NOTES TO UNAUDITED CONDENSED
FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF ORGANIZATION, BUSINESS
OPERATIONS
NextGen Acquisition Corp. II (the “Company”)
is a blank check company incorporated as a Cayman Islands exempted company on January 11, 2021. The Company was incorporated for the
purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with
one or more businesses that the Company has not yet identified (“Business Combination”).
As of March 31, 2021, the Company had not yet
commenced operations. All activity for the period from January 11, 2021 (inception) through March 31, 2021 relates to the Company’s
formation and the initial public offering (the “Initial Public Offering”), which is described below. The Company will not
generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate
non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Initial Public Offering.
The Company’s sponsor is NextGen Sponsor
II LLC, a Cayman Islands limited liability company (the “Sponsor”). The registration statement for the Company’s Initial
Public Offering was declared effective on March 22, 2021. On March 25, 2021, the Company consummated its Initial Public Offering of 35,000,000
units (the “Units” and, with respect to the Class A ordinary shares included in the Units being offered, the “Public
Shares”), at $10.00 per Unit, generating gross proceeds of $350.0 million (see Note 3), and incurring offering costs of approximately
$19.7 million, of which approximately $12.3 million was for deferred underwriting commissions (see Note 6). The Company granted the underwriters
a 45-day option to purchase up to an additional 5,250,000 Units at the Initial Public Offering price to cover over-allotments, if any.
On April 9, 2021, the Underwriters partially exercised the over-allotment option and on April 13, 2021, purchased an
additional 3,259,457 Units from the Company (the “Over-Allotment Units”), generating gross proceeds of $32,594,570, and forfeited
the remainder of the option.
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the private placement (“Private Placement”) of 6,333,333 warrants (each, a “Private
Placement Warrant” and collectively, the “Private Placement Warrants”), at a price of $1.50 per Private Placement Warrant
with the Sponsor, generating gross proceeds of $9.5 million (see Note 4). In connection with the Underwriters’ partial exercise
of their over-allotment option, the Sponsor purchased an additional 434,594 Private Placement Warrants (the “Additional Private
Placement Warrants”), generating gross proceeds to the Company of approximately $651,891.
Upon the closing of the Initial Public Offering
and the Private Placement, $350.0 million ($10.00 per Unit) of the net proceeds of the Initial Public Offering and certain of the proceeds
of the Private Placement were placed in a trust account (“Trust Account”) with Continental Stock Transfer & Trust Company
acting as trustee and invested in United States government treasury bills with a maturity of 185 days or less or in money market funds
investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended
(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 Trust Account as described below. In connection with the closing and sale of the Over-Allotment Units
and the Additional Private Placement Warrants (together, the “Over-Allotment Closing”), a total of $32,594,570 in proceeds
from the Over-Allotment Closing (which amount includes $1,140,810 of the Underwriters’ deferred discount) was placed in the Trust
Account.
The Company’s management has broad discretion
with respect to the specific application of the net proceeds of its 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. The Company’s
initial Business Combination must be 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 the amount of any deferred underwriting commissions and taxes payable on the income
earned on the Trust Account) at the time the Company signs a definitive agreement in connection with the initial Business Combination.
However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding
voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register
as an investment company under the Investment Company Act.
NEXTGEN ACQUISITION CORP.
II
NOTES TO UNAUDITED CONDENSED
FINANCIAL STATEMENTS
The Company will provide its holders of 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 shareholder meeting called to approve the Business Combination or (ii) by means
of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender
offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares for
a pro rata portion of the amount then in the Trust Account ($10.00 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 Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the
underwriters (as discussed in Note 6). These Public Shares were recorded at a redemption value and classified as temporary equity, in
accordance with Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.”
In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon
such consummation of a Business Combination and a majority of the shares voted are voted in favor of the Business Combination. If a shareholder
vote is not required by law and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company
will, pursuant to the amended and restated memorandum and articles of association which will be adopted by the Company upon the consummation
of the Initial Public Offering (the “Amended and Restated Memorandum and Articles of Association”), conduct the redemptions
pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (the “SEC”), and file tender offer documents
with the SEC prior to completing a Business Combination. If, however, a shareholder approval of the transactions is required by law,
or the Company decides to obtain shareholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction
with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each Public Shareholder
may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction. If the Company seeks
shareholder approval in connection with a Business Combination, the holders of the Founder Shares prior to this Initial Public Offering
(the “Initial Shareholders”) agreed to vote their Founder Shares (as defined in Note 5) and any Public Shares purchased during
or after the Initial Public Offering in favor of a Business Combination. In addition, the Initial Shareholders agreed to waive their
redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of a Business Combination.
