Item 1. Financial Statements
The accompanying notes are an integral part of
the unaudited condensed financial statements.
The accompanying notes are an integral part of
the unaudited condensed financial statements.
FOR THE PERIOD FROM AUGUST 14, 2020 (INCEPTION)
THROUGH SEPTEMBER 30, 2020
|
|
Class B
Common Stock
|
|
|
Additional
Paid-in
|
|
|
Accumulated
|
|
|
Total
Stockholders’
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Equity
|
|
Balance — August 14, 2020 (Inception)
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of Class B common stock to Sponsor
|
|
|
5,750,000
|
|
|
|
575
|
|
|
|
24,425
|
|
|
|
—
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(882
|
)
|
|
|
(882
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance – September 30, 2020
|
|
|
5,750,000
|
|
|
$
|
575
|
|
|
$
|
24,425
|
|
|
$
|
(882
|
)
|
|
$
|
24,118
|
|
The accompanying notes are an integral part of
the unaudited condensed financial statements.
CASCADE ACQUISITION CORP.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
Nine Months
Ended
September 30,
|
|
|
For the Period from August 14, 2020 (Inception) through
September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
12,565,659
|
|
|
$
|
(882
|
)
|
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Interest earned on marketable securities held in Trust Account
|
|
|
(86,291
|
)
|
|
|
—
|
|
Change in fair value of warrant liabilities
|
|
|
(14,179,730
|
)
|
|
|
—
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Prepaid expenses
|
|
|
95,135
|
|
|
|
—
|
|
Accounts payable and accrued expenses
|
|
|
807,497
|
|
|
|
878
|
|
Net cash used in operating activities
|
|
|
(797,730
|
)
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
Proceeds from issuance of Class B common stock to Sponsor
|
|
|
—
|
|
|
|
25,000
|
|
Proceeds from promissory note – related party
|
|
|
—
|
|
|
|
141,075
|
|
Repayment of convertible promissory note – related party
|
|
|
—
|
|
|
|
(141,075
|
)
|
Net cash provided by financing activities
|
|
|
—
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
Net Change in Cash
|
|
|
(797,730
|
)
|
|
|
24,996
|
|
Cash – Beginning
|
|
|
1,277,708
|
|
|
|
—
|
|
Cash – Ending
|
|
$
|
479,978
|
|
|
$
|
24,996
|
|
|
|
|
|
|
|
|
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
|
|
|
Offering costs included in accrued offering costs
|
|
$
|
—
|
|
|
$
|
36,367
|
|
The accompanying notes are an integral part of
the unaudited condensed financial statements.
CASCADE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(UNAUDITED)
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS
OPERATIONS
Cascade Acquisition Corp. (the “Company”)
was incorporated in Delaware on August 14, 2020. The Company was formed for the purpose of entering into a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”).
The Company is not limited to a particular industry
or geographic region for purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and,
as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of September 30, 2021, the Company had not
commenced any operations. All activity from inception through September 30, 2021 relates to the Company’s formation and the initial
public offering (“Initial Public Offering”), which is described below, and the search for a target for its initial Business
Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest.
The Company generates non-operating income in the form of interest income and unrealized gains and losses from the marketable securities
held in the Trust Account (as defined below), along with income or loss from the change in fair value of the warrant liabilities.
The registration statement for the Company’s
Initial Public Offering was declared effective on November 19, 2020. On November 24, 2020, the Company consummated the Initial Public
Offering of 20,000,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units
sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $200,000,000, which is described in Note 4.
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the sale of 7,317,000 warrants (the “Private Placement Warrants”) at a price of $1.00
per Private Placement Warrant in a private placement to Cascade Acquisition Holdings LLC (the “Sponsor”), generating gross
proceeds of $7,317,000, which is described in Note 5.
Following the closing of the Initial Public Offering
on November 24, 2020, an amount of $202,000,000 ($10.10 per Unit) from the net proceeds of the sale of the Units in the Initial Public
Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”), located in the
United States and invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment
Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in any open-ended
investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the
Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the
distribution of the funds held in the Trust Account, as described below.
On December 9, 2020, pursuant to the full
exercise of the underwriters’ over-allotment option, the Company consummated the sale of an additional 3,000,000 Units, at $10.00
per Unit. Also on December 9, 2020, pursuant to a provision of the sponsor warrant purchase agreement, the Company consummated the sale
of an additional 900,000 Private Placement Warrants, at $1.00 per Private Placement Warrant. Combined sales of Units and Private Placement
Warrants generated total gross proceeds of $30,900,000. A total of $30,300,000 of the net proceeds was deposited into the Trust Account,
bringing the aggregate proceeds held in the Trust Account to $232,300,000.
Transaction costs amounted to $11,166,437, consisting
of $3,917,000 of underwriting fees, $6,854,750 of deferred underwriting fees and $394,687 of other offering costs.
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. The Company
must complete a Business Combination with one or more target businesses that together have an aggregate fair market value of at least
80% of the value of the Trust Account (excluding the deferred underwriting commissions and taxes payable on income earned on the Trust
Account) at the time of the agreement to enter into an initial 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.
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 $10.10 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.
