Notes To The Unaudited Condensed Financial
Statements
Note 1. Description of Organization And Business Operations
Crescera Capital Acquisition Corp. (the “Company”)
is a blank check company incorporated in the Cayman Islands on March 11, 2021. The Company was formed for the purpose of effecting
a merger, capital stock exchange, asset acquisition, share purchase, reorganization or similar Business Combination with one or more businesses
(the “Business Combination”). The Company is an emerging growth company and, as such, the Company is subject to all of the
risks associated with emerging growth companies.
As of March 31, 2023, the Company had not
commenced any operations. All activity from inception through March 31, 2023 relates to the Company’s formation, the initial public
offering (“Initial Public Offering” or “IPO”) as described below, and since the closing of the Initial Public
Offering, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after
the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest
income on investments held in a trust account from the proceeds derived from the Initial Public Offering and non-operating income or expense
in the form of changes in the fair value of warrant liabilities.
The registration statement for the Company’s
Initial Public Offering was declared effective on November 18, 2021. On November 23, 2021, the Company consummated the Initial
Public Offering of 20,125,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units sold,
the “Public Shares”), including 2,625,000 additional Units to cover over-allotments (the “Over-Allotment Units”),
at $10.00 per Unit, generating gross proceeds of $201,250,000 (see Note 3).
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the sale of 10,150,000 warrants (the “Private Placement Warrants”) at a price of
$1.00 per Private Placement Warrant in a private placement to CC Sponsor LLC (the “Sponsor”) generating gross proceeds of
$10,150,000 (see Note 4).
Upon the closing of the Initial Public Offering
on November 23, 2021, an amount of $205,275,000 ($10.20 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”), and was invested
in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with maturities of 185
days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940,
as amended (the “Investment Company Act”), which invest only in direct U.S. government treasury obligations, as determined
by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds held in the
Trust Account, as described below.
The Company’s management has broad discretion
with respect to the specific application of the net proceeds of the Initial Public Offering and sale of the Private Placement Warrants,
although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. Nasdaq
rules provide that the Business Combination must be with one or more target businesses that together have a fair market value equal to
at least 80% of the balance in the Trust Account (excluding the deferred underwriting commissions and taxes payable on income earned on
the Trust Account) at the time of the signing a definitive agreement to enter a Business Combination. The Company will only complete a
Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the
target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company
under the Investment Company Act. There is no assurance that the Company will be able to successfully effect a Business Combination.
The Company will provide its holders of the outstanding
Public Shares (the “Public Shareholders”) 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 shareholders meeting called to approve the Business Combination or
(ii) by means of a tender offer. In connection with an initial Business Combination, the Company may seek shareholder approval of a Business
Combination at a meeting called for such purpose at which public shareholders may seek to redeem their shares, regardless of whether they
vote for or against a Business Combination. The Company will proceed with a Business Combination only if the Company has net tangible
assets of at least $5,000,001 either immediately prior to or upon such consummation of a Business Combination and, if the Company seeks
shareholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination.
If the Company seeks shareholder approval of a
Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s amended and restated
memorandum and articles of association (the “Amended and Restated Memorandum and Articles of Association”) provides that,
a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder 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 seeking redemption rights with respect to 15% or more of the Public Shares without the Company’s prior written
consent.
The Public Shareholders will be entitled to redeem
their shares for a pro rata portion of the amount then in the Trust Account (initially $10.20 per 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 per-share amount to
be distributed to Public Shareholders who redeem their shares will not be reduced by the deferred underwriting commissions the Company
will pay to the representative of the underwriters (as discussed in Note 5). There will be no redemption rights upon the completion of
a Business Combination with respect to the Company’s warrants. These shares of Class A ordinary shares were recorded at a redemption
value and classified as temporary equity upon the completion of the Initial Public Offering, in accordance with Accounting Standards Codification
(“ASC”) Topic 480 Distinguishing Liabilities from Equity.
If a shareholder vote is not required and the
Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and
Restated Memorandum and Articles of Association, offer such redemption pursuant to the tender offer rules of the Securities and Exchange
Commission (the “SEC”), and file tender offer documents containing substantially the same information as would be included
in a proxy statement with the SEC prior to completing a Business Combination.
