NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
(As Restated)
NOTE
1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
KludeIn
I Acquisition Corp. (the “Company”) is a blank check company incorporated in Delaware on September 24, 2020. The Company
was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other
similar business combination with one or more businesses (the “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 September 30, 2021, the Company had not commenced any operations. All activity for the period from September 24, 2020 (inception)
through September 30, 2021 relates to the Company’s formation, the initial public offering (the “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 will
generate non-operating income in the form of interest income and unrealized gain from the marketable securities held in the Trust Account
(as defined below), and gains or losses from the change in fair value of the warrant liabilities.
The
registration statement for the Company’s Initial Public Offering was declared effective on January 6, 2021. On January 11, 2021,
the Company consummated the Initial Public Offering of 17,250,000 units (the “Units” and, with respect to the shares of Class
A common stock included in the Units sold, the “Public Shares”), which included the full exercise by the underwriters of
their over-allotment option in the amount of 2,250,000 Units, at $10.00 per Unit, generating gross proceeds of $172,500,000, which is
described in Note 4.
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the sale of 5,200,000 warrants (each, a “Private Placement
Warrant” and, collectively, the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in
a private placement to KludeIn Prime LLC (the “Sponsor”), generating gross proceeds of $5,200,000, which is described in
Note 5.
Transaction
costs amounted to $9,891,996, consisting of $3,450,000 of underwriting fees, $6,037,500 of deferred underwriting fees and $404,496 of
other offering costs. Transaction costs allocated to the warrants were $364,208 and were expensed in the condensed statement of operations.
Following
the closing of the Initial Public Offering on January 11, 2021, an amount of $172,500,000 ($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”), invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment
Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in money market funds
meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation
of a Business Combination or (ii) the distribution of the funds in the Trust Account to the Company’s stockholders, as described
below.
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering
and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward
consummating a Business Combination. Nasdaq Capital Markets rules provide that the Business Combination must be with one or more target
businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (less any deferred underwriting
commissions and taxes payable on interest earned on the Trust Account) at the time of the signing a definitive agreement to enter a Business
Combination. The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more
of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to
be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able
to successfully complete a Business Combination.
KLUDEIN
I ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
(As Restated)
The
Company will provide its holders of its outstanding Public Shares (the “public stockholders”) with the opportunity to redeem
all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting
called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder
approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders
will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated
to be $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to
the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect
to the Company’s warrants.
The
Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 either prior to or
upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted
in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder
vote for business or other reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended
and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities
and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination.
If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business
or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not
pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Sponsor
has agreed to vote its Founder Shares (as defined in Note 6) and any Public Shares purchased during or after the Initial Public Offering
in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares, without
voting, and if they do vote, irrespective of whether they vote for or against the proposed Business Combination.
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, (b) to waive its liquidation rights with respect to the Founder Shares if the Company fails
to complete a Business Combination by July 11, 2022 and (c) not to propose an amendment to the Amended and Restated Certificate of Incorporation
(i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial
Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect
to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless the Company provides
the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
The
Company will have until July 11, 2022 to complete a Business Combination (the “Combination Period”). If the Company is unable
to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of
winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held
in the Trust Account and not previously released to the Company to pay its tax obligations (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.
KLUDEIN
I ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
(As Restated)
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 underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 7) held in
the Trust Account in the event the Company does not complete a Business Combination within in the Combination Period and, in such event,
such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public
Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution
will be less than the Initial Public Offering price per Unit ($10.00).
In
order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims
by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed
entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) the
actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in
the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes. This liability will not apply with
respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as
to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including
liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed
waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such
third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to
claims of creditors by endeavoring to have all vendors, service providers (except the Company’s independent registered public accounting
firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving
any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Liquidity
and Going Concern
As
of September 30, 2021, the Company had $473,299 in its operating bank accounts, $172,559,258 in securities held in the Trust Account
to be used for a Business Combination or to repurchase or redeem its common stock in connection therewith and working capital of $495,908,
which excludes franchise and income taxes payable as such amounts can be paid from the interest earned in the Trust Account. As of September
30, 2021, approximately $59,000 of the amount on deposit in the Trust Account represented interest income, which is available to pay
the Company’s tax obligations.
Until
the consummation of a Business Combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating
prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting
the target business to acquire, and structuring, negotiating and consummating the Business Combination.
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 until the earlier of the consummation of the Business Combination or July,
11, 2022, the date the Company is required to liquidate. These 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’s Sponsor, officers and directors 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.
Risks
and Uncertainties
Management
continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could
have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific
impact is not readily determinable as of the date of the financial statements. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
KLUDEIN
I ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(Unaudited)
(As Restated)
NOTE
2. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
Warrants
The
Company previously accounted for its outstanding Public Warrants and Private Placement Warrants (collectively, with the Public Warrants,
the “Warrants”) issued in connection with its Initial Public Offering as components of equity instead of as derivative liabilities.
The warrant agreements governing the Warrants includes a provision that provides for potential changes to the settlement amounts dependent
upon the characteristics of the holder of the warrant. In addition, the warrant agreement includes a provision that in the event of a
tender offer or exchange offer made to and accepted by holders of more than 50% of the outstanding shares of a single class of stock,
all holders of the Warrants would be entitled to receive cash for their Warrants (the “tender offer provision”).
On
April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the Securities and Exchange
Commission together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition
companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition
Companies (“SPACs”)” (the “SEC Statement”). Specifically, the SEC Statement focused on certain settlement
terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in
the warrant agreement.
In
further consideration of the SEC Statement, the Company’s management further evaluated the Warrants under Accounting Standards
Codification (“ASC”) Subtopic 815-40, Contracts in Entity’s Own Equity. ASC Section 815-40-15 addresses equity versus
liability treatment and classification of equity-linked financial instruments, including warrants, and states that a warrant may be classified
as a component of equity only if, among other things, the warrant is indexed to the issuer’s common stock. Under ASC Section 815-40-15,
a warrant is not indexed to the issuer’s common stock if the terms of the warrant require an adjustment to the exercise price upon
a specified event and that event is not an input to the fair value of the warrant. Based on management’s evaluation, the Company’s
audit committee, in consultation with management, concluded that the Company’s Private Placement Warrants are not indexed to the
Company’s common stock in the manner contemplated by ASC Section 815-40-15 because the holder of the instrument is not an input
into the pricing of a fixed-for-fixed option on equity shares. In addition, based on management’s evaluation, the Company’s
audit committee, in consultation with management, concluded that the tender offer provision in the public warrant agreement fails the
“classified in stockholders’ equity” criteria as contemplated by ASC Section 815-40-25.
