NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE
30, 2022
(Unaudited)
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. The Company has two wholly-owned
subsidiaries that were created on April 21, 2022, Paas Merger Sub 1 Inc., a Delaware corporation (“Merger Sub 1”) and Paas
Merger Sub 2 LLC., a Delaware limited liability company (“Merger Sub 2” and, together with Merger Sub 1, the “Merger
Subs”).
As of June 30, 2022, the
Company had not commenced any operations. All activity through June 30, 2022 relates to the Company’s formation and 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 and subsequent to entering into the Merger Agreement described in Note 6, pursuing
the completion of the business combination transaction. The Company will not generate any operating revenues until after the completion
of a Business Combination, at the earliest. The Company generates non-operating income in the form of interest income and unrealized
gains 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 and convertible promissory note.
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 includes the full exercise by the underwriter of its
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 3.
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 4.
The Company incurred $14,303,235
in transaction costs, including $3,450,000 of underwriting fees, $6,037,500 of deferred underwriting fees, $4,411,238 of fair value of
the Founder Shares (defined below) attributable to the Anchor Investor (defined below) and $404,497 of other offering costs. Transaction
costs allocated to the warrants were $523,013 and were expensed in the accompanying condensed consolidated statement of operations for
the six months ended June 30, 2021.
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 any open-ended
investment company that holds itself out as a money market fund 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 into
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 effect a Business Combination.
KLUDEIN
I ACQUISITION CORP.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE
30, 2022
(Unaudited)
The
Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem
all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder
meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will
seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, 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 the Public Shares in conjunction with a proxy solicitation pursuant to the proxy rules
and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the
Sponsor has agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Initial Public
Offering in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares,
without voting, and if they do vote, irrespective of whether they vote for or against the proposed 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 Public 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 January 11, 2023 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 initially had until July 11, 2022 to complete a Business Combination, which was extended to January 11, 2023 (the “Combination
Period”) after the approval obtained at a special meeting of stockholders held on July 7, 2022 (the “Extension”). 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.
At the special meeting of
stockholders on July 7, 2022 in connection with the Extension, stockholders holding 6,845,606 Public Shares exercised their right to redeem
such shares for a pro rata portion of the funds in the Trust Account. As a result, $68,488,348 (approximately $10.00 per share) was removed
from the Trust Account to pay such holders. Following redemptions, the Company has 10,404,394 Public Shares outstanding and the aggregate
amount remaining in the Trust Account was $104,093,013.
KLUDEIN
I ACQUISITION CORP.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE
30, 2022
(Unaudited)
On July 7, 2022, the Company
issued an unsecured promissory note to the Sponsor for up to an aggregate principal amount of $2,060,070 (the “Extension Funds”)
to be deposited into the Company’s Trust Account in connection with the Extension. The Company will deposit up to six equal
installments of the Extension Funds, or $343,345, into the Trust Account on a monthly basis for each month of the Extension and such amount
will be distributed either to: (i) all of the holders of the Public Shares upon the Company’s liquidation or (ii) holders
of Public Shares who elect to have their shares redeemed in connection with the consummation of the Company’s initial Business Combination.
The Extension Funds note is not convertible and bears no interest and is due and payable upon the earlier of the date on which the Company
consummates its initial Business Combination or the date of the liquidation of the Company. In connection with the Extension, the Company
drew down $343,345 in July 2022 and August 2022, for an aggregate of $686,690, under the Extension Funds note and deposited the amounts
into the Trust Account.
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 6) held in
the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event,
such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public
Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution
will be less than the Initial Public Offering price per Unit ($10.00).
In
order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims
by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed
entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (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.
On
May 18, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Merger Sub 1, Merger
Sub 2 and Near Intelligence Holdings Inc., a Delaware corporation (“Near”). Pursuant to the Merger Agreement, subject to
the terms and conditions set forth therein, immediately prior to the consummation (the “Closing”) of the transactions contemplated
by the Merger Agreement, (i) Merger Sub 1 will merge with and into Near, with Near surviving the merger as a wholly-owned subsidiary
of the Company (the “First Merger”) and (ii) immediately following the First Merger, Near, as the surviving entity of the
First Merger, will merge with and into Merger Sub 2, with Merger Sub 2 being the surviving entity (the “Second Merger” and,
together with the First Merger, the “Mergers” or the “Target Business Combination”). In connection with the Mergers,
the Company will change its corporate name to “Near Intelligence, Inc.”
Liquidity
and Going Concern
In order to fund working
capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor
or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working
Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. If the Company completes a Business Combination,
it may repay the notes out of the proceeds of the Trust Account released to it. In the event that a Business Combination does not close,
the Company may use a portion of the working capital held outside the Trust Account to repay the notes, but no proceeds from our Trust
Account would be used for such repayment. On January 21, 2022, the Company issued a promissory note with respect to the Working Capital
Loans in the principal amount of up to $1,500,000 to the Sponsor. The Working Capital Loan is non-interest bearing and payable upon the
consummation of a Business Combination or 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 (see Note 8). As of June 30, 2022, the Company had drawn
$712,500 on the Working Capital Loan and had $787,500 available to draw.
