The accompanying notes are an integral part of
the unaudited condensed financial statements.
The accompanying notes are an integral part of
the unaudited condensed financial statements.
The accompanying notes are an integral part of
the unaudited condensed financial statements.
The accompanying notes are an integral part of
the unaudited condensed financial statements.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited and Restated)
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 June 30, 2021, the Company had not commenced
any operations. All activity through June 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
stockholders, 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 consummating 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 holders of the outstanding
Public Shares (the “public 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
JUNE 30, 2021
(Unaudited and Restated)
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 irrespective of whether they vote
for or against the proposed transaction or do not vote at all.
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
JUNE 30, 2021
(Unaudited and Restated)
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 connection with the preparation of the Company’s
financial statements as of September 30, 2021, the Company concluded it should restate its financial statements to classify all Public
Shares in temporary equity. In accordance with ASC 480, paragraph 10-S99, redemption provisions not solely within the control of the Company
require common stock subject to redemption to be classified outside of permanent equity. The Company previously determined the Class A
common stock subject to possible redemption to be equal to the redemption value of $10.00 per Class A common stock while also taking into
consideration a redemption cannot result in net tangible assets being less than $5,000,001. Previously, the Company did not consider redeemable
shares classified as temporary equity as part of net tangible assets. Effective with these financial statements, the Company revised this
interpretation to include temporary equity in net tangible assets. As a result, the Company restated its previously filed financial statements
to present all redeemable Class A common stock as temporary equity and to recognize accretion from the initial book value to redemption
value at the time of its Initial Public Offering and in accordance with ASC 480. As a result, management has noted an adjustment related
to temporary equity and permanent equity. This resulted in an adjustment to the initial carrying value of the Class A common stock subject
to possible redemption with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and Class
A common stock.
In connection with the change in presentation
for the Class A common stock subject to redemption, the Company also restated its income (loss) per common share calculation to allocate
net income (loss) pro rata between Class A and Class B common stock. This presentation contemplates a Business Combination as the most
likely outcome, in which case, both classes of common stock share pro rata in the income (loss) of the Company.
There has been no change in the Company’s
total assets, liabilities or operating results.
The impact of the restatement on the Company’s
financial statements is reflected in the following tables.
| |
As | | |
| | |
| |
| |
Previously | | |
| | |
As | |
| |
Reported | | |
Adjustments | | |
Restated | |
Condensed Balance Sheet as of June 30, 2021 | |
| | |
| | |
| |
Class A Common Stock Subject to Possible Redemption | |
$ | 226,087,267 | | |
$ | 23,912,733 | | |
$ | 250,000,000 | |
Class A Common Stock | |
| 239 | | |
| (239 | ) | |
| — | |
Retained Earnings (Accumulated Deficit) | |
| 4,999,140 | | |
| (23,912,494 | ) | |
| (18,913,354 | ) |
Total Stockholders’ Equity (Deficit) | |
$ | 5,000,004 | | |
$ | (23,912,733 | ) | |
$ | (18,912,729 | ) |
| |
As | | |
| | |
| |
| |
Previously | | |
| | |
As | |
| |
Reported | | |
Adjustments | | |
Restated | |
Condensed Statement of Operations for the Three Months Ended June 30, 2021 | |
| | |
| | |
| |
Basic and diluted weighted average shares outstanding, Class A common stock subject to redemption | |
| 21,816,112 | | |
| 3,183,888 | | |
| 25,000,000 | |
Basic and diluted net income per share, Class A common stock subject to redemption | |
$ | 0.00 | | |
$ | 0.25 | | |
$ | 0.25 | |
Basic and diluted weighted average shares outstanding, Class B non-redeemable common stock | |
| 9,433,888 | | |
| (3,183,888 | ) | |
| 6,250,000 | |
Basic and diluted net income per share, Class B non-redeemable common stock | |
$ | 0.84 | | |
$ | (0.59 | ) | |
$ | 0.25 | |
STRATIM CLOUD ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited and Restated)
| |
As | | |
| | |
| |
| |
Previously | | |
| | |
As | |
| |
Reported | | |
Adjustments | | |
Restated | |
Condensed Statement of Operations for the Six Months Ended June 30, 2021 | |
| | |
| | |
| |
Basic and diluted weighted average shares outstanding, Class A common stock subject to redemption | |
| 21,821,577 | | |
| (7,180,693 | ) | |
| 14,640,884 | |
Basic and diluted net income per share, Class A common stock subject to redemption | |
$ | 0.00 | | |
$ | 0.32 | | |
$ | 0.32 | |
Basic and diluted weighted average shares outstanding, Class B non-redeemable common stock | |
| 8,111,397 | | |
| (1,861,397 | ) | |
| 6,250,000 | |
Basic and diluted net income per share, Class B non-redeemable common stock | |
$ | 0.81 | | |
$ | (0.49 | ) | |
$ | 0.32 | |
| |
As | | |
| | |
| |
| |
Previously | | |
| | |
As | |
| |
Reported | | |
Adjustments | | |
Restated | |
Condensed Statement of Cash Flows for the Six Months Ended June 30, 2021 | |
| | |
| | |
| |
Non-Cash investing and financing activities: | |
| | |
| | |
| |
Initial classification of Class A common stock subject to possible redemption | |
$ | 218,547,300 | | |
$ | 31,452,700 | | |
$ | 250,00,000 | |
Change in value of Class A common stock subject to possible redemption | |
| 7,539,967 | | |
| (7,539,967 | ) | |
| — | |
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 six months ended June 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.
