The accompanying notes are an integral part of
the unaudited condensed consolidated financial statements.
The accompanying notes are an integral part of
the unaudited condensed consolidated financial statements.
The accompanying notes are an integral part of
the unaudited condensed consolidated financial statements.
The accompanying notes are an integral part of
the unaudited condensed consolidated financial statements.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022
(Unaudited)
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Broadscale Acquisition Corp. (the “Company”)
is a blank check company incorporated in Delaware on November 5, 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 not limited to a particular industry
or sector for purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such,
the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of June 30, 2022, the Company had not commenced
any operations. All activity for the period from November 5, 2020 (inception) through June 30, 2022, relates to the Company’s formation,
the initial public offering (“Initial Public Offering”), which is described below, and subsequent to the Initial Public Offering,
identifying a target for a 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 from the proceeds
derived from the investments held in the Trust Account, which is described below.
The registration statement for the Company’s
Initial Public Offering was declared effective on February 11, 2021. On February 17, 2021, the Company consummated the Initial Public
Offering of 34,500,000 units (the “Units” and, with respect to the Class A common stock included in the Units sold, the “Public
Shares”), which includes the full exercise by the underwriter of its over-allotment option in the amount of 4,500,000 Units, at
$10.00 per Unit, generating gross proceeds of $345,000,000, which is described in Note 3.
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the sale of 6,266,667 warrants (the “Private Placement Warrants”) at a price of
$1.50 per Private Placement Warrant in a private placement to Nokomis ESG Sponsor, LLC (the “Sponsor”) generating gross proceeds
of $9,400,000, which is described in Note 4.
Transaction costs amounted to $19,416,464, consisting
of $6,900,000 in cash underwriting fees, $12,075,000 in deferred underwriting fees, and $441,464 of other offering costs.
Following the closing of the Initial Public Offering
on February 17, 2021 including the full exercise of the underwriters’ over-allotment option, an amount of $345,000,000 ($10.00
per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants
was placed in a trust account (the “Trust Account”), located in the United States and was 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 money market funds meeting certain conditions under Rule 2a-7 of the Investment
Company Act, which invest only in direct U.S. government Treasury obligations, as determined by the Company, until the earlier of: (i)
the completion of a Business Combination and (ii) the distribution of the funds held 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 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 with one or more operating businesses or assets with a fair market value equal to at least 80% of the net
assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust
Account). 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 business sufficient for it not to be required
to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to complete
a Business Combination successfully.
The Company will provide the holders of the outstanding
Public Shares (the “Public Stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the
completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination
or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination
or conduct a tender offer will be made by the Company. The Public Stockholders will be entitled to redeem their Public Shares for a pro
rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest
then in the Trust Account, net of taxes payable). There will be no redemption rights upon the completion of a Business Combination with
respect to the Company’s warrants.
BROADSCALE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022
(Unaudited)
The Company will only proceed with a Business
Combination if the Company has net tangible assets of at least $5,000,001 following any related redemptions 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 applicable law or stock exchange listing requirements 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 “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 applicable law or stock exchange listing requirements, or the Company decides to obtain stockholder approval for business
or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not
pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Sponsor
has agreed to vote its Founder 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 redeem their Public Shares without voting,
and if they do vote, irrespective of whether they vote for or against the proposed transaction.
Notwithstanding the foregoing, if the Company
seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the 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% of the Public Shares, without the prior consent of the Company.
The Sponsor has agreed (a) to waive its
redemption rights with respect to the Founder Shares and Public Shares held by it in connection with the completion of a Business Combination
and (b) not to propose an amendment to the Certificate of Incorporation (i) to modify the substance or timing of the Company’s
obligation to allow redemptions in connection with a Business Combination or to redeem 100% of its Public Shares if the Company does
not complete a Business Combination within the Combination Period (as defined below) or (ii) with respect to any other provision
relating to stockholders’ rights or pre-business combination activity, unless the Company provides the Public Stockholders with
the opportunity to redeem their Public Shares in conjunction with any such amendment.