The Company’s Sponsor agreed (a) to vote
its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of a Business
Combination, (b) not to propose an amendment to the Company’s Amended and Restated Memorandum and Articles of Association with respect
to the Company’s pre-Business Combination activities prior to the consummation of a Business Combination unless the Company provides
dissenting Public Shareholders with the opportunity to redeem their Public Shares in conjunction with any such amendment; (c) not to redeem
any shares (including the Founder Shares) and Private Placement Warrants (including underlying securities) into the right to receive cash
from the Trust Account in connection with a shareholder vote to approve a Business Combination (or to sell any shares in a tender offer
in connection with a Business Combination if the Company does not seek shareholder approval in connection therewith) or a vote to amend
the provisions of the Amended and Restated Memorandum and Articles of Association relating to shareholders’ rights of pre-Business
Combination activity and (d) that the Founder Shares and Private Placement Warrants (including underlying securities) shall not participate
in any liquidating distributions upon winding up if a Business Combination is not consummated. However, the Sponsor will be entitled to
liquidating distributions from the Trust Account with respect to any Public Shares purchased during or after the Initial Public Offering
if the Company fails to complete its Business Combination.
If the Company is unable to complete a Business
Combination within 18 months from the closing of the Initial Public Offering, or May 23, 2023 (or within 24 months from the closing of
the Initial Public Offering, or November 23, 2023, if the Company extends the period of time to consummate its initial Business Combination
in accordance with the terms described in the prospectus) (the “Combination Period”), the Company will (i) cease all operations
except for the purpose of winding up, (ii) as promptly as reasonably possible but no 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 taxes (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
Shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable
law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and
the Company’s board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject
in each case to its obligations to provide for claims of creditors and the requirement of applicable law. See Note 10 for further details
pertaining to extension period. The representative of the underwriters agreed to waive its rights to the deferred underwriting commission
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 funds held in the Trust Account that will be available to fund the redemption of the Public
Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution
will be less than the Initial Public Offering price per Unit ($10.00).
The Sponsor 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 entered into a written letter of intent, confidentiality or similar agreement or Business Combination
agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.20 per Public Share and (ii) the actual amount
per Public Share held in the Trust Account as of the day of liquidation of the Trust Account, if less than $10.20 per 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 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”). However, the Company
has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor
has sufficient funds to satisfy its indemnity obligations. None of the Company’s officers or directors will indemnify the Company
for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
Risks and Uncertainties
COVID-19
On January 30, 2020, the World Health Organization
(“WHO”) announced a global health emergency because of a new strain of coronavirus (the “COVID-19 outbreak”).
In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact
of the COVID-19 outbreak continues to evolve. Management continues to evaluate the impact of the COVID-19 outbreak 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
condensed financial statements. The condensed financial statements do not include any adjustments that might result from the outcome of
this uncertainty.
War in Ukraine
As a result of the military action commenced in
February 2022 by the Russian Federation and Belarus in the country of Ukraine and related economic sanctions, the Company’s ability
to consummate a Business Combination, or the operations of a target business with which the Company ultimately consummates a Business
Combination, may be materially and adversely affected. Further, the Company’s ability to consummate a transaction may be dependent
on the ability to raise equity and debt financing which may be impacted by these events, including as a result of increased market volatility,
or decreased market liquidity in third-party financing being unavailable on terms acceptable to the Company or at all. The impact of this
action and related sanctions on the world economy and the specific impact on the Company’s financial position, results of operations
and/or ability to consummate a Business Combination are not yet determinable. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
Going Concern, Liquidity and Capital Resources
As of March 31, 2023, the Company had $307,602
in cash held outside of the Trust Account and a working capital surplus of $334,624.
In order to finance transaction costs in connection
with a Business Combination, the Company’s Sponsor, or an affiliate of the Sponsor or certain of the Company’s officers and
directors may, but are not obligated to, provide the Company working capital loans (as defined in Note 5). As of March 31, 2023 and
December 31, 2022, there were no amounts outstanding under any working capital loans.
The Company will have until May 23, 2023 to complete
a Business Combination, which period can be extended to November 23, 2023 if the Company extends the period of time to consummate its
initial Business Combination in accordance with the terms described in the prospectus. If a Business Combination is not consummated by
May 23, 2023 and an extension has not been effected as described above, there will be a mandatory liquidation and subsequent dissolution
of the Company. See Note 10 for further details pertaining to extension period.
The Company has incurred and expects to incur
significant costs in pursuit of its financing and acquisition plans. In connection with the Company’s assessment of going concern
considerations, management has determined that both the Company’s liquidity and liquidation deadline raise substantial doubt about
the Company’s ability to continue as a going concern within one year from the date that the financial statements are issued. There
is no assurance that the Company’s plans to consummate a Business Combination or raise additional funds will be successful within
the Combination Period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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”)
and pursuant to the rules and regulations of the SEC.