In addition, the Company agreed not to enter into a definitive agreement regarding an initial Business Combination without the prior
consent of the Sponsor.
Notwithstanding the foregoing, the Company’s
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 redeeming its shares with respect to more
than an aggregate of 15% or more of the Class A ordinary shares sold in the Initial Public Offering, without the prior consent of the
Company.
The Company’s Sponsor, executive officers
and directors agreed not to propose an amendment to the Company’s Amended and Restated Memorandum and Articles of Association that
would affect the substance or timing of the Company’s obligation to provide for the redemption of its Public Shares in connection
with a Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the
Company provides the Public Shareholders with the opportunity to redeem their Class A ordinary shares in conjunction with any such amendment.
If the Company is unable to complete a Business
Combination within 24 months from the closing of the Initial Public Offering, or March 25, 2023 (the “Combination Period”),
the Company will (i) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than
10 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 (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net
of taxes payable), divided by the number of then issued and outstanding Public Shares, which redemption will completely extinguish Public
Shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any); and (3) as promptly
as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the board of directors, liquidate
and dissolve, subject in each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and
the requirements of other applicable law.
NEXTGEN ACQUISITION CORP.
II
NOTES TO UNAUDITED CONDENSED
FINANCIAL STATEMENTS
The Initial Shareholders agreed to waive their
liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination
Period. However, if the Initial Shareholders should acquire Public Shares in or after the Initial Public Offering, they will be entitled
to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination
within the Combination Period. The underwriters 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 in 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 Company’s
Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets remaining available
for distribution (including Trust Account assets) will be only $10.00 per share initially held in the Trust Account. In order to protect
the amounts held in the Trust Account, 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 other similar agreement or business combination 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 share due to reductions in the value of the trust
assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business
who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will
it apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities,
including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). 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 vendors, service providers (except the Company’s independent registered public accounting
firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving
any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Liquidity and management’s
plan
Prior to the completion
of the Initial Public Offering, the Company lacked the liquidity it needed to sustain operations for a reasonable period or time, which
is considered to be one year from the issuance date of the financial statement. The Company has since completed its Initial Public Offering
at which time capital in excess of the funds deposited in the trust and/or used to fund offering expenses was released to the Company
for general working capital purposes. Accordingly, management has since reevaluated the Company’s liquidity and financial condition
and determined that sufficient capital exists to sustain operations one year from the date this financial statement is issued and therefore
substantial doubt has been alleviated.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES AND BASIS OF PRESENTATION
Basis of presentation
The accompanying unaudited condensed financial
statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America
(“U.S. GAAP”) for financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include
all of the information and footnotes required by U.S. GAAP. In the opinion of management, the unaudited condensed financial statements
reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results
for the periods presented. Operating results for the period from January 11, 2021 (Inception) through March 31, 2021 are not necessarily
indicative of the results that may be expected through December 31, 2021 or any future period.
Emerging growth company
As an emerging growth company, the Company 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 auditor 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.
NEXTGEN ACQUISITION CORP.
II
NOTES TO UNAUDITED CONDENSED
FINANCIAL STATEMENTS
Further, Section 102(b)(1) of the JOBS Act exempts
emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an
emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging
growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition
period which means that when a standard is issued or revised and it has different application dates for public or private companies,
the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised
standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging
growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because
of the potential differences in accounting standards used. This may make comparison of the Company’s financial statement 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 financial statements in conformity
with U.S. 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 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.
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, and investments held in Trust Account. At March 31, 2021, the Company had not experienced
losses on this account and management believes the Company is not exposed to significant risks on such account.
Investments held in trust account
As of March 31, 2021, the Company had approximately
$350.0 million invested in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act
which invest only in direct U.S. government treasury obligations held in the Trust Account.
Fair value of financial instruments
Fair value is defined as the price that would
be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement
date. U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy
gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and
the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
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Level 1, defined
as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
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Level 2, defined
as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for
similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
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Level 3, defined
as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such
as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
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NEXTGEN ACQUISITION CORP.
