NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(UNAUDITED)
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS
OPERATIONS
CleanTech Acquisition Corp. (the “Company”)
is a blank check company incorporated in Delaware on June 18, 2020. The Company was formed for the purpose of entering into a merger,
share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities
(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 through September 30, 2021 relates to the Company’s formation and the initial public offering
(“Initial Public Offering”), which is described below. The Company will not generate any operating revenues until after the
completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from
the proceeds derived from the Initial Public Offering.
The registration statement for the Company’s Initial
Public Offering was declared effective on July 14, 2021. On July 19, 2021, the Company consummated the Initial Public Offering
of 15,000,000 units (the “Units” and, with respect to the shares of common stock included in the Units sold, the “Public
Shares”), at $10.00 per unit, generating gross proceeds of $150,000,000, which is discussed in Note 3.
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the sale of 4,333,333 warrants at a price of $1.00 per Private Placement Warrant in a private
placement to CleanTech Sponsor (the “Sponsor”), and 2,166,667 warrants (together, the “Private Placement Warrants”)
at a price of $1.00 per Private Placement Warrant in a private placement to CleanTech Investments, an affiliate of the Sponsor (the “Co-sponsor”),
generating gross proceeds of $6,500,000, which is described in Note 4.
The Company granted the underwriters in the Initial
Public Offering (the “Underwriters”) a 45-day option to purchase up to 2,250,000 additional Units to cover over-allotments,
if any. On July 28, 2021, the Underwriters exercised the over-allotment option in full and purchased an additional 2,250,000 units (the
“Over-Allotment Units”), generating gross proceeds of $22,500,000.
Simultaneously with the closing of the exercise of the over-allotment
option, the Company consummated the sale of 675,000 warrants (the “Over-Allotment Warrants”) at a purchase price of $1.00
per warrant in a private placement to the Sponsor, generating gross proceeds of $675,000.
Following the closing of the Initial Public Offering
and the over-allotment, an amount of $174,225,000 from the net proceeds of the sale of the Public Units in the Initial Public Offering
and the sale of the Private Warrants was placed in a trust account (the “Trust Account”), and was invested only in U.S. government
treasury obligations with maturities of 183 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the
Investment Company Act of 1940, as amended (the “Investment Company Act”) which invest only in direct U.S. government treasury
obligations, 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.
Transaction costs related to the issuances described
above amounted to $3,916,282, consisting of $3,450,000 of cash underwriting fees and $466,282 of other offering costs. In addition, at
September 30, 2021, $789,012 of cash was held outside of the Trust Account and is available for working capital purposes.
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. 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 value of the Trust Account
(as defined below) (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-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.
CLEANTECH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(UNAUDITED)
The Company, after signing a definitive agreement
for an Initial Business Combination, will either (i) seek stockholder approval of the Initial Business Combination at a meeting called
for such purpose in connection with which stockholders may seek to redeem their shares, regardless of whether they vote for or against
the Initial Business Combination, for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account
as of two business days prior to the consummation of the Initial Business Combination, including interest but less taxes payable, or (ii)
provide stockholders with the opportunity to sell their Public Shares to the Company by means of a tender offer (and thereby avoid the
need for a stockholder vote) for an amount in cash equal to their pro rata share of the aggregate amount then on deposit in the Trust
Account as of two business days prior to the consummation of the Initial Business Combination, including interest but less taxes payable.
The decision as to whether the Company will seek stockholder approval of the Initial Business Combination or will allow stockholders to
sell their Public Shares in a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors
such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek stockholder
approval, unless a vote is required by law or under NASDAQ rules. If the Company seeks stockholder approval, it will complete its Initial
Business Combination only if a majority of the outstanding shares of common stock voted are voted in favor of the Initial Business Combination.
However, in no event will the Company redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001
either immediately prior to or upon consummation of the Initial Business Combination. In such case, the Company would not proceed with
the redemption of its Public Shares and the related Initial Business Combination, and instead may search for an alternate Initial Business
Combination.
If the Company seeks stockholder approval of the
initial Business Combination and the Company does not conduct redemptions in connection with the Business Combination pursuant to the
tender offer rules, the certificate of incorporation provides that a public stockholder, individually or 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 Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 20% of the shares
sold in the initial public offering. Furthermore, in order for a public stockholder to have his, her or its shares redeemed for cash in
connection with any proposed Business Combination, the Company may require that the public stockholders vote either in favor of or against
a proposed Business Combination. If required to vote pursuant to the procedures specified in the proxy statement to stockholders relating
to the Business Combination, and a public stockholder fails to vote in favor of or against the proposed Business Combination, whether
that stockholder abstains from the vote or simply does not vote, that stockholder would not be able to have his, her or its shares of
common stock redeemed to cash in connection with such Business Combination.
