NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
NOTE
1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Stratim
Cloud Acquisition Corp. (the “Company”) is a blank check company incorporated in Delaware on July 29, 2020. The Company was
formed for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar
business combination with one or more businesses (a “Business Combination”).
The
Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination. The Company
is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and
emerging growth companies.
As
of September 30, 2021, the Company had not commenced any operations. All activity through September 30, 2021 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 a 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
registration statement for the Company’s Initial Public Offering was declared effective on March 11, 2021. On March 16, 2021, the
Company consummated the Initial Public Offering of 25,000,000 units (the “Units” and, with respect to the shares Class A
common stock included in the Units sold, the “Public Shares”) at $10.00 per unit, generating gross proceeds of $250,000,000,
which is described in Note 4.
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the sale of 4,666,667 warrants (the “Private Placement
Warrants”) at a price of $1.50 per Private Placement Warrant in a private placement to Stratim Cloud Acquisition LLC (the “Sponsor”),
generating gross proceeds of $7,000,000, which is described in Note 5.
Transaction
costs amounted to $14,326,696, consisting of $5,000,000 of underwriting fees, $8,750,000 of deferred underwriting fees and $576,696 of
other offering costs.
At
the closing of the Initial Public Offering on March 16, 2021, an amount of $250,000,000 ($10.00 per Unit) from the net proceeds of the
sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust
Account”) which will be invested 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 any open-ended investment
company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined
by the Company, until the earlier of: (i) the completion of the Business Combination and (ii) the distribution of the funds in the Trust
Account to the Company’s shareholders, as described below.
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering
and sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward
completing a Business Combination. The Company must complete a Business Combination with one or more target businesses that together
have an aggregate fair market value of at least 80% of the value of the Trust Account (excluding the deferred underwriting commissions
and taxes payable on income earned on the Trust Account) at the time of the agreement to enter into an 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 that the Company will be able to successfully effect
a Business Combination.
The
Company will provide its stockholders 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 stockholder meeting called to approve the Business Combination or (ii) by
means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a
tender offer will be made by the Company, solely in its discretion. The public stockholders will be entitled to redeem their Public Shares
for a pro rata portion of the amount then 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). There will be no redemption
rights upon the completion of a Business Combination with respect to the Company’s warrants.
STRATIM
CLOUD ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
The
Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 either immediately
prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares
voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to
hold a stockholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation
(the “Amended and Restated Certificate of Incorporation”), 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, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval
for business or other 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 stockholder approval in connection with a Business Combination,
the Sponsor and other holders of the Company’s shares of Class B common stock prior to the closing of the Initial Public Offering
(the “Initial Stockholders”) have agreed to vote their Founder Shares (as defined in Note 6) and any Public Shares purchased
during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public stockholder may elect
to redeem their Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against the proposed Business
Combination.
Notwithstanding
the above, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender
offer rules, the Amended and Restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of
such stockholder or any other person with whom such stockholder 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.
The
Initial Stockholders have agreed (a) to waive their redemption rights with respect to their Founder 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
Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection
with the Company’s initial Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business
Combination or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination
activity, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with
any such amendment. However, if the Initial Stockholders 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
Company will have until March 16, 2023 to consummate 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
earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations (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 stockholders’ rights as stockholders (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 remaining stockholders and
the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware
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
Initial Stockholders have agreed to waive their liquidation rights with respect to their Founder Shares if the Company fails to complete
a Business Combination within the Combination Period. However, if the Initial Stockholders 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 7) held in the Trust Account in the event the Company does not complete a Business Combination within in 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, the Sponsor has agreed to 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 discussed
entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (1) $10.00 per Public Share
and (2) 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 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 of 1933, as amended (the “Securities Act”). Moreover,
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 all 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.
STRATIM
CLOUD ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
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 and/or search for a target company, the specific impact is not readily
determinable as of the date of the financial statement. The financial statement does not include any adjustments that might result from
the outcome of this uncertainty.
NOTE
2. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENT
In the Company’s previously issued financial
statements, a portion of the public shares were classified as permanent equity to maintain net tangible assets greater than $5,000,000
on the basis that the Company will consummate its initial business combination only if the Company has net tangible assets of at least
$5,000,001. Thus, the company has historically classified a portion of Class A unit shares in permanent equity to satisfy the $5,000,000
net tangible asset requirement.
