ACCELERATE ACQUISITION CORP.
CONDENSED BALANCE SHEETS
| |
June 30, | | |
December 31, | |
| |
2022 | | |
2021 | |
| |
(Unaudited) | | |
| |
ASSETS | |
| | |
| |
Current assets | |
| | |
| |
Cash | |
$ | 654,759 | | |
$ | 937,154 | |
Prepaid expenses | |
| 450,601 | | |
| 670,169 | |
Total Current Assets | |
| 1,105,360 | | |
| 1,607,323 | |
| |
| | | |
| | |
Investments held in Trust Account | |
| 400,393,149 | | |
| 400,031,275 | |
TOTAL ASSETS | |
$ | 401,498,509 | | |
$ | 401,638,598 | |
| |
| | | |
| | |
LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT | |
| | | |
| | |
Liabilities | |
| | | |
| | |
Current liabilities | |
| | | |
| | |
Accrued expenses | |
$ | 195,699 | | |
$ | 353,466 | |
Income taxes payable | |
| 78,361 | | |
| — | |
Total Current Liabilities | |
| 274,060 | | |
| 353,466 | |
| |
| | | |
| | |
Deferred underwriting fee payable | |
| 14,000,000 | | |
| 14,000,000 | |
Derivative warrant liabilities | |
| 3,306,667 | | |
| 17,153,333 | |
Total Liabilities | |
| 17,580,727 | | |
| 31,506,799 | |
| |
| | | |
| | |
Commitments and Contingencies | |
| | | |
| | |
Class A common stock subject to possible redemption; $0.0001 par value, 500,000,000 shares authorized; 40,000,000 shares at a redemption value of $10.01 and $10.00 per share as of June 30, 2022, and December 31, 2021 | |
| 400,294,788 | | |
| 400,000,000 | |
| |
| | | |
| | |
Stockholders’ Deficit | |
| | | |
| | |
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding | |
| — | | |
| — | |
Class B common stock, $0.0001 par value; 50,000,000 shares authorized; 10,000,000 shares issued and outstanding as of June 30, 2022 and December 31, 2021 | |
| 1,000 | | |
| 1,000 | |
Additional paid-in capital | |
| — | | |
| — | |
Accumulated deficit | |
| (16,378,006 | ) | |
| (29,869,201 | ) |
Total Stockholders’ Deficit | |
| (16,377,006 | ) | |
| (29,868,201 | ) |
TOTAL LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT | |
$ | 401,498,509 | | |
$ | 401,638,598 | |
The accompanying notes are an integral part
of these unaudited condensed financial statements.
ACCELERATE ACQUISITION CORP.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
| |
For the Three Months Ended June 30, | | |
For the Six Months Ended June 30, | |
| |
2022 | | |
2021 | | |
2022 | | |
2021 | |
Operating and formation costs | |
$ | 306,101 | | |
$ | 356,996 | | |
$ | 624,196 | | |
$ | 1,284,852 | |
Loss from operations | |
| (306,101 | ) | |
| (356,996 | ) | |
| (624,196 | ) | |
| (1,284,852 | ) |
| |
| | | |
| | | |
| | | |
| | |
Other income (loss): | |
| | | |
| | | |
| | | |
| | |
Interest earned on investments held in Trust Account | |
| 608,405 | | |
| 9,974 | | |
| 641,874 | | |
| 10,960 | |
Change in fair value of derivative warrant liabilities | |
| 4,753,333 | | |
| (11,586,668 | ) | |
| 13,846,666 | | |
| (3,940,000 | ) |
Total other income (loss), net | |
| 5,361,738 | | |
| (11,576,694 | ) | |
| 14,488,540 | | |
| (3,929,040 | ) |
| |
| | | |
| | | |
| | | |
| | |
Income (Loss) before income taxes | |
| 5,055,637 | | |
| (11,933,690 | ) | |
| 13,864,344 | | |
| (5,213,892 | ) |
Provision for income taxes | |
| (78,361 | ) | |
| — | | |
| (78,361 | ) | |
| — | |
Net income (loss) | |
$ | 4,977,276 | | |
$ | (11,933,690 | ) | |
$ | 13,785,983 | | |
$ | (5,213,892 | ) |
| |
| | | |
| | | |
| | | |
| | |
Weighted average shares outstanding, Class A common stock | |
| 40,000,000 | | |
| 40,000,000 | | |
| 40,000,000 | | |
| 22,099,448 | |
| |
| | | |
| | | |
| | | |
| | |
Basic and diluted net income (loss) per share, Class A common stock | |
$ | 0.10 | | |
$ | (0.24 | ) | |
$ | 0.28 | | |
$ | (0.16 | ) |
| |
| | | |
| | | |
| | | |
| | |
Weighted average shares outstanding, Class B common stock | |
$ | 10,000,000 | | |
$ | 10,000,000 | | |
$ | 10,000,000 | | |
$ | 10,000,000 | |
| |
| | | |
| | | |
| | | |
| | |
Basic and diluted net income (loss) per share, Class B common stock | |
$ | 0.10 | | |
$ | (0.24 | ) | |
$ | 0.28 | | |
$ | (0.16 | ) |
The accompanying notes are an integral part
of the unaudited condensed financial statements.