The initial stockholders have agreed to waive
their redemption rights with respect to any shares they own in connection with the consummation of the initial Business Combination, including
their founder shares and public shares that they have purchased during or after the offering, if any. In addition, the initial stockholders
have agreed to waive their rights to liquidating distributions with respect to its founder shares if the Company fails to consummate the
initial Business Combination within 12 months (or up to 18 months, as applicable) from the closing of the offering. However, if the initial
stockholders acquire public shares in or after the Initial Public Offering, they will be entitled to receive liquidating distributions
with respect to such public shares if the Company fails to consummate the initial Business Combination within the required time period.
If the Company does not complete a business combination
within 12 months (or up to 18 months, as applicable) from the closing this offering (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 100% of the outstanding public shares and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of the remaining stockholders and the board of directors, dissolve and liquidate, subject (in the case of (ii)
and (iii) above) to the 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 warrants, which will expire worthless if the Company
fails to complete the Business Combination within the time period.
In order to protect the amounts in the Trust
Account, the Sponsor has agreed that it will 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) $10.10 per Public Share or (ii) 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, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective
target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable)
nor will it apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain
liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). The Company will
seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to
have all vendors, service providers (except the Company’s independent registered public accounting firm), prospective target businesses
or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim
of any kind in or to monies held in the Trust Account.
Risks and Uncertainties
Management continues to evaluate the impact of
the COVID-19 pandemic on the industry 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.
CLEANTECH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(UNAUDITED)
NOTE 2. BASIS OF PRESENTATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements of the Company are presented in conformity with accounting
principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations 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 comprehensive 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 final prospectus for
its Initial Public Offering as filed with the SEC on July 16, 2021, as well as the Company’s Current Reports on Form 8-K, as filed
with the SEC on July 23, 2021 and August 3, 2021.
The interim results for the three and nine months
ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any
future periods.
Revision of Previously Issued Financial Statements
The Company revised its previously issued
financial statements to classify redeemable common stock in temporary equity. In accordance with Securities and Exchange Commission
(“SEC”) and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption
provisions not solely within the control of the Company require common stock subject to redemption to be classified outside of
permanent equity. The Company had previously classified a portion of the redeemable common stock in permanent equity. Although the
Company did not specify a maximum redemption threshold, its charter provides that currently, the Company will not redeem its public
shares in an amount that would cause its net tangible assets to be less than $5,000,001. The Company revised its financial
statements to classify all redeemable common stock as temporary equity and any related impact, as the threshold in its charter would
not change the nature of the underlying shares as redeemable and thus would be required to be disclosed outside of permanent
equity.
The reclassification of amounts from permanent
equity to temporary equity result in non-cash financial statement corrections and will have no impact on the Company’s current or
previously reported cash position, operating expenses or total operating, investing or financing cash flows.
The following tables summarize the effect of the
revision on each financial statement line item as of the dates, and for the periods, indicated:
|
|
July 19, 2021
|
|
|
|
As Previously
Reported
|
|
|
Adjustments
|
|
|
As Revised
|
|
Balance Sheet (unaudited)
|
|
|
|
|
|
|
|
|
|
Common stock subject to possible redemption
|
|
$
|
154,073,040
|
|
|
$
|
7,818,210
|
|
|
$
|
161,891,250
|
|
Allocation of underwriter’s discounts, offering costs and deferred fees to shares
|
|
|
—
|
|
|
|
(3,657,956
|
)
|
|
|
(3,657,956
|
)
|
Immediate accretion to redemption value
|
|
|
—
|
|
|
|
15,991,706
|
|
|
|
15,991,706
|
|
Total common stock subject to possible redemption
|
|
|
154,073,040
|
|
|
|
20,151,960
|
|
|
|
174,225,000
|
|
Common stock
|
|
|
631
|
|
|
|
(200
|
)
|
|
|
431
|
|
Additional paid-in capital
|
|
|
5,258,926
|
|
|
|
(5,258,926
|
)
|
|
|
—
|
|
Accumulated deficit
|
|
|
(259,547
|
)
|
|
|
(14,892,834
|
)
|
|
|
(15,152,381
|
)
|
Total stockholders’ equity (deficit)
|
|
$
|
5,000,010
|
|
|
$
|
(20,151,960
|
)
|
|
$
|
(15,151,950
|
)
|
CLEANTECH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(UNAUDITED)
Emerging Growth Company
The Company is an “emerging growth company,”
as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”),
and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that
are not emerging growth companies including, but not limited to, not being required to comply with the independent 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 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 expenses during
the reporting periods.
Making estimates requires management to exercise
significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances
that existed at the date of the 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 from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments
with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents
as of September 30, 2021 and December 31, 2020.
CLEANTECH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(UNAUDITED)
Investments Held in Trust Account
At September 30, 2021, the assets held in the
Trust Account were held in money market funds, which are invested in U.S. Treasury securities. Trading securities are presented on the
condensed balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of
these securities is included in unrealized gains (losses) on investments held in Trust Account in the accompanying condensed statements
of operations. Interest and dividend income on these securities is included in net gain on investments held in Trust
Account in the accompanying condensed statements of operations.
Common Stock Subject to Possible Redemption
The Company accounts for its Class common stock subject to possible redemption in accordance with the guidance
in ASC Topic 480 “Distinguishing Liabilities from Equity.” Class A common stock subject to mandatory redemption (if any) are
classified as liability instruments 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 occurrence of uncertain
events not solely within the Company’s control) are classified as temporary equity. At all other times, Class A common stock are classified
as shareholders’ 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, as of September 31, 2021, 17,250,000 Class A
common stock subject to possible redemption are presented as temporary equity, outside of the shareholders’ equity section of the Company’s
unaudited condensed balance sheet. Effective with the closing of the Initial Public Offering, the Company recognized the accretion from
the initial book value to redemption amount, which resulted in charges against additional paid-in capital (to the extent available) and
accumulated deficit.
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.
As of September 30, 2021, the common stock
reflected in the condensed balance sheet are reconciled in the following table:
Gross proceeds
|
|
$
|
172,500,000
|
|
Less:
|
|
|
|
|
Proceeds allocated to Public Warrants
|
|
|
(10,608,750
|
)
|
Issuance costs allocated to common stock
|
|
|
(3,657,956
|
)
|
Plus:
|
|
|
|
|
Accretion of carrying value to redemption value
|
|
|
15,991,706
|
|
Common stock subject to possible redemption
|
|
$
|
174,225,000
|
|
Offering Costs associated with the Initial
Public Offering
The Company complies with the requirements
of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A - Expenses of Offering. Offering costs consist principally of
professional and registration fees incurred through the balance sheet date that are related to the Initial Public Offering. Offering
costs directly attributable to the issuance of an equity contract to be classified in equity are recorded as a reduction in equity.
Offering costs for equity contracts that are classified as assets and liabilities are expensed immediately. The Company incurred
offering costs amounting to $3,916,282 as a result of the Initial Public Offering (consisting of a $3,450,000 underwriting discount
and $466,282 of other offering costs). The Company recorded $3,659,903 of offering costs as a reduction of equity in connection with
the redeemable common stock included in the Units. The Company immediately expensed $256,379 of offering costs in connection with
the Public Warrants and Private Placement Warrants that were classified as liabilities.
Derivative
Warrant Liabilities
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 (“ASC 480”) and ASC 815, Derivatives
and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments
pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements
for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other
conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of
warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
CLEANTECH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(UNAUDITED)
For issued or modified warrants that meet all
of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the
time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required
to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair
value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the Private Placement
Warrants included in the Founder Units (as defined in Note 5) was estimated using a Black-Scholes Option Pricing Model (see Note 9).
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. Deferred tax assets were deemed to be de minimis as of September 30, 2021
and December 31, 2020.
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 provision for income taxes was deemed to be
de minimis for the nine months ended September 30, 2021 and for the period from June 18, 2020 (inception) through September 30, 2020.
CLEANTECH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(UNAUDITED)
Net Income (Loss) Per Share of Common Stock
Net income (loss) per share of common stock
is computed by dividing net earnings by the weighted-average number of shares of common stock outstanding during the period. The
Company has not considered the effect of the Warrants sold in the Initial Public Offering and private placement to purchase an
aggregate of 15,800,000 shares in the calculation of diluted income per share, since the exercise of the Warrants are contingent
upon the occurrence of future events and the inclusion of such Warrants would be anti-dilutive.
The following table reflects the calculation of basic and diluted net
income (loss) per share of common stock (in dollars, except per share amounts):
|
|
Three Months
Ended
September 30,
2021
|
|
|
Nine Months
Ended
September 30,
2021
|
|
|
Three Months
Ended
September 30,
2020
|
|
|
For the period
from June 18,
2020
(inception)
through
September 30,
2020
|
|
Basic and diluted net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
3,341,073
|
|
|
$
|
3,341,073
|
|
|
$
|
—
|
|
|
$
|
(1,000
|
)
|
Denominator
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average shares outstanding (1)
|
|
|
17,760,989
|
|
|
|
9,904,182
|
|
|
|
3,750,000
|
|
|
|
3,750,000
|
|
Basic and diluted net income (loss) per share of common stock
|
|
$
|
0.19
|
|
|
$
|
0.34
|
|
|
$
|
0.00
|
|
|
$
|
(0.00
|
)
|
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal
Depository Insurance Corporation coverage limit of $250,000. The Company has not experienced losses on these accounts and management believes
the Company is not exposed to significant risks on such account.