However, in light of recent comment letters issued
by the Securities & Exchange Commission (“SEC”) to several special purpose acquisition companies, management re-evaluated
the Company’s application of ASC 480-10-S99-3A to its accounting classification of public shares. Upon re-evaluation, management
determined that the public shares include certain provisions that require classification of the public shares as temporary equity regardless
of the minimum net tangible asset required by the Company to complete its initial business combination.
As of the date of the previously filed quarterly
report for period ended September 30, 2021 management considered such changes not material and treated them as revisions for all periods
included in the report without restating previously filed periods. Subsequently the Company re-evaluated these changes in accordance with
SEC Staff Accounting Bulletin No. 99, “Materiality” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects
of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” and determined that such changes
are material and that the previously issued unaudited financial statements for the period ended September 30, 2021, filed on November
9, 2021, should be restated and refiled.
STRATIM
CLOUD ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
NOTE
3. 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 prospectus for its Initial
Public Offering as filed with the SEC on March 15, 2021. The interim results for the three and nine months ended September 30, 2021 are
not necessarily indicative of the results to be expected for the year ending December 31, 2021 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 stockholder 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.
Liquidity
As of September 30, 2021, the Company had $1,021,767
in its operating bank account, and working capital of $806,631. The Company’s liquidity needs prior to the Company’s Initial
Public Offering and Private Placement had been satisfied through a capital contribution from the Sponsor in the amount of $25,000 (see
Note 4) for the founder shares, and an unsecured promissory note from the Sponsor of $300,000 (see Note 6). The Company fully repaid the
promissory note to the Sponsor on January 15, 2021. Subsequent to the consummation of the Initial Public Offering and Private Placement,
the Company’s liquidity needs have been satisfied through the proceeds from the consummation of the Private Placement not held in
the Trust Account. In addition, in order to finance transaction costs in connection with a Business Combination, the Company’s
Sponsor, or an affiliate of the Sponsor, or certain Company’s officers and directors may, but are not obligated to, provide the
Company with Working Capital Loans (see Note 6).
Based
on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity 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 the working capital for identifying and evaluating prospective initial Business Combination candidates, performing due diligence
on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring,
negotiating and consummating the Business Combination.
STRATIM
CLOUD ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
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 financial statements and the reported amounts of expenses during the reporting period. One of the significant estimates used in
the preparation of these condensed financial statements is the valuation of the Public and Private Placement Warrants.
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. One of the more significant accounting estimates
included in these condensed financial statements is the determination of the fair value of the warrant liabilities. 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 nine months or less when purchased to be cash equivalents.
The Company did not have any cash equivalents as of September 30, 2021 and December 31, 2020.
Marketable
Securities held in the Trust Account
At
September 30, 2021, substantially all of the assets held in the Trust Account were held in Money Market Funds, which are invested primarily
in U.S. Treasury securities. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading
securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the
change in fair value of investments held in Trust Account are included in interest earned on marketable securities held in Trust Account
in the accompanying condensed statements of operations. The estimated fair values of investments held in Trust Account are determined
using available market information.
Class
A Common Stock Subject to Possible Redemption
The
Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in Accounting Standards
Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Class A common stock subject to mandatory
redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common
stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of
uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is
classified as stockholders’ equity. The Company’s Class A common stock feature certain redemption rights that are considered
to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, Class A common stock
subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section
of the Company’s balance sheet.
The
Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to
equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock
are affected by charges against additional paid in capital and accumulated deficit.
STRATIM
CLOUD ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
Offering
Costs associated with the Initial Public Offering
The
Company complies with the requirements of the ASC340-10-S99-1and SEC Staff Accounting Bulletin (“SAB”) Topic 5A—“Expenses
of Offering”. Offering costs consist principally of professional and registration fees incurred through the balance sheet date.
Offering costs are allocated to the separable financial instruments issued in the IPO based on a relative fair value basis compared to
total proceeds received. Offering costs associated with warrant liabilities is expensed, and offering costs associated with the Class A
common stock are charged to the shareholders’ equity. Accordingly, as of September 30, 2021, offering costs in the aggregate of
$14,326,696 have been charged to shareholders’ equity and $233,334 of offering costs associated with warrant and forward purchase
unit issuance cost has been expensed on the Company’s statement of operations.
Warrant
Liabilities
The
Company accounts for 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 adjust 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 condensed statements of operations. The Private Placement Warrants
and the Public Warrants for periods where no observable traded price was available are valued using a Modified Black-Scholes Option Pricing
Model. For periods subsequent to the detachment of the Public Warrants from the Units, the Public Warrant quoted market price will be
used as the fair value as of each relevant date.
