Combination
Agreement will effect the following transactions (collectively, the “Proposed Transactions”):
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(1)
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the
Company will merge with and into Pubco (the “Merger”), as a result of which the separate corporate existence of the Company
shall cease and Pubco shall continue as the surviving company, and each issued and outstanding security of the Company immediately prior
to the Merger Effective Time shall no longer be outstanding and shall automatically be cancelled, in exchange for the right of the holder
thereof to receive a substantially equivalent security of Pubco; and
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(2)
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Pubco
will acquire all of the issued and outstanding share capital of Nexters Global in exchange for the payment, issue and delivery to the
Nexters Global Shareholders of a combination of cash and shares of Pubco (the “Share Acquisition”), such that Nexters Global
will be a direct wholly owned subsidiary of Pubco.
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At
the effective time of the Merger, (i) each issued and outstanding ordinary share of the Company will automatically be converted into
and exchanged for the right to receive one ordinary share of Pubco (“Pubco Ordinary Shares”), (ii) each issued and outstanding
public warrant of the Company will automatically be converted into and exchanged for the right one public warrant of Pubco (“Pubco
Public Warrants”), (iii) each issued and outstanding private warrant of the company will automatically be converted into and exchanged
for the right to receive one private warrant of Pubco (“Pubco Private Warrants” and, collectively with the Pubco Public Warrants,
“Pubco Warrants”), and (iv) each issued and outstanding option to purchase ordinary shares of the Company shall be converted
automatically into the right of the holder thereof to receive an option relating to Pubco Ordinary Shares (the “Pubco Options”).
Each of the Pubco Public Warrants, Pubco Private Warrants and Pubco Options will have substantially the same terms and conditions as
are in effect with respect to Company’s public warrants, private warrants and options immediately prior to the Merger Effective
time.
In
consideration for the purchase of Nexters Global’s share capital, Pubco will:
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(1)
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pay
to the shareholders of Nexters Global cash in an amount not to exceed $150,000,000 equal
to 50% of the aggregate amount of funds held by the Company either in or outside of its trust
account, after taking into account any payments to be made to the Company’s public
shareholders who validly exercise redemption rights pursuant to the Redemption (as defined
below) and the proceeds received by Pubco pursuant to the A&R Forward Purchase Agreement
(as defined below) (the “Base Cash Consideration”), subject to increase or decrease
based on the Nexters Global’s net working capital as of the Reference Time (as such
term is defined in the Business Combination Agreement) and subject to decrease by the amount
of the Nexters Global’s outstanding indebtedness and transaction expenses as of the
Reference Time and the Share Acquisition Closing, respectively (the Base Cash Consideration
as so adjusted, the “Cash Payment”); and
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(2)
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issue
to the shareholders of the Nexters Global immediately prior to the Share Acquisition Closing
an aggregate number of Pubco Ordinary Shares (the “Exchange Shares”) with an
aggregate value of $2,032,500,000 minus the Base Cash Consideration, with each Exchange Share
valued at the price per share payable to the Company’s public shareholders pursuant
to the Redemption minus Deferred Exchange Shares (valued at approximately $200 million),
as described further below.
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The
issuance of an aggregate of 20,000,000 Exchange Shares (being the Deferred Exchange Shares) to the shareholders of Nexters Global immediately
prior to the Share Acquisition Closing (other than Everix Investments Limited) will be deferred as follows:
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●
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the
issuance of 10,000,000 Exchange Shares, in the aggregate, will be deferred until the volume
weighted average trading price of the Pubco Ordinary Shares is $13.50 or greater for any
20 trading days within a period of 30 trading days prior to the third anniversary of the
Share Acquisition Closing; and
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●
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the
issuance of an additional 10,000,000 Exchange Shares, in the aggregate, will be deferred
until the volume weighted average trading price of the Pubco Ordinary Shares is $17.00 or
greater for any 20 trading days within a period of 30 trading days prior to the third anniversary
of the Share Acquisition Closing.