As of June 30, 2022, the
Company had $44,448 in its operating bank accounts, $172,882,919 in cash and marketable 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 deficit of $1,330,503,
which excludes $382,919 of interest earned on the Trust Account which is available to pay Delaware franchise taxes payable and income
taxes payable. As of June 30, 2022, $382,919 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 has used and will be using the funds not held in the Trust Account and any additional funds available
under the financing arrangement described below for completing the Company’s Target Business Combination.
KLUDEIN
I ACQUISITION CORP.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE
30, 2022
(Unaudited)
In
connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board’s
Accounting Standards Codification Subtopic 205-40, “Presentation of Financial Statements – Going Concern,” the Company
has until January 11, 2023, to consummate an initial Business Combination. It is uncertain that the Company will be able to consummate
an initial Business Combination by this time. If an initial Business Combination is not consummated by this date, there will be a mandatory
liquidation and subsequent dissolution of the Company. Additionally, the Company may not have sufficient liquidity to fund the working
capital needs of the Company through one year from the issuance of these condensed consolidated financial statements. Management has
determined that the liquidity condition and mandatory liquidation, should an initial Business Combination not occur, and potential subsequent
dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made
to the carrying amounts of assets or liabilities should the Company be required to liquidate after January 11, 2023.
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 condensed consolidated financial statements. The condensed consolidated financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
In February 2022, the Russian
Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including
the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and
related sanctions on the world economy are not determinable as of the date of these financial statements. The specific impact on the Company’s
financial condition, results of operations, and cash flows is also not determinable as of the date of these condensed consolidated financial
statements.
NOTE
2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally
accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions
to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements
prepared in accordance with GAAP have been condensed consolidated or omitted, pursuant to the rules and regulations of the SEC for interim
financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial
position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial
statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial
position, operating results and cash flows for the periods presented.
The
accompanying unaudited consolidated financial statements should be read in conjunction with the Company’s annual report on Form
10-K for the year ended December 31, 2021, as filed with the SEC on April 12, 2022. The accompanying condensed balance sheet
as of December 31, 2021 has been derived from the audited financial statements included in that annual report. The interim results for
the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the year ending December
31, 2022 or for any future periods.
Reclassifications
Certain reclassifications have
been made to the historical financial statements to conform to the quarterly period’s presentation. The reclassification relates
to $85,100 from accumulated deficit to additional paid in capital presented on the condensed consolidated statement of stockholders’
deficit for the three months ended March 31, 2022 to conform with the current quarterly period’s presentation. Such reclassification
has no effect on net income (loss) as previously reported.
Principles
of Consolidation
The accompanying condensed
consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, which were formed on April 21,
2022. All significant intercompany balances and transactions have been eliminated in consolidation.
KLUDEIN
I ACQUISITION CORP.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE
30, 2022
(Unaudited)
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 public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced
disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously
approved.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of
such extended transition period which means that when a standard is issued or revised and it has different application dates for public
or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies
adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which
is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult
or impossible because of the potential differences in accounting standards used.
Use
of Estimates
The
preparation of condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the condensed consolidated financial statements and the reported amounts of income and expenses during the reporting periods.
Making
estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of
a condition, situation or set of circumstances that existed at the date of the condensed consolidated financial statements, which management
considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual
results could differ significantly from those estimates.
Cash
and Cash Equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company did not have any cash equivalents as of June 30, 2022 and December 31, 2021.
Marketable
Securities Held in Trust Account
At June 30, 2022 and
December 31, 2021, substantially all of the assets held in the Trust Account were primarily invested 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 condensed consolidated balance sheets at fair value at the end of each reporting period. Interest earned and gains and losses resulting
from the change in fair value of investments held in the Trust Account are included in the accompanying condensed consolidated statements
of operations. The estimated fair values of investments held in Trust Account are determined using available market information.
Class
A Common Stock Subject to Possible Redemption
The
Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in 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 are either
within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s
control) is classified as temporary equity. At all other times, 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, 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 consolidated balance sheets.
The Company recognizes changes
in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value
at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the re-measurement
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 during the three and six months ended June 30, 2021. The change in the carrying value of redeemable Class A common stock during
the three and six months ended June 30, 2022 was an increase of $7,428, which
represents cumulative earnings on the Trust Account through June 30, 2022, net of the Company’s tax obligations as of June 30, 2022
(see Note 10).
KLUDEIN
I ACQUISITION CORP.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE
30, 2022
(Unaudited)
At
June 30, 2022 and December 31, 2021, the shares of Class A common stock reflected in the condensed consolidated balance sheet as temporary
equity were reconciled in the following table:
Gross proceeds for the Initial Public Offering | |
$ | 172,500,000 | |
Less: | |
| | |
Proceeds allocated to the initial fair value of Public Warrants | |
| (6,210,000 | ) |
Class A common stock issuance costs | |
| (9,527,789 | ) |
Fair value of Founder Shares attributable to Anchor Investor allocated to redeemable Class A common stock, net of allocated transaction costs | |
| (4,252,433 | ) |
Plus: | |
| | |
Re-measurement of carrying value to redemption value | |
| 19,990,222 | |
Class A common stock subject to possible redemption, as of December 31, 2021 | |
| 172,500,000 | |
Plus: | |
| | |
Re-measurement of carrying value to redemption value | |
| 7,428 | |
Class A common stock subject to possible redemption, as of June 30, 2022 | |
$ | 172,507,428 | |
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 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 condensed consolidated statements
of operations. For the Private Placement Warrants, the fair value was estimated using a binomial lattice model incorporating the Cox-Ross-Rubenstein
methodology since the closing date of Initial Public Offering and as of June 30, 2022 (see Note 9). For the public warrants, the fair
value was estimated using a binomial lattice model incorporating the Cox-Ross-Rubenstein methodology at the closing date of Initial Public
Offering and the level 1 quoted prices in an active market since the public warrants starting trading separately on March 1, 2021 and
as of June 30, 2022 (see Note 9).