Certain information or footnote disclosures normally
included in unaudited condensed financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the
rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary
for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying
unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair
presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed
financial statements should be read in conjunction with the Company’s annual report on Form 10-K as filed with the SEC on April
14, 2023. The interim results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for
the year ending December 31, 2023 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, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”),
and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that
are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting
firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation
in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive
compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts
emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging
growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth
companies but any such an 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 that is neither an emerging growth company
nor an emerging growth company that 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 unaudited condensed financial
statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported
amounts of revenues and expenses during the reporting period.
Making estimates requires management to exercise
significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances
that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could
change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those
estimates.
Cash and Cash Equivalents
The Company considers all short-term investments
with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents
as of March 31, 2023 and December 31, 2022. As of March 31, 2023 and December 31, 2022, the Company had operating
cash (i.e. cash held outside the Trust Account) of $307,602 and $618,891, respectively.
Marketable Securities in the Trust Account
As of March 31, 2023 and December 31,
2022, the Company had a total of $210,559,509 and $208,242,878 in the Trust Account held in cash and money market funds, respectively.
The Company’s portfolio of investments held in the Trust Account are comprised solely of U.S. government securities, within the
meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 180 days or less, 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 these securities is included in gain on marketable securities, dividends and interest held in the Trust Account
in the accompanying statement of operations. The fair value for trading securities is determined using quoted market prices in active
markets.
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.
The carrying amounts reflected in the balance
sheet for current assets and current liabilities approximate fair value due to their short-term nature.
GAAP specifies a three-level hierarchy that is
used when measuring and disclosing fair value. The fair value hierarchy gives the highest priority to quoted prices available in active
markets (i.e. observable inputs) and the lowest priority to data lacking transparency (i.e. unobservable inputs). An instrument’s
categorization within the fair value hierarchy is based on the lowest level of significant inputs to its valuation. The following is a
description of the three hierarchy levels.
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.
See Note 9 for additional information on assets
and liabilities measured at fair value.
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 and ASC Topic 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 ordinary
shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted
at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all
of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the
time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required
to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair
value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The Company issued 10,062,500 warrants
to purchase Class A ordinary shares to investors in the Company’s Initial Public Offering and simultaneously issued 10,150,000 Private
Placement Warrants. All of the Company’s outstanding warrants are recognized as derivative liabilities in accordance with ASC 815-40.
Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at
each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair
value is recognized in the statement of operations. The fair value of warrants issued in connection with the Initial Public Offering were
measured at fair value using a Monte Carlo simulation model for the Public Warrants and Private Placement Warrants.
Offering
Costs
Offering
costs consist of legal, accounting, underwriting and other costs incurred through the balance sheet date that are directly related to
the Initial Public Offering. Upon the completion of the Initial Public Offering, the offering
costs were allocated using the relative fair values of the Company’s Class A ordinary shares and its warrants. The costs allocated
to warrants were recognized in other expenses and those related to the Company’s Class A ordinary shares were charged to temporary
equity.
Class
A Ordinary Shares Subject to Possible Redemption
All of the
20,125,000 Class A ordinary shares sold as part of the Units in the Initial Public Offering contain a redemption feature which allows
for the redemption of such Public Shares in connection with the Company’s liquidation, if there is a shareholder vote or tender
offer in connection with the Business Combination and in connection with certain amendments to the Amended and Restated Memorandum and
Articles of Association. In accordance with 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 ordinary shares subject to redemption to
be classified outside of permanent equity. Therefore, all Class A ordinary shares have been classified outside of permanent equity.
The Company recognizes changes in redemption value
immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each
reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional
paid-in capital (to the extent available) and accumulated deficit. The redemption value of the redeemable ordinary shares as of March 31,
2023 increased as the income earned on the Trust Account exceeds the Company’s expected dissolution expenses (up to $100,000). As
such, the Company recorded an increase in the carrying amount of the redeemable ordinary shares of $2,316,631 for the three months ended
March 31, 2023.
As of March 31, 2023 and December 31, 2022,
the Class A ordinary shares subject to redemption reflected in the balance sheet are reconciled in the following table:
Class
A ordinary shares subject to possible redemption | |
| | |
Class A ordinary shares subject to possible redemption as of December 31, 2022 | |
$ | 208,142,878 | |
Plus: | |
| | |
Additional remeasurement of carrying value to redemption value as of March 31, 2023 | |
| 2,316,631 | |
Class A ordinary shares subject to possible redemption as of March 31, 2023 | |
$ | 210,459,509 | |
Net Income Per Ordinary Share
Net income per ordinary share is computed by dividing
net income by the weighted-average number of ordinary shares outstanding during the period. The net income per share calculation allocates
income and losses shared pro rata between Class A and Class B ordinary shares. As a result, the calculated net income per share is the
same for Class A and Class B ordinary shares. The remeasurement of Class A ordinary shares subject to redemption to redemption value is
excluded from the earnings per share as the redemption value approximates fair value. Class B ordinary shares subject to forfeiture are
not considered in the calculation of diluted income per share until the forfeiture contingency has lapsed. The Company has not considered
the effect of the Public Warrants (as defined in Note 3) and Private Placement Warrants to purchase an aggregate of 20,212,500 shares
in the calculation of diluted income per share, since the exercise of the warrants is contingent upon the occurrence of future events.