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The
transaction is subject to certain conditions, including: (i) the Company’s shareholders having approved, among other things,
the transactions contemplated by the Business Combination Agreement; (ii) the absence of any law or governmental order that would
prohibit the Proposed Transactions; (iii) the termination or expiration of all required waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended; (iv) the Company having at least $5,000,001 of net tangible assets (as determined in
accordance with Rule 3a51-1(g)(1) of the Exchange Act) remaining after the Closing; (v) the Company and Pubco having at least $100 million
of cash either in or outside of the trust account, after taking into accounts payments by the Company for the Redemption and any proceeds
received by Pubco under the A&R Forward Purchase Agreement; (vi) the Registration Statement having been declared effective by the
SEC and remaining effective; and (vii) the Pubco Ordinary Shares and Pubco Warrants having been approved for listing on Nasdaq, subject
only to official notice thereof.
On
February 2, 2021, the Company filed a Current Report on Form 8-K announcing the entry into a Material Definitive Agreement including
the full Business Combination Agreement and the A&R Forward Purchase Agreement.
Liquidity
and Capital Resources
As
of March 31, 2021, the Company had approximately $282,000 in its operating bank account and working capital deficit of approximately
$1.8 million.
Through
March 31, 2021, the Company’s liquidity needs were satisfied through a payment of $25,000 from Sponsor to cover certain offering
costs in exchange for the issuance of the Founder Shares and a loan of approximately $191,000 from the Sponsor pursuant to the Note (see
Note 5). Subsequent to the consummation the Initial Public Offering, the Company’s liquidity needs were also satisfied with net
proceeds from the consummation of the Private Placement not held in the Trust Account. The Company fully repaid the Note balance of approximately
$191,000 on August 12, 2020. In addition, 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, provide the Company
Working Capital Loans (see Note 5). As of March 31, 2021 and December 31, 2020, there were no amounts outstanding under the Working Capital
Loans.
Based
on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity from the Sponsor or
an affiliate of the Sponsor, or certain of the Company’s officers and directors to meet its needs through the earlier of the consummation
of a Business Combination or one year from this filing. Over this time period, the Company will be using these funds for paying existing
accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective
target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating
and consummating a Business Combination.
NOTE
2 – Basis of Presentation and Summary of Significant Accounting Policies
Basis
of Presentation
The accompanying unaudited condensed financial statements are presented
in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim
financial information and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required
by GAAP. In the opinion of management, the unaudited condensed financial statements reflect all adjustments, which include only normal
recurring adjustments necessary for the fair statement of the balances and results for the periods presented. Operating results for the
three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31,
2021 or any future periods.
The
accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto
included in the Company’s Annual Report on Form 10-K/A filed with the SEC on June 8, 2021.
Emerging
Growth Company
As
an emerging growth company, the Company 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
auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, 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 an emerging growth 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 unaudited condensed financial statements in conformity with U.S. 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 unaudited condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates. 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 financial
statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming
events. Accordingly, the actual results could differ significantly from those estimates.
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.
There were no cash equivalents held outside the Trust Account at March 31, 2021 and December 31, 2020.
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 Depository Insurance Coverage of $250,000, and any investments held in Trust Account. The Company
has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
The Company’s investments held in the Trust Account as of March 31, 2021 and December 31, 2020 are comprised of investments in
U.S. Treasury securities having a maturity of 185 days or less or investments in money market funds that comprise only U.S. treasury
securities money market funds.
Investments
Held in the 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. The Company’s investments held in the Trust Account are classified
as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains
and losses resulting from the change in fair value of these securities is included in net gain on investments held in Trust Account in
the accompanying unaudited condensed statement of operations. The estimated fair values of investments held in the Trust Account are
determined using available market information.
Fair
Value of Financial Instruments
Fair
value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction
between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs
used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets
or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
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Level
1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
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Level
2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices
for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
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Level
3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions,
such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
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In
some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In
those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input
that is significant to the fair value measurement.
As of March 31, 2021 and December 31,2020, the
carrying values of cash, prepaid expenses, accounts payable and accrued expenses approximate fair value due to the short-term nature of
the instruments. The fair value of marketable securities held in Trust Account is determined using quoted prices in active markets.
The
fair value of Private Placement Warrants is measured using Black-Scholes Option Pricing model at each balance sheet date.
