NOTES
TO CONDENSED FINANCIAL STATEMENTS
MARCH
31, 2021
(Unaudited)
NOTE 1.
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Golden
Arrow Merger Corp. (the “Company”) is a blank check company incorporated in Delaware on December 31, 2020. The Company was
formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses (the “Business Combination”).
The
Company is not limited to a particular industry or sector 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 March 31, 2021, the Company had not commenced any operations. All activity for the period from December 31, 2020 (inception) through
March 31, 2021 relates to the Company’s formation and the initial public offering (“Initial Public Offering”), which
is described below, and subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company
will not generate any operating revenues until after the completion of 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 Company has selected
December 31 as its fiscal year end.
The
registration statement for the Company’s Initial Public Offering was declared effective on March 16, 2021. On March 19, 2021, the
Company consummated the Initial Public Offering of 25,000,000 units (the “Units” and, with respect to the Class A common
stock included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $250,000,000 which
is described in Note 3.
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the sale of 4,500,000 warrants (the “Private Placement
Warrants”) at a price of $1.50 per Private Placement Warrant in a private placement to Golden Arrow Sponsor, LLC (the “Sponsor”),
generating gross proceeds of $6,750,000, which is described in Note 4.
Transaction
costs amounted to $14,246,969, consisting of $5,000,000 in cash underwriting fees, $8,750,000 of deferred underwriting fees and $496,969
of other offering costs.
Following
the closing of the Initial Public Offering on March 19, 2021, an amount of $250,000,000 ($10.00 per Unit) from the net proceeds of the
sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust
Account”), located in the United States and will be invested only in U.S. government securities, within the meaning set forth in
Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of
185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting
the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of (i) the completion
of a Business Combination and (ii) the distribution of the funds held in the Trust Account, as described below.
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering
and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward
consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully.
The Company must complete one or more initial Business Combinations with one or more operating businesses or assets with a fair market
value equal to at least 80% of the net assets held in the Trust Account (excluding any deferred underwriting fees and taxes payable on
the interest earned on the Trust Account). 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
business sufficient for it not to be required to register as an investment company under the Investment Company Act.
The
Company will provide the holders of the outstanding Public Shares (the “Public Stockholders”) with the opportunity to redeem
all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder
meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will
seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company. The Public Stockholders will
be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially $10.00 per Public
Share, plus any pro rata interest then in the Trust Account, net of taxes payable). There will be no redemption rights upon the completion
of a Business Combination with respect to the Company’s warrants.
GOLDEN
ARROW MERGER CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
MARCH
31, 2021
(Unaudited)
The
Company will only proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 following any related
redemptions and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination.
If a stockholder vote is not required by applicable law or stock exchange listing requirements and the Company does not decide to hold
a stockholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation
(the “Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and
Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If,
however, stockholder approval of the transaction is required by applicable law or stock exchange listing requirements, or the Company
decides to obtain stockholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy
solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection
with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased
during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each Public Stockholder may elect
to redeem their Public Shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction.
Notwithstanding
the foregoing, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the
tender offer rules, the Certificate of Incorporation will provide that a Public Stockholder, together with any affiliate of such stockholder
or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with
respect to more than an aggregate of 15% of the Public Shares, without the prior consent of the Company.
The
Sponsor has agreed (a) to waive its redemption rights with respect to the Founder Shares and Public Shares held by it in connection
with the completion of a Business Combination and (b) not to propose an amendment to the Certificate of Incorporation (i) to
modify the substance or timing of the Company’s obligation to allow redemptions in connection with a Business Combination or to
redeem 100% of its Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below)
or (ii) with respect to any other provision relating to stockholders’ rights or pre-business combination activity, unless
the Company provides the Public Stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
The
Company will have until March 19, 2023 to complete a Business Combination (the “Combination Period”). If the Company has
not completed a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose
of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares,
at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned
on the funds held in the Trust Account and not previously released to 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 Stockholders’ rights
as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board
of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims
of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect
to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination
Period.