The following table reflects the calculation of
basic and diluted net income per ordinary share:
| |
For the Three Months Ended | |
| |
March 31, 2023 | | |
March 31, 2022 | |
| |
Class A | | |
Class B | | |
Class A | | |
Class B | |
Basic and diluted net income per share: | |
| | |
| | |
| | |
| |
Numerator: | |
| | | |
| | | |
| | | |
| | |
Net income | |
$ | 543,314 | | |
$ | 181,105 | | |
$ | 5,166,731 | | |
$ | 1,722,243 | |
Denominator: | |
| | | |
| | | |
| | | |
| | |
Basic and diluted weighted average shares outstanding | |
| 20,125,000 | | |
| 6,708,333 | | |
| 20,125,000 | | |
| 6,708,333 | |
Basic and diluted net income per share | |
$ | 0.03 | | |
$ | 0.03 | | |
$ | 0.26 | | |
$ | 0.26 | |
Income Taxes
The Company complies with the accounting and reporting
requirements of ASC Topic 740, Income Taxes (“ASC 740”), 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 condensed
financial statements 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.
ASC 740 also clarifies the accounting for uncertainty
in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process
for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits
to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. 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 March 31, 2023 and December 31, 2022. 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 considered an exempted Cayman Islands
Company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As
such, the Company’s tax provision was zero for the period presented.
The Inflation Reduction Act (“IRA”)
was enacted on August 16, 2022. The IRA includes provisions imposing a 1% excise tax on share repurchases that occur after December 31,
2022 and introduces a 15% corporate alternative minimum tax (“CAMT”) on adjusted financial statement income. The CAMT will
be effective for us beginning in fiscal 2023. Currently, the Company is not expecting the IRA to have an adverse impact to our financial
statements.
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal
depository insurance coverage of $250,000. The Company has not experienced losses on this account and management believes the Company
is not exposed to significant risks on such account.
Recent Accounting Standards
Management does not believe that any recently
issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed
financial statements.
Note 3. Initial Public Offering
Pursuant to the Initial Public Offering, the Company
sold 20,125,000 Units, which includes the exercise by the underwriters of their over-allotment option in the amount of 2,625,000, at $10.00
per Unit, generating gross proceeds of $201,250,000. Each Unit consisted of one share of Class A ordinary shares of the Company, par value
$0.0001 per share, and one-half of one redeemable warrant of the Company (“Public Warrant” or together with the Private Placement
Warrants, the “Warrants”). Each whole Public Warrant entitles the holder to purchase one Class A ordinary share at an exercise
price of $11.50 per whole share (see Note 7).
Note 4. Private Placement
Simultaneously with the closing of the Initial
Public Offering, the Sponsor purchased an aggregate of 10,150,000 Private Placement Warrants at a price of $1.00 per Private Placement
Warrant (for an aggregate purchase price of $10,150,000). Each warrant is exercisable to purchase one share of the Company’s Class
A ordinary shares at a price of $11.50 per share. Certain proceeds from the sale of the Private Placement Warrants were added to the proceeds
from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination
Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject
to the requirement of applicable law) and the Private Placement Warrants will expire worthless.
Note 5. Related Party Transactions
Founder Shares
In March 2021, one of the Company’s officers
paid $25,000, to cover certain of the Company’s offering costs, in exchange for an aggregate of 5,750,000 Class B ordinary shares
(the “Class B Ordinary Shares” or “Founder Shares”), which were temporarily issued to such officer. On April 7,
2021, the Founder Shares were transferred to the Company’s Sponsor.
In October 2021, the Company effected a share
capitalization pursuant to which an additional 958,333 Founder Shares were issued for no consideration, using the existing share premium
account, resulting in an aggregate of 6,708,333 of Founder Shares outstanding. Prior to the Initial Public Offering, the Sponsor also
transferred 25,000 of the Founder Shares to each of the Company’s three independent directors.