Offering
Costs
The
Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A – “Expenses of
Offering.” Offering costs consist of costs incurred in connection with the formation and preparation for the Initial Public Offering.
These costs, together with the underwriting discount, were charged to additional paid-in capital upon the completion of the Initial Public
Offering. Offering costs associated with the issuance of derivative warrant liabilities are expensed as incurred, presented as non-operating
expenses in the statement of operations. Offering costs associated with the ordinary shares and public warrants were charged to
stockholders’ equity upon the completion of the Initial Public Offering.
Ordinary
Shares Subject to Possible Redemption
The Company accounts for
its ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities
from Equity.” Ordinary shares subject to mandatory redemption (if any) are classified as liability instruments 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
ordinary shares features certain redemption rights that are considered to be outside of the Company’s control and subject to the
occurrence of uncertain future events. Accordingly, at March 31, 2021 and December 31, 2020, 22,906,930 and 22,925,656 ordinary shares
subject to possible redemption are presented as temporary equity, respectively, outside of the shareholders’ equity section of
the Company’s condensed balance sheets.
Net
Income (Loss) per Ordinary Share
The
Company complies with accounting and disclosure requirements of ASC Topic 260, “Earnings Per Share.” Net income (loss) per
share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding during the period, excluding
ordinary shares subject to forfeiture by the Sponsor. Weighted average shares were reduced for the effect of an aggregate of 937,500
ordinary shares that were subject to forfeiture if the option to purchase additional Units is not exercised by the underwriters (see
Note 6). On September 17, 2020, the underwriters notified the Company that the over-allotment was not exercised, and as a result, 937,500
ordinary shares were forfeited and cancelled, effective as of September 19, 2020. The Company has not considered the effect of the warrants
sold in the Initial Public Offering and Private Placement to purchase an aggregate of 19,250,000 shares of ordinary shares in the
calculation of diluted earnings per share, since their inclusion would be anti-dilutive under the treasury stock method. As a result,
diluted loss per share is the same as basic loss per share for the period presented.
The
Company’s unaudited condensed statement of operations includes a presentation of income (loss) per share for ordinary shares subject
to redemption in a manner similar to the two-class method of income (loss) per share. Net income per ordinary share, basic and diluted
for redeemable ordinary shares for the three months ended March 31, 2021 is calculated by dividing the interest income earned on investments
held in the trust account of approximately $17,000 by the weighted average number of redeemable ordinary shares outstanding for the period.
Net loss per ordinary share, basic and diluted for non-redeemable ordinary shares for the three months ended March 31, 2021 is calculated
by dividing the net loss of approximately $187,000, less income attributable to redeemable ordinary shares, by the weighted average number
of non-redeemable ordinary shares outstanding for the period.
Share-based
Compensation
Share-based
compensation to employees and non-employees is recognized over the requisite service period based on the estimated grant-date fair
value of the awards. The Company recognizes the expense for share-based compensation awards subject to performance-based milestone
vesting over the remaining service period when management determines that achievement of the milestone is probable. Management
evaluates when the achievement of a performance-based milestone is probable based on the expected satisfaction of the performance
conditions at each reporting date. Share-based compensation would be recognized in general and administrative expense in the
statement of operations. We have determined that the consummation of an initial Business Combination is a performance condition subject
to significant uncertainty. As such, the achievement of the performance is not deemed to be probable of achievement until the consummation
of the event, and therefore no compensation has been recognized for the three months ended March 31, 2021.
Income
Taxes
ASC
Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax
positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not
to be sustained upon examination by taxing authorities. The Company’s management determined that the British Virgin Islands is
the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits
as income tax expense. There were no unrecognized tax benefits and no amounts accrued for in interest and penalties as of March 31, 2021
and December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals
or material deviation from its position.
There
is currently no taxation imposed on income by the Government of the British Virgin Islands. In accordance with British Virgin Islands
federal income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s
unaudited condensed financial statements. The Company’s management does not expect that the total amount of unrecognized tax benefits
will materially change over the next twelve months.