The Company will have until February 17, 2023
to complete a Business Combination (the “Combination Period”). If the Company has not completed 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 pay 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 Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate,
subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of
other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which
will expire worthless if the Company fails to complete a Business Combination within the Combination Period.
BROADSCALE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022
(Unaudited)
The Sponsor has agreed to waive its liquidation
rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However,
if the Sponsor acquires Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions
from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriter has agreed
to waive its rights to its deferred underwriting commission held in the Trust Account in the event the Company does not complete a Business
Combination within the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account
that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share
value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).
In order to protect the amounts held in the Trust
Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or
products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement,
reduce the amount of funds in the Trust Account to below the lesser of (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 prospective target business who executed a waiver of any and all rights to monies held in the Trust Account nor will it apply
to any claims under the Company’s indemnity of the underwriter 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 for the Company’s independent registered public
accounting firm), prospective target businesses and 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 and Going Concern
The Company will need to raise additional capital
through loans or additional investments from its Sponsor, stockholders, officers, directors, or third parties. The Company’s officers,
directors and Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they
deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able
to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures
to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential
transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially
acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern
for a reasonable period of time, which is considered to be one year from the issuance date of the condensed consolidated financial statements.
These condensed consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the
classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
The Company intends to complete a Business Combination
by February 17, 2023. However, in the absence of a completed Business Combination, the Company may require additional capital. If the
Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include,
but not necessarily be limited to, suspending the pursuit of a Business Combination. The Company cannot provide any assurance that new
financing will be available to it on commercially acceptable terms, if at all.
In connection with the Company’s assessment
of going concern considerations in accordance with FASB’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures
of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that if the Company
is unable to raise additional funds to alleviate liquidity needs as well as complete a Business Combination by February 17, 2023, then
the Company will cease all operations except for the purpose of liquidating. The liquidity condition and date for mandatory liquidation
and subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern. No adjustments have
been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after February 17, 2023.
BROADSCALE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022
(Unaudited)
Business Combination Agreement
As previously reported, on November 30, 2021,
the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Voltus, Inc., a Delaware corporation
(“Voltus”), and Velocity Merger Sub Inc., a Delaware corporation and a direct, wholly owned subsidiary of the Company. On
August 12, 2022, the Merger Agreement was terminated (the “Termination”).
As a result of the Termination, the Merger Agreement
is of no further force and effect and the agreements entered into in connection with the Merger Agreement, including, but not limited
to, (i) the Sponsor Side Letter dated as of November 30, 2021, between the Company, the Sponsor and Voltus, and (ii) the Subscription
Agreements dated as of November 30, 2021, by and among the Company and certain institutional and private investors, have also been terminated
and are no longer effective, as applicable, in accordance with their respective terms.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”)
for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain
information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or
omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information
and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management,
the accompanying unaudited condensed consolidated 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.
Principles of Consolidation
The accompanying condensed consolidated financial
statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions
have been eliminated in consolidation.
BROADSCALE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022
(Unaudited)
The accompanying unaudited condensed consolidated
financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K as filed with the SEC on March
15, 2022. The interim results for the three and six months ended June 30, 2022, are not necessarily indicative of the results to be expected
for the year ending December 31, 2022, or any future period.
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 consolidated
financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated
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.
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 June 30, 2022, and December 31, 2021.
Marketable Securities Held in Trust Account
At June 30, 2022 and December 31, 2021, substantially
all of the assets held in the Trust Account were held in U.S. Treasury bills and money market funds, which invest in U.S. Treasury securities.
The Company presents its investments in treasury securities on the condensed consolidated balance sheet at amortized cost and adjusted
for the amortization or accretion of premiums or discounts. The Company presents its investments in money market funds on the balance
sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities
is included in interest income in the accompanying condensed consolidated statements of operations. The estimated fair value of investments
held in the Trust Account are determined using available market information.
Offering Costs
Offering costs consisted of legal, accounting
and other expenses incurred through the date of 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 warrant liabilities were expensed as incurred in the statements
of operations. Offering costs associated with the Class A common stock subject to possible redemption issued were initially charged to
temporary equity and then accreted to common stock subject to redemption upon the completion of the Initial Public Offering.