II
NOTES TO UNAUDITED CONDENSED
FINANCIAL STATEMENTS
In some circumstances, the inputs used to measure
fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is
categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
As of March 31, 2021, the carrying values of
cash, prepaid expenses, accounts payable, and accrued expenses approximate their fair values due to the short-term nature of the instruments.
Offering costs associated with the initial Public Offering
Offering costs consisted of legal, accounting,
underwriting fees and other costs incurred through the Initial Public Offering that were directly related to the Initial Public Offering.
Offering costs are allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value
basis, compared to total proceeds received. Offering costs associated with warrant liabilities are expensed as incurred, presented as
non-operating expenses in the statements of operations. Offering costs associated with the Class A ordinary share were charged to shareholders’
equity upon the completion of the Initial Public Offering.
Class A Ordinary Shares subject to possible
redemption
The Company accounts
for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing
Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption (if any) are classified as liability instruments
and are measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A ordinary shares that feature redemption
rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within
the Company’s control) are classified as temporary equity. At all other times, Class A ordinary shares are classified as shareholders’
equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s
control and subject to the occurrence of uncertain future events. Accordingly, as of March 31, 2021, 31,585,427 Class A ordinary shares
subject to possible redemption are presented as temporary equity, outside of the shareholders’ equity section of the Company’s
balance sheet.
Net loss per ordinary share
We comply with accounting
and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net loss per share is computed by dividing
net loss by the weighted average number of shares of ordinary shares outstanding during the period excluding ordinary shares subject
to forfeiture. An aggregate of 31,585,427 Class A ordinary shares subject to possible redemption on March 31, 2021 has been excluded
from the calculation of basic loss per ordinary share, since such shares, if redeemed, only participate in their pro rata share of the
trust earnings. We have not considered the effect of the warrants sold in the Initial Public Offering and Private Placement to purchase
an aggregate of 13,333,333 ordinary shares in the calculation of diluted loss per share, since the exercise of the warrants are contingent
upon the occurrence of future events. As a result, diluted net loss per ordinary share is the same as basic net loss per ordinary share
for the period presented.
We apply the two-class
method in calculating income (loss) per ordinary share. Net income (loss) per ordinary share, basic and diluted for Class A ordinary
shares subject to possible redemption is calculated by dividing the proportionate share of income or loss on Investment held by the Trust
Account, net of applicable franchise and income taxes, by the weighted average number of shares of Class A ordinary shares subject to
possible redemption outstanding since original issuance.
Net income (loss) per
ordinary share, basic and diluted for non-redeemable ordinary share is calculated by dividing net income (loss) less income attributable
to Class A ordinary shares subject to possible redemption by the weighted average number of shares of non-redeemable ordinary shares
outstanding for the period presented.
NEXTGEN ACQUISITION CORP.
II
NOTES TO UNAUDITED CONDENSED
FINANCIAL STATEMENTS
Income taxes
The Company complies with the accounting and
reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting
and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement
and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates
applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when
necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC Topic 740 prescribes a recognition threshold
and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in
a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing
authorities. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. 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.
There is currently no taxation imposed on income
by the Government of the Cayman Islands. In accordance with Cayman federal income tax regulations, income taxes are not levied on the
Company. Consequently, income taxes are not reflected in the Company’s financial statement. The Company’s management does
not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
Derivative warrant liabilities
The Company does not use derivative instruments
to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including
issued share purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives,
pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded
as liabilities or as equity, is re-assessed at the end of each reporting period.
The Company accounts for its 13,333,333 warrants
issued in connection with its Initial Public Offering (7,000,000) and Private Placement (6,333,333) as derivative warrant 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 Company’s statements of operations. The fair value of warrants issued by the
Company in connection with the Public Offering and Private Placement has been estimated using Monte-Carlo simulations at each measurement
date.
Recent accounting pronouncements
The Company’s management does not believe
that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the
accompanying financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
On March 25, 2021, the Company consummated its
Initial Public Offering of 35,000,000 Units, at $10.00 per Unit, generating gross proceeds of $350.0 million, and incurring offering
costs of approximately $19.7 million, of which approximately $12.3 million was for deferred underwriting commissions.
On April 9, 2021,
the Underwriters partially exercised the over-allotment option and on April 13, 2021, purchased an additional 3,259,457 Units from
the Company, generating gross proceeds of $32,594,570, and forfeited the remainder of the option.
Each Unit consists of one Class A ordinary share
and one-fifth of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one
Class A ordinary share at an exercise price of $11.50 per share, subject to adjustment (see Note 6).
NEXTGEN ACQUISITION CORP.
II
NOTES TO UNAUDITED CONDENSED
FINANCIAL STATEMENTS
NOTE 4. RELATED PARTY TRANSACTIONS
Founder Shares
On January 18, 2021, the Sponsor subscribed for
an aggregate of 11,500,000 Class B ordinary shares, par value $0.0001 per share (the “Founder Shares”), for an aggregate
purchase price of $25,000. On March 22, 2021 the Sponsor effected a surrender of 1,437,500 Class B ordinary shares to the Company for
no consideration, resulting in a decrease in the total number of Class B ordinary shares outstanding from 11,500,000 to 10,062,500. The
holders of the Founder Shares agreed to forfeit up to an aggregate of 1,312,500 Founder Shares, on a pro rata basis, to the extent that
the option to purchase additional Units is not exercised in full by the underwriters. On April 13, 2021, the underwriters partially exercised
the over-allotment, thus, 497,636 Class B ordinary shares were forfeited.
The Initial Shareholders agreed not to transfer,
assign or sell any of their Founder Shares until the earlier to occur of (A) one year after the completion of the initial Business Combination;
and (B) subsequent to the initial Business Combination (x) if the last reported sale price of Class A ordinary shares equals or exceeds
$12.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and
the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination
or (y) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that
results in all of the Public Shareholders having the right to exchange their ordinary shares for cash, securities or other property.
Private Placement Warrants
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the Private Placement of 6,333,333 Private Placement Warrants, at a price of $1.50 per Private
Placement Warrant with the Sponsor, generating gross proceeds of $9.5 million. In connection with the Underwriters’ partial exercise
of their over-allotment option, the Sponsor purchased an additional 434,594 Private Placement Warrants, generating gross proceeds to
the Company of approximately $651,891.
Each whole Private Placement Warrant is exercisable
for one whole share of Class A ordinary shares at a price of $11.50 per share. If the Company does not complete a Business Combination
within the Combination Period, the Private Placement Warrants will expire worthless. The Private Placement Warrants will be non-redeemable
for cash and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees.
The Sponsor and the Company’s officers
and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants until 30
days after the completion of the initial Business Combination.
Related Party Loans
On January 18, 2021, the Sponsor agreed to loan
the Company up to $300,000 pursuant to a promissory note (the “Note”). The Note was non-interest bearing, unsecured and due
upon the closing of the Initial Public Offering. The Company borrowed $160,000 under the Note and repaid the Note in full upon closing
of the Initial Public Offering.
In addition, in order to finance transaction
costs in connection with a Business Combination, the Sponsor, members of the Company’s founding team or any of 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 $1.5 million of such Working Capital Loans may
be convertible into warrants of the post Business Combination entity at a price of $1.50 per warrant. 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, the Company had no borrowings under the Working Capital
Loans.
NEXTGEN ACQUISITION CORP.
II
NOTES TO UNAUDITED CONDENSED
FINANCIAL STATEMENTS
Administrative Services Agreement
Commencing on the date that the Company’s
securities were first listed on Nasdaq, the Company agreed to pay the Sponsor a total of $20,000 per month for office space, administrative,
financial and support services. Upon the Company’s liquidation, the Company will cease paying these monthly fees. The Company incurred
approximately $20,000 in administrative expenses under the agreement, which is recognized in the accompanying unaudited condensed statements
of operations for the three months ended March 31, 2021 within General and administrative expenses – related party. As of March
31, 2021 there was $0 in accounts payable – related party outstanding, as reflected in the accompanying unaudited condensed balance
sheets.
In addition, the Sponsor, officers and directors,
or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on the
Company’s behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations.
The audit committee will review on a quarterly basis all payments that were made by the Company to the Sponsor, directors, officers or
any of their respective affiliates.
NOTE 5. COMMITMENTS AND CONTINGENCIES
Registration and Shareholder Rights
The holders of the Founder Shares, Private Placement
Warrants and any warrants that may be issued upon conversion of Working Capital Loans (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 and upon conversion of
the Founder Shares) are entitled to registration rights pursuant to a registration and shareholder rights agreement signed upon the effective
date of the Initial Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands,
that the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect
to registration statements filed subsequent to the completion of the initial Business Combination. The Company will bear the expenses
incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriters were entitled to an underwriting
discount of $0.20 per unit, or $7.0 million in the aggregate, paid upon the closing of the Initial Public Offering. In addition, $0.35
per unit, or approximately $12.3 million in the aggregate will be payable to the underwriters for deferred underwriting commissions.
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.
In connection with the Over-Allotment Closing
on April 13, 2021, the underwriters were entitled to an additional fee of $651,891 paid upon closing, and $1,140,810 in deferred underwriting
commissions.
Risks and Uncertainties
Management continues to evaluate the impact of
the COVID-19 pandemic and has concluded that, while it is reasonably possible that the virus could have a negative effect on the Company’s
financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as
of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome
of this uncertainty.
NEXTGEN ACQUISITION CORP.
II
NOTES TO UNAUDITED CONDENSED
FINANCIAL STATEMENTS
NOTE
6. SHAREHOLDERS’ EQUITY
Preference Shares — The Company
is authorized to issue 5,000,000 preference shares with a par value of $0.0001 per share. As of March 31, 2021, there were no preference
shares issued or outstanding.
Class A Ordinary Shares —
The Company is authorized to issue 500,000,000 Class A ordinary shares with a par value of $0.0001 per share. Holders of the Company’s
Class A ordinary shares are entitled to one vote for each share. As of March 31, 2021, there were 3,414,573 Class A ordinary shares issued
and outstanding, excluding 31,585,427 Class A ordinary shares subject to possible redemption.
Class B Ordinary Shares —
The Company is authorized to issue 50,000,000 Class B ordinary shares with a par value of $0.0001 per share. On January 18, 2021, the
Company issued 11,500,000 Class B ordinary shares. On March 22, 2021 the Sponsor effected a surrender of 1,437,500 Class B ordinary shares
to the Company for no consideration, resulting in a decrease in the total number of Class B ordinary shares outstanding from 11,500,000
to 10,062,500. On April 13, 2021, the underwriters partially exercised the over-allotment, thus, 497,636 Class B ordinary shares were
forfeited.
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 shareholders, except as
required by law. Each ordinary share will have one vote on all such matters.
The Class B ordinary shares will automatically
convert into Class A ordinary shares at the time of the initial Business Combination, or earlier at the option of the holder, on a one-for-one
basis, subject to adjustment for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and
the like, and subject to further adjustment as provided herein. In the case that additional Class A ordinary shares, or equity-linked
securities, are issued or deemed issued in excess of the amounts issued in the Initial Public Offering and related to the closing of
the initial Business Combination, the ratio at which the Class B ordinary shares will convert into Class A ordinary shares will be adjusted
(unless the holders of a majority of the issued and outstanding Class B ordinary shares agree to waive such anti-dilution adjustment
with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class
B ordinary shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of all ordinary shares issued and outstanding
upon the completion of the Initial Public Offering plus all Class A ordinary shares and equity-linked securities issued or deemed issued
in connection with the initial Business Combination, excluding any shares or equity-linked securities issued, or to be issued, to any
seller in the initial Business Combination. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate
of less than one to one.
NOTE 7. WARRANTS
Public Warrants may only be exercised for a whole
number of shares. No fractional Public Warrants will be issued upon separation of the Units and only whole Public Warrants will trade.
The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months
from the closing of the Initial Public Offering; provided in each case that the Company has an effective registration statement under
the Securities Act covering the issuance of 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 the Company permits holders to exercise their warrants on a cashless basis under the
circumstances specified in the warrant agreement). The Company agreed that as soon as practicable, but in no event later than 15 business
days after the closing of the initial Business Combination, the Company will use its commercially reasonable efforts to file with the
SEC a registration statement covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants, and the Company
will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of the initial
Business Combination and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class
A ordinary shares until the warrants expire or are redeemed; provided that if the 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, requires 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.
NEXTGEN ACQUISITION CORP.
II
NOTES TO UNAUDITED CONDENSED
FINANCIAL STATEMENTS
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 ordinary share (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 its 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,
the $18.00 per share redemption trigger price described under “Redemption of warrants for cash when the price per Class A ordinary
share equals or exceeds $18.00” and “Redemption of warrants for Class A ordinary shares when the price per Class A ordinary
share equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and
the Newly Issued Price, and the $10.00 per share redemption trigger price described under the caption “Redemption of warrants when
the price per Class A ordinary share equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to the higher
of the Market Value and the Newly Issued Price.
The Private Placement Warrants are identical
to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class
A ordinary shares issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days
after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will
be non-redeemable so long as they are held by the initial purchasers or such purchasers’ permitted transferees. If the Private
Placement Warrants are held by someone other than the Initial Shareholders 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.
Redemption of warrants for cash when the price
per Class A ordinary share 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 not less than 30 days’ prior written notice
of redemption to each warrant holder; and
|
|
●
|
if, and only if, the last reported sale price of 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
the Company sends the notice of redemption to the warrant holders (the “Reference Value”) equals or exceeds $18.00 per
share (as adjusted for share sub-divisions, share dividends, rights issuances, consolidations, reorganizations, recapitalizations
and the like).
|
The Company will not redeem the warrants as described
above unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise
of the warrants is then effective and a current prospectus relating to those Class A ordinary shares is available throughout the 30-day
redemption period. If and when the warrants become redeemable by the Company, it may exercise its redemption right even if the Company
is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Redemption of warrants for Class A ordinary
shares when the price per Class A ordinary share equals or exceeds $10.00:
Once the warrants become exercisable, the Company
may redeem the outstanding warrants (including both Public Warrants and Private Placement Warrants):
|
●
|
in whole and not in part;
|
|
●
|
at $0.10 per warrant upon a minimum of 30 days’
prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption
and receive that number of shares determined by reference to an agreed table based on the redemption date and the “fair market
value” of Class A ordinary shares;
|
|
●
|
if, and only if, the Reference Value equals or exceeds
$10.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations
and the like); and
|
|
●
|
if the Reference Value is less than $18.00 per share
(as adjusted), the Private Placement Warrants must also concurrently be called for redemption on the same terms as the outstanding
Public Warrants, as described above.
|
NEXTGEN ACQUISITION CORP.
II
NOTES TO UNAUDITED CONDENSED
FINANCIAL STATEMENTS
The “fair market value” of Class
A ordinary shares shall mean the average reported last sale price of Class A ordinary shares for the 10 trading days ending on the third
trading day prior to the date on which the notice of redemption is sent to the holders of warrants.
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. FAIR VALUE MEASUREMENTS
The following table presents information about
the Company’s financial liabilities that are measured at fair value on a recurring basis as of March 31, 2021 and indicates the
fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value.
|
|
Fair Value Measured as of March
31, 2021
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative warrant liabilities - Public warrants
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
9,616,840
|
|
|
$
|
9,616,840
|
|
Derivative warrant liabilities - Private warrants
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
9,111,210
|
|
|
$
|
9,111,210
|
|
Total fair value
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
18,728,050
|
|
|
$
|
18,728,050
|
|
Transfers to/from Levels 1, 2, and 3 are recognized
at the end of the reporting period. There were no transfers between levels for the period from January 11, 2021 (inception) through March
31, 2021.
The Company utilizes a binomial Monte-Carlo simulation
to estimate the fair value of the warrants at each reporting period, with changes in fair value recognized in the statements of operations.
For the period from January 11, 2021 (inception) through March 31, 2021, the Company recognized a gain from a decrease in the fair value
of liabilities of approximately $314,000 presented as change in fair value of derivative warrant liabilities on the accompanying statements
of operations.
The change in the fair value of the derivative
warrant liabilities for the period from January 11, 2021 (inception) through March 31, 2021 is summarized as follows:
Derivative warrant liabilities at March 25,
2021
|
|
$
|
-
|
|
Issuance of Public
and Private Warrants
|
|
|
19,042,300
|
|
Derivative warrant liabilities at March 25,
2021
|
|
$
|
19,042,300
|
|
Change in fair value of derivative
warrant liabilities
|
|
|
(314,250
|
)
|
Derivative warrant liabilities at
March 31, 2021
|
|
$
|
18,728,050
|
|
The estimated fair value of the derivative warrant
liabilities – Public warrant and derivative warrant liabilities – Private warrant are determined using Level 3 inputs. Inherent
in a Monte-Carlo simulation are assumptions related to expected stock-price volatility, expected life and risk-free interest rate. The
Company estimates the volatility of its ordinary shares based on historical volatility of select peer companies 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.
NEXTGEN ACQUISITION CORP.
II
NOTES TO UNAUDITED CONDENSED
FINANCIAL STATEMENTS
The following table provides quantitative information
regarding Level 3 fair value measurements inputs as their measurement dates:
|
|
As of
March 25,
2021
|
|
|
As of
March 31,
2021
|
|
Exercise price
|
|
|
11.50
|
|
|
|
11.50
|
|
Stock Price
|
|
|
9.72
|
|
|
|
9.63
|
|
Option term (in years)
|
|
|
6.67
|
|
|
|
6.66
|
|
Volatility
|
|
|
20
|
%
|
|
|
20
|
%
|
Risk-free interest rate
|
|
|
1.21
|
%
|
|
|
1.32
|
%
|
NOTE 9. Revision to Prior Period Financial
Statements
On April 12, 2021, the staff of the SEC (“SEC
Staff”) issued a statement (the “SEC Staff Statement”) entitled “Staff Statement on Accounting and Reporting
Considerations for Warrants Issued by Special Purpose Acquisition Companies.” In the statement, the SEC Staff, among other things,
highlighted potential accounting implications of certain terms that are common in warrants issued in connection with the initial public
offerings of special purpose acquisition companies such as the Company. As a result of the Staff statement and in light of evolving views
as to certain provisions commonly included in warrants issued by special purpose acquisition companies, the Company re-evaluated the
accounting for its warrants under ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and concluded
that they do not meet the criteria to be classified in shareholders’ equity. Because the warrants meet the definition of a derivative
under ASC 815-40, we have revised the balance sheet dated March 25, 2021 to classify the warrants as liabilities at fair value, with
subsequent changes in their fair values to be recognized in the statement of operations at each reporting date.
The Company’s prior accounting treatment
for the warrants was equity classification rather than as derivative liabilities. Accounting for the warrants as liabilities pursuant
to ASC 815-40 requires that the Company re-measures the warrants at their fair value each reporting period and record the changes in
such value in the unaudited condensed statement of operations. Accordingly, the Company has revised the value and classification of the
warrants in the financial statements included herein (“Revision”). The Revision did not impact the Company’s cash,
total shareholder’s equity, operating expense, net loss, or cash flows.
Subsequent to the Company’s Current Report
on Form 8-K filed on March 31, 2021, the Company identified and corrected the following errors in connection with the preparation of
the financial statement for the 8-K balance sheet as of March 25, 2021:
|
|
As of March 25, 2021
|
|
|
|
As Previously Reported
|
|
|
Adjustment
|
|
|
As Revised
|
|
Balance Sheet
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
353,411,664
|
|
|
$
|
-
|
|
|
$
|
353,411,664
|
|
Liabilities and shareholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
$
|
1,449,492
|
|
|
$
|
-
|
|
|
$
|
1,449,492
|
|
Deferred underwriting commissions
|
|
|
12,250,000
|
|
|
|
-
|
|
|
|
12,250,000
|
|
Derivative warrant liabilities
|
|
|
-
|
|
|
|
19,042,300
|
|
|
|
19,042,300
|
|
Total liabilities
|
|
|
13,699,492
|
|
|
|
19,042,300
|
|
|
|
32,741,792
|
|
Class A ordinary shares, $0.0001 par value; shares subject
to possible redemption
|
|
|
334,712,170
|
|
|
|
(19,042,300
|
)
|
|
|
315,669,870
|
|
Shareholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Preference shares - $0.0001 par value
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Class A ordinary shares - $0.0001 par value
|
|
|
153
|
|
|
|
190
|
|
|
|
343
|
|
Class B ordinary shares - $0.0001 par value
|
|
|
1,006
|
|
|
|
-
|
|
|
|
1,006
|
|
Additional paid-in-capital
|
|
|
5,081,675
|
|
|
|
550,905
|
|
|
|
5,632,580
|
|
Accumulated deficit
|
|
|
(82,832
|
)
|
|
|
(551,095
|
)
|
|
|
(633,927
|
)
|
Total shareholders’ equity
|
|
|
5,000,002
|
|
|
|
-
|
|
|
|
5,000,002
|
|
Total liabilities and shareholders’
equity
|
|
$
|
353,411,664
|
|
|
|
-
|
|
|
$
|
353,411,663
|
|
NOTE 10. SUBSEQUENT EVENTS
As described in Note 3, on April 9, 2021, the Underwriters
partially exercised the over-allotment option and on April 13, 2021, purchased an additional 3,259,457 Units from the Company, generating
gross proceeds of $32,594,570, and forfeited the remainder of the option. As described in Note 4, in connection with the underwriters’
partial exercise of the over-allotment option, the Sponsor purchased an additional 434,594 Private Placement Warrants, generating gross
proceeds to the Company of approximately $651,891, and forfeited 497,636 Class B ordinary shares.