The Founder Shares include an aggregate of up
to 875,000 shares that were subject to forfeiture by the Sponsor. The underwriter’s over-allotment opinion was exercised and these
shares are no longer subject to forfeiture. Prior to the initial investment in the Company of $25,000 by the Company’s Sponsor,
the Company had no assets, tangible or intangible. The per share purchase price of the Founder Shares was determined by dividing the amount
of cash contributed to the Company by the aggregate number of Founder Shares issued. Out of the 6,708,333 Founder Shares, 5,031,250 Founder
Shares will convert into Class A ordinary shares after the initial Business Combination and 1,677,083 Founder Shares will convert into
Class A ordinary shares only to the extent the Company’s share trades at or above $12.50 per share as described in the final prospectus.
Prior to the Initial Public Offering, three independent
directors purchased 25,000 Founder Shares each from the Sponsor, at their original purchase price (approximately $0.004 per share) for
a total of $280. If the director is removed from office as director, or voluntarily resigns his position with the Company before a merger,
capital stock exchange, asset acquisition, share purchase, reorganization or similar Business Combination involving the Company, all of
the director’s Class B ordinary shares shall be returned to the Sponsor. The fair value of the Founder Shares at the grant dates
was determined using an internal model using the issuance price of the Units in the Initial Public Offering as a proxy adjusting for the
value for the warrants included in the Units, for the probability the Company will consummate an initial Business Combination and for
holding costs and no rights of redemption. Valuation of the 75,000 Founder Shares granted to the directors is estimated to be $342,201
or $4.56 per share. The Company will record the fair value of the transferred shares in excess of the amount paid of $341,921 as director
compensation expense upon consummation of an initial Business Combination, in accordance with the guidance in ASC 718, Compensation
- Stock Compensation.
The holders of the Founder Shares agreed, subject
to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (i) 180 days after the
completion of the initial Business Combination or (ii) subsequent to the initial Business Combination, 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
shareholders having the right to exchange their ordinary shares for cash, securities or other property.
The Founder Shares will automatically convert
into Class A ordinary shares on the first business day following the completion of the initial Business Combination, at a ratio such that
the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate on an as-converted basis,
15% of the sum of (i) the total number of all Class A ordinary shares issued and outstanding upon completion of this offering (including
the over-allotment shares as a result of the underwriter exercising its over-allotment option), plus (ii) the total number of Class A
ordinary shares issued or deemed issued or issuable upon conversion of the Founder Shares plus (iii) the total number of Class A ordinary
shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities (as defined herein) or rights issued
or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding
(x) any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed
issued, or to be issued, to any seller in the initial Business Combination, and (y) any Private Placement Warrants issued to the Sponsor,
its affiliates or any member of the Company’s management team upon conversion of working capital loans. Prior to the initial Business
Combination, only holders of Class B ordinary shares will be entitled to vote on the appointment of directors.
Promissory Note - Related Party
The Sponsor agreed to loan the Company an aggregate
of up to $250,000 to be used for a portion of the expenses of the Initial Public Offering. The loan is non-interest bearing, unsecured
and was due at the earlier of December 31, 2022 or the closing of the initial Business Combination. In January 2023, the loan was amended
retroactively to December 31, 2022 to become due only upon a Business Combination. As of March 31, 2023 and December 31, 2022,
the Company had borrowed $149,008 under the promissory note.
Working Capital Loans
In order to finance transaction costs in connection
with an initial 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
an initial Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to
the Company. In the event that an initial 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. The Working Capital Loans would either be repaid upon consummation of an initial Business Combination or, at the lender’s
discretion, up to $2,100,000 of such Working Capital Loans may be convertible into Private Placement Warrants of the post-initial Business
Combination entity at a price of $1.00 per warrant. 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. As of March 31, 2023 and December 31, 2022, the
Company had no borrowings under the Working Capital Loans.
Note 6. Commitments And Contingencies
Registration Rights
The holders of Founder Shares, Private Placement
Warrants and warrants that may be issued upon conversion of Working Capital Loans, if any (and any Class A ordinary shares issuable upon
the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans), are entitled to registration
rights pursuant to a registration rights agreement that was signed prior to the consummation of the Initial Public Offering. These holders
will be entitled to certain demand and “piggyback” registration rights. However, the registration rights agreement provides
that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until
termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration
statements.
Underwriting Agreement
The Company granted the underwriters a 45-day
option to purchase up to 2,625,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting
discounts and commissions. The underwriters fully exercised the option on November 23, 2021.
The underwriters were entitled to a cash underwriting
discount of 2.0% of the gross proceeds of the Initial Public Offering, or $4,025,000 in the aggregate, which was paid upon closing of
the Initial Public Offering. In addition, the representative of the underwriters will be entitled to a deferred fee of 3.5% of the gross
proceeds of the Initial Public Offering, or $7,043,750. The deferred fee will become payable to the representative of 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. Warrants
The Company accounted for the 20,212,500 Warrants
issued in connection with the Initial Public Offering (the 10,062,500 of Public Warrants and the 10,150,000 of Private Placement Warrants)
in accordance with the guidance contained in ASC 815-40 Derivatives and Hedging — Contracts in Entity’s Own Equity.
