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 of the Company have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP. In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair presentation have been included. Operating results for the three months ended September 30, 2021 and for the period from January 8, 2021 (inception) through September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. 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 final prospectus filed by the Company with the SEC on March 29, 2021 and March 19, 2021, respectively. In April 2021, the Company identified an error in its accounting treatment for both its public and private warrants (Warrants) as presented in its audited balance sheet as of March 23, 2021 included in its Current Report on Form 8-K, filed March 29, 2021. The Warrants were reflected as a component of equity as opposed to liabilities on the balance sheet. The impact of the error correction is reflected in the unaudited condensed financial statements contained herein which resulted in a $14.4 million increase to derivative liabilities and offsetting decrease to Class A ordinary shares subject to possible redemption to the March 23, 2021 balance sheet. There was an impact on the offering costs allocated to warrant liability. Restatement of Previously Reported Financial Statements In preparation of the Company’s unaudited condensed financial statements for the quarterly period ended September 30, 2021, the Company concluded it should restate its previously issued financial statements to classify all Public Shares in temporary equity. In accordance with the SEC and its staff’s guidance on redeemable equity instruments in ASC 480-10-S99, redemption provisions not solely within the control of the Company require shares subject to redemption to be classified outside of permanent equity. The Company had previously classified a portion of its Public Shares in permanent equity. Although the Company did not specify a maximum redemption threshold, its charter provides that currently, the Company will not redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001. Previously, the Company did not consider redeemable shares classified as temporary equity as part of net tangible assets. Effective with these condensed financial statements, the Company revised this interpretation to include temporary equity in net tangible assets. In accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” the Company evaluated the corrections and has determined that the related impact was material to the previously filed financial statements that contained the error, reported in the Company’s Form 8-K filed with the SEC on March 29, 2021 (the “Post-IPO Balance Sheet”) and the Company’s Form 10-Qs for the quarterly periods ended March 31, 2021, and June 30, 2021 (the “Affected Quarterly Periods”). Therefore, the Company, in consultation with its Audit Committee, concluded that the Post-IPO Balance Sheet and the Affected Quarterly Periods should be restated to present all Public Shares as temporary equity and to recognize accretion from the initial book value to redemption value at the time of its Initial Public Offering and the Over-Allotment. As such, the Company is reporting these restatements to those periods in this Quarterly Report. The previously presented Post-IPO Balance Sheet and Affected Quarterly Periods should no longer be relied upon. The impact of the restatement to the Post-IPO Balance Sheet is an increase to Class A ordinary shares subject to possible redemption of approximately $26.4 million, a decrease to additional paid-in capital of $5.9 million, an increase to the accumulated deficit of $20.5 million, and the reclassification of 2,640,808 Class A ordinary shares from permanent equity to Class A ordinary shares subject to possible redemption. As of March 23, 2021 As Reported Adjustment As Restated Total assets $ 303,847,702 $ 303,847,702 Total liabilities $ 25,255,778 $ 25,255,778 Class A ordinary shares subject to possible redemption 273,591,920 26,408,080 300,000,000 Preference shares - - - Class A ordinary shares 264 (161 ) 103 Class B ordinary shares 863 - 863 Additional paid-in capital 5,881,028 (5,881,028 ) - Retained earnings (accumulated deficit) (882,151 ) (20,526,891 ) (21,409,042 ) Total shareholders’ equity (deficit) $ 5,000,004 $ (26,408,080 ) $ (21,408,076 ) Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Equity (Deficit) $ 303,847,702 $ - $ 303,847,702 The impact of the restatement on the financial statements for the Affected Quarterly Periods is presented below. The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported balance sheet as of March 31, 2021: As of March 31, 2021 As Reported Adjustment As Restated Total assets $ 303,677,311 $ 303,677,311 Total liabilities $ 25,437,952 $ 25,437,952 Class A ordinary shares subject to possible redemption 273,239,350 26,760,650 300,000,000 Preference shares - - - Class A ordinary shares 371 (268 ) 103 Class B ordinary shares 863 - 863 Additional paid-in capital 6,233,491 (6,233,491 ) - Retained earnings (accumulated deficit) (1,234,716 ) (20,526,891 ) (21,761,607 ) Total shareholders’ equity (deficit) $ 5,000,009 $ (26,760,650 ) $ (21,760,641 ) Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Equity (Deficit) $ 303,677,311 $ - $ 303,677,311 The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported statement of cash flows for the period from January 8, 2021 (inception) through March 31, 2021: Form 10-Q: For the Period From January 8, 2021 (Inception) Through March 31, 2021 As Reported Adjustment As Restated Cash Flows Used In Operating Activities $ (1,181,799 ) $ - $ (1,181,799 ) Cash Flows Used In Investing Activities $ (300,900,000 ) $ - $ (300,900,000 ) Cash Flows Provided By Financing Activities $ 303,710,581 $ - $ 303,710,581 Supplemental Disclosure of Noncash Financing Activities: Offering costs included in accounts payable $ 21,866 $ - $ 21,866 Offering costs included in accrued expenses $ 70,000 $ - $ 70,000 Offering costs paid by related