NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
Note
1 - Description of Organization, Business Operations and Going Concern
Omnichannel
Acquisition Corp. (the “Company”) is a blank check company incorporated in Delaware on September 9, 2020. The Company was
formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses (the “Business Combination”). The Company is an emerging growth company and, as such,
the Company is subject to all of the risks associated with emerging growth companies.
As of March 31, 2022, the Company had not commenced
any operations. All activity for the period from September 9, 2020 (inception) through March 31, 2022 relates to the Company’s formation
and the initial public offering (the “Initial Public Offering”), described below, and since the closing of the Initial Public
Offering, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after
the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest
income on investments from the proceeds held in Trust Account (as defined below).
The Company’s sponsor is Omnichannel Sponsor
LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for the Company’s Initial Public
Offering was declared effective November 19, 2020. On November 24, 2020, the Company consummated its Initial Public Offering of 20,000,000 units
(the “Units”) at $10.00 per Unit, generating gross proceeds of $200.0 million, and incurring offering costs of approximately
$11.6 million, inclusive of approximately $7.0 million in deferred underwriting commissions (see Note 5). The Company granted
the underwriters in the Initial Public Offering (the “Underwriters”) a 45-day option to purchase up to 3,000,000 additional
units to cover over-allotments, if any. The Underwriters partially exercised the over-allotment option and, on November 30, 2020, the
underwriters purchased an additional 650,000 Units (the “Over-Allotment Units”), generating gross proceeds of $6.5 million,
and the Company incurred additional offering costs of $357,500 in underwriting fees (inclusive of $227,500 in deferred underwriting
fees) (the “Over-Allotment”).
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the private placement (“Private Placement”) of 6,000,000 warrants
(each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.00 per
Private Placement Warrant to the Sponsor, generating proceeds of $6.0 million (see Note 4). Simultaneously with the closing of the
Over-Allotment on November 30, 2020, the Company consummated the second closing of the Private Placement, resulting in the purchase of
an aggregate of an additional 130,000 Private Placement Warrants by the Sponsor, generating gross proceeds to the Company of
$130,000.
Upon
the closing of the Initial Public Offering, the Over-Allotment and the Private Placement, $206.5 million ($10.00 per Unit)
of the net proceeds of the sale of the Units in the Initial Public Offering, the Over-Allotment and of the Private Placement Warrants
in the Private Placement were placed in a trust account (“Trust Account”) located in the United States with Continental Stock
Transfer & Trust Company acting as trustee, and invested only in U.S. government treasury bills with a maturity of 185 days
or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment
Company Act of 1940, as amended (the “Investment Company Act”), as determined by the Company, until the earlier of (i) the
completion of a Business Combination and (ii) the distribution of the Trust Account as described below.
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering
and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward
consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully.
The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the
net assets held in the Trust Account net of amounts disbursed to management for working capital purposes, if permitted, and excluding
the amount of any deferred underwriting commissions) at the time of the agreement to enter into the initial Business Combination. However,
the Company will only complete a Business Combination if the post-business combination company owns or acquires 50% or more of the
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.
OMNICHANNEL ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
The
Company provides the holders of the Company’s outstanding shares of Class A common stock (the “Public Stockholders”),
par value $0.0001 per share, sold in the Initial Public Offering (the “Public Shares”) 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 held in the Trust Account (initially anticipated
to be $10.00 per Public Share). The per-share amount to be distributed to Public Stockholders who redeem their Public Shares will
not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 5). These Public
Shares are recorded at a redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance
with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic
480, “Distinguishing Liabilities from Equity” (“ASC 480”). The Company will proceed with a Business Combination
if a majority of the shares voted are voted in favor of the Business Combination. The Company will not redeem the Public Shares in an
amount that would cause its net tangible assets to be less than $5,000,001. 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 legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation
pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each Public Stockholder may elect to redeem their
Public Shares irrespective of whether they vote for or against the proposed transaction. If the Company seeks stockholder approval in
connection with a Business Combination, the Initial Stockholders (as defined below) agreed to vote their Founder Shares (as defined below
in Note 4) and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination. In addition,
the Initial Stockholders agreed to waive their redemption rights with respect to their Founder Shares and Public Shares in connection
with the completion of a Business Combination.