Such guidance provides that, because the Warrants do not meet the criteria for equity treatment thereunder, each Warrant must be recorded
as a liability. Accordingly, the Company classifies each Warrant as a liability at its fair value. This liability is subject to re-measurement
at each balance sheet date. With each such re-measurement, the Warrant liability will be adjusted to fair value, with the change in fair
value recognized in the Company’s condensed statement of operations.
Additionally, certain adjustments to the settlement
amount of the Private Placement Warrants are based on a variable that is not an input to the fair value of a “fixed-for-fixed”
option as defined under ASC 815-40, and thus the Private Placement Warrants are not considered indexed to the Company’s own shares
and not eligible for an exception from derivative accounting.
The accounting treatment of derivative financial
instruments requires that the Company record a derivative liability upon issuance of the warrants at the closing of the Initial Public
Offering. The Public Warrants will be allocated a portion of the proceeds from the issuance of the Units equal to its fair value determined
with the assistance of a professional independent valuation firm.
Public Warrants may only be exercised for a whole
number of shares. No fractional Public Warrants were issued upon separation of the Units and only whole Public Warrants trade. The Public
Warrants will become exercisable 30 days after the completion of a Business Combination provided that the Company has an effective registration
statement under the Securities Act covering the Class A ordinary shares issuable upon exercise of the warrants and a current prospectus
relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky,
laws of the state of residence of the holder (or holders are permitted to exercise their warrants on a cashless basis under certain circumstances
as a result of (i) the Company’s failure to have an effective registration statement by the 60th business day after the closing
of the initial Business Combination or (ii) a notice of redemption described under “Redemption of warrants when the price per share
of Class A ordinary shares equals or exceeds $10.00”). The Company has agreed that as soon as practicable, but in no event later
than 20 business days after the closing of its initial Business Combination, the Company will use its commercially reasonable efforts
to file with the SEC and have an effective registration statement covering the Class A ordinary shares issuable upon exercise of the warrants
and will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of the
Company’s initial Business Combination and to maintain a current prospectus relating to those Class A ordinary shares until the
warrants expire or are redeemed. If the shares issuable upon exercise of the warrants are not registered under the Securities Act in accordance
with the above requirements, the Company will be required to permit holders to exercise their warrants on a cashless basis. However, no
warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking
to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws
of the state of the exercising holder, or an exemption from registration is available. Notwithstanding the above, if the Company’s
Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy
the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require
holders of Public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of
the Securities Act and, in the event the Company so elects, it will not be required to file or maintain in effect a registration statement,
and in the event the Company does not so elect, it will use its commercially reasonable efforts to register or qualify the shares under
applicable blue sky laws to the extent an exemption is not available.
The warrants have an exercise price of $11.50
per share, subject to adjustments, and will expire five years after the completion of a Business Combination or earlier upon redemption
or liquidation. In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising
purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20
per share of Class A ordinary shares (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 Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor
or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from
such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial Business
Combination on the date of the consummation of the initial Business Combination (net of redemptions) and (z) the volume weighted average
trading price of Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company
consummates the initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price
of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price,
and the $10.00 and $18.00 per share redemption trigger prices described under “Redemption of warrants for Class A ordinary shares”
and “Redemption of warrants for cash” will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of
the Market Value and the Newly Issued Price, respectively.
The Private Placement Warrants are identical to
the Public Warrants, except that, so long as they are held by the Sponsor or its permitted transferees, (i) they will not be redeemable
by the Company, (ii) they (including the Class A ordinary shares issuable upon exercise of these warrants) may not, subject to certain
limited exceptions, be transferred, assigned or sold by the Sponsor until 30 days after the completion of the initial Business Combination,
(iii) they may be exercised by the holders on a cashless basis and (iv) are subject to registration rights.
If a tender offer, exchange or redemption offer
shall have been made to and accepted by the holders of the Class A ordinary shares and upon completion of such offer, the offeror owns
beneficially more than 50% of the outstanding Class A ordinary shares the holder of the warrant shall be entitled to receive the highest
amount of cash, securities or other property to which such holder would actually have been entitled as a shareholder if such warrant had
been exercised, accepted such offer and all of the Class A ordinary shares held by such holder had been purchased pursuant to the offer.