Convertible
Instruments
The
Company evaluated the accounting for its promissory notes that feature conversion options in accordance with ASC 815, Derivatives and
Hedging Activities (“ASC 815”). ASC 815 requires companies to bifurcate conversion options from their host instruments and
account for them as freestanding derivative financial instruments according to certain criteria. The criteria includes circumstances
in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the
economic characteristics and risks of the host contract, (b) a promissory note that embodies both the embedded derivative instrument
and the host contract is not re-measured at fair value under otherwise applicable GAAP with changes in fair value reported in earnings
as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative
instrument. However, the Company has elected to account for its promissory notes at fair value, as described in Note 9. Changes in fair value are recognized in the accompanying condensed
consolidated statements of operations.
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 $14,303,235—consisting of $3,450,000 of underwriting fees, $6,037,500 of deferred underwriting
commissions, $4,411,238 of fair value of the Founder Shares attributable to the Anchor Investor, and $404,497 of other offering costs—to
the issuance of its Class A common stock and warrants in the amount of $13,780,222 and $523,013, respectively. Issuance costs attributed
to the warrants were expensed to the condensed statement of operations during the three months ended March 31, 2021. Issuance costs attributed
to the Class A common stock were initially charged to temporary equity and then re-measured to Class A common stock subject to redemption
upon completion of the Initial Public Offering.
KLUDEIN
I ACQUISITION CORP.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE
30, 2022
(Unaudited)
Income
Taxes
The Company accounts for
income taxes under ASC 740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities
for both the expected impact of differences between the unaudited condensed consolidated financial statements and tax basis of assets
and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally
requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not
be realized. As of June 30, 2022 and December 31, 2021, the Company’s deferred tax asset had a full valuation allowance recorded
against it. The Company’s effective tax rate was 9.22% and 0.00% for the three months ended June 30, 2022 and 2021, respectively,
and (1.47)% and 0.00% for the six months ended June 30, 2022 and 2021, respectively. The effective tax rate differs from the statutory
tax rate of 21% for the three and six months ended June 30, 2022 and 2021, due to changes in fair values of warrant liability and Working
Capital Loan, which are not included in taxable income, and the valuation allowance on the deferred tax assets.
ASC
740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes
a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected
to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination
by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim
period, disclosure and transition.
The
Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized
tax benefits and no amounts accrued for interest and penalties as of June 30, 2022 and December 31, 2021. The Company is currently not
aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
The Company has identified
the United States as its only “major” tax jurisdiction. The Company is subject to income taxation by major taxing authorities
since inception. These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax
jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of
unrecognized tax benefits will materially change over the next 12 months. For interim periods, the income tax provision or benefit related
to ordinary income or loss is computed at an estimated annual effective income tax rate and the income tax provision or benefit related
to all other items is individually computed and recognized when the items occur.
Net Income (Loss) per Share of Common Stock
The Company complies with
accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. 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 for the period. The
Company applies the two-class method in calculating income (loss) per share of common stock. Re-measurement associated with the redeemable
shares of Class A common stock is excluded from income (loss) per share of common stock as the redemption value approximates fair
value. Net income (loss) is allocated among the classes of common stock based on weighted average shares outstanding.
The calculation of diluted
income (loss) per share of common stock does not consider the effect of the warrants issued in connection with the (i) Initial Public
Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. The
warrants are exercisable to purchase 13,825,000 shares of Class A common stock in the aggregate, not including warrants that
may be acquired from the conversion feature in the Working Capital Loan. As of June 30, 2022 and 2021, the Company did not have any other
dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings
of the Company. As a result, diluted net income (loss) per share of common stock is the same as basic net income (loss) per share of common
stock for the periods presented.
Founder Shares subject to
forfeiture (see Note 5) are not included in weighted average shares outstanding for basic net income (loss) per share until the forfeiture
restrictions lapse, however, they are included in weighted average shares outstanding for diluted net income (loss) per share for the
entire period.
The following table reflects
the calculation of basic and diluted net income (loss) per share of common stock (in dollars, except share amounts):
| |
For the Three Months Ended June 30, 2022 | | |
For the Six Months Ended June 30, | |
| |
2022 | | |
2021 | | |
2022 | | |
2021 | |
| |
Class A | | |
Class B | | |
Class A | | |
Class B | | |
Class A | | |
Class B | | |
Class A | | |
Class B | |
Basic and diluted net income (loss) per share of common stock | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Numerator: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Allocation of net income (loss) | |
$ | (693,266 | ) | |
$ | (173,317 | ) | |
$ | (2,277,814 | ) | |
$ | (569,453 | ) | |
$ | 3,931,205 | | |
$ | 982,801 | | |
$ | (1,155,513 | ) | |
$ | (303,654 | ) |
Denominator: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Basic and diluted weighted average shares outstanding | |
| 17,250,000 | | |
| 4,312,500 | | |
| 17,250,000 | | |
| 4,312,500 | | |
| 17,250,000 | | |
| 4,312,500 | | |
| 16,291,667 | | |
| 4,281,250 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Basic and diluted net income (loss) per share of common stock | |
$ | (0.04 | ) | |
$ | (0.04 | ) | |
$ | (0.13 | ) | |
$ | (0.13 | ) | |
$ | 0.23 | | |
$ | 0.23 | | |
$ | (0.07 | ) | |
$ | (0.07 | ) |
KLUDEIN
I ACQUISITION CORP.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE
30, 2022
(Unaudited)
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution,
which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on 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 Company’s condensed consolidated balance sheets, primarily
due to their short-term nature, except for warrants (see Note 9).
Recent
Accounting Standards
Management
does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect
on the Company’s condensed consolidated financial statements.
NOTE
3 — 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 8).
NOTE 4 — 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. Certain qualified institutional buyers or institutional accredited
investors (“Anchor Investor”) purchased an aggregate of 780,000 Private Placement Warrants from the Sponsor at a price of
$1.00 per Private Placement Warrant ($780,000 in the aggregate). As a result, the Sponsor and Anchor Investor held 4,420,000 and 780,000
Private Placement Warrants, respectively. 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. As a result of the difference in the initial fair value of
$0.72 per warrant of the Private Placement Warrants and the purchase price of $1.00 per share, the Company recorded a contribution to
additional paid-in capital of $1,456,000 as of the date of the Private Placement issuance which is included in the condensed statements
of stockholders’ equity for the three months ended March 31, 2021.
NOTE
5 — 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”). On January 6, 2021, the Sponsor transferred an aggregate of 75,000 Founder
Shares to the Company’s director nominees. These 75,000 Founder Shares were not subject to forfeiture in the event the underwriter’s
over-allotment option was not exercised. 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 was not exercised in full or in part, so that the Sponsor would collectively
own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the
Sponsor did 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 were forfeited, and none are currently subject to forfeiture.
KLUDEIN
I ACQUISITION CORP.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE
30, 2022
(Unaudited)
The
Sponsor and its director nominees have 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.
In
connection with the closing of the Initial Public Offering, the Anchor Investor acquired from the Sponsor an indirect economic interest
in an aggregate of 635,625 Founder Shares at the original purchase price that the Sponsor paid for the Founder Shares. The Sponsor has
agreed to distribute such Founder Shares to the Anchor Investor after the completion of a Business Combination. The Company estimated
the aggregate fair value of the Founder Shares attributable to the Anchor Investor to be $4,411,238, or $6.94 per share. The fair value
of the Founder Shares was estimated using the income approach. The excess of the fair value of the Founder Shares was determined to be
an offering cost in accordance with Staff Accounting Bulletin Topic 5A and Topic 5T. Accordingly, the offering cost was allocated to
the separable financial instruments issued in the Initial Public Offering using the with-and-without method, compared to total proceeds
received. Offering costs related to the Founder Shares amounted to a contribution to additional paid-in capital $4,411,238, of which
$158,805 were expensed to the statement of operations and included in transaction costs attributable to warrant liabilities and the remaining
$4,252,433 recorded as an additional offering cost as a reduction of temporary equity, and re-measured to accumulated deficit upon recording
temporary equity at redemption value during the three months ended March 31, 2021.
The
transfer of the Founders Shares to the Company’s director nominees, as described above, is within the scope of FASB ASC Topic 718,
“Compensation-Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified
awards is measured at fair value upon the grant date. The Founders Shares were effectively transferred subject to a performance condition
(i.e., the occurrence of a Business Combination). Compensation expense related to the Founders Shares and common stock purchase warrants
is recognized only when the performance condition is probable of occurrence under the applicable accounting literature in this circumstance.
Stock-based compensation would be recognized at the date a Business Combination is considered probable in an amount equal to the number
of Founders Shares times the grant date fair value per share (unless subsequently modified) less the amount initially received for the
purchase of the Founders Shares. As of June 30, 2022 and December 31, 2021, the Company determined that a Business Combination is not
considered probable, and, therefore, no stock-based compensation expense has been recognized.
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 Note.
Working Capital 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, make 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. On January 21, 2022, the Company issued a promissory note with respect to the Working
Capital Loans in the principal amount of up to $1,500,000 to the Sponsor. The Working Capital Loan is non-interest bearing and payable
upon the consummation of a Business Combination or may be convertible into warrants of the post-Business Combination entity at a price
of $1.00 per warrant at the lender’s discretion. The warrants would be identical to the Private Placement Warrants described in
Note 8. On January 31, 2022, April 1, 2022 and June 30, 2022, $350,000, $112,500, and $250,000, were drawn on the Working Capital Loan,
respectively. As of June 30, 2022, the total Working Capital Loan amount outstanding is $712,500 and is included (at its then current
fair value) in Working Capital Loan on the accompanying condensed consolidated balance sheet as of June 30, 2022. The Working Capital
Loan is accounted for at fair value (see Note 9). The initial fair value of the Working Capital Loan draw on January 31, 2022 was $264,900,
which resulted in a contribution of $85,100 to stockholders’ deficit. The initial fair value of the Working Capital Loan draws on
April 1, 2022 and June 30, 2022 were $83,396 and $184,807, which resulted in a contribution of $29,104 and $65,193 to stockholders’
deficit, respectively. The fair value of the note as of June 30, 2022 was $526,700, which resulted in a change in fair value of the convertible
note of $1,003 and $6,403 recorded in the condensed consolidated statements of operations for the three and six months ended June 30,
2022, respectively.