BROADSCALE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022
(Unaudited)
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.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured
at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are 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 June 30, 2022 and December 31, 2021, the 34,500,000 shares of Class A common stock subject to
possible redemption are presented 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 redeemable common stock 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.
Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption
value. The change in the carrying value of redeemable Class A common stock resulted in charges against additional paid-in capital and
accumulated deficit.
At June 30, 2022 and December 31, 2021, the Class
A common stock reflected in the condensed consolidated balance sheets is reconciled in the following table:
Gross proceeds | |
$ | 345,000,000 | |
Less: | |
| | |
Proceeds allocated to Public Warrants | |
| (15,438,750 | ) |
Class A common stock issuance costs | |
| (18,534,129 | ) |
Plus: | |
| | |
Accretion of carrying value to redemption value | |
| 33,972,879 | |
Class A common stock subject to possible redemption, December 31, 2021 | |
$ | 345,000,000 | |
Plus: | |
| | |
Accretion of carrying value to redemption value | |
| 134,107 | |
Class A common stock subject to possible redemption, June 30, 2022 (unaudited) | |
$ | 345,134,107 | |
Warrant Liabilities
The Company does not use derivative instruments
to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including
issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives,
pursuant to ASC 480 and FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). The Company accounts for its
Private Placement Warrants and Public Warrants (as defined in Note 3) and the Closing Warrants under the PIPE Investment (collectively,
the “Warrants) as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific
terms and applicable authoritative guidance in ASC 480 and ASC 815. The assessment considers whether the warrants are freestanding financial
instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements
for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common shares, among other
conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant
issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all
of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the
time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required
to be recorded at their initial fair value on the date of issuance, and each condensed consolidated balance sheet date thereafter. Changes
in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value
of the Warrants was initially estimated using a binomial lattice model (see Note 9). For periods subsequent to the detachment of the
Public Warrants from the Units, the Public Warrant closing price was used as the fair value of the Warrants as of each relevant date.
The subsequent measurements and fair value of the Private Placement Warrants after the detachment of the Public Warrants was also based
on the closing price of the Public Warrants.
BROADSCALE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022
(Unaudited)
Income Taxes
The Company accounts for income taxes under ASC
740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities for both the expected
impact of differences between the unaudited condensed financial statements and tax basis of assets and liabilities and for the expected
future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be
established when it is more likely than not that all or a portion of deferred tax assets will not be realized. As of June 30, 2022 and
December 31, 2021, the Company’s deferred tax asset had a full valuation allowance recorded against it. Our effective tax rate was
(0.60)% and 0.00% for the three months ended June 30, 2022 and 2021, respectively, and (0.36)% and 0.00% for the six months ended June
30, 2022 and 2021, respectively. The effective tax rate differs from the statutory tax rate of 21% for the three and six months ended
June 30, 2022 and 2021, due to changes in fair value in warrant liability, changes in fair value in the warrant liability, and the valuation
allowance on the deferred tax assets.
ASC 740 also clarifies the accounting for uncertainty
in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process
for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits
to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides
guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.
The Company recognizes accrued interest and penalties
related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest
and penalties as of June 30, 2022 and December 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 has identified the United States as
its only “major” tax jurisdiction. The Company is subject to income taxation by major taxing authorities since inception.
These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and
compliance with federal and state 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 Income (Loss) per Common Share
The Company complies with the accounting and
disclosure requirements of Financial Accounting Standards Board (“FASB”) ASC Topic 260, “Earnings Per Share”.
Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock
outstanding for the period. The Company has two classes of shares, 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 of shares. Net income (loss) per common share is calculated by dividing
the net income (loss) by the weighted average shares of common stock outstanding for the respective period. Accretion associated with
the redeemable shares of Class A common stock is excluded from earnings per share as the redemption value approximates fair value.
BROADSCALE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022
(Unaudited)
The calculation of diluted net income (loss) per
common share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private
placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase
6,266,667 Class A common shares in the aggregate. As of June 30, 2022 and 2021, the Company did not have any other dilutive securities
or other contracts that could, potentially, be exercised or converted into common shares and then share in the earnings of the Company.