In
addition to restatements for the above, the Company allocated its issuance costs of $9,891,996—consisting of $3,450,000 of underwriting
fees, $6,037,500 of deferred underwriting commissions, and $404,496 of other offering costs—to the issuance of its Class A shares
and Warrants in the amount of $9,527,887 and $364,109, respectively. The issuance costs attributed to the Warrants were restated at IPO
date below as those offering costs should have been expensed to the condensed statement of operations versus being accounted for as a
reduction of equity.
As
a result of the above, the Company should have classified the Warrants as derivative liabilities in its previously issued balance sheet
as of January 11, 2021. Under this accounting treatment, the Company is required to measure the fair value of the Warrants at the end
of each reporting period as well as re-evaluate the treatment of the warrants and recognize changes in the fair value from the prior
period in the Company’s operating results for the current period.
Temporary
equity
After
preparing and filing the Company’s unaudited condensed financial statements as of September 30, 2021, the Company concluded it
should restate (instead of revised) its previously issued financial statements to classify all Class A Common Stock subject to possible
redemption in temporary equity. In accordance with ASC 480, paragraph 10-S99, redemption provisions not solely within the control of
the Company require common stock subject to redemption to be classified outside of permanent equity. The Company previously determined
the Class A Common Stock subject to possible redemption to be equal to the redemption value of $10.00 per share of Class A Common Stock
while also taking into consideration that a redemption cannot result in net tangible assets being less than $5,000,001. Management has
also determined that the shares of Class A Common Stock issued in connection with the Initial Public Offering can be redeemed or become
redeemable subject to the occurrence of future events considered outside the Company’s control.
In
connection with the change in presentation for the Class A common stock subject to possible redemption, the Company also restated its
income (loss) per common share calculation to allocate net income (loss) to Class A and Class B common stock on a pro rata basis based
on weighted average shares outstanding. This presentation contemplates a Business Combination as the most likely outcome, in which case,
both classes of shares share pro rata in the income (loss) of the Company.
KLUDEIN I ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited) (As Restated)
Therefore, in accordance with SEC Staff Accounting
Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements
when Quantifying Misstatements in Current Year Financial Statements,” the Company re-evaluated the changes and has determined that
the related impact was material to the Affected Periods. Therefore, the Company, in consultation with its Audit Committee, concluded that
the Affected Periods should be restated (instead of revise) to present (i) all Class A common stock subject to possible redemption as
temporary equity, (ii) to recognize accretion from the initial book value to redemption value at the time of its Initial Public Offering,
and (iii) to correct its earnings per share calculation. As such, the Company is reporting these restatements to those Affected Periods
in this quarterly report.
There
has been no change in the Company’s total assets, liabilities or operating results.
The
impact of the restatements noted above on the Company’s previously issued financial statements is reflected as follows:
IPO Balance Sheet - January 11, 2021
|
|
As
Previously
Filed
|
|
|
Warrant
Adjustment
|
|
|
Temporary
Equity
Adjustment
|
|
|
As
Restated
|
|
Derivative warrant liabilities
|
|
$
|
—
|
|
|
$
|
9,954,000
|
|
|
$
|
—
|
|
|
$
|
9,954,000
|
|
Class A Common Stock Subject to Possible Redemption
|
|
|
162,829,910
|
|
|
|
9,954,000
|
|
|
|
19,624,090
|
|
|
|
172,500,000
|
|
Class A Common Stock
|
|
|
97
|
|
|
|
99
|
|
|
|
(196
|
)
|
|
|
—
|
|
Additional Paid-In Capital
|
|
|
5,002,566
|
|
|
|
364,109
|
|
|
|
(5,366,675
|
)
|
|
|
—
|
|
Accumulated deficit
|
|
|
(3,091
|
)
|
|
|
(364,208
|
)
|
|
|
(14,257,219
|
)
|
|
|
(14,624,518
|
)
|
Total Stockholders’ Equity (Deficit)
|
|
$
|
5,000,003
|
|
|
$
|
—
|
|
|
$
|
(19,624,090
|
)
|
|
$
|
(14,624,087
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Class A Common Stock Subject to Possible Redemption
|
|
|
16,282,991
|
|
|
|
(995,400
|
)
|
|
|
1,962,409
|
|
|
|
17,250,000
|
|
Number of Class A Common Stock
|
|
|
967,009
|
|
|
|
995,400
|
|
|
|
(1,962,409
|
)
|
|
|
—
|
|
Condensed Balance Sheet as of March 31, 2021 (unaudited)
|
|
As
Previously
Reported
|
|
|
Adjustment
|
|
|
As
Restated
|
|
Class A Common stock subject to possible redemption
|
|
$
|
154,788,220
|
|
|
$
|
17,711,780
|
|
|
$
|
172,500,000
|
|
Class A Common stock
|
|
$
|
177
|
|
|
$
|
(177
|
)
|
|
$
|
—
|
|
Additional paid-in capital
|
|
$
|
3,454,383
|
|
|
$
|
(3,454,383
|
)
|
|
$
|
—
|
|
Retained Earnings (Accumulated deficit)
|
|
$
|
1,545,012
|
|
|
$
|
(14,257,220
|
)
|
|
$
|
(12,712,208
|
)
|
Total Stockholders’ Equity (Deficit)
|
|
$
|
5,000,003
|
|
|
$
|
(17,711,780
|
)
|
|
$
|
(12,711,777
|
)
|
Number of Class A common stock subject to possible redemption
|
|
|
15,478,822
|
|
|
|
1,771,178
|
|
|
|
17,250,000
|
|
Number of Class A common stock
|
|
|
1,771,178
|
|
|
|
(1,771,178
|
)
|
|
|
—
|
|
Condensed Balance Sheet as of June 30, 2021 (unaudited)
|
|
As
Previously
Reported
|
|
|
Adjustment
|
|
|
As
Restated
|
|
Class A Common stock subject to possible redemption
|
|
$
|
151,940,950
|
|
|
$
|
20,559,050
|
|
|
$
|
172,500,000
|
|
Class A Common stock
|
|
$
|
206
|
|
|
$
|
(206
|
)
|
|
$
|
—
|
|
Additional paid-in capital
|
|
$
|
6,301,624
|
|
|
$
|
(6,301,624
|
)
|
|
$
|
—
|
|
Accumulated deficit
|
|
$
|
(1,302,255
|
)
|
|
$
|
(14,257,220
|
)
|
|
$
|
(15,559,475
|
)
|
Total Stockholders’ Equity (Deficit)
|
|
$
|
5,000,006
|
|
|
$
|
(20,559,050
|
)
|
|
$