ACCELERATE ACQUISITION CORP.
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’
EQUITY (DEFICIT)
(UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30,
2022
| |
Class B Common Stock | | |
Additional Paid-in | | |
Accumulated | | |
Total Stockholders’ | |
| |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | |
Balance — January 1, 2022 | |
| 10,000,000 | | |
$ | 1,000 | | |
$ | — | | |
$ | (29,869,201 | ) | |
$ | (29,868,201 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Net income | |
| — | | |
| — | | |
| — | | |
| 8,808,707 | | |
| 8,808,707 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Balance – March 31, 2022 | |
| 10,000,000 | | |
$ | 1,000 | | |
$ | — | | |
$ | (21,060,494 | ) | |
$ | (21,059,494 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Accretion for Class A Common Stock to redemption value | |
| — | | |
| — | | |
| — | | |
| (294,788 | ) | |
| (294,788 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Net income | |
| — | | |
| — | | |
| — | | |
| 4,977,276 | | |
| 4,977,276 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Balance – June 30, 2022 | |
| 10,000,000 | | |
$ | 1,000 | | |
$ | — | | |
$ | (16,378,006 | ) | |
$ | (16,377,006 | ) |
FOR THE THREE AND SIX MONTHS ENDED JUNE 30,
2021
| |
Class B Common Stock | | |
Additional Paid-in | | |
Accumulated | | |
Total Stockholders’ | |
| |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Equity (Deficit) | |
Balance — January 1, 2021 | |
| 11,500,000 | | |
$ | 1,150 | | |
$ | 23,850 | | |
$ | (1,000 | ) | |
$ | 24,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Accretion for Class A Common Stock to redemption amount | |
| — | | |
| — | | |
| (3,324,000 | ) | |
| (32,465,683 | ) | |
| (35,789,683 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Cash paid in excess of fair value for Private Placement Warrants | |
| — | | |
| — | | |
| 3,300,000 | | |
| — | | |
| 3,300,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Forfeiture of Founder Shares | |
| (1,500,000 | ) | |
| (150 | ) | |
| 150 | | |
| — | | |
| — | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Net income | |
| — | | |
| — | | |
| — | | |
| 6,719,798 | | |
| 6,719,798 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Balance – March 31, 2021 | |
| 10,000,000 | | |
$ | 1,000 | | |
$ | — | | |
$ | (25,746,885 | ) | |
$ | (25,745,885 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Net loss | |
| — | | |
| — | | |
| — | | |
| (11,933,690 | ) | |
| (11,933,690 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Balance – June 30, 2021 | |
| 10,000,000 | | |
$ | 1,000 | | |
$ | — | | |
$ | (37,680,575 | ) | |
$ | (37,679,575 | ) |
The accompanying notes are an integral part
of the unaudited condensed financial statements.
