| Basis of Presentation and Summary of Significant Accounting Policies | Note
2 — Basis of Presentation and Summary of Significant Accounting Policies Basis
of Presentation The
accompanying unaudited condensed financial statements are presented in U.S. dollars in conformity with accounting principles generally
accepted in the United States of America (“GAAP”) for financial information and pursuant to the rules and regulations of
the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP. In the opinion of management, the unaudited
condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement
of the balances and results for the periods presented. Operating results for the three and six months ended June 30, 2021 are not necessarily
indicative of the results that may be expected through December 31, 2021 or any future periods. The
accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto
included in the Form 8-K and the prospectus filed by the Company with the SEC on February 25, 2021 and February 18, 2021, respectively. Emerging
Growth Company The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our
Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required
to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced
disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously
approved. Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with
the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected
not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application
dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time
private companies adopt the new or revised standard. This may make comparison of the Company’s 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. Proposed
Business Combination and Related Transaction On
June 29, 2021, the Company entered into an agreement and plan of merger (the “Merger Agreement”) by and among the Company,
Orchard Merger Sub, Inc., a Delaware corporation (“Merger Sub”), Pardes Biosciences, Inc., a Delaware corporation (“Pardes”)
and Shareholder Representative Services LLC, solely in its capacity as the representative, agent and attorney-in-fact of the securityholders
of Pardes (in such capacity, the “Stockholders’ Representative”). The Merger Agreement provides, among other things,
that on the terms and subject to the conditions set forth therein, Merger Sub will merge with and into Pardes, with Pardes surviving
as a wholly-owned subsidiary of the Company (the “Merger”). Upon the closing of the Merger (the “Closing”), it
is anticipated that the Company will change its name to “Pardes Biosciences, Inc.” and is referred to herein as “New
Pardes” as of the time following such change of name. The date on which the Closing actually occurs is hereinafter referred to
as the “Closing Date.” Consideration
and Structure Under the Merger Agreement, the Company has agreed
to acquire all of the outstanding equity interests of Pardes in exchange for 32,500,000 shares of Class A Common Stock, to be paid at
the effective time of the Merger. Pursuant to the Merger Agreement, at or prior
to the effective time of the Merger, each option exercisable for Pardes equity that is outstanding immediately prior to the effective
time of the Merger shall be assumed by the Company and continue in full force and effect on the same terms and conditions as are currently
applicable to such options, subject to adjustments to exercise price and number of shares of Class A Common Stock issued upon exercise. Representations,
Warranties and Covenants The
parties to the Merger Agreement have agreed to customary representations and warranties for transactions of this type. The representations
and warranties of Pardes made under the Merger Agreement will not survive the Closing. In addition, the parties to the Merger Agreement
agreed to be bound by certain customary covenants for transactions of this type, including, among others, covenants with respect to the
conduct of Pardes, the Company and their respective subsidiaries during the period between execution of the Merger Agreement and the
Closing. The covenants made under the Merger Agreement will not survive the Closing. Each of the parties to the Merger Agreement has
agreed to use its reasonable best efforts to cause all actions and things necessary to consummate and expeditiously implement the Merger. Conditions
to Closing Under the Merger Agreement, the obligations of the parties to consummate
the Merger are subject to the satisfaction or waiver of certain customary closing conditions of the respective parties, including, without
limitation: (i) the approval and adoption of the Merger Agreement and transactions contemplated thereby by requisite vote of the Company’s
stockholders (the “Company Stockholder Approval”) and Pardes’ stockholders (the “Pardes Stockholder Approval”);
(ii) the receipt of consents or approvals from the applicable governmental, regulatory or administrative authorities; (iii) the aggregate
cash proceeds from Company’s trust account, together with the proceeds from the Subscriptions (as defined below), equaling no less
than $100,000,000 (after deducting any amounts paid to Company stockholders that exercise their redemption rights in connection with the
Merger and net of the Company’s unpaid liabilities), (iv) (A) the representations and warranties of the Company, Pardes and Merger
Sub contained in the Merger Agreement (other than each party’s respective Fundamental Representations, as defined in the Merger
Agreement) being true and correct as of the date of the Merger Agreement and as of the Closing Date, except for any failure to be true
and correct that would not have or reasonably be expected to have a Material Adverse Effect (as defined in the Merger Agreement) and (B)
each party’s respective Fundamental Representations being true and correct as of the date of the Merger Agreement and as of the
Closing Date, except for de minimis inaccuracies; (v) the absence of a Material Adverse Effect since the date of the Merger Agreement;
(vi) the Company has not redeemed the Class A Common Stock of the Company in an amount that would cause the Company to have net tangible
assets of less than $5,000,001; and (vii) the Company’s initial listing application with Nasdaq in connection with the Merger has
been conditionally approved and, immediately following the effective time of the Merger, the Company has satisfied any applicable initial
and continuing listing requirements of Nasdaq, and the Company has not received any notice of non-compliance therewith, and the shares
of the Company’s Class A Common Stock has been approved for listing on Nasdaq. Use
of Estimates The
preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting period. Making estimates requires management to exercise
significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances
that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near
term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Cash