Income
Taxes
The
Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition
of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets
and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally
requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not
be realized. As of September 30, 2021, the Company had a deferred tax asset of approximately $159,000, which had a full valuation allowance
recorded against it of approximately $159,000. The Company’s deferred tax assets were deemed to be de minimis as of December 31,
2020.
ASC
740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes
a recognition threshold and measurement process for financial statement recognition and measurement of a tax position 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 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 interest and penalties as of September 30, 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.
STRATIM
CLOUD ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
The
Company’s currently taxable income primarily consists of interest income on the Trust Account. The Company’s general and
administrative costs are generally considered start-up costs and are not currently deductible. During the three and nine months ended
September 30, 2021, the Company recorded no income tax expense. The Company’s effective tax rate differs from the statutory tax
rate of 21% for the three and nine months ended September 30, 2021, respectively, due to the valuation allowance recorded on the Company’s
net operating losses and the permanent difference arising from the income recorded due to the change in fair value of the Company’s
warrant liability.
Net
income (Loss) per Common Share
The Company has two classes of shares, Class A
common stock and Class B common stock. Net income (loss) per common share is computed by dividing net loss, on a pro rata basis, by the
weighted average number of common shares outstanding for the period. Remeasurement associated with the redeemable shares of Class A common
stock is excluded from net loss per common share as the redemption value approximates fair value.
The Company has not considered the effect of the
warrants sold in the IPO and Private Placement to purchase 13,000,000 shares of Class A common stock in the calculation of diluted loss
per share, since the exercise of the warrants is contingent upon the occurrence of future events. As of September 30, 2021, the Company
did not have any other dilutive securities or other contracts that could, potentially, be exercised or converted into shares of common
stock and then share in earnings of the Company. As a result, diluted net loss per common share is the same as basic net loss per common
share for the period presented.
The following table reflects the calculation
of basic and diluted net income (loss) per common share (in dollars, except per share amounts):The following table reflects the calculation
of basic and diluted net income per common share (in dollars, except per share amounts):
| |
Three Months Ended September 30, 2021 | | |
Nine Months Ended September 30, 2021 | |
| |
Class A | | |
Class B | | |
Class A | | |
Class B | |
Basic and diluted net income per common stock | |
| | |
| | |
| | |
| |
Numerator: | |
| | |
| | |
| | |
| |
Allocation of net income, as adjusted | |
$ | 1,912,730 | | |
$ | 478,183 | | |
$ | 6,622,377 | | |
$ | 2,376,781 | |
Denominator: | |
| | | |
| | | |
| | | |
| | |
Basic and diluted weighted average stock outstanding | |
| 25,000,000 | | |
| 6,250,000 | | |
| 18,131,868 | | |
| 6,507,555 | |
Basic and diluted net income per common stock | |
$ | 0.08 | | |
$ | 0.08 | | |
$ | 0.37 | | |
$ | 0.37 | |
STRATIM
CLOUD ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
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. The Company has not experienced losses on this account
and management believes the Company is not exposed to significant risks on such account.
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
In
August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 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) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates
the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies
the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard
also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s
own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for
all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis,
with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 effective January 1, 2021. The adoption of
ASU 2020-06 did not have an impact on the Company’s financial statements.
Management
does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material
effect on the Company’s condensed financial statements.
NOTE
4. INITIAL PUBLIC OFFERING
Pursuant
to the Initial Public Offering, the Company sold 25,000,000 Units at a purchase price of $10.00 per Unit. Each Unit consists of one share
of Class A common stock and one-third of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the
holder to purchase one share of Class A common stock at an exercise price of $11.50 per whole share (see Note 8).
NOTE
5. PRIVATE PLACEMENT
Simultaneously
with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 4,666,667 Private Placement Warrants at a price
of $1.50 per Private Placement Warrant, for an aggregate purchase price of $7,000,000. The Sponsor has agreed to purchase up to a total
of 5,166,667 Private Placement Warrants, for an aggregate purchase price of $7,750,000, if the over-allotment option is exercised in
full by the underwriter. A portion of the proceeds from the sale of the Private Placement Warrants were added to the net proceeds from
the Initial Public Offering held in the Trust Account. Each Private Placement Warrant is exercisable for one share of Class A common
stock at a price of $11.50 per share, subject to adjustment (see Note 9). If the Company does not complete a Business Combination within
the Combination Period, the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the
redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.