ACCELERATE ACQUISITION CORP.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| |
For the Six Months Ended June 30, | |
| |
2022 | | |
2021 | |
| |
| | |
| |
Cash Flows from Operating Activities: | |
| | |
| |
Net income (loss) | |
$ | 13,785,983 | | |
$ | (5,213,892 | ) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |
| | | |
| | |
Interest earned on investments held in Trust Account | |
| (641,874 | ) | |
| (10,960 | ) |
Transaction costs allocable to derivative warrant liabilities | |
| — | | |
| 801,198 | |
Change in fair value of derivative warrant liabilities | |
| (13,846,666 | ) | |
| 3,940,000 | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Prepaid expenses | |
| 219,568 | | |
| (950,333 | ) |
Accrued expenses | |
| (157,767 | ) | |
| 237,274 | |
Income tax payable | |
| 78,361 | | |
| — | |
Net cash used in operating activities | |
| (562,395 | ) | |
| (1,196,713 | ) |
| |
| | | |
| | |
Cash Flows from Investing Activities: | |
| | | |
| | |
Investment of cash in Trust Account | |
| — | | |
| (400,000,000 | ) |
Cash withdrawn from trust account to pay franchise and income taxes | |
| 280,000 | | |
| | |
Net cash provided by (used in) investing activities | |
| 280,000 | | |
| (400,000,000 | ) |
| |
| | | |
| | |
Cash Flows from Financing Activities: | |
| | | |
| | |
Proceeds from sale of Units, net of underwriting discounts paid | |
| — | | |
| 392,000,000 | |
Proceeds from sale of Private Placement Warrants | |
| — | | |
| 11,000,000 | |
Proceeds from promissory notes – related party | |
| — | | |
| 148,311 | |
Repayment of promissory notes – related party | |
| — | | |
| (148,311 | ) |
Payment of offering costs | |
| — | | |
| (565,881 | ) |
Net cash provided by financing activities | |
| — | | |
| 402,434,119 | |
| |
| | | |
| | |
Net Change in Cash | |
| (282,395 | ) | |
| 1,237,406 | |
Cash – Beginning | |
| 937,154 | | |
| — | |
Cash – Ending | |
$ | 654,759 | | |
$ | 1,237,406 | |
| |
| | | |
| | |
Non-cash investing and financing activities: | |
| | | |
| | |
Deferred underwriting fee payable | |
$ | — | | |
$ | 14,000,000 | |
Forfeiture of Founder Shares | |
$ | — | | |
$ | (150 | ) |
| |
| | | |
| | |
The accompanying notes are an integral part
of the unaudited condensed financial statements.
ACCELERATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2022
(Unaudited)
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS
OPERATIONS
Accelerate Acquisition Corp. (the “Company”)
was incorporated in Delaware on December 30, 2020. The Company was formed for the purpose of entering into a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (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 December 30, 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 company for a Business Combination. The Company will not generate any operating revenues until
after the completion of a Business Combination, at the earliest. The Company generates non-operating income in the form of interest income
from the proceeds derived from the Initial Public Offering.
The registration statement for the Company’s
Initial Public Offering was declared effective on March 17, 2021. On March 22, 2021, the Company consummated the Initial Public Offering
of 40,000,000 units (the “Units” and, with respect to the Class A common stock included in the Units sold, the “Public
Shares”), at $10.00 per Unit, generating gross proceeds of $400,000,000 which is described in Note 3.
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the sale of 7,333,333 warrants (the “Private Placement Warrants”) at a price of
$1.50 per Private Placement Warrant in a private placement to Accelerate Acquisition Sponsor, LLC (the “Sponsor”), generating
gross proceeds of $11,000,000, which is described in Note 4.
Transaction costs amounted to $22,590,881, consisting
of $8,000,000 in cash underwriting fees, $14,000,000 of deferred underwriting fees and $590,881 of other offering costs.
Following the closing of the Initial Public Offering
on March 22, 2021, an amount of $400,000,000 ($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 will be 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 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 any deferred underwriting fees 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.
ACCELERATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2022
(Unaudited)
The Company will provide its holders of the outstanding
Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the
completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination
or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination
or conduct a tender offer will be made by the Company. The public stockholders will be entitled to redeem their Public Shares for a pro
rata portion of the amount then in the Trust Account (initially $10.00 per Public Share, plus any pro rata interest earned on the funds
held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights
upon the completion of a Business Combination with respect to the Company’s warrants.
If the Company seeks stockholder approval, the
Company will only proceed with a Business Combination if 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 rules 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 applicable law or stock exchange rules, 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 irrespective of whether they vote for or against the proposed transaction or do not vote at all.
Notwithstanding the above, if the Company seeks
stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Amended and
Restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other
person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more
than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company.