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
Sponsor and the Company’s officers and directors (the “Initial Stockholders”) agreed not to propose an amendment to
the Amended and Restated Certificate of Incorporation to modify the substance or timing of the Company’s obligation to redeem 100%
of the Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or with
respect to any other material provisions 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.
If
the Company is unable to complete a Business Combination within 18 months from the closing of the Initial Public Offering, or May 24,
2022 (the “Combination Period”), the Company will (i) cease all operations except for the purpose of winding up, (ii) as
promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable
in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust
Account and not previously released to the Company to pay its taxes (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 remaining stockholders and the board of directors, liquidate and dissolve, 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.
OMNICHANNEL ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
The
Initial Stockholders agreed to waive their rights to liquidating distributions from the Trust Account with respect to the 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, they will be entitled to liquidating distributions from the Trust Account with respect
to such Public Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriters agreed
to waive their rights to the deferred underwriting commission (see Note 5) held in the Trust Account in the event the Company does not
complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the other funds
held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is
possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be
only $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 (except for the Company’s independent registered public accounting firm) for services rendered
or products sold to the Company, or a prospective target business with which the Company has entered into a letter of intent, confidentiality
or other similar agreement or business combination agreement (a “Target”), reduce the amount of funds in the Trust Account
to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the
date of the liquidation of the Trust Account, if less than $10.00 per Public 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 Target that executed a waiver of any
and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) not 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”). 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, 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.
Termination
of Proposed Business Combination
On
July 19, 2021, the Company entered into a business combination agreement with Omnichannel Merger Sub, Inc., a wholly owned
subsidiary of Omnichannel (“Merger Sub”), and Kin Insurance, Inc., a Delaware corporation (“Kin”) (the
“Kin Business Combination Agreement”). On January 26, 2022, the Company, Merger Sub and Kin entered into a Termination
of Business Combination Agreement (the “Termination Agreement”), pursuant to which the parties agreed to mutually
terminate the Kin Business Combination Agreement. The termination of the Kin Business Combination Agreement was effective as of
January 26, 2022.
For additional information regarding the agreement,
see the Company’s Current Reports on Form 8-K filed by us on July 19, 2021, January 26, 2022 and January 27, 2022 for more information.
Going
Concern Consideration
As of March 31, 2022, the Company had approximately $15,000 in
cash and a working capital deficit of approximately $3.0 million (not including franchise tax obligations of approximately $50,000 that
may be paid using interest income, to the extent available, on the proceeds held in the Trust Account).
The Company’s liquidity needs had been satisfied
through a capital contribution of $25,000 from the Sponsor to purchase the Founder Shares, the loan under the Note from the Sponsor
of approximately $105,000 to the Company prior to the consummation of the Initial Public Offering, and the net proceeds from the
consummation of the Private Placement not held in the Trust Account. The Company fully repaid the Note on November 24, 2020. In addition,
in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain
of the Company’s officers and directors may, but are not obligated to, provide the Company Working Capital Loans (as defined below)
(see Note 4).
On September 10, 2021, the Sponsor agreed to provide
up to $300,000 in Working Capital Loans to the Company, and, on November 11, 2021, the Sponsor committed to provide up to an additional
$700,000 in Working Capital Loans to the Company for an aggregate amount of up to $1.0 million in Working Capital Loans, in
each case in order to finance the Company’s working capital needs (including transaction costs in connection with a Business
Combination) (the foregoing, the “Sponsor Loan Commitment”). As described above, up to $1.0 million of the Sponsor
Loan Commitment may be convertible into warrants to purchase Class A common stock at a conversion price of $1.00 per warrant. As
of March 31, 2022, the Company borrowed from the Sponsor the amount of $790,000 under the Sponsor Loan Commitment, which amount remains
outstanding (see Note 4).
OMNICHANNEL ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
In
connection with the Company’s assessment of going concern considerations in accordance with FASB ASC Topic 205-40, “Presentation
of Financial Statements - Going Concern,” management has determined that the liquidity condition and mandatory liquidation date
and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. If the Company
is unable to complete a Business Combination by May 24, 2022, then the Company will cease all operations except for the purpose of liquidating.
No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after May
24, 2022.
Risks
and Uncertainties
Management
continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could
have a negative effect on the Company’s financial position, results of its operations, and/or search for a target company, the
specific impact is not readily determinable as of the date of the unaudited condensed consolidated financial statements. The unaudited
condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
In
February 2022, the Russian Federation commenced a military action with the country of Ukraine. As a result of this action, various nations,
including the United States, have instituted economic sanctions against the Russian Federation. Further, the impact of this action and
related sanctions on the world economy is not determinable as of the date of these unaudited condensed consolidated financial statements.
The specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date
of unaudited condensed consolidated financial statements.
Note
2 - Summary of Significant Accounting Policies and Basis of Presentation
Basis
of Presentation
The
accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting
principles generally accepted in the United States of America (“GAAP”) for interim financial information and Article 10
of Regulation S-X. Accordingly, certain disclosures included in the annual financial statements have been condensed or omitted from
these financial statements as they are not required for interim financial statements under GAAP and the rules of the SEC. In the
opinion of management, all adjustments (consisting of normal accruals) considered for a fair presentation have been included.
Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for
the year ending December 31, 2022 or any future period.
The accompanying unaudited condensed consolidated
financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31,
2021, as filed with the SEC on March 25, 2022 (the “10-K”), which contains the audited financial statements and notes thereto.
The financial information as of December 31, 2021 presented herein is derived from the audited financial statements presented in the Company’s
10-K.
Principles
of Consolidation
The
accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary.
All significant intercompany accounts and transactions have been eliminated in consolidation.
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.
OMNICHANNEL ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with
the requirements that apply to non-emerging growth companies but any such an 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 unaudited condensed consolidated
financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted
out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use
of Estimates
The
preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires 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 unaudited condensed consolidated financial statements and the reported amounts of income and expenses during the reporting periods.
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 unaudited condensed consolidated financial statements,
which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly,
the actual results could differ significantly from those estimates.
Cash
and Cash Equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company had no cash equivalents as of March 31, 2022 and December 31, 2021.
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 Corporation coverage limit of $250,000. As of March 31, 2022 and December
31, 2021, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant
risks on such accounts.
Investments
Held in the Trust Account
The
Company’s portfolio of investments may comprised of U.S. government securities, within the meaning set forth in Section
2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in
U.S. government securities and generally have a readily determinable fair value, or a combination thereof. When the Company’s
investments held in the Trust Account are comprised of U.S. government securities, the investments are classified as trading
securities. When the Company’s investments held in the Trust Account are comprised of money market funds, the investments are
recognized at fair value. Trading securities and investments in money market funds are presented on the condensed consolidated
balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these
securities are included in net gain from investments held in Trust Account in the accompanying unaudited condensed consolidated
statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market
information.
OMNICHANNEL ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
Fair
Value Measurement
Fair
value is defined as the price that would be received for sale of an asset or paid for transfer of a liability in an orderly transaction
between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs
used in measuring fair value.
The
hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements)
and the lowest priority to unobservable inputs (Level 3 measurements). These tiers consist of:
| |
● |
Level
1, defined as observable inputs such as quoted prices for identical instruments in active markets; |
| |
|
|
| |
● |
Level
2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted
prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active;
and |
| |
|
|
| |
● |
Level
3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions,
such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
In
some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In
those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input
that is significant to the fair value measurement.
Offering
Costs Associated with the Initial Public Offering
Offering
costs consisted of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that were directly
related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public
Offering based on a relative fair value basis, compared to total proceeds received. Offering costs associated with derivative warrant
liabilities were expensed as incurred and presented as non-operating expenses in the condensed consolidated statements of operations. Offering costs associated
with the Class A common stock issued were charged against the carrying value of the shares of Class A common stock upon the completion
of the Initial Public Offering. The Company classifies deferred underwriting commissions as non-current liabilities as their liquidation
is not reasonably expected to require the use of current assets or require the creation of current liabilities.
Derivative
Warrant Liabilities
The
Company does not use derivative instruments to hedge its exposures to cash flow, market or foreign currency risks. Management evaluates
all of the Company’s financial instruments, including issued warrants to purchase its Class A common stock, to determine if such
instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and FASB ASC Topic 815, “Derivatives
and Hedging” (“ASC 815”). The classification of derivative instruments, including whether such instruments should be
recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
The
warrants issued in connection with the Initial Public Offering (the “Public Warrants”) and the Private Placement Warrants
are recognized as derivative liabilities in accordance with ASC 815. Accordingly, the Company recognizes the warrant instruments as liabilities
at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each
balance sheet date until exercised, and any change in fair value is recognized in the condensed consolidated statements of operations. The fair value of Public
Warrants and Private Warrants was measured by reference to the listed price in an active market for the Public Warrants, the closing
price of the warrants on NYSE as of March 31, 2022 and December 31, 2021. The determination of the fair value of the warrant liability
may be subject to change as more current information becomes available and accordingly the actual results could differ significantly.