The
Sponsor has agreed to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination
within the Combination Period. However, if the Sponsor acquires Public Shares in or after the Initial Public Offering, such Public Shares
will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the
Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in
the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event,
such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public
Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution
will be less than the Initial Public Offering price per Unit ($10.00).
In
order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims
by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed
entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share
and (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 $10.00 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 monies held
in the Trust Account 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”). Moreover,
in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the
extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify
the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except for the Company’s independent
registered public accounting firm), prospective target businesses and 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.
GOLDEN
ARROW MERGER CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
MARCH
31, 2021
(Unaudited)
NOTE
2. REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENT
The
Company previously accounted for its outstanding Public Warrants (as defined in Note 5) and Private Placement Warrants (collectively,
with the Public Warrants, the “Warrants”) issued in connection with its Initial Public Offering as components of equity instead
of as derivative liabilities. The warrant agreement governing the Warrants includes a provision that provides for potential changes to
the settlement amounts dependent upon the characteristics of the holder of the warrant. In addition, the warrant agreement includes a
provision that in the event of a tender offer or exchange offer made to and accepted by holders of more than 50% of the outstanding shares
of a single class of stock all holders of the Warrants would be entitled to receive cash for their Warrants (the “tender offer
provision”).
On
April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the Securities and Exchange
Commission together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition
companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition
Companies (“SPACs”)” (the “SEC Statement”). Specifically, the SEC Statement focused on certain settlement
terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in
the warrant agreement.
In
further consideration of the SEC Statement, the Company’s management further evaluated the Warrants under Accounting Standards
Codification (“ASC”) Subtopic 815-40, Contracts in Entity’s Own Equity. ASC Section 815-40-15 addresses equity
versus liability treatment and classification of equity-linked financial instruments, including warrants, and states that a warrant may
be classified as a component of equity only if, among other things, the warrant is indexed to the issuer’s common stock. Under
ASC Section 815-40-15, a warrant is not indexed to the issuer’s common stock if the terms of the warrant require an adjustment
to the exercise price upon a specified event and that event is not an input to the fair value of the warrant. Based on management’s
evaluation, the Company’s audit committee, in consultation with management, concluded that the Company’s Private Placement
Warrants are not indexed to the Company’s common stock in the manner contemplated by ASC Section 815-40-15 because the holder of
the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares. In addition, based on management’s
evaluation, the Company’s audit committee, in consultation with management, concluded that the tender offer provision fails the
“classified in stockholders’ equity” criteria as contemplated by ASC Section 815-40-25.
As
a result of the above, the Company should have classified the Warrants as derivative liabilities in its previously issued financial statement
as of March 19, 2021. Under this accounting treatment, the Company is required to measure the fair value of the Warrants at the end of
each reporting period as well as re-evaluate the treatment of the warrants and recognize changes in the fair value from the prior period
in the Company’s operating results for the current period.
The
Company’s accounting for the Warrants as components of equity instead of as derivative liabilities did not have any effect on the
Company’s previously reported investments held in trust or cash.
|
|
As
|
|
|
|
|
|
|
|
|
|
Previously
|
|
|
|
|
|
As
|
|
|
|
Reported
|
|
|
Adjustments
|
|
|
Revised
|
|
Balance sheet as of March 19, 2021 (audited)
|
|
|
|
|
|
|
|
|
|
Warrant Liability
|
|
$
|
—
|
|
|
$
|
12,833,333
|
|
|
$
|
12,833,333
|
|
Class A Common Stock Subject to Possible Redemption
|
|
|
237,527,540
|
|
|
|
(12,833,333
|
)
|
|
|
224,694,207
|
|
Class A Common Stock
|
|
|
125
|
|
|
|
128
|
|
|
|
253
|
|
Additional Paid-in Capital
|
|
|
4,999,647
|
|
|
|
481,696
|
|
|
|
5,481,343
|
|
Accumulated Deficit
|
|
|
(489
|
)
|
|
|
(481,824
|
)
|
|
|
(482,313
|
)
|
GOLDEN
ARROW MERGER CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
MARCH
31, 2021
(Unaudited)
NOTE
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted
in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form
10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements
prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial
reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position,
results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include
all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating
results and cash flows for the periods presented.