and Cash Equivalents The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company had no cash equivalents as of June 30, 2021 and December 31, 2020. 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 of 185 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 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 is included in income on investments held in the Trust Account in
the accompanying unaudited condensed statement of operations. The estimated fair values of investments held in the Trust Account are
determined using available market information. Concentration
of Credit Risk Financial
instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution,
which, at times, may exceed the Federal Depository Insurance Corporation coverage limit of $250,000. As of June 30, 2021 and December
31, 2020, the Company had not experienced losses on these accounts and management believes the Company is not exposed to significant
risks on such accounts. Fair
Value Measurements Fair
value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction
between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs
used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets
or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
● Level
1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
● Level
2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted
prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active;
and
● Level
3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions,
such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. In
some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In
those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input
that is significant to the fair value measurement. As
of June 30, 2021, the carrying values of cash, accounts payable and accrued expenses approximate their fair values due to the short-term
nature of the instruments. Offering
Costs Associated with the Initial Public Offering Offering
costs consisted of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that were charged
to stockholders’ equity upon the completion of the Initial Public Offering. The Company classifies deferred underwriting commissions
as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation
of current liabilities. Class A
Common Stock Subject to Possible Redemption The Company accounts for its Class A Common Stock subject to possible
redemption in accordance with the guidance in ASC 480. Class A Common Stock subject to mandatory redemption (if any) are classified as
liability instruments and are measured at fair value. Conditionally redeemable Class A Common Stock (including shares of Class A Common
Stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of
uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, Class A Common
Stock are classified as stockholders’ equity. The Company’s Class A Common Stock feature certain redemption rights that are
considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, as of June
30, 2021, 18,850,938 shares of Class A Common Stock subject to possible redemption at the redemption amount were presented at redemption
value as temporary equity, outside of the stockholders’ equity section of the Company’s condensed balance sheets. As of December
31, 2020, there were no shares of Class A Common Stock subject to possible redemption. Income
Taxes The
Company follows the asset and liability method of accounting for income taxes under FASB ASC Topic 740, “Income Taxes” (“ASC
740”). Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences
are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in
income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets
to the amount expected to be realized. Deferred tax assets were deemed immaterial as of June 30, 2021 and December 31, 2020. 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 no unrecognized tax benefits as of June 30, 2021 or December 31,
2020. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were
accrued for the payment of interest and penalties as of June 30, 2021 and December 31, 2020. The Company is currently not aware of any
issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject
to income tax examinations by major taxing authorities since inception. Net
Income (Loss) Per Share of Common Stock The Company’s condensed statements of operations include a presentation
of net income (loss) per share for Class A Common Stock subject to possible redemption in a manner similar to the two-class method of
net income (loss) per common stock. Net income (loss) per common stock, basic and diluted, for redeemable Class A Common Stock is calculated
by dividing the interest income earned on the Trust Account, less interest available to be withdrawn for the payment of taxes, by the
weighted average number of redeemable Class A Common Stock outstanding for the periods. Net income (loss) per common stock, basic and
diluted, for non-redeemable Class A and Class B common stock is calculated by dividing the net income (loss), adjusted for income attributable
to redeemable Class A common stock, by the weighted average number of non-redeemable Class A and Class B common stock outstanding for
the periods. Non-redeemable shares of Class A Common Stock are Private Placement Shares held by the Sponsor and non-redeemable shares
of Class B common stock include the Founder Shares as these common stocks do not have any redemption features and do not participate in
the income earned on the Trust Account. The
following table reflects the calculation of basic and diluted net income (loss) per share of common stock:
For the Three Months For the Six Months
Redeemable Class A common stock
Numerator: Income allocable to redeemable Class A common stock
Income from investments held in Trust Account $ 6,782 $ 7,113
Less: Company’s portion available to be withdrawn to pay taxes (6,782 ) (7,113 )
Net income attributable to redeemable Class A common stock $ - $ -
Denominator: Weighted average redeemable Class A common stock
Basic and diluted weighted average shares outstanding, redeemable Class A common stock 20,125,000 20,125,000
Basic and diluted net income per share, redeemable Class A common stock $ 0.00 $ 0.00
Non-redeemable Class A and Class B common stock
Numerator: Net income (loss) minus net income allocable to redeemable Class A common stock
Net income (loss) $ (2,165,912 ) $ (2,334,105 )
Net income allocable to redeemable Class A common stock - -
Net income (loss) attributable to non-redeemable Class A and Class B common stock $ (2,165,912 ) $ (2,334,105 )
Denominator: weighted average non-redeemable Class A and Class B common stock
Basic and diluted weighted average shares outstanding, non-redeemable Class A and Class B common stock 5,633,750 5,299,938
Basic and diluted net loss per share, non-redeemable Class A and Class B common stock $ (0.38 ) $ (0.44 ) Recent
Accounting Pronouncements Management
does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect
on the accompanying unaudited condensed financial statements. |