|
(15,559,044
|
)
|
Number of Class A common stock subject to possible redemption
|
|
|
15,194,095
|
|
|
|
2,055,905
|
|
|
|
17,250,000
|
|
Number of Class A common stock
|
|
|
2,055,905
|
|
|
|
(2,055,905
|
)
|
|
|
—
|
|
KLUDEIN I ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited) (As Restated)
Condensed Statement of Operations for the Three Months Ended March 31, 2021 (unaudited)
|
|
As
Previously
Reported
|
|
|
Adjustment
|
|
|
As
Restated
|
|
Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption
|
|
|
15,287,591
|
|
|
|
(15,287,591
|
)
|
|
|
—
|
|
Basic and diluted net income (loss) per share, Class A common stock subject to possible redemption
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Basic and diluted weighted average shares outstanding, Non-redeemable common stock
|
|
|
5,991,211
|
|
|
|
(5,991,211
|
)
|
|
|
—
|
|
Basic and diluted net income (loss) per share, Non-redeemable common stock
|
|
$
|
0.26
|
|
|
$
|
(0.26
|
)
|
|
$
|
—
|
|
Weighted average shares outstanding of Class A common stock
|
|
|
—
|
|
|
|
15,141,667
|
|
|
|
15,141,667
|
|
Basic and diluted net income per share, Class A common stock
|
|
$
|
—
|
|
|
$
|
0.08
|
|
|
$
|
0.08
|
|
Weighted average shares outstanding of Class B common stock
|
|
|
—
|
|
|
|
4,243,750
|
|
|
|
4,243,750
|
|
Basic and diluted net income per share, Class B common Stock
|
|
$
|
—
|
|
|
$
|
0.08
|
|
|
$
|
0.08
|
|
Condensed Statement of Operations for the Three Months Ended June 30, 2021 (unaudited)
|
|
As
Previously
Reported
|
|
|
Adjustment
|
|
|
As
Restated
|
|
Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption
|
|
|
15,478,822
|
|
|
|
(15,478,822
|
)
|
|
|
—
|
|
Basic and diluted net income per share, Class A common stock subject to possible redemption
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Basic and diluted weighted average shares outstanding, Non-redeemable common stock
|
|
|
6,083,678
|
|
|
|
(6,083,678
|
)
|
|
|
—
|
|
Basic and diluted net loss (income) per share, Non-redeemable common stock
|
|
$
|
(0.47
|
)
|
|
$
|
0.47
|
|
|
$
|
—
|
|
Weighted average shares outstanding of Class A common stock
|
|
|
—
|
|
|
|
17,250,000
|
|
|
|
17,250,000
|
|
Basic and diluted net loss per share, Class A common stock
|
|
$
|
—
|
|
|
$
|
(0.13
|
)
|
|
$
|
(0.13
|
)
|
Weighted average shares outstanding of Class B common stock
|
|
|
—
|
|
|
|
4,312,500
|
|
|
|
4,312,500
|
|
Basic and diluted net loss per share, Class B common stock
|
|
$
|
—
|
|
|
$
|
(0.13
|
)
|
|
$
|
(0.13
|
)
|
Condensed Statement of Operations for the Six Months Ended June 30, 2021 (unaudited)
|
|
As
Previously
Reported
|
|
|
Adjustment
|
|
|
As
Restated
|
|
Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption
|
|
|
15,389,956
|
|
|
|
(15,389,956
|
)
|
|
|
—
|
|
Basic and diluted net income per share, Class A common stock subject to possible redemption
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Basic and diluted weighted average shares outstanding, Non-redeemable common stock
|
|
|
6,037,958
|
|
|
|
(6,037,958
|
)
|
|
|
—
|
|
Basic and diluted net loss (income) per share, Non-redeemable common stock
|
|
$
|
(0.22
|
)
|
|
$
|
0.22
|
|
|
$
|
—
|
|
Weighted average shares outstanding of Class A common stock
|
|
|
—
|
|
|
|
16,291,667
|
|
|
|
16,291,667
|
|
Basic and diluted net loss per share, Class A common stock
|
|
$
|
—
|
|
|
$
|
(0.06
|
)
|
|
$
|
(0.06
|
)
|
Weighted average shares outstanding of Class B common stock
|
|
|
—
|
|
|
|
4,281,250
|
|
|
|
4,281,250
|
|
Basic and diluted net loss per share, Class B common stock
|
|
$
|
—
|
|
|
$
|
(0.06
|
)
|
|
$
|
(0.06
|
)
|
Condensed Statement of Changes in Stockholders’ Equity (Deficit) for the three months ended of March 31, 2021 (unaudited)
|
|
As
Previously
Reported
|
|
|
Adjustment
|
|
|
As
Restated
|
|
Sale of 17,250,000 unites, net of underwriting discounts, initial value of public warrants and offering costs
|
|
$
|
156,762,211
|
|
|
$
|
(156,762,211
|
)
|
|
$
|
—
|
|
Common stock subject to possible redemption
|
|
$
|
(154,788,220
|
)
|
|
$
|
154,788,220
|
|
|
$
|
—
|
|
Accretion for Class A common stock to redemption amount
|
|
$
|
—
|
|
|
$
|
(15,737,789
|
)
|
|
$
|
(15,737,789
|
)
|
Total stockholders’ equity (deficit)
|
|
$
|
5,000,003
|
|
|
$
|
(17,711,780
|
)
|
|
$
|
(12,711,777
|
)
|
KLUDEIN I ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited) (As Restated)
Condensed Statement of Changes in Stockholders’ Equity (Deficit) for the three months ended June 30, 2021 (unaudited)
|
|
As
Previously
Reported
|
|
|
Adjustment
|
|
|
As
Restated
|
|
Change in value of common stock subject to possible redemption
|
|
$
|
2,847,270
|
|
|
$
|
(2,847,270
|
)
|
|
$
|
—
|
|
Total stockholders’ equity (deficit)
|
|
$
|
5,000,006
|
|
|
$
|
(20,559,050
|
)
|
|
$
|
(15,559,044
|
)
|
Condensed Statement of Cash Flows for the Three Months Ended March 31, 2021 (unaudited)
|
|
As
Previously
Reported
|
|
|
Adjustment
|
|
|
As
Restated
|
|
Initial classification of common stock subject to possible redemption
|
|
$
|
151,856,160
|
|
|
$
|
20,643,840
|
|
|
$
|
172,500,000
|
|
Change in value of common stock subject to possible redemption
|
|
$
|
1,912,310
|
|
|
$
|
(1,912,310
|
)
|
|
$
|
—
|
|
Condensed Statement of Cash Flows for the Six Months Ended June 30, 2021 (unaudited)
|
|
As
Previously
Reported
|
|
|
Adjustment
|
|
|
As
Restated
|
|
Initial classification of common stock subject to possible redemption
|
|
$
|
151,856,160
|
|
|
$
|
20,643,840
|
|
|
$
|
172,500,000
|
|
Change in value of common stock subject to possible redemption
|
|
$
|
(934,931
|
)
|
|
$
|
934,931
|
|
|
$
|
—
|
|
NOTE
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted
in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form
10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements
prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial
reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position,
results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include
all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating
results and cash flows for the periods presented.