The
accompanying unaudited condensed financial statements should be read in conjunction with the Company’s prospectus for its Initial
Public Offering as filed with the SEC on March 18, 2021, as well as the Company’s Current Report on Form 8-K, as filed with the
SEC on March 25, 2021. The interim results for the three months ended March 31, 2021 are not necessarily indicative of the results to
be expected for the year ending December 31, 2021 or for any future periods.
Emerging
Growth Company
The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, 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.
GOLDEN
ARROW MERGER CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
MARCH
31, 2021
(Unaudited)
Use
of Estimates
The
preparation of the condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Making
estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of
a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating
its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ
significantly from those estimates.
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, 2021.
Cash
Held in Trust Account
At
March 31, 2021, substantially all of the assets held in the Trust Account were held in money market funds which are invested primarily
in U.S. Treasury securities.
Class
A Common Stock Subject to Possible Redemption
The
Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in Accounting Standards
Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Shares of Class A common stock
subject to mandatory redemption are classified as a liability instrument and is measured at fair value. Conditionally redeemable Class
A common stock (including Class A common stock that features redemption rights that is either within the control of the holder or subject
to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity.
At all other times, Class A common stock is classified as stockholders’ equity. The Company’s Class A common stock features
certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future
events. Accordingly, at March 31, 2021, the 22,859,724 shares of Class A common stock subject to possible redemption are presented
as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet.
Offering
Costs
Offering costs consist of underwriting, legal,
accounting and other expenses incurred through the Initial Public Offering that are directly related to the Initial Public Offering. Offering
costs amounting to $13,765,145 were charged to stockholders’ equity upon the completion of the Initial Public Offering, and $481,824
of the offering costs were related to the warrant liabilities and charged to the statement of operations.
Warrant
Liability
The
Company accounts for the Warrants in accordance with the guidance contained in ASC 815-40-15 under which the Warrants do not meet the
criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Warrants as liabilities at
their fair value and adjust the Warrants to fair value at each reporting period. This liability is subject to re-measurement at each
balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. The Private Warrants and
the Public Warrants for periods where no observable traded price was available are valued using a lattice model, specifically a binomial
lattice model incorporating the Cox-Ross-Rubenstein methodology. For periods subsequent to the detachment of the Public Warrants from
the Units, the Public Warrant quoted market price was used as the fair value as of each relevant date.
GOLDEN
ARROW MERGER CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
MARCH
31, 2021
(Unaudited)
Income
Taxes
The
Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax
assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements
carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered
or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included
the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be
realized. As of March 31, 2021, the Company had a deferred tax asset of approximately $16,000, which had a full valuation allowance recorded
against it.
The
Company’s current taxable income primarily consists of interest earned on the Trust Account. The Company’s general and administrative
costs are generally considered start-up costs and are not currently deductible. The change in fair value of the warrant liability is
a permanent difference. During the three months ended March 31, 2021, the Company recorded no income tax expense. The Company’s
effective tax rate for the three months ended March 31 was approximately 0%, which differs from the expected income tax rate due to the
start-up costs (discussed above) which are not currently deductible.
ASC
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 March 31, 2021.
The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation
from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
Net
income (Loss) per Common Share
Net
income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the
period. The Company has not considered the effect of warrants sold in the Initial Public Offering and private placement to purchase 12,833,333
shares of Class A common stock 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
Company’s statement of operations includes a presentation of income (loss) per share for common shares subject to possible redemption
in a manner similar to the two-class method of income (loss) per share. Net income per common share, basic and diluted, for Class A redeemable
common stock is calculated by dividing the interest income earned on the Trust Account, less any applicable franchise and income taxes,
by the weighted average number of Class A redeemable common stock outstanding since original issuance. Net loss per share, basic and
diluted, for Class A and Class B non-redeemable common stock is calculated by dividing the net loss, adjusted for income attributable
to Class A redeemable common stock, net of applicable franchise and income taxes, by the weighted average number of Class A and Class
B non-redeemable common stock outstanding for the period. Class A and Class B non-redeemable common stock includes the Founder Shares
as these shares do not have any redemption features and do not participate in the income earned on the Trust Account.