The Sponsor has agreed (a) to waive its
redemption rights with respect to its 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 Amended and Restated Certificate of Incorporation (i) to modify the substance or
timing of the Company’s obligation to provide holders of shares of Class A common stock the right to have their shares redeemed
in connection with the Company’s initial Business Combination or to redeem 100% of its Public Shares if the Company does not complete
a Business Combination or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business
combination activity, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction
with any such amendment.
The Company will have until March 22, 2023 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 (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.
ACCELERATE ACQUISITION CORP.
NOTES TO CONDENSED 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 representative of the
underwriters has agreed to waive its rights to the deferred underwriting commission (see Note 6) 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 (1) $10.00 per Public Share and (2) the actual amount
per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the
trust assets, less taxes payable, provided that such liability will not apply to claims by a third party or prospective target business
who executed a waiver of any and all rights to the monies held in the Trust Account nor will it apply to any claims under the Company’s
indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities
Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable
against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will
seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to
have all vendors, service providers (except the Company’s independent registered public accounting firm), prospective target businesses
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
In connection with the Company’s assessment
of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”)
2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has until
March 22, 2023 to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination
by this time. Additionally, the Company may not have sufficient liquidity to fund the working capital needs of the Company until one
year from the issuance of these financial statements. If a Business Combination is not consummated by this date, there will be a mandatory
liquidation and subsequent dissolution of the Company. Management has determined that the mandatory liquidation, should a Business Combination
not occur, and potential subsequent dissolution, raises 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 March
22, 2023. The Company intends to complete a Business Combination before the mandatory liquidation date.
ACCELERATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2022
(Unaudited)
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The accompanying unaudited condensed financial
statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”)
for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain
information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or
omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information
and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management,
the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are
necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial
statements should be read in conjunction with the Company’s Annual Report on Form 10-K as filed with the SEC on March 9, 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 for any future periods.
Emerging Growth Company
The Company is an “emerging growth company,”
as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”),
and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that
are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public
accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive
compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote
on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts
emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company
can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but
any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that
when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging
growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make
comparison of the Company’s financial statement 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.
Offering Costs
Offering costs consist of legal, accounting,
underwriting fees and other costs incurred through the condensed balance sheet date that are directly related to the Initial Public Offering.
Offering costs were allocated on a relative fair value basis between stockholders’ (deficit) equity and expense. The portion of
offering costs allocated to the Public Warrants has been charged to expense. Offering costs associated with the issuance of the Class
A common stock issued were charged against the carrying value of the Class A common stock subject to possible redemption upon the completion
of the Initial Public Offering. On December 31, 2021, offering costs totaled $22,590,881 (consisting of $8,000,000 of underwriting fees,
$14,000,000 of deferred underwriting fees and $590,881 of other offering costs), of which $801,198 was charged to expense and $21,789,683
was charged to temporary equity.
ACCELERATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2022
(Unaudited)
Use of Estimates
The preparation of the condensed financial statements
in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts
of 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. One of the more significant accounting estimates included in these financial statements
is the determination of the fair value of the derivative warrant liability. Such estimates may be subject to change as more current information
becomes available and accordingly the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments
with an original maturity of 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.
Investments Held in Trust Account
At June 30, 2022, substantially all of the assets held in the Trust
Account were invested in both Money Market Funds and U.S. Treasury Securities. At December 31, 2021, substantially all of the assets held
in the Trust Account were invested in Money Market Funds. Interest income is recognized when earned. Interest income is recognized
when earned. The Company’s portfolio of marketable securities is comprised solely of U.S. government securities, within the meaning
set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open-ended investment company
that holds itself out as a money market fund selected by the Company meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of
Rule 2a-7 of the Investment Company Act. All of the Company’s investments held in the Trust Account are classified as trading securities.
Trading securities are presented on the condensed balance sheets at fair value at the end of each reporting period. Gains and losses resulting
from the change in fair value of investments held in Trust Account are included in interest earned on marketable securities held in Trust
Account in the accompanying statements of operations. The estimated fair values of investments held in Trust Account are determined using
available market information.
Class A Common Stock Subject to Possible
Redemption
The Company accounts for its Class A common stock
subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing
Liabilities from Equity.” Class A common stock subject to mandatory redemption is classified as a liability instrument and is measured
at fair value. Conditionally redeemable common stock (including common stock that feature 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’ (deficit) 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, 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 balance sheets.
