NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
DD3 Acquisition Corp. II
(the “Company”) was incorporated in Delaware on September 30, 2020. The Company was formed for the purpose of entering into
a merger, capital stock exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination
with one or more businesses or entities (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 March 31, 2021, the
Company had not commenced any operations. All activity for the period from September 30, 2020 (inception) through March 31, 2021 relates
to the Company’s formation and its initial public offering (“Initial Public Offering”), which is described
below. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest.
The Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.
The registration statements
for the Company’s Initial Public Offering were declared effective on December 7, 2020. On December 10, 2020, the Company consummated
the Initial Public Offering of 12,500,000 units (the “Units” and, with respect to the shares of Class A common stock
included in the Units sold, the “Public Shares”), which includes the partial exercise by the underwriters of their over-allotment
option in the amount of 1,500,000 Units, at $10.00 per Unit, generating gross proceeds of $125,000,000, which is described in Note 4.
Simultaneously with the
closing of the Initial Public Offering, the Company consummated the sale of an aggregate of 370,000 units (each, a “Private Unit”
and, collectively, the “Private Units”) at a price of $10.00 per Private Unit in a private placement to DD3 Sponsor Group,
LLC (the “Sponsor”) and the Forward Purchase Investors (as defined in Note 5), generating gross proceeds of $3,700,000, which
is described in Note 5.
Transaction costs amounted
to $2,966,508, consisting of $2,500,000 of underwriting fees and $466,508 of other offering costs.
Following the closing of
the Initial Public Offering on December 10, 2020, an amount of $125,000,000 ($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 Units was placed in a trust account (the “Trust
Account”), located in the United States and invested only in U.S. government securities, within the meaning set forth in
Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in any open-ended investment
company that holds itself out as a money market fund selected by the Company 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 a Business Combination and
(ii) the distribution of the funds in 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 Private
Units, 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 a Business
Combination with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in
the Trust Account (excluding taxes payable on interest earned on the Trust Account) at the time of the agreement to enter into a 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.
The Company will provide
its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to convert 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 convert their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated
to be $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 conversion rights upon the completion of a Business Combination with respect
to the Company’s warrants.
DD3 ACQUISITION CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
The Company will proceed
with a Business Combination only if the Company has net tangible assets of at least $5,000,001 either immediately prior to or upon such
consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor
of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote
for business or other reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended
and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities
and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination.
If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business
or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and
not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Company’s
Sponsor, initial stockholders, officers and directors have agreed to vote their Founder Shares (as defined in Note 6), Private Shares
(as defined in Note 5) 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 convert their Public Shares irrespective of whether they vote for or against the proposed
transaction or do not vote at all.
If the Company seeks stockholder
approval of a Business Combination and it does not conduct conversions 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 converting 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 Company’s Sponsor,
initial stockholders, officers and directors have agreed (a) to waive their conversion rights with respect to any Founder Shares,
Private Shares and Public Shares held by them in connection with the completion of a Business Combination or any amendment to the Amended
and Restated Certificate of Incorporation prior thereto 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 obligations with respect to conversion rights as described
in the Company’s final prospectus for its Initial Public Offering 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 convert
their Public Shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on
deposit in the Trust Account, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding
Public Shares.
The Company will have until
December 10, 2022 to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business
Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as
promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable
in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust
Account and not previously released to the Company to pay its tax obligations, 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 conversion 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 Company’s Sponsor,
initial stockholders, officers and directors have agreed to waive their liquidation rights with respect to the Founder Shares if the
Company fails to complete a Business Combination within the Combination Period. However, if the Company’s Sponsor, initial stockholders,
officers or directors 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. 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).
DD3 ACQUISITION CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
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 (1) $10.00 per Public Share or (2) the actual
amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value
of the trust assets, in each case net of the interest which may be withdrawn to pay the Company’s taxes. This liability will not
apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and
except as 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.