CASCADE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(UNAUDITED)
The Company will proceed with a Business Combination
only if the Company has net tangible assets of at least $5,000,001 either 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 May 24, 2022
(or until November 24, 2022 if the Company extends the period of time to consummate a Business Combination) 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. 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 Company will have until May 24, 2022 to complete
a Business Combination. However, if the Company anticipates that it may not be able to consummate a Business Combination by May 24, 2022,
the Company may extend the period of time to consummate a Business Combination by an additional six months (until November 24, 2022) to
complete a Business Combination (the “Combination Period”). In order to extend the time available for the Company to consummate
a Business Combination, the Sponsor or its affiliate or designees must deposit into the Trust Account $2,300,000 ($0.10 per Public Share
in either case), on or prior to the date of the deadline.
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.
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 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 amount of funds deposited into the Trust
Account ($10.10).
CASCADE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(UNAUDITED)
In order to protect the amounts held in the Trust
Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or
products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement,
reduce the amount of funds in the Trust Account to below (1) $10.10 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, if less than $10.10 per Public Share 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 accountants), 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 $479,978
in its operating bank accounts, $232,382,820 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 a working capital deficit of $121,480 (after adding back $104,098 in franchise
tax payable as that liability, which is included in accounts payable and accrued expenses in the accompanying condensed balance sheet,
is allowed to be settled using the Trust Account).
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.
In connection with the Company’s assessment
of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”)
2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has until
May 24, 2022 to consummate the proposed Business Combination. It is uncertain that the Company will be able to consummate the proposed
Business Combination by this time. 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 financial statements. If a Business Combination is not consummated by this date, there
will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the liquidity condition and
mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution, raises substantial doubt about the
Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities
should the Company be required to liquidate after May 24, 2022. The Company intends to complete the proposed Business Combination before
the mandatory liquidation date. However, there can be no assurance that the Company will be able to consummate any Business Combination
by May 24, 2022. In addition, the Company may 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, the Company 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 through the liquidation date of May 24, 2022.
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 operations and/or search for a target company, the specific impact is not readily determinable as of the
date of the financial statements. The accompanying condensed financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
NOTE 2. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
In connection with the preparation of the Company’s
financial statements as of September 30, 2021, management identified errors made in its historical financial statements where, at the
closing of the Company’s Initial Public Offering, the Company improperly valued its Class A common stock subject to possible redemption.
The Company previously determined the Class A common stock subject to possible redemption to be equal to the redemption value, while also
taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001. Management determined that the
Public Shares underlying the Units issued during the Initial Public Offering can be redeemed or become redeemable subject to the occurrence
of future events considered outside the Company’s control. Therefore, management concluded that the redemption value should include
all shares of 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 an adjustment 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.
CASCADE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(UNAUDITED)
The following tables summarize the effect of the restatement on each
financial statement line items as of the dates, and for the period, indicated:
Balance Sheet as of November 24, 2020 (audited)
|
|
As Previously
Reported
|
|
|
Adjustment
|
|
|
As Restated
|
|
Class A common stock subject to possible redemption
|
|
$
|
175,505,080
|
|
|
$
|
26,494,920
|
|
|
$
|
202,000,000
|
|
Class A common stock
|
|
$
|
262
|
|
|
$
|
(262
|
)
|
|
$
|
—
|
|
Additional paid-in capital
|
|
$
|
5,491,701
|
|
|
$
|
(5,491,701
|
)
|
|
$
|
—
|