The
accompanying unaudited condensed financial statements should be read in conjunction with the Company’s annual report on Form 10-K
for the year ended December 31, 2020, as filed with the SEC on March 26, 2021. The accompanying condensed balance sheet as of December
31, 2020 has been derived from the audited financial statements included in that annual report. The interim results for the three and
nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021
or for any future periods.
KLUDEIN I ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited) (As Restated)
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.
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 condensed financial
statements is the determination of the fair value of the warrant liabilities. 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 September 30, 2021 and December 31, 2020.
Marketable Securities Held in Trust Account
At September 30, 2021, substantially all of the
assets held in the Trust Account were held in U.S. Treasury securities. All of the Company’s investments held in the Trust Account
are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting
period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in interest earned
on marketable securities held in Trust Account in the accompanying condensed statements of operations. The estimated fair values of investments
held in Trust Account are determined using available market information. At December 31, 2020, there were no assets held in the Trust
Account.
Class A Common Stock Subject to Possible
Redemption (Restated – See Note 2)
The Company accounts for its Class A common stock
subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.”
Class A common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally
redeemable common stock (including Class A common stock that features redemption rights that is either within the control of the holder
or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary
equity. At all other times, common stock is classified as stockholders’ equity. The Company’s 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, as of September 30, 2021, 17,250,000 shares of Class A common stock subject to possible redemption is presented at redemption
value as temporary equity, outside of the stockholders’ equity section of the Company’s condensed balance 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. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial carrying value
to redemption amount, which approximates fair value. The change in the carrying value of redeemable Class A common stock resulted in charges
against additional paid-in capital (to the extent available), accumulated deficit and Class A common stock.
KLUDEIN I ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited) (As Restated)
At September 30, 2021, the shares of Class
A common stock reflected in the condensed balance sheet were reconciled in the following table:
Gross proceeds
|
|
$
|
172,500,000
|
|
Less:
|
|
|
|
|
Proceeds allocated to the fair value of Public Warrants
|
|
|
(6,210,000
|
)
|
Class A common stock issuance costs
|
|
|
(9,527,789
|
)
|
Plus:
|
|
|
|
|
Accretion of carrying value to redemption value
|
|
|
15,737,789
|
|
|
|
|
|
|
Class A common stock subject to possible redemption
|
|
$
|
172,500,000
|
|
Warrant Liabilities
The Company does not use derivative instruments
to hedge exposures to cash flow, market, or foreign currency risks. The Company accounts for warrants as either equity-classified or liability-classified
instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing
Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“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 shares of common stock, 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 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. For the Private Placement Warrants, the
fair value was estimated using a binomial lattice model incorporating the Cox-Rss-Rubenstein methodology at the closing date of Initial
Public Offering and as of September 30, 2021(see Note 10). For the public warrants, the fair value was estimated using a binomial lattice
model incorporating the Cox-Rss-Rubenstein methodology at the closing date of Initial Public Offering and the level 1 quoted prices in
an active market as of September 30, 2021(see Note 10).
Allocation of issuance costs
The Company accounts for the allocation of its
issuance costs to its warrants using the guidance in ASC Topic 470-20, Debt with Conversion and Other Options (“ASC 470-20), applied
by analogy. Under this guidance, if debt or stock is issued with detachable warrants, the proceeds need to be allocated to the two instruments
using either the fair value method, the relative fair value method, or the residual value method. The guidance also requires companies
to use a consistent approach in allocating issuance costs between the instruments. Accordingly, the Company allocated its issuance costs
of $9,891,996—consisting of $3,450,000 of underwriting fees, $6,037,500 of deferred underwriting commissions, and $404,496 of other
offering costs—to the issuance of its Class A common stock and warrants in the amount of $9,527,789 and $364,208, respectively.
Issuance costs attributed to the warrants were expensed to the condensed statements of operations. Issuance costs attributed to the Class
A common stock were initially charged to temporary equity and then accreted to Class A common stock subject to redemption upon completion
of the Initial Public Offering. The Company classifies deferred underwriting commissions as non-current liabilities as their liquidation
is not reasonably expected to require the use of current assets or require the creation of current liabilities.
Income Taxes
The Company follows the asset and liability method
of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated
future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities
and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
KLUDEIN I ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited) (As Restated)
FASB ASC 740 prescribes a recognition threshold
and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in
a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing
authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were
no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2021 and December 31, 2020. The Company
is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
The Company is subject to income tax examinations by major taxing authorities since inception. The effective tax rate differs from the
statutory tax rate of 21% for the three and nine months ended September 30, 2021, due to the valuation allowance recorded on the Company’s
net operating losses.
Net income (Loss) per Share of Common Stock
(Restated – See Note 2)
The Company complies with accounting and disclosure
requirements of FASB ASC Topic 260, “Earnings Per Share”. The Company has two classes of shares, 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 share of common stock
is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period.
The Company has not considered the effect of the
warrants sold in the Initial Public Offering, and the Private Placement to purchase an aggregate of 13,825,000 of the Company’s
shares of Class A common stock in the calculation of diluted net income (loss) because their exercise is contingent upon future events
and the inclusion would be anti-dilutive under the treasury stock method. As a result, diluted net income (loss) per share is the same
as basic net income (loss) per share for the periods presented. Accretion associated with the Class A common stock subject to possible
redemption is excluded from earnings per share as the redemption value approximates fair value.
Class B Founder Shares subject to forfeiture (see
Note 6) are not included in weighted average shares outstanding until the forfeiture restrictions lapse.
The following table reflects the calculation of
basic and diluted net income (loss) per common share:
|
|
Three Months
Ended
September 30, 2021
|
|
|
Nine Months
Ended
September 30, 2021
|
|
|
For the Period
from July 31,
2020 (Inception) Through
September 30, 2020
|
|
|
|
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)
|
|
$
|
820,102
|
|
|
$
|
205,026
|
|
|
$
|
(224,555
|
)
|
|
$
|
(50,679
|
)
|
|
$
|
—
|
|
|
$
|
(761
|
)
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average shares outstanding
|
|
|
17,250,000
|
|
|
|
4,312,500
|
|
|
|
16,615,809
|
|
|
|
4,291,820
|
|
|
|
—
|
|
|
|
3,750,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income (loss) per common share
|
|
$
|
0.05
|
|
|
$
|
0.05
|
|
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
—
|
|
|
$
|
(0.00
|
)
|
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal
Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts.
Fair Value of Financial Instruments
The fair value of the Company’s assets and
liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying
amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature, except for warrants (see Note
10).
KLUDEIN I ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited) (As Restated)
Recent Accounting Standards
In August 2020, the FASB issued Accounting Standards
Update (“ASU”) No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and
Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments
and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible
instruments by removing major separation models required under current U.S. GAAP. The ASU also removes certain settlement conditions that
are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share
calculation in certain areas. The Company adopted ASU 2020-06 on January 1, 2021. Adoption of the ASU did not impact the Company’s
financial position, results of operations or cash flows.
Management does not believe that any other recently
issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed
financial statements.
NOTE 4. INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering, the Company
sold 17,250,000 Units, which includes a full exercise by the underwriters of their over-allotment option in the amount of 2,250,000 Units,
at a purchase price of $10.00 per Unit. Each Unit consists of one share of the Company’s Class A common stock and one-half
of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of Class A
common stock at an exercise price of $11.50 per whole share (see Note 7).
NOTE 5. PRIVATE PLACEMENT WARRANTS
Simultaneously with the closing of the Initial
Public Offering, the Sponsor purchased an aggregate of 5,200,000 Private Placement Warrants at a price of $1.00 per Private Placement
Warrant ($5,200,000 in the aggregate), 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. 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 will be used to fund the redemption of the Public
Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.
NOTE 6. RELATED PARTY TRANSACTIONS
Founder Shares
On September 24, 2020, the Sponsor paid $25,000
to cover certain offering costs of the Company in consideration for 4,312,500 shares of Class B common stock (the “Founder
Shares”). The Founder Shares included an aggregate of up to 562,500 shares subject to forfeiture by the Sponsor to the extent that
the underwriters’ over-allotment is not exercised in full or in part, so that the Sponsor will collectively own, on an as-converted
basis, 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Sponsor does not purchase
any Public Shares in the Initial Public Offering). As a result of the underwriters’ election to fully exercise their over-allotment
option, no Founder Shares are currently subject to forfeiture.
The Sponsor has agreed, subject to certain 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 or (B) subsequent to a Business Combination, (x) if the last sale price of the Class A common
stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like)
for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, or (y) the
date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of
the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.
Promissory Note — Related Party
On September 24, 2020, the Sponsor agreed to loan
the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the
“Note”). The Note was non-interest bearing and was payable on the earlier of June 30, 2021 or the completion of the Initial
Public Offering. The outstanding balance under the Note of $88,905 was repaid at the closing of the Initial Public Offering on January
11, 2021. Borrowings are no longer available under the Promissory Note.
KLUDEIN I ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited) (As Restated)
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 directors and officers may,
but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a
Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company.
Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination
does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds
held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital
Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either
be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such
Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.00 per warrant. The warrants
would be identical to the Private Placement Warrants. To date, the Company has not entered into any Working Capital Loans.
NOTE 7. COMMITMENTS AND CONTINGENCIES
Registration Rights
Pursuant to a registration rights agreement entered
into on January 6, 2021, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion
of the Working Capital Loans (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and
warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will have registration
rights to require the Company to register a sale of any of the Company’s securities held by them. These holders of these securities
will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities for
sale under the Securities Act. In addition, these holders will have “piggy-back” registration rights to include their securities
in other registration statements filed by us, subject to certain limitations. The registration rights agreement does not contain liquidating
damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear
the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriters are entitled to a deferred fee
of $0.35 per Unit, or $6,037,500 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the
Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
NOTE 8. STOCKHOLDERS’ (DEFICIT) EQUITY
Preferred Stock — The Company
is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences
as may be determined from time to time by the Company’s board of directors. As of September 30, 2021 and December 31, 2020, there
were no shares of preferred stock issued or outstanding.
Class A Common Stock —
The Company is authorized to issue 280,000,000 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 September 30, 2021, there were 17,250,000 shares of Class A common stock issued
and outstanding, all of which are subject to possible redemption and are presented as temporary equity (as Restated – see Note 2).
At December 31, 2020, there were no shares of Class A common stock issued or outstanding.