Derivative warrant liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the
use of current assets or require the creation of current liabilities.
OMNICHANNEL ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
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 ASC Topic 480, “Distinguishing
Liabilities from Equity.” Class A common stock subject to mandatory redemption (if any) is classified as a liability instruments
and is measured at fair value. Conditionally redeemable Class A common stock (including Class A 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, Class A common stock is classified as stockholders’
equity. The Company’s Class A common stock features certain redemption rights that are considered to be outside of the Company’s
control and subject to the occurrence of uncertain future events. Accordingly, as of March 31, 2022 and December 31, 2021, 20,650,000 shares
of Class A common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders’
deficit section of the Company’s condensed consolidated balance sheets.
The
Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of the Class A common stock subject
to possible redemption to equal the redemption value at the end of each reporting period. This method would view the end of the reporting
period as if it were also the redemption date for the security. Effective with the closing of the Initial Public Offering, the Company
recognized the accretion from initial book value to redemption amount, which resulted in charges against additional paid-in capital (to
the extent available) and accumulated deficit. This method would view the end of the reporting period as if it were also the redemption
date for the security.
Net
Income per Common Share
The
Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has
two classes of shares issued and outstanding, which are referred to as Class A common stock and Class B common stock. Income and losses
are shared pro rata between the two classes. Net income per common share is calculated by dividing the net income by the weighted average
shares of common stock outstanding for the respective period.
The
calculation of diluted net income per common share does not consider the effect of the warrants issued in connection with the Initial
Public Offering and the Private Placement to purchase an aggregate of 16,455,000 shares of the Company’s Class A common
stock in the calculation of diluted income per share, because their exercise is contingent upon future events. As a result, diluted net
income per share is the same as basic net income per share for the three months ended March 31, 2022 and 2021. Accretion associated with
the redeemable Class A common stock is excluded from earnings per share as the redemption value approximates fair value.
The
following table presents a reconciliation of the numerator and denominator used to compute basic and diluted net income per share for
each class of common stock:
| | |
For the Three Months Ended
March 31, 2022 | | |
For the Three Months Ended
March 31, 2021 | |
| | |
Class A | | |
Class B | | |
Class A | | |
Class B | |
| Basic and diluted net income per common share: | |
| | |
| | |
| | |
| |
| Numerator: | |
| | |
| | |
| | |
| |
| Allocation of net income | |
$ | 5,083,151 | | |
$ | 1,270,788 | | |
$ | 5,624,157 | | |
$ | 1,406,039 | |
| | |
| | | |
| | | |
| | | |
| | |
| Denominator: | |
| | | |
| | | |
| | | |
| | |
| Basic and diluted weighted average common shares outstanding | |
| 20,650,000 | | |
| 5,162,500 | | |
| 20,650,000 | | |
| 5,162,500 | |
| | |
| | | |
| | | |
| | | |
| | |
| Basic and diluted net income per common share | |
$ | 0.25 | | |
$ | 0.25 | | |
$ | 0.27 | | |
$ | 0.27 | |
OMNICHANNEL ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
Income
Taxes
The
Company follows the asset and liability method of accounting for income taxes under FASB ASC Topic 740, “Income Taxes” (“ASC
740”), which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred tax assets
and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement
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 March 31, 2022 and December 31, 2021, the Company had deferred tax assets with a full valuation allowance against them.
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. As of March 31, 2022 and December 31, 2021, there were no amounts accrued for interest and penalties.
Recent
Accounting Standards
The
Company’s management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted
would have a material effect on the accompanying unaudited condensed consolidated financial statements.
Note
3 - Initial Public Offering
On
November 24, 2020, the Company consummated its Initial Public Offering of 20,000,000 Units at $10.00 per Unit, generating
gross proceeds of $200.0 million, and incurring offering costs of approximately $11.6 million, inclusive of approximately $7.0 million
in deferred underwriting commissions. On November 30, 2020, the underwriters purchased an additional 650,000 Over-Allotment
Units, generating gross proceeds of $6.5 million, and incurred additional offering costs of $357,500 in underwriting fees (inclusive
of $227,500 in deferred underwriting fees).