party under promissory note $ 146,289 $ - $ 146,289 Deferred underwriting commissions in connection with the initial public offering $ 10,500,000 $ - $ 10,500,000 Initial value of Class A ordinary shares subject to possible redemption $ 288,041,470 $ (288,041,470 ) $ - Change in value of Class A ordinary shares subject to possible redemption $ (14,802,120 ) $ 14,802,120 $ - The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported balance sheet as of June 30, 2021: As of June 30, 2021 As Reported Adjustment As Restated Total assets $ 326,509,384 $ 326,509,384 Total liabilities $ 31,793,798 $ 31,793,798 Class A ordinary shares subject to possible redemption 289,715,580 33,976,930 323,692,510 Preference shares - - - Class A ordinary shares 443 (340 ) 103 Class B ordinary shares 809 - 809 Additional paid-in capital 10,946,615 (10,946,615 ) - Retained earnings (accumulated deficit) (5,947,861 ) (23,029,975 ) (28,977,836 ) Total shareholders’ equity (deficit) $ 5,000,006 $ (33,976,930 ) $ (28,976,924 ) Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Equity (Deficit) $ 326,509,384 $ - $ 326,509,384 The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported statement of cash flows for the period from January 8, 2021 (inception) through June 30, 2021: Form 10-Q: For the Period From January 8, 2021 (Inception) Through June 30, 2021 As Reported Adjustment As Restated Cash Flows Used In Operating Activities $ (1,393,953 ) $ - $ (1,393,953 ) Cash Flows Used In Investing Activities $ (323,692,510 ) $ - $ (323,692,510 ) Cash Flows Provided By Financing Activities $ 326,908,374 $ - $ 326,908,374 Supplemental Disclosure of Noncash Financing Activities: Offering costs included in accrued expenses $ 70,000 $ - $ 70,000 Offering costs paid by related party under promissory note $ 146,289 $ - $ 146,289 Deferred underwriting commissions in connection with the initial public offering $ 11,329,237 $ - $ 11,329,237 Initial value of Class A ordinary shares subject to possible redemption $ 288,041,470 $ (288,041,470 ) $ - Change in value of Class A ordinary shares subject to possible redemption $ 1,674,110 $ (1,674,110 ) $ - In connection with the change in presentation for the Class A ordinary shares subject to possible redemption, the Company has revised its earnings per share calculation to allocate income and losses shared pro rata between the two classes of shares. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of shares participate pro rata in the income and losses of the Company. The impact to the reported amounts of weighted average shares outstanding and basic and diluted earnings per common share is presented below for the Affected Quarterly Periods: The table below presents the effect of the financial statement adjustments related to the restatement discussed above to the Company’s previously reported statement of shareholders’ equity for the period from January 8, 2021 (inception) through June 30, 2021: For the Three Months Ended June 30, 2021 and for the Period From January 8, 2021 (Inception) through June 30, 2021 As Reported Adjustment As Restated Balance - January 8, 2021 (inception) $ - $ - $ - Issuance of Class B ordinary shares to Sponsor 25,000 - 25,000 Sale of shares in initial public offering, less allocation to derivative warrant liabilities, gross 285,550,450 (285,550,450 ) - Offering costs (16,401,375 ) 16,401,375 - Sale of shares in initial private offering, less allocation to derivative warrant liabilities, gross 10,300,000 (499,550 ) 9,800,450 Shares subject to possible redemption (273,239,350 ) 273,239,350 - Accretion of Class A ordinary shares subject to possible redemption amount - (32,854,514 ) (32,854,514 ) Net loss (1,234,716 ) - (1,234,716 ) Balance - March 31, 2021 (Unaudited) $ - $ (19,303,072 ) $ (19,303,072 ) Sale of shares in initial public offering, less allocation to derivative warrant liabilities, gross (Over-allotment) 285,550,450 (285,550,450 ) - Offering costs (1,235,587 ) 1,235,587 - Shares subject to possible redemption (16,476,230 ) 16,476,230 - Net loss $ (4,713,145 ) $ - $ (4,713,145 ) Balance - June 30, 2021 (Unaudited) $ - $ (19,985,729 ) $ (19,985,729 ) EPS for Class A ordinary shares As Reported Adjustment As Adjusted Form 10-Q (March 31, 2021) - For the Period From January 8, 2021 (Inception) Through March 31, 2021 Net loss $ (1,234,716 ) $ - $ (1,234,716 ) Weighted average shares outstanding 28,639,679 (25,386,667 ) 3,253,012 Basic and diluted earnings per share $ - $ (0.11 ) $ (0.11 ) Form 10-Q (June 30, 2021) - three months ended June 30, 2021 Net loss $ (4,713,145 ) $ - $ (4,713,145 ) Weighted average shares outstanding 27,342,030 4,871,007 32,213,037 Basic and diluted earnings per share $ - $ (0.11 ) $ (0.11 ) Form 10-Q (June 30, 2021) - For the Period From January 8, 2021 (Inception) Through June 30, 2021 Net loss $ (5,947,861 ) $ - $ (5,947,861 ) Weighted average shares outstanding 28,639,679 (10,240,907 ) 18,398,772 Basic and diluted earnings per share $ - $ (0.22 ) $ (0.22 ) EPS for Class B ordinary shares As Reported Adjustment As Adjusted Form 10-Q (March 31, 2021) - For the Period From January 8, 2021 (Inception) Through March 31, 2021 Net loss $ (1,234,716 ) $ - $ (1,234,716 ) Weighted average shares outstanding 10,770,846 (1,687,587 ) 9,083,259 Basic and diluted earnings per share $ (0.11 ) $ (0.00 ) $ (0.11 ) Form 10-Q (June 30, 2021) - three months ended June 30, 2021 Net loss $ (4,713,145 ) $ - $ (4,713,145 ) Weighted average shares outstanding 7,647,505 1,435,754 9,083,259 Basic and diluted earnings per share $ (0.62 ) $ 0.51 $ (0.11 ) Form 10-Q (June 30, 2021) - For the Period From January 8, 2021 (Inception) Through June 30, 2021 Net loss $ (5,947,861 ) $ - $ (5,947,861 ) Weighted average shares outstanding 12,924,266 (4,542,964 ) 8,381,302 Basic and diluted earnings per share $ (0.46 ) $ 0.24 $ (0.22 ) 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 auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. 