Derivative
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 stock purchase warrants, to determine if such instruments are derivatives or contain
features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-40. The classification of derivative instruments, including
whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
The
Company issued 6,750,000 Private Placement Warrants which are recognized as derivative warrant liabilities in accordance with ASC 815-40.
Accordingly, the Company recognizes the Private Placement Warrants as liabilities at fair value and adjust the instruments to fair value
at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in
fair value is recognized in our statement of operations. The fair value of Private Placement Warrants is measured using Black-Scholes
Option Pricing model at each balance sheet date.
Recent
Adopted Accounting Standards
In
August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives
and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an
Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major
separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked
contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The
Company adopted ASU 2020-06 on January 1, 2021. Adoption of the ASU did not impact the Company’s financial position, results of
operations or cash flows.
Recent
Issued Accounting Standards
The
Company’s management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently
adopted, would have a material impact on the Company’s unaudited condensed financial statements.
NOTE
3 – Initial Public Offering
On
August 10, 2020, the Company consummated its Initial Public Offering of 25,000,000 Units, at $10.00 per Unit, generating gross proceeds
of $250.0 million, and incurring offering costs of approximately $14.3 million, inclusive of approximately $8.8 million in deferred underwriting
commissions.
Each
Unit consists of one ordinary share and one-half of one redeemable warrant (“Public Warrant”). Each whole Public Warrant
entitles the holder to purchase one ordinary share at an exercise price of $11.50 per share, subject to adjustment (see Note 6).
NOTE
4 – Private Placement
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the Private Placement of 6,750,000 Private Placement Warrants,
at a price of $1.00 per Private Placement Warrant with the Sponsor, generating gross proceeds of approximately $6.8 million, incurring
offering costs of approximately $11,000.
Each
whole Private Placement Warrant is exercisable for one whole ordinary share at a price of $11.50 per share. A portion of the proceeds
from the Private Placement Warrants was 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 Private Placement Warrants will expire worthless. The Private
Placement Warrants will be non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted
transferees.
NOTE
5 – Related Party Transactions
Founder
Shares
On
June 8, 2020, the Company issued 6,250,000 ordinary shares to the Sponsor (the “Founder Shares”). The Sponsor paid for certain
offering costs of $25,000 on behalf of the Company in exchange for issuance of the Founder Shares. In July 2020, the Company performed
a 1.23 share split resulting in the Sponsor holding an aggregate of 7,687,500 Founder Shares. All shares and associated amounts have
been retroactively restated to reflect the share capitalization. The Sponsor had agreed to forfeit up to an aggregate of 937,500 Founder
Shares, on a pro rata basis, to the extent that the option to purchase additional units is not exercised in full by the underwriters
so that the Founder Shares would represent 20% of the Company’s issued and outstanding shares after the Initial Public Offering
plus the number of ordinary shares to be sold pursuant to the Forward Purchase Agreement (as defined below). On September 17, 2020, the
underwriters notified the Company that the over-allotment option was not exercised; as a result, these Founder Shares were forfeited,
effective as of September 19, 2020.
The
Sponsor agreed, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier to occur of:
(x) one year after the date of the completion of the initial Business Combination or earlier if, subsequent to the initial Business Combination,
the last reported sale price of the ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share dividends,
reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing at least 150 days after the
initial Business Combination, or (y) the Company consummates a subsequent liquidation, merger, stock exchange or other similar transaction
which results in all of the Company’s shareholders having the right to exchange their ordinary shares for cash, securities or other
property.
Related
Party Loans
On
June 10, 2020, the Sponsor agreed to loan the Company up to $200,000 to be used for the payment of costs related to the Initial Public
Offering pursuant to a promissory note (the “Note”). The Note was non-interest bearing, unsecured and due upon the date the
Company consummated the Initial Public Offering. The Company borrowed approximately $191,000 under the Note and repaid the Note in full
on August 12, 2020.
In
addition, 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 (“Working
Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the
proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside
the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of 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, without
interest, or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into warrants of
the post Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants.
As of March 31, 2021 and December 31, 2020, the Company had no borrowings under the Working Capital Loans.