Liquidity
The Company does not believe it will need to raise additional funds
in order to meet the expenditures required for operating its business. However, if the Company’s estimate of the costs of identifying
a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary
to do so, the Company may have insufficient funds available to operate its business prior to a Business Combination. Moreover, the Company
may need to obtain additional financing either to complete its Business Combination or because the Company become obligated to redeem
a significant number of its Public Shares upon consummation of a Business Combination, in which case the Company may issue additional
securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, the Company
would only complete such financing simultaneously with the completion of a Business Combination. If the Company is unable to complete
a Business Combination because it does not have sufficient funds available to it, the Company will be forced to cease operations and liquidate
the Trust Account. In addition, following a Business Combination, if cash on hand is insufficient, the Company may need to obtain additional
financing in order to meet its obligations.
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 financial statements. The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
NOTE 2. REVISION OF PREVIOUSLY
ISSUED FINANCIAL STATEMENTS
The Company previously accounted
for its outstanding Private Warrants (as defined in Note 5) as components of equity instead of as derivative liabilities. The warrant
agreement governing the Private Warrants includes a provision that provides for potential changes to the settlement amounts dependent
upon the characteristics of the holder of the warrant.
On April 12, 2021, the Acting
Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued
a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled
“Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)”
(the “SEC Statement”).
In consideration of the SEC
Statement, the Company’s management reevaluated the Private Warrants under Accounting Standards Codification (“ASC”)
Subtopic 815-40, Contracts in Entity’s Own Equity. ASC Section 815-40-15 addresses equity versus liability treatment and classification
of equity-linked financial instruments, including warrants, and states that a warrant may be classified as a component of equity only
if, among other things, the warrant is indexed to the issuer’s common stock. Under ASC Section 815-40-15, a warrant is not indexed
to the issuer’s common stock if the terms of the warrant require an adjustment to the exercise price upon a specified event and
that event is not an input to the fair value of the warrant. Based on management’s evaluation, the Company’s audit committee,
in consultation with management, concluded that the Company’s Private Warrants are not indexed to the Company’s common stock
in the manner contemplated by ASC Section 815-40-15 because the holder of the instrument is not an input into the pricing of a fixed-for-fixed
option on equity shares.
As a result of the above,
the Company should have classified the Private Warrants as derivative liabilities in its previously issued balance sheet as of December
10, 2020 and its financial statements as of December 31, 2020 and for the period from September 30, 2020 (inception) through December
31, 2020. Under this accounting treatment, the Company is required to measure the fair value of the Private Warrants at the end of each
reporting period as well as re-evaluate the treatment of the warrants and recognize changes in the fair value from the prior period in
the Company’s operating results for the current period.
The Company’s accounting
for the Private Warrants as components of equity instead of as derivative liabilities did not have any effect on the Company’s previously
reported investments held in trust or cash.
DD3 ACQUISITION CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
The table below summarizes
the effects of the revision on the financial statements for all periods being revised.
|
|
As
|
|
|
|
|
|
|
|
|
|
Previously
|
|
|
|
|
|
As
|
|
|
|
Reported
|
|
|
Adjustments
|
|
|
Revised
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet as of December 10, 2020 (audited)
|
|
|
|
|
|
|
|
|
|
Warrant Liability
|
|
$
|
—
|
|
|
$
|
109,150
|
|
|
$
|
109,150
|
|
Class A Common Stock Subject to Possible Redemption
|
|
|
120,757,490
|
|
|
|
(109,150
|
)
|
|
|
120,648,340
|
|
Class A Common Stock
|
|
|
79
|
|
|
|
2
|
|
|
|
81
|
|
Additional Paid-in Capital
|
|
|
5,000,611
|
|
|
|
394
|
|
|
|
5,001,005
|
|
Accumulated Deficit
|
|
|
(1,000
|
)
|
|
