Table of Contents
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM
10-Q
 
 
(MARK ONE)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 20212022
 
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
    
    
        
    
to
    
    
        
    
Commission file number:
001-40264
 
 
DRAGONEER GROWTH OPPORTUNITIES CORP. III
(Exact Name of Registrant as Specified in Its Charter)
 
 
 
Cayman Islands
 
98-1560356
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
One Letterman Drive
Building D, Suite M500
San Francisco, CA 94129
(Address of principal executive offices)
(415)
539-3099
(Issuer’s telephone number)
 
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Trading Symbol(s)
 
Name of each exchange
on which registered
Class A ordinary shares, $0.0001 par value
 
DGNU
 
The Nasdaq CapitalStock Market LLC
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule
12b-2
of the Exchange Act.
 
Large accelerated filer ☐  Accelerated filer ☐
Non-accelerated
filer		 ☒  Smaller reporting company ☒
   Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2
of the Exchange Act).    Yes  ☒    No  ☐
As of August
181
5
, 2021,2022, there were 43,067,606 Class A ordinary shares, $0.0001 par value and 10,766,902 Class B ordinary shares, $0.0001 par value, issued and outstanding.
 
 
 
Table of Contents
DRAGONEER GROWTH OPPORTUNITIES CORP. III
FORM
10-Q
FOR THE QUARTER ENDED JUNE 30, 20212022
TABLE OF CONTENTS
 
  
Page
Part I. Financial Information
  
Item 1. Interim Financial Statements
  
Condensed Balance Sheets as of June 30, 20212022 (Unaudited) and December 31, 20202021
   1 
Unaudited Condensed Statements of Operations for the three and six months ended June 30, 2022 and June 30, 2021 (Unaudited)
   2 
Unaudited Condensed StatementStatements of Changes in Shareholders’ (Deficit) EquityDeficit for the three and six months ended June 30, 2022 and June 30, 2021 (Unaudited)
   3 
Unaudited Condensed StatementStatements of Cash Flows for the six months ended June 30, 2022 and June 30, 2021 (Unaudited)
   4 
Notes to Condensed Financial Statements (Unaudited)
   5 
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
   1617 
Item 3. Quantitative and Qualitative Disclosures RegardingAbout Market Risk
   1921 
Item 4. Controls and Procedures
   1921 
Part II. Other Information
  
Item 1. Legal Proceedings
   2021 
Item 1A. Risk Factors
   2022 
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
   2023 
Item 3. Defaults Upon Senior Securities
   2023 
Item 4. Mine Safety Disclosures
   2023 
Item 5. Other Information
   2023 
Item 6. Exhibits
   2124 
Part III. Signatures
   2225 
Table of Contents
PART I—FINANCIAL INFORMATION
Item 1. Interim Financial Statements.
DRAGONEER GROWTH OPPORTUNITIES CORP. III
CONDENSED BALANCE SHEETS
 
   
June 30,
2021
  
December 31,

2020
 
   
(Unaudited)
    
ASSETS
         
Current assets
         
Cash
  $3,342,461  $—   
Prepaid expenses
   1,087,070   —   
   
 
 
  
 
 
 
Total Current Assets
   4,429,531   —   
Deferred offering costs
   —     66,224 
Cash held in Trust Account
   430,676,061   —   
   
 
 
  
 
 
 
TOTAL ASSETS
  
$
435,105,592
 
 
$
66,224
 
   
 
 
  
 
 
 
LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY
         
Current Liabilities
         
Accrued offering costs
  $653,379  $18,774 
Accounts payable and other accrued expenses
   170,937   —   
Promissory note – related party
   —     27,450 
Convertible note – related party, net of debt discount   224,690   
—
 
 
 
Total current liabilities
   1,049,006   46,224 
Warrant liability
   20,590,233   —   
Conversion option liability
  
2,827,922
   
—
 
 
 
Deferred underwriting fee payable
   15,073,661   —   
   
 
 
  
 
 
 
Total Liabilities
   
39,540,822
 
 
 
46,224
 
   
 
 
  
 
 
 
Commitments and Contingencies
   0   0 
Class A ordinary shares subject to possible redemption, 43,067,606 and 0 shares at $10.00 per share redemption value as of June 30, 2021 and December 31, 2020, respectively
  430,676,061   —   
Shareholders’ (Deficit) Equity
         
Preference shares, $0.0001 par value; 1,000,000 shares authorized; 0 shares issued and outstanding
   0—     0—   
Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; 0 shares issued and outstanding (excluding 43,067,606 and 0 shares subject to possible redemption) at June 30, 2021 and December 31, 2020, respectively
   0—     0—   
Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 10,766,902
and 11,500,000 shares
 issued and outstanding at June 30, 2021 and December 31, 2020, respectively (1)
   1,077   1,150 
Additional
paid-in
capital
   0   23,850 
Accumulated deficit
   (35,112,368)   (5,000) 
   
 
 
  
 
 
 
Total Shareholders’ (Deficit) Equity
   
(35,111,291
) 
 
 
20,000
 
   
 
 
  
 
 
 
TOTAL LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY
  
$
 
435,105,592
 
$
66,224
 
   
 
 
  
 
 
 
(1)
Included at December
 31, 2020
,
are 1,500,000 Class B ordinary shares that were subject to forfeiture if the over-allotment option was not exercised in full or in party by the underwriters. On May 6, 2021 the underwriters partially exercised their over-allotment option and 733,098 Class B ordinary shares were forfeited (see Note 5). 
   
June 30,

2022
  
December 31,

2021
 
   
(unaudited)
    
ASSETS
         
Current Assets
         
Cash
  $1,872,691  $3,185,171 
Prepaid expenses
   449,440   765,502 
Total Current Assets
   2,322,131   3,950,673 
Cash held in Trust Account
   430,676,061   430,676,061 
   
 
 
  
 
 
 
Total Assets
  
$
432,998,192
 
 
$
434,626,734
 
   
 
 
  
 
 
 
 
LIABILITIES, CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ DEFICIT
 
Current Liabilities
         
Accounts payable and other accrued expenses
  $36,658  $291,654 
Accrued offering cost
   8,000   648,379 
Convertible note
   1,824,987   1,031,415 
Total Current Liabilities
   1,869,645   1,971,448 
Warrant liability
   1,764,717   7,642,968 
Deferred underwriting fee payable
   15,073,661   15,073,661 
   
 
 
  
 
 
 
Total Liabilities
  
 
18,708,023
 
 
 
24,688,077
 
   
 
 
  
 
 
 
Commitments and Contingencies (Note 6)
   0    0  
Class A ordinary shares subject to possible redemption, 43,067,606 at $10.00 per share redemption value as of June 30, 2022 and December 31, 2021, respectively
   430,676,061   430,676,061 
Shareholders’ Deficit
         
Preferred shares, $0.0001 par value; 1,000,000 shares authorized; 0 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively
   —     —   
Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; 0 shares issued and outstanding (excluding 43,067,606 shares subject to possible redemption) at June 30, 2022 and December 31, 2021, respectively
   0—     0—   
Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 10,766,902 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively
   1,077   1,077 
Additional paid in capital
   —     —   
Accumulated deficit
   (16,386,969)   (20,738,481) 
   
 
 
  
 
 
 
Total Shareholders’ Deficit
  
 
(16,385,892
) 
 
 
(20,737,404
) 
   
 
 
  
 
 
 
TOTAL LIABILITIES, CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ DEFICIT.
  
$
432,998,192
 
 
$
434,626,734
 
   
 
 
  
 
 
 
The accompanying notes are an integral part of the unaudited condensed financial statements.
 
1
Table of Contents
DRAGONEER GROWTH OPPORTUNITIES CORP. III
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
 
   
Three Months
Ended June 30,
  
Six Months Ended
June 30,
 
   
2021
  
2021
 
Formation costs and other operating expenses
  $365,526  $435,889 
   
 
 
  
 
 
 
Loss from operations
  
 
(365,526
) 
 
(435,889
)
Other expense:
         
Interest expense – amortization of debt discount
  
(52,613
)
 
  
(52,613
)
 
Change in fair value of warrant liability
   (3,021,878)   (2,209,144) 
Loss from issuance of Private Placement Warrants
   (515,358)   (7,767,566) 
Transaction costs allocable to warrant liability
   0     (41,191) 
   
 
 
  
 
 
 
Other expense, net
  
 
(3,589,849
)  (10,070,514) 
Net loss
  
$
(3,955,375
) 
$
(10,506,403
) 
   
 
 
  
 
 
 
Weighted average shares outstanding, Class A redeemable ordinary shares
   41,874,648   41,739,364 
   
 
 
  
 
 
 
Basic and diluted net loss per share, Class A redeemable ordinary shares
  
$
0.00
 
 
$
0.00
 
   
 
 
  
 
 
 
Weighted average shares outstanding, Class B
non-redeemable
ordinary shares 
   10,468,662   10,439,371 
   
 
 
  
 
 
 
Basic and diluted net loss per share, Class B
non-redeemable
ordinary shares
  
$
(0.38
) 
 
$
(1.01
) 
   
 
 
  
 
 
 
   
For the Three Months Ended

June 30,
  
For the Six Months Ended

June 30,
 
   
2022
  
2021
  
2022
  
2021
 
Operating expenses
  $339,995  $365,526  $733,167  $435,889 
   
 
 
  
 
 
  
 
 
  
 
 
 
Loss from operations
  
 
(339,995
) 
 
 
(365,526
) 
 
 
(733,167
) 
 
 
(435,889
) 
   
 
 
  
 
 
  
 
 
  
 
 
 
Other income (expense):
                 
Change in fair value of warrant liability
   5,326,602   (3,021,878)   5,878,251   (2,209,144) 
Loss from issuance of Private Placement Warrants
   —     (515,358)   —     (7,767,566) 
Interest expense - amortization of debt discount
   (398,978)   (52,613)   (793,572)   (52,613) 
Transaction costs allocable to warrant liability
  
 
—  
 
  —    
 
—  
 
  (41,191) 
   
 
 
  
 
 
  
 
 
  
 
 
 
Other income (loss), net
   4,927,624   (3,589,849)   5,084,679   (10,070,514) 
   
 
 
  
 
 
  
 
 
  
 
 
 
Net income (loss)
  
$
4,587,629
 
 
$
(3,955,375
) 
 
$
4,351,512
 
 
$
(10,506,403
) 
   
 
 
  
 
 
  
 
 
  
 
 
 
Weighted average shares outstanding of Class A ordinary
shares
(1)
   43,067,606   41,874,648   43,067,606   22,270,657 
   
 
 
  
 
 
  
 
 
  
 
 
 
Basic and diluted net income (loss) per ordinary share, Class A ordinary
shares
(1)
  
$
0.09
 
 
$
(0.08
) 
 
$
0.08
 
 
$
(0.38
) 
   
 
 
  
 
 
  
 
 
  
 
 
 
Weighted average shares outstanding of Class B ordinary
shares
(1)
   10,766,902   10,468,662   10,766,902   5,567,665 
   
 
 
  
 
 
  
 
 
  
 
 
 
Basic and diluted net income (loss) per ordinary share, Class B ordinary
shares
(1)
  
$
0.09
 
 
$
(0.08
) 
 
$
0.08
 
 
$
(0.38
) 
   
 
 
  
 
 
  
 
 
  
 
 
 
(1)
Subsequent to March 31, 2021, the Company adjusted its approach in calculating net income (loss) per share to comply with FASB ASC Topic 260, “Earnings Per Share”. In doing so, the Company adopted a pro-rata approach between its two classes of shares. All share and per-share data have been retroactively restated to reflect this change.  
The accompanying notes are an integral part of the unaudited condensed financial statements.
 
2
Table of Contents
DRAGONEER GROWTH OPPORTUNITIES CORP. III
CONDENSED STATEMENTSTATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021
(UNAUDITED)
 
   
Class A
Ordinary Shares
  
Class B
Ordinary Shares
  
Additional
Paid-in

Capital
  
Accumulated
Deficit
  
Total
Shareholders’
Equity
(Deficit)
 
   
Shares
  
Amount
  
Shares
  
Amount
  
 
  
 
  
 
 
Balance—January 1, 2021
  
 
0  
 
 
$
0  
 
 
 
11,500,000
 
 
$
1,150
 
 
$
23,850
 
 
$
(5,000
) 
 
$
20,000
 
Sale of 40,000,000 Units,
 
net
 
of
underwriting discounts
 
and
 
offering
expenses
   40,000,000   4,000   0     0     377,058,295   0     377,062,295 
Class A ordinary shares subject to possible redemption
   (40,000,000)   (4,000)   0     0     (377,082,145)   (22,913,855)   (400,000,000) 
Net loss
   —     —     —     —     0     (6,551,028)   (6,551,028) 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Balance—March 31,
2021
(
unaudited
)
  
 
0  
 
 
$
0  
 
 
 
11,500,000
 
 
$
1,150
 
 
$
0  
 
 
$
(29,469,883
) 
 
$
(29,468,733
) 
Sale of 3,067,606 Class A shares, net of underwriting discounts and offering expenses
   3,067,606   307   0     0     28,988,571   0     28,988,878 
Forfeiture of 733,098 Founder Shares
   0—     0—     (733,098)   (73)   —   73   0—   
Class A ordinary shares subject to possible redemption
   (3,067,606)   (307)   0     0     (28,988,571)   (1,687,183)   (30,676,061) 
Net loss
   —     —     —     —     0     (3,955,375)   (3,955,375) 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Balance—June 30,
2021
(
unaudited
)
  
 
0  
 
 
$
0  
 
 
 
10,766,902
 
 
$
1,077
 
 
$
—
 
 
$
(35,112,368
) 
 
$
(35,111,291
) 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
   
Class A Ordinary Shares
   
Class B Ordinary Shares
   
Additional
Paid
   
Accumulated
  
Total Shareholders’
 
   
Shares
   
Amount
   
Shares
   
Amount
   
in Capital
   
Deficit
  
(Deficit)
 
Balance – January 1, 2022
  
 
—  
 
  
$
—  
 
  
 
10,766,902
 
  
$
1,077
 
  
$
—  
 
  
$
(20,738,481
) 
 
$
(20,737,404
) 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
  
 
 
 
Net loss
   —      —      —      —      —      (236,117)   (236,117) 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
  
 
 
 
Balance – March 31, 2022
  
 
—  
 
  
$
—  
 
  
 
10,766,902
 
  
$
1,077
 
  
$
—  
 
  
$
(20,974,598
) 
 
$
(20,973,521
) 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
  
 
 
 
Net income
   —      —      —      —      —      4,587,629   4,587,629 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
  
 
 
 
Balance – June 30, 2022
  
 
—  
 
  
$
—  
 
  
 
10,766,902
 
  
$
1,077
 
  
$
—  
 
  
$
(16,386,969
) 
 
$
(16,385,892
) 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
  
 
 
 
   
Class A Ordinary Shares
   
Class B Ordinary Shares
  
Additional
Paid
  
Accumulated
  
Total Shareholders’
 
   
Shares
   
Amount
   
Shares
  
Amount
  
in Capital
  
Deficit
  
Equity (Deficit)
 
Balance – January 1, 2021
  
 
—  
 
  
$
—  
 
  
 
11,500,000
 
 
$
1,150
 
 
$
23,850
 
 
$
(5,000
) 
 
$
20,000
 
   
 
 
   
 
 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Accretion of Class A ordinary shares subject to possible redemption
   —      —      —     —     (23,850)   (22,913,855)   (22,937,705) 
Net loss
   —      —      —     —     —     (6,551,028)   (6,551,028) 
   
 
 
   
 
 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Balance – March 31, 2021
  
 
—  
 
  
$
—  
 
  
 
11,500,000
 
 
$
1,150
 
 
$
—  
 
 
$
(29,469,883
) 
 
$
(29,468,733
) 
   
 
 
   
 
 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Forfeiture of 733,098 Founder Shares
   —      —      (733,098)   (73)   —     73   —   
Accretion of Class A ordinary shares subject to possible redemption
   —      —      —     —     —     (1,687,183)   (1,687,183) 
Net loss
   —      —      —     —     —     (3,955,375)   (3,955,375) 
   
 
 
   
 
 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Balance – June 30, 2021
  
 
—  
 
  
$
—  
 
  
 
10,766,902
 
 
$
1,077
 
 
$
—  
 
 
$
(35,112,368
) 
 
$
(35,111,291
) 
   
 
 
   
 
 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
The accompanying notes are an integral part of the unaudited condensed financial statements.
 
3
Table of Contents
DRAGONEER GROWTH OPPORTUNITIES CORP. III
CONDENSED STATEMENTSTATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2021
(UNAUDITED)
 
  
For the Six Months Ended

June 30,
 
  
2022
 
2021
 
Cash Flows from Operating Activities:
        
Net
loss
  $(10,506,403) 
Adjustments to reconcile net loss to net cash used in operating activities:   
Net income (loss)
  $4,351,512  $(10,506,403) 
Adjustments to reconcile net income (loss) to net cash used in operating activities:
     
Change in fair value of warrant liability
   2,209,144    (5,878,251)   2,209,144 
Loss from issuance of Private Placement Warrants
   7,767,566    —     7,767,566 
Transaction costs allocated to warrant liability
   41,191    —     41,191 
Amortization of debt discount
  
 
52,613
    793,572   52,613 
Changes in operating assets and liabilities:
        
Prepaid expenses
   (1,067,470)    316,062   (1,067,470) 
Accounts payable and accrued expenses
   170,937    (254,996)   170,937 
  
 
   
 
  
 
 
Net cash used in operating activities
  
 
(1,332,422
) 
  
 
(672,101
) 
 
 
(1,332,422
) 
  
 
   
 
  
 
 
Cash Flows from Investing Activities:
        
Investment of cash in Trust Account
   (430,676,061)    —     (430,676,061) 
  
 
   
 
  
 
 
Net cash used in investing activities
  
 
(430,676,061
) 
  
 
—  
 
 
 
(430,676,061
) 
  
 
   
 
  
 
 
Cash Flows from Financing Activities:
        
Proceeds from sale of Units, net of underwriting discounts paid
   422,062,539 
Proceeds from sale of Shares, net of underwriting discounts paid
   —     422,062,539 
Proceeds from sale of Private Placement Warrants
   10,613,522    —     10,613,522 
Repayment of promissory note - related party
   —     (228,836) 
Proceeds from convertible note - related party
   —     3,000,000 
Payment
of offering costs
   (96,281)   (640,379)   (96,281) 
Repayment
of promissory note – related party
   (228,836) 
Proceeds from convertible note – related party   3,000,000 
  
 
   
 
  
 
 
Net cash provided by financing activities
  
 
435,350,944
 
Net cash provided by (used in) financing activities
  
 
(640,379
) 
 
 
435,350,944
 
  
 
   
 
  
 
 
Net Change in Cash
  
 
3,342,461
 
  
 
(1,312,480
) 
 
 
3,342,461
 
Cash – Beginning of period
   0   
Cash - Beginning of period
   3,185,171   —   
  
 
   
 
  
 
 
Cash – End of period
  
$
3,342,461
 
Cash - End of period
  
$
1,872,691
 
 
$
3,342,461
 
  
 
   
 
  
 
 
Non-Cash
investing and financing activities:
        
Offering costs included in accrued offering costs
  $587,155   $—    $587,155 
  
 
   
 
  
 
 
Offering costs paid through promissory note
  $181,786   $—    $181,786 
  
 
   
 
  
 
 
Payment of prepaid expenses through promissory note
  $19,600   $—    $19,600 
  
 
   
 
  
 
 
Initial classification of Class A ordinary shares subject to possible redemption
  $430,676,061 
  
 
 
Deferred underwriting fee payable
  $15,073,661   $—    $15,073,661 
 
 
 
  
 
  
 
 
Initial Classification of conversion option
 
$
2,827,922
 
Initial classification of conversion option
  $—    $2,827,922 
  
 
   
 
  
 
 
The accompanying notes are an integral part of the unaudited condensed financial statements.
 
4
Table of Contents
DRAGONEER GROWTH OPPORTUNITIES CORP. III
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 20212022
(Unaudited)
NOTE 1. DESCRIPTION OF
ORGANIZATION AND BUSINESS OPERATIONS
Dragoneer Growth Opportunities Corp. III (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on September 25, 2020. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities (a “Business Combination”).
The Company is not limited to a particular industry or 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 June 30, 2021,2022, the Company had not commenced any operations. All activity through June 30, 20212022 relates to the Company’s formation, the initial public offering (“Initial Public Offering”), which is described below, and subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company willmay generate
non-operating
income in the form of interest income from the proceeds derived from the Initial Public Offering.
The registration statement for the Company’s Initial Public Offering became effective on March 22, 2021. On March 25, 2021, the Company consummated the Initial Public Offering of 40,000,000 Class A ordinary shares (the “Public Shares”), at $10.00 per Public Share, generating gross proceeds of $400,000,000 which is described in Note
3
. 3.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 10,000,000 warrants (the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to Dragoneer Growth Opportunities Holdings III (an affiliate of Dragoneer Investment Group, LLC (the “Sponsor”)), generating gross proceeds of $10,000,000, which is described in Note
4
. 4.
Transaction costs amounted to $24,666,079, consisting of $8,613,522 of underwriting fees, $15,073,661 of deferred underwriting fees and $978,896 of other offering costs.
Following the closing of the Initial Public Offering on March 25, 2021, an amount of $400,000,000 ($10.00 per Public Shares)Share) from the net proceeds of the sale of the Public Shares in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”), and may be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting certain 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 in the Trust Account to the Company’s shareholders, as described below.
On May 6, 2021, the underwriters partially exercised their over-allotment option, resulting in an additional 3,067,606 Public Shares issued for an aggregate amount of $
30,676,060
.$30,676,060. In connection with the underwriters’ partial exercise of their over-allotment option, the Company also consummated the sale of an additional 613,522 Private Placement Warrants at $1.00 per Private Placement Warrant, generating total gross proceeds of $613,522. A total of $30,676,060 was deposited into the Trust Account, bringing the aggregate proceeds held in the Trust Account to $430,676,060.$430,676,061.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. Exchange listing rules require that the Business Combination must be with one or more target businesses that together have an aggregate fair market value of at least 80% of the value of the Trust Account (as defined below) (excluding any deferred underwriters fees and taxes payable on the income earned on the trust account) at the time of the agreement to enter into the initial business combination. The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the issued and 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.

5
Table of Contents
The Company will provide the holders of the public sharesPublic Shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of the Business Combination, either (i) in connection with a general 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, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two business days prior to the consummation of the Business Combination (initially anticipated to be $10.00 per Public Share), including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares,Public Shares, subject to certain limitations as described in the prospectus. The
per-share
amount to be distributed to the Public Shareholders who properly redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note
5
) 6).
The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 and, if the Company seeks shareholder approval, it receives an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who attend and vote in person or by proxy at a general meeting of the Company. If a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the Company’s Sponsor has agreed to vote its Founder Shares (as defined in Note
4
) 5) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each Public Shareholder may elect to redeem their Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against an Initial Business Combination.
Notwithstanding the foregoing, if the Company seeks shareholder approval of the Business Combination and the Company does not conduct redemptions pursuant to the tender offer rules, 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% of the Public Shares without the Company’s prior written consent.
5
Table of Contents
DRAGONEER GROWTH OPPORTUNITIES CORP. III
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
The Sponsor has agreed (a) to waive its redemption rights with respect to any 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 Amended and Restated Memorandum and Articles of Association (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of the 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 shareholders’ rights or
pre-initial
business combination activity, unless the Company provides the Public Shareholders with the opportunity to redeem their Public Shares upon approval of any such amendment at a
per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding Public Shares.
The Company will have until March 25, 2023 (or June 25, 2023 if the Company has executed a letter of intent, agreement in principle or definitive agreement for a Business Combination by March 25, 2023 but has not completed a Business Combination by March 25, 2023) to consummate a Business Combination (the “Combination Period”). However, if the Company has not completed a Business Combination within the Combination Period as may be extended from time to time by the Company as a result of a shareholder vote to amend its Amended and Restated Memorandum and Articles of Association (an “Extension Period”), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the 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 the rights of the Public Shareholders as shareholders (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 Public Shareholders and its 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.
The Sponsor has agreed to waive its rights to liquidating distributions from the Trust Account with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period or any Extension Period. However, if the Sponsor or any of its respective affiliates acquire Public Shares, 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 or any Extension 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 or any Extension 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 Share ($10.00).
6
Table of Contents
In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent auditors) 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 (1) $10.00 per Public Share and (2) 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 Shares due to reductions in the value of trust assets, in each case net of the interest which may be withdrawn to pay taxes, provided that such liability will not apply to any claims by a third party or prospective target business that executed a waiver of any and all rights to seek access to 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”). 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 (other than 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, Capital Resources and Going Concern
6As of June 30, 2022, the Company had $430,676,061 held in the Trust Account and $1,872,691 held outside of the Trust Account. Through June 30, 2022, the Company has 0t earned any interest on the cash held in the Trust Account. The Company intends to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, properties or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a Business Combination.
In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Company’s Sponsor or an affiliate of the Company’s Sponsor or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required. If the Company completes a Business Combination, the Company may repay such loaned amounts out of the proceeds of the Trust Account released to the Company. In the event that a Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, but no proceeds from the Company’s Trust Account would be used for such repayment. Up to $3,000,000 of such loans may be converted upon completion of a Business Combination into warrants at a price of $1.00 per warrant. Such warrants would be identical to the Private Placement Warrants.
On June 18, 2021, the Company entered into a Working Capital Loan with the Sponsor pursuant to which the Sponsor agreed to loan the Company up to an aggregate principal amount of $3,000,000, which the Company drew in full on the same day. The Working Capital Loan
is non-interest bearing
and due on the date on which the Company consummates a Business Combination. The outstanding balance under the Working Capital Loan amounted to $3,000,000 as of June 30, 2022.
In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update
(“ASU”) 2014-15,
“Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company must consummate an initial Business Combination within 24 months (or 27 months, as applicable) from the closing of our Initial Public Offering or during any Extension Period. It is uncertain that the Company will be able to consummate an initial Business Combination within this time. If an initial Business Combination is not consummated within this time, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the liquidity condition and mandatory liquidation, should an initial Business Combination not occur, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after March 25, 2023.
Risks and Uncertainties
In February 2022, a military conflict started between Russia and Ukraine. The ongoing military conflict has provoked strong reactions from the United States, the UK, the European Union and various other countries around the world, including the imposition of broad financial and economic sanctions against Russia. Further, the precise effects of the ongoing military conflict and these sanctions on the global economies remain uncertain as of the date of these unaudited condensed financial statements. The specific impact on the Company’s financial condition, results of operations and cash flows is also not determinable as of the date of these unaudited condensed financial statements.
7
Table of Contents
Management continues to evaluate the impact of
DRAGONEER GROWTH OPPORTUNITIES CORP. IIIthe COVID-19
pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.​​​​​​​​​​​​​​
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of
Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interimint
erim financial informationinf
ormation 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 Annual Form
10-K
as filed with the SEC on March 24, 2021.31, 2022. The interim results for the three and six months ended June 30, 20212022 are not necessarily indicative of the results to be expected for the year ending December 31, 20212022 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 shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that 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
7
Table of Contents
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 statement with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the
potential
differences in accounting standards used.
Use of Estimates
The preparation of the condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. One of the more significant accounting estimates included in these condensed financial statements is the determination of the fair value of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates.
8
Table of Contents
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 anyhas $1,872,691 and $3,185,171 in cash outside of the Trust Account and 0 cash equivalents as of June 30, 20212022 and December 31, 2020.2021, respectively.
Cash Held in Trust Account
At June 30, 2022 and December 31, 2021, the assets held in the Trust Account were held in cash.
Offering Costs
Offering costs consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the Initial Public Offering. Offering costs amounted to $
24,666,079
,$24,666,079, of which
$
24,624,888
$24,624,888 were charged against carrying value of Class A ordinary shares subject to shareholders’ equityredemption and $
41,191
$41,191 was expensed to the condensed statements of operations.operations as of June 30, 2021. No offering costs were incurred for the six months ended June 30, 2022.
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 Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including 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, 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 occurrence of uncertain future events. Accordingly, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equitydeficit section of the Company’s unaudited condensed balance sheets.
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable Class A ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares is affected by charges against additional paid in capital and accumulated deficit.
As of June 30, 2022 and December 31, 2021, the Class A ordinary shares subject to possible redemption reflected on the balance sheet are reconciled in the following table:
Gross Proceeds
  $430,676,061 
Less:
     
Class A ordinary shares issuance costs
   (24,624,888) 
Plus:
     
Accretion of carrying value to redemption value
   24,624,888 
   
 
 
 
Class A ordinary shares subject to possible redemption
  $430,676,061 
   
 
 
 
Warrant Liability
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing“Distinguishing Liabilities from EquityEquity” (“ASC 480”), and ASC 815, Derivatives“Derivatives and HedgingHedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
9
Table of Contents
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional
paid-in
paid in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a
non-cash
gain or loss on the statements of operations. The fair value of the warrants was estimated using a Modified Black-Scholes Option Pricing model (see Note
9
) 10).
8
Table of Contents
DRAGONEER GROWTH OPPORTUNITIES CORP. III
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
Income
Taxes
The Company accounts for income taxes under ASC Topic 740, “Income Taxes,” which 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 major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of June 30, 20212022 and December 31, 2020,2021, there were 0 unrecognized tax benefits and 0 amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the period presented. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
Net Income (Loss) per Ordinary Share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of shares. Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding for the period. The calculation of dilutedDiluted net income (loss) per ordinary share does not considerreflects the effectpotential dilution that could occur if warrants were to be exercised or converted or otherwise resulted in issuance of Ordinary Shares that then shared in the earnings of the warrants issued in connection with the Initial Public Offering and the private placement sinceentity. As the exercise of the warrants are contingent upon the occurrencecompletion of future events anda business combination they have not been included in the inclusioncalculation of such warrants would be anti-dilutive.
The Company’s statements of operations includes a presentation of lossdiluted net income (loss) per share for ordinary shares subject to possible redemption in a manner similar toshare. Accretion associated with the
two-class
method of loss per ordinary share. Net income per ordinary share, basic and diluted, for redeemable Class A redeemable ordinary shares is calculated by dividing the interest income earned on the Trust Account, by the weighted average number of Class A redeemable ordinary shares outstanding since original issuance. Net income (loss)excluded from earnings per share basic and diluted, for Class B
non-redeemable
ordinary shares is calculated by dividingas the net income (loss), adjusted for income attributable to Class A redeemable ordinary shares, by the weighted average number of Class B
non-redeemable
ordinary shares outstanding for the period. Class B
non-redeemable
ordinary shares 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.value approximates fair value.
The following table reflects the calculation of basic and diluted net income (loss) per ordinary share (in dollars, except per share amounts):
   
Three Months Ended
June 30,
2021
  
Six Months Ended
June 30,
2021
 
Redeemable Class A Ordinary Shares
         
Numerator: Earnings allocable to Redeemable Class A Ordinary Shares
         
Interest Income
  $0    $0   
   
 
 
  
 
 
 
Net Earnings allocable to Redeemable Class A Ordinary Shares  $0    $0   
   
 
 
  
 
 
 
Denominator: Weighted Average Redeemable Class A
 
Ordinary
 
Shares
Redeemable Class A Ordinary Shares, Basic and Diluted
   41,874,648   41,739,364 
Earnings/Basic and Diluted Redeemable Class A Ordinary Shares
  $0.00  $0.00 
Non-Redeemable
Class B Ordinary Shares
         
Numerator: Net Loss minus Redeemable Net Earnings
         
Net Loss
 Redeemable Class A Ordinary Shares
  $(3,955,375)  $(10,506,403) 
Less: Income
 attributable to Redeemable Class A Ordinary Shares
   0     0   
   
 
 
  
 
 
 
Non-Redeemable
Net Loss
  $(3,955,373)  $(10,506,403) 
Denominator:
Weighted Average Non-Redeemable Class B Ordinary Shares
         
Non-Redeemable
Ordinary Shares, Basic and Diluted
   10,468,662   10,439,371 
Loss/Basic and Diluted
Non-Redeemable
B Ordinary Shares
  $(0.38) $(1.01)
Note: As for the three and six months ended June 30, 2022, and as stated in Note 1 to the condensed statements of operations, these amounts for the three and six months ended June 30, 2021 basic and diluted shares arehave been adjusted to conform with the same as there are nocurrent year presentation:
non-redeemable
securities that are dilutive to the Company’s shareholders.
   
For the Three Months Ended

June 30.
 
   
2022
   
2021
 
   
Class A Ordinary

Shares
   
Class B Ordinary

Shares
   
Class A Ordinary

Shares
   
Class B Ordinary

Shares
 
Basic and diluted net loss per ordinary share
                    
Numerator:
                    
Allocation of net income (loss)
  $3,670,103   $917,526   $(3,164,300)   $(791,075) 
Denominator
                    
Basic and diluted weighted average shares outstanding
   43,067,606    10,766,902    41,874,648    10,468,662 
   
 
 
   
 
 
   
 
 
   
 
 
 
Basic and diluted net income (loss) per ordinary share
  $0.09   $0.09   $(0.08)   $(0.08) 
   
 
 
   
 
 
   
 
 
   
 
 
 
10
Table of Contents

   
For the Six Months Ended

June 30.
 
   
2022
   
2021
 
   
Class A Ordinary

Shares
   
Class B Ordinary

Shares
   
Class A Ordinary

Shares
   
Class B Ordinary

Shares
 
Basic and diluted net loss per ordinary share
                    
Numerator:
                    
Allocation of net income (loss)
  $3,481,210   $870,302   $(8,405,122)   $(2,101,281) 
Denominator
                    
Basic and diluted weighted average shares outstanding
   43,067,606    10,766,902    22,270,657    5,567,665 
   
 
 
   
 
 
   
 
 
   
 
 
 
Basic and diluted net income (loss) per ordinary share
  $0.08   $0.08   $(0.38)   $(0.38) 
   
 
 
   
 
 
   
 
 
   
 
 
 
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a
financial
institution, which, at times may exceed the Federal Depository Insurance Corporation coverage limit of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such account.
Fair Value of Financial Instruments
The 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 Company’s condensed balance sheets, primarily due to their short-term nature, except for the Private Placement Warrants (see Note
9
) 10).
9
Table of Contents
DRAGONEER GROWTH OPPORTUNITIES CORP. III
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
Fair Value Measurements
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. 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:
 
Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
 
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
 
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.
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.
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then
re-valued
at each reporting date, with changes in the fair value reported in the unaudited condensed statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or
non-current
based on whether or not
net-cash
settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
11
Table of Contents
The Company will account for warrants for shares of the Company’s Class A ordinary shares that are not indexed to its own stock as liabilities at fair value on the balance sheet in accordance with ASC Topic 815. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is
then re-valued
at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or
non-current based
on whether or
not net-cash settlement
or conversion of the instrument could be required within 12 months of the balance sheet date.
The Company will account for the conversion features in Convertible notes under ASC Topic 815. However, if a conversion feature meets the criteria of the scope exception, then it will not be bifurcated.
Recent Accounting Standards
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)
2020-06,
Debt — Debt with Conversion and Other Options (Subtopic
470-20)
and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic
815-40)
(“ASU
2020-06”)
to simplify accounting for certain financial instruments. ASU
2020-06
eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU
2020-06
amends the diluted earnings per share guidance, including the requirement to use the
if-converted
method for all convertible instruments. ASU
2020-06
is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company adopted ASU
2020-06
effective January 1, 2021. The adoption of ASU
2020-06
did not have
a significant
impact on the Company’s financial statements.
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering, the Company sold 40,000,000 Public Shares, at a purchase price of $10.00 per Public Share. The underwriters partially exercised their over-allotment option on May 6, 2021, resulting in the sale of an additional 3,067,606 Public Shares at $10.00 per Public Share
.
Share.
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 10,000,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, for an aggregate purchase price of $10,000,000. As a result of the underwriters’ partial exercise of their over-allotment option on May 6, 2021, the Sponsor purchased an additional 613,522 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, for an aggregate purchase price of $613,522. A portion of the proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering to be held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period or any Extension Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will be worthless.
T
he
The Company incurred a loss of $0 and $515,358 and
$7,767,566 
related to the issuance of the Private Placement Warrants for the three months ended June 30, 2022 and 2021, respectively.
The Company incurred a loss of $0 and $7,767,566 related to the issuance of the Private Placement Warrants for the six months ended June 30, 2022 and 2021, respectively.
10
Table of Contents
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
In September 2020, the Sponsor paid $25,000 to cover certain offering and formation costs of the Company in consideration for 2,875,000 Class B ordinary shares (the “Founder Shares”). On February 3, 2021, the Company effected a share dividend and on March 1, 2021 the Company effected a share cancellation, resulting in 11,500,000
Founder Shares outstanding at December 31, 2020. All share
and
per-share
amounts have been retroactively restated to reflect the share transactions. The Founder Shares included an aggregate of up to 1,500,000 shares that were subject to forfeiture depending on the extent to which the underwriters’ over-allotment option was exercised, so that the number of Founder Shares would equal, on an
as-converted
basis, 20% of the Company’s issued and outstanding ordinary shares after the Initial Public Offering (assuming the Sponsor does not purchase any Public Shares in the Initial Public Offering). As a result of the underwriters’ partial exercise of their over-allotment option on May 6, 2021, 766,902 Founder Shares are no longer subject to forfeiture and 733,098 Founder Shares were forfeited, resulting in there being 10,766,902 Founder Shares issued and outstandingoutstanding.
.
The
12
Table of Contents
Other than as described above, the Sponsor has agreed subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earliestearlier to occur of: (A) one year after the completion of a Business Combination andor (B) subsequentthe date on which the Company completes a liquidation, merger, capital stock exchange or similar transaction that results in the Company’s stockholders having the right to a Business Combination, (x)exchange their shares of ordinary shares for cash, securities or other property. Notwithstanding the foregoing, if the closinglast sale price of the Company’s Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations,stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within
any
30-trading day
day period commencing at least 120 days after athe Business Combination, or (y) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the Public Shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.
As a result of the underwriters’ election to partially exercise their over-allotment option, a total of 766,902 Founder Shares are no longer subject to forfeiture and 733,098 Founder Shares were forfeited, resulting in there being a total of 10,766,902 Founder Shares issued and outstanding.
will be released from
Promissory Note — Related
Party
On September 29, 2020, the Company issued an unsecured promissory note (the “Promissory Note”) to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $300,000. The Promissory Note was
non-interestlock-up.
bearing and payable on the earlier of May 31, 2021 and the completion of the Initial Public Offering. The outstanding balance under the Promissory Note of $228,836, was repaid upon the consummation of the Initial Public Offering on March 25, 2021.
Related Party Loans
In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $3,000,000 of notes may be converted upon completion of a Business Combination into warrants at a price of $1.00 per warrant. Such warrants would be identical to the Private Placement Warrants. 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 proceeds0proceeds held in the Trust Account would be used to repay the Working Capital Loans.
On June 18, 2021, the Company entered into a convertible promissory noteWorking Capital Loan with the Sponsor pursuant to which the Sponsor agreed to loan the Company up to an aggregate principal amount of $3,000,000, (the “Convertible Promissory Note”), which the Company drew in full on the same day. The Convertible Promissory NoteWorking Capital Loan is
non-interest
bearing and due on the date on which the Company consummates a Business Combination. IfThe outstanding balance under the Company does not consummate a Business Combination, the Company may use a portion of any funds held outside the Trust Account to repay the Convertible Promissory Note; however, no proceeds from the Trust Account may be used for such repayment. If such funds are insufficient to repay the Convertible Promissory Note, the unpaid amounts would be forgiven. UpWorking Capital Loan amounted to $3,000,000 as of the Convertible Promissory Note may be converted into warrants at a price of $1.00 per warrant at the option of the Sponsor. The warrants would be identical to the Private Placement Warrants.June 30, 2022 and December 31, 2021, respectively.
The Company assessed the provisions of the Convertible Promissory NoteWorking Capital Loan under ASC
815-15.
The derivative component of the obligation is initially valued and classified as a derivative liability with an offset to debt discount. The conversion option was valued using a Black-Scholes Option Pricing Model, which is considered to be Level 3 fair value measurement (see Note 9)10).
The debt discount is being amortized to interest expense as a
non-cash
charge over the term of the Convertible Promissory Note,Working Capital Loan, which is assumed to be March 25, 2023, the Company’s expected Business Combination date. The Company initially recorded the $3,000,000 convertible promissory noteloan net of a debt discount of
$2,827,923
, $2,827,923, on the accompanying unaudited condensed balance sheet.
During the three and six months ended June 30, 2022 and 2021, the Company recorded $398,978 and $52,613, respectively, of interest expense related to the amortization of the debt discount.
During the six months ended June 30, 2022 and 2021, the Company recorded $793,572 and $52,613, respectively, of interest expense related to the amortization of the debt discount. The balance of the debt discount amounted to $2,775,310$1,175,013 and $1,968,585 at June 30, 2021.
2022 and December 31, 2021, respectively.
NOTE 6. COMMITMENTS
AND CONTINGENCIES
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 condensed financial statements. The condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty. 
11
Table of Contents
Registration and Shareholder Rights
Pursuant to a registration and shareholder rights agreement entered into on March 22, 2021, the holders of the Founder Shares and Private Placement Warrants, and any warrants that may be issued upon conversion of the Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and any warrants that may be issued upon conversion of Working Capital Loans and conversion of Founder Shares) are entitled to registration rights pursuant to a registration and shareholder rights agreement to be signed prior to or on the effective date of the Initial Public Offering.rights. The holders of these securities will beare 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. However, the registration and shareholder rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable
lock-up
period. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s 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 to purchase up to 6,000,000 additional Public Shares to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions. The underwriters partially exercised their over-allotment option on May 6, 2021 resulting in the sale of an additional 3,067,606 Public Shares at a price of $10.00 per Public Share. The underwriters’ remaining over-allotment option expired unexercised on May 6, 2021.
13
Table of Contents
The underwriters are entitled to a deferred fee of $0.35 per Public Share, or $15,073,661 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
12
Table of Contents
DRAGONEER GROWTH OPPORTUNITIES CORP. III
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
Forward Purchase Agreement
The Company entered into a
forward purchase agreement pursuant to which an affiliate of the Sponsor agreed to purchase an aggregate of up to 5,000,000 forward purchase shares for $10.00 per share, or up to $50,000,000 in the aggregate, in a private placement to close substantially concurrently with the initial Business Combination. The Company will determine in its sole discretion the specific number of forward purchase shares that it sells to the purchaser, if any. The funds from the sale of forward purchase shares may be used as part of the consideration to the sellers in the initial Business Combination, expenses in connection with the initial Business Combination or for working capital in the post transaction company. The obligations under the forward purchase agreement do not depend on whether any public shareholdersPublic Shareholders elect to redeem their shares and provide the Company with a minimum funding level for the initial Business Combination.
NOTE 7. CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION
Class
 A Ordinary Shares
—The Company is authorized to issue 200,000,000 Class A ordinary shares, with a par value of $0.0001 per share. Holders of Class A ordinary shares are entitled to one vote for each share. At June 30, 2022 and December 31, 2021, there were 43,067,606 Class A ordinary shares issued and outstanding, all of which were classified as temporary equity and subject to possible redemption.
The Company determined the Class A ordinary shares subject to redemption to be equal to the redemption value of approximately $10.00 per Public Share. It was concluded that the redemption value should include all Public Shares resulting in the Class A ordinary shares subject to possible redemption being equal to $430,676,061. This resulted in a measurement adjustment to the carrying value of the Class A ordinary shares subject to redemption with the offset recorded to additional paid in capital and accumulated deficit. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.
NOTE 8. SHAREHOLDERS’ EQUITY 
DEFICIT
Preference Shares
—
The Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At June 30, 20212022 and December 31, 2020,2021, there were 0 preference shares issued or outstanding.
Class
 A Ordinary Shares
— The Company is authorized to issue 200,000,000 Class A ordinary shares, with a par value of $0.0001 per share. Holders of Class A ordinary shares are entitled to one vote for each share. At June 30, 2021, there were 43,067,606 Class A ordinary shares issued and outstanding, all of which were classified as Class A ordinary shares subject to possible redemption. At December 31, 2020, there were 0 Class A ordinary shares issued or outstanding.
The Company determined the Class A ordinary shares subject to redemption to be equal to the redemption value of approximately $10.00 per Public Share while also taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001. Upon considering the impact of the forward purchase agreement, it was concluded that the redemption value should include all Public Shares resulting in the Class A ordinary shares subject to possible redemption being equal to 430,676,060. This resulted in a measurement adjustment to the carrying value of the Class A ordinary shares subject to redemption with the offset recorded to additional
paid-in
capital and accumulated deficit.
Class
B Ordinary Shares
—The Company is authorized to issue 20,000,000 Class B ordinary shares, with a par value of $0.0001 per share. Holders of the Class B ordinary shares are entitled to one vote
for each share. At June 30, 2022 and December 31, 2021, there are 0 shares subject to forfeiture and at December 31, 2020, there were 11,500,000 shares outstanding with 1,500,000 subject to forfeiture depending on the extent to which the underwriters’ over-allotment option was exercised, so that the number of10,766,902 Class B ordinary shares would
equal 20% of the Company’s issued and outstanding, ordinary shares after the Initial Public Offering.respectively.
Holders of Class A ordinary shares and Class B ordinary shares will vote together as a single class on all matters submitted to a vote of shareholders, except as required by law. Prior to the Business Combination, only holders of the Founder Shares will have the right to vote on the appointment of directors. Holders of the Public Shares will not be entitled to vote on the appointment of directors during such time. In addition, prior to the completion of a Business Combination, holders of a majority of the Founder Shares may remove a member of the board of directors for any reason.
In a vote to continue the company in a jurisdiction outside the Cayman Islands, only holders of the Founder Shares will have the right to vote.
The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of a Business Combination or earlier at the option of the holders thereof at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an
as-converted
basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of the Initial Public Offering plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of a Business Combination, excluding any forward purchase shares and any
14
Table of Contents
Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in a Business Combination and any Private Placement Warrants issued to the Sponsor, its affiliates or any member of the Company’s management team, including upon conversion of Working Capital Loans. 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 8.9. WARRANT LIABILITY
As of June 30, 2022 and December 31, 2021, there are 10,613,522 Private
Placement Warrants outstanding. As of December 31, 2020 there were 0 warrants outstanding. Each Private Placement Warrant entitles the holder to purchase one Class A
ordinary share at a price of $11.50 per share, subject to adjustment, at any time commencing 30 days after the completion of a Business Combination. The 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 Class A ordinary shares pursuant to the exercise of a Private Placement Warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A ordinary shares underlying the Private Placement Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No Private Placement Warrant will be exercisable and the Company will not be obligated to issue a Class A ordinary share upon exercise of a Private Placement Warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the Private Placement Warrants.
13
Table of Contents
DRAGONEER GROWTH OPPORTUNITIES CORP. III
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
The Company has agreed that as soon as practicable, but in no event later than twenty business days after the closing of a Business Combination, the Company will use its commercially reasonable efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the Private Placement 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 a Business Combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the Private Placement Warrants expire or are redeemed, as specified in the warrant agreement.
The exercise price and number of Class A ordinary shares issuable upon exercise of the Private Placement Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, the Private Placement Warrants will not be adjusted for issuances of Class A ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Private Placement 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 Private Placement Warrants will not receive any of such funds with respect to their Private Placement Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Private Placement Warrants. Accordingly, the Private Placement Warrants may expire worthless.
The Private Placement Warrants and the Class A ordinary shares issuable upon the 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 exercisable on a cashless basis and be
non-redeemable,
so long as they are held by the initial purchasers or their permitted transferees.
NOTE 9.10. FAIR VALUE MEASUREMENTS
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
 
Level 1:
  Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2:
  Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
Level 3:
  Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.
At June 30, 2021, assets held in the Trust Account were comprised
15
Table of $430,676,061 held in cash. During the three and six months ended June 30, 2021, the Company did not withdraw any interest income from the Trust Account.Contents
The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis at June 30, 2022 and December 31, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
 
   
Level
   
June 30, 2021
 
Liabilities:
          
Warrant Liability – Private Placement Warrants
   3   $20,590,232 
Warrant Liability – Conversion Option
   3    2,827,922 
   
Level
   
June 30, 2022
   
December 31, 2021
 
Liabilities:
               
Warrant Liability—Private Placement Warrants
   3   $1,764,717   $7,642,968 
There were 0 assets or liabilities measured on a recurring basis at December 31, 2020. The Private Placement Warrants were accounted for as liabilities in accordance with ASC
815-40
and are presented in the accompanying unaudited condensed balance sheets. The Private Placement Warrants are measured at fair value at inception and on a recurring basis, with changes in fair value presented in the unaudited condensed statements of operations.
The Private Placement Warrants were valued using a Modified Black Scholes Option Pricing Model, which is considered to be a Level 3 fair value measurement. The Modified Black Scholes Option Pricing model’s primary unobservable input utilized in determining the fair value of the Private Placement Warrants is the expected volatility of the ordinary shares. The expected volatility as of the Initial Public Offering date was derived from observable public warrant pricing on comparable ‘blank-check’ companies without an identified target.
14
Table of Contents
DRAGONEER GROWTH OPPORTUNITIES CORP. III
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
The following table provides quantitative information regarding Level 3 fair value measurements:
 
 
As of
June 30,
2021
   
As of June 30, 2022
 
As of December 31, 2021
 
Stock price
 $10.00   $9.73  $9.77 
Strike price
 $11.50   $11.50  $11.50 
Volatility
  27.0%    2.0%   12.0% 
Risk-free rate
  1.13%    2.91%   1.54% 
Dividend yield
  0.0%    0.0%   0.0% 
Fair value of warrants
 $1.94 
The following table presents the changes in the fair value of Level 3 warrant liabilities:
 
  
Warrant
Liabilities
   
Private Placement
Warrants Liabilities
 
Fair value as of January 1, 2021
  $0—     $0—   
Initial measurement on March 25, 2021
   17,252,208    17,252,208 
Change in fair value
   2,147,792 
Measurement of the additional Private Placement warrants issued on May 6
,
2021
   1,190,233 
Changes in fair value
(1)

   2,209,144 
Measurement of the additional Private Placement warrants issued on May 6, 2021
   1,128,881 
  
 
 
Fair value as of June 30, 2021
  $20,590,233   $20,590,233 
  
 
   
 
 
Fair value as of January 1, 2022
  $7,642,968 
Changes in fair value
(1)
   (5,878,251) 
  
 
 
Fair value as of June 30, 2022
  $1,764,717 
  
 
 
There were 0 transfers to/from Levels 1, 2, or 3 for the three and six months ended June 30, 2021.
(1)
Changes in valuation inputs or other assumptions are recognized in change in fair value of warrant liabilities in the unaudited condensed statements of operations.
Conversion
Option Liability
The liability for the conversion option was valued using a Black-Scholes Option Pricing Model, which is considered to be a Level 3 fair value measurement. The Black Scholes model’s primary unobservable input utilized in determining the fair value of the conversion option is the expected volatility of the
ordinary shares.
The following table presents During the three and six months ended June 30, 2022 and 2021, there were no changes in the fair value of the conversion option liability:liability.
16
Table of Contents
   
Conversion
Option Liability
 
Fair value as of January 1, 2021
  $0—   
Initial classification of conversion option
   2,827,922 
Change in fair value
   0—   
   
 
 
 
Fair Value as of June 30, 2021
  
$
2,827,922 
NOTE 10.11. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the unaudited condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.
15
Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Dragoneer Growth Opportunities Corp. III. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Dragoneer Growth Opportunities Holdings III.directors. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form
10-Q
including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the completion of the Proposed Business Combination (as defined below), the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, including that the conditions of the Proposed Business Combination are not satisfied. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s final prospectus for its Initial Public Offering filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a blank check company incorporated in theas a Cayman Islands exempted company on September 25, 2020 formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). While we may pursue an initial Business Combination target in any industry or entities. Wegeographic location, we intend to effectuatefocus our Business Combination using cash derived fromsearch for a target business operating in the proceedsmedia, entertainment and technology industries. Our sponsor is Dragoneer Growth Opportunities Holdings III (an affiliate of the Initial Public Offering and the sale of the Private Placement Warrants, our shares, debt orDragoneer Investment Group, LLC (the “Sponsor”)), a combination of cash, shares and debt.Cayman Islands limited liability company.
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.
Recent Developments
On June 18, 2021, we entered into a convertible promissory note with the Sponsor pursuant to which the Sponsor agreed to loan us up to an aggregate principal amount of $3,000,000 (the “Convertible Promissory Note”), which we drew in full on the same day. The Convertible Promissory Note is
non-interest
bearing and due on the date on which we consummate a Business Combination. If we do not consummate a Business Combination, we may use a portion of any funds held outside the Trust Account to repay the Convertible Promissory Note; however, no proceeds from the Trust Account may be used for such repayment. If such funds are insufficient to repay the Convertible Promissory Note, the unpaid amounts would be forgiven. Up to $3,000,000 of the Convertible Promissory Note may be converted into warrants at a price of $1.00 per warrant at the option of the Sponsor. The warrants would be identical to the Private Placement Warrants.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities through June 30, 20212022 were organizational activities, those necessary to prepare for the Initial Public Offering, described below, and identifying a target company for a Business Combination. We do not expect to generate any operating revenues until after the completion of our Business Combination. We will generate
non-operating
income in the form of interest income on marketable securities held in the Trust Account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.expenses in connection with searching for a prospective initial Business Combination.
For the three months ended June 30, 2022, we had a net income of $4,587,629, which consists of operating costs of $339,995, and interest expense related to the amortization of the debt discount of $398,978, offset by a gain on the change in the fair value of the warrant liability of $5,326,602.
17
Table of Contents
For the six months ended June 30, 2022, we had a net income of $4,351,512, which consists of operating costs of $733,167, and interest expense related to the amortization of the debt discount of $793,572, offset by a gain on the change in the fair value of the warrant liability of $5,878,251.
For the three months ended June 30, 2021, we had a net loss of $3,955,375, which relates toconsists of formation and operating costs of $365,526, a change in fair valueinterest expense related to the amortization of warrant liabilitythe debt discount of $3,021,878,$52,613, a loss on the issuance of the private Placement Warrants of $515,358, and interest expense related to the authorizationa change in fair value of the debt discountwarrant liability of $52,613.$3,021,878.
For the six months ended June 30, 2021, we had a net loss of $10,506,403, which consisted primarilyconsists of formation and operating costs of $435,889, a change in fair valueinterest expense related to the amortization of warrant liabilitythe debt discount of $2,209,144,$52,613, a loss on the issuance of the private Placement Warrants of $7,767,566, interest expense related to the amortization of the debt discount of $52,613, and transaction costs allocable to the warrant liability of $41,191.
$41,191, and a change in fair value of warrant liability of $2,209,144.
Liquidity, and Capital Resources and Going Concern
On March 25, 2021, we consummated the Initial Public Offering of 40,000,000 Class A Public Shares at $10.00 per Public Share, generating gross proceeds of $400,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 10,000,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant in a private placement to the Sponsor, generating gross proceeds of $10,000,000.
On May 6, 2021, the underwriters partially exercised their over-allotment option, resulting in an additional 3,067,606 Public Shares issued for an aggregate amount of $30,676,060. In connection with the underwriters’ partial exercise of their over-allotment option, the Company also consummated the sale of an additional 613,522 Private Placement Warrants at $1.00 per Private Placement Warrant, generating total gross proceeds of $613,522. A total of $30,676,060 was deposited into the Trust Account, bringing the aggregate proceeds held in the Trust Account to $430,676,060.
$430,676,061.
For the six months ended June 30, 2022, cash used in operating activities was $672,101. Net income of $4,351,512 was affected by a gain on the change in the fair value of the warrant liability of $5,878,251, and amortization of the debt discount of $793,572. Changes in operating assets and liabilities provided $61,066 of cash for operating activities.
16
Table of Contents
For the six months ended June 30, 2021, cash used in operating activities was $1,332,422. Net loss of $10,506,403 was affected by a loss on the change in fair value of warrant liability of $2,209,144, a loss on the issuance of the privatePrivate Placement Warrants of $7,767,566, amortization of the debt discount of $52,613, and transaction costs allocable to the warrant liability of $41,191. Changes in operating assets and liabilities used $896,533 of cash for operating activities.
17
Table of Contents
As of June 30, 2021,2022, we had cash held in the Trust Account of $430,676,061. Interest income on the balance in the Trust Account may be used by us to pay taxes. Through June 30, 2021,2022, we have not withdrawnearned any interest earned from the Trust Account.
We intend to use substantially all of the funds held in the Trust Account including any amounts representing interest earned onand the Trust Account (less income taxes payable),proceeds from the sale of the forward purchase shares to complete our Business Combination. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
As of June 30, 2022, we had cash of $1,872,691 held outside of the Trust Account. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plantsproperties, or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.
In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor, or certain of our officers and directors or their affiliates may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $3,000,000 of such loans may be convertible into warrants at a price of $1.00 per warrant, at the option of the lender. The warrants would be identical to the Private Placement Warrants.
18
Table of Contents
On June 18, 2021, we entered into a convertible promissory noteWorking Capital Loan with the Sponsor pursuant to which the Sponsor agreed to loan us up to an aggregate principal amount of $3,000,000 (the “Convertible Promissory Note”“Working Capital Loan”), which we drew in full on the same day. The Convertible Promissory NoteWorking Capital Loan is
non-interest
bearing and due on the date on which we consummate a Business Combination. If we do not
In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update
(“ASU”) 2014-15,
“Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company must consummate aan initial Business Combination we may use a portion of any funds held outside the Trust Account to repay the Convertible Promissory Note; however, no proceedswithin 24 months (or 27 months, as applicable) from the Trust Account mayclosing of our Initial Public Offering or during any Extension Period. It is uncertain that the Company will be used for such repayment.able to consummate an initial Business Combination within this time. If such funds are insufficient to repay the Convertible Promissory Note, the unpaid amounts wouldan initial Business Combination is not consummated within this time, there will be forgiven. Up to $3,000,000a mandatory liquidation and subsequent dissolution of the Convertible Promissory Note may be converted into warrants atCompany. Management has determined that the liquidity condition and mandatory liquidation, should an initial Business Combination not occur, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue as a price of $1.00 per warrant at the option of the Sponsor. The warrants would be identicalgoing concern. No adjustments have been made to the Private Placement Warrants.
We do not believe we will needcarrying amounts of assets or liabilities should the Company be required to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking
in-depth
due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our Public Shares upon consummation of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination.liquidate after March 25, 2023.
Off-Balance
Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance
sheet arrangements as of June 30, 2021.2022. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating
off-balance
sheet arrangements. We have not entered into any
off-balance
sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any
non-financial
assets.
Contractual Obligations
Registration and Shareholder Rights Agreement
Pursuant to a registration and shareholder rights agreement entered into on March 22, 2021, the holders of the Founder Shares and Private Placement Warrants, and any warrants that may be issued upon conversion of the Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and any warrants that may be issued upon conversion of Working Capital Loans and conversion of Founder Shares) are entitled to registration rights. 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. However, the registration and shareholder rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the
applicable lock-up
period. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s 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
to purchase up to 6,000,000 additional Public Shares to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions. The underwriters partially exercised their over-allotment option on May 6, 2021 resulting in the sale of an additional 3,067,606 Public Shares at a price of $10.00 per Public Share. The underwriters’ remaining over-allotment option expired unexercised on May 6, 2021.
The underwriters are entitled to a deferred fee of $0.35 per Public Share, or $15,073,661 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
Forward Purchase Agreement
The Company entered into a forward purchase agreement pursuant to which an affiliate of the Sponsor agreed to purchase an aggregate of up to 5,000,000 forward purchase shares for $10.00 per share, or up to $50,000,000 in the aggregate, in a private placement to close substantially concurrently with the initial Business Combination. The Company will determine in its sole discretion the specific number of forward purchase shares that it sells to the purchaser, if any. The funds from the sale of forward purchase shares may be used as part of the consideration to the sellers in the initial Business Combination, expenses in connection with the initial Business Combination or for working capital in the post transaction company. The obligations under the forward purchase agreement do not depend on whether any public shareholdersPublic Shareholders elect to redeem their shares and provide the Company with a minimum funding level for the initial Business Combination.
19
Table of Contents
Since the forward purchase shares are not freestanding financial instruments, they are not deemed to be within the scope of ASC
815-40.
Accordingly, the forward purchase shares themselves are not derivative instruments and will not be recognized within equity of the Company until issued for consideration.
Critical Accounting Policies
The preparation of condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:
Warrant Liability
We account for the warrants issued in connection with our Initial Public Offering in accordance with the guidance contained in ASC 815 under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, we classify 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 statements of operations. The fair value of the warrants was estimated using a Modified Black Scholes Option Pricing Model.
18
Table of Contents
Derivative Financial Instruments
We evaluate our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the issuance date and is then revalued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or
non-current
based on whether or not
net-cash
settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
Class A Ordinary Shares Subject to Possible Redemption
We account for our ordinary shares subject to possible conversion in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption are classified as a liability instrument and measured at fair value. Conditionally redeemable ordinary shares (including 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 our control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. Our ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ (deficit) equity section of our unaudited condensed balance sheets.
Net Loss Per Ordinary Share
We apply
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the
two-class
method in calculating earnings per share. two classes of shares. Net income (loss) per ordinary share basic and diluted for Class A redeemable ordinary shares is calculatedcomputed by dividing the interestnet income earned on the Trust Account(loss) by the weighted average number of Class A redeemable ordinary shares outstanding since original issuance. Net loss per ordinary share, basic and diluted for Class B
non-redeemable
ordinary shares is calculated by dividing the net income (loss), less income attributable to Class A redeemable ordinary shares, by the weighted average number of Class B
non-redeemable
ordinary shares outstanding for the periods presented.period. Diluted net income per share reflects the potential dilution that could occur if warrants were to be exercised or converted or otherwise resulted in issuance of Ordinary Shares that then shared in the earnings of the entity. As the exercise of the warrants are contingent upon the completion of a business combination they have not been included in the calculation of diluted net income (loss) per share. Accretion associated with the redeemable Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value.
Recent Accounting Standards
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)
2020-06,
Debt — Debt with Conversion and Other Options (Subtopic
470-20)
and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic
815-40)
(“ASU
2020-06”)
to simplify accounting for certain financial instruments. ASU
2020-06
eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU
2020-06
amends the diluted earnings per share guidance, including the requirement to use the
if-converted
method for all convertible instruments. ASU
2020-06
is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. We adopted ASU
2020-06
effective January 1,2021. The adoption of ASU
2020-06
did not have a significant impact on the Company’s financial statements.
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our unaudited condensed financial statements.
20
Table of Contents
JOBS Act
On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. 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 an election to opt out is irrevocable. We have elected to irrevocably 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, we will adopt the new or revised standard at the time public companies adopt the new or revised standard. This may make comparison of our financial statements with another emerging growth company that has not opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used.
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company”, we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of
non-emerging
growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our Initial Public Offering or until we are no longer an “emerging growth company,” whichever is earlier.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not required forWe are a smaller reporting companies.company as defined by Rule
12b-2
of the Exchange Act and are not required to provide the information otherwise required under this item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
As required by Rules
13a-15
and
15d-15
under the Exchange Act, our Chief Executive Officer and Chief Operating Officer (Principal Financial Officer) carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2021.2022. Based upon their evaluation, our Chief Executive Officer and Chief Operating Officer (Principal Financial Officer) concluded that our disclosure controls and procedures (as defined in Rules
13a-15
(e) and
15d-15
(e) under the Exchange Act) were not effective due to a material weakness in internal controls over financial reporting related to inaccurate accounting for the Private Placement Warrants. In light of this material weakness, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with GAAP. Accordingly, management believes that the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q present fairly in all material respects our financial position, results of operations and cash flows for the periods presented.effective.
19
Table of Contents
Changes in Internal Control over Financial Reporting
During the fiscal quarter ended June 30, 2021, other than described below,2022, there werehas been no changeschange in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that havehas materially affected, or areis reasonably likely to materially affect, our internal control over financial reporting. In light of the error in classification of the Private Placement Warrants, we have enhanced our processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards that apply to our financial statements. We have also provided enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects. The Company has also retained the services of a valuation expert to assist in the valuation analysis of the Private Placement Warrants on a quarterly basis.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings
NoneNone.
21
Table of Contents
Item 1A. Risk Factors
Factors that could cause our actual results to differ materially from those in this report include the risk factors described in our final prospectus Annual Report on Form
10-K
for our Initial Public Offeringthe year ended December 31, 2021, as filed with the SEC. SEC on March 31, 2022 (our “2021 Annual Report on Form
10-K”).
Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Report, except as described below, there have been no material changes to the risk factors disclosed in our final prospectus for our Initial Public Offering filed with the. 2021 Annual Report on Form
10-K.
We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
The risk factor disclosure in our 2021 Annual Report on Form
10-K
filed with the SEC on March 31, 2022, set forth under the heading “Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial Business Combination, and results of operations.” is replaced in its entirety with the following risk factor:
Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial Business Combination, and results of operations.
We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial Business Combination, and results of operations.
On March 30, 2022, the SEC issued proposed rules relating to, among other items, enhancing disclosures in business combination transactions involving SPACs and private operating companies; amending the financial statement requirements applicable to transactions involving shell companies; effectively eliminating the safe harbor relating to the use of projections in SEC filings in connection with proposed business combination transactions; increasing the potential liability of certain participants in proposed business combination transactions; and the extent to which SPACs could become subject to regulation under the Investment Company Act of 1940. These rules, if adopted, whether in the form proposed or in revised form, may materially adversely affect our ability to negotiate and complete our initial business combination and may increase the costs and time related thereto.
Moreover, because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed.
22
Table of Contents
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.Proceeds
On March 25, 2021, we consummated the Initial Public Offering of 40,000,000 Class A ordinary shares. The Class A ordinary shares were sold at an offering price of $10.00 per unit, generating total gross proceeds of $400,000,000. The securities in the offering were registered under the Securities Act on registration statement on Form
S-1
(No.
333-253796).
The Securities and Exchange Commission declared the registration statements effective on March 17, 2021.
On May 6, 2021, the underwriters partially exercised their over-allotment option, resulting in an additional 3,067,606 Class A ordinary shares issued for an aggregate amount of $30,676,060.
Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 10,000,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, for an aggregate purchase price of $10,000,000. As a result of the underwriters’ partial exercise of their overallotment option on May 6, 2021, the Sponsor purchased an additional 613,522 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, for an aggregate purchase price of $613,522. A portion of the proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering to be held in the Trust Account. A portion of the proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering to be held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period or any Extension Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will be worthless. The issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
We paid a total of $24,666,079, consisting of $8,613,522 of underwriting fees, $15,073,661 of deferred underwriting fees and $978,896 of other offering costs and expenses related to the Initial Public Offering.
For a description of the use of the proceeds generated in our Initial Public Offering, see Part I, Item 2 of this Form
10-Q.
Item 3. Defaults Upon Senior Securities
NoneNone.
Item 4. Mine Safety Disclosures
NoneNone.
Item 5. Other Information
NoneNone.
 
2023
Table of Contents
Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form
10-Q.
 
No.
  
Description of Exhibit
31.1*  Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*  Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*  Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*  Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
104  Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
101.INS*  XBRL Instance Document
101.SCH*  XBRL Taxonomy Extension Schema Document
101.CAL*  XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*  XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*  XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*  XBRL Taxonomy Extension Presentation Linkbase Document
 
*
Filed herewith.
 
2124
Table of Contents
PART III—SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
  
DRAGONEER GROWTH OPPORTUNITIES CORP. III
Date: August 18, 2021
1
5
, 2022		  By: 
/s/ Christian Jensen
  Name: Christian Jensen
  Title: Chief Executive Officer
   (Principal Executive Officer)
Date: August 18, 2021
1
5
, 2022		  By: 
/s/ Pat Robertson
  Name: Pat Robertson
  Title: President
   (Principal Financial Officer and Principal Accounting Officer), Chief Operating Officer and Director
 
2225