If less than 65% of the consideration receivable by the holders of the Class A ordinary shares in the applicable event is payable in the
form of common equity in the successor entity that is listed on a national securities exchange or is quoted in an established over-the-counter
market, and if the holder of the warrant properly exercises the warrant within thirty days following the public disclosure of the consummation
of the applicable event by the Company, the warrant price shall be reduced by an amount equal to the difference (but in no event less
than zero) of (i) the warrant price in effect prior to such reduction minus (ii) (A) the Per Share Consideration (as defined in the warrant
agreement) minus (B) the value of the warrant based on the Black-Scholes Warrant Value for a Capped American Call on Bloomberg Financial
Markets.
Redemption of warrants when the price per share
of Class A ordinary shares equals or exceeds $18.00: Once the warrants become exercisable, the Company may redeem the outstanding
warrants (except as described herein with respect to the Private Placement Warrants):
| ● | in whole and not in part; |
| ● | at a price of $0.01 per warrant; |
| ● | upon a minimum of 30 days’ prior written notice of redemption; and |
| ● | if, and only if, the last reported sale price (the “closing price”) of Class A ordinary shares equals or exceeds $18.00
per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described
under the heading “Description of Securities — Warrants — Public Warrants — Redemption Procedures — Anti-dilution
Adjustments”) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which
we send the notice of redemption to the warrant holders. |
The Company will not redeem the warrants as described
above unless an effective registration statement under the Securities Act covering the Class A ordinary shares issuable upon exercise
of the warrants is effective and a current prospectus relating to those Class A ordinary shares is available throughout the 30-day redemption
period. Any such exercise would not be on a cashless basis and would require the exercising warrant holder to pay the exercise price for
each warrant being exercised.
Redemption of warrants when the price per share
of Class A ordinary shares equals or exceeds $10.00: Once the warrants become exercisable, the Company may redeem the outstanding
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 on a cashless basis prior to redemption and receive that number of shares determined by reference to the
table set forth under “Description of Securities — Warrants — Public Warrants” based on the redemption date and
the “fair market value” of Class A ordinary shares (as defined below) except as otherwise described in “Description
of Securities — Warrants — Public Warrants”; and; |
| ● | if, and only if, the closing price of Class A ordinary shares equals or exceeds $10.00 per public share (as adjusted for adjustments
to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of
Securities — Warrants — Public Warrants — Redemption Procedures — Anti-dilution Adjustments”) for any 20
trading days within the 30-trading day period ending three trading days before we send the notice of redemption to the warrant holders;
and |
| ● | if the closing price of the Class A ordinary shares for any 20 trading days within a 30-trading day period ending on the third trading
day prior to the date on which we send the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted for
adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description
of Securities — Warrants — Public Warrants — Redemption Procedures — Anti-dilution Adjustments”), the private
placement warrants must also be concurrently called for redemption on the same terms as the outstanding public warrants, as described
above. |
In no event will the Company be required to net
cash settle any warrant. 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.
Note 8. Shareholders’ Equity (Deficit)
Preferred shares — The Company is
authorized to issue 5,000,000 preferred shares, par value $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. As of March 31, 2023 and December 31, 2022,
there were no preferred shares issued or outstanding.
Class A ordinary shares — The Company
is authorized to issue up to 500,000,000 Class A ordinary shares with a par value of $0.0001 per share. As of March 31, 2023 and
December 31, 2022, there were no Class A ordinary shares issued and outstanding, excluding 20,125,000 Class A ordinary shares subject
to possible redemption.
Class B ordinary shares — The Company
is authorized to issue up to 50,000,000 Class B ordinary shares with a par value of $0.0001 per share. As of March 31, 2023 and December 31,
2022, there were 6,708,333 Class B ordinary shares issued and outstanding.
Holders of the Class A ordinary shares and holders
of the Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the Company’s shareholders,
except as required by law or stock exchange rule; provided that only holders of the Class B ordinary shares shall have the right to vote
on the election of the Company’s directors prior to the initial Business Combination.
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 March 31, 2023 and
December 31, 2022, 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 | |
March 31, 2023 | |
| | |
| | |
| | |
| |
Assets | |
| | |
| | |
| | |
| |
Investments held in Trust Account: | |
| | | |
| | | |
| | | |
| | |
Money Market investments | |
$ | 210,559,509 | | |
$ | 210,559,509 | | |
$ | — | | |
$ | — | |
Liabilities | |
| | | |
| | | |
| | | |
| | |
Warrant liability – Public Warrants | |
$ | 971,031 | | |
$ | 971,031 | | |
$ | — | | |
$ | — | |
Warrant liability – Private Placement Warrants | |
$ | 1,002,016 | | |
$ | — | | |
$ | — | | |
$ | 1,002,016 | |
December 31, 2022 | |
| | | |
| | | |
| | | |
| | |
Assets | |
| | | |
| | | |
| | | |
| | |
Investments held in Trust Account: | |
| | | |
| | | |
| | | |
| | |
Money Market investments | |
$ | 208,242,878 | | |
$ | 208,242,878 | | |
$ | — | | |
$ | — | |
Liabilities | |
| | | |
| | | |
| | | |
| | |
Warrant liability – Public Warrants | |
$ | 302,881 | | |
$ | 302,881 | | |
$ | — | | |
$ | — | |
Warrant liability – Private Placement Warrants | |
$ | 321,469 | | |
$ | — | | |
$ | — | | |
$ | 321,469 | |
The Company utilized a Monte Carlo simulation
model for the initial valuation of the Public Warrants. The subsequent measurement of the Public Warrants as of March 31, 2023 is
classified as Level 1 due to the use of an observable market quote in an active market under the ticker CRECW. The quoted price of the
Public Warrants was approximately $0.03 per warrant as of March 31, 2023.