Each
Unit consists of one share of Class A common stock and one-half of one redeemable warrant (each, a “Public Warrant”). Each
whole Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment
(see Note 7).
Note
4 - Related Party Transactions
Founder
Shares
On
December 31, 2020, the Sponsor purchased 10,062,500 shares of the Company’s Class B common stock, par value $0.0001 per
share (the “Founder Shares”), for an aggregate price of $25,000. On November 13, 2020 and November 19, 2020, respectively,
the Sponsor surrendered 2,875,000 and 1,437,500 shares of Class B common stock to the Company for cancellation for
no consideration, resulting in an aggregate of 5,750,000 shares of Class B common stock outstanding. The Initial Stockholders
agreed to forfeit up to 750,000 Founder Shares to the extent that the over-allotment option is not exercised in full by the
underwriters, so that the Founder Shares would represent 20.0% of the Company’s issued and outstanding shares after the Initial
Public Offering. On November 30, 2020, the underwriters partially exercised the over-allotment option to purchase an additional 650,000 Units;
thus, only 587,500 shares of Class B common stock remain subject to forfeiture. The remaining unexercised over-allotment
option expired on January 8, 2021; thus, 587,500 shares of Class B common stock held by the Sponsor were forfeited.
OMNICHANNEL ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
The
Initial Stockholders agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier
to occur of (i) one year after the completion of the initial Business Combination; and (ii) the date following the completion of the
initial Business Combination 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. Notwithstanding
the foregoing, if the closing price of Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations,
reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days
after the initial Business Combination, the Founder Shares will be released from the lockup.
Private
Placement Warrants
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the Private Placement of 6,000,000 Private Placement
Warrants at a price of $1.00 per Private Placement Warrant to the Sponsor, generating gross proceeds of $6.0 million. Simultaneously
with the closing of the Over-Allotment on November 30, 2020, the Company consummated the second closing of the Private Placement, resulting
in the purchase of an aggregate of an additional 130,000 Private Placement Warrants by the Sponsor, generating gross proceeds
to the Company of $130,000.
Each
whole Private Placement Warrant is exercisable for one whole share of Class A common stock at a price of $11.50 per share. A portion
of the proceeds from the sale of the Private Placement Warrants to the Sponsor was added to the proceeds from the Initial Public Offering
held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the Private Placement
Warrants will expire worthless. The Private Placement Warrants will be non-redeemable for cash and exercisable on a cashless basis so
long as they are held by the Sponsor or its permitted transferees.
The
Sponsor and the Company’s officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of
their Private Placement Warrants until 30 days after the completion of the initial Business Combination.
Related
Party Loans
In order to finance transaction costs in connection with a Business
Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated
to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination,
the Company will 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. The Working Capital Loans would either be repaid upon consummation of
a Business Combination or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible
into warrants of the post Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private
Placement Warrants. As of March 31, 2022 and December 31, 2021, there was no 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.
On
September 10, 2021, the Sponsor agreed to provide up to $300,000 in Working Capital Loans to the Company, and, on November 11, 2021,
the Sponsor committed to provide up to an additional $700,000 in Working Capital Loans to the Company for an aggregate amount of
up to $1.0 million in Working Capital Loans, in each case in order to finance the Company’s working capital needs (including
transaction costs in connection with a Business Combination) (the foregoing, the “Sponsor Loan Commitment”). As described
above, up to $1.0 million of the Sponsor Loan Commitment may be convertible into warrants to purchase shares of Class A common stock
of the Company at a conversion price of $1.00 per warrant. As of March 31, 2022 and December 31, 2021, the Company borrowed from
the Sponsor the amount of $790,000 and $650,000 under the Sponsor Loan Commitment, and is presented on the accompanying condensed
consolidated balance sheets, respectively.
Administrative
Services Agreement
The
Company entered into an agreement that provided that, commencing on the effective date of the prospectus through the earlier of consummation
of the initial Business Combination and the Company’s liquidation, the Company shall pay the Sponsor a total of $4,000 per
month for office space, secretarial, expense for period and administrative services provided to members of the Company’s management
team. The Company incurred $12,000 in expenses in connection with such services for each of the three months ended March 31, 2022
and 2021, which is included in administrative expenses - related party on the accompanying unaudited condensed consolidated statements
of operations. As of March 31, 2022 and December 31, 2021, there were outstanding balances of approximately $13,000 and $9,000 for
such fees, respectively, in “Accounts payable – related party,” as reflected in the accompanying condensed consolidated
balance sheets.
OMNICHANNEL ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
The
Company’s officers or directors will be reimbursed for any out-of-pocket expenses incurred in connection with activities on the
Company’s behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations.
The Company’s audit committee will review on a quarterly basis all payments that were made to the Sponsor, officers or directors,
or the Company’s or their affiliates. Any such payments prior to an initial Business Combination will be made using funds held
outside the Trust Account. Other than quarterly audit committee review of such payments, the Company does not expect to have any additional
controls in place governing the reimbursement payments to the Company’s directors and officers for their out-of-pocket expenses
incurred in connection with identifying and consummating an initial Business Combination.
Note
5 - Commitments and Contingencies
Registration
and Stockholder Rights
The
holders of Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans, if any
(and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued
upon conversion of Working Capital Loans), are entitled to registration rights pursuant to a registration rights agreement. The holders
of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities.
In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent
to the completion of the initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any
such registration statements.
Underwriting
Agreement
The
underwriters were entitled to an underwriting discount of $0.20 per Unit, or $4.0 million in the aggregate, paid upon the closing
of the Initial Public Offering. In addition, the underwriters are entitled to a deferred fee of $0.35 per Unit, or approximately
$7.0 million in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account
solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
In
connection with the consummation of the Over-Allotment on November 30, 2020, the underwriters were entitled to an additional fee of $130,000 paid
upon closing, and $227,500 in deferred underwriting commissions.
Note
6 - Class A Common Stock Subject to Possible Redemption
The
Company’s Class A common stock features certain redemption rights that are considered to be outside of the Company’s control
and subject to the occurrence of future events. The Company is authorized to issue 380,000,000 shares of Class A common stock
with a par value of $0.0001 per share. Holders of the Company’s Class A common stock are entitled to one vote for
each share. As of March 31, 2022 and December 31, 2021, there were 20,650,000 shares of Class A common stock outstanding, which
were all subject to possible redemption and are classified outside of permanent equity in the condensed consolidated balance sheets.
The Class A common stock subject to possible redemption
reflected on the condensed consolidated balance sheets is reconciled on the following table:
| Gross proceeds | |
$ | 206,500,000 | |
| Less: | |
| | |
| Proceeds allocated to Public Warrants at issuance | |
| (12,183,500 | ) |
| Offering costs allocated to Class A common stock subject to possible redemption | |
| (11,228,780 | ) |
| Plus: | |
| | |
| Accretion of carrying value to redemption value | |
| 23,412,280 | |
| Class A common stock subject to possible redemption | |
$ | 206,500,000 | |
OMNICHANNEL ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
Note
7 - Stockholders’ Deficit
Preferred
Stock - The Company is authorized to issue 1,000,000 shares of preferred stock, par value $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. As of March 31, 2022 and December 31, 2021, there were no shares of preferred stock issued or outstanding.
Class
A Common Stock - The Company is authorized to issue 380,000,000 shares of Class A common stock with a par
value of $0.0001 per share. As of March 31, 2022 and December 31, 2021, there were 20,650,000 shares of Class A
common stock issued and outstanding, all subject to possible redemption and therefore classified as temporary equity on the
accompanying condensed consolidated balance sheets (see Note 6).
Class
B Common Stock - The Company is authorized to issue 20,000,000 shares of Class B common stock with a par value
of $0.0001 per share. As of March 31, 2022 and December 31, 2021, there were 5,162,500 shares of Class B common stock
issued and outstanding, respectively.
Only
holders of the Class B common stock have the right to vote on the election of directors prior to the Business Combination. Holders of
Class A common stock and holders of Class B common stock vote together as a single class on all other matters submitted to a vote of
the Company’s stockholders except as required by law.