KLUDEIN
I ACQUISITION CORP.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE
30, 2022
(Unaudited)
Extension
Funds
On
July 7, 2022, the Company issued an unsecured promissory note to the Sponsor for up to an aggregate principal amount of $2,060,070 to
be deposited into the Trust Account in connection with the Extension. The Company will deposit up to six equal installments of the
Extension Funds, or $343,345, into the Trust Account on a monthly basis for each month of the Extension and such amount will be distributed
either to: (i) all of the holders of the Public Shares upon the Company’s liquidation or (ii) holders of Public Shares
who elect to have their shares redeemed in connection with the consummation of the Company’s initial Business Combination. The Extension
Funds note is not convertible and bears no interest and is due and payable upon the earlier of the date on which the Company consummates
its initial Business Combination or the date of the liquidation of the Company. In connection with the Extension, the Company drew down
$343,345 in July 2022 and August 2022, for an aggregate of $686,690, under the Extension Funds note and deposited the amounts into the
Trust Account.
NOTE
6 — 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.
In
connection with the Closing, the existing Registration Rights Agreement, dated as of January 6, 2021, between the Company and the Sponsor
will be amended and restated and the Company, the Sponsor, and certain persons and entities holding securities of Near prior to the Closing
(collectively, together with the Sponsor, the “Reg Rights Holders”) will enter into an Amended and Restated Registration Rights
Agreement (the “A&R Registration Rights Agreement”). Pursuant to the A&R Registration Rights Agreement, the Company
will agree that, within 30 days after the Closing, the Company will file with the SEC (at the Company’s sole cost and expense) a
registration statement registering the resale of certain securities held by or issuable to the Reg Rights Holders (the “Resale Registration
Statement”), and the Company will use its reasonable best efforts to have the Resale Registration Statement declared effective as
soon as reasonably practicable after the filing thereof, but in no event later than 60 days (or 90 days if the SEC notifies the Company
that it will review the Resale Registration Statement). In certain circumstances, each of the Reg Rights Holders can demand up to two
underwritten offerings and will be entitled to piggyback registration rights, in each case subject to certain limitations set forth in
the A&R Registration Rights Agreement.
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.
Contingent
Legal Fees
As
of June 30, 2022 and December 31, 2021, the Company has incurred legal fees of $1,244,802 and $118,550, respectively, payments for which
are contingent upon the consummation of the Business Combination, of which such amounts are included in accrued expenses in the accompanying
condensed consolidated balance sheets.
KLUDEIN
I ACQUISITION CORP.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE
30, 2022
(Unaudited)
Advisor
Agreement
On
September 16, 2021, the Company entered into an advisor agreement, in which the advisor (CF&CO) will act as the Company’s
placement agent and arranger in connection with any financing. Additionally, the advisor will act as a capital markets advisor in
connection with the Target Business Combination. The Company agrees to pay the advisor the following (i) $6 million if the Total
Capital (as hereinafter defined) involved in the Financing and Target Business Combination is less than $175.5 million (ii) $8
million if the Total Capital involved in the Financing and Target Business Combination is equal to or greater than $175.5 million
but less than $225 million; or (iii) $10 million if the Total Capital involved in the Financing and Target Business Combination is
equal to or greater than $225 million. For purposes of this Agreement, “Total Capital” means the aggregate amount of
proceeds received from any Financing plus the total amount of proceeds raised in connection with the initial public offering of the
Company (the “IPO”) that remain in the Trust Account at the time of the closing of the Target Business Combination,
after giving effect to redemptions of any Public Stockholders. Upon the earlier of (i) the consummation of the Target Business
Combination or any other Business Combination, (ii) the liquidation of the Company in accordance with its organizational documents
if it does not consummate a Business Combination prior to its deadline to do so (as such deadline may be extended by amendment to
the Company’s organizational documents), or (iii) termination of this Agreement, the Company will promptly reimburse CF&CO
for its out-of-pocket expenses reasonably incurred by CF&CO in connection with CF&CO rendering its services under this
Agreement, including the fees and disbursements of legal counsel, whether or not any Financing occurs; provided that, except as
contemplated by the Indemnification Provisions, such expenses will not exceed $50,000 in the aggregate, in each case unless approved
in writing (including e-mail) by the Company in advance (not to be unreasonably withheld, delayed or conditioned).
Merger
Agreement
On
May 18, 2022, the Company entered into Merger Agreement. Unless otherwise defined herein, the capitalized terms used below have the meanings
given to them in the Merger Agreement.
Near,
a global leader in privacy-led data intelligence, curates one of the world’s largest sources of intelligence on people, places
and products. Near processes data from over 1.6 billion unique user IDs, in over 70 million places across 44 countries to empower marketing
and operational data leaders to confidently reach, understand and market to consumers and optimize their business results. Near has offices
in Los Angeles, Silicon Valley, Paris, Bangalore, Singapore, Sydney and Tokyo. Near serves major enterprises in retail, real estate,
restaurants, tourism, technology, marketing and other industries.