NOTE
6. RELATED PARTY TRANSACTIONS
Founder
Shares
On
August 14, 2020, the Initial Stockholders purchased 7,187,500 shares of Class B common stock (the “Founder Shares”) for an
aggregate consideration of $25,000. The Founder Shares included an aggregate of up to 937,500 shares of Class B common stock subject
to forfeiture by the Initial Stockholders to the extent that the underwriters’ over-allotment was not exercised in full or in part,
so that the Initial Stockholders would own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after
the Initial Public Offering (assuming the Initial Stockholders did not purchase any Public Shares in the Initial Public Offering). The
underwriters’ elected not to exercise their remaining over-allotment and, accordingly, 937,500 Founder Shares were forfeited resulting
in 6,250,000 Founder Shares issued and outstanding as of September 30, 2021.
STRATIM
CLOUD ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
The
Initial Stockholders have agreed that, subject to certain limited exceptions, the Founder Shares will not be transferred, assigned, sold
or released from escrow until the earlier of (A) one year after the completion of a Business Combination or (B) subsequent
to a Business Combination, (x) if the last reported sale price of the Class A common stock equals or exceeds $12.00 per share
(as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading
day period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation,
merger, capital stock exchange or other similar transaction that results in all of the stockholders having the right to exchange their
common stock for cash, securities or other property.
Administrative
Services Agreement
The
Company entered into an agreement whereby, commencing on March 11, 2021, the Company will pay the Sponsor up to $10,000 per month for
office space, utilities, administrative and support services. Upon completion of a Business Combination or its liquidation, the Company
will cease paying these monthly fees. For the three and nine months ended September 30, 2021, the Company incurred and paid $30,000 and
$65,000 in fees for these services, respectively, of which $30,000 of such amount is included in accrued expenses in the accompanying
balance sheets.
Advances
from Related Party
The
Sponsor paid for certain offering costs on behalf of the Company in connection with the Initial Public Offering. The outstanding balance
under these advances of $292,312 was repaid at the closing of the Initial Public Offering on March 16, 2021.
Promissory
Note — Related Party
On
August 14, 2020, the Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which
the Company could borrow up to an aggregate principal amount of $300,000. The Promissory Note was non-interest bearing and payable on
the earlier of (i) June 30, 2021 or (i) the consummation of the Initial Public Offering. The outstanding balance under the Promissory
Note of $300,000 was repaid at the closing of the Initial Public Offering on March 16, 2021.
Related
Party Loans
In
order to finance transaction costs in connection with a Business Combination, the Initial Stockholders or an affiliate of the Initial
Stockholders or certain of the Company’s directors and officers 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 $1,500,000 of such Working Capital Loans may be convertible
into warrants of the post-Business Combination entity at a price of $1.50 per warrant. The warrants would be identical to the Private
Placement Warrants.
NOTE
7. COMMITMENTS
Registration
Rights
Pursuant
to a registration rights agreement entered into on March 11, 2021, the holders of the Founder Shares, Private Placement Warrants and
warrants that may be issued upon conversion of Working Capital Loans (and any shares of common stock issuable upon the exercise of the
Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares)
will be entitled to registration rights pursuant to a registration rights agreement to be entered into on or prior to the closing of
the Initial Public Offering requiring the Company to register such securities for resale (in the case of the Founder Shares, only after
conversion to shares of Class A common stock). The holders of these securities will be entitled to make up to three demands, excluding
short form registration demands, that the Company register such securities. In addition, the holders will have certain “piggy-back”
registration rights with respect to registration statements filed subsequent to the completion of a Business Combination 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 be required to effect or permit any registration or cause any registration statement 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.
STRATIM
CLOUD ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
Underwriting
Agreement
The
Company granted the underwriters a 45-day option to purchase up to 3,750,000 additional Units to cover over-allotments at the Initial
Public Offering price, less the underwriting discounts and commissions. The underwriters’ elected not to exercise their remaining
over-allotment.
The
underwriters were paid a cash underwriting discount of $0.20 per Unit, or $5,000,000 in the aggregate. In addition, the underwriters
are entitled to a deferred fee of $0.35 per Unit, or $8,750,000 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 8. STOCKHOLDERS’ EQUITY
Preferred Stock — The Company
is authorized to issue 1,000,000 shares of preferred stock 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, 2021 and December
31, 2020, there were no shares of preferred stock issued or outstanding.