|
(396
|
)
|
|
|
(1,396
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet as of December 31, 2020 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant Liability
|
|
$
|
—
|
|
|
$
|
183,150
|
|
|
$
|
183,150
|
|
Class A Common Stock Subject to Possible Redemption
|
|
|
120,670,238
|
|
|
|
(183,150
|
)
|
|
|
120,487,088
|
|
Class A Common Stock
|
|
|
80
|
|
|
|
2
|
|
|
|
82
|
|
Additional Paid-in Capital
|
|
|
5,087,862
|
|
|
|
74,394
|
|
|
|
5,162,256
|
|
Accumulated Deficit
|
|
|
(88,249
|
)
|
|
|
(74,396
|
)
|
|
|
(162,645
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Operations for the Three Months Ended December 31, 2020 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value of warrant liability
|
|
$
|
—
|
|
|
$
|
(74,000
|
)
|
|
$
|
(74,000
|
)
|
Transaction costs associated with warrant liability
|
|
|
—
|
|
|
|
(396
|
)
|
|
|
(396
|
)
|
Net loss
|
|
|
(88,249
|
)
|
|
|
(74,396
|
)
|
|
|
(162,645
|
)
|
Weighted average shares outstanding, Common Stock subject to possible redemption
|
|
|
12,075,749
|
|
|
|
(10,915
|
)
|
|
|
12,064,834
|
|
Basic and diluted net income per share, Common Stock subject to possible redemption
|
|
|
0.00
|
|
|
|
—
|
|
|
|
0.00
|
|
Weighted average shares outstanding, Common Stock
|
|
|
3,016,894
|
|
|
|
46,821
|
|
|
|
3,063,715
|
|
Basic and diluted net loss per share, Common Stock
|
|
|
(0.03
|
)
|
|
|
(0.02
|
)
|
|
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Operations for the Period from September 30, 2020 (inception) Through December 31, 2020 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value of warrant liability
|
|
$
|
—
|
|
|
$
|
(74,000
|
)
|
|
$
|
(74,000
|
)
|
Transaction costs associated with warrant liability
|
|
|
—
|
|
|
|
(396
|
)
|
|
|
(396
|
)
|
Net loss
|
|
|
(88,249
|
)
|
|
|
(74,396
|
)
|
|
|
(162,645
|
)
|
Weighted average shares outstanding, Common Stock subject to possible redemption
|
|
|
12,075,749
|
|
|
|
(10,915
|
)
|
|
|
12,064,834
|
|
Basic and diluted net income per share, Common Stock subject to possible redemption
|
|
|
0.00
|
|
|
|
—
|
|
|
|
0.00
|
|
Weighted average shares outstanding, Common Stock
|
|
|
3,060,814
|
|
|
|
2,901
|
|
|
|
3,063,715
|
|
Basic and diluted net loss per share, Common Stock
|
|
|
(0.03
|
)
|
|
|
(0.02
|
)
|
|
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow Statement for the Period from September 30, 2020 (inception) Through December 31, 2020 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(88,249
|
)
|
|
$
|
(74,396
|
)
|
|
$
|
(162,645
|
)
|
Change in fair value of warrant liability
|
|
|
—
|
|
|
|
74,000
|
|
|
|
74,000
|
|
Transaction costs associated with warrant liability
|
|
|
—
|
|
|
|
396
|
|
|
|
396
|
|
Initial classification of Class A Common Stock subject to possible redemption
|
|
|
120,757,490
|
|
|
|
(109,150
|
)
|
|
|
120,648,340
|
|
Change in value of Class A Common Stock subject to possible redemption
|
|
|
(87,252
|
)
|
|
|
(74,000
|
)
|
|
|
(161,252
|
)
|
DD3 ACQUISITION CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited
condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of
America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10
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 final prospectus for its Initial Public Offering
as filed with the SEC on December 10, 2020, as well as the Company’s Quarterly Report on Form 10-Q, as filed with the SEC on
February 16, 2021, as well as the Company’s Current Reports on Form 8-K, as filed with the SEC on December 11, 2020 and December
16, 2020. The interim results for the three months ended March 31, 2021 and for the period from September 30, 2020 (inception) through
March 31, 2021 are not necessarily indicative of the results to be expected for period ended September 30, 2021 or for any future periods.
The Company had no activity
for the period ended September 30, 2020 (inception). Accordingly, the condensed balance sheet as of September 30, 2020 is not presented.
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.
Use of Estimates
The preparation of the condensed
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 financial statements and the reported amounts
of revenues and expenses during the reporting period.
Making estimates requires
management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation
or set of circumstances that existed at the date of the 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.
DD3 ACQUISITION CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
Cash and Cash Equivalents
The Company considers all
short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have
any cash equivalents as of March 31, 2021.