Fair Value of Financial Instruments
The Company applies ASC Topic 820, Fair Value
Measurement (“ASC 820”), which establishes a framework for measuring fair value and clarifies the definition of fair value
within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to
transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants
on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable
inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants
would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting
entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the
assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information
available in the circumstances.
CLEANTECH ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(UNAUDITED)
The carrying amounts reflected in the balance sheet for cash, prepaid
expenses and accrued offering costs approximate fair value due to their short-term nature.
Level 1 — Assets and liabilities with unadjusted, quoted prices
listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets
for identical assets or liabilities.
Level 2 — Inputs to the fair value measurement are determined
using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs,
such as interest rates and yield curves that are observable at commonly quoted intervals.
Level 3 — Inputs to the fair value measurement are unobservable
inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities.
Derivative Financial Instruments
The Company evaluates its financial instruments
to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic
815, Derivatives and Hedging. For derivative financial instruments that are accounted for as liabilities, the derivative instrument
is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value
reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded
as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet
as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months
of the balance sheet date.
Recent Accounting Standards
In August 2020, the Financial Accounting Standards
Board (“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. ASU 2020-06 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 Company’s financial statements.
CLEANTECH
ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(UNAUDITED)
NOTE
3. INITIAL PUBLIC OFFERING
Pursuant
to the Initial Public Offering which was consummated on July 19, 2021, the Company sold 15,000,000 Units at a purchase price of $10.00
per Unit. Each Unit consists of one share of the Company’s common stock, $0.0001 par value, one right entitling the holder thereof to
receive one-twentieth (1/20) of one share common stock upon the consummation of an initial business combination, and one-half of one
redeemable warrant (“Redeemable Warrant”). Each whole Redeemable Warrant is exercisable to purchase one share of common stock
and only whole warrants are exercisable. No fractional warrants will be issued upon separation of the Units and only whole warrants will
trade. The Redeemable Warrants will become exercisable on the later of 30 days after the completion of the Initial Business Combination
or 12 months from the closing of the Initial Public Offering. Each whole Redeemable Warrant entitles the holder to purchase one share
of common stock at an exercise price of $11.50 (see Note 7).
On
July 26, 2021, the underwriters fully exercised the over-allotment option and purchased an additional 2,250,000 Units (the “Over-Allotment
Units”), generating gross proceeds of $22,500,000 on July 28, 2021.
NOTE
4. PRIVATE PLACEMENT
Simultaneously
with the closing of the Initial Public Offering, the Sponsor and Co-Sponsor purchased an aggregate of 6,500,000 Private Warrants at a
price of $1.00 per Private Placement Warrant ($6,500,000 in the aggregate). Each Private Placement Warrant is exercisable to purchase
one share of common stock at a price of $11.50 per share. Simultaneously with the sale of Over-Allotment Units, the Company consummated
a private sale of an additional 675,000 Private Warrants at a purchase price of $10.00 per Private Warrant, generating gross proceeds
of $675,000. The proceeds from the sale of the Private Warrants were added to the net proceeds from the Initial Public Offering held
in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale
of the Private 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.
CLEANTECH
ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(UNAUDITED)
NOTE
5. RELATED PARTY TRANSACTIONS
Founder
Shares
In
July 2020, the Sponsor was issued 5,000,000 shares of Common stock (the “Founder Shares”) for an aggregate price of $25,000.
In February 2021, the Company effected a 1.4375-for-1 stock split of its issued and outstanding shares of Common Stock, resulting in
an aggregate of 4,312,500 Founder Shares issued and outstanding. The Founder Shares include an aggregate of up to 562,500 shares of common
stock subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment option is 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.
On
February 16, 2021, CleanTech Sponsor paid $16,667 to the Company, which amount was paid to CleanTech Investments LLC to cancel 4,791,667
of its Founder Shares that it previously held and immediately thereafter the Company issued 4,791,667 Founders Shares to CleanTech Sponsor.
As a result, CleanTech Sponsor owns 4,791,667 Founders Shares and CleanTech Investments LLC owns 2,395,833 Founder Shares. CleanTech
Sponsor and CleanTech Investments LLC will both participate in the purchase of the Private Warrants based their pro rata ownership of
Founder Shares.