|
Accumulated deficit
|
|
$
|
(492,533
|
)
|
|
$
|
(21,002,957
|
)
|
|
$
|
(21,495,490
|
)
|
Total Stockholders’ Equity (Deficit)
|
|
$
|
5,000,005
|
|
|
$
|
(26,494,920
|
)
|
|
$
|
(21,494,915
|
)
|
Class A common stock
|
|
|
2,623,259
|
|
|
|
(2,623,259
|
)
|
|
|
--
|
|
Class A common stock subject to possible redemption
|
|
|
17,376,741
|
|
|
|
2,623,259
|
|
|
|
20,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet as of December 31, 2020 (audited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common stock subject to possible redemption
|
|
$
|
195,101,440
|
|
|
$
|
37,198,560
|
|
|
$
|
232,300,000
|
|
Class A common stock
|
|
$
|
368
|
|
|
$
|
(368
|
)
|
|
$
|
—
|
|
Additional paid-in capital
|
|
$
|
12,827,735
|
|
|
$
|
(12,827,735
|
)
|
|
$
|
—
|
|
Accumulated deficit
|
|
$
|
(7,828,675
|
)
|
|
$
|
(24,370,457
|
)
|
|
$
|
(32,199,132
|
)
|
Total Stockholders’ Equity (Deficit)
|
|
$
|
5,000,003
|
|
|
$
|
(37,198,560
|
)
|
|
$
|
(32,198,557
|
)
|
Class A common stock
|
|
|
3,682,737
|
|
|
|
(3,682,737
|
)
|
|
|
--
|
|
Class A common stock subject to possible redemption
|
|
|
19,317,263
|
|
|
|
3,682,737
|
|
|
|
23,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet as of March 31, 2021 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common stock subject to possible redemption
|
|
$
|
203,918,209
|
|
|
$
|
28,381,791
|
|
|
$
|
232,300,000
|
|
Class A common stock
|
|
$
|
281
|
|
|
$
|
(281
|
)
|
|
$
|
—
|
|
Additional paid-in capital
|
|
$
|
4,011,053
|
|
|
$
|
(4,011,053
|
)
|
|
$
|
—
|
|
Accumulated deficit
|
|
$
|
988,098
|
|
|
$
|
(24,370,457
|
)
|
|
$
|
(23,382,359
|
)
|
Total Stockholders’ Equity (Deficit)
|
|
$
|
5,000,007
|
|
|
$
|
(28,381,791
|
)
|
|
$
|
(23,381,784
|
)
|
Class A common stock
|
|
|
2,812,180
|
|
|
|
(2,812,180
|
)
|
|
|
--
|
|
Class A common stock subject to possible redemption
|
|
|
20,187,820
|
|
|
|
2,812,180
|
|
|
|
23,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet as of June 30, 2021 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common stock subject to possible redemption
|
|
$
|
200,803,116
|
|
|
$
|
31,496,884
|
|
|
$
|
232,300,000
|
|
Class A common stock
|
|
$
|
312
|
|
|
$
|
(312
|
)
|
|
$
|
—
|
|
Additional paid-in capital
|
|
$
|
7,126,115
|
|
|
$
|
(7,126,115
|
)
|
|
$
|
—
|
|
Accumulated deficit
|
|
$
|
(2,126,999
|
)
|
|
$
|
(24,370,457
|
)
|
|
$
|
(26,497,456
|
)
|
Total Stockholders’ Equity (Deficit)
|
|
$
|
5,000,003
|
|
|
$
|
(31,496,884
|
)
|
|
$
|
(26,496,881
|
)
|
Class A common stock
|
|
|
3,119,396
|
|
|
|
(3,119,396
|
)
|
|
|
--
|
|
Class A common stock subject to possible redemption
|
|
|
19,880,604
|
|
|
|
3,119,396
|
|
|
|
23,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Operations for the Period from August 14, 2020 (inception) to December 31, 2020 (audited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption
|
|
|
18,957,421
|
|
|
|
(18,957,421
|
)
|
|
|
—
|
|
Basic and diluted weighted average shares outstanding, Non-redeemable common stock
|
|
|
5,931,349
|
|
|
|
(5,931,349
|
)
|
|
|
—
|
|
Basic and diluted net loss per share, Non-redeemable common stock
|
|
$
|
(1.32
|
)
|
|
$
|
1.32
|
|
|
$
|
—
|
|
Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption
|
|
|
—
|
|
|
|
5,798,561
|
|
|
|
5,798,561
|
|
Basic and diluted net loss per share, Class A common stock subject to possible redemption
|
|
|
—
|
|
|
|
(0.72
|
)
|
|
|
(0.72
|
)
|
Basic and diluted weighted average shares outstanding, Class B common stock (non-redeemable)
|
|
|
—
|
|
|
|
5,126,923
|
|
|
|
5,126,923
|
|
Basic and diluted net loss per share, Class B common stock (non-redeemable)
|
|
|
—
|
|
|
|
(0.72
|
)
|
|
|
(0.72
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Operations for the Three Months Ended March 31, 2021 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption
|
|
|
19,317,263
|
|
|
|
(19,317,263
|
)
|
|
|
—
|
|
Basic and diluted weighted average shares outstanding, Non-redeemable common stock
|
|
|
9,432,737
|
|
|
|
(9,432,737
|
)
|
|
|
—
|
|
Basic and diluted net income per share, Non-redeemable common stock
|
|
$
|
0.93
|
|
|
$
|
(0.93
|
)
|
|
$
|
—
|
|
Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption
|
|
|
—
|
|
|
|
23,000,000
|
|
|
|
23,000,000
|
|
Basic and diluted net income per share, Class A common stock subject to possible redemption
|
|
$
|
—
|
|
|
$
|
0.31
|
|
|
$
|
0.31
|
|
Basic and diluted weighted average shares outstanding, Class B common stock (non-redeemable)
|
|
|
—
|
|
|
|
5,750,000
|
|
|
|
5,750,000
|
|
Basic and diluted net income per share, Class B common stock (non-redeemable)
|
|
$
|
—
|
|
|
$
|
0.31
|
|
|
$
|
0.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Operations for the Three Months Ended June 30, 2021 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption
|
|
|
20,187,820
|
|
|
|
(20,187,820
|
)
|
|
|
—
|
|
Basic and diluted weighted average shares outstanding, Non-redeemable common stock
|
|
|
8,562,180
|
|
|
|
(8,562,180
|
)
|
|
|
—
|
|
Basic and diluted net loss per share, Non-redeemable common stock
|
|
$
|
(0.36
|
)
|
|
$
|
0.36
|
|
|
$
|
—
|
|
Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption
|
|
|
—
|
|
|
|
23,000,000
|
|
|
|
23,000,000
|
|
Basic and diluted net loss per share, Class A common stock subject to possible redemption
|
|
$
|
—
|
|
|
$
|
(0.11
|
)
|
|
$
|
(0.11
|
)
|
Basic and diluted weighted average shares outstanding, Class B common stock (non-redeemable)