Pursuant to the Merger Agreement,
subject to the terms and conditions set forth therein, immediately prior to the Closing, (i) the First Merger will be consummated,
as a result of which all of the issued and outstanding capital stock of Near will no longer be outstanding and will automatically be cancelled
and will cease to exist in exchange for the right to receive the Merger Consideration, and (ii) the Second Merger will be consummated,
as a result of which all of the issued and outstanding capital stock of Near will no longer be outstanding and will automatically be cancelled
and will cease to exist and each membership interest of Merger Sub 2 will remain outstanding as a membership interest of the surviving
entity. Following the Business Combination, KludeIn will change its name to “Near Intelligence, Inc.”, or such other name
as may be mutually agreed to by KludeIn and Near.
The Company’s securities
(the “Merger Consideration”) payable to Near security holders from the Company at the effective time of the First Merger (the
“First Effective Time”) will have an aggregate value equal to, without duplication, (i) the Company Base Value (as defined
below), (ii) minus (or plus, if negative), the Closing Net Debt, (iii) (x) plus, in the event that the Closing Net Working Capital Amount
exceeds the Target Net Working Capital Amount, the difference between the Closing Net Working Capital Amount and the Target Net Working
Capital Amount, or (y) minus, in the event that the Closing Net Working Capital Amount is less than the Target Net Working Capital Amount,
the difference between the Closing Net Working Capital Amount and the Target Net Working Capital Amount, and (iv) minus the amount of
any unpaid Company Transaction Expenses. For purposes of the Merger Agreement, “Company Base Value” is an amount equal to
Six Hundred Seventy-Five Million U.S. Dollars ($675,000,000) plus the amount of any Permitted Equity Financing. A “Permitted Equity
Financing” is any equity financing transaction or series of equity financing transactions entered into by Near on or after the date
of the Merger Agreement, by way of issuance, subscription or sale, which results in cash proceeds to Near prior to the First Effective
Time in an amount not exceeding Fifty Million U.S. Dollars ($50,000,000), in exchange for shares of stock or convertible securities of
Near (excluding, for the avoidance of doubt, any instrument issued by Near in connection with the Permitted Debt contemplated under the
Merger Agreement).
The Merger Consideration
to be paid to the Near security holders will be paid solely by the delivery of new Company securities in accordance with the conversion
ratio specified in the Merger Agreement. In accordance with the terms and subject to the conditions of the Merger Agreement, at the First
Effective Time (i) each share of Near’s common stock outstanding as of immediately prior to the First Effective Time will be converted
into a right to receive a number of shares of the Company’s Class A common stock (“Purchaser Class A Common Stock”)
(with each valued at $10.00 per share), (ii) each outstanding Near restricted stock unit (whether vested or unvested) will be assumed
by the Company and converted into a restricted stock unit of the Company, (iii) each outstanding Near warrant that is issued and outstanding
will be assumed by the Company and converted into a corresponding warrant to purchase shares of Purchaser Class A Common Stock, in accordance
with the terms of such warrants, and (iv) to the extent there are any other Near convertible securities, if not exercised or converted
prior to the First Effective Time, such security will be cancelled, retired and terminated and cease to represent a right to acquire,
be exchanged for or convert into shares of Purchaser Class A Common Stock.
The foregoing description
of the Merger Agreement is qualified in its entirety by reference to the full text of the Merger Agreement, which is filed as Exhibit
2.1 to this Report.
KLUDEIN
I ACQUISITION CORP.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE
30, 2022
(Unaudited)
Common Stock Subscription Agreement
Simultaneously with the execution
and delivery of the Merger Agreement, KludeIn entered into a common stock purchase agreement (the “Common Stock Purchase Agreement”)
and related registration rights agreement (the “CF Registration Rights Agreement”) with CF Principal Investments LLC (“CF”).
Pursuant to the Common Stock Purchase Agreement, following the Closing, Near, as KluedIn’s successor, has the right to sell
to CF up to a Total Commitment (as defined in the Common Stock Purchase Agreement) of $100,000,000 in shares of Near’s Common
Stock, subject to certain limitations and conditions set forth in the Common Stock Purchase Agreement. Near is obligated under the
Common Stock Purchase Agreement and the CF Registration Rights Agreement to file a registration statement with the SEC to register under
the Securities Act for the resale by CF of shares of Common Stock that Near may issue to CF under the Common Stock Purchase Agreement.
Near will not have the right to commence any sales of Common Stock
to CF under the Common Stock Purchase Agreement until the Commencement (as defined in the Common Stock Purchase Agreement), which is the
time when all of the conditions to the Near’s right to commence sales of Common Stock to CF set forth in the Common Stock Purchase
Agreement have been satisfied, including that a registration statement relating to the Common Stock is filed and declared effective by
the SEC.
After the Commencement, Near will have the right, from time to time
at its sole discretion until the first day of the month next following the 36-month period from and after the Commencement, to direct
CF to purchase up to a specified maximum amount of shares of Common Stock as set forth in the Common Stock Purchase Agreement. Near will
control the timing and amount of any sales of the Common Stock to CF. Actual sales of shares of the Common Stock to CF under the Common
Stock Purchase Agreement will depend on a variety of factors to be determined by Near from time to time, including, among other things,
market conditions, and the trading price of the Common Stock.
The purchase price of the shares of Common Stock that Near elects to
sell to CF pursuant to the Common Stock Purchase Agreement will be the volume weighted average price of the Common Stock during the applicable
purchase date on which Near has timely delivered written notice to CF directing it to purchase the shares of Common Stock under the Common
Stock Purchase Agreement. Near will receive 98% of the volume weighted average price of the Common Stock so sold.
In connection with the execution of the Common Stock Purchase Agreement,
Near will issue to CF shares of Common Stock in an amount equal to $2,000,000 at a per share price based on the price of Near’s
Common Stock on the Commencement Date, as consideration for CF’s irrevocable commitment to purchase the shares of Common Stock upon
the terms and subject to the satisfaction of the conditions set forth in the Common Stock Purchase Agreement.
The foregoing description
of the Common Stock Subscription Agreement and the CF Registration Rights Agreement is qualified in its entirety by reference to the full
text of the Common Stock Subscription Agreement and the CF Registration Rights Agreement, copies of which are filed as Exhibits 10.6 and
10.7, respectively, to this Report.
The material terms and conditions of the Merger Agreement and the related
ancillary agreements (attached hereto as Exhibits 10.1 through 10.7) were previously disclosed in the Company’s Current Report on
Form 8-K filed by the Company with the SEC on May 19, 2022.
Registration Statement on Form S-4
The Company filed a Registration
Statement on Form S-4 with the SEC on July 1, 2022, in connection with the registration under the Securities Act of the shares of the
Company’s Class A common stock to be issued under the Merger Agreement as the Merger Consideration. However, there is no assurance
as to when or if this Registration Statement will be declared effective by the SEC.
KLUDEIN
I ACQUISITION CORP.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE
30, 2022
(Unaudited)
NOTE
7 — STOCKHOLDERS’ DEFICIT
Preferred
Stock — The Company is authorized to issue up to 1,000,000 shares of preferred stock with a par value of $0.0001 per
share with such designation, rights and preferences as may be determined from time to time by the Company’s board of directors.
As of June 30, 2022 and December 31, 2021, there were no shares of preferred stock issued or outstanding.
Class A
Common Stock — The Company is authorized to issue up to 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 June 30, 2022 and December
31, 2021, there were 17,250,000 shares of Class A common stock issued and outstanding, all of which are subject to possible redemption
and presented as temporary equity.
Class B
Common Stock — The Company is authorized to issue up to 20,000,000 shares of Class B common stock with a par
value of $0.0001 per share. Holders of the Company’s Class B common stock are entitled to one vote for each share. At June 30,
2022 and December 31, 2021, there were 4,312,500 shares of Class B common stock issued and outstanding.
Holders
of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote
of stockholders, except as required by law.
The shares of Class B
common stock will automatically convert into shares of Class A common stock at the time of a Business Combination 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 holders
of the Class B common stock have agreed to waive such adjustment to the conversion ratio if the Merger Agreement discussed in Note 6 is
consummated.
NOTE
8 — WARRANT LIABILITIES
As
of June 30, 2022 and December 31, 2021, there were 8,625,000 Public Warrants outstanding. 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 CONSOLIDATED FINANCIAL STATEMENTS
JUNE
30, 2022
(Unaudited)
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
June 30, 2022 and December 31, 2021, there were 5,200,000 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 CONSOLIDATED FINANCIAL STATEMENTS
JUNE
30, 2022
(Unaudited)
NOTE
9 — 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 and liabilities that are measured at fair value on a recurring
basis at June 30, 2022 and December 31, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to
determine such fair value:
Description | |
Level | | |
December 31,
2021 | | |
June
30, 2022 | |
Assets: | |
| | |
| | |
| |
Cash and marketable securities
held in Trust Account | |
| 1 | | |
$ | 172,580,609 | | |
$ | 172,882,919 | |
| |
| | | |
| | | |
| | |
Liabilities: | |
| | | |
| | | |
| | |
Warrant Liabilities – Public Warrants | |
| 1 | | |
| 5,180,136 | | |
| 946,908 | |
Warrant Liabilities – Private Placement
Warrants | |
| 3 | | |
| 3,131,574 | | |
| 570,889 | |
Working Capital Loan | |
| 3 | | |
| — | | |
| 526,700 | |
The
warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the accompanying
condensed consolidated balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with
changes in fair value presented within change in fair value of warrant liabilities in the condensed consolidated statements of operations.
As
of June 30, 2022 and December 31, 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 June
30, 2022 and December 31, 2021, the Public Warrants were valued using the level 1 quoted prices in an active market.
KLUDEIN
I ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022
(Unaudited)
The
following table provides quantitative information regarding Level 3 fair value measurements for Private Placement Warrants at June
30, 2022 and December 31, 2021:
| |
As
of June 30, 2022 | | |
As
of December 31, 2021 | |
Stock price | |
$ | 9.99 | | |
$ | 9.84 | |
Strike price | |
$ | 11.50 | | |
$ | 11.50 | |
Volatility | |
| 2.7 | % | |
| 12.2 | % |
Risk-free rate | |
| 2.98 | % | |
| 1.17 | % |
Probability of Business Combination occurring | |
| 75 | % | |
| 75 | % |
Dividend yield | |
| 0.0 | % | |
| 0.0 | % |
Fair value of warrants | |
$ | 0.11 | | |
$ | 0.60 | |
The
following table presents the changes in the fair value of Level 3 warrant liabilities for the three and six months ended June 30, 2021:
| |
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 valuation inputs or other assumptions | |
| (832,000 | ) | |
| (1,380,000 | ) | |
| (2,212,000 | ) |
Transfer to Level 1 | |
| — | | |
| (4,830,000 | ) | |
| (4,830,000 | ) |
Fair value as of March 31, 2021 | |
$ | 2,912,000 | | |
$ | — | | |
$ | 2,912,000 | |
Change in valuation inputs or other assumptions | |
| 988,000 | | |
| — | | |
| 988,000 | |
Fair value as of June 30, 2021 | |
$ | 3,900,000 | | |
$ | — | | |
$ | 3,900,000 | |
The
following table presents the changes in the fair value of Level 3 warrant liabilities for the three and six months ended June 30, 2022:
| |
Private
Placement | |
Fair value as of January 1, 2022 | |
$ | 3,131,574 | |
Change in fair value | |
| (2,403,574 | ) |
Fair value as of March 31, 2022 | |
$ | 728,000 | |
Change in fair value | |
| (157,111 | ) |
Fair value as of June 30, 2022 | |
$ | 570,889 | |
Transfers
to/from Levels 1, 2 and 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs.
The estimated fair value of the Public Warrants transferred from a Level 3 measurement to a Level 1 fair value measurement during the
three and six months ended June 30, 2021 was $4,830,000. There were no transfers from Level 3 to any other levels during the three and
six months ended June 30, 2022.
The Working Capital Loan was measured at fair value as of the date
of the initial borrowing on January 31, 2022 and for subsequent borrowings on April 1, 2022 and June 30, 2022, and as of June 30, 2022.
The discounted cash flow method was used to value the debt component of the Working Capital Loan and the Black Scholes Option Pricing
Model was used to value the debt conversion option. There were no transfers out of Level 3 to other levels in the fair value hierarchy
during the three and six months ended June 30, 2022 for the Working Capital Loan.
The following table provides quantitative information regarding Level 3
fair value measurements for the Working Capital Loan at June 30, 2022, April 1, 2022 and January 31, 2022:
| |
As
of June 30, 2022 | | |
As
of April 1, 2022 | | |
As
of January 31, 2022 | |
Stock price | |
$ | 9.99 | | |
$ | 9.94 | | |
$ | 9.87 | |
Strike price | |
$ | 11.50 | | |
$ | 11.50 | | |
$ | 11.50 | |
Volatility | |
| 10.1 | % | |
| 3.8 | % | |
| 9.1 | % |
Risk-free rate | |
| 2.98 | % | |
| 2.40 | % | |
| 2.40 | % |
Probability of Business Combination occurring | |
| 75 | % | |
| 75 | % | |
| 75 | % |
Dividend yield | |
| 0.0 | % | |
| 0.0 | % | |
| 0.0 | % |
KLUDEIN
I ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022
(Unaudited)
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 Working Capital Loan for the three and six months ended June 30, 2022:
| |
Working
Capital Loan | |
Fair value as of January 1, 2022 | |
$ | — | |
Initial measurement at January 31, 2022 | |
| 264,900 | |
Change in fair value | |
| (5,400 | ) |
Fair value as of March 31, 2022 | |
$ | 259,500 | |
Initial measurement at April 1, 2022 | |
| 83,396 | |
Initial measurement at June 30, 2022 | |
| 184,807 | |
Change in fair value | |
| (1,003 | ) |
Fair value as of June 30, 2022 | |
$ | 526,700 | |
Transfers
to/from Levels 1, 2 and 3 are recognized at the end of the reporting period.
NOTE
10 — SUBSEQUENT EVENTS
The
Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed consolidated
financial statements were issued. Based upon this review, other than the below, the Company did not identify any subsequent events that
would have required adjustment or disclosure in the condensed consolidated financial statements.
On July 7, 2022, the Company
withdrew $322,309 from the Trust to pay for the Company’s previously paid and accrued tax obligations, of which $20,000 is included
in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheet as of June 30, 2022.
On July 7, 2022, the Company
issued an unsecured promissory note to the Sponsor for up to an aggregate principal amount of $2,060,070 to be deposited into the Company’s
Trust Account in connection with the Extension. The Company will deposit up to six equal installments of the Extension Funds, or $343,345,
into the Trust Account on a monthly basis for each month of the Extension and such amount will be distributed either to: (i) all
of the holders of the Public Shares upon the Company’s liquidation or (ii) holders of Public Shares who elect to have their
shares redeemed in connection with the consummation of the Company’s initial Business Combination. The Extension Funds note is not
convertible and bears no interest and is due and payable upon the earlier of the date on which the Company consummates its initial Business
Combination or the date of the liquidation of the Company. In connection with the Extension, the Company drew down $343,345 in July 2022
and August 2022, for an aggregate of $686,690, under the Extension Funds note and deposited the amount into the Trust Account.
At the special meeting of
stockholders on July 7, 2022 in connection with the Extension, stockholders holding 6,845,606 Public Shares exercised their right to redeem
such shares for a pro rata portion of the funds in the Trust Account. As a result, $68,488,348 (approximately $10.00 per share), which
included $32,288 of interest earned on the Trust Account which was not previously used to pay the Company’s tax obligation, was
removed from the Trust Account to pay such holders. Following redemptions, the Company had 10,404,394 Public Shares outstanding and the
aggregate amounts remaining in the Trust Account was $104,093,013.
In August 2022, the Company received a $200,000 advance from its Sponsor for working capital purposes.