The estimated fair value of the Private Placement
Warrants, and the Public Warrants was initially determined using Level 3 inputs. Inherent in a Monte Carlo simulation are assumptions
related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimated the volatility
of its Private Placement Warrants based on implied volatility from the Company’s traded warrants and from historical volatility
of select peer company’s Class A ordinary shares that matches the expected remaining life of the warrants. 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 was estimated utilizing a probability weighted approach based on the expected outcomes
of both a successful and unsuccessful business combination. The dividend rate is based on the historical rate, which the Company anticipates
remaining 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 on January 14, 2022, after the Public Warrants were separately listed and traded.
The following table provides the significant inputs
used in the Monte Carlo simulation model to measure the fair value of the Private Placement Warrants:
| |
As of
March 31,
2023 | | |
As of
December 31,
2022 | |
Exercise Price | |
| 11.50 | | |
| 11.50 | |
Underlying share price | |
$ | 10.46 | | |
$ | 10.22 | |
Volatility | |
| 6.4 | % | |
| 5.3 | % |
Weighted Term to Business Combination (years) | |
| 1.04 | | |
| 1.07 | |
Risk-free rate | |
| 4.61 | % | |
| 4.71 | % |
Dividend yield | |
| 0.00 | % | |
| 0.00 | % |
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 as of March 31, 2023:
Fair value as of December 31, 2021 | |
$ | 13,926,587 | |
Transfer of Public Warrants to Level 1 measurement | |
| (6,912,938 | ) |
Change in fair value of derivative warrant liabilities with Level 3 inputs | |
| (6,692,181 | ) |
Fair value as of March 31, 2022 | |
| 321,469 | |
Change in fair value of derivative warrant liabilities with Level 3 inputs | |
| 1,561,568 | |
Fair value as of June 30, 2022 | |
| 1,883,037 | |
Change in fair value of derivative warrant liabilities with Level 3 inputs | |
| (964,034 | ) |
Fair value as of September 30, 2022 | |
| 919,003 | |
Change in fair value of derivative warrant liabilities with Level 3 inputs | |
| (597,534 | ) |
Fair value as of December 31, 2022 | |
| 321,469 | |
Change in fair value of derivative warrant liabilities with Level 3 inputs | |
| 680,547 | |
Fair value as of March 31, 2023 | |
$ | 1,002,016 | |
Note 10. Subsequent Events
The Company evaluated subsequent events and transactions that occurred
after the balance sheet date up to the date that the financial statements were issued.
On April 19, 2023, the Company filed a definitive
proxy statement (the “Definitive Proxy Statement”) and a related current report on Form 8-K dated April 20, 2023 for the solicitation
of proxies in connection with a special meeting of the Company’s stockholders to be held on May 16, 2023 (the “Shareholder
Meeting”) to consider and vote on, among other proposals, an amendment to the Company’s Amended and Restated Memorandum and
Articles of Association (the “Articles”) to extend the date by which the Company must consummate a business combination (the
“Extension Amendment”) from May 23, 2023 (the date which is 18 months from the closing date of the Company’s initial
public offering of shares of Class A shares (the “Original Termination Date”) to November 23, 2023 (the date which is 24 months
from the closing date of the Company’s IPO (the “Articles Extension Date”), or such earlier date as determined by the
board of directors, and to allow the board of directors, without another shareholder vote, to extend the period of time to consummate
the initial business combination for an additional 6 months after the Articles Extension Date on the same terms as the Original Extension
Right (as defined in the Definitive Proxy Statement) as contemplated by our IPO prospectus and in accordance with the Articles, if requested
by the Sponsor, and upon five days’ advance notice prior to the applicable Termination Date, until May 23, 2024 (the date which
is 30 months from the closing date of the Company’s IPO) (the “Additional Articles Extension Date”), or a total of twelve
months after the Original Termination Date.