In
June 2021, CleanTech Sponsor and CleanTech Investments forfeited for no consideration 1,916,667 founder shares and 958,333 founder
shares, respectively, which the Company cancelled, resulting in a decrease in the total number of founder shares outstanding from
7,187,500 shares to 4,312,500 shares. As a result, CleanTech Sponsor owns 2,875,000 founder shares and CleanTech Investments owns
1,437,500 founder shares. The founder shares include an aggregate of up to 562,500 shares that are subject to forfeiture to the
extent that the underwriters' over-allotment option is not exercised in full or in part. The founder shares include an aggregate of
up to 562,500 shares that are subject to forfeiture to the extent that the underwriters’ over-allotment option is not
exercised in full or in part. All share and per-share amounts have been retroactively restated to reflect the share
forfeiture.
The
underwriter exercised the over-allotment option on in full July 28, 2021; thus, no Founders Shares are subject to forfeiture.
Administrative
Services Agreement
The
Company entered into an agreement, commencing on the July 14, 2021, to pay Chardan Capital Markets, LLC up to $10,000 per month for office
space, administrative and support services. The total amounts of administrative service fees accrued for the three months and nine months
ended September 30, 2021 were $20,000. Upon completion of the Business Combination or the Company’s liquidation, the Company will
cease paying these monthly fees.
Promissory
Note - Related Party
On
March 1, 2021, the Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which
the Company could borrow an aggregate of up to $250,000 to cover expenses related to the Initial Public Offering. The Promissory Note
was non-interest bearing and is payable on the earlier of Promptly after the date on which the Maker consummates an initial public offering
of its securities or (ii) the completion of the Initial Public Offering. The outstanding balance under the Promissory Note of $188,302
was repaid on July 23, 2021. The promissory note is no longer available to the Company.
Related
Party Loans
In
addition, in order to finance transaction costs in connection with an intended initial Business Combination, the Company’s
Sponsor, Co-Sponsor, or an affiliate of the Sponsor or the officers and directors may, but are not obligated to, loan the Company
funds as may be required. If the Company consummates the initial Business Combination, it would repay such loaned amounts. The notes
would either be paid upon consummation of the Company’s initial Business Combination, without interest, or, at the
lender’s discretion, up to $500,000 of the notes may be converted upon consummation of the Business Combination into
additional private warrants to purchase shares of common stock at a conversion price of $1.00 per private warrant (which, for
example, would result in the holders being issued private warrants to purchase 500,000 shares of common stock if $500,000 of notes
were so converted). Such private warrants will be identical to the private warrants issued at the closing of the initial
public offering. Loans made by Chardan Capital Markets, LLC or any of its related persons will not be convertible into private
warrants, and Chardan Capital Markets, LLC and its related persons will have no recourse with respect to their ability to convert
their loans into private warrants. As of September 30, 2021 and December 31 2020, there were no borrowings under these loans.
CLEANTECH
ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(UNAUDITED)
NOTE
6. COMMITMENTS AND CONTINGENCIES
Registration
and Stockholder Rights Agreement
Pursuit
to a registration rights agreement entered into on July 14, 2021, the holders of insider shares issued and outstanding, as well as the
holders of the private warrants (and all underlying securities), will be entitled to registration and stockholder rights pursuant to
an agreement to be signed prior to or on the effective date of the initial public offering. The holders of a majority of these securities
are entitled to make up to two demands that the Company registers such securities. The holders of the majority of the insider shares
can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common
stock are to be released from escrow. In addition, the holders have certain “piggy-back” registration rights with respect
to registration statements filed subsequent to the consummation of a Business Combination. The Company will bear the expenses incurred
in connection with the filing of any such registration statements.
Underwriters
Agreement
The
Company granted the underwriter a 45-day option to purchase up to 2,250,000 additional Units to cover over-allotments at the Initial
Public Offering price, less the underwriting discounts and commissions. On July 28, 2021, the Underwriters exercised the over-allotment
option in full and purchased an additional 2,250,000 Units for an aggregate purchase price of $22,500,000.
In
connection with the closing of the Initial Public Offering and subsequent exercise of the over-allotment option, the underwriter was
paid a cash underwriting fee of $0.20 per Unit, or $3,450,000 in the aggregate.
Business
Combination Marketing Agreement
The
Company intends to engage Chardan Capital Markets, LLC as an advisor in connection with the initial Business Combination to assist the
Company in holding meetings with the stockholders to discuss the potential Business Combination and the target business’s attributes,
introduce the Company to potential investors that are interested in purchasing the securities in connection with the potential Business
Combination, assist the Company in obtaining stockholder approval for the Business Combination and assist the Company with press releases
and public filings in connection with the Business Combination. The Company will pay Chardan Capital Markets, LLC a marketing fee for
such services upon the consummation of the initial Business Combination in an amount equal to, in the aggregate, 3.5% of the gross proceeds
of the initial public offering, including any proceeds from the full or partial exercise of the underwriters’ over-allotment option.