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 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. Use of Estimates 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. 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 unaudited condensed 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 held outside the Trust Account as of September 30, 2021. Investments Held in Trust Account The Company’s portfolio of investments is comprised solely 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 condensed balance sheet 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 from investments held in Trust Account in the accompanying unaudited condensed statements 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 Coverage of $250,000, and investments held in Trust Account. At September 30, 2021, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. 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,” equal or approximate the carrying amounts represented in the condensed balance sheet. 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. U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These consist of: ● Level 1, defined as observable inputs such as quoted prices 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 Warrant Liabilities The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued share purchase warrants and forward purchase agreements, 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 Public Warrants and the Private Placement Warrants issued in connection with the Initial Public Offering and the Private Placement are recognized as derivative liabilities in accordance with ASC 815. In addition, based on management’s evaluation, the tender offer provision fails the indexation criteria as contemplated by ASC Section 815-40-25. As a result, the Company accounts for the Public Warrants as a liability. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s condensed statements of operations. The initial estimated fair value of the warrants was measured using a Monte Carlo simulation. The subsequent estimated fair value of the Public Warrants is based on the listed price in an active market for such warrants while the fair value of the Private Placement Warrants continues to be measured using a Monte Carlo simulation. Offering Costs Associated with the Initial Public Offering Offering costs consisted of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs 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 associated with derivative warrant liabilities were expensed as incurred and presented as non-operating expenses in the condensed statements of operations. Offering costs associated with the Class A ordinary shares issued were charged against the carrying value of Class A ordinary shares subject to possible redemption 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 Ordinary Shares Subject to Possible Redemption The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC 480. Class A ordinary shares subject to mandatory redemption (if any) is classified as liability instruments and are measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A ordinary shares that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, Class A ordinary shares is classified as shareholders’ equity. The Company’s Public Shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, as of September 30, 2021, 32,369,251 Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s condensed balance sheet. Effective with the closing of the Initial Public Offering (including sale of the Over-Allotment Units), the Company recognized the accretion from initial book value to redemption amount, which resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit. Income Taxes The Company accounts for income taxes under FASB ASC Topic 740, “Income Taxes,” which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statement and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is considered an exempted Cayman Islands Company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the period presented. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. Net Income Per Ordinary Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of shares. Net income per ordinary share is calculated by dividing the net income by the weighted average of ordinary shares outstanding for the respective period. The calculation of diluted net income per ordinary shares does not consider the effect of the warrants issued in connection with the Initial Public Offering (including sale of the Over-Allotment Units) and the Private Placement to purchase an aggregate of 16,699,626 ordinary shares in the calculation of diluted income per share, because their exercise is contingent upon future events and their inclusion would be anti-dilutive under the treasury stock method. As a result, diluted net income per share is the same as basic net income per share for the three months ended September 30, 2021 and for the period from January 8, 2021 (inception) through September 30, 2021. Accretion associated with the redeemable Class A ordinary shares is excluded from net income per share as the redemption value approximates fair value. The following table reflects presents a reconciliation of the numerator and denominator used to compute basic and diluted net income per share for each class of ordinary shares: For the For The Period From Class A Class B Class A Class B Basic and diluted net income per ordinary share: Numerator: Allocation of net income $ 7,644,777 $ 2,154,453 $ 2,807,492 $ 1,043,877 Denominator: Basic and diluted weighted average ordinary shares outstanding 32,369,251 9,122,313 23,230,667 8,637,592 Basic and diluted net income per ordinary share $ 0.24 $ 0.24 $ 0.12 $ 0.12 Recent Accounting Pronouncements In August 2020, the FASB issued 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 U.S. 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 adopted ASU 2020-06 on January 8, 2021 (inception). Adoption of the ASU did not impact the Company’s financial position, results of operations or cash flows. 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 statements. |