As a result, diluted net income (loss) per common share is the same as basic net income (loss) per common share for the periods presented.
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 June 30, 2022 | | |
Three Months Ended June 30, 2021 | | |
Six Months Ended June 30, 2022 | | |
Six Months Ended June 30, 2021 | |
| |
Class A | | |
Class B | | |
Class A | | |
Class B | | |
Class A | | |
Class B | | |
Class A | | |
Class B | |
Basic and diluted net income (loss) per common share | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Numerator: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Allocation of net income (loss), as adjusted | |
$ | 3,798,131 | | |
$ | 949,533 | | |
$ | (860,491 | ) | |
$ | (215,123 | ) | |
$ | 6,416,573 | | |
$ | 1,604,143 | | |
$ | 4,623,597 | | |
$ | 1,518,653 | |
Denominator: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Basic and diluted weighted average shares outstanding | |
| 34,500,000 | | |
| 8,625,000 | | |
| 34,500,000 | | |
| 8,625,000 | | |
| 34,500,000 | | |
| 8,625,000 | | |
| 25,350,829 | | |
| 8,326,657 | |
Basic and diluted net income (loss) per common share | |
$ | 0.11 | | |
$ | 0.11 | | |
$ | (0.02 | ) | |
$ | (0.02 | ) | |
$ | 0.19 | | |
$ | 0.19 | | |
$ | 0.18 | | |
$ | 0.18 | |
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
Deposit Insurance Corporation coverage limit of $250,000. The Company has not experienced losses on this account and management believes
the Company is not exposed to significant risks on such account.
Fair Value of Financial Instruments
The fair value of the Company’s assets
and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximates the carrying
amounts represented in the accompanying condensed consolidated balance sheets, primarily due to their short-term nature, except for the
warrant liabilities (see Note 9).
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
consolidated financial statements.
BROADSCALE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022
(Unaudited)
NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering, the
Company sold 34,500,000 Units, which includes a full exercise by the underwriter of its overallotment option in the amount of 4,500,000
Units, at a price of $10.00 per Unit. Each Unit consists of one share of Class A common stock and one-fourth 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.
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial
Public Offering, the Sponsor purchased an aggregate of 6,266,667 Private Placement Warrants at a price of $1.50 per Private Placement
Warrant ($9,400,000) from the Company in a private placement. Each Private Placement Warrant is exercisable to purchase one share of
Class A common stock at a price of $11.50 per share, subject to adjustment. The proceeds from the sale of the Private Placement
Warrants were added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete
a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants held in the Trust
Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement
Warrants will expire worthless.
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
In November 2020, the Sponsor purchased 150,000
shares (the “Founder Shares”) of the Company’s Class B common stock for an aggregate price of $25,000. On December
11, 2020, the Company effected a 47.91667-for-1 stock split and on February 11, 2021, the Company effected a stock dividend of 1.2 shares
of Class B common stock for each share of Class B common stock outstanding prior to the dividend, resulting in 8,625,000 shares of Class B
common stock being issued and outstanding. All share and per share amounts have been retroactively restated to reflect the stock split
and stock dividend.
The Sponsor has agreed, subject to limited exceptions,
not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (A) one year after the completion of a
Business Combination and (B) subsequent to a Business Combination, (x) if the last reported sale price of the Class A
common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations
and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination,
or (y) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results
in all of the Public Stockholders having the right to exchange their shares of common stock for cash, securities or other property.
Administrative Services Agreement
Commencing on February 12, 2021, the Company
has agreed to pay the Sponsor or an affiliate of the Sponsor a total of $20,000 per month for office space, utilities, secretarial support
and administrative services. Upon completion of the Business Combination or the Company’s liquidation, the Company will cease paying
these monthly fees. For the three and six months ended June 30, 2022, the Company incurred and paid $60,000 and $120,000 in fees for
these services, respectively. For the three and six months ended June 30, 2021, the Company incurred and paid $60,000 and $100,000 in
fees for these services, respectively.