As a result, Chardan Capital Markets, LLC will not be entitled to such fee unless the Company consummates the initial Business Combination.
A copy of the form of Business Combination marketing agreement has been filed as an exhibit to the registration statement of which the
Company’s prospectus forms a part.
CLEANTECH
ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(UNAUDITED)
NOTE
7. WARRANTS
As
of September 30, 2021 and December 31, 2020, there were 15,800,000 (including 8,625,000 Public Warrants and 7,175,000 Private Placement
Warrants).
Each
whole public warrant entitles the registered holder to purchase one share of common stock at a price of $11.50 per whole share, subject
to adjustment as described below, at any time commencing on the later of one year after the closing of the initial public offering or
the consummation of an initial Business Combination. However, no public warrants will be exercisable for cash unless the Company has
an effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current
prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of
common stock issuable upon exercise of the public warrants is not effective within 120 days from the closing of the initial Business
Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company
shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to an available exemption
from registration under the Securities Act. The warrants will expire five years from the closing of the initial Business Combination
at 5:00 p.m., New York City time.
The
private warrants are identical to the public warrants underlying the units offered by the Company’s prospectus except
that (i) each private warrant is exercisable for one share of common stock at an exercise price of $11.50 per share, and (ii) such
private warrants will be exercisable for cash (even if a registration statement covering the shares of common stock issuable upon
exercise of such warrants is not effective) or on a cashless basis, at the holder’s option, and will not be redeemable by us,
in each case so long as they are still held by the initial purchasers or their affiliates. The private warrants purchased by
CleanTech Investments will not be exercisable more than five years from the effective date of the registration statement, of which
the Company’s prospectus forms a part, in accordance with FINRA Rule 5110(g)(8), as long as Chardan Capital Markets, LLC or
any of its related persons beneficially own these private warrants.
The
Company may call the outstanding warrants for redemption (excluding the private warrants but including any warrants already issued upon
exercise of the unit purchase option), in whole and not in part, at a price of $0.01 per warrant:
|
●
|
at
any time while the warrants are exercisable,
|
|
●
|
upon
not less than 30 days’ prior written notice of redemption to each warrant holder,
|
|
●
|
if,
and only if, the reported last sale price of the shares of common stock equals or exceeds
$16.50 per share, for any 20 trading days within a 30-day trading period ending on the third
business day prior to the notice of redemption to warrant holders, and
|
|
●
|
if,
and only if, there is a current registration statement in effect with respect to the shares
of common stock underlying such warrants at the time of redemption and for the entire 30-day
trading period referred to above and continuing each day thereafter until the date of redemption.
|
The
right to exercise will be forfeited unless the warrants are exercised prior to the date specified in the notice of redemption. On and
after the redemption date, a record holder of a warrant will have no further rights except to receive the redemption price for such holder’s
warrant upon surrender of such warrant.
If
the Company calls the warrants for redemption as described above, the Company’s management will have the option to require all holders
that wish to exercise warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by
surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the
number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and
the “fair market value” by (y) the fair market value. The “fair market value” shall mean the average reported
last sale price of the Company’s common stock for the 10 trading days ending on the third trading day prior to the date on which the
notice of redemption is sent to the holders of warrants. Whether the Company will exercise the option to require all holders to exercise
their warrants on a “cashless basis” will depend on a variety of factors including the price of the common shares at the
time the warrants are called for redemption, the Company’s cash needs at such time and concerns regarding dilutive share issuances.
CLEANTECH
ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(UNAUDITED)
The
exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including
in the event of a share dividend, extraordinary dividend or the Company’s recapitalization, reorganization, merger or consolidation.
In addition, if the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection
with the closing of the initial Business Combination at a newly issued price of less than $9.20 per share of common stock (with such
issue price or effective issue price to be determined in good faith by the board of directors and, in the case of any such issuance to
the Company’s initial stockholders or their affiliates, without taking into account any founder shares or private warrants held by them,
as applicable, prior to such issuance), the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115%
of the newly issued price and the $16.50 per share redemption trigger price described below under will be adjusted (to the nearest cent)
to be equal to 165% of the market value (the volume weighted average trading price of the common stock during the 20 trading day period
starting on the trading day prior to the consummation of an initial Business Combination).
The
warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant
agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full
payment of the exercise price, by certified or official bank check payable to us, for the number of warrants being exercised. The warrant
holders do not have the rights or privileges of holders of shares of common stock and any voting rights until they exercise their warrants
and receive shares of common stock. After the issuance of shares of common stock upon exercise of the warrants, each holder will be entitled
to one vote for each share held of record on all matters to be voted on by stockholders.