Class A Common Stock —
The Company is authorized to issue 75,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of Class A
common stock are entitled to one vote for each share. At September 30, 2021, there were no shares of Class A common stock issued and
outstanding, excluding 25,000,000 shares of Class A common stock subject to possible redemption which are presented as temporary equity.
At December 31, 2020, there were no shares of Class A common stock issued or outstanding.
Class B Common Stock —
The Company is authorized to issue 10,000,000 shares of Class B common stock with a par value of $0.0001 per share. Holders of Class B
common stock are entitled to one vote for each share. At September 30, 2021 and December 31, 2020, there were 6,250,000 and 7,187,500
shares of common stock issued and outstanding, respectively, of which an aggregate of up to 937,500 shares were subject to forfeiture
to the extent that the underwriters’ over-allotment option was not exercised in full or in part, so that the Initial Stockholders
would collectively own 20% of the Company’s issued and outstanding common stock after the Initial Public Offering.
Holders of Class B common stock will vote on
the election of directors prior to the consummation of a Business Combination. Holders of Class A common stock and Class B
common stock will vote together as a single class on all matters submitted to a vote of stockholders except as required by law.
The shares of Class B common stock will
automatically convert into shares of Class A common stock at the time of a Business Combination on a one-for-one basis, subject
to adjustment. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued
in excess of the amount issued in the Initial Public Offering and related to the closing of a Business Combination, including pursuant
to a specified future issuance, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will
be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect
to any such issuance or deemed issuance, including a specified future issuance) so that the number of shares of Class A common stock
issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the aggregate
number of all shares of common stock outstanding upon the completion of the Initial Public Offering, plus the aggregate number of shares
of Class A common stock and equity-linked securities issued or deemed issued in connection with a Business Combination (net of the number
of shares of Class A common stock redeemed 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 and any Private Placement Warrants issued to the Sponsor, an affiliate
of the Sponsor or any of our officers or directors.
NOTE 9. WARRANTS
Public Warrants may only be exercised for a whole
number of shares. No fractional shares will be issued upon exercise of the Public Warrants. 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. 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 common stock 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 covering the issuance of the shares of Class A common stock issuable upon exercise
of the warrants is then effective and a current prospectus relating to those shares of Class A common stock is available, subject to
the Company satisfying its obligations with respect to registration. No warrant will be exercisable for cash or on a cashless basis,
and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, 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 from registration
is available.
STRATIM CLOUD ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
The Company has agreed that as soon as practicable,
but in no event later than twenty business days after the closing of a Business Combination, the Company will use its commercially
reasonable efforts to file with the SEC a registration statement registering the issuance, under the Securities Act, of the shares of
Class A common stock issuable upon exercise of the warrants. The Company will use its commercially reasonable efforts to cause the same
to become effective within 60 business days following a Business Combination 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 above, if the Class A common stock is 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, the Company will not be required to
file or maintain in effect a registration statement, but will use its commercially reasonable efforts to register or qualify the shares
under applicable blue sky laws to the extent an exemption is not available.
Redemption of warrants when the price per
share of Class A common stock equals or exceeds $18.00. Once the Public Warrants become exercisable, the Company may redeem
the Public Warrants (except with respect to the Private Placement Warrants):
| ● | in whole and not in part; |
| ● | at a price of $0.01 per warrant; |
| ● | upon not less than of 30 days’ prior written notice of redemption to each warrant holder; and |
| ● | if, and only if, the last reported sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, 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 Company sends the notice of redemption 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 when the price per
share of Class A common stock equals or exceeds $10.00. Once the Public Warrants become exercisable,
the Company may redeem the Public Warrants:
| ● | in whole and not in part; |
| ● | at $0.10 per warrant provided that holders will be able to exercise their warrants prior to redemption and receive that number of shares based on the redemption date and the fair market value of the Class A common stock; |
| ● | upon a minimum of 30 days’ prior written notice of redemption |
| ● | if, and only if, last reported sale price of the Class A common stock equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like); and |
| ● | if, and only if, there is an effective registration statement covering the issuance of the shares of Class A common stock 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. |
If the Company calls the Public Warrants for
redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless
basis,” as described in the warrant agreement. The exercise price and number of shares of Class A common stock issuable upon
exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization,
merger or consolidation. However, the warrants will not be adjusted for issuance of Class A common stock at a price below its exercise
price. Additionally, in no event will the Company be required to net cash settle the warrants. 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.