The
Class B common stock will automatically convert into Class A common stock concurrently with or immediately following the consummation
of the initial Business Combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations,
recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional shares of Class A common
stock or equity-linked securities are issued or deemed issued in connection with the initial Business Combination, the number of shares
of Class A common stock issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20%
of the total number of shares of Class A common stock outstanding after such conversion (after giving effect to any redemptions of shares
of Class A common stock by Public Stockholders), including the total number of shares of Class A common stock issued, or deemed issued
or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection
with or in relation to the consummation of the initial Business Combination, excluding any shares of Class A common stock or equity-linked
securities or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in the
initial Business Combination and any private placement warrants issued to the Sponsor, officers or directors upon conversion of Working
Capital Loans, provided that such conversion of Founder Shares will never occur on a less than one-for-one basis.
Note
8 - Derivative Warrant Liabilities
As of March 31, 2022 and December 31, 2021, there
was an aggregate of 10,325,000 Public Warrants and 6,130,000 Private Placement Warrants outstanding.
Public
Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the Units
and only whole Public Warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion
of a Business Combination or (b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company has
an effective registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the
Public Warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their Public Warrants
on a cashless basis and such cashless exercise is exempt from registration under the Securities Act). The Company has agreed that as
soon as practicable, but in no event later than 15 business days after the closing of the initial Business Combination, it will use its
commercially reasonable efforts to file with the SEC and have an effective registration statement covering the shares of the Class A
common stock issuable upon exercise of the warrants and to maintain a current prospectus relating to those shares of the Class A common
stock until the warrants expire or are redeemed. If a registration statement covering the shares of the Class A common stock issuable
upon exercise of the warrants is not effective by the 60th business day after the closing of the initial Business Combination,
warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have
failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section
3(a)(9) of the Securities Act or another exemption.
OMNICHANNEL ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
The
warrants have an exercise price of $11.50 per share, subject to adjustments, and will expire five years after the completion
of a Business Combination or earlier upon redemption or liquidation. 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 the initial Business
Combination at an issue price or effective issue price of less than $9.20 per share (with such issue price or effective issue price to
be determined in good faith by the 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 the initial Business Combination on the date of the consummation of the initial Business
Combination (net of redemptions), and (z) the volume weighted average trading price of the common stock during the 20 trading day period
starting on the trading day prior to the day on which the Company consummates its initial 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 price described under “Redemption
of warrants when the price per share of Class A common stock equals or exceeds $18.00” and “Redemption of warrants when the
price per share of Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to 180% of
the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger described under “Redemption
of warrants when the price per share of Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to
be equal to the higher of the Market Value and the Newly Issued Price.
The
Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants and the shares of Class A
common stock issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after
the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be
non-redeemable so long as they are held by the Sponsor or its permitted transferees. If the Private Placement Warrants are held by someone
other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable
by such holders on the same basis as the Public Warrants.
Redemption
of warrants when the price per share of Class A common stock equals or exceeds $18.00:
Once
the warrants become exercisable, the Company may redeem the outstanding warrants for cash:
| |
● |
in whole and
not in part; |
| |
|
|
| |
● |
at a price of $0.01 per
warrant; |
| |
|
|
| |
● |
upon a minimum of 30 days’
prior written notice of redemption; and |
| |
|
|
| |
● |
if, and only if, the last
reported sale price (the “closing price”) of Class A common stock equals or exceeds $18.00 per share (as adjusted) 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 |
The
Company will not redeem the warrants as described above unless an effective registration statement under the Securities Act covering
the shares of Class A common stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares
of Class A common stock is available throughout the 30-day redemption period. Any such exercise would not be on a “cashless”
basis and would require the exercising holder to pay the exercise price for each warrant being exercised.
OMNICHANNEL ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
Redemption
of warrants when the price per share of Class A common stock equals or exceeds $10.00:
Once
the warrants become exercisable, the Company may redeem the outstanding warrants:
| |
● |
in whole and
not in part; |
| |
|
|
| |
● |
at $0.10 per warrant upon
a minimum of 30 days’ prior written notice of redemption, provided that holders will be able to exercise their
warrants, but only on a cashless basis, prior to redemption and receive that number of shares determined by reference to an agreed
table based on the redemption date and the “fair market value” of Class A common stock; |
| |
|
|
| |
● |
if, and only if, the closing
price of Class A common stock equals or exceeds $10.00 per share (as adjusted) for any 20 trading days within the 30-trading day
period ending three trading days before the Company sends the notice of redemption to the warrant holders; and |
| |
|
|
| |
● |
if the closing price of
Class A common stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on
which the Company sends the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted), the Private
Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described
above. |
The
“fair market value” of Class A common stock for the above purpose shall mean the volume-weighted average price of Class A
common stock during the 10 trading days ending on the third trading day immediately following the date on which the notice of redemption
is sent to the holders of warrants. In no event will the warrants be exercisable in connection with this redemption feature for more
than 0.361 shares of Class A common stock per warrant (subject to adjustment).