GOLDEN
ARROW MERGER CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
MARCH
31, 2021
(Unaudited)
The
following table reflects the calculation of basic and diluted net income (loss) per common share (in dollars, except per share amounts):
|
|
Three
Months
Ended
March 31,
2021
|
|
Class A common stock subject
to possible redemption
|
|
|
|
Numerator: Earnings allocable to Class A common
stock subject to possible redemption
|
|
|
|
Interest earned on marketable
securities held in Trust Account
|
|
$
|
—
|
|
Net
income attributable
|
|
$
|
—
|
|
Denominator:
Weighted Average Class A common stock subject to possible redemption
|
|
|
|
|
Basic
and diluted weighted average shares outstanding, Class A common stock subject to possible redemption
|
|
|
25,000,000
|
|
Basic
and diluted net income per share, Class A common stock subject to possible redemption
|
|
$
|
0.00
|
|
|
|
|
|
|
Non-Redeemable Common Stock
|
|
|
|
|
Numerator: Net Loss minus Net Earnings
|
|
|
|
|
Net income
|
|
$
|
3,420,721
|
|
Less:
Net income allocable to Class A common stock subject to possible redemption
|
|
|
—
|
|
Non-Redeemable
Net Loss
|
|
$
|
3,420,721
|
|
Denominator: Weighted Average Non-redeemable
Common stock
|
|
|
|
|
Basic
and diluted weighted average shares outstanding, Non-redeemable Common stock
|
|
|
6,250,000
|
|
Basic and diluted net
income per share, Non-redeemable Common stock
|
|
$
|
0.55
|
|
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 Coverage 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
fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value
Measurement,” approximates the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their
short-term nature.
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.
GOLDEN
ARROW MERGER CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
MARCH
31, 2021
(Unaudited)
NOTE
4. PUBLIC OFFERING
Pursuant to the Initial Public Offering, the Company
sold 25,000,000 Units, at a price of $10.00 per Unit. Each Unit consists of one share of Class A common stock and one-third of one
redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of Class A
common stock at a price of $11.50 per share, subject to adjustment (see Note 9). On May 6, 2021, the Company sold 3,750,000 additional
Units (the “Additional Units”) at $10.00 per Additional Unit. The Additional Units were identical to the Units sold pursuant
to the Initial Public Offering.
NOTE
5. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial
Public Offering, the Sponsor purchased an aggregate of 4,500,000 Private Placement Warrants, at a price of $1.50 per warrant, or $6,750,000
in the aggregate. On May 6, 2021, simultaneously with the sale of the Additonal Units, the Company consummated the sale of an additional
500,000 Private Placement Warrants, at a price of $1.50 per Private Placement Warrant, or $750,000 in the aggregate, if the over-allotment
option is exercised in full or in part by the underwriters. Each Private Placement Warrant is exercisable to purchase one share of Class
A common stock at an exercise price of $11.50 per share, subject to adjustment (see Note 7). A portion of the proceeds from the Private
Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete
a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants held in the Trust Account
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.
NOTE
6. RELATED PARTY TRANSACTIONS
Founder
Shares
In January 2021, the Sponsor paid $25,000 to cover
certain of the Company’s offering costs in consideration for the issuance of 7,187,500 shares of the Company’s Class B common
stock (the “Founder Shares”). The Founder Shares include an aggregate of up to 937,500 shares subject to forfeiture to the
extent that the underwriters’ over-allotment is not exercised in full or in part, so that the number of Founder Shares will equal,
on an as-converted basis, approximately 20% of the Company’s issued and outstanding common stock after the Initial Public Offering.
As a result of the underwriters’ full exercise of their over-allotment option on May 6, 2021, no shares remain subject to forfeiture.
The
Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur
of: (A) one year after the completion of a Business Combination and (B) subsequent to a Business Combination, (x) if the last
reported sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations,
reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days
after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange or other
similar transaction that results in all of the Public Stockholders having the right to exchange their shares of common stock for cash,
securities or other property.
Promissory
Note — Related Party
On
January 8, 2021, the Sponsor issued an unsecured promissory note to the Company (the “Promissory Note”), pursuant to which
the Company could borrow up to an aggregate principal amount of $200,000. The Promissory Note is non-interest bearing and payable on
the earlier of (i) June 30, 2021 or (ii) the consummation of the Initial Public Offering. As of March 31, 2021, there was $141,367
outstanding under the Promissory Note, which is currently due on demand.
Working
Capital Loans
In
addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor, an affiliate of the Sponsor,
or certain of the Company’s officers and directors or their affiliates may, but are not obligated to, loan the Company funds as
may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working
Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid
only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion
of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used
to repay the Working Capital Loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without
interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the
post Business Combination entity. The warrants would be identical to the Private Placement Warrants. 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, 2021, no Working Capital Loans were outstanding.
GOLDEN
ARROW MERGER CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
MARCH
31, 2021
(Unaudited)
NOTE
7. COMMITMENTS
Risks
and Uncertainties
Management
continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could
have a negative effect on the Company’s financial position, results of its operations, and/or search for a target company, the
specific impact is not readily determinable as of the date of this financial statement. The financial statement does not include any
adjustments that might result from the outcome of this uncertainty.
Registration
Rights
Pursuance
to a registration rights agreement entered into on March 16, 2021, the holders of the Founder Shares, Private Placement Warrants and
warrants that may be issued upon conversion of Working Capital Loans (and any Class A common stock issuable upon the exercise of
the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder
Shares) have registration rights to require the Company to register a sale of any of the securities held by them. The holders of these
securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition,
the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the
completion of a Business Combination. The registration rights agreement does not contain liquidated damages or other cash settlement
provisions resulting from delays in registering the securities. 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 from the date of Initial Public Offering to purchase up to 3,750,000 additional Units
to cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions.
The
underwriters are entitled to a deferred fee of $0.35 per Unit, or $8,750,000 in the aggregate (or $10,062,500 in the aggregate if the
underwriters’ over-allotment option is exercised in full). The deferred fee will become payable to the underwriters from the amounts
held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting
agreement.
NOTE
8. STOCKHOLDERS’ EQUITY
Preferred
Stock — The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with
such designation, rights and preferences as may be determined from time to time by the Company’s board of directors. At March 31,
2021, there were no shares of preferred stock issued or outstanding.
Class A
Common Stock — The Company is authorized to issue 200,000,000 shares of Class A common stock with a par value of $0.0001
per share. Holders of Class A common stock are entitled to one vote for each share. At March 31, 2021, there were 2,140,276 shares
of Class A common stock issued and outstanding, excluding 22,859,724 shares of Class A common stock subject to possible redemption.
Class B Common Stock —
The Company is authorized to issue 20,000,000 shares of Class B common stock with a par value of $0.0001 per share. Holders of Class B
common stock are entitled to one vote for each share. At March 31, 2021, there were 7,187,500 shares of common stock issued and outstanding,
of which an aggregate of up to 937,500 shares of Class B common stock are subject to forfeiture to the extent that the underwriters’
over-allotment option is not exercised in full or in part so that the number of Founder Shares will equal 20% of the Company’s issued
and outstanding common stock after the Initial Public Offering. As a result of the underwriters’ full exercise of their over-allotment
option on May 6, 2021, no shares remain subject to forfeiture.
Holders
of Class A common stock and holders of Class B common stock will vote together as a single class on all matters submitted to
a vote of stockholders except as otherwise required by law.
The
shares of Class B common stock will automatically convert into shares of Class A common stock at the time of a Business Combination,
or earlier at the option of the holder, on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A
common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in the Proposed Public Offering
and related to the closing of a Business Combination, the ratio at which shares of Class B common stock shall convert into shares
of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock
agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A
common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis,
20% of the total number of all shares of common stock outstanding upon completion of the Proposed Public Offering plus all shares of
Class A common stock and equity-linked securities issued or deemed issued in connection with a Business Combination (net of the
number of shares of Class A common stock redeemed in connection with a Business Combination), excluding any shares or equity-linked
securities issued, or to be issued, to any seller in a Business Combination.
GOLDEN
ARROW MERGER CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
MARCH
31, 2021
(Unaudited)
NOTE
9. WARRANTS
Warrants
— As of March 31, 2021, there were 8,333,333 Public Warrants outstanding. Public Warrants may only be exercised for a whole
number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants
will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing
of the Initial Public Offering. The Public Warrants will expire five years after the completion of a Business Combination or earlier
upon redemption or liquidation.
The
Company will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have
no obligation to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of the shares
of Class A common stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares
of Class A common stock is available, subject to the Company satisfying its obligations with respect to registration. 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.
The
Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of a Business Combination,
the Company will use its commercially reasonable efforts to file with the SEC, and within 60 business days following a Business Combination
to have declared effective, a registration statement covering the issuance of the shares of Class A common stock issuable upon exercise
of the warrants and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire
or are redeemed. Notwithstanding the above, if the Class A common stock is at the time of any exercise of a warrant not listed on
a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1)
of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless
basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will
not be required to file or maintain in effect a registration statement, but will use its commercially reasonable efforts to register
or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
Redemption
of warrants when the price per share of Class A common stock equals or exceeds $18.00. Once the warrants become exercisable,
the Company may redeem the outstanding 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, or 30 day redemption period,
to each warrant holder; and
|
|
●
|
if,
and only if, the last reported sale price of the Class A common stock equals or exceeds $18.00
per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations
and the like) for any 20 trading days within a 30-trading day period ending on the third
trading day prior to the date on which the Company sends the notice of redemption to the
warrant holders.
|
If
and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register
or qualify the underlying securities for sale under all applicable state securities laws.
GOLDEN
ARROW MERGER CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
MARCH
31, 2021
(Unaudited)
Redemption
of warrants when the price per share of Class A common stock equals or exceeds $10.00. Commencing
ninety days after 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 provided that holders will be able to exercise their warrants
on a cashless basis prior to redemption and receive that number of shares of Class A
common stock based on the redemption date and the fair market value of the Class A common
stock;
|
|
●
|
upon
a minimum of 30 days’ prior written notice of redemption;
|
|
●
|
if,
and only if, the last reported sale price of the Class A common stock equals or exceeds
$10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations
and the like) on the trading day prior to the date on which the Company sends the notice
of redemption to the warrant holders;
|
|
●
|
if,
and only if, the Private Placement Warrants are also concurrently called for redemption on
the same terms as the outstanding Public Warrants, as described above; and
|
|
●
|
if,
and only if, there is an effective registration statement covering the issuance of the shares
of Class A common stock issuable upon exercise of the warrants and a current prospectus
relating thereto available throughout the 30-day period after written notice of redemption
is given.
|
If
the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that
wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise
price and number of Class A common stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances
including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However,
except as described below, the Public Warrants will not be adjusted for issuances of common stock at a price below its exercise price.
Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a
Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public
Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s
assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.
In
addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising
purposes in connection with the closing of its Business Combination at an issue price or effective issue price of less than $9.20 per
share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s
board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares
held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate
gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding
of the Company’s Business Combination on the date of the completion of such Business Combination (net of redemptions), and (z) the
volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day
after the day on which the Company consummates its Business Combination (such price, the “Market Value”) is below $9.20 per
share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value
and the Newly Issued Price and the $10.00 and $18.00 per share redemption trigger price described above 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.
At
March 31, 2021, there were 4,500,000 Private Placement Warrants outstanding. The Private Placement Warrants are identical to the Public
Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A common
stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or saleable until 30 days
after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will
be exercisable on a cashless basis and be non-redeemable, except as described above, so long as they are held by the initial purchasers
or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted
transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the
Public Warrants.
GOLDEN
ARROW MERGER CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
MARCH
31, 2021
(Unaudited)
NOTE
10. FAIR VALUE MEASUREMENTS
The
Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each
reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
The
fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would
have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction
between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company
seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable
inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is
used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and
liabilities:
|
Level
|
1:
Quoted prices in active markets for identical assets or liabilities. An active market for
an asset or liability is a market in which transactions for the asset or liability occur
with sufficient frequency and volume to provide pricing information on an ongoing basis.
|
|
Level
|
2:
Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices
in active markets for similar assets or liabilities and quoted prices for identical assets
or liabilities in markets that are not active.
|
|
Level
|
3:
Unobservable inputs based on our assessment of the assumptions that market participants would
use in pricing the asset or liability.
|
At
March 31, 2021, assets held in the Trust Account were comprised of $250,000,000 in money market funds which are primarily invested in
U.S. Treasury securities. During the three months ended March 31, 2021, the Company did not withdraw any interest income from the Trust
Account.
GOLDEN
ARROW MERGER CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
MARCH
31, 2021
(Unaudited)
The
following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring
basis at March 31, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
Description
|
|
Level
|
|
March 31,
2021
|
|
Assets:
|
|
|
|
|
|
Investments held in
Trust Account
|
|
1
|
|
$
|
250,000,000
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
Warrant Liability – Public Warrants
|
|
3
|
|
$
|
5,750,000
|
|
Warrant Liability – Private Placement
Warrants
|
|
3
|
|
$
|
3,105,000
|
|
The
Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on our accompanying
March 31, 2021 condensed balance sheet. The warrant liabilities are measured at fair value at inception and on a recurring basis, with
changes in fair value presented within change in fair value of warrant liabilities in the condensed statement of operations.
The Company utilizes a lattice model,
specifically a binomial lattice model incorporating the Cox-Ross-Rubenstein methodology, to value the 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 binomial options pricing model are assumptions related to expected share-price volatility, expected
life, risk-free interest rate and dividend yield. The Company estimates the volatility of its shares of common stock based on historical
volatility 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
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.
The key inputs for the binomial lattice model
as of March 19, 2021 (Initial Measurement and March 31, 2021 were as follows:
|
|
At
March 19,
2021
(Initial
Measurement)
|
|
|
As of
March 31,
2021
|
|
Stock price
|
|
$
|
9.67
|
|
|
$
|
9.72
|
|
Strike price
|
|
$
|
11.50
|
|
|
$
|
11.50
|
|
Term (in years)
|
|
|
5.0
|
|
|
|
5.0
|
|
Volatility
|
|
|
16.5
|
%
|
|
|
12.6
|
%
|
Risk-free rate
|
|
|
0.99
|
%
|
|
|
1.00
|
%
|
Dividend yield
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
GOLDEN
ARROW MERGER CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
MARCH
31, 2021
(Unaudited)
The
following table presents the changes in the fair value of warrant liabilities:
|
|
Private
Placement
|
|
|
Public
|
|
|
Warrant
Liabilities
|
|
Fair value as of January 1, 2021
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Initial
measurement on March 19th, 2021
|
|
|
4,500,000
|
|
|
|
8,333,333
|
|
|
|
12,833,333
|
|
Change
in valuation inputs or other assumptions
|
|
|
(1,395,000
|
)
|
|
|
(2,583,333
|
)
|
|
|
(3,978,333
|
)
|
Fair value as of March
31, 2021
|
|
|
3,105,000
|
|
|
|
5,750,000
|
|
|
|
8,855,000
|
|
There
were no transfers between Levels 1, 2 or 3 during the three months ended March 31, 2021.
NOTE
11. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions
that occurred after the balance sheet date up to the date that the condensed financial statements were issued. Based upon this review,
except as noted below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed
financial statements.
On May 3, 2021, the underwriters notified the
Company of their exercise of the over-allotment option in full and, on May 6, 2021, the underwriters purchased 3,750,000 additional Units
(the “Additional Units”) at $10.00 per Additional Unit upon the closing of the over-allotment option, generating gross proceeds
of $37,500,000.
Simultaneously with the sale of the Additional
Units, the Company consummated the sale of an additional 500,000 Private Placement Warrants (the “Additional Private Placement”)
to the Sponsor at a price of $1.50 per additional Private Placement Warrant (the “Additional Private Placement Warrants”),
generating gross proceeds of $750,000.
A total of $37,500,000 of the net proceeds from
the sale of the Additional Units and the Additional Private Placement Warrants was placed in a trust account established for the benefit
of the Company’s public stockholders (the “Trust Account”), with Continental Stock Transfer & Trust Company acting
as trustee, bringing the aggregate proceeds held in the Trust Account to $285,000,000.