Administrative
Services Agreement
Commencing
on the date that of the Company’s final prospectus, the Company agreed to pay an affiliate of the Sponsor a total of up to $10,000
per month for office space, administrative and support services. For the three months ended March 31, 2021, the Company did not incur
any expense for these services. Upon completion of the Initial Business Combination or the Company’s liquidation, the Company will
cease paying these monthly fees.
Forward
Purchase Agreement
On
August 5, 2020, the Company entered into a forward purchase agreement (the “Forward Purchase Agreement”) with the Sponsor,
which provides for the purchase of $20,000,000 of units, with each unit consisting of one ordinary share (the “Forward Purchase
Shares”) and one half of one warrant to purchase one ordinary share at $11.50 per share (the “Forward Purchase Warrants”),
for a purchase price of $10.00 per unit, in a private placement to occur concurrently with the closing of the initial Business Combination.
The purchase under the Forward Purchase Agreement is required to be made regardless of whether any ordinary shares are redeemed by the
Public Shareholders. The Forward Purchase Shares and Forward Purchase Warrants will be issued only in connection with the closing of
the initial Business Combination. The proceeds from the sale of Forward Purchase Shares and Forward Purchase Warrants may be used as
part of the consideration to the sellers in the initial Business Combination, expenses in connection with the initial Business Combination
or for working capital in the post-transaction company. The forward purchase agreement is accounted for as equity on the balance
sheet.
Amended
and Restated Forward Purchase Agreement
On
January 31, 2021, the Company, Pubco and the Sponsor entered into the Amended and Restated Forward Purchase Agreement (the “A&R
Forward Purchase Agreement”). The A&R Forward Purchase Agreement amends the Forward Purchase Agreement by, among other things,
increasing the Sponsor’s purchase commitment thereunder from $20 million to $50 million and replacing the Sponsor’s commitment
to acquire the Company’s public units with a commitment to acquire Pubco ordinary shares and Pubco public warrants in a private
placement to occur after, and subject to, the Merger closing and prior to the Share Acquisition closing.
Directors Compensation
Commencing on August 6, 2020 through the earlier of consummation of the initial Business Combination and the Company’s liquidation,
the Company agreed to pay its directors $40,000 each and granted each of the independent directors an option to purchase 40,000 Class
A ordinary shares at an exercise price of $10.00 per share, which will vest upon the consummation of the initial Business Combination
and will expire five years after the date on which it first became exercisable. In addition, the Sponsor, executive officers and directors,
or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on the
Company’s behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations.
The Company’s audit committee will review on a quarterly basis all payments that were made to the Sponsor, officers or directors,
or the Company’s or their affiliates. During the three months ended March 31, 2021, the Company paid $80,000 director compensation.
NOTE
6 – Commitments and Contingencies
Registration
Rights
The
holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and
any ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working
Capital Loans) are entitled to registration rights pursuant to a registration rights agreement, requiring the Company to register such
securities for resale. The holders of the majority of these securities are entitled to make up to three demands, excluding short form
demands, that the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights
with respect to registration statements filed subsequent to the completion of the initial Business Combination and rights to require
the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses
incurred in connection with the filing of any such registration statements.
Underwriting
Agreement
The
Company granted the underwriters a 45-day option from the date of the prospectus to purchase up to 3,750,000 additional Units at the
Initial Public Offering price less the underwriting discounts and commissions. On September 17, 2020, the underwriters notified the Company
that the over-allotment option was not exercised; as a result, 937,500 Founder Shares were forfeited, effective as of September 19, 2020.
The
underwriters were entitled to an underwriting commission of $0.20 per unit, or $5.0 million in the aggregate, paid upon the closing of
the Initial Public Offering. In addition, the underwriters were entitled to a deferred underwriting commission of $0.35 per unit, or
approximately $8.8 million 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.
Risks
and Uncertainties
Management
is continuing to evaluate the impact of the COVID-19 pandemic on the industry 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 and the close of the business combination, the specific impact is not readily determinable as of the date of these financial
statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE
7 – Warrants
Public
Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the Units
and only whole Public Warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion
of a Business Combination or (b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company has
an effective registration statement under the Securities Act covering the ordinary shares issuable upon exercise of the Public Warrants
and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the
securities, or blue sky, laws of the state of residence of the holder (or the Company permit holders to exercise their warrants on a
cashless basis under certain circumstances).