STRATIM CLOUD ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited and Restated)
Liquidity
As of June 30, 2021, the Company had $1,075,204 in its operating bank
account, and working capital of $718,451. 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 6) 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.
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. 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 six months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as
of June 30, 2021 and December 31, 2020.
Marketable Securities held in the Trust
Account
At June 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.
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 stockholders’
equity. Accordingly, as of June 30, 2021, offering costs in the aggregate of $14,326,696 have been charged to stockholders’
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.
STRATIM CLOUD ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited and Restated)
Warrant Liability
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 follows the asset and liability method
of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated
future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities
and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amount expected to be realized. As of June 30, 2021, the Company had
a deferred tax asset of approximately $154,000, which had a full valuation allowance recorded against it of approximately $154,000. The
Company’s deferred tax assets were deemed to be de minimis as of December 31, 2020.
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 six months ended June 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 six months ended June 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
ASC 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 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 June 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. The Company
is subject to income tax examinations by major taxing authorities since inception.
Net income 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 June 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 per common share (in dollars, except per share amounts):
| |
Three Months Ended June 30, 2021 | | |
Six Months Ended June 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 | |
$ | 6,340,918 | | |
$ | 1,585,229 | | |
$ | 4,631,233 | | |
$ | 1,977,012 | |
Denominator: | |
| | | |
| | | |
| | | |
| | |
Basic and diluted weighted average stock outstanding | |
| 25,000,000 | | |
| 6,250,000 | | |
| 14,640,884 | | |
| 6,250,000 | |
Basic and diluted net income per common stock | |
$ | 0.25 | | |
$ | 0.25 | | |
$ | 0.32 | | |
$ | 0.32 | |
STRATIM CLOUD ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited and Restated)
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 these accounts.
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 10).
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 June 30, 2021.
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.
STRATIM CLOUD ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited and Restated)
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 six months ended June 30, 2021, the Company incurred and paid $30,000 and $35,000 in fees for these services, respectively,
of which $16,371 of such amount is included in prepaid 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
JUNE 30, 2021
(Unaudited and Restated)
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 as of June 30, 2021.
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 June 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 June 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 June 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
JUNE 30, 2021
(Unaudited and Restated)
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
JUNE 30, 2021
(Unaudited and Restated)
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 June 30, 2021 and indicates the fair
value hierarchy of the valuation inputs the Company utilized to determine such fair value:
Description | |
Level | |
June 30, 2021 | |
Assets: | |
| |
| |
Marketable Securities held in Trust Account | |
1 | |
$ | 250,003,083 | |
| |
| |
| | |
Liabilities: | |
| |
| | |
Warrant Liability – Public Warrants | |
1 | |
$ | 6,916,666 | |
Warrant Liability – Private Placement Warrants | |
3 | |
$ | 3,966,667 | |
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 June 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
JUNE 30, 2021
(Unaudited and Restated)
The following table presents the quantitative
information regarding Level 3 fair value measurements at June 30, 2021:
| |
March 16,
2021 (Initial Measurement) | | |
June 30, 2021 | |
Exercise price | |
$ | 11.50 | | |
$ | 11.50 | |
Stock Price | |
$ | 9.46 | | |
$ | 9.69 | |
Risk-free interest rate | |
| 1.32 | % | |
| 0.91 | % |
Expected term (in years) | |
| 5.0 | | |
| 5.0 | |
Expected volatility | |
| 31.20 | % | |
| 15.81 | % |
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 | |
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 six months ended June 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.