Due from Sponsor
At the closing of the Initial Public Offering
on February 17, 2021, a portion of the proceeds from the sale of the Private Placement Warrants in the amount of $2,124,125 was due to
the Company to be held outside of the Trust Account for working capital purposes. The Company received the cash on February 18, 2021.
As of June 30, 2022, and December 31, 2021, there were no amounts due from the Sponsor.
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.
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, without interest, or, at the lender’s discretion, up to
$2,000,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.50
per warrant. The warrants would be identical to the Private Placement Warrants.
BROADSCALE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022
(Unaudited)
On April 18, 2022, the Company issued an unsecured
convertible promissory note (the “Sponsor Convertible Note”) to the Sponsor, pursuant to which the Company may borrow up to
$400,000 from the Sponsor for ongoing expenses reasonably related to the business of the Company and the consummation of the Business
Combination. All unpaid principal under the Sponsor Convertible Note will be due and payable in full upon the consummation of a Business
Combination (the “Maturity Date”). The Sponsor will have the option, at any time on or prior to the Maturity Date, to convert
any amounts outstanding under the Sponsor Convertible Note into warrants to purchase shares of the Company’s Class A common stock,
at a conversion price of $1.50 per warrant. The warrants would be identical to the Private Placement Warrants. As of June 30, 2022, there
was $190,000 in borrowings outstanding under the Sponsor Convertible Note. As of December 31, 2021, there were no amounts outstanding
under the Working Capital Loans.
NOTE 6. COMMITMENTS
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 these 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 and Belarus
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 and Belarus. Further, the impact of this action and related sanctions on
the world economy are not determinable as of the date of these 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 these condensed
consolidated financial statements.
Registration Rights
Pursuant to a registration rights agreement entered
into on February 11, 2021, the holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion
of Working Capital Loans (and any 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 and upon conversion of the Founder Shares) will be entitled to registration
rights, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to Class A
common stock). The holders of the majority 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 a Business Combination and rights to require the Company to register
for resale such securities pursuant to Rule 415 under the Securities Act. The registration rights agreement does not contain liquidated
damages or other cash settlement provisions resulting from delays in registering securities. The Company will bear the expenses incurred
in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriter is entitled to a deferred fee
of $0.35 per Unit, or $12,075,000 in the aggregate. The deferred fee will become payable to the underwriter from the amounts held in
the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
NOTE 7. STOCKHOLDERS’ DEFICIT
Preferred Stock — The Company
is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designations, voting and other
rights and preferences as may be determined from time to time by the Company’s board of directors. At June 30, 2022 and December
31, 2021, there were no shares of preferred stock issued or outstanding.
BROADSCALE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022
(Unaudited)
Class A Common Stock —
The Company is authorized to issue 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 June 30, 2022 and December 31, 2021, there were 34,500,000 shares
of Class A common stock issued and outstanding, including Class A common stock subject to possible redemption which are presented as
temporary equity.
Class B Common Stock —
The Company is authorized to issue 10,000,000 shares of Class B common stock with a par value of $0.0001 per share. Holders of Class B
common stock are entitled to one vote for each share. On December 11, 2020, the Company effected a 47.91667-for-1 stock split and on
February 11, 2021, the Company effected a stock dividend of 1.2 shares of Class B common stock for each share of Class B common stock
outstanding prior to the dividend, resulting in 8,625,000 shares of Class B common stock being issued and outstanding. All share
and per-share amounts have been retroactively restated to reflect the stock split and stock dividend. As of June 30, 2022 and December
31, 2021, there were 8,625,000 shares of Class B common stock issued and outstanding.
Holders of Class B common stock will vote on
the election of directors prior to the consummation of a Business Combination. Holders of Class A common stock and holders
of Class B common stock will vote together as a single class on all other matters submitted to a vote of stockholders except as
otherwise required by law.