In addition, if (x) the Company issues additional
shares of Class A common stock 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 Class A common (with such issue price or effective
issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor
or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such
issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of
the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation
of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s Class A
common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates 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 $18.00 per share redemption
trigger prices will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price,
respectively.
STRATIM CLOUD ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
The Private Placement Warrants will be identical
to the Public Warrants underlying the Units being sold in the Initial Public Offering, except that the Private Placement Warrants and
the Class A common stock issuable upon the 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 exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted
transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their 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.
NOTE 10. FAIR VALUE MEASUREMENTS
The Company follows the guidance in ASC 820 for
its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets
and liabilities that are re-measured and reported at fair value at least annually.
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 our assessment of the assumptions that market participants would use in pricing the asset or liability. |
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, 2021 and indicates the
fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
Description | |
Level | | |
September 30, 2021 | |
Assets: | |
| | |
| |
Marketable Securities held in Trust Account | |
| 1 | | |
$ | 250,008,220 | |
| |
| | | |
| | |
Liabilities: | |
| | | |
| | |
Warrant Liability – Public Warrants | |
| 1 | | |
$ | 5,250,000 | |
Warrant Liability – Private Placement Warrants | |
| 3 | | |
$ | 2,986,667 | |
The Warrants were accounted for as liabilities
in accordance with ASC 815-40 and are presented within warrant liabilities in the condensed balance sheet. The warrant liabilities are
measured at fair value at inception and on a recurring basis, with changes in fair value presented in the condensed statements of operations.
Initial and Subsequent Measurement
The Warrants were valued using a Modified Black
Scholes Option Pricing Model, which is considered to be a Level 3 fair value measurement. The Modified Black Scholes Option Pricing Model’s
primary unobservable input utilized in determining the fair value of the Warrants is the expected volatility of the common stock. The
expected volatility as of the Initial Public Offering date and September 30, 2021 was derived from observable public warrant pricing
on comparable ‘blank-check’ companies without an identified target. The subsequent measurements of the Public Warrants after
the detachment of the Public Warrants from the Units will be classified as Level 1 due to the use of an observable market quote in an
active market. For periods subsequent to the detachment of the Public Warrants from the Units, the close price of the Public Warrant
price will be used as the fair value as of each relevant date.
STRATIM CLOUD ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
The following table presents the quantitative
information regarding Level 3 fair value measurements at September 30, 2021:
| |
September 30, 2021 | | |
March 16, 2021 (Initial Measurement) | |
Exercise price | |
$ | 11.50 | | |
$ | 11.50 | |
Stock Price | |
$ | 9.77 | | |
$ | 9.46 | |
Risk-free interest rate | |
| 1.07 | % | |
| 1.32 | % |
Expected term (in years) | |
| 4.49 | | |
| 5.0 | |
Expected volatility | |
| 13.02 | % | |
| 31.20 | % |
The following table presents the changes in the
fair value of Level 3 warrant liabilities:
| |
Private Placement | | |
Public | | |
Warrant Liabilities | |
Fair value as of January 1, 2021 | |
$ | — | | |
$ | — | | |
$ | — | |
Initial measurement on March 16, 2021 | |
| 7,233,334 | | |
| 11,916,666 | | |
| 19,150,000 | |
Change in fair value | |
| 93,333 | | |
| 250,000 | | |
| 343,333 | |
Fair value as of March 31, 2021 | |
| 7,326,667 | | |
| 12,166,666 | | |
| 19,493,333 | |
Change in fair value | |
| (3,360,000 | ) | |
| — | | |
| (3,360,000 | ) |
Transfers out of level 3 into level 1 | |
| — | | |
| (12,166,666 | ) | |
| (12,166,666 | ) |
Fair value as of June 30, 2021 | |
| 3,966,667 | | |
| — | | |
| 3,966,667 | |
Change in fair value | |
| (980,000 | ) | |
| — | | |
| (980,000 | ) |
Fair value as of September 30, 2021 | |
$ | 2,986,667 | | |
| — | | |
$ | 2,986,667 | |
Transfers to/from Levels 1, 2 and 3 are recognized
at the end of the reporting period in which a change in valuation technique or methodology occurs. During the second quarter of 2021,
there were transfers out of Level 3 into Level 1 of $12,166,666 in the fair value hierarchy for the three and nine months ended September
30, 2021 for the Public Warrants.
NOTE 11. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions
that occurred after the balance sheet date up to the date that the 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 condensed financial statements.