The
Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of the initial Business
Combination, the Company will use its commercially reasonable efforts to file with the SEC a registration statement for the registration,
under the Securities Act, of the ordinary shares issuable upon exercise of the warrants. The Company will use its commercially reasonable
efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and its prospectus relating
thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above,
if the ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies
the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require
holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9)
of the Securities Act and, in the event the Company so elects, it will not be required to file or maintain in effect a registration statement
or register or qualify the shares under applicable blue sky laws to the extent an exemption is available.
The
warrants have an exercise price of $11.50 per share and will expire in five years after the completion of a Business Combination or earlier
upon redemption or liquidation.
The
Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that
the Private Placement Warrants and the ordinary shares issuable upon exercise of the Private Placement Warrants will not be transferable,
assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally,
the Private Placement Warrants will be non-redeemable so long as they are held by the initial purchasers or such purchasers’ permitted
transferees. If the Private Placement Warrants are held by someone other than the Sponsor or its permitted transferees, the Private Placement
Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
Once
the warrants become exercisable, the Company may redeem the outstanding warrants (excluding the Private Placement Warrants), in whole
and not in part, at a price of $0.01 per warrant:
|
●
|
upon
a minimum of 30 days’ prior written notice of redemption;
|
|
●
|
if,
and only if, the last reported sale price of the ordinary shares equals or exceeds $18.00 per share (as adjusted for share splits, share
dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading
day period ending three business days before we send the notice of redemption to the warrant holders.
|
Once
the warrants become exercisable, the Company may redeem the outstanding warrants, in whole and not in part, at a price of $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 determined by reference to an agreed table set forth based on the redemption
date and the “fair market value” of the ordinary shares;
|
|
●
|
if,
and only if, the closing price of the ordinary shares equals or exceeds $10.00 per Public Share (as adjusted for share splits, share
dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within the 30-trading
day period ending three trading days before the Company sends the notice of redemption to the warrant holders, and
|
|
●
|
if
the closing price of the ordinary shares for any 20 trading days within a 30-trading day period ending on the third trading day prior
to the date on which the Company sends the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted for
share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like), the Private Placement
Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above.
|
The
“fair market value” of the ordinary shares for the above purpose shall mean the volume weighted average price of the ordinary
shares during the ten trading days immediately following the date on which the notice of redemption is sent to the holders of warrants.
The Company will provide the warrant holders with the final fair market value no later than one business day after the ten-trading day
period described above ends. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.361
ordinary shares per warrant (subject to adjustment).
The
exercise price and number of ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances including
in the event of a share capitalization, or recapitalization, reorganization, merger or consolidation. However, the warrants will not
be adjusted for issuance of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required
to net cash settle the warrants shares. If the Company is unable to complete a Business Combination within the Combination Period and
the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their
warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to
such warrants. Accordingly, the warrants may expire worthless.
The
Public warrants are accounted for as equity and the Private Placement warrants are accounted for as liabilities on the balance sheet.
NOTE
8 – Shareholders’ Equity
Ordinary
Shares
The Company is authorized to issue unlimited ordinary
shares with no par value. Holders of the Company’s ordinary shares are entitled to one vote for each share. On June 8, 2020, the
Company issued 6,250,000 ordinary shares. In July 2020, the Company performed a 1.23 share split resulting in the Sponsor holding an aggregate
of 7,687,500 Founder Shares. All shares and associated amounts have been retroactively restated to reflect the share capitalization. Of
these 7,687,500 Founder Shares, 937,500 were subject to forfeiture by the Sponsor (or its permitted transferees) on a pro rata basis depending
on the extent to which the underwriters’ option to purchase additional units was exercised. On September 17, 2020, the underwriters
notified the Company that the over-allotment option was not exercised; thus, the 937,500 ordinary shares were forfeited, effective as
of September 19, 2020. As of March 31, 2021 and December 31, 2020, there were 31,750,000 ordinary shares issued and outstanding, consisting
of 6,750,000 Founder Shares and 25,000,000 Public Shares (of which 22,906,930 and 22,925,656 shares are subject to possible redemption,
respectively).