The Company recognizes changes in redemption
value immediately as they occur and adjusts the carrying value of redeemable common shares 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
amount value. The change in the carrying value of redeemable Class A common shares 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 balance sheets are reconciled in the following table:
Gross proceeds |
|
$ |
400,000,000 |
|
Less: |
|
|
|
|
Proceeds allocated to Public Warrants |
|
|
(14,000,000 |
) |
Class A common stock issuance costs |
|
|
(21,789,683 |
) |
Plus: |
|
|
|
|
Accretion of carrying value to redemption value |
|
|
35,789,683 |
|
|
|
|
|
|
Class A common stock subject to possible redemption, December 31, 2021 |
|
$ |
400,000,000 |
|
Add: |
|
|
|
|
Accretion of carrying value to redemption value |
|
|
294,788 |
|
Class A common stock subject to possible redemption, June 30, 2022 |
|
|
400,294,788 |
|
ACCELERATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2022
(Unaudited)
Derivative Warrant Liabilities
The Company accounts for the Warrants (as defined
below) (see Note 9) in accordance with the guidance contained in ASC 815-40-15-7D and 7F under which the Warrants do not meet the criteria
for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Warrants as liabilities at their fair
value and adjust the Warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet
date until exercised, and any change in fair value is recognized in our statements of operations. The Private Placement Warrants and
the Public Warrants for periods where no observable traded price was available are valued using a lattice model, specifically a binomial
lattice model incorporating the Cox-Ross-Rubenstein methodology. For periods subsequent to the detachment of the Public Warrants from
the Units, the Public Warrant quoted market price was used as the fair value as of each relevant date. The Private Placement Warrants
were initially valued using a lattice model, specifically a binomial lattice model incorporating the Cox-Ross-Rubenstein methodology.
As of June 30, 2022, and December 31, 2021, the fair value of the Private Placement Warrants was the equivalent to that of the Public
Warrants as they had substantially the same terms.
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
1.55% and 0% for the three months ended June 30, 2022 and 2021, respectively, and 0.57% and 0% 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, 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 accounting and disclosure
requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income per common share is computed by dividing net income
by the weighted average number of common shares 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 stock. Accretion
associated with the redeemable shares of Class A common shares is excluded from earnings per share as the redemption value approximates
fair value.
The calculation of diluted income per 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 20,666,666
Class A common stocks in the aggregate. As of June 30, 2022, and 2021, the Company did not have any dilutive securities or other
contracts that could, potentially, be exercised or converted into common stocks and then share in the earnings of the Company. As a result,
diluted net loss per common share is the same as basic net loss per common share for the periods presented.
ACCELERATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2022
(Unaudited)
The following table reflects the calculation
of basic and diluted net income per common share (in dollars, except per share amounts):
| |
Three Months Ended June 30, 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 | |
$ | 3,981,821 | | |
$ | 995,455 | | |
$ | (9,546,952 | ) | |
$ | (2,386,738 | ) | |
$ | 11,028,786 | | |
$ | 2,757,197 | | |
$ | (3,589,599 | ) | |
$ | (1,624,293 | ) |
Denominator: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Basic and diluted weighted average shares outstanding | |
| 40,000,000 | | |
| 10,000,000 | | |
| 40,000,000 | | |
| 10,000,000 | | |
| 40,000,000 | | |
| 10,000,000 | | |
| 22,099,448 | | |
| 10,000,000 | |
Basic and diluted net income (loss) per common share | |
$ | 0.10 | | |
$ | 0.10 | | |
$ | (0.24 | ) | |
$ | (0.24 | ) | |
$ | 0.28 | | |
$ | 0.28 | | |
$ | (0.16 | ) | |
$ | (0.16 | ) |
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 Coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is
not exposed to significant risks on such account.
Fair Value of Financial Instruments
The fair value of the Company’s financial
assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale
of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the
measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of
observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions
about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and
liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
|
Level 1: |
Quoted prices
in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions
for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. |
|
Level 2: |
Observable
inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities
and quoted prices for identical assets or liabilities in markets that are not active. |
|
Level 3: |
Unobservable
inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. |
As of June 30, 2022, and December 31, 2021, the
carrying value of cash, prepaid expenses and accrued expenses, approximate their fair values primarily due to the short-term nature of
the instruments.
Recent Accounting Standards
The Company’s management does not believe
that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying
financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering, the
Company sold 40,000,000 Units, at a price of $10.00 per Unit, generating gross proceeds of $400,000,000. Each Unit consists of one share
of Class A common stock and one-third of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles
the holder to purchase one share of Class A common stock at 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 7,333,333 Private Placement Warrants, at a price of $1.50 per warrant, or $11,000,000
in the aggregate. Each Private Placement Warrant is exercisable to purchase one share of Class A common stock at an exercise price of
$11.50 per share, subject to adjustment (see Note 8). A portion of the proceeds from the Private Placement Warrants were added to the
proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the
Combination Period, the 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.
ACCELERATE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2022
(Unaudited)
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On December 31, 2020, the Sponsor paid $25,000
to cover certain offering costs of the Company in consideration for 8,625,000 shares of Class B common stock (the “Founder
Shares”). The Sponsor subsequently transferred 30,000 Founder Shares to each of the independent directors and 20,000 Founder Shares
to each advisor, for $0.003 per share. On January 20, 2021, the Company effected a stock dividend of 1,437,500 shares of Class B common
stock, and on March 1, 2021, the Company effected a stock dividend of 1,437,500 shares of Class B common stock, resulting in there being
an aggregate of 11,500,000 Founder Shares outstanding. The Founder Shares included an aggregate of up to 1,500,000 shares subject to
forfeiture by the Sponsor to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the
number of Founder Shares will collectively represent approximately 20% of the Company’s issued and outstanding shares after the
Initial Public Offering. As a result of the underwriters’ option not to exercise its over-allotment option, 1,500,000 shares were
forfeited.
The Sponsor has agreed, subject to certain limited
exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier 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, reorganization or other similar transaction
that results in all of the Company’s stockholders having the right to exchange their shares of Class A common stock for cash,
securities or other property.
Administrative Support Agreement
The Company entered into an agreement, commencing on March 22, 2021,
pursuant to which the Company will pay a monthly fee of $10,000 to the Sponsor for administrative services including office space, utilities
and secretarial support provided to the Company. Upon completion of the initial 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 $30,000
and $60,000 in fees for these services, respectively. For the three and six months ended June 30, 2021, the Company incurred and paid $30,000 in fees for these services.
Promissory Note — Related Parties
On December 31, 2020, the Sponsor issued an unsecured
promissory note to the Company (the “Promissory Note”), pursuant to which the Company could borrow up to an aggregate principal
amount of $300,000. Accelerate Acquisition Corp. no longer borrows on this facility. The Promissory Note was non-interest bearing and
payable on the earlier of June 30, 2021, or the consummation of the Initial Public Offering. As of June 30, 2022, and December 31, 2021,
there were no amounts outstanding under the Promissory Note.
Related Party Loans
In addition, in order to finance transaction
costs in connection with a Business Combination, the Sponsor, an affiliate of the Sponsor, or certain of the Company’s officers
and directors or their affiliates 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. The Working Capital
Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up
to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.50
per warrant. The warrants would be identical to the Private Placement Warrants. 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. As of June 30, 2022, and December
31, 2021, there were no amounts outstanding under the Working Capital Loans.
ACCELERATE
ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2022
(Unaudited)
NOTE
6. COMMITMENTS AND CONTINGENCIES
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 this financial statement. The financial statement does 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 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 financial statements.
Registration
and Stockholder Rights
Pursuant
to a registration and stockholder rights agreement entered into on March 17, 2021, the holders of the Founder Shares, Private Placement
Warrants, and warrants that may be issued upon conversion of Working Capital Loans (and any shares of Class A common stock issuable
upon the exercise of the Private Placement Warrants and warrants issued upon conversion of the 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 our Class A common stock). Any holder of at least 20% of the outstanding registrable
securities owned by these holders is 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 our securities. The Company will bear certain expenses incurred in connection
with the filing of any such registration statements.
Underwriting
Agreement
The
Company granted the underwriters a 45-day option from the date of Initial Public Offering to purchase up to 6,000,000 additional Units
to cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions. As a result of
the underwriters’ election not to exercise their over-allotment, 6,000,000 Units are no longer available for purchase.
The
underwriters are entitled to a deferred fee of $0.35 per Unit sold in the Initial Public Offering, or $14,000,000 in the aggregate. The
deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company
completes a Business Combination, subject to the terms of the underwriting agreement.
NOTE
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 designation, rights and preferences as may be determined from time to time by the Company’s board of directors. As of June
30, 2022, and December 31, 2021, there were no shares of preferred stock issued or outstanding.
Class A
Common Stock — The Company is authorized to issue 500,000,000 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 40,000,000 shares of Class A common stock issued and outstanding subject to possible redemption which are presented
as temporary equity.
Class B
Common Stock — The Company is authorized to issue 50,000,000 shares of Class B common stock with a par value of $0.0001
per share. At June 30, 2022 and December 31, 2021, there were 10,000,000 shares of Class B common stock issued and outstanding.
ACCELERATE
ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2022
(Unaudited)
In
January 2021, the Sponsor transferred 30,000 shares of Class B common stock to each of the Company’s independent directors and
20,000 shares of Class B common stock to each of the Company’s advisors.
Holders
of Class A common stock and holders of Class B common stock will vote together as a single class on all matters submitted to
a vote of our stockholders except as otherwise required by law.
The
shares of Class B common stock will automatically convert into shares of Class A common stock at the time of a Business Combination
on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock, or equity-linked securities,
are issued or deemed issued in excess of the 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 the 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 loans made to the Company). The Company cannot determine at this
time whether a majority of the holders of our Class B common stock at the time of any future issuance would agree to waive such
adjustment to the conversion ratio.
NOTE
8. WARRANTS
Warrants
—As of June 30, 2022, there were 13,333,333 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 on the later of (a) 12 months from the closing of the Initial Public Offering and (b) 30 days after the
completion of a Business Combination. The warrants will expire five years after the completion of a Business Combination.
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 with respect to the 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 any shares
of Class A common stock upon exercise of a warrant unless the share of 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 20 business days after the closing of the Company’s
initial 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 shares of the Class A common stock are at the time of any exercise of a
Public Warrant not listed on a national securities exchange such that they 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 elect, it will not be required to file or maintain in effect a registration statement, but the Company will use its commercially
reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. 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.
ACCELERATE
ACQUISITION CORP.
NOTES TO CONDENSED 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 warrants become exercisable,
the Company may redeem the outstanding warrants (except as described herein 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 business 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 for stock splits, stock capitalizations, reorganizations, recapitalizations and the
like). |
If
and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register
or qualify the underlying securities for sale under all applicable state securities laws.
Redemption
of warrants when the price per share of Class A common stock equals or exceeds $10.00. Commencing ninety days after the
warrants become exercisable, the Company may redeem the outstanding warrants:
| ● | in whole and not in part; |
| | |
| ● | at $0.10 per warrant; |
| | |
| ● | upon a minimum of 30 days’ prior written notice of redemption; |
| | |
| ● | if, and only if, the Reference Value equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like); and |
| | |
| ● | if the Reference Value is less than $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) the Private Placement Warrants must also concurrently be called for redemption on the same terms as the outstanding Public Warrants, as described above. |
If
the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that
wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise
price and number of Class A common stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances
including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However,
except as described below, the Public Warrants will not be adjusted for issuances of common stock at a price below its exercise price.
Additionally, in no event will the Company be required to net cash settle the Public 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 Public
Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s
assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.
ACCELERATE
ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2022
(Unaudited)
In
addition, if (x) the Company issues additional shares of our Class A common stock or equity-linked securities for capital raising
purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20
per share of our Class A common stock (with such issue price or effective issue price to be determined in good faith by our board
of directors and, in the case of any such issuance to our sponsor or its affiliates, without taking into account any founder shares held
by our sponsor or such affiliates, as applicable, prior to such issuance), (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 our initial business combination
on the date of the completion of our initial business combination (net of redemptions), and (z) the volume-weighted average trading
price of our Class A common stock during the 20 trading day period starting on the trading day prior to the day on which we complete
our initial business combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants
will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $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.
As
of June 30, 2022 there were 7,333,333 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 saleable until 30 days
after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will
be exercisable on a cashless basis and be non-redeemable, except as described above, 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 our 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
$400,393,149 in Money Market Fund and U.S. Treasury Securities. At December 31, 2021, assets held in the Trust Account were comprised
of $400,031,275 in money market funds which are invested primarily in U.S. Treasury Securities. During the period ended June 30, 2022,
the Company withdrew $280,000 of interest income from the trust account to pay franchise and income taxes.
ACCELERATE
ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE
30, 2022
(Unaudited)
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, 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 – Money Market Fund and U.S. Treasury Securities | |
| 1 | | |
$ | 400,393,149 | | |
$ | 400,031,275 | |
| |
| | | |
| | | |
| | |
Liabilities: | |
| | | |
| | | |
| | |
Warrant Liabilities – Public Warrants | |
| 1 | | |
$ | 2,133,333 | | |
$ | 11,066,666 | |
Warrant Liabilities – Private Placement Warrants | |
| 2 | | |
$ | 1,173,334 | | |
$ | 6,086,667 | |
The
Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on our accompanying
June 30, 2022 and December 31, 2021, condensed balance sheets. The warrant liabilities are measured at fair value at inception and on
a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the statements of operations.
The
Public Warrants were initially valued using a lattice model, specifically a binomial lattice model incorporating the Cox-Ross-Rubenstein
methodology, which is considered a Level 3 fair value measurement. As of June 30, 2022, and December 31, 2021, the Public Warrants were
valued using the instrument’s publicly listed trading price as of the condensed balance sheet date, which is considered to be a
Level 1 measurement due to the use of an observable market quote in an active market.
The
Private Placement Warrants were initially valued using a lattice model, specifically a binomial lattice model incorporating the Cox-Ross-Rubenstein
methodology, which is considered to be a Level 3 fair value measurement. The primary unobservable input utilized in determining the fair
value of the Private Placement Warrants is the expected volatility of our common stock. The expected volatility of the Company’s
common stock was determined based on the implied volatility of the Public Warrants. As of June 30, 2022, and December 31, 2021, the fair
value of the Private Placement Warrants was the equivalent to that of the Public Warrants as they had substantially the same terms as
defined in the make-whole provision contained within the warrant agreement; however, they are not actively traded, as such are listed
as a Level 2 in the hierarchy table above. The change in fair value is recognized in the statements of operations.
The key inputs into the binomial lattice model for the Private Placement Warrants as of June 30, 2021 were as follows:
| |
June
30, 2021 (Initial Measurement) | |
Input | |
|
Private
Warrants | |
Market
price of public shares | |
|
$ | 9.69 | |
Risk-free
rate | |
|
| 0.90 | % |
Dividend
yield | |
|
| 0.00 | % |
Exercise
price | |
|
$ | 11.50 | |
Effective
expiration date | |
|
| 8/1/26 | |
Transfers
to/from Levels 1, 2 and 3 are recognized at the beginning of the reporting period in which a change in valuation technique or methodology
occurs. The table below presents the estimated value of the Public Warrants transferred from a Level 3 measurement to a Level 1 measurement
upon detachment and the estimated value of the Private Placement Warrants transferred from a Level 3 measurement to a Level 2 measurement
due to the make-whole provision included in the warrant agreement.
| |
Public
Warrants | | |
Private
Warrants | | |
Total
Warrants | |
Fair
value as of January 1, 2021 | |
$ | — | | |
$ | — | | |
$ | — | |
Initial
measurement on March 22, 2021 | |
| 14,000,000 | | |
| 7,700,000 | | |
| 21,700,000 | |
Change
in fair value of derivative warrant liabilities | |
| (4,933,334 | ) | |
| (2,713,333 | ) | |
| (7,646,667 | ) |
Fair
value as of March 31, 2021 | |
| 9,066,666 | | |
| 4,986,667 | | |
| 14,053,333 | |
Transfer
to Level 1 upon detachment | |
| (9,066,666 | ) | |
| — | | |
| (9,066,666 | ) |
Change
in fair value | |
| — | | |
| 4,253,333 | | |
| 4,253,333 | |
Fair
value as of June 30, 2021 | |
| — | | |
| 9,240,000 | | |
| 9,240,000 | |
Change
in fair value of derivative warrant liabilities | |
| — | | |
| (2,321,733 | ) | |
| (2,321,733 | ) |
Transfer
to Level 2 due to make-whole provision | |
| — | | |
| 6,918,267 | | |
| 6,918,267 | |
Fair
value as of December 31, 2021 | |
$ | — | | |
$ | — | | |
$ | — | |
NOTE
10. SUBSEQUENT EVENTS
The
Company evaluated subsequent events and transactions that occurred after the unaudited condensed balance sheet date up to the date that
the unaudited 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 financial statements.