The shares of Class B common stock will automatically
convert into Class A common stock concurrently with or immediately following the consummation of a Business Combination on a one-for-one
basis, subject to adjustment. In the case that additional shares of Class A common stock, or equity-linked securities, are issued
or deemed issued in excess of the 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 (i) the total number of all shares of common
stock outstanding upon completion of the Initial Public Offering, plus (ii) all shares of Class A common stock and equity-linked
securities issued or deemed issued in connection with a Business Combination (excluding any shares of Class A common stock or equity-linked
securities issued, or to be issued, to any seller in a Business Combination, and any private placement-equivalent warrants issued to the
Sponsor or its affiliates upon conversion of working capital loans made to the Company). The Company cannot determine at this time whether
a majority of the holders of Class B common stock at the time of any future issuance would agree to waive such adjustment to the
conversion ratio.
NOTE 8. WARRANT LIABILITIES
Warrants — As of June 30,
2022 and December 31, 2021, there were 8,625,000 Public Warrants outstanding. Public Warrants may only be exercised for a whole number
of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants
will become exercisable 30 days after the completion of a Business Combination. The Public Warrants will expire five years after
the completion of a Business Combination or earlier upon redemption or liquidation.
The Company will not be obligated to deliver
any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise
unless a registration statement under the Securities Act covering the issuance of the shares of Class A common stock underlying
the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect
to registration. No warrant will be exercisable and the Company will not be obligated to issue shares of Class A common stock upon
exercise of a warrant unless Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to
be exempt under the securities laws of the state of residence of the registered holder of the warrants.
The Company has agreed that as soon as practicable,
but in no event later than 15 business days after the closing of a Business Combination, the Company will use its commercially reasonable
efforts to file with the SEC a registration statement covering the shares of Class A common stock issuable upon exercise of the
warrants. The Company will use its commercially reasonable efforts to cause such registration statement to become effective within 60
business days after the closing of a Business Combination and to maintain a current prospectus relating to those shares of Class A
common stock until the warrants expire or are redeemed, as specified in the warrant agreement; provided that if the shares of Class A
common stock are at the time of any exercise of a warrant not listed on a national securities exchange and, as such, do not satisfy the
definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require
holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9)
of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration
statement, but it will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the
extent an exemption is not available. If a registration statement covering the shares of Class A common stock issuable upon exercise
of the warrants is not effective by the 60th business day after the closing of a 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.
BROADSCALE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022
(Unaudited)
Redemption of warrants when the price per
share of Class A common stock equals or exceeds $18.00. Once the Public Warrants become exercisable, the Company may redeem
the Public Warrants (except with respect to the Private Placement Warrants):
|
● |
in whole and
not in part; |
|
● |
at a price
of $0.01 per warrant; |
|
● |
upon a minimum
of 30 days’ prior written notice of redemption to each warrant holder; and |
| ● | if, and only if, the last reported sale price of the Class A common stock for any 20 trading days within a 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders (the “Reference Value”) equals or exceeds $18.00 per share (as adjusted). |
If and when the warrants become redeemable by
the Company, the Company may exercise its redemption right even if the Company is unable to register or qualify the underlying securities
for sale under all applicable state securities laws.
Redemption of warrants when the price per
share of Class A common stock equals or exceeds $10.00. Once the Public Warrants become exercisable, the Company may redeem
the Public Warrants:
|
● |
in whole and
not in part; |
|
● |
at $0.10 per
warrant upon a minimum of 30 days’ prior written notice of redemption; provided that holders will be able to exercise
their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the fair
market value of the Class A common stock; |
|
● |
if, and only
if, the Reference Value equals or exceeds $10.00 per share (as adjusted); and |
| ● | if the Reference Value 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. |
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 issuance of Class A common stock
at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company
is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account,
holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the
Company’s assets held outside of the Trust Account with respect to such warrants. Accordingly, the warrants may expire worthless.
In addition, if (x) the Company issues additional
shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of a Business
Combination at an issue price or effective issue price of less than $9.20 per 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 or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable,
prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more
than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation
of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s Class A
common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates a Business
Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted
(to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $10.00 and $18.00 per
share redemption trigger prices will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the Market Value
and the Newly Issued Price, respectively.