Marketable Securities Held in Trust Account
At March 31, 2021, substantially
all of the assets held in the Trust Account were held in U.S. Treasury Bills.
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.” Shares of 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 is 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 features certain redemption rights that are considered to be outside of the Company’s
control and subject to occurrence of uncertain future events. Accordingly, at March 31, 2021, 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
condensed balance sheet.
Warrant Liabilities
The Company accounts for
the Private Warrants in accordance with the guidance contained in ASC 815-40, under which the Private Warrants do not meet the criteria
for equity treatment and must be recorded as liabilities. Under ASC 815-40, the Company’s Private Warrants are not indexed to the
Company’s common stock in the manner contemplated by ASC 815-40 because the holder of the instrument is not an input into the pricing
of a fixed-for-fixed option on equity shares. Accordingly, the Company classifies the Private Warrants as liabilities at their fair value
and adjusts the Private Warrants to fair value at each reporting period. These liabilities are subject to re-measurement at each balance
sheet date until exercised, and any change in fair value is recognized in the statement of operations. The Private Warrants are valued
using a binomial lattice model.
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.
FASB 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 March 31, 2021. 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 may be subject
to potential examination by federal, state and city taxing authorities in the areas of income taxes. These potential examinations may
include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal,
state and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially
change over the next twelve months.
Net Loss Per Common Share
Net income (loss) per share
is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period, excluding
shares of common stock subject to forfeiture. The Company has not considered the effect of the warrants sold in the Initial Public Offering
and private placement to purchase an aggregate of 6,435,000 shares in the calculation of diluted income (loss) per share, since the inclusion
of such warrants would be anti-dilutive.
DD3 ACQUISITION CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
The Company’s statement
of operations includes a presentation of income (loss) per share for common stock subject to possible redemption in a manner similar to
the two-class method of income (loss) per common share. Net income (loss) per common share, basic and diluted, for Class A common stock
subject to possible redemption is calculated by dividing the proportionate share of income or loss on marketable securities held by the
Trust Account, net of applicable franchise and income taxes, by the weighted average number of Class A common stock subject to possible
redemption outstanding since original issuance.
Net income (loss)
per share, basic and diluted, for non-redeemable common stock is calculated by dividing the net income (loss), adjusted for income or
loss on marketable securities attributable to Class A common stock subject to possible redemption, by the weighted average number of
non-redeemable common stock outstanding for the period.
Non-redeemable
common stock includes Founder Shares and non-redeemable shares of common stock as these shares do not have any redemption features. Non-redeemable
common stock participates in the income or loss on marketable securities based on non-redeemable shares’ proportionate interest.
The following table reflects
the calculation of basic and diluted net income (loss) per common share (in dollars, except per share amounts):
|
|
Three Months
Ended
March 31,
2021
|
|
|
For the
Period from
September 30,
2020
(Inception)
Through
March 31, 2021
|
|
Class A common stock subject to possible redemption
|
|
|
|
|
|
|
Numerator: Earnings allocable to Class A common stock subject to possible redemption
|
|
|
|
|
|
|
Interest earned on marketable securities held in Trust Account
|
|
$
|
41,264
|
|
|
$
|
40,112
|
|
Less: interest available to be withdrawn for payment of taxes
|
|
|
(41,264
|
)
|
|
|
(40,112
|
)
|
Net income allocable to Class A common stock subject to possible redemption
|
|
$
|
—
|
|
|
$
|
—
|
|
Denominator: Weighted Average Class A common stock subject to possible redemption
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption
|
|
|
12,048,820
|
|
|
|
12,051,850
|
|
Basic and diluted net income per share, Class A common stock subject to possible redemption
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
Non-Redeemable Common Stock
|
|
|
|
|
|
|
|
|
Numerator: Net Loss minus Net Earnings
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(160,980
|
)
|
|
$
|
(323,625
|
)
|
Net income allocable to Class A common stock subject to possible redemption
|
|
|
—
|
|
|
|
—
|
|
Non-Redeemable Net Loss
|
|
$
|
(160,980
|
)
|
|
$
|
(323,625
|
)
|
Denominator: Weighted Average Non-redeemable Common stock
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average shares outstanding, Non-redeemable Common stock
|
|
|
3,946,180
|
|
|
|
3,533,667
|
|
Basic and diluted net loss per share, Non-redeemable Common stock
|
|
$
|
(0.04
|
)
|
|
$
|
(0.09
|
)
|
Concentration of Credit Risk
Financial instruments that
potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times,
may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account.
DD3 ACQUISITION CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
Fair Value of Financial Instruments
The fair value of the Company’s
assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates
the carrying amounts represented in the condensed balance sheet, primarily due to their short-term nature, excluding the Private Warrants
(see Note 10).
Recent Accounting Standards
Management does not believe
that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s
condensed financial statements.
NOTE 4. INITIAL PUBLIC OFFERING
Pursuant to the Initial
Public Offering, the Company sold 12,500,000 Units, which includes a partial exercise by the underwriters of their over-allotment option
in the amount of 1,500,000 Units, at a price of $10.00 per Unit. Each Unit consists of one share of Class A common stock and one-half
of one redeemable warrant (“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 9).
NOTE 5. PRIVATE PLACEMENT
Simultaneously with the
closing of the Initial Public Offering, the Sponsor and the Forward Purchase Investors purchased an aggregate of 370,000 Private Units
at a price of $10.00 per Private Unit, for an aggregate purchase price of $3,700,000, in a private placement. The Sponsor purchased an
aggregate of 296,000 Private Units and Forward Purchase Investors purchased an aggregate of 74,000 Private Units. Each Private Unit consists
of one share of Class A common stock (“Private Share”) and one-half of one redeemable warrant (“Private Warrant”).
Each whole Private 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 9). A portion of the proceeds from the Private Units were added to the proceeds from the Initial Public Offering
held in the Trust Account. The Private Units are identical to the Units sold in the Initial Public Offering, except as described in Note 9.
If the Company does not complete a Business Combination within the Combination Period, the proceeds of the sale of the Private Units
will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and underlying securities will
be worthless.
Certain funds affiliated
with Baron Capital Group, Inc., which are members of the Sponsor, and MG Partners Multi-Strategy Fund LP (collectively, the “Forward
Purchase Investors”) have entered into contingent forward purchase agreements with the Company as described in Note 7.
NOTE 6. RELATED PARTY TRANSACTIONS
Founder Shares
On October 13, 2020, the
Sponsor purchased 2,875,000 shares (the “Founder Shares”) of the Company’s Class B common stock for an aggregate price
of $25,000. On December 7, 2020, the Company effected a stock dividend of 287,500 shares with respect to the Class B common stock, resulting
in an aggregate of 3,162,500 Founder Shares issued and outstanding. All share and per-share amounts have been retroactively restated
to reflect the stock dividend effectuated on December 7, 2020. The Founder Shares included an aggregate of up to 412,500 shares 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 own, on an as-converted basis, 20.0% of the Company’s issued and outstanding shares after the Initial Public
Offering (excluding the Private Shares). As a result of the underwriters’ election to partially exercise their over-allotment option,
a total of 375,000 Founder Shares are no longer subject to forfeiture and 37,500 Founder Shares were forfeited, resulting in an aggregate
of 3,125,000 Founder Shares issued and outstanding.
The Company’s Sponsor,
initial stockholders, officers and directors have agreed, subject to certain limited exceptions, not to transfer, assign or sell any
of the Founder Shares until the earlier of one year after the date of the consummation of a Business Combination and the date on which
the closing price of the Class A common stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations
and recapitalizations) for any 20 trading days within a 30-trading day period commencing 150 days after a Business Combination, or earlier
if, subsequent to a Business Combination, the Company completes a liquidation, merger, stock exchange or other similar transaction which
results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or
other property.
DD3 ACQUISITION CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
Due from Sponsor
As of December 10, 2020,
the Company advanced the Sponsor an aggregate of $25,000, which is included in prepaid expenses in the accompanying condensed balance
sheet. The outstanding balance of the $25,000 due was repaid on January 11, 2021.
Administrative Services Agreement
The Company entered into
an agreement, commencing on December 7, 2020 through the earlier of the Company’s consummation of a Business Combination and its
liquidation, to pay the Sponsor a total of up to $10,000 per month for office space, utilities and administrative support. For the three
months ended March 31, 2021 and for the period from September 30, 2020 (inception) through March 31, 2021, the Company incurred $30,000
and $40,000, respectively, in fees for these services, of which $20,000 is included in accrued expenses in the accompanying condensed
balance sheet at March 31, 2021.
Promissory Note — Related Party
On October 13, 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 $150,000. The Promissory Note was non-interest bearing and payable on the
earlier of (i) March 31, 2021 or (ii) the consummation of the Initial Public Offering. The outstanding balance under the
Promissory Note of $105,747 was repaid at the closing of the Initial Public Offering on December 10, 2020.
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 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 units of the post-Business Combination
entity at a price of $10.00 per unit. The units would be identical to the Private Units.
NOTE 7. COMMITMENTS
Registration Rights Agreement
Pursuant to a registration
rights agreement entered into on December 7, 2020, the holders of the Founder Shares, Private Units, Private Shares, Private Warrants,
the units that may be issued upon conversion of Working Capital Loans, the shares of Class A common stock and the warrants issued as
part of such units (and any shares of Class A common stock issuable upon the exercise of the Private Warrants and warrants included
as part of the units that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will be entitled
to registration rights. The holders of a majority of these securities are entitled to make up to two demands that the Company register
such securities. The holders of the majority of the Founder Shares can elect to exercise these registration rights at any time commencing
three months prior to the date on which the Founder Shares are to be released from escrow. The holders of a majority of the Private Units
and units issued to the Sponsor, officers, directors, initial stockholders or their affiliates in payment of Working Capital Loans made
to the Company (or underlying securities) can elect to exercise these registration rights at any time after the Company consummates a
Business Combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration
statements filed subsequent to the consummation of a Business Combination. The registration rights agreement does not contain liquidated
damages or other cash settlement provisions resulting from delays in registering such securities. The Company will bear the expenses
incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriters were paid
a cash underwriting discount of $0.20 per Unit, or $2,500,000 in the aggregate, payable upon the closing of the Initial Public Offering.
Business Combination Marketing Agreement
The Company engaged the
underwriters as an advisor in connection with a Business Combination to assist the Company in holding meetings with its shareholders
to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors
that are interested in purchasing the Company’s securities in connection with a Business Combination, provide financial advisory
services to assist the Company in the Company’s efforts to obtain any stockholder approval for the Business Combination and assist
the Company with its press releases and public filings in connection with the Business Combination. The Company will pay the underwriters
a cash fee for such services upon the consummation of a Business Combination in an amount equal to, in the aggregate, 3.5% of the gross
proceeds of Initial Public Offering (exclusive of any applicable finders’ fees which might become payable).
DD3 ACQUISITION CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
Forward Purchase Agreements
The Forward Purchase Investors
entered into contingent forward purchase agreements with the Company as of November 17, 2020 and November 19, 2020, which provide for
the purchase by the Forward Purchase Investors of an aggregate of up to 5,000,000 shares of Class A common stock, at a price of $10.00
per share, for total gross proceeds of up to $50,000,000. These shares would be purchased in a private placement to close simultaneously
with the consummation of the Company’s Business Combination. These issuances would be made pursuant to the exemption from registration
contained in Section 4(a)(2) of the Securities Act.
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 March 31,
2021, there were no shares of preferred stock issued or outstanding.
Class A Common Stock
— The Company is currently authorized to issue up to 100,000,000 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 March 31, 2021, there were 837,389 shares of Class
A common stock issued and outstanding, excluding 12,032,611 shares of Class A common stock subject to possible redemption.
Class B Common Stock
— The Company is currently authorized to issue up to 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 March 31, 2021, there were 3,125,000 shares of
Class B common stock issued and outstanding.
Only holders of Class B
common stock have the right to vote on the election of directors prior to a Business Combination. Holders of Class A common stock
and Class B common stock will vote together as a single class on all other 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, or at any time prior thereto
at the option of the holder, 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 amounts offered in the Initial Public Offering and related
to the closing of a Business Combination, 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) 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 sum of the total number of all
shares of common stock outstanding upon the completion of the Initial Public Offering (not including the shares of Class A common stock
underlying the Private Units) plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection
with a Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in a Business Combination
and any additional units issued to the Sponsor, officers, directors, initial stockholders or their affiliates in payment of Working Capital
Loans made to the Company). The Company cannot determine at this time whether a majority of the holders of the Class B common stock at
the time of any future issuance would agree to waive such adjustment to the conversion ratio.
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 consummation of a Business Combination or (b) December 10, 2021. The
Public Warrants will expire five years after the consummation of a Business Combination or earlier upon redemption or liquidation.
The Company may redeem the
Public Warrants (excluding the Private Warrants and any warrants underlying units issued upon conversion of the Working Capital Loans):
|
●
|
in
whole and not in part;
|
|
●
|
at
a price of $0.01 per warrant;
|
|
●
|
at
any time after the warrants become exercisable;
|
|
●
|
upon
not less than 30 days’ prior written notice of redemption to each warrant holder;
|
|
●
|
if,
and only if, the reported last sale price of the shares of Class A common stock equals or exceeds $18.00 per share (as adjusted for
stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day
commencing at any time after the warrants become exercisable and ending on the third business day prior to the notice of redemption
to warrant holders; and
|
|
●
|
if,
and only if, there is a current registration statement in effect with respect to the shares of Class A common stock underlying the
warrants.
|
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.
DD3 ACQUISITION CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
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, except as described below, the warrants will not be adjusted for
issuances 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 its initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A common
stock (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, initial stockholders or their affiliates, without taking into account any Founder Shares
held by the Sponsor, initial stockholders or their 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 Company’s initial Business Combination on the date of the consummation of such initial Business Combination
(net of redemptions), and (z) the volume weighted average trading price of the Class A 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, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to
115% of the greater of (i) the Market Value or (ii) the Newly Issued Price, and the $18.00 per share redemption trigger price of the
warrants will be adjusted (to the nearest cent) to be equal to 180% of the greater of (i) the Market Value or (ii) the Newly Issued Price.
The Private Warrants are
identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Warrants and the shares
of Class A common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or salable until after
the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable
on a cashless basis and will be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If
the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private 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 the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability.
|
DD3 ACQUISITION CORP. II
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
The following table presents
information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at March 31, 2021,
and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
Description
|
|
Level
|
|
March
31, 2021
|
|
Assets:
|
|
|
|
|
|
|
Marketable securities
held in Trust Account
|
|
1
|
|
$
|
125,040,112
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
Warrant Liability –
Private Warrants
|
|
3
|
|
$
|
190,550
|
|
The Private Warrants are
accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the accompanying condensed
balance sheet. The Private Warrants are measured at fair value at inception and on a recurring basis, with changes in fair value presented
in the condensed statement of operations.
The Private Warrants were
valued using a binomial lattice model, which is considered to be a Level 3 fair value measurement. The binomial lattice model’s
primary unobservable input utilized in determining the fair value is the expected volatility of the common stock. The expected volatility
as of the valuation dates was implied from the Company’s own Public Warrant pricing.
The following table presents
the quantitative information regarding Level 3 fair value measurements of the warrant liability as of March 31, 2021:
Risk-free interest rate
|
|
|
0.92
|
%
|
Effective expiration date
|
|
|
4/25/2026
|
|
Dividend yield
|
|
|
0.00
|
%
|
Expected volatility
|
|
|
17.1
|
%
|
Exercise price
|
|
$
|
11.50
|
|
One-touch hurdle
|
|
$
|
18.15
|
|
Unit Price
|
|
$
|
9.76
|
|
The following table presents
the changes in the fair value of Private Warrants:
Fair value as of September 30, 2020 (inception)
|
|
$
|
—
|
|
Initial classification on December 10, 2020 (Initial Public Offering)
|
|
|
109,150
|
|
Change in fair value
|
|
|
74,000
|
|
Fair value as of December 31, 2020
|
|
|
183,150
|
|
Change in fair value
|
|
|
7,400
|
|
Fair value as of March 31, 2021
|
|
$
|
190,550
|
|
There were no transfers in or out of Level 3
from other levels in the fair value hierarchy during the three months ended March 31, 2021.
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.