Class B Common Stock —
The Company is authorized to issue 20,000,000 shares of common stock with a par value of $0.0001 per share. Holders of Class B common
stock are entitled to one vote for each share. At September 30, 2021 and December 31, 2020, there were 4,312,500 shares of Class B common
stock issued and outstanding, 562,500 of which were subject to forfeiture until the underwriter exercised its over-allotment in connection
with the IPO (see Note 6).
KLUDEIN I ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited) (As Restated)
Holders of Class A common stock and Class B common
stock will vote together as a single class on all other matters submitted to a vote of shareholders, except as required by law.
The shares of Class B common stock will automatically
convert into shares of Class A common stock at the time of a Business Combination on a one-for-one basis (subject to adjustment). In the
case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with a Business
Combination, the number of shares of Class A common stock issuable upon conversion of all Founder Shares will equal, in the aggregate,
on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the completion of the Initial
Public Offering, plus the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise
of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation
of a Business Combination, excluding any shares of Class A common stock or equity-linked securities exercisable for or convertible into
shares of Class A common stock issued, or to be issued, to any seller in a Business Combination and any private placement-equivalent warrants
issued to the Sponsor, officers or directors upon conversion of Working Capital Loans; provided that such conversion of Founder Shares
will never occur on a less than one for one basis. The Company cannot determine at this time whether a majority of the holders of the
Class B common stock at the time of any future issuance would agree to waive such adjustment to the conversion ratio.
NOTE 9. WARRANT LIABILITIES
As of September 30, 2021, there were 8,625,000
Public Warrants outstanding. As of December 31, 2020, there were no Public Warrants outstanding. Public Warrants may only be exercised
for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become
exercisable on the later of (a) 30 days after the consummation of a Business Combination or (b) 12 months from the closing of the Initial
Public Offering. The Public Warrants will expire five years from the consummation of a Business Combination or earlier upon redemption
or liquidation.
The Company will not be obligated to deliver any
Class A common stock pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless
a registration statement under the Securities Act covering the issuance of the Class A common stock issuable upon exercise of the Public
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, it will use its best efforts to file with the
SEC a registration statement registering the issuance of the shares of Class A common stock issuable upon exercise of the warrants, to
cause such registration statement to become effective 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. 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 or within a specified period following the consummation of a Business Combination, warrant holders may, until such time as
there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration
statement, exercise warrants on a “cashless basis” pursuant to the exemption provided by Section 3(a)(9) of the Securities
Act; provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to
exercise their warrants on a cashless basis.
KLUDEIN I ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited) (As Restated)
Once the warrants become exercisable, the Company
may call the warrants for redemption (except as described with respect to the Private Placement Warrants):
|
●
|
in
whole and not in part;
|
|
●
|
at
a price of $0.01 per warrant;
|
|
●
|
upon
not less than 30 days’ prior written notice of redemption to each warrant holder; and
|
|
●
|
if,
and only if, the reported closing price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits,
stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three
business days before the Company sends to the notice of redemption to the warrant holders.
|
If and when the warrants become redeemable by
the Company, the Company may exercise its redemption right even if the Company is unable to register or qualify the underlying securities
for sale under all applicable state securities laws.
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 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 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.
In addition, if (x) the Company issues additional
shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial
Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue
price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance
to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable,
prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than
60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination
on the date of the consummation of such initial Business Combination (net of redemptions), and (z) the volume weighted average trading
price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company
consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price
of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price
and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the higher
of the Market Value and the Newly Issued Price.
At September 30, 2021, there were 5,200,000 Private
Placement Warrants outstanding. As of December 31, 2020, there were no 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 shares of common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable
until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement
Warrants will be exercisable on a cashless basis and will 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.
KLUDEIN I ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited) (As Restated)
NOTE 10. FAIR VALUE MEASUREMENTS
The Company follows the guidance in ASC 820 for
its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets
and liabilities that are re-measured and reported at fair value at least annually.
The fair value of the Company’s financial
assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale
of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the
measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of
observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions
about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities
based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
|
Level
1:
|
Quoted
prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions
for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
|
|
Level
2:
|
Observable
inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities
and quoted prices for identical assets or liabilities in markets that are not active.
|
|
Level
3:
|
Unobservable
inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability.
|
The following table presents information about
the Company’s assets that are measured at fair value on a recurring basis at September 30, 2021, and indicates the fair value hierarchy
of the valuation inputs the Company utilized to determine such fair value:
Description
|
|
Level
|
|
September 30,
2021
|
|
Assets:
|
|
|
|
|
|
|
Marketable securities held in Trust Account
|
|
1
|
|
$
|
172,559,258
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
Warrant Liability – Public Warrants
|
|
1
|
|
|
5,606,250
|
|
Warrant Liability – Private Placement Warrants
|
|
3
|
|
|
3,386,074
|
|
The warrants were accounted for as liabilities
in accordance with ASC 815-40 and are presented within warrant liabilities on the accompanying 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 condensed statements of operations.
As of September 30, 2021, the Private Placement
Warrants were valued using a binomial lattice model which is considered to be a Level 3 fair value measurement. The binomial lattice model’s
primary unobservable input utilized in determining the fair value of the warrants is the expected volatility of the common stock. The
expected volatility as of the closing date of the Initial Public Offering was derived from observable Public Warrant pricing on comparable
‘blank-check’ companies without an identified target. The expected volatility as of subsequent valuation dates was implied
from the Company’s own Public Warrant pricing. As of September 30, 2021, the Public Warrants were valued using the level 1 quoted
prices in an active market.