BROADSCALE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022
(Unaudited)
As of June 30, 2022 and December 31, 2021, there
were 6,266,667 Private Placement Warrants outstanding. The Private Placement Warrants are identical to the Public Warrants underlying
the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A common stock issuable
upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion
of a Business Combination, subject to certain limited exceptions. Additionally, except as provided herein under “— Redemption
of warrants when the price per share of Class A common stock equals or exceeds $10.00”, the Private Placement Warrants will
be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees.
If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement
Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
NOTE 9. FAIR VALUE MEASUREMENTS
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 an entity’s assessment of the assumptions
that market participants would use in pricing the asset or liability. |
At June 30, 2022, assets held in the Trust Account
were comprised of $345,236,409 in money market funds which are invested in U.S. Treasury securities. Through June 30, 2022, the
Company withdrew $205,927 of interest earned on the Trust Account to pay for taxes.
At December 31, 2021, assets held in the Trust
Account were comprised of $345,019,584 in money market funds which are invested in U.S. Treasury securities. Through December 31, 2021,
the Company withdrew $11,667 of interest earned on the Trust Account to pay for taxes.
The following table presents information about
the Company’s assets and liabilities that are measured at fair value on a recurring basis at June 30, 2022 and December 31, 2021
and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
Description | |
Level | |
June 30, 2022 | | |
December 31, 2021 | |
Assets: | |
| |
| | |
| |
Investments held in Trust Account – U.S. Treasury Securities Money Market Fund | |
1 | |
$ | 345,236,409 | | |
$ | 345,019,584 | |
| |
| |
| | | |
| | |
Liabilities: | |
| |
| | | |
| | |
Warrant Liability – Public Warrants | |
1 | |
$ | 2,042,400 | | |
$ | 8,047,125 | |
Warrant Liability – Private Placement Warrants | |
2 | |
$ | 1,483,947 | | |
$ | 5,846,800 | |
The Warrants are accounted for as liabilities
in accordance with ASC 815-40 and are presented within warrant liabilities in the accompanying condensed consolidated balance sheets.
The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within
the change in fair value of warrant liabilities in the condensed consolidated statements of operations.
As of June 30, 2022 and December 31, 2021 the Public Warrants are classified
as Level 1 due to the use of an observable market quote in an active market under the ticker SCLEW. As of June 30, 2022 and December 31,
2021 the Private Placement Warrants are classified as Level 2. As the transfer of Private Placement Warrants to anyone outside of a small
group of individuals who are permitted transferees would result in the Private Placement Warrants having substantially the same terms
as the Public Warrants, the Company determined that the fair value of each Private Placement Warrant is equivalent to that of each Public
Warrant.
BROADSCALE ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022
(Unaudited)
The following table presents the changes in the fair value of level
3 warrant liabilities:
| |
Private Placement | | |
Public Warrant | | |
Total Level 3 Warrant Liabilities | |
Initial measurement on February 17, 2021 | |
| 11,217,334 | | |
| 15,438,750 | | |
| 26,656,084 | |
Change in valuation inputs or other assumptions | |
| (4,261,334 | ) | |
| (5,865,000 | ) | |
| (10,126,334 | ) |
Fair value as of March 31, 2021 | |
$ | 6,956,000 | | |
$ | 9,573,750 | | |
$ | 16,529,750 | |
Change in valuation inputs or other assumptions | |
| 313,334 | | |
| 345,000 | | |
| 658,334 | |
Transfer to Level 1 | |
| — | | |
| (9,918,750 | ) | |
| (9,918,750 | ) |
Transfer to Level 2 | |
| (7,269,334 | ) | |
| — | | |
| (7,269,334 | ) |
Fair value as of June 30, 2021 | |
$ | — | | |
$ | — | | |
$ | — | |
Transfers to/from Levels 1, 2 and 3 are recognized
at the end of the reporting period in which a change in valuation technique or methodology occurs. There were no transfers from Level
3 to Level 1 or Level 2 during the three and six months period ended June 30, 2022.
NOTE 10. SUBSEQUENT EVENTS
The Company evaluated subsequent events and
transactions that occurred after the condensed consolidated balance sheet date up to the date that the condensed consolidated
financial statements were issued. Based upon this review, except as set forth in Note 1 above, the Company did not identify any
subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements.