NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 1 — Description of Organization and Business Operations and Liquidity
Ascendant Digital Acquisition Corp. III (the “Company”) was incorporated in the Cayman Islands on February 19, 2021. The Company is a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities (the “Business Combination”).combination.
The Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination.business combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of
September 30, 2021,March 31, 2022, the Company had not commenced any operations. All activity through
September 30, 2021,March 31, 2022 relates to the Company’s formation and
Initialthe initial public offering (the “Initial Public
Offering (“IPO”Offering”), which is described below and since the offering, the search for a prospective
Initialinitial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business
Combination,combination, at the earliest. The Company
will generategenerates non-operating
income in the form of interest income from the proceeds
derived fromheld in the
IPO.Trust Account (as defined below).The registration statement for the Company’s IPOInitial Public Offering (the “Registration Statement”) was declared effective on November 10, 2021. On November 15, 2021, the Company consummated the sale of 26,100,000 units (“Units”) with respect to the Class A ordinary shares included in the Units being offered (the “Public Shares”) at $10.00 per Unit generating gross proceeds of $261,000,000, which is discussed in Note 3. The company has selected December 31 as its fiscal year end.
Simultaneously with the closing of the IPO,Initial Public Offering, the Company consummated the sale of 10,330,000 warrants (“Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to the Company’s sponsor, Ascendant Sponsor LP III (the “Sponsor”) generating gross proceeds of $10,330,000.
Additionally with the closing of the IPO,Initial Public Offering, the Company consummated the closing of the sale of 3,900,000 additional Units upon receiving notice of the underwriter’s election to partially exercise its overallotment option (“Overallotment Units”), generating additional gross proceeds of $39,000,000. Since the underwriters’underwriters only partially exercised their over-allotment option, on November 15, 2021 the Sponsor forfeited 3,750 shares for no consideration. Simultaneously with the exercise of the overallotment, the Company consummated the Private Placement of an additional 1,170,000 Private Placement Warrants to the Sponsor, generating gross proceeds of $1,170,000.
Offering costs for the IPOInitial Public Offering and the exercise of the underwriters’ over-allotment option amounted to $14,026,631,$14,172,182, consisting of $3,000,000 of underwriting fees, $10,500,000 of deferred underwriting fees payable (which are held in the Trust Account (defined below)) and $526,631$672,182 of other costs. As described in Note 6, the $10,500,000 of deferred underwriting fee payable is contingent upon the consummation of a Business Combinationbusiness combination by February 15, 2023, subject to the terms of the underwriting agreement.
Following the closing of the
IPOInitial Public Offering and partial exercise of the over-allotment, $306,000,000 ($10.20 per Unit) from the net proceeds of the sale of the Units in the
IPOInitial Public Offering and the Private Placement Warrants was placed in a trust account (“Trust Account”) and
will be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4)
of
Rule 2a-7 of the
the Investment Company Act, as determined by the Company,
untiluntil the earlier of:of (i) the completion of a Business Combinationbusiness combination and (ii) the distribution of the Trust Account, as described below.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPOInitial 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.business combination. There is no assurance that the Company will be able to complete a Business Combinationbusiness combination successfully. The Company must complete one or more initial Business Combinationsbusiness combinations having an aggregate fair market value of at least 80% of the assets held in the Trust Account excluding the deferred underwriting commissions and taxes payable on income earned on the Trust Account) at the time of the agreement to enter into the initial Business Combination.business combination. However, the Company will only complete a Business Combinationbusiness combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance the Company will be able to successfully effect a Business Combination.
5
ASCENDANT DIGITAL ACQUISITION CORP. III
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The Company will provide the holders of the outstanding Public Shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company. The Public Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially
anticipated to beat $10.20
per Public Share, plus any pro rata interest then in the Trust Account, net of taxes payable). There will be no redemption rights with respect to the Company’s warrants.
Theper-share
All of the Public Shares contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, if there is a shareholder vote or tender offer in connection with the Company’s Business Combination and in connection with certain amendments to the Company’s amended and restated certificate of incorporation. In accordance with Accounting Standards Codification(“ASC”) 480-10-S99, redemption
provisions not solely within the control of a company require Class A ordinary shares subject to redemptionamount to be
classified outside of permanent equity. Given that thedistributed to Public Shareholders who redeem their Public Shares will
not be
issued with other freestanding instruments (i.e., public warrants),reduced by the
initial carryingdeferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 6). These Public Shares were recorded at a redemption value
of Class A ordinary sharesand classified as temporary equity
will beupon the
allocated proceeds determinedcompletion of the Initial Public Offering, in accordance with
the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity” (“ASC 470-20. The480”).
Class A ordinary shares are subject toit is probable that the equity instrument will become redeemable, the Company has the option to either (i) accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or (ii) recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately. While redemptions cannot cause the Company’s net tangible assets to fall below $5,000,001, the Public Shares are redeemable and are classified as such on the balance sheet until such date that a redemption event takes place.Redemptions of the Company’s Public Shares may be subject to the satisfaction of conditions, including minimum cash conditions, pursuant to an agreement relating to the Company’s Business Combination.business combination. If the Company seeks shareholder approval of the Business Combination,business combination, the Company will proceed with a Business Combinationbusiness combination if a majority of the shares voted are voted in favor of the Business Combination,business combination, or such other vote as required by law or stock exchange rule. If a shareholder vote is not required by applicable law or stock exchange listing requirements and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to its Certificateamended and restated memorandum and articles of Incorporation,incorporation (the “Charter”), conduct the redemptions pursuant to the tender offer rules of the SEC and file tender offer documents with the SEC prior to completing a Business Combination.business combination. If, however, shareholder approval of the transaction is required by applicable law or stock exchange listing requirements, or the Company decides to obtain shareholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks shareholder approval in connection with a Business Combination,business combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the IPOInitial Public Offering in favor of approving a Business Combination.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 the proposed transaction.
Notwithstanding the foregoing, the Certificate of IncorporationCharter
provides that a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Class A ordinary shares sold in the Initial Public Offering, without the prior consent of the Company.
The Company’s Sponsor, officers,
directors and
directors (theadvisory board members (collectively, “Initial Shareholders”)
have agreed not to propose an amendment to the
Certificate of IncorporationCharter that would affect the substance or timing of the Company’s obligation to redeem
100% of its Public Shares if the Company does not complete a
Business Combination,business combination, unless the Company provides the Public Shareholders with the opportunity to redeem their shares of Class A ordinary shares in conjunction with any such amendment.
If the Company is unable to complete a
Business Combinationbusiness combination by February 15, 2023, 15 months from the closing of the
IPOInitial Public Offering (“Combination Period”), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares,
at
a per-share price, payable
payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to
usthe Company to pay
the Company’sfor its franchise and income taxes (less up
toto $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which
redemption will completely extinguish Public Shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under DelawareCayman Islands law to provide for claims of creditors and the requirements of other applicable law.
6
ASCENDANT DIGITAL ACQUISITION CORP. III
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The Initial Shareholders have agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combinationbusiness combination within the Combination Period. However, if the Initial Shareholders should acquire Public Shares in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combinationbusiness combination within the Combination Period. The underwriters have agreed to waive their rights to its deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combinationbusiness combination within the Combination Period, and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be only $10.20 per shares held in the Trust Account. In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a vendor 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. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Liquidity and Management’s PlanGoing Concern Consideration
As of March 31, 2022, the Company had cash of $665,569 and working capital surplus of $1,334,812.
PriorThe Company’s liquidity needs up to March 31, 2022 had been satisfied through the cash receipt of $25,000 from the Sponsor to cover for certain expenses on behalf of the Company in exchange for issuance of Founder Shares (as defined in Note 5), and loan from the related party of approximately $153,396 under the Note (as defined in Note 5). The Company repaid the Note in full on November 11, 2021. Subsequent to the completionconsummation of the Initial Public Offering, the Company lackedCompany’s liquidity has been satisfied through the liquidity it needed to sustain operations for a reasonable period of time, which is considered to be one yearnet proceeds from the issuance date of these interim financial statements. The Company has since completed its IPO at which time capital in excessconsummation of the funds depositedInitial Public Offering, over-allotment, and the Private Placement held outside of the Trust Account. In addition, in order to finance transaction costs in connection with a business combination, the trust and/Sponsor or usedan affiliate of the Sponsor, or certain of the Company’s officers and directors
to,
fund offering expensesprovide the Company Working Capital Loans (as defined in Note 5). As of
approximately $2 million was releasedMarch 31, 2022, there were 0 amounts outstanding under Working Capital Loan.In connection with the Company’s assessment of going concern considerations in accordance with FASB Accounting Standards Update(“ASU”) 2014-15, “Disclosures
of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the mandatory liquidation and 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
for general working capital purposes. Accordingly, management has since reevaluated the Company’s liquidity and financial condition and determined that sufficient capital existsbe required to
sustain operations for at least one year from the date that these liquidate after February 15, 2023. The unaudited condensed
financial statements
were issued, and therefore substantial doubt has been alleviated.do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.
Note 2 — Summary of Significant Accounting Policies
The accompanying unaudited condensed financial statements
have been preparedare presented in
accordanceU.S. dollars in conformity with accounting principles generally accepted in the United States of America (“
U.S. GAAP”) for interim financial information and
in accordance with the instructions to Form
10-Q
and Article
108 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,and pursuant to the rules and regulations of the
SEC for interim financial reporting.SEC. Accordingly, they do not include all
of the information and footnotes
necessary for a complete presentation of financial position, results of operations, or cash flows.required by GAAP. In the opinion of management, the
accompanying unaudited condensed
consolidated financial statements
includereflect all adjustments,
consisting of awhich include only normal recurring
nature, which areadjustments necessary for
athe fair
presentationstatement of the
financial position, operatingbalances and results
and cash flows for the periods presented.
Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected through December 31, 2022 or any future period.7
ASCENDANT DIGITAL ACQUISITION CORP. III
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The accompanying unaudited condensed
consolidated financial statements should be read in conjunction with the
Company’s prospectus for its Initial Public Offering as audited financial statements and notes thereto included in the Annual Report on Form10-K
filed
by the Company with the SEC on
November 10, 2021 as well asMarch 25, 2022.The preparation of unaudited condensed financial statements in conformity with GAAP requires the Company’s
Current Report on Form8-K,
as filed withmanagement to make estimates and assumptions that affect the
SEC on November 15, 2021. The interim results forreported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
period February 19, 2021 (inception) through September 30, 2021 are not necessarily indicativedate of the
unaudited condensed financial statements. Making estimates requires management to exercise significant judgment. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. 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 be expected for the period ended December 31, 2021one or for anymore future periods.confirming events. Actual results could differ from those estimates.
The Company is an emerging growth company as defined in Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), which exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that
apply
to non-emerging growth companies
companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised, and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
This may make comparison of the Company’s unaudited condensed financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
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. TheAs of March 31, 2022 and December 31, 2021, the Company did 0t have anyhad 0 cash equivalents as of September 30, 2021.equivalents.
The Company complies with the requirements of Financial Accounting Standards Board (FASB) Accounting Standard Codification (ASC)Offering costs consist principally of legal, accounting, underwriting fees and other costs directly related to the IPO. Offering costs are allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs amounted to $14,026,298 of which $13,586,104 was charged against the carrying value of Class A ordinary shares upon the completion of the IPO and $440,527 was expensed for offering costs related to the warrant issuance.
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 DepositoryDeposit Insurance Corporation coverage limit ofo
$250,000.
At September 30, 2021, theThe Company has not experienced losses on these accounts, and management believes the Company is not exposed to significant risks on such accounts.
Investments Held in the Trust Account
The Company’s portfolio of investments is comprised of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity o
days or less, or investments in money market funds that invest in U.S. government securities and generally have a readily determinable fair value, or a combination thereof. When the Company’s investments held in the Trust Account are comprised of U.S. government securities, the investments are classified as trading securities. When the Company’s investments held in the Trust Account are comprised of money market funds, the investments are recognized at fair value. Trading securities and investments in money market funds are presented on the condensed balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities are included in interest income from investments held in the Trust Account in the accompanying condensed statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information.
8
ASCENDANT DIGITAL ACQUISITION CORP. III
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC Topic 820, “Fair Value Measurements,” equals or approximates the carrying amounts represented in the condensed balance sheets, primarily due to their short-term nature, except for the derivative warrant liabilities (see Note 9).
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 does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity,is re-assessed at the
end of each reporting period. The Warrants are recognized as derivative liabilities in accordance with ASC 815. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the carrying value of the instruments to fair value at each reporting period until they are exercised. The determination of the fair value of the warrant liability may be subject to change as more current information becomes available and accordingly the actual results could differ significantly. Derivative warrant liabilities are classifiedas non-current liabilities
as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. 9
ASCENDANT DIGITAL ACQUISITION CORP. III
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Class A Ordinary sharesShares Subject to Possible Redemption
The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity.” OrdinaryShares of Class A ordinary shares subject to mandatory redemption (if any) isare classified as a liability instrument and are measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A ordinary shares that featuresfeature 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) isare classified as temporary equity. At all other times, Class A ordinary shares isare classified as shareholders’ equity. The Company’s Class A ordinary shares featuressold in the Initial Public Offering and over-allotment feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, all sharesas of March 31, 2022 and December 31, 202
Class A ordinary shares subject to possible redemption
will bewere presented
at redemption value as temporary equity, outside of the shareholders’
equitydeficit section of the Company’s
condensed
balance
sheet.sheets.The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of the Class A ordinary shares subject to possible redemption to equal the redemption value at the end of each reporting period. This method would view the end of the reporting period as if it were also the redemption date for the security. Effective with the closing of the Initial Public Offering (including exercise of the over-allotment option), the Company recognized the accretion from initial book value to redemption amount, which resulted in charges againstadditional paid-in capital
(to the extent available) and accumulated deficit. Fair Value of Financial InstrumentsOffering Costs Associated with the Initial Public Offering
The
Company complies with the requirements of FASB ASCOffering costs consisted of legal, accounting, underwriting fees and other costs incurred that were directly related to the Initial Public Offering. Upon completion of the Initial Public Offering, offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair
value basis, compared to total proceeds received. Offering costs allocated to derivative warrant liabilities were expensed as incurred and presented asnon-operating
expenses in the condensed statements of operations. Offering costs allocated to the Class A ordinary shares issued were charged against the carrying value of the
Company’s assets and liabilities which qualify as financial instruments underClass A ordinary shares subject to possible redemption upon the
FASB ASC 820, “Fair Value Measurements and Disclosures,” approximatecompletion of the
carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.Derivative Financial Instruments
Initial Public Offering. The Company
evaluates its financial instrumentsclassifies deferred underwriting commissions asnon-current
liabilities as their liquidation is not reasonably expected to
determine if such instruments are derivativesrequire the use of current assets or
contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. Derivative instruments are initially recorded at fair value onrequire the
grant dateand re-valued at
each reporting date, with changes in the fair value reported in the statementscreation of
operations. Derivative assets and liabilities are classified in the balance sheet as currentor non-current based
on whether ornot net-cash settlement
or conversion of the instrument could be required within 12 months of the balance sheet date. The preparation of financial statements in conformity with U.S. 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. Making estimates requires management to exercise significant judgment. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. 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. Actual results could differ from those estimates.liabilities.
The Company follows the guidance for accounting for income taxes under FASB ASC 740, “Income Taxes.” FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were 0unrecognized0 unrecognized tax benefits as of September 30,March 31, 2022 and December 31, 2021. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. NaNamountsNaN amounts were accrued for the payment of interest and penalties for the period from February 19, 2021 (inception) through September 30,as of March 31, 2022 and December 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s unaudited condensed financial statements.
Net LossIncome (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. This presentation assumes a business combination as the most likely outcome. Net lossincome (loss) per ordinary share is computedcalculated by dividing the net loss by the weighted average number of shares of ordinary shares outstanding duringfor the respective period. Weighted average shares were reduced for
10
ASCENDANT DIGITAL ACQUISITION CORP. III
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The calculation of diluted net income (loss) does not consider the effect of the warrants underlying the Units sold in the Initial Public Offering and the Private Placement Warrants to purchase an aggregate of 978,75026,500,000 Class BA ordinary shares that are subject to forfeiture if the over-allotment option is not exercised by the underwriters (see Note 5). On September 30, 2021, the Company did 0t have any dilutive securities and other contracts that could, potentially, be exercised or converted into shares of ordinary shares and then share in the earningscalculation of the Company.diluted income (loss) per ordinary share since their exercise is contingent upon future events. As a result, diluted lossnet income (loss) per commonordinary share is the same as basic lossnet income (loss) per commonordinary share for the three months ended March 31, 2022 and for the period presented.from February 19, 2021 (inception) through March 31, 2021. Accretion associated with the redeemable Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value.
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessmenttable below presents a reconciliation of the instruments’ specific termsnumerator and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”)denominator used to compute basic and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the instruments are free standing financial instruments pursuant to ASC 480, meet the definitiondiluted net loss per ordinary share for each class of a liability pursuant to ASC 480, and whether the instruments meet all of the requirements for equity classification under ASC 815, including whether the instruments are indexed to the Company’s own common shares and whether the instrument holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, was conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the instruments are outstanding. Management has concluded that the Public Warrants and Private Warrants issued pursuant to the warrant agreement qualify for liability accounting treatment.ordinary shares:
| | | | | | | | | | | | | | | | | |
| | | For the Three Months Ended
March 31, 2022 | | | For the Period From
February 19, 2021
(Inception) Through
March 31, 2021 | |
| | | | | | | | | | | | |
Basic and diluted net income ( loss ) per ordinary share: | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Allocation of net income (loss) | | $ | 6,073,181 | | | $ | 1,518,295 | | | $ | 0 | | | $ | (10,243 | ) |
| | | | | | | | | | | | | | | | |
| Basic and diluted weighted average ordinary shares outstanding | | | 30,000,000 | | | | 7,500,000 | | | | 0 | | | | 5,729,268 | |
| | | | | | | | | | | | | | | | | |
Basic and diluted net income ( loss ) per ordinary share | | $ | 0.20 | | | $ | 0.20 | | | $ | 0 | | | $ | (0.00 | ) |
| | | | | | | | | | | | | | | | | |
Recent Accounting Pronouncements
In August 2020, the FASB issued Accounting Standards Update(“ASU”) No. 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): Accounting
for Convertible Instruments and Contracts in an Entity’s Own Equity(“ASU 2020-06”), which
simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The Company adoptedASU 2020-06 on
February 19, 2021 (inception). Adoption of the ASU did not impact the Company’s financial position, results of operations or cash flows.The Company’s management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying unaudited condensed financial statement.statements.
Note 3 — Initial Public Offering
Pursuant toOn November 15, 2021, the IPO, andCompany consummated its Initial Public Offering of 30,000,000 Units, including 3,900,000 units as a result of the underwriters’ partial exercise by the underwriters of their over-allotment option, the Company sold 30,000,000 units at a price of $10.00 per Unit. Unit, generating gross proceeds of $300.0 million, and incurring offering costs of approximately $14.2 million, of which approximately $10.5 million was for deferred underwriting commissions.
Each Unit consists of one
share of Class A ordinary
shares (such shares of Class A ordinary shares included in the Units being offered, the “Public Shares”),share,and
one-half aof
one redeemable warrant
(each, a(the “Public Warrant”). Each Public Warrant entitles the holder to purchase
1share of Class1Class A ordinary
sharesshare at a price of $11.50 per share, subject to adjustment (see Note 7).
Note 4 — Private Placement Warrants
On November 15, 2021, simultaneously with the consummation of the IPOInitial Public Offering and the underwriters’ partial exercise of their over-allotment option, the Company consummated the issuance and sale (“Private Placement”) of 11,500,000 Private Placement Warrants in a private placement transaction at a price of $10.00 per Placement Unit, generating
gross proceeds of $11,500,000. Each whole Private Placement Warrant will be exercisable to purchase one share of Class A ordinary shares at a price of $11.50 per share. A portion of the proceeds from the Private Placement Units will be added to the proceeds from the Proposed Public Offering to be held in the Trust Account. If the Company does not complete a
BusinessCombination
business combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Private Placement Warrants and all underlying securities will be worthless.
11
ASCENDANT DIGITAL ACQUISITION CORP. III
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 5 — Related Party Transactions
On February 24, 2021, the Sponsor purchased an aggregate of 8,625,000
(“founder
shares”) of the Company’s Class B ordinary shares
par value $0.0001 per share (“Class B ordinary shares”) for an aggregate purchase price of $25,000, or approximately $0.003 per share. On March 23, 2021, the Sponsor surrendered 1,437,500 founder shares to the Company for cancellation for no consideration creating a total of 7,187,500 founder shares to be outstanding. In March 2021, the Sponsor transferred an aggregate of 230,000 founder shares to members of the Company’s board of directors and the Company’s advisory board, resulting in the Sponsor holding 6,957,500 founder shares. On November 9, 2021, the Company effected a share capitalization of 316,250 founder shares, resulting in
our sponsor the Sponsor
holding 7,273,750 founder shares (for an aggregate of 7,503,750 founder shares of which up to 978,750 of which were subject to forfeiture if the underwriters’ over-allotment option is not exercised in full). Since the
underwriters’underwriters only partially exercised their over-allotment option, on November 15, 2021 the Sponsor forfeited 3,750 shares for no consideration.
The Founder Shares will automatically convert into shares of Class A ordinary shares at the time of the Company’s initial Business Combinationbusiness combination and are subject to certain transfer restrictions, as described in Note 6. Holders of Founder Shares may also elect to convert their shares of Class B ordinary shares into an equal number of shares of Class A ordinary shares, subject to adjustment, at any time.
On February 24, 2021, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the
IPOInitial Public Offering pursuant to a promissory note (the “Note”). This
loan
is was 0n-interest bearing and
and payable on the earlier of December 31, 2021, or the completion of the
IPO. As of September 30, 2021, the Company had $153,397 of borrowings under the Note.Initial Public Offering. The outstanding balance under the Note was repaid at the closing of the
IPOInitial Public Offering on November 15, 2021, and the Note was terminated.
In addition, in order to finance transaction costs in connection with a Business Combination,business combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination,business combination, the Company will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combinationbusiness combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination,business combination, without interest, or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into units of the post Business Combinationbusiness combination entity at a price of $1.00 per warrant. The units would be identical to the Private Placement Units. As of September 30,March 31, 2022 and December 31, 2021, there were 0Working0 Working Capital Loans outstanding.
SupportAdministrative Services Agreement
TheOn November 9, 2021, the Company intends to payentered into an entity affiliatedagreement with the Sponsor, pursuant to which the Company agreed to pay the Sponsor a feetotal of approximately $10,000 per month followingfor office space, secretarial and administrative services provided to the consummation of the IPOCompany until the earlier of the consummation of thea Business Combination or liquidation for office spaceliquidation. The Company incurred $30,000 in connection with such fees during the three months ended March 31, 2022, included within the general and administrative support services. Asfees in the accompanying unaudited condensed statements of September 30, 2021, 0amounts have been paid under this agreement.operations.
In addition, the Sponsor, officers and directors, and any of their respective affiliates will be reimbursed for anyout-of-pocket
expenses incurred in connection with activities on the Company’s behalf such as identifying potential partner businesses and performing due diligence on suitable business combinations. The audit committee will review on a quarterly basis all payments that were made by the Company to the Sponsor, officers or directors, or the Company’s or their affiliates. Any such payments prior to an initial business combination will be made from funds held outside the Trust Account.
ASCENDANT DIGITAL ACQUISITION CORP. III
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
During the period from February 19, 2021 (inception) through December 31, 2021, the Company’s Sponsor paid approximately $19,000 of expenses on behalf of the Company. As of December 31, 2021, outstanding balance for such expenses was
approximately $19,000, included in due to related party in current liabilities, on the accompanyingcondensed
balance sheet. Such fees were settled during the three months ended March 31, 2022. Note 6 — Commitments and Contingencies
The holders of Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans, if any, will be entitled to registration rights (in the case of the Founder Shares, only after conversion of such shares to shares of Class A ordinary shares) pursuant to a registration rights agreement to be signed on or before the date of the prospectus for the
IPO.Initial Public Offering. These holders will be entitled to certain demand and “piggyback” registration rights. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until the termination of
the
applicable lock-up period for
for the securities to be registered. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Forward Purchase Agreement
On October 17, 2021, the Company entered into an amended and restated forward purchase agreement with NEXON Co. Ltd. (“Nexon”), pursuant to which Nexon has subscribed to purchase from the Company, upon the Company’s request, up to 9,000,000 forward purchase units, consisting of 1 Class A ordinary share, or a forward purchase share, andone-half
of one warrant to purchase one Class A ordinary share, for $10.00 per unit, for an aggregate amount of up to $90,000,000, in a private placement that will close concurrently with the closing of the Company’s initial Business Combination. Nexon’s commitment under its forward purchase agreement is subject to, among other conditions, the approval of its investment committee in its sole and absolute discretion. The forward purchase shares and forward purchase warrants will be identical to the Class A ordinary shares and warrants, respectively, included in the units sold in the IPO, except that they will not be transferable, assignable or salable until 30 days after the completion of the initial Business Combination combination, except as described in the Registration Statement, and will be subject to registration rights, as described in the Registration Statement.The Company granted the underwriters
aa 45-day
option
from the final prospectus relating to the
IPOInitial Public Offering to purchase up to 3,915,000 additional Units to cover over-allotments, if any, at the
IPOInitial Public Offering price less the underwriting discounts and commissions. On November 15, 2021, the underwriters elected to partially exercise the over-allotment option purchasing 3,900,000 units and forfeited the option for the remaining 15,000 Units.
The underwriters were paid a cash underwriting discount of $0.10 per unit on the offering not including the Units issued with the underwriter’s exercise of their over-allotment option, or $3,000,000 in the aggregate at the closing of the IPO.Initial Public Offering. In addition, the underwriters are entitled to a deferred underwriting commissions of $0.35 per unit, or $10,500,000 from the closing of the IPO.Initial Public Offering. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely if the Company completes a Business Combination,business combination, subject to the terms of the underwriting agreement.
Management continues
evaluating to evaluate
the impact
of
the COVID-19 pandemic and
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
unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy are not determinable as of the date of these financial statements and 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.
Note 7 — Shareholder’s Equity
Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ DeficitOrdinary sharesPreference Shares
13
ASCENDANT DIGITAL ACQUISITION CORP. III
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The Company is authorized to issue 500,000,000 shares of Class A ordinary shares with a par value of $0.0001 per share. As of
September 30,March 31, 2022 and December 31, 2021, there were
030,000,000 shares of Class A
Ordinaryordinary shares
issued and outstanding.
The Company is authorized to issue 50,000,000 shares of Class B ordinary shares with a par value of $0.0001 per share. Holders of Class B ordinary shares are entitled to one vote for each share. As of
September 30,March 31, 2022 and December 31, 2021, there were
7,503,7507,500,000 shares of Class B ordinary shares outstanding.
This number includes an aggregateShareholders of upthe ordinary shares of record are entitled to 978,750 sharesone vote for each share held on all matters to be voted on by shareholders. Holders of Class B ordinary shares subjectwill have the right to forfeiture ifappoint all of the over-allotment option is not exercised in full or in part byCompany’s directors prior to the underwriter.
Holdersconsummation of the initial business combination. On any other matter submitted to a vote of the Company’s shareholders, holders of Class AB ordinary shares and holders of Class BA ordinary shares will vote together as a single class, on all other matters submitted to a vote of shareholders except as required by law.
applicable law or stock exchange rule.The shares of Class B ordinary shares will automatically convert into shares of Class A ordinary shares at the time of the initial
Business Combination onbusiness combinationon a
one-for-one basis,
, subject subject to adjustment. In the case that additional shares of Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the Proposed Public Offering and related to the closing of the initial
Business Combination,business combination, the ratio at which shares of Class B ordinary shares shall convert into shares of Class A ordinary shares will be adjusted (unless the holders of a majority of the outstanding shares of Class B ordinary shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A ordinary shares issuable upon conversion of all shares of Class B ordinary shares will equal, in the aggregate, on
anan as-converted
basis,
approximately 26.0% of the sum of the total number of all shares of ordinary shares outstanding upon the completion of the Proposed Public Offering plus all shares of Class A ordinary shares and equity-linked securities issued or deemed issued in connection with the initial
Business Combinationbusiness combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial
Business Combinationbusiness combination and any private placement-equivalent warrants issued to the Sponsor or its affiliates upon conversion of loans made to the Company). Holders of Founder Shares may also elect to convert their shares of Class B ordinary shares into an equal number of shares of Class A ordinary shares, subject to adjustment as provided above, at any time.
—The Company is authorized to issue 5,000,000 shares of preference shares with a par value of $0.0001 per shares with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. For the period presented, there were 0 preference shares issued or outstanding.As of September 30,March 31, 2022 and December 31, 2021, there were no warrants issuedthe Company has 15,000,000 Public Warrants and 11,500,000 Private Placement Warrants outstanding.
Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) the completion of a Business Combinationbusiness combination and (b) 12 months from the closing of the Proposed Public Offering. The Public Warrants will expire five years from the completion of a Business Combinationbusiness combination or earlier upon redemption or liquidation.
The Company will not be obligated to deliver any shares of ordinary shares pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the ordinary shares underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption is available.
Redemption of warrants when the price per Class
A ordinary shares equals or exceeds $18.00$18.00:
Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described herein with respect to the private placement warrants)Private Placement Warrants):
in whole and not in part;
at a price of $0.01 per warrant;
ASCENDANT DIGITAL ACQUISITION CORP. III
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
upon a minimum of 30 days’ prior written notice of redemption, which the Company refers to
as
the “30-day redemption
period”; and
if, and only if, the last reported sale price (the “closing price”) of
our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities—Warrants— Public Shareholders’ Warrants—Anti-Dilution Adjustments”) for any 20 trading days
within
a 30- trading30-trading day
day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
The Company will not redeem the warrants as described above unless an effective registration statement under the Securities Act covering the Class A ordinary shares issuable upon exercise of the warrants is effective and a current prospectus relating to those Class A ordinary shares is available
throughout
the 30-day redemption period.
period. If and when the warrants become redeemable by the Company, the Company may exercise their redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Except as set forth below, none of the private placement warrants will be redeemable by the Company so long as they are held by the Company’s sponsor or its permitted transferees.
Redemption of warrants when the price per Class
A ordinary shares equals or exceeds $10.00$10.00:
Once the warrants become exercisable, the Company may call redeem the outstanding warrants:
in whole and not in part;
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table set forth under “Description of Securities— Warrants—Public Shareholders’ Warrants” based on the redemption date and the “fair market value” of our Class A ordinary shares (as defined below) except as otherwise described in “Description of Securities—Warrants—Public Shareholders’ Warrants”;
if, and only if, the closing price of Class A ordinary shares equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities—Warrants—Public Shareholders’ Warrants—Anti-dilution Adjustments”) for any 20 trading days
within
the 30-trading day
period ending three trading days before the Company sends the notice of redemption to the warrant holders; and
if the closing price of the Class A ordinary shares for any 20 trading days
within
a 30-trading day period
period ending on the third trading day prior to the date on which
we send the Company sends
the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities—Warrants—Public Shareholders’ Warrants—Anti-dilution Adjustments”), the private placement warrants must also be concurrently called for redemption on the same terms as the outstanding public warrants, as described above.
The “fair market value” of Class A ordinary shares for the above purpose shall mean the volume weighted average price of Class A ordinary shares during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants. The Company will provide warrant holders with the final fair market value no later than one business day after the 10 trading day period described above ends. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.361 Class A ordinary shares per warrant (subject to adjustment). Any redemption of the warrants for Class A ordinary shares will apply to both the public warrants and the private placement warrants.Private Placement Warrants.
The “fair market value” of Class A ordinary shares for the above purpose shall mean the volume weighted average price of our Class A ordinary shares during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants. The Company will provide warrant holders with the final fair market value no later than one business day after the 10 trading day period described above ends. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.361 Class A ordinary shares per warrant (subject to adjustment). Any redemption of the warrants for Class A ordinary shares will apply to both the public warrants and the private placement warrants.
No fractional Class A ordinary shares will be issued upon redemption. If, upon redemption, a holder would be entitled to receive a fractional interest in a share, the Company will round down to the nearest whole number of the number of Class A ordinary shares to be issued to the holder. Please see the section entitled “Description of Securities—Warrants—Public Shareholders’ Warrants” for additional information.
If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.basis”.
15
ASCENDANT DIGITAL ACQUISITION CORP. III
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The Private
Placement Warrants
will beare identical to the Public Warrants underlying the Units
being sold in the
ProposedInitial Public Offering, except that the Private
Placement Warrants and the shares of
Ordinaryordinary shares issuable upon the exercise of the Private
Placement Warrants will not be transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private
Placement Warrants will be exercisable for cash or on a cashless basis, at the holder’s option,
and
be non-redeemable so long
long as they are held by the initial purchasers or their permitted transferees. If the Private
Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private
Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
The exercise price and number of shares of Ordinaryordinary shares issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or ourthe Company’s recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of shares of Ordinaryordinary shares at a price below their respective exercise prices. Additionally, in no event will the Company be required to net cash settle the 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 warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
In addition, if the Company issues additional shares of Ordinaryordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per share of Ordinaryordinary shares (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors, and in the case of any such issuance to the initial shareholdersInitial Shareholders or their affiliates, without taking into account any Founder Shares held by them prior to such issuance), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s Ordinaryordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater of (i) the Market Value or (ii) the price at which the Company issues the additional shares of Ordinaryordinary shares or equity-linked securities.
Note 9 — Fair Value Measurements
The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value.
| | | | | | | | | | | | | |
| | Quoted Prices in
Active Markets
(Level 1) | | | Significant
Other
Observable
Inputs
(Level 2) | | | Significant
Other
Unobservable
Inputs
(Level 3) | |
| | | | | | | | | | | | |
Investments held in Trust Account (1) | | $ | 306,224,438 | | | $ | 0 | | | $ | 0 | |
| | | | | | | | | | | | |
| Derivative warrant liabilities—Public warrant | | $ | 6,000,000 | | | $ | 0 | | | $ | 0 | |
| Derivative warrant liabilities—Private warrant | | $ | 0 | | | $ | 0 | | | $ | 4,600,000 | |
| | | | | | | | | | | | | |
| | Quoted Prices in
Active Markets
(Level 1) | | | Significant
Other
Observable
Inputs
(Level 2) | | | Significant
Other
Unobservable
Inputs
(Level 3) | |
| | | | | | | | | | | | |
Investments held in Trust Account (1) | | $ | 306,016,692 | | | $ | 0 | | | $ | 0 | |
| Liabilities: | | | | | | | | | | | | |
| Derivative warrant liabilities—Public warrant | | $ | 0 | | | $ | 0 | | | $ | 10,350,000 | |
| Derivative warrant liabilities—Private warrant | | $ | 0 | | | $ | 0 | | | $ | 7,935,000 | |
| (1) | Includes $3,524 and $933 in cash as of March 31, 2022 and December 31, 2021, respectively. |
16
ASCENDANT DIGITAL ACQUISITION CORP. III
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Transfers to/from Levels 1, 2, and 3 are recognized at the beginning of the reporting period. The estimated fair value of the Public Warrants transferred from a Level 3 measurement to a Level 1 fair value measurement in January 2022, as the Public Warrants were separately listed and traded in in January 2022.
Level 1 assets include investments in money market funds that invest solely in U.S. government securities and U.S. Treasury Bills. The Company uses inputs such as actual trade data, quoted market prices from dealers or brokers, and other similar sources to determine the fair value of its investments.
The Company utilizes a Monte Carlo simulation model to value the Private Placement Warrants and the Public Warrants prior to being separately listed and traded, with changes in fair value recognized in the accompanying unaudited condensed statements of operations. The estimated fair value of the warrant liability is determined using Level 3 inputs. Inherent in a Monte Carlo simulation are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its ordinary shares based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S.Treasury zero-coupon yield
curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero. The following table provides quantitative information regarding Level 3 fair value measurements inputs as of March 31, 2022 and December 31, 2021:
| | | | | | | | | |
| | | | | | | |
| Exercise price | | $ | 11.50 | | | $ | 11.50 | |
| Volatility | | | 4.30 | % | | | 10.80 | % |
| Stock price | | $ | 10.01 | | | $ | 9.81 | |
| Expected term (years) | | | 5.76 | | | | 5.86 | |
| Risk-free rate | | | 2.38 | % | | | 1.33 | % |
| Dividend yield | | | 0.00 | % | | | 0.00 | % |
| Probability of business combination | | | 93.40 | % | | | 90.00 | % |
The change in the fair value of the Level 3 warrant liabilities for the three months ended March 31, 2022 is summarized as follow:
| | | | | |
Derivative warrant liabilities at December 31, 2021 - Level 3 | | $ | 18,285,000 | |
Transfer of Public Warrants from Level 3 to level 1
| | | | |
| Change in fair value of derivative warrant liabilities | | | (3,335,000 | ) |
| | | | | |
Derivative warrant liabilities at March 31, 2022 - Level 3 | | $ | 4,600,000 | |
| | | | | |
Note 10 — Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the condensed balance sheet date up to the date that the condensed financial statements were issued. Based on this review, other than the IPO and related transactions described in these condensed financial statements, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.
Following the closing17
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References in this report (this “Quarterly Report”) to “we,” “us” or the “Company” refer to Ascendant Digital Acquisition Corp. III References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Ascendant Sponsor LP III. 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 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,
including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding 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. 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 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.
Ascendant Digital Acquisition Corp. III was incorporated in the Cayman Islands on February 19, 2021. The Company wasWe were formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, reorganization or other similar business transaction with one or more businesses that the Company haswe have not yet identified (a “Business Combination”).
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.
As of
September 30, 2021, the CompanyMarch 31, 2022, we had not commenced any operations. All activity through
September 30, 2021March 31, 2022 relates to
the Company’sour formation and the initial public offering (the “IPO”)
. The Company, and since the offering, the search for a prospective initial Business Combination. We will not generate any operating revenues until after the completion of a Business Combination, at the earliest.
The CompanyWe will
generate
non-operating interest
income in the form of interest income from the proceeds
derived from the IPO placedheld in the Trust
Account (defined below).Account.For the three months ended September 30, 2021March 31, 2022, we had net income of $7,597,476, which consisted of a gain of $7,685,000 from the change in fair value of derivative warrant liabilities. $20 in interest income from operating account and for$207,746 in income from investments held in Trust Account, which were partially offset by $271,290 in general and administrative expenses and $30,000 of related party administrative fees.
For the period February 19, 2021 (inception) through to September 30,March 31, 2021, we had a net loss of $0 and $10,243, respectively, which consisted solely of general and administrative expenses.
Capital Resources and Capital ResourcesGoing Concern Consideration
The registration statement for the Company’sour IPO (the “Registration Statement”) was declared effective on November 10, 2021. On November 15, 2021, the Companywe consummated the sale of 26,100,000 units (“Units”) with respect to the Class A ordinary shares included in the Units being offered (the “Public Shares”) at $10.00 per Unit generating gross proceeds of $261,000,000, which is discussed in Note 3.$261,000,000.
Simultaneously with the closing of the IPO, the Companywe consummated the sale of 10,330,000 warrants (“Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to the Company’sour sponsor, Ascendant Sponsor LP III (the “Sponsor”) generating gross proceeds of $10,330,000, which is described in Note 4.$10,330,000.
Additionally with the closing of the IPO, the Companywe consummated the closing of the sale of 3,900,000 additional Units upon receiving notice of the underwriter’s election to partially exercise its overallotment option (“Overallotment Units”), generating additional gross proceeds of $39,000,000. Simultaneously with the exercise of the overallotment, the Companywe consummated the Private Placement of an additional 1,170,000 Private Placement Warrants to the Sponsor, generating gross proceeds of $1,170,000.
Offering costs for the IPO and the exercise of the underwriters’ over-allotment option amounted to $14,026,631, consisting of $3,000,000 of underwriting fees, $10,500,000 of deferred underwriting fees payable (which are held in the Trust Account (defined below)) and $526,631 of other costs. As described in Note 6, the $10,500,000 ofThe deferred underwriting fee payable is contingent upon the consummation of a Business Combination by February 15, 2023, subject to the terms of the underwriting agreement.
Following the closing of the IPO and partial exercise of the over-allotment, $306,000,000 ($10.20 per Unit) from the net proceeds of the sale of the Units in the IPO and the Private Placement Warrants was placed in a trust account (“Trust Account”) and
will be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by
the Companyus meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4)
of
Rule 2a-7 of the
the Investment Company Act, as determined by
the Company,us, until the earlier
of:of (i) the completion of a Business Combination and (ii) the distribution of the Trust Account.
We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less taxes payable), to complete our Business Combination. To the extent that our capital stock 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.
In order to finance transaction costs in connection with a Business Combination, theour Sponsor or an affiliate of theour Sponsor, or certain of the Company’sour officers and directors may, but are not obligated to, loan the Companyus funds as may be required (“Working Capital Loans”). If the Company completeswe complete a Business Combination, the Companywe will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company.us. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Companywe may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into unitswarrants of the post Business Combination entity at a price of $10.00$1.00 per unit.warrant. The unitswarrants would be identical to the Private Placement Units.Warrants. As of September 30,March 31, 2022 and December 31, 2021, there were no Working Capital Loans outstanding.
WeAs of March 31, 2022, we had cash of $665,569 and working capital surplus of $1,334,812. In connection with our assessment of going concern considerations in accordance with FASB Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” our management has determined that the mandatory liquidation and subsequent dissolution raises substantial doubt about our ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should we be required to liquidate after February 15, 2023. The unaudited condensed financial statements do not
believeinclude any adjustment that might be necessary if we
will needare unable to
raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifyingcontinue as a
target business, undertakingin-depthgoing concern.
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.
Off-Balance
Sheet Arrangements
We have no obligations, assets or liabilities, which would be
considered
off-balance sheet
sheet arrangements as of
September 30, 2021.March 31, 2022. We do not participate in transactions that create relationships with entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of
facilitating
off-balance sheet
sheet arrangements. We have not entered into
any
off-balance sheet
sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased
any
non-financial assets.
assets.We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities. The underwriters are entitled to a deferred underwriting commissions of $0.35 per unit, or $10,500,000 from the closing of the IPO. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely if the Company completes a Business Combination, subject to the terms of the underwriting agreement.
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. We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required
for
non-emerging growth
growth companies. As such, our
unaudited condensed financial statements may not be comparable to companies that comply with public company effective dates.
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 control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required
of
non-emerging growth
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 executive compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our IPO or until we are no longer an “emerging growth company,” whichever is earlier.
Critical Accounting Policies
The preparation of unaudited 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:
Ordinary sharesShares Subject to Possible Redemption
We account for our ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption isare classified as a liability instrument and isare measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that featuresfeature 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) isare classified as temporary equity. At all other times, ordinary shares isare classified as shareholders’ equity. Our ordinary shares featuresfeature 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 isare presented as temporary equity, outside of the shareholders’ equitydeficit section of our condensed balance sheets. The Company recognizesWe recognize 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 inpaid-in capital and accumulated deficit.
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.
Net Loss Per Ordinary Share
The Company compliesWe comply with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” We have 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 lossincome (loss) per commonordinary share is computedcalculated by dividing the net loss by the weighted average number of shares of ordinary shares outstanding duringfor the respective period. Weighted average shares were reduced for
The calculation of diluted net income (loss) does not consider the effect of the warrants underlying the Units sold in the Initial Public Offering and the Private Placement Warrants to purchase an aggregate of 978,75026,500,000 Class BA ordinary shares that are subject to forfeiture if the over-allotment option is not exercised by the underwriters (see Note 5). On September 30, 2021, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into shares of ordinary shares and then share in the earningscalculation of the Company.diluted income (loss) per ordinary share since their exercise is contingent upon future events. As a result, diluted lossnet income (loss) per commonordinary share is the same as basic lossnet income (loss) per commonordinary share for the three months ended March 31, 2022 and for the period presented.from February 19, 2021 (inception) through March 31, 2021. Accretion associated with the redeemable Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As of September 30, 2021,March 31, 2022, we were not subject to any market or interest rate risk. The net proceeds held in the Trust Account have been invested in U.S. government treasury bills, notes or bonds with a maturity of 185 days or less, or in certain money market funds that invest solely in U.S. treasuries. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.
Item 4. Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Operating Officer, to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
As required by
Rules
13a-15 and 15d-15 under
and15d-15
under the Exchange Act, our Chief Executive Officer and Chief Operating Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of
September 30, 2021.March 31, 2022. Based upon their evaluation, our Chief Executive Officer and Chief Operating Officer concluded that our disclosure controls and procedures (as defined in
Rules 13a-15 (e)
13a-15and 15d-15 (e)
(e) and15d-15
(e) under the Exchange Act) were effective.
Changes in Internal Control Over Financial Reporting
During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our final prospectus, as amended, for our IPO filed with the SEC on October 19,November 12, 2021. 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 Quarterly Report, there have been no material changes to the risk factors disclosed in our final prospectus for our IPO filed with the SEC on November 15,12, 2021.
| UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
The securities in the IPO were registered under the Securities Act on a registration statement on
Form
S-1
(Registration (Registration No. 333-255349). The
The Registration Statement on
Form
S-1, as
as amended (the “Registration Statement”), for the Company’s IPO was declared effective on November 10, 2021. On November 15, 2021, the Company consummated the sale of 26,100,000 units (“Units”) with respect to the Class A ordinary shares included in the Units being offered (the “Public Shares”) at $10.00 per Unit generating gross proceeds of $261,000,000, which is discussed in Note 3.
Simultaneously with the closing of the IPO, the Company consummated the sale of 10,330,000 warrants (“Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to the Company’s sponsor, Ascendant Sponsor LP III (the “Sponsor”) generating gross proceeds of $10,330,000.
Offering costs for the IPO and the exercise of the underwriters’ over-allotment option amounted to $14,026,631, consisting of $3,000,000 of underwriting fees, $10,500,000 of deferred underwriting fees payable (which are held in the Trust Account (defined below)) and $526,631 of other costs. As described in Note 6, the $10,500,000 of deferred underwriting fee payable is contingent upon the consummation of a Business Combination by February 15, 2023, subject to the terms of the underwriting agreement.
Additionally with the closing of the IPO, the Company consummated the closing of the sale of 3,900,000 additional Units upon receiving notice of the underwriter’s election to partially exercise its overallotment option (“Overallotment Units”), generating additional gross proceeds of $39,000,000. Simultaneously with the exercise of the overallotment, the Company consummated the Private Placement of an additional 1,170,000 Private Placement Warrants to the Sponsor, generating gross proceeds of $1,170,000.
Following the closing of the IPO and partial exercise of the over-allotment, $306,000,000 ($10.20 per Unit) from the net proceeds of the sale of the Units in the IPO and the Private Placement Warrants was placed in a trust account (“Trust Account”) and will be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company that holds itself out
as
a money market fund selected by the Company meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4)
of
Rule 2a-7 of the
the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account.
For a description of the use of the proceeds generated in our IPO, see Part I, Item 2 of this Quarterly Report.
| DEFAULTS UPON SENIOR SECURITIES |
| | |
| | |
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3.1 | | Amended and Restated Memorandum and Articles of Association (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on November 16, 2021). |
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4.1 | | Warrant Agreement, dated November 9, 2021, between the Company and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on November 16, 2021). |
| |
10.1 | | Letter Agreement, dated November 9, 2021, among the Company, the Sponsor and the Company’s officers and directors (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on November 16, 2021). |
| |
10.2 | | Investment Management Trust Agreement, dated November 9, 2021, between the Company and Continental Stock Transfer & Trust Company, as trustee (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on November 16, 2021). |
| |
10.3 | | Registration Rights Agreement, dated November 9, 2021, among the Company and the Sponsor (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed on November 16, 2021). |
| |
10.4 | | Administrative Services Agreement, dated November 9, 2021, between the Company and the Sponsor (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed on November 16, 2021). |
| |
10.5 | | Private Placement Warrants Purchase Agreement, dated November 9, 2021, between the Company and the Sponsor (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K, filed on November 16, 2021). |
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10.6 | | Amended and Restated Forward Purchase Agreement, dated October 17, 2021, by and between the Company and NEXON Co. Ltd. (incorporated by reference to Exhibit 10.9 to the Company’s Amendment No. 2 to Registration Statement on Form S-1, filed with the SEC on October 19, 2021 (Reg. No. 333-255349)) |
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| 31.1* | | Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and and 15(d) to 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) and and 15(d) to 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. |
| |
| 101.INS* | | Inline XBRL Instance Document |
| |
| 101.CAL* | | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| |
| 101.SCH* | | Inline XBRL Taxonomy Extension Schema Document |
| |
| 101.DEF* | | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| |
| 101.LAB* | | Inline XBRL Taxonomy Extension Extension Labels Linkbase Document |
| |
| 101.PRE* | | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| |
| 104 | | The cover page from the Company’sForm 10-Q for the quarterly period ended September 30, 2021,March 31, 2022, formatted in Inline XBRL and contained in Exhibit 101 |
| ** | These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. |
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.
| | | | | | |
| | | | ASCENDANT DIGITAL ACQUISITION CORP. III |
| |
| By: | | /s/ Mark Gerhard |
| | Name: Mark Gerhard |
| | Title: Chief Executive Officer and Director (Principal Executive Officer) |
| | |
| | | | | | |
| | | | | | |
| | | | | | Chief Executive Officer and Director
(Principal Executive Officer)
|
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | Chief Operating Officer and Director (Principal (Principal Financial and Accounting Officer)
|