|
|
|
—
|
|
|
|
5,750,000
|
|
|
|
5,750,000
|
|
Basic and diluted net loss per share, Class B common stock (non-redeemable)
|
|
$
|
—
|
|
|
$
|
(0.11
|
)
|
|
$
|
(0.11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Operations for the Six Months Ended June 30, 2021 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption
|
|
|
19,754,946
|
|
|
|
(19,754,946
|
)
|
|
|
—
|
|
Basic and diluted weighted average shares outstanding, Non-redeemable common stock
|
|
|
8,995,054
|
|
|
|
(8,995,054
|
)
|
|
|
—
|
|
Basic and diluted net income per share, Non-redeemable common stock
|
|
$
|
0.63
|
|
|
$
|
(0.63
|
)
|
|
$
|
—
|
|
Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption
|
|
|
—
|
|
|
|
23,000,000
|
|
|
|
23,000,000
|
|
Basic and diluted net income per share, Class A common stock subject to possible redemption
|
|
$
|
—
|
|
|
$
|
0.20
|
|
|
$
|
0.20
|
|
Basic and diluted weighted average shares outstanding, Class B common stock (non-redeemable)
|
|
|
—
|
|
|
|
5,750,000
|
|
|
|
5,750,000
|
|
Basic and diluted net income per share, Class B common stock (non-redeemable)
|
|
$
|
—
|
|
|
$
|
0.20
|
|
|
$
|
0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Changes in Stockholders’ Equity (Deficit) for the Period from August 14, 2020 (Inception) Through December 31, 2020 (audited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of 23,000,000 Units, net of underwriting discounts, offering costs and warrant liability
|
|
$
|
207,905,118
|
|
|
$
|
(207,905,118
|
)
|
|
$
|
—
|
|
Class A common stock subject to possible redemption
|
|
$
|
(195,101,440
|
)
|
|
$
|
195,101,440
|
|
|
$
|
—
|
|
Accretion for Class A common stock subject to redemption amount
|
|
$
|
—
|
|
|
$
|
(24,394,882
|
)
|
|
$
|
(24,394,882
|
)
|
Total stockholders’ equity (deficit)
|
|
$
|
5,000,003
|
|
|
$
|
(37,198,560
|
)
|
|
$
|
(32,198,557
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Changes in Stockholders’ Equity (Deficit) for the for the Three Months ended March 31, 2021 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in value of Class A common stock subject to redemption
|
|
$
|
8,816,769
|
|
|
$
|
(8,816,769
|
)
|
|
$
|
—
|
|
Total stockholders’ equity (deficit)
|
|
$
|
5,000,007
|
|
|
$
|
(28,381,791
|
)
|
|
$
|
(23,381,784
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Changes in Stockholders’ Equity (Deficit) for the for the Three Months ended June 30, 2021 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in value of Class A common stock subject to redemption
|
|
$
|
(3,115,093
|
)
|
|
$
|
3,115,093
|
|
|
$
|
—
|
|
Total stockholders’ equity (deficit)
|
|
$
|
5,000,003
|
|
|
$
|
(31,496,884
|
)
|
|
$
|
(26,496,881
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Cash Flows for the Period from August 14, 2020 (inception) to December 31, 2020 (audited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial classification of Class A common stock subject to possible redemption
|
|
$
|
202,355,084
|
|
|
$
|
(202,355,084
|
)
|
|
$
|
—
|
|
Change in value of Class A common stock subject to possible redemption
|
|
$
|
(7,253,644
|
)
|
|
$
|
7,253,644
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Cash Flows for the Three Months Ended March 31, 2021 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in value of Class A common stock subject to possible redemption
|
|
$
|
8,816,769
|
|
|
$
|
(8,816,769
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Cash Flows for the Six Months Ended June 30, 2021 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in value of Class A common stock subject to possible redemption
|
|
$
|
5,701,676
|
|
|
$
|
(5,701,676
|
)
|
|
$
|
—
|
|
CASCADE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(UNAUDITED)
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial
statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”)
for 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 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 audited financial statements and notes thereto included in Amendment
No. 1 to the Annual Report on Form 10-K for the period ended December 31, 2020 filed with the SEC on June 29, 2021. The December 31, 2020
condensed balance sheet data was derived from audited financial statements. The operating results for the three and nine months ended
September 30, 2021 are not necessarily indicative of the results to be expected for the full year ending December 31, 2021.
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 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 an emerging
growth 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.
The Company will remain an emerging growth company
until the earliest of (i) the last day of the first fiscal year (a) following the fifth anniversary of the completion of the Initial Public
Offering, (b) in which the Company’s total annual gross revenue is at least $1.07 billion or (c) when the Company is deemed to be
a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of
the prior June 30th and (ii) the date on which the Company has issued more than $1.0 billion in non-convertible debt securities during
the prior three-year period.
Use of Estimates
The preparation of unaudited 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 unaudited condensed 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 unaudited condensed 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.
CASCADE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(UNAUDITED)
Cash and Cash Equivalents
The Company considers all short-term investments
with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents
as of 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 money market funds, which are invested primarily in U.S. Treasury securities. At December
31, 2020, substantially all of the assets held in the Trust Account were 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.
Class A Common Stock Subject to Possible
Redemption
The Company accounts for its Class A common stock
subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) 480 “Distinguishing
Liabilities from Equity” (“ASC 480”). Class A common stock subject to mandatory redemption (if any) are classified as
a liability instrument and are measured at fair value. Conditionally redeemable Class A common stock (including Class A common stock that
feature 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) are classified as temporary equity. At all other times, common stock are classified as
stockholders’ equity. The Company’s Class A common stock feature certain redemption rights that are considered to be outside
of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, at September 30, 2021 and December
31, 2020, the 23,000,000 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 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. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid in capital
and accumulated deficit.
At September 30, 2021 and December
31, 2020, the Class A common stock reflected in the condensed balance sheets are reconciled in the following table:
Gross proceeds
|
|
$
|
230,000,000
|
|
Less:
|
|
|
|
|
Proceeds allocated to Public Warrants
|
|
|
(11,500,000
|
)
|
Class A common stock issuance costs
|
|
|
(10,594,882
|
)
|
Plus:
|
|
|
|
|
Accretion of carrying value to redemption value
|
|
|
24,394,882
|
|
Class A common stocks subject to possible redemption
|
|
$
|
232,300,000
|
|
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 ASC 480, Distinguishing
Liabilities from Equity 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 common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside
of the Company’s control, 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. The Company accounts for the
warrants issued in connection with our Initial Public Offering in accordance with the guidance contained in ASC 815-40-15-7D, under which
the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the
warrants as liabilities at their fair value and adjusts the warrants to fair value at each reporting period. This liability is subject
to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our condensed statements of
operations. The Private Placement Warrants and the Public Warrants (as described in Note 4) for periods where no observable traded price
was available are valued using a Monte Carlo simulation. For periods subsequent to the detachment of the Public Warrants from the Units,
the Public Warrant quoted market price on the New York Stock Exchange was used as the fair value of each relevant date.
CASCADE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(UNAUDITED)
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.
The Financial Accounting Standards Board (“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 Company may be subject to potential examination
by federal, state and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing
and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal, state and city tax laws. The
Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve
months. The effective tax rate differs from the statutory tax rate of 21% for the three and nine months ended September 30, 2021 and for
the period from August 14, 2020 (inception) through September 30, 2020, due to the valuation allowance recorded on the Company’s
net operating losses and permanent differences related to the warrant liabilities.
On March 27, 2020, the CARES Act was enacted in
response to COVID-19 pandemic. Under ASC 740, the effects of changes in tax rates and laws are recognized in the period which the new
legislation is enacted. The CARES Act made various tax law changes including among other things (i) increasing the limitation under Section
163(j) of the Internal Revenue Code of 1986, as amended (the “IRC”) for 2019 and 2020 to permit additional expensing of interest
(ii) enacting a technical correction so that qualified improvement property can be immediately expensed under IRC Section 168(k), (iii)
making modifications to the federal net operating loss rules including permitting federal net operating losses incurred in 2018, 2019,
and 2020 to be carried back to the five preceding taxable years in order to generate a refund of previously paid income taxes and (iv)
enhancing the recoverability of alternative minimum tax credits. Given the Company’s full valuation allowance position and capitalization
of all costs, the CARES Act did not have an impact on the financial statements.
Net Income (Loss) per Common Share
The Company complies with accounting and disclosure
requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per common share is computed by dividing net income
(loss) by the weighted average number of common stock outstanding for the period. The Company applies the two-class method in calculating
income (loss) per common share. Accretion associated with the redeemable shares of Class A common stock is excluded from income (loss)
per common share as the redemption value approximates fair value.
The calculation of diluted income (loss) per common
share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement
since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase 19,717,000
shares of Class A common stock in the aggregate. As of September 30, 2021 and 2020, the Company did not have any 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 common share is the same as basic net income (loss) per common share for the periods presented.
CASCADE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(UNAUDITED)
The following table reflects the calculation of
basic and diluted net income (loss) per common share (in dollars, except share amounts):
|
|
Three Months Ended
September 30, 2021
|
|
|
Nine Months Ended
September 30, 2021
|
|
|
For the Period from
August 14,
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), as adjusted
|
|
$
|
5,491,186
|
|
|
$
|
1,372,797
|
|
|
$
|
10,052,527
|
|
|
$
|
2,513,132
|
|
|
$
|
—
|
|
|
$
|
(882
|
)
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average shares outstanding
|
|
|
23,000,000
|
|
|
|
5,750,000
|
|
|
|
23,000,000
|
|
|
|
5,750,000
|
|
|
|
—
|
|
|
|
5,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income (loss) per common share
|
|
$
|
0.24
|
|
|
$
|
0.24
|
|
|
$
|
0.44
|
|
|
$
|
0.44
|
|
|
$
|
—
|
|
|
$
|
(0.00
|
)
|
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal
Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account and management believes the Company
is not exposed to significant risks on such account.
Fair Value of Financial Instruments
The fair value of the Company’s assets and
liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying
amounts represented in the accompanying condensed balance sheet, primarily due to their short-term nature, except for warrant liabilities
(see Note 10)
Recent Accounting Standards
In August 2020, the FASB issued Accounting Standards
Update (“ASU”) 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) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU2020-06
eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments
and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity.
The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled
in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted
method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective
basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU 2020-06
would have on its 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 accompanying condensed
financial statements.
CASCADE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(UNAUDITED)
NOTE 4. INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering, the Company
sold 23,000,000 Units, inclusive of 3,000,000 Units sold to the underwriters on December 9, 2020 upon the underwriters’ election
to fully exercise their over-allotment option, at a purchase price of $10.00 per Unit. Each Unit consists of one share of Class A
common stock and one-half of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase
one share of Class A common stock at an exercise price of $11.50 per share (see Note 9).
NOTE 5. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial
Public Offering, the Sponsor purchased an aggregate of 7,317,000 Private Placement Warrants at a price of $1.00 per private Placement
Warrant, for an aggregate purchase price of $7,317,000 in a private placement. On December 9, 2020, in connection with the underwriters’
election to fully exercise their over-allotment option, the Company sold an additional 900,000 Private Placement Warrants to the Sponsor,
at a price of $1.00 per Private Placement Warrant, generating gross proceeds of $900,000. Each Private Placement Warrant is exercisable
for one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 9). The proceeds from the Private
Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete
a Business Combination within the Combination Period, the proceeds of 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.
There will be no redemption rights or liquidating distributions from the Trust Account with respect to the Private Placement Warrants.
NOTE 6. RELATED PARTY TRANSACTIONS
Founder Shares
On August 24, 2020, the Company issued an aggregate
of 7,187,500 shares of Class B common stock to the Sponsor for an aggregate purchase price of $25,000 in cash. In October 2020, the
Sponsor returned to the Company, at no cost, an aggregate of 1,437,500 shares of Class B common stock, which the Company cancelled, resulting
in an aggregate of 5,750,000 shares of Class B common stock (the “Founder Shares”) issued and outstanding. The Founder Shares
included an aggregate of up to 750,000 shares of Class B common stock subject to forfeiture by the Sponsor to the extent that the
underwriters’ over-allotment option was not exercised in full or in part, so that the Sponsor will own, on an as-converted basis,
20% of the Company’s issued and outstanding shares after the Initial Public Offering. As a result of the underwriters’ election
to fully exercise their over-allotment option on December 9, 2020, no Founder Shares are currently subject to forfeiture.
The Sponsor has agreed that, subject to certain
limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier of (A) one year after the completion
of a Business Combination and (B) subsequent to a Business Combination, (x) if the last reported sale price of the Class A
common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock 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, stock exchange, reorganization or other similar transaction
that results in all of the Company’s stockholders having the right to exchange their shares of Class A common stock for cash,
securities or other property.
CASCADE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(UNAUDITED)
Promissory Note — Related
Party
On August 14, 2020, the Company issued an unsecured
promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company could borrow up to an aggregate principal
amount of $300,000. The Promissory Note was non-interest bearing and payable on the earlier of (i) March 31, 2021 or (i) the
consummation of the Initial Public Offering. The Company borrowed a total of $172,046 under the Promissory Note, which was repaid on December
7, 2020. Borrowings are no longer available under the Promissory Note.
Related Party Loans
In order to finance transaction costs in connection
with a Business Combination, the initial stockholders or an affiliate of the initial stockholders 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. As of September 30, 2021, the terms of the Working
Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. Through the date of this filing,
the Company has not made any borrowings under the Working Capital Loans.
Related Party Extension Loans
As discussed in Note 1, the Company may extend
the period of time to consummate a Business Combination by an additional six months (until November 24, 2022 to complete a Business Combination).
In order to extend the time available for the Company to consummate a Business Combination, the Sponsor or its affiliates or designees
must deposit into the Trust Account $2,300,000 ($0.10 per Public Share), on or prior to the date of the deadline. Any such payments would
be made in the form of a non-interest bearing, unsecured promissory note. Such notes would either be paid upon consummation of a Business
Combination, or, at the relevant insider’s discretion, converted upon consummation of a Business Combination into additional Private
Placement Warrants at a price of $1.00 per Private Warrant. The Sponsor and its affiliates or designees are not obligated to fund the
Trust Account to extend the time for the Company to complete a Business Combination.
CASCADE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(UNAUDITED)
NOTE 7. COMMITMENTS
Registration Rights
Pursuant to a registration rights agreement entered
into on November 19, 2020, the holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion
of Working Capital Loans (and any Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants
issued upon conversion of the Working Capital Loans) will be entitled to registration rights. The holders of these securities are entitled
to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain
“piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business
Combination. 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
Jay Levine, the Company’s Chief Executive
Officer, Gene Weil, a director of the Company, and certain affiliates of the Sponsor and Waterfall Asset Management, LLC purchased an
aggregate of 2.75% of the Units in the Initial Public Offering, and certain other investors identified by the Sponsor purchased an aggregate
of 14.3% of the Units in the Initial Public Offering, in each case at the Initial Public Offering price, for an aggregate of 3,415,000
Units. The underwriters did not receive any underwriting discounts or commissions on the Units purchased by such parties.
The underwriters are entitled to a deferred fee
of $0.35 per Unit, excluding the Units purchased by the parties described above, or $6,854,750 in the aggregate which is included in the
accompanying condensed balance sheets. 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.
Consulting Agreement
On January 30, 2021, the Company entered into a consulting
agreement with a service provider, pursuant to which the service provider will provide the Company with consulting services in connection
with our search for a potential merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination.
The Company agreed to pay the service provider an initial fee of $41,668 and $20,834 per month thereafter up to a period of 16 months.
Total expense, which is included in the accompanying condensed statements of operations, were $10,417 and $156,255 for the three and nine
months ended September 30, 2021, respectively. Effective August 13, 2021, the Company terminated the agreement and no further fees were
due upon termination.
CASCADE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(UNAUDITED)
NOTE 8. STOCKHOLDERS’ EQUITY
Preferred Stock — The Company
is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share, with such designations, voting and other
rights and preferences as may be determined from time to time by the Company’s board of directors. At 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 200,000,000 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 and December 31, 2020, there were 23,000,000 shares of common stock
subject to possible redemption, which are presented as temporary equity.
Class B Common stock — The
Company is authorized to issue 20,000,000 shares of Class B common stock, with a par value of $0.0001 per share. Holders of the Class
B common stock are entitled to one vote for each share. At September 30, 2021 and December 31, 2020, there were 5,750,000 shares of Class
B common stock issued and outstanding.
Holders of the Class B common stock will have
the right to elect all of the Company’s directors prior to a Business Combination. Holders of Class A common stock and Class B
common stock will vote together as a single class on all other matters submitted to a vote of stockholders except as required by law.
The shares of Class B common stock will automatically
convert into shares of Class A common stock at the time of the consummation of a Business Combination at a ratio such that 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 (i) the total number of shares of common stock issued and outstanding upon completion of the Initial
Public Offering, plus (ii) the sum of (a) all shares of common stock issued or deemed issued or issuable upon conversion or
exercise of any equity-linked securities or deemed issued by the Company in connection with or in relation to the completion of a Business
Combination, excluding (1) 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 (2) Private Placement
Warrants issued to the Sponsor or any of its affiliates upon conversion of Working Capital Loans minus (b) the number of Public Shares
redeemed by Public Stockholders in connection with a Business Combination. In no event will the shares of our Class B common stock
convert into shares of our Class A common stock at a rate of less than one to one.
NOTE 9. WARRANTS
As of September 30, 2021 and December 31, 2020, the
Company had 11,500,000 Public Warrants and 8,217,000 Private Placement 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 completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering.
The Public Warrants will expire five years from the completion 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 warrants
is then effective and a current prospectus relating thereto is available, subject to the Company satisfying its obligations with respect
to registration, or a valid exemption from registration is available. No warrant will be exercisable for cash or on a cashless basis,
and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares
upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption is available.
CASCADE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(UNAUDITED)
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 commercially reasonable efforts
to file with the SEC a registration statement covering the issuance, under the Securities Act, of the Class A common stock issuable upon
exercise of the warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within 60
business days after the closing of a Business Combination and to maintain the effectiveness of such registration statement, and a current
prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. Notwithstanding
the above, if the Class A common stock are, at the time of any exercise of a warrant, not listed on a national securities exchange such
that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at
its option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with
Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in
effect a registration statement, but will use its commercially reasonable efforts to register or qualify the shares under applicable blue
sky laws to the extent an exemption is not available.
Redemption of Warrants When the Price per share
of Class A Common stock Equals or Exceeds $18.00 — Once the warrants become exercisable, the Company may redeem the outstanding
Public Warrants:
|
●
|
in whole and not in part;
|
|
|
|
|
●
|
at a price of $0.01 per Public Warrant;
|
|
|
|
|
●
|
upon not less than 30 days’ prior written notice of redemption to each warrant holder and
|
|
|
|
|
●
|
if, and only if, the last reported sale price of the Class A common stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders (the “Reference Value”) equals or exceeds $18.00 per share (as adjusted).
|
If and when the warrants become redeemable by
the Company, the Company may exercise its redemption right even if the Company is unable to register or qualify the underlying securities
for sale under all applicable state securities laws.
Redemption of Warrants When the Price per share
of Class A Common Stock Equals or Exceeds $10.00 — Once the warrants become exercisable, the Company may redeem the outstanding
warrants:
|
●
|
in whole and not in part;
|
|
●
|
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption; provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the “fair market value” of the Class A common stock; and
|
|
●
|
if, and only if, the Reference Value equals or exceeds $10.00 per share (as adjusted).
|
|
●
|
if the Reference Value is less than $18.00 per share (as adjusted), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above.
|
The exercise price and number of shares of common
stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend,
extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants
will not be adjusted for issuances of common stock at a price below its exercise price. Additionally, in no event will the Company be
required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period
and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect
to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with
respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.
CASCADE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(UNAUDITED)
In addition, if (x) the Company issues additional
Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination
at an issue price or effective issue price of less than $9.20 per Class A common stock (with such issue price or effective issue price
to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates,
without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly
Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest
thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions),
and (z) the volume weighted average trading price of its Class A common stock during the 20 trading day period starting on the trading
day prior to the day on which the Company consummates its 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 will be adjusted (to the nearest cent) to be equal to 180%
of the higher of the Market Value and the Newly Issued Price and the $10.00 per share redemption trigger price will be adjusted (to the
nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
The Private Placement Warrants are identical to
the Public Warrants underlying the Units sold in the Initial Public Offering, except that, so long as they are held by the Sponsor or
its permitted transferees: (1) they will not be redeemable by the Company; (2) they (including the common stock issuable upon exercise
of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by the Sponsor until 30 days after
the completion of a Business Combination; (3) they may be exercised by the holders on a cashless basis; (4) they (including the common
stock issuable upon exercise of these warrants) are entitled to registration rights; and (5) they can only be exercised during the period
(A) commencing on the later of: (i) the date that is thirty (30) days after the first date on which the Company completes its Business
Combination, and (ii) the date that is twelve (12) months from the date of the closing of the Initial Public Offering, and (B) terminating
at the earliest to occur of (x) 5:00 p.m., New York City time on the date that is seven years after the date on which the Company completes
its Business Combination, and (y) the liquidation of the Company in accordance with the Company’s Amended and Restated Certificate
of Incorporation, as amended from time to time, if the Company fails to complete a Business Combination.
NOTE 10. FAIR VALUE MEASUREMENTS
The Company follows the guidance in ASC Topic
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 our assessment of the assumptions that market participants would use in pricing the asset or liability.
|
CASCADE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(UNAUDITED)
The following table presents information about
the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2021 and December 31,
2020, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
Description
|
|
Level
|
|
|
September 30,
2021
|
|
|
Level
|
|
|
December 31,
2020
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable securities held in Trust Account
|
|
|
1
|
|
|
$
|
232,382,820
|
|
|
|
1
|
|
|
$
|
232,296,529
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant Liability – Public Warrants
|
|
|
1
|
|
|
$
|
7,130,000
|
|
|
|
3
|
|
|
$
|
15,640,000
|
|
Warrant Liability – Private Placement Warrants
|
|
|
2
|
|
|
$
|
5,505,390
|
|
|
|
3
|
|
|
$
|
11,175,120
|
|
The warrants are accounted for as liabilities
in accordance with ASC 815-40 and are presented within warrant liabilities on the accompanying balance sheets. The warrant liabilities
are measured at fair value at inception and on a recurring basis, with changes in fair value presented within the change in fair value
of warrant liabilities in the statements of operations.
The Public Warrants and Private Placement Warrants
were valued as of November 24, 2020 and December 31, 2020 using a Monte Carlo simulation, which is considered to be a Level 3 fair value
measurement. The Monte Carlo simulation’s primary unobservable input utilized in determining the fair value of the Warrants is the
probability of consummation of the Business Combination. The probability assigned to the consummation of the Business Combination was
90%, which was estimated based on the observed success rates of business combinations for special purpose acquisition companies. The expected
volatility as of the Initial Public Offering date was derived from observable public warrant pricing on comparable ‘blank-check’
companies without an identified target.
The following table presents the quantitative
information regarding Level 3 fair value measurements at December 31, 2020:
Expected volatility
|
|
|
23.0
|
%
|
Risk-free interest rate
|
|
|
0.52
|
%
|
Expected term (years)
|
|
|
5.42
|
|
Fair value per share of Class A common stock
|
|
$
|
10.45
|
|
The subsequent measurements of the Public Placement
Warrants after the detachment of the Public Placement Warrants from the Units are classified as Level 1 due to the use of the quoted price
in an active market (the New York Stock Exchange) under the ticker CAS.WS. For the Private Placement Warrants, because of the provision
in the Public and Private Placement Warrant agreements described in Note 8 regarding the Company’s ability to redeem the warrants
when the trading price of the warrants equals or exceeds $10.00, the Company concluded the fair value of the Public and Private Placement
Warrants to be equal. Therefore, subsequent measurements of the fair value of the Private Placement Warrants are also determined by using
the quoted price in an active market under the ticker CAS. WS, which for the Private Warrants is a Level 2 measurement.
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
|
|
$
|
11,175,120
|
|
|
$
|
15,640,000
|
|
|
$
|
26,815,120
|
|
Transfers to Level 1
|
|
|
—
|
|
|
|
(15,640,000
|
)
|
|
|
(15,640,00
|
)
|
Transfers to Level 2
|
|
|
(11,175,120
|
)
|
|
|
—
|
|
|
|
(11,175,120
|
)
|
Fair value as of September 30, 2021
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Transfers in the amount of $15,640,000 from Level
3 to Level 1, and transfers in the amount of $11,175,120 from Level 3 to Level 2 of the fair value hierarchy occurred during the nine
months ended September 30, 2021. There were no transfers between fair value levels during the three months ended 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 financial statements were issued. The Company did not identify any
subsequent events that would have required adjustment or disclosure in the condensed financial statements.