Preferred
Shares
The
Company is authorized to issue without shareholder approval of an unlimited number of preferred shares with no par value, divided into
five classes, through Class E (collectively, the “preferred shares”) each with such designation, rights and preferences as
may be determined by a resolution of the Company’s board of directors to amend the Amended and Restated Memorandum and Articles
of Association to create such designations, rights and preferences. As of March 31, 2021 and December 31, 2020, there were no preferred
shares issued or outstanding.
Share
Options
In
August 2020, the Company granted option awards to three of its independent directors that contain both a performance condition and service
condition. Each option award is an option to purchase 40,000 ordinary shares at an exercise price of $10.00 per share which vest upon
the consummation of the initial Business Combination and will expire in five years after the date on which they first become exercisable.
The Company has determined that the consummation of an initial Business Combination is a performance condition subject to significant
uncertainty. As such, the achievement of the performance is not deemed to be probable of achievement until the consummation of the event,
and therefore no compensation has been recognized for the three months ended March 31, 2021.
NOTE
9 – Fair Value Measurements
The
following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a
recurring basis as of March 31, 2021 and December 31, 2020 by level within the fair value hierarchy:
|
|
Fair Value Measured as of March 31, 2021
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments held in Trust Account - U.S. Treasury bills
|
|
$
|
250,081,552
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
250,081,552
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative warrant liabilities -
private placement warrants
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
5,467,500
|
|
|
$
|
5,467,500
|
|
|
|
Fair Value Measured as of December 31, 2020
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments held in Trust Account - U.S. Treasury bills
|
|
$
|
250,064,076
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
250,064,076
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative warrant liabilities - private placement warrants
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
7,492,500
|
|
|
$
|
7,492,500
|
|
Transfers
to/from Levels 1, 2 and 3 are recognized at the beginning of the reporting period. There were no transfers between levels for the three
months ended March 31, 2021.
The fair value of marketable securities held in Trust Account is determined
using quoted prices in active markets.
The
fair value of the Private Placement Warrants has been estimated using a Black-Scholes Option Pricing model at each balance sheet date.
For the three months ended March 31, 2021, the Company recognized a decrease in the fair value of derivative warrant liabilities of approximately
$2.0 million, which is presented as change in fair value of derivative warrant liabilities in the accompanying statement of operations.
The
change in the fair value of the derivative warrant liabilities, measured with Level 3 inputs, for three months ended March 31, 2021 is
summarized as follows:
Derivative warrant liabilities at December 31, 2020
|
|
$
|
7,492,500
|
|
Change in fair value of derivative warrant liabilities
|
|
|
(2,025,000
|
)
|
Derivative warrant liabilities at March 31, 2021
|
|
$
|
5,467,500
|
|
The
estimated fair value of derivative warrant liabilities is determined using Level 3 inputs. Inherent in a Black-Scholes model are assumptions
related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. However, inherent uncertainties
are involved. If factors or assumptions change, the estimated fair values could be materially different. The Company estimates the volatility
of its ordinary shares based on historical volatility of select peer companies that matches the expected remaining life of the warrants.
The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected
remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The
dividend rate is based on the historical rate, which the Company anticipates remaining at zero.
The
following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates for measurement
of warrant liabilities:
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
Exercise price
|
|
$
|
11.50
|
|
|
$
|
11.50
|
|
Share price
|
|
$
|
9.90
|
|
|
$
|
10.10
|
|
Term (in years)
|
|
|
5.17
|
|
|
|
5.42
|
|
Volatility
|
|
|
14.60
|
%
|
|
|
18.00
|
%
|
Risk-free interest rate
|
|
|
0.96
|
%
|
|
|
0.42
|
%
|
Dividend yield
|
|
|
-
|
|
|
|
-
|
|
NOTE
10 – Subsequent Events
Management
has evaluated subsequent events to determine if events or transactions occurring through the date the financial statements were issued
required potential adjustment to or disclosure in the financial statements and has concluded that all such events that would require
recognition or disclosure have been recognized or disclosed.