In
no event will the Company be required to net cash settle any warrant. 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.
Note
9 - Fair Value Measurements
The
following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring
basis as of March 31, 2022 and December 31, 2021 and indicate the fair value hierarchy of the valuation techniques that the Company
utilized to determine such fair value.
| | |
Fair Value Measured as of
March 31, 2022 | |
| Description | |
Quoted Prices in Active Markets
(Level 1) | | |
Significant Other Observable Inputs
(Level 2) | | |
Significant Other Unobservable Inputs
(Level 3) | |
| Assets: | |
| | |
| | |
| |
| Investments held in Trust Account (1) | |
$ | 206,541,294 | | |
$ | - | | |
$ | - | |
| Liabilities: | |
| | | |
| | | |
| | |
| Derivative warrant liabilities - Public warrants | |
| 1,858,500 | | |
| - | | |
| - | |
| Derivative warrant liabilities - Private placement warrants | |
| - | | |
| 1,103,400 | | |
| - | |
OMNICHANNEL ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| |
|
Fair Value Measured as of
December 31, 2021 |
|
| Description |
|
Quoted Prices in Active Markets
(Level 1) |
|
|
Significant Other Observable Inputs
(Level 2) |
|
|
Significant Other Unobservable Inputs
(Level 3) |
|
| Assets: |
|
|
|
|
|
|
|
|
|
| Investments held in Trust Account (1) |
|
$ |
206,554,632 |
|
|
$ |
- |
|
|
$ |
- |
|
| Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
| Derivative warrant liabilities - Public warrants |
|
|
6,091,750 |
|
|
|
- |
|
|
|
- |
|
| Derivative warrant liabilities - Private placement warrants |
|
|
- |
|
|
|
3,616,700 |
|
|
|
- |
|
| (1) | Includes approximately $1,100 and $0 in cash as of March
31, 2022 and December 31, 2021, respectively. |
Transfers
to/from Levels 1, 2, and 3 are recognized at the beginning of the reporting period. The estimated fair value of the Public Warrants transferred
from a Level 3 measurement to a Level 1 fair value measurement and the estimated fair value of the Private Placement Warrants transferred
from a Level 3 measurement to a Level 2 fair value measurement as a result of the Public Warrants being listed price in an active
market in March 2021, the closing price of the warrants on NYSE as of March 31, 2021.
Level
1 assets may include investments in U.S. government securities or money market funds that invest solely in U.S. government
securities. The Company uses inputs such as actual trade data, quoted market prices from dealers or brokers, and other similar
sources to determine the fair value of its investments.
The
fair value of Public Warrants and Private Warrants was measured by reference to the listed price in an active market for the Public Warrants,
the closing price of the warrants on NYSE as of March 31, 2022 and December 31, 2021. The Company determined that the fair value of each
Private Placement Warrant approximates the fair value of a Public Warrant as the transfer of Private Placement Warrants to anyone who
is not a permitted transferee would result in the Private Placement Warrants having substantially the same terms as the Public Warrants.
For the three months ended March 31, 2022 and 2021, the Company recognized income to the unaudited condensed consolidated statements
of operations resulting from a decrease in the fair value of warrant liabilities of approximately $6.8 million and approximately $8.1
million, presented as change in fair value of derivative warrant liabilities on the accompanying unaudited condensed consolidated statements
of operations.
There
is no change to the fair value of the derivative warrant liabilities, measured with Level 3 inputs for the three months ended March 31,
2022. For the three months ended March 31, 2021, the change in the fair value of the derivative warrant liabilities, measured with Level
3 inputs, is summarized as follows:
| Level 3 derivative warrant liabilities at January 1, 2021 | |
$ | 21,226,950 | |
| Transfer of Public Warrants and Private Placement Warrants from Level 3: | |
| (21,226,950 | ) |
| Level 3 derivative warrant liabilities at March 31, 2021 (Unaudited) | |
$ | - | |
Note
10 - Subsequent Events
Management
has evaluated subsequent events and transactions that occurred through the date the unaudited condensed consolidated financial statements
were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure
in the unaudited condensed consolidated financial statements.