Except
as described above, no public warrants will be exercisable for cash, and the Company will not be obligated to issue shares of common
stock unless at the time a holder seeks to exercise such warrant, a prospectus relating to the shares of common stock issuable upon exercise
of the warrants is current and the shares of common stock have been registered or qualified or deemed to be exempt under the securities
laws of the state of residence of the holder of the warrants. Under the terms of the warrant agreement, the Company has agreed to use
best efforts to meet these conditions and to maintain a current prospectus relating to the shares of common stock issuable upon exercise
of the warrants until the expiration of the warrants. However, the Company cannot assure you that it will be able to do so and, if the
Company does not maintain a current prospectus relating to the shares of common stock issuable upon exercise of the warrants, holders
will be unable to exercise their warrants, and the Company will not be required to settle any such warrant exercise. If the prospectus
relating to the shares of common stock issuable upon the exercise of the warrants is not current or if the common stock is not qualified
or exempt from qualification in the jurisdictions in which the holders of the warrants reside, the Company will not be required to net
cash settle or cash settle the warrant exercise, the warrants may have no value, the market for the warrants may be limited, and the
warrants may expire worthless.
No
fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive
a fractional interest in a share, the Company will, upon exercise, round down to the nearest whole number the number of shares of common
stock to be issued to the warrant holder.
The
Company accounts for the 15,800,000 warrants issued in connection with the Initial Public Offering in accordance with the guidance contained
in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant
must be recorded as a liability.
The
accounting treatment of derivative financial instruments required that the Company record the warrants as derivative liabilities at fair
value upon the closing of the Initial Public Offering. The Public Warrants were allocated a portion of the proceeds from the issuance
of the Units equal to its fair value. This warrant liabilities are subject to re-measurement at each balance sheet date. With each such
re-measurement, the warrant liability will be adjusted to its current fair value, with the change in fair value recognized in the Company’s
statement of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a
result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification.
CLEANTECH
ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(UNAUDITED)
NOTE
8. STOCKHOLDERS’ EQUITY (DEFICIT)
Common
Stock — On July 16, 2021, the Company amended its Amended and Restated Certificate of Incorporation such that the Company
is authorized to issue 200,000,000 shares of Common Stock with a par value of $0.0001 per share. As of September 30, 2021, there
were 21,562,500 shares of common stock outstanding, including 17,250,000 common stock subject to possible redemption. Of the 21,562,500
shares of Common Stock outstanding, up to 562,500 shares were subject to forfeiture to the Company by the Sponsor for no consideration
to the extent that the underwriters’ over-allotment option was not exercised in full or in part, so that the initial stockholders
will collectively own 20% of the Company’s issued and outstanding common stock after the initial public offering. The underwriters
exercised the over-allotment option in full on July 28, 2021; thus, no shares of common stock remain subject to forfeiture.
Holders
of record of common stock are entitled to one vote for each share held on all matters to be voted on by stockholders. In connection with
any vote held to approve the initial Business Combination, insiders, officers and directors, have agreed to vote their respective shares
of common stock owned by them immediately prior to the initial public offering, including both the insider shares and any shares acquired
in the initial public offering or following the initial public offering in the open market, in favor of the proposed Business Combination.
Rights
— Except in cases where the Company is not the surviving company in a Business Combination, each holder of a right will
automatically receive one-twentieth (1/20) of a share of common stock upon consummation of the Business Combination, even if the holder
of a right converted all shares held by him, her or it in connection with the Business Combination or an amendment to the Company’s
Certificate of Incorporation with respect to its pre-business combination activities. In the event that the Company will not be the surviving
company upon completion of the Business Combination, each holder of a right will be required to affirmatively convert his, her or its
rights in order to receive the one-twentieth (1/20) of a share of common stock underlying each right upon consummation of the Business
Combination. No additional consideration will be required to be paid by a holder of rights in order to receive his, her or its additional
share of common stock upon consummation of the Business Combination. The shares issuable upon exchange of the rights will be freely tradable
(except to the extent held by affiliates of the Company). If the Company enters into a definitive agreement for a Business Combination
in which the Company will not be the surviving entity, the definitive agreement will provide for the holders of rights to receive the
same per share consideration the holders of shares of common stock will receive in the transaction on an as-converted into common stock
basis.
The
Company will not issue fractional shares in connection with an exchange of rights. As a result, the holders of the rights must hold rights
in multiples of 20 in order to receive shares for all of the holders’ rights upon closing of a Business Combination. If the Company
is unable to complete an initial Business Combination within the required time period and the Company liquidates the funds held in the
Trust Account, holders of rights will not receive any of such funds with respect to their rights, nor will they receive any distribution
from the Company’s assets held outside of the Trust Account with respect to such rights, and the rights will expire worthless.
Additionally, in no event will the Company be required to net cash settle the rights. Accordingly, the rights may expire worthless.
CLEANTECH
ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(UNAUDITED)
NOTE
9. FAIR VALUE MEASUREMENTS
The
following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a
recurring basis as of 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
|
|
Amount at Fair Value
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
September 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments held in Trust Account:
|
|
|
|
|
|
|
|
|
|
|
|
|
Money Market investments
|
|
$
|
174,226,747
|
|
|
$
|
174,226,747
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant liabilities – Public Warrants
|
|
$
|
7,935,000
|
|
|
$
|
7,935,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Warrant liabilities – Private Placement Warrants
|
|
$
|
4,735,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,735,500
|
|
The Company did not have any assets or liabilities measured at fair value as of December 31, 2020.
The
Company utilized a Monte Carlo simulation model for the initial valuation of the Public Warrants, and a Binomial/lattice model in conjunction
with the publicly-traded value for the subsequent valuation of the Public Warrants. The measurement of the Public Warrants as of September 30,
2021 is classified as Level 1 due to the use of an observable market quote in an active market under the ticker CLAQW. The quoted price
of the Public Warrants was $0.92 per warrant as of September 30, 2021.
The
Company utilizes a Black-Scholes Option Pricing Model to value the Private Placement Warrants at each reporting period, with changes
in fair value recognized in the statement of operations. The estimated fair value of the warrant liability is determined using Level
3 inputs. Inherent in a Black-Scholes Option Pricing Model are assumptions related to expected share-price volatility, expected life,
risk-free interest rate and dividend yield. The Company estimates volatility based on research on comparable companies with the same
type of warrants along with the implied volatilities shortly after they start trading. The risk-free interest rate is based on the U.S.
Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected
life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate,
which the Company anticipates to remain at zero.
Transfers
to/from Levels 1, 2 and 3 are recognized at the end of the reporting period. The estimated fair value of the Public Warrants transferred
from a Level 3 measurement to a Level 1 fair value measurement in September 2021 after the Public Warrants were separately listed and
traded.
CLEANTECH
ACQUISITION CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
(UNAUDITED)
The
following table provides the significant unobservable inputs used in the Monte Carlo model for the initial valuation the Public Warrants:
|
|
As of
July 19, 2021
(initial
measurement)
|
|
Stock Price on Valuation Date
|
|
$
|
9.71
|
|
Strike price (Exercise Price Share)
|
|
$
|
11.50
|
|
Probability of completing a Business Combination
|
|
|
83.0
|
%
|
Term (in years)
|
|
|
6.59
|
|
Volatility
|
|
|
4.5% pre-merger / 23
post-merger
|
%
|
Risk-free rate
|
|
|
0.91
|
%
|
Fair value of warrants
|
|
$
|
1.23
|
|
The
following table provides the significant inputs to the Black-Scholes Option Pricing Model fair value of the Private Placement Warrants:
|
|
As of
July 19, 2021
(initial
measurement)
|
|
|
As of
September 30, 2021
|
|
Stock price
|
|
$
|
9.71
|
|
|
$
|
9.93
|
|
Strike price
|
|
$
|
11.50
|
|
|
$
|
11.50
|
|
Probability of completing a Business Combination
|
|
|
83.0
|
%
|
|
|
100.0
|
%
|
Dividend yield
|
|
|
—
|
%
|
|
|
—
|
%
|
Term (in years)
|
|
|
5.0
|
|
|
|
4.8
|
|
Volatility
|
|
|
17.2
|
%
|
|
|
12.2
|
%
|
Risk-free rate
|
|
|
0.9
|
%
|
|
|
0.9
|
%
|
Discount for lack of marketability
|
|
|
—
|
%
|
|
|
—
|
%
|
Fair value of warrants
|
|
$
|
0.85
|
|
|
$
|
0.66
|
|
The
following table provides a summary of the changes in the fair value of the Company’s Level 3 financial instruments that are measured
at fair value on a recurring basis:
Fair value as of December 31, 2020
|
|
$
|
—
|
|
Initial measurement of Public Warrants and Private Placement Warrants at July 19, 2021
|
|
|
14,750,000
|
|
Initial measurement of over-allotment warrants
|
|
|
1,957,500
|
|
Transfer of Public Warrants to Level 1 measurement
|
|
|
(7,935,000
|
)
|
Change in fair value
|
|
|
(4,037,000
|
)
|
Fair value as of September 30, 2021
|
|
$
|
4,735,500
|
|
The
Company recognized gains in connection with the change in the fair value of warrant liabilities of $4,037,000 in the condensed
statements of operations during the three months and nine months ended September 30, 2021.
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.