KLUDEIN I ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited) (As Restated)
The following table provides quantitative information
regarding Level 3 fair value measurements for both public and private placement warrants at January 11, 2021 and for private placement
warrants only at September 30, 2021:
|
|
At
January 11,
2021
(Initial Measurement)
|
|
|
As of
September 30,
2021
|
|
Stock price
|
|
$
|
9.64
|
|
|
$
|
9.86
|
|
Strike price
|
|
$
|
11.50
|
|
|
$
|
11.50
|
|
Volatility
|
|
|
14.1
|
%
|
|
|
12.7
|
%
|
Risk-free rate
|
|
|
0.56
|
%
|
|
|
0.93
|
%
|
Probability of Business Combination occurring
|
|
|
75
|
%
|
|
|
75
|
%
|
Dividend yield
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
Fair value of warrants
|
|
$
|
0.72
|
|
|
$
|
0.65
|
|
The following contains additional information regarding the inputs
used in the pricing models:
|
●
|
Term
– the expected life of the warrants was assumed to be equivalent to their remaining contractual term.
|
|
●
|
Risk-free rate – the risk-free interest rate is based on the U.S. treasury yield curve in effect on the date of valuation equal to the remaining expected life of the Warrants.
|
|
●
|
Volatility – the Company estimated the volatility of its common stock warrants based on implied volatility and actual historical volatility of a group of comparable publicly traded companies observed over a historical period equal to the expected remaining life of the Warrants.
|
|
●
|
Dividend yield – the dividend yield percentage is zero because the Company does not currently pay dividends, nor does it intend to do so during the expected term of the Private Placement Warrants.
|
The following table presents the changes in the
fair value of Level 3 warrant liabilities:
|
|
Private
Placement
|
|
|
Public
|
|
|
Warrant
Liabilities
|
|
Fair value as of January 1, 2021
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Initial measurement on January 11, 2021
|
|
|
3,744,000
|
|
|
|
6,210,000
|
|
|
|
9,954,000
|
|
Change in fair value
|
|
|
(357,926
|
)
|
|
|
(1,380,000
|
)
|
|
|
(1,737,926
|
)
|
Transfer to Level 1
|
|
|
—
|
|
|
|
(4,830,000
|
)
|
|
|
(4,830,000
|
)
|
Fair value as of September 30, 2021
|
|
|
3,386,074
|
|
|
|
—
|
|
|
|
3,386,074
|
|
Transfers to/from Levels 1, 2 and 3 are recognized
at the end of the reporting period. Due to the use of quoted prices in an active market (Level 1) to measure the fair values of the Public
Warrants subsequent to initial measurement, the Company had transfers out of Level 3 totaling $4.8 million during the period from January
11, 2021 through September 30, 2021.
NOTE 11. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions
that occurred after the balance sheet date up to the date that the condensed financial statements were issued. Based upon this review,
other than the changes made to the previously issued financial statements for the Affected Periods, which are disclosed in Note 2, the
Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements.
Item 2. Management’s Discussion and Analysis
of Financial Condition and Results of Operations
References in this report (the “Quarterly
Report”) to “we,” “us” or the “Company” refer to KludeIn I Acquisition Corp. References to our
“management” or our “management team” refer to our officers and directors, and references to the “Sponsor”
refer to KludeIn Prime LLC. The following discussion and analysis of the Company’s financial condition and results of operations
should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain
information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
In this Amendment No. 1 (“Amendment No. 1”) to the Quarterly
Report on Form 10-Q of KludeIn I Acquisition Corp. (the “Company”) for the quarter ended September 30, 2021, we are restating
our unaudited interim financial statements as of and for the quarterly periods ended March 31, 2021, June 30, 2021 and September 30, 2021,
see Note 2 for additional information.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking
statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”) that are not historical facts and involve risks and uncertainties that could cause actual
results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this
Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” regarding the completion of the proposed Business Combination (as defined below), the Company’s financial
position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such
as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek”
and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements
relate to future events or future performance, but reflect management’s current beliefs, based on information currently available.
A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed
in the forward-looking statements, including that the conditions of the Proposed Business Combination are not satisfied. For information
identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements,
please refer to the Risk Factors section of the Company’s final prospectus for its Initial Public Offering filed with the U.S. Securities
and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s
website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to
update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
This Management’s Discussion and Analysis
of Financial Condition and Results of Operations has been amended and restated to give effect to the restatement of our audited balance
sheet dated as of January 11, 2021 and financial statements as of March 31, 2021, June 30, 2021, and September 30, 2021 (the “Affected
Periods”). Management identified errors made in its historical financial statements where, at the closing of our Initial Public
Offering, we improperly valued our Class A common stock subject to possible redemption. We previously determined the Class A common stock
subject to possible redemption to be equal to the redemption value of $10.00 per share of Class A common stock while also taking into
consideration a redemption cannot result in net tangible assets being less than $5,000,001. Management determined that the Class A common
stock issued during the Initial Public Offering can be redeemed or become redeemable subject to the occurrence of future events considered
outside of the Company’s control. Therefore, management concluded that the redemption value should include all Class A common stock
subject to possible redemption, resulting in the Class A common stock subject to possible redemption being equal to their redemption value.
As a result, management has noted a reclassification error related to temporary equity and permanent equity. This resulted in a restatement
to the initial carrying value of the Class A common stock subject to possible redemption with the offset recorded to additional paid-in
capital (to the extent available), accumulated deficit and Class A common stock.
Overview
We are a blank check company formed under the
laws of the State of Delaware on September 24, 2020 for the purpose of effectuating a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or other similar business combination with one or more businesses. We intend to effectuate our initial
business combination (the “Business Combination”) using cash from the proceeds of our initial public offering (the “Initial
Public Offering”) and the sale of the private placement warrants (the “Private Placement Warrants”), our capital stock,
debt or a combination of cash, stock and debt.
We expect to continue to incur significant costs
in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.
Results of Operations
We have neither engaged in any operations nor
generated any revenues to date. Our only activities from September 24, 2020 (inception) through September 30, 2021 were organizational
activities, those necessary to prepare for the Initial Public Offering, described below, and identifying a target company for a Business
Combination. We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate
non-operating income in the form of interest income and unrealized gains on marketable securities held in a trust account (the “Trust
Account”). We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance),
as well as for due diligence expenses.
For the three months ended September 30, 2021,
we had a net income of $1,025,128, which consists of the change in fair value of the warrant liabilities of $1,290,176, unrealized gain
on marketable securities held in Trust Account of $3,734 and interest earned on marketable securities held in the Trust Account of $18,051,
partially offset by operational costs of $286,833.
For the nine months ended September 30, 2021,
we had a net loss of $275,234, which consists of operational costs of $931,960 and transaction costs allocated to warrants of $364,208,
partially offset by the change in fair value of the warrant liabilities of $961,676, unrealized gain on marketable securities held in
Trust Account of $1,361, and interest earned on marketable securities held in the Trust Account of $57,897.
For the period from September 24, 2020 (inception) through September
30, 2020, we had a net loss of $761, which consisted of formation and operational costs.
Liquidity and Capital Resources
On January 11, 2021, we consummated the Initial
Public Offering of 17,250,000 units (“Units”), at a price of $10.00 per Unit, generating gross proceeds of $172,500,000. Simultaneously
with the closing of the Initial Public Offering, we consummated the sale of 5,200,000 Private Placement Warrants to the Sponsor at a price
of $1.00 per Private Placement Warrant generating gross proceeds of $5,200,000.
Following the Initial Public Offering, the full
exercise of the over-allotment option, and the sale of the Private Placement Warrants, a total of $172,500,000 was placed in the Trust
Account. We incurred $9,891,997 in transaction costs, including $3,450,000 of underwriting fees, $6,037,500 of deferred underwriting fees
and $404,497 of other offering costs.
For the nine months ended September 30, 2021,
cash used in operating activities was $897,443. Net loss of $275,234 was affected by changes in fair value of the warrant liabilities
of $961,676, interest earned on marketable securities held in the Trust Account of $57,897, transaction costs allocated to warrants of
$364,208 and an unrealized gain on marketable securities held in Trust Account of $1,361. Changes in operating assets and liabilities
provided $34,517 of cash for operating activities.
At September 30, 2021, we had cash and marketable
securities held in the Trust Account of $172,559,258 (including approximately $59,000 of interest income, including unrealized gain) consisting
of U.S. treasury bills with a maturity of 185 days or less. Interest income on the balance in the Trust Account may be used by us to pay
taxes. Through September 30, 2021, we had not withdrawn any interest earned from the Trust Account.
We intend to use substantially all of the funds
held in the Trust Account, including any amounts representing interest earned on the Trust Account (less income taxes payable), to complete
our Business Combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our
Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the
target business or businesses, make other acquisitions and pursue our growth strategies.
At September 30, 2021, we had cash of $473,299.
We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence
on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their
representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate
and complete a Business Combination.
In order to fund working capital deficiencies
or finance transaction costs in connection with a Business Combination, the Sponsor, or certain of our officers and directors or their
affiliates may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such
loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the
Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of
such loans may be convertible into warrants at a price of $1.00 per warrant, at the option of the lender. The warrants would be identical
to the Private Placement Warrants.
As indicated in the accompanying financial statements,
at September 30, 2021, the Company had $473,299 in cash, and a working capital of $495,908, which excludes $59,258 of Delaware franchise
taxes payable.
The Company’s liquidity needs prior to the
consummation of the Initial Public Offering were satisfied through the proceeds of $25,000 from the sale of the Class B common stock (“Founders
Shares”), and loans from the Sponsor of approximately $89,000. The loan was repaid in full on January 11, 2021. Subsequent from
the consummation of the Initial Public Offering, the Company’s liquidity has been satisfied through the net proceeds received from
the consummation of the Initial Public Offering and the sale of Private Placement Warrants.
In connection with the Company’s assessment
of going concern considerations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) Topic 205-40, “Basis of Presentation – Going Concern,” management has determined that the expected
shortfall in working capital over the period of time between the date these financial statement are issued and its estimated business
combination date raises substantial doubt about the Company’s ability to continue as a going concern until the earlier of the consummation
of the Business Combination or the date the Company is required to liquidate. Based on the above factors, management determined there
is substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements
are issued. The financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going
concern. The Company’s Sponsor, officers and directors 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.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities,
which would be considered off-balance sheet arrangements as of September 30, 2021. We do not participate in transactions that create relationships
with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established
for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements,
established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease
obligations, operating lease obligations or long-term liabilities.
The underwriters are entitled to a deferred fee
of $0.35 per Unit, or $6,037,500 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.
Critical Accounting Policies
The preparation of condensed financial statements
and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities
at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from
those estimates. We have identified the following critical accounting policies:
Warrant Liabilities
The Company does not use derivative instruments
to hedge exposures to cash flow, market, or foreign currency risks. The Company accounts for warrants as either equity-classified or liability-classified
instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing
Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“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 shares of common stock, 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 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. For the Private Placement Warrants, the
fair value was estimated using a binomial lattice model incorporating the Cox-Rss-Rubenstein methodology at the closing date of the Initial
Public Offering and as of September 30, 2021. For the public warrants, the fair value was estimated using a binomial lattice model incorporating
the Cox-Rss-Rubenstein methodology at the closing date of the Initial Public Offering and the level 1 quoted prices in an active market
as of September 30, 2021.
Common Stock Subject to Possible Redemption
(as restated – see Note 2)
We account for our common stock subject to possible
conversion in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject
to mandatory redemption is classified as a liability instrument and measured at fair value. Conditionally redeemable common stock (including
common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence
of uncertain events not solely within our control) is classified as temporary equity. At all other times, common stock is classified as
stockholders’ equity. Our common stock features certain redemption rights that are considered to be outside of our control and subject
to occurrence of uncertain future events. Accordingly, all shares of Class A common stock subject to possible redemption are presented
at redemption value as temporary equity, outside of the stockholders’ equity section of our condensed balance sheet.
Net Income (Loss) Per Share of Common Stock
(as restated – see Note 2)
The Company complies with accounting and disclosure
requirements of FASB ASC Topic 260, “Earnings Per Share”. The Company has two classes of shares, 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 share of common stock
is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period.
The Company has not considered the effect of the
warrants sold in the Initial Public Offering, and the Private Placement to purchase an aggregate of 13,825,000 of the Company’s
shares of Class A common stock in the calculation of diluted net income (loss) because their exercise is contingent upon future events
and the inclusion would be anti-dilutive under the treasury stock method. As a result, diluted net income (loss) per share is the same
as basic net income (loss) per share for the periods presented. Accretion associated with the Class A common stock subject to possible
redemption is excluded from earnings per share as the redemption value approximates fair value.
Recent Accounting Standards
In August 2020, the FASB issued Accounting
Standards Update (“ASU”) No. 2020-06, “Debt—Debt with Conversion and Other Options
(Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity
(Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”
(“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models
required under current U.S. GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts
to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain
areas. We adopted ASU 2020-06 on January 1, 2021. Adoption of the ASU did not impact our financial position, results
of operations or cash flows.
Management does not believe that any other recently
issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements.