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.
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.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
CIIG Capital Partners II, Inc. (the “Company”)
was incorporated in Delaware on January 6, 2021. The Company was formed for the purpose of effecting a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”).
Although the Company is not limited to a particular
industry or sector for purposes of consummating a Business Combination, the Company intends to focus its search on companies in the technology,
media and telecommunications industries. The Company is an early stage and emerging growth company and, as such, the Company is subject
to all of the risks associated with early stage and emerging growth companies.
As of September 30, 2021, the Company had not
commenced any operations. All activity for the period from January 6, 2021 (inception) through September 30, 2021 relates to the Company’s
formation, the initial public offering (“Initial Public Offering”), which is described below, and subsequent to the Initial
Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after
the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest
income from the proceeds derived from the Initial Public Offering.
The registration statements for the Company’s
Initial Public Offering were declared effective on September 14, 2021. On September 17, 2021, the Company consummated the Initial Public
Offering of 28,750,000 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 3,750,000 Units, at $10.00 per Unit, generating gross proceeds of $287,500,000, which is described in Note 3.
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the sale of 12,062,500 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 CIIG Management
II LLC, a Delaware Limited Liability Company (the “Sponsor”) and certain funds and accounts managed by subsidiaries of BlackRock,
Inc. (the “Direct Anchor Investors” the Direct Anchor Investors, together with the Sponsor, are the “initial stockholders”),
generating gross proceeds of $12,062,500, which is described in Note 4.
Transaction costs amounted to $16,342,432, consisting
of $5,750,000 of underwriting fees, $10,062,500 of deferred underwriting fees and $529,932 of other offering costs.
Following the closing of the Initial Public Offering
on September 17, 2021, an amount of $291,812,500 ($10.15 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, 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 of 1940, as amended (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 Private Placement Warrants,
although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There
is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete a Business Combination
with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the Trust Account
(as defined below) (excluding the deferred underwriting commissions and taxes payable on interest earned on the Trust Account) at the
time of the agreement to enter into a Business Combination. The Company will only complete a Business Combination if the post-transaction
company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in
the target sufficient for it not to be required to register as an investment company under the Investment Company Act.
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 $10.15 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).
The amount in the Trust Account will initially be approximately $10.15 per public share and such amount may be increased by $0.10 per
Public Share for a 6-month extension of time to consummate the Business Combination, as described herein. The per-share amount to be distributed
to public stockholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay
to the underwriters (as discussed in Note 6). There will be no redemption rights upon the completion of a Business Combination with respect
to the Company’s warrants.
CIIG CAPITAL PARTNERS II, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
The Company will proceed with a Business Combination
if the Company has net tangible assets of at least $5,000,001 immediately prior to or upon such consummation of a Business Combination
and, if the Company seeks stockholder approval, unless otherwise required by applicable law, regulation or stock exchange rules, 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 legal 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 transactions is required by law, or the Company decides to obtain stockholder
approval for business or legal 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 Company’s Sponsor, officers and directors have agreed to vote their Founder Shares (as defined in Note 5) and any Public
Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public stockholder
may elect to redeem their Public Shares irrespective of whether they vote for or against the Initial transaction.
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 any Founder Shares and Public Shares held by them in connection with the completion of a Business Combination and
(b) not to propose an amendment to the Amended and Restated Certificate of Incorporation that would affect the substance or timing
of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless
the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
The Company will have until March 17, 2023 to
complete a Business Combination (or up to September 17, 2023 if it extends the period of time to consummate a Business Combination in
accordance with the terms described below; the “Combination Period”). If the Company anticipates that it may not be able to
consummate a Business Combination by March 17, 2023, it may, but is not obligated to, extend the period of time to consummate a Business
Combination by an additional six months (for a total of up to 24 months to complete a Business Combination); provided that the Sponsor
(or its designees) must deposit into the Trust Account funds equal to an aggregate of $2,587,500 ($0.10 per Public Share) for such extension
on or prior to the date of the deadline for such extension, in exchange for a non-interest bearing, unsecured promissory note (the “Extension
Loan”). Such Extension Loan may be convertible into Private Placement Warrants, at a price of $1.00 per warrant at the option of
the lender.
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), subject to applicable law, 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 initial stockholders or any of their respective affiliates acquire Public Shares 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 $10.15 per Unit.
CIIG CAPITAL PARTNERS II, INC.
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 (i) $10.15 per Public Share or (ii) such lesser 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, 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.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial
statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”)
for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain
information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or
omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information
and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management,
the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are
necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial
statements should be read in conjunction with the Company’s prospectus for its Initial Public Offering as filed with the SEC on
September 14, 2021, as well as the Company’s Current Report on Form 8-K, as filed with the SEC on September 23, 2021. The interim
results for the three months ended September 30, 2021 and for the period from January 6, 2021 (inception) through September 30, 2021 are
not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future periods.
Emerging Growth Company
The Company is an “emerging growth company,”
as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart
Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being
required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley
Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from
the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments
not previously approved.
Further, Section 102(b)(1) of the JOBS Act
exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies
(that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company
can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but
any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that
when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging
growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison
of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth
company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting
standards used.
Use of Estimates
The preparation of the condensed financial statements
in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period.
Making estimates requires management to exercise
significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances
that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near
term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
CIIG CAPITAL PARTNERS II, INC.
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.
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 Bills. 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.
Offering Costs
Offering costs consist of underwriting, legal,
accounting and other expenses incurred through the Initial Public Offering that are directly related to the Initial Public Offering. Offering
costs are allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis,
compared to total proceeds received. Offering costs associated with the Class A common stock issued were initially charged to temporary
equity and then accreted to common stock subject to redemption upon the completion of the Initial Public Offering. Offering costs amounted
to $16,342,43 were charged to stockholders’ equity upon the completion of the Initial Public Offering.
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.”
Shares of Class A common stock subject to mandatory redemption are classified as a liability instrument and are measured at fair value.
Conditionally redeemable common stock (including common stock that features redemption rights that is either within the control of the
holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as
temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Class A common stock
features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain
future events. Accordingly, at September 30, 2021, Class A common stock subject to possible redemption is presented at redemption value
as temporary equity, outside of the stockholders’ equity section of the Company’s condensed balance sheet.
In connection with the change in presentation
for the Class A common stock subject to redemption, the Company also revised its income (loss) per common share calculation to allocate
net income (loss) evenly to Class A and Class B common stock. This presentation contemplates a Business Combination as the most likely
outcome, in which case, both classes of common stock share pro rata in the income (loss) of the Company.
There has been no change in the Company’s
total assets, liabilities or operating results.
At September 30, 2021, the Class A common stock
reflected in the condensed balance sheet are reconciled in the following table:
Gross proceeds
|
|
$
|
287,500,000
|
|
Less:
|
|
|
|
|
Class A common stock issuance costs
|
|
|
(16,342,423
|
)
|
Plus:
|
|
|
|
|
Accretion of carrying value to redemption value
|
|
|
20,654,932
|
|
|
|
|
|
|
Class A common stock subject to possible redemption
|
|
$
|
291,812,500
|
|
Income Taxes
The Company complies with the accounting and reporting
requirements of ASC Topic 740 “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting
for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases
of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to
the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce
deferred tax assets to the amount expected to be realized. As of September 30 ,2021, the Company had a deferred tax asset of approximately
$1,200, which had a full valuation allowance recorded against it of approximately $1,200.
CIIG CAPITAL PARTNERS II, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
The Company’s current taxable income primarily
consists of interest earned on the Trust Account. The Company’s general and administrative costs are generally considered start-up
costs and are not currently deductible. During the three months ended September 30, 2021 and for the period from January 6, 2021 (inception)
through September 30, 2021, the Company recorded no income tax expense. The Company’s effective tax rate for three months ended
September 30, 2021 and for the period from January 6, 2021 (inception) through September 30, 2021 was approximately 0%, which differs
from the expected income tax rate due to the start-up costs (discussed above) which are not currently deductible.
ASC Topic 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. 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 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 Company is subject to income tax examinations by major taxing authorities since inception.
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 26,437,500
shares of Class A common stock in the aggregate. As of September 30, 2021, 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.
The following table reflects the calculation of
basic and diluted net income (loss) per common share (in dollars, except per share amounts):
|
|
Three Months Ended
September 30, 2021
|
|
|
For the period from
January 6, 2021
(inception) Through
September 30, 2021
|
|
|
|
Class A
|
|
|
Class B
|
|
|
Class A
|
|
|
Class B
|
|
Basic and diluted net loss per common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocation of net loss, as adjusted
|
|
$
|
(21,035
|
)
|
|
$
|
(34,558
|
)
|
|
$
|
(9,812
|
)
|
|
$
|
(46,781
|
)
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average shares outstanding
|
|
|
4,375,000
|
|
|
|
7,187,500
|
|
|
|
1,507,491
|
|
|
|
7,187,500
|
|
Basic and diluted net loss per common stock
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk consist of a cash account and the trust 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.
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.
CIIG CAPITAL PARTNERS II, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
Recent Accounting Standards
In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt
with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic
815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which
simplifies accounting for convertible instruments by removing major separation models required under current GAAP. ASU 2020-06 removes
certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies
the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning after December
15, 2023, including interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2020-06 effective
as of January 06, 2021. The adoption of ASU 2020-06 did not have an impact on the Company’s financial statements.
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 financial
statements.
NOTE 3. PUBLIC OFFERING
Pursuant to the Initial Public Offering, the Company
sold 25,875,000 Units, which includes a full exercise by the underwriters of their over-allotment option in the amount of 3,750,000 Units,
at a 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 a price of $11.50
per share, subject to adjustment (see Note 8).
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial
Public Offering, the Sponsor and the Direct Anchor Investors purchased an aggregate of 12,062,500 Private Placement Warrants at a price
of $1.00 per Private Placement Warrant, for an aggregate purchase price of $12,062,500, in a private placement. A portion of the proceeds
from the Private Placement Warrants were added to the proceeds from the Initial Public Offering to be held in the Trust Account. The Private
Placement Warrants are identical to the Public Warrants underlying the Units to be sold in the Initial Public Offering, except as described
in Note 8. 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 underlying securities will be worthless.
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
In January 2021, the Sponsor purchased 8,625,000
shares (the “Founder Shares”) of the Company’s Class B common stock for an aggregate price of $25,000. In July
2021, the Sponsor forfeited 2,156,250 Founder Shares, resulting in the Sponsor holding 6,468,750 Founder Shares. In September 2021, we
effected a stock dividend of 0.11111111 shares for each founder share outstanding, resulting in our sponsor holding an aggregate number
of 7,187,500 founder shares. All share and per-share amounts have been retroactively restated to reflect the share cancellation. As a
result of the underwriters’ election to fully exercise their over-allotment option at the close of the Initial Public Offering,
a total of 937,500 Founder Shares are no longer subject to forfeiture.
The Sponsor has agreed, subject to limited exceptions,
not to transfer, assign or sell any of their 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 Company’s 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, reorganization 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.
CIIG CAPITAL PARTNERS II, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
Administrative Services Agreement
Commencing
on September 14, 2021, the Company will agree to pay an affiliate of the Sponsor a total of $10,000 per month for office space, utilities
and secretarial and administrative support. Upon completion of the Business Combination or the Company’s liquidation, the Company
will cease paying these monthly fees. For the three months ended September 30, 2021 and for the period from January 6, 2021 (inception)
through September 30, 2021, the Company did not incur fees for these services.
Promissory Note — Related Party
On February 26, 2021, the Sponsor agreed to loan
the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering (the “Promissory Note”).
The Promissory Note is non-interest bearing and payable on the earlier of September 30, 2021 or the completion of the Initial Public Offering.
The Company borrowed a total of $167,417 under the Promissory Note, which was repaid on September 20, 2021.
NOTE 6. COMMITMENTS
Related Party Loans
In addition, in order to finance transaction costs
in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and
directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”).
If the Company completes a Business Combination,
the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. 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 there were no outstanding Working Capital Loans.
Risks and Uncertainties
Management continues to evaluate the impact of
the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s
financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of
the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of
this uncertainty.
Registration Rights
On September 14, 2021, the Company entered into
a registration rights agreement with respect to the Founder Shares, the Private Placement Warrants (and their underlying shares), and
warrants (and their underlying shares) that may be issued upon conversion of Extension Loans and Working Capital Loans and the shares
of Class A common stock issuable upon conversion of the Founder Shares. The holders of the Founder Shares, Private Placement Warrants,
and warrants that may be issued upon conversion of Extension Loans and Working Capital Loans (and in each case holders of their underlying
shares, as applicable) will have registration rights to require the Company to register the sale of the securities held by them pursuant
to a registration rights agreement to be signed prior to or on the effective date of the Initial Public Offering. The holders of the majority
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 certain “piggy-back” registration
rights to include their securities in other registration statements filed subsequent to the completion of a Business Combination and rights
to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear
the expenses incurred in connection with the filing of any such registration statements.
CIIG CAPITAL PARTNERS II, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
Underwriting Agreement
The underwriters are entitled to a deferred fee
of $0.35 per Unit, or $10,062,500 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in
the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
NOTE 7. 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, 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, there were 28,750,000 shares issued and outstanding, including
28,750,000 shares of Class A 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 Class B
common stock are entitled to one vote for each share. At September 30, 2021, there were 7,187,500 shares of Class B common stock
issued and outstanding. As a result of the underwriters’ election to fully exercise their over-allotment option at the close of
the Initial Public Offering, a total of 937,500 Founder Shares are no longer subject to forfeiture.
Holders of Class A common stock and Class B
common stock will vote together as a single class on all 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 excess of
the amounts offered in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which shares of
Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of
the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance)
so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal,
in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the completion
of the Initial Public Offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection
with a Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in a Business Combination).
NOTE 8. WARRANT LIABILITY
Warrants — As of September
30, 2021, there were no Public Warrants outstanding. Public Warrants may only be exercised for a whole number of shares. No fractional
warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants will become exercisable on
the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the Initial
Public Offering. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption
or liquidation.
The Company will not be obligated to deliver any
shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise
unless a registration statement under the Securities Act with respect to the shares of Class A common stock underlying the warrants
is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration.
No warrant will be exercisable and the Company will not be obligated to issue any 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.
CIIG CAPITAL PARTNERS II, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
Redemptions of Warrants for Cash—Once
the warrants become exercisable, the Company may redeem the Public 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 last sale price of the Company’s 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 the notice of redemption to each warrant holder.
|
If and when the warrants become redeemable by
the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale
under all applicable state securities laws.
Redemption of Warrants for Shares of Class A
Common Stock—Commencing ninety days after the warrants become exercisable, the Company may redeem the outstanding warrants (including
the Private Placement Warrants):
➤
|
in whole and not in part;
|
➤
|
at a price of $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, but only on a cash basis, prior to redemption and receive that number of shares of Class A common stock to be determined, based on the redemption date and the fair market value of the Company’s Class A common stock ;
|
➤
|
if, and only if, the last reported sale price of the Company’s Class A common stock equals or exceeds $10.00 per share and is less than $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days (the “Reference Days”) within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrant holders.
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If the Company calls the Public Warrants for redemption
for cash, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless
basis,” as described in the warrant agreement. The exercise price and number of shares of Class A common stock issuable upon
exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization,
merger or consolidation. However, the warrants will not be adjusted for issuance of Class A common stock at a price below its exercise
price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a
Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants
will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets
held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
In addition, if (x) the Company issues additional
shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of a Business
Combination at an issue price or effective issue price of less than $9.20 per share (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, initial stockholders
or their affiliates, without taking into account any Founder Shares held by them prior to such issuance) (the “Newly Issued Price”),
(y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon,
available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and
(z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the
trading day prior to the day on which the Company consummates a Business Combination (such price, the “Market Value”) is below
$9.20 per share, the exercise price of each warrant will be adjusted (to the nearest cent) to be equal to 115% of the higher of (i) the
Market Value and (ii) the Newly Issued Price, the $18.00 per share redemption trigger price described above will be adjusted to be
equal to 180% of the higher of (i) the Market Value and (ii) the Newly Issued Price and the $10.00 per share redemption trigger
price described above will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
As of September 30, 2021, there were $12,062,500 Private
Warrants outstanding The Placement Warrants will be identical to the Public Warrants underlying the Units being sold in the Initial Public
Offering, except that the Placement Warrants and the Class A common stock issuable upon exercise of the Placement Warrants will not be
transferable, assignable or salable until 30 days after the completion of our initial business combination, subject to certain limited
exceptions. Additionally, the Placement Warrants will be exercisable on a cashless basis and be non-redeemable.
CIIG CAPITAL PARTNERS II, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
NOTE 9. FAIR VALUE MEASUREMENTS
The fair value of the Company’s financial
assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale
of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the
measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of
observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions
about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities
based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
|
Level 1:
|
Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
|
|
Level 2:
|
Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
|
|
Level 3:
|
Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.
|
The Company classifies its U.S. Treasury and equivalent
securities as held-to-maturity in accordance with ASC Topic 320 “Investments - Debt and Equity Securities.” Held-to-maturity
securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities
are recorded at amortized cost on the accompanying balance sheet and adjusted for the amortization or accretion of premiums or discounts.
At September 30, 2021, assets held in the Trust
Account were comprised of $803 in cash and $291,814,261 in U.S. Treasury securities. During the period from January 6, 2021 (inception)
through September 30, 2021, the Company did not withdraw any interest income from the Trust Account.
The following table presents information about
the Company’s assets that are measured at fair value on a recurring basis at September 30, 2021 and indicates the fair value hierarchy
of the valuation inputs the Company utilized to determine such fair value. The gross holding gains and fair value of held-to-maturity
securities at September 30, 2021 are as follows:
|
|
Held-To-Maturity
|
|
Level
|
|
Amortized
Cost
|
|
Gross
Holding
Gain
|
|
Fair Value
|
September 30, 2021
|
|
U.S. Treasury Securities (Mature on 12/16/21)
|
|
|
1
|
|
$
|
291,814,261
|
|
$
|
2,229
|
|
$
|
291,816,490
|
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 financial statements were issued. Based upon this review,
the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements.