Item 1.
Condensed Financial Statements
KISMET
ACQUISITION ONE CORP
CONDENSED
BALANCE SHEETS
|
|
June 30,
2021
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|
|
December 31,
2020
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|
|
|
(Unaudited)
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
8,558
|
|
|
$
|
761,523
|
|
Prepaid expenses
|
|
|
355,500
|
|
|
|
409,687
|
|
Total current assets
|
|
|
364,058
|
|
|
|
1,171,210
|
|
Investments held in Trust Account
|
|
|
250,087,787
|
|
|
|
250,064,076
|
|
Total assets
|
|
$
|
250,451,845
|
|
|
$
|
251,235,286
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity:
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|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
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|
$
|
199,682
|
|
|
$
|
221,731
|
|
Accrued expenses
|
|
|
2,478,585
|
|
|
|
506,374
|
|
Due to related party
|
|
|
8,117
|
|
|
|
8,117
|
|
Total current liabilities
|
|
|
2,686,384
|
|
|
|
736,222
|
|
Deferred underwriting commissions in connection with the initial public offering
|
|
|
8,750,000
|
|
|
|
8,750,000
|
|
Derivative warrant liabilities
|
|
|
8,100,000
|
|
|
|
7,492,500
|
|
Total liabilities
|
|
|
19,536,384
|
|
|
|
16,978,722
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies
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|
|
|
|
|
|
|
|
Ordinary shares, no par value; 22,591,546 and 22,925,656 shares subject to possible redemption at $10.00 per share as of June 30, 2021 and December 31, 2020, respectively
|
|
|
225,915,460
|
|
|
|
229,256,560
|
|
|
|
|
|
|
|
|
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Shareholders’ Equity:
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|
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|
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Preferred shares, no par value; unlimited shares authorized; none issued and outstanding
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|
|
-
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-
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Ordinary shares, no par value; unlimited shares authorized; 9,158,454 and 8,824,344 shares issued and outstanding (excluding 22,591,546 and 22,925,656 shares subject to possible redemption) as of June 30, 2021 and December 31, 2020, respectively
|
|
|
11,323,159
|
|
|
|
7,982,059
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|
Accumulated deficit
|
|
|
(6,323,158
|
)
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|
|
(2,982,055
|
)
|
Total shareholders’ equity
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|
|
5,000,001
|
|
|
|
5,000,004
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|
Total Liabilities and Shareholders’ Equity
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|
$
|
250,451,845
|
|
|
$
|
251,235,286
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|
The
accompanying notes are an integral part of these unaudited condensed financial statements.
KISMET
ACQUISITION ONE CORP
UNAUDITED
CONDENSED STATEMENTS OF OPERATIONS
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For the Three
Months Ended
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For the Six
Months Ended
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For the Period
from June 3,
2020
(inception) through
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|
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June 30,
2021
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June 30,
2021
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June 30,
2020
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|
Operating expense
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|
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|
|
|
|
|
|
|
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General and administrative expenses
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|
$
|
527,580
|
|
|
$
|
2,757,314
|
|
|
$
|
10,220
|
|
Loss from operations
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|
|
(527,580
|
)
|
|
|
(2,757,314
|
)
|
|
|
(10,220
|
)
|
Change in fair value of derivative warrant liabilities
|
|
|
(2,632,500
|
)
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|
|
(607,500
|
)
|
|
|
-
|
|
Net gain from investments held in Trust Account
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|
|
6,235
|
|
|
|
23,711
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|
|
|
-
|
|
Net loss
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|
$
|
(3,153,845
|
)
|
|
$
|
(3,341,103
|
)
|
|
$
|
(10,220
|
)
|
|
|
|
|
|
|
|
|
|
|
|
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Weighted average shares outstanding of Founder Shares, basic and diluted (1)
|
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6,750,000
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6,750,000
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6,750,000
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|
|
|
|
|
|
|
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|
|
|
|
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Basic and diluted net loss per share, Founder Shares
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|
$
|
(0.47
|
)
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|
$
|
(0.50
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding of redeemable ordinary shares, basic and diluted
|
|
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25,000,000
|
|
|
|
25,000,000
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|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income per share, redeemable ordinary shares
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|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
-
|
|
|
(1)
|
For
the period from June 3, 2020 (inception) through June 30, 2020, weighted average shares outstanding of Founder Shares excluded an aggregate
of up to 937,500 ordinary shares subject to forfeiture if the option to purchase additional units was not exercised in full or in part
by the underwriters. On September 17, 2020, the underwriters notified the Company that the over- allotment option was not exercised;
thus, these shares were forfeited accordingly.
|
The
accompanying notes are an integral part of these unaudited condensed financial statements.
KISMET
ACQUISITION ONE CORP
UNAUDITED
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
For
the Three and Six Months Ended June 30, 2021
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|
|
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Total
|
|
|
|
Ordinary Shares
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|
|
Accumulated
|
|
|
Shareholders’
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Deficit
|
|
|
Equity
|
|
Balance - December 31, 2020
|
|
|
8,824,344
|
|
|
$
|
7,982,059
|
|
|
$
|
(2,982,055
|
)
|
|
$
|
5,000,004
|
|
Shares subject to possible redemption
|
|
|
18,726
|
|
|
|
187,260
|
|
|
|
-
|
|
|
|
187,260
|
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
(187,258
|
)
|
|
|
(187,258
|
)
|
Balance - March 31, 2021 (unaudited)
|
|
|
8,843,070
|
|
|
$
|
8,169,319
|
|
|
$
|
(3,169,313
|
)
|
|
$
|
5,000,006
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|
Shares subject to possible redemption
|
|
|
315,384
|
|
|
|
3,153,840
|
|
|
|
-
|
|
|
|
3,153,840
|
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,153,845
|
)
|
|
|
(3,153,845
|
)
|
Balance - June 30, 2021 (unaudited)
|
|
|
9,158,454
|
|
|
$
|
11,323,159
|
|
|
$
|
(6,323,158
|
)
|
|
$
|
5,000,001
|
|
For
the Period from June 3, 2020 (Inception) through June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
Ordinary Shares
|
|
|
Accumulated
|
|
|
Shareholders’
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Deficit
|
|
|
Equity
|
|
Balance - June 3, 2020 (inception)
|
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Issuance of ordinary shares to Sponsor (1)
|
|
|
7,687,500
|
|
|
|
25,000
|
|
|
|
-
|
|
|
|
25,000
|
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
(10,220
|
)
|
|
|
(10,220
|
)
|
Balance - June 30, 2020 (unaudited)
|
|
|
7,687,500
|
|
|
$
|
25,000
|
|
|
$
|
(10,220
|
)
|
|
$
|
14,780
|
|
(1)
|
As of June 30, 2020, this number included up to 937,500 ordinary shares subject to forfeiture if the option to purchase additional units was not exercised in full or in part by the underwriters. On September 17, 2020, the underwriters notified the Company that the over-allotment option was not exercised; thus, these shares were forfeited accordingly.
|
The
accompanying notes are an integral part of these unaudited condensed financial statements.
KISMET
ACQUISITION ONE CORP
UNAUDITED
CONDENSED STATEMENTS OF CASH FLOWS
|
|
|
|
|
For the Period
|
|
|
|
For the Six
Months Ended
|
|
|
from June 3,
2020 (inception) through
|
|
|
|
June 30,
2021
|
|
|
June 30,
2020
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(3,341,103
|
)
|
|
$
|
(10,220
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Change in fair value of derivative warrant liabilities
|
|
|
607,500
|
|
|
|
-
|
|
General and administrative expenses paid by Sponsor through note payable
|
|
|
-
|
|
|
|
4,753
|
|
Unrealized gain from investments held in Trust Account
|
|
|
(23,711
|
)
|
|
|
-
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Prepaid expenses
|
|
|
54,187
|
|
|
|
-
|
|
Accounts payable
|
|
|
(22,049
|
)
|
|
|
5,462
|
|
Accrued expenses
|
|
|
1,972,211
|
|
|
|
-
|
|
Net cash used in operating activities
|
|
|
(752,965
|
)
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
Proceeds received under note payable issued to related party
|
|
|
-
|
|
|
|
84,000
|
|
Offering costs paid
|
|
|
-
|
|
|
|
(83,450
|
)
|
Net cash provided by financing activities
|
|
|
-
|
|
|
|
550
|
|
|
|
|
|
|
|
|
|
|
Net change in cash
|
|
|
(752,965
|
)
|
|
|
545
|
|
Cash - beginning of the period
|
|
|
761,523
|
|
|
|
-
|
|
Cash - end of the period
|
|
$
|
8,558
|
|
|
$
|
545
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of noncash activities:
|
|
|
|
|
|
|
|
|
Offering costs paid by Sponsor in exchange for issuance of ordinary shares
|
|
$
|
-
|
|
|
$
|
25,000
|
|
Offering costs included in accrued expenses
|
|
$
|
-
|
|
|
$
|
27,560
|
|
Change in value of ordinary shares subject to possible redemption
|
|
$
|
(3,341,100
|
)
|
|
$
|
-
|
|
The
accompanying notes are an integral part of these unaudited condensed financial statements.
KISMET ACQUISITION ONE
CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE
1 – Description of Organization and Business Operations
Kismet
Acquisition One Corp (the “Company”) was newly incorporated in the British Virgin Islands on June 3, 2020 as a business company
with limited liability and formed for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation,
contractual control arrangement with, purchasing all or substantially all of the assets of, or engaging in any other similar initial
business combination with one or more businesses or entities (“Business Combination”). Although the Company is not limited
to a particular industry or geographic region for purposes of consummating a Business Combination, the Company intends to focus on companies
in the telecommunications infrastructure, internet and technology and consumer goods and services sectors operating in Russia. The Company
has neither engaged in any operations nor generated revenue to date. The Company is an “emerging growth company,” as defined
in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart our Business
Startups Act of 2012 (the “JOBS Act”).
All
activity for the period from June 3, 2020 (inception) through June 30, 2021 relates to the Company’s formation, the preparation
for its initial public offering (the “Initial Public Offering”), which is described below, and since the Initial Public Offering,
the search for a potential target. The Company will not generate any operating revenues until after the completion of its initial Business
Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from
the Initial Public Offering.
The
Company’s sponsor is Kismet Sponsor Limited, a business company incorporated in the British Virgin Islands with limited liability
(the “Sponsor”). The registration statement for the Company’s Initial Public Offering was declared effective on August
5, 2020. On August 10, 2020, the Company consummated its Initial Public Offering of 25,000,000 units (the “Units” and, with
respect to the ordinary shares included in the Units being offered, the “Public Shares”), at $10.00 per Unit, generating
gross proceeds of $250.0 million, and incurring offering costs of approximately $14.3 million, inclusive of approximately $8.8 million
in deferred underwriting commissions (Note 6). The Company granted the underwriter a 45-day option to purchase up to an additional 3,750,000
Units at the Initial Public Offering price to cover the over-allotment option, if any. The over-allotment option expired unexercised
on September 19, 2020.
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the private placement (“Private Placement”) of 6,750,000
warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”), at a price
of $1.00 per Private Placement Warrant to the Sponsor, generating gross proceeds of approximately $6.8 million, and incurring offering
costs of approximately $11,000 (Note 4).
Upon
the closing of the Initial Public Offering and the Private Placement in August 2020, $250.0 million ($10.00 per Unit) of the net proceeds
of the Initial Public Offering and certain of the proceeds of the Private Placement were placed in a trust account (“Trust Account”)
initially invested in cash and subsequently in U.S. “government securities” within the meaning of Section 2(a)(16) of the
Investment Company Act of 1940 (the “Investment Company Act”), having a maturity of 185 days or less or in money market funds
meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury
obligations, until the earlier of: (i) the completion of a Business 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 its Initial Public Offering
and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward
consummating a Business Combination. The Company’s initial Business Combination must be with one or more operating businesses or
assets with a fair market value equal to at least 80% of the net assets held in the Trust Account (excluding the amount of the deferred
underwriting discount held in trust and taxes payable on the income earned on the Trust Account) at the time the Company signs a definitive
agreement in connection with the initial Business Combination. However, the Company will only complete a Business Combination if the
post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling
interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act 1940,
as amended, or the Investment Company Act.
KISMET ACQUISITION ONE
CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The
Company will provide its holders of the Public Shares (the “Public Shareholders”) with the opportunity to redeem all or a
portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting called
to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder
approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders
will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated
to be $10.00 per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company
to pay its tax obligations). The per-share amount to be distributed to Public Shareholders who redeem their Public Shares will not be
reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 6). These Public Shares
have been recorded at a redemption value and classified as temporary equity on the condensed balance sheets in accordance with Accounting
Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” If the Company seeks shareholder
approval of a Business Combination, it will complete the Business Combination only if the Company has net tangible assets of at least
$5,000,001 upon such consummation of a Business Combination and a majority of the shares are voted in favor of the Business Combination.
If a shareholder vote is not required by law and the Company does not decide to hold a shareholder vote for business or other legal reasons,
the Company will, pursuant to its amended and restated memorandum and articles of association (the “Amended and Restated Memorandum
and Articles of Association”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission
(the “SEC”), and file tender offer documents with the SEC prior to completing a Business Combination. If, however, a shareholder
approval of the transactions is required by law, or the Company decides to obtain shareholder approval for business or legal reasons,
the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the
tender offer rules. Additionally, each Public Shareholder may elect to redeem such shareholder’s Public Shares irrespective of
whether such shareholder votes for or against the proposed transaction. If the Company seeks shareholder approval in connection with
a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 5) and the Sponsor and the Company’s
officers and directors have agreed to vote any Public Shares purchased during or after the Initial Public Offering in favor of a Business
Combination. In addition, the Sponsor has agreed to waive its redemption rights with respect to its Founder Shares and the Sponsor and
the Company’s officers and directors have agreed to waive their redemption rights with respect to any Public Shares owned by them
in connection with the completion of a Business Combination.
Notwithstanding
the foregoing, the Company’s Amended and Restated Memorandum and Articles of Association provide 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 20% or more of the ordinary shares sold in the Initial Public Offering,
without the prior consent of the Company.
The
Sponsor and the Company’s officers and directors have agreed not to propose an amendment to the Company’s Amended and Restated
Memorandum and Articles of Association that would affect the substance or timing of the Company’s obligation to provide for the
redemption of its Public Shares in connection with a Business Combination or to redeem 100% of its Public Shares if the Company does
not complete a Business Combination, unless the Company provides the Public Shareholders with the opportunity to redeem their ordinary
shares in conjunction with any such amendment.
If
the Company is unable to complete a Business Combination within 24 months from the closing of the Initial Public Offering, or August
10, 2022 (as may be extended by approval of the Company’s shareholders, the “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 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 the Company to pay its
taxes, if any (less up to $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
liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of the remaining shareholders and the Company’s board of directors, commence a voluntary liquidation and
thereby a formal dissolution of the Company, subject in each case to the Company’s obligations under British Virgin Islands law
to provide for claims of creditors and the requirements of other applicable law.
KISMET ACQUISITION ONE
CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
In
connection with the redemption of 100% of the Company’s outstanding Public Shares for a portion of the funds held in the Trust
Account, each holder will receive a full pro rata portion of the amount then in the Trust Account, plus any pro rata interest earned
on the funds held in the Trust Account and not previously released to the Company to pay the Company’s taxes payable (less up to
$100,000 of interest to pay dissolution expenses).
The
Sponsor has agreed to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination
within the Combination Period. However, if the Sponsor should acquire Public Shares after the Initial Public Offering, it will be entitled
to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination
within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission held in the
Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such
amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Company’s
Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets remaining available
for distribution (including Trust Account assets) will be only $10.00 per share initially held in the Trust Account. In order to protect
the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the Company if and to the extent any claims by
a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has entered
into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds
in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust
Account as of the date of the liquidation of the Trust Account, if less than $10.00 per share due to reductions in the value of the trust
assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business
who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will
it apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities,
including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party,
the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility
that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have vendors, service providers
(except the Company’s independent registered public accounting firm), prospective target businesses or other entities with which
the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies
held in the Trust Account.
Proposed
Business Combination
On January 31, 2021, the Company entered into
a Business Combination Agreement, as amended on July 17, 2021(see Note 10) (the “Business Combination Agreement”) with Nexters
Inc., a British Virgin Islands business company (“Pubco”), the Company’s Sponsor, solely in its capacity as the Purchaser
Representative, Nexters Global Ltd. (“Nexters Global”), a private limited liability company domiciled in Cyprus, Fantina Holdings
Limited, a private limited liability company domiciled in Cyprus, solely in its capacity as the Nexters Global Shareholders Representative,
and the shareholders of Nexters Global. Pursuant to the Business Combination Agreement, among other things, the Company agreed to combine
with Nexters Global in a business combination whereby the Company will merge with and into Pubco and Pubco will purchase all shares of
Nexters Global, making Nexters Global a direct wholly-owned subsidiary of Pubco (the “Merger”). Pubco is a newly formed entity
that was formed for the sole purpose of entering into and consummating the transactions set forth in the Business Combination Agreement.
Pursuant
to the terms, and subject to the conditions, contained in the Business Combination Agreement, the parties to the Business Combination
Agreement will effect the following transactions (collectively, the “Proposed Transactions”):
|
(1)
|
the Company will merge
with and into Pubco (the “Merger”), as a result of which the separate corporate existence of the Company shall cease
and Pubco shall continue as the surviving company, and each issued and outstanding security of the Company immediately prior to the
Merger Effective Time shall no longer be outstanding and shall automatically be cancelled, in exchange for the right of the holder
thereof to receive a substantially equivalent security of Pubco; and
|
|
(2)
|
Pubco will acquire all
of the issued and outstanding share capital of Nexters Global in exchange for the payment, issue and delivery to the Nexters Global
Shareholders of a combination of cash and shares of Pubco (the “Share Acquisition”), such that Nexters Global will be
a direct wholly owned subsidiary of Pubco.
|
KISMET ACQUISITION ONE
CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
At
the effective time of the Merger, (i) each issued and outstanding ordinary share of the Company will automatically be converted into
and exchanged for the right to receive one ordinary share of Pubco (“Pubco Ordinary Shares”), (ii) each issued and outstanding
public warrant of the Company will automatically be converted into and exchanged for the right one public warrant of Pubco (“Pubco
Public Warrants”), (iii) each issued and outstanding private warrant of the company will automatically be converted into and exchanged
for the right to receive one private warrant of Pubco (“Pubco Private Warrants” and, collectively with the Pubco Public Warrants,
“Pubco Warrants”), and (iv) each issued and outstanding option to purchase ordinary shares of the Company shall be converted
automatically into the right of the holder thereof to receive an option relating to Pubco Ordinary Shares (the “Pubco Options”).
Each of the Pubco Public Warrants, Pubco Private Warrants and Pubco Options will have substantially the same terms and conditions as
are in effect with respect to Company’s public warrants, private warrants and options immediately prior to the Merger Effective
time.
In
consideration for the purchase of Nexters Global’s share capital, Pubco will:
|
(1)
|
pay to the shareholders of Nexters Global cash in an amount not to exceed $150,000,000 equal to 50% of the aggregate amount of funds held by the Company either in or outside of its trust account, after taking into account any payments to be made to the Company’s public shareholders who validly exercise redemption rights pursuant to the Redemption (as defined below) and the proceeds received by Pubco pursuant to the A&R Forward Purchase Agreement (as defined below) (the “Base Cash Consideration”), subject to increase or decrease based on the Nexters Global’s net working capital as of the Reference Time (as such term is defined in the Business Combination Agreement) and subject to decrease by the amount of the Nexters Global’s outstanding indebtedness and transaction expenses as of the Reference Time and the Share Acquisition Closing, respectively (the Base Cash Consideration as so adjusted, the “Cash Payment”); and
|
|
(2)
|
issue to the shareholders of the Nexters Global immediately prior to the Share Acquisition Closing an aggregate number of Pubco Ordinary Shares (the “Exchange Shares”) with an aggregate value of $2,032,500,000 minus the Base Cash Consideration, with each Exchange Share valued at the price per share payable to the Company’s public shareholders pursuant to the Redemption minus Deferred Exchange Shares (valued at approximately $200 million), as described further below.
|
The
issuance of an aggregate of 20,000,000 Exchange Shares (being the Deferred Exchange Shares) to the shareholders of Nexters Global immediately
prior to the Share Acquisition Closing (other than Everix Investments Limited) will be deferred as follows:
|
●
|
the issuance of 10,000,000 Exchange Shares, in the aggregate, will be deferred until the volume weighted average trading price of the Pubco Ordinary Shares is $13.50 or greater for any 20 trading days within a period of 30 trading days prior to the third anniversary of the Share Acquisition Closing; and
|
|
●
|
the issuance of an additional
10,000,000 Exchange Shares, in the aggregate, will be deferred until the volume weighted average trading price of the Pubco Ordinary
Shares is $17.00 or greater for any 20 trading days within a period of 30 trading days prior to the third anniversary of the Share
Acquisition Closing.
|
The
transaction is subject to certain conditions, including: (i) the Company’s shareholders having approved, among other things,
the transactions contemplated by the Business Combination Agreement; (ii) the absence of any law or governmental order that would
prohibit the Proposed Transactions; (iii) the termination or expiration of all required waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended; (iv) the Company having at least $5,000,001 of net tangible assets (as determined in
accordance with Rule 3a51-1(g)(1) of the Exchange Act) remaining after the Closing; (v) the Company and Pubco having at least $100 million
of cash either in or outside of the trust account, after taking into accounts payments by the Company for the Redemption and any proceeds
received by Pubco under the A&R Forward Purchase Agreement; (vi) the Registration Statement having been declared effective by the
SEC and remaining effective; and (vii) the Pubco Ordinary Shares and Pubco Warrants having been approved for listing on Nasdaq, subject
only to official notice thereof.
On July 16, 2021, in support of the Transactions,
the Company, Pubco and the Sponsor entered into separate subscription agreements (each as amended, restated or supplemented from
time to time, a “Subscription Agreement”) with certain institutional investors with whom the Sponsor had prior business relationships
(each, a “Subscriber”), pursuant to which the Subscribers agreed to subscribe for and purchase an aggregate of 5,000,000 shares
of Pubco’s ordinary shares for a purchase price of $10.00 per share for an aggregate commitment of $50,000,000 in a private placement
(the “PIPE”) to be consummated substantially concurrently with the closing of the Transactions (the “Closing”).
See Note 10.
On
February 2, 2021, the Company filed a Current Report on Form 8-K announcing the entry into a Material Definitive Agreement including
the full Business Combination Agreement and the A&R Forward Purchase Agreement.
KISMET ACQUISITION ONE
CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Liquidity
and Capital Resources
As
of June 30, 2021, the Company had approximately $9,000 in its operating bank account and a working capital deficit of approximately $2.3
million.
Through
June 30, 2021, the Company’s liquidity needs were satisfied through a payment of $25,000 from Sponsor to cover certain offering
costs in exchange for the issuance of the Founder Shares and a loan of approximately $191,000 from the Sponsor pursuant to the Note (see
Note 5). Subsequent to the consummation the Initial Public Offering, the Company’s liquidity needs were also satisfied with net
proceeds from the consummation of the Private Placement not held in the Trust Account. The Company fully repaid the Note balance of approximately
$191,000 on August 12, 2020. In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor
or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, provide the Company
Working Capital Loans (see Note 5). As of June 30, 2021 and December 31, 2020, there were no amounts outstanding under the Working Capital
Loans.
On July 7, 2021, the Sponsor agreed to loan the
Company up to $400,000 pursuant to a promissory note in order to finance the Company’s working capital needs. The note is non-interest
bearing and up to $1,500,000 of such loan may be convertible into Private Placement Warrants at a price of $1.00 per warrant at the option
of the Sponsor.
Based
on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity from the Sponsor or
an affiliate of the Sponsor, or certain of the Company’s officers and directors to meet its needs through the earlier of the consummation
of a Business Combination or one year from this filing. Over this time period, the Company will be using these funds for paying existing
accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective
target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating
and consummating a Business Combination.
KISMET ACQUISITION ONE
CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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 interim financial information and Article 8 of Regulation S-X. 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 for the year ending 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 Company’s Annual Report on Form 10-K/A filed with the SEC on June 8, 2021.
Emerging
Growth Company
As
an emerging growth company, the Company may take advantage of certain exemptions from various reporting requirements that are applicable
to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the
auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive
compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote
on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with
the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected
not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application
dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time
private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another
public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition
period difficult or impossible because of the potential differences in accounting standards used.
Use
of Estimates
The
preparation of unaudited condensed 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 unaudited condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates. Making estimates requires management to exercise significant judgment. It is at least reasonably
possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial
statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming
events. One of the more significant accounting estimates included in these financial statements is the determination of the fair value
of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly the actual
results could differ significantly from those estimates.
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.
There were no cash equivalents held outside the Trust Account at June 30, 2021 and December 31, 2020.
KISMET ACQUISITION ONE
CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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 any investments held in Trust Account. The Company
has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
The Company’s investments held in the Trust Account as of June 30, 2021 and December 31, 2020 are comprised of investments in U.S.
Treasury securities having a maturity of 185 days or less or investments in money market funds that comprise only U.S. treasury securities
money market funds.
Investments
Held in the Trust Account
The
Company’s portfolio of investments held in the Trust Account 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 investment 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 net gain on investments
held in 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.
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,” approximates the carrying amounts represented in the condensed balance sheets.
As
of June 30, 2021 and December 31, 2020, the carrying values of cash, prepaid expenses, accounts payable and accrued expenses approximate
fair value due to the short-term nature of the instruments. The fair value of marketable securities held in Trust Account is determined
using quoted prices in active markets.
The
fair value of Private Placement Warrants is measured using Black-Scholes Option Pricing model at each balance sheet date.
Fair
Value of Financial 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.
KISMET ACQUISITION ONE
CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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 stock purchase warrants, to determine if such instruments are derivatives or contain
features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-40. The classification of derivative instruments, including
whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
The
Company issued 6,750,000 Private Placement Warrants which are recognized as derivative warrant liabilities in accordance with ASC 815-40.
Accordingly, the Company recognizes the Private Placement Warrants as liabilities at fair value and adjust 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 our statements of operations. The fair value of Private Placement Warrants is measured using Black-Scholes
Option Pricing model at each balance sheet date. The determination of the fair value of the warrant liabilities may be subject to change
as more current information becomes available and accordingly the actual results could differ significantly. Derivative warrant liabilities
are classified 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.
Offering
Costs
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 associated with the issuance of derivative warrant liabilities are expensed as
incurred, presented as non-operating expenses in the statements of operations. Offering costs associated with the ordinary shares and
public warrants 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.
Ordinary
Shares Subject to Possible Redemption
The
Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing
Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and
are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are
either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s
control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s
ordinary shares features certain redemption rights that are considered to be outside of the Company’s control and subject to the
occurrence of uncertain future events. Accordingly, at June 30, 2021 and December 31, 2020, 22,591,546 and 22,925,656 ordinary shares
subject to possible redemption are presented as temporary equity, respectively, outside of the shareholders’ equity section of
the Company’s condensed balance sheets.
Net
Income (Loss) per Ordinary Share
The
Company’s unaudited condensed statements of operations includes a presentation of income (loss) per ordinary share subject to redemption
in a manner similar to the two-class method of income (loss) per share. Net income per ordinary share, basic and diluted, is calculated
by dividing the investment income earned on the Trust Account by the weighted average number of redeemable ordinary shares outstanding
for the periods. Net loss per Founder Share, basic and diluted, is calculated by dividing the net loss, less income attributable to redeemable
ordinary shares, by the weighted average number of Founder Shares outstanding for the periods.
The
calculation of diluted net income (loss) per ordinary share does not consider the effect of the warrants issued in connection with the
(i) IPO, (ii) exercise of over-allotment and (iii) Private Placement since the exercise price of the warrants is in excess of the average
ordinary shares price for the period and therefore the inclusion of such warrants would be anti-dilutive.
KISMET ACQUISITION ONE
CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The
following table reflects the calculation of basic and diluted net income (loss) per ordinary share:
|
|
For the Three
Months Ended
|
|
|
For the Six
Months Ended
|
|
|
For the Period from
June 3,
2020
(inception) through
|
|
|
|
June 30,
2021
|
|
|
June 30,
2021
|
|
|
June 30,
2020
|
|
Redeemable ordinary shares
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain from investments held in Trust Account
|
|
$
|
6,235
|
|
|
$
|
23,711
|
|
|
$
|
-
|
|
Net income attributable to redeemable ordinary shares
|
|
$
|
6,235
|
|
|
$
|
23,711
|
|
|
$
|
-
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding of redeemable ordinary shares, basic and diluted
|
|
|
25,000,000
|
|
|
|
25,000,000
|
|
|
|
-
|
|
Basic and diluted net income per share, redeemable ordinary shares
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Founder shares
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(3,153,845
|
)
|
|
$
|
(3,341,103
|
)
|
|
$
|
(10,220
|
)
|
Less: Net income attributable to redeemable ordinary shares
|
|
|
(6,235
|
)
|
|
|
(23,711
|
)
|
|
|
-
|
|
Net loss attributable to Founder Shares
|
|
$
|
(3,160,080
|
)
|
|
$
|
(3,364,814
|
)
|
|
$
|
(10,220
|
)
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding of Founder Shares, basic and diluted
|
|
|
6,750,000
|
|
|
|
6,750,000
|
|
|
|
6,750,000
|
|
Basic and diluted net loss per share, Founder Shares
|
|
$
|
(0.47
|
)
|
|
$
|
(0.50
|
)
|
|
$
|
(0.00
|
)
|
Share-based
Compensation
Share-based
compensation to employees and non-employees is recognized over the requisite service period based on the estimated grant-date fair value
of the awards. The Company recognizes the expense for share-based compensation awards subject to performance-based milestone vesting
over the remaining service period when management determines that achievement of the milestone is probable. Management evaluates when
the achievement of a performance-based milestone is probable based on the expected satisfaction of the performance conditions at each
reporting date. Share-based compensation would be recognized in general and administrative expense in the statement of operations. We
have determined that the consummation of an initial Business Combination is a performance condition subject to significant uncertainty.
As such, the achievement of the performance is not deemed to be probable of achievement until the consummation of the event, and therefore
no compensation has been recognized for the three and six months ended June 30, 2021.
Income
Taxes
ASC
Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax
positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not
to be sustained upon examination by taxing authorities. The Company’s management determined that the British Virgin 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 in 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.
There
is currently no taxation imposed on income by the Government of the British Virgin Islands. In accordance with British Virgin Islands
federal 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. The Company’s management does not expect that the total amount of unrecognized tax benefits
will materially change over the next twelve months.
KISMET
ACQUISITION ONE CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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 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 1, 2021. 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 recently issued, but not yet effective, accounting pronouncements, if currently
adopted, would have a material impact on the Company’s unaudited condensed financial statements.
NOTE
3 – Initial Public Offering
On
August 10, 2020, the Company consummated its Initial Public Offering of 25,000,000 Units, at $10.00 per Unit, generating gross proceeds
of $250.0 million, and incurring offering costs of approximately $14.3 million, inclusive of approximately $8.8 million in deferred underwriting
commissions.
Each
Unit consists of one ordinary share and one-half of one redeemable warrant (“Public Warrant”). Each whole Public Warrant
entitles the holder to purchase one ordinary share at an exercise price of $11.50 per share, subject to adjustment (see Note 6).
NOTE
4 – Private Placement
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the Private Placement of 6,750,000 Private Placement Warrants,
at a price of $1.00 per Private Placement Warrant with the Sponsor, generating gross proceeds of approximately $6.8 million, incurring
offering costs of approximately $11,000.
Each
whole Private Placement Warrant is exercisable for one whole ordinary share at a price of $11.50 per share. A portion of the proceeds
from the Private Placement Warrants was added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company
does not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless. The Private
Placement Warrants will be non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted
transferees.
KISMET
ACQUISITION ONE CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE
5 – Related Party Transactions
Founder
Shares
On
June 8, 2020, the Company issued 6,250,000 ordinary shares to the Sponsor (the “Founder Shares”). The Sponsor paid for certain
offering costs of $25,000 on behalf of the Company in exchange for issuance of the Founder Shares. In July 2020, the Company performed
a 1.23 share split resulting in the Sponsor holding an aggregate of 7,687,500 Founder Shares. All shares and associated amounts have
been retroactively restated to reflect the share capitalization. The Sponsor had agreed to forfeit up to an aggregate of 937,500 Founder
Shares, on a pro rata basis, to the extent that the option to purchase additional units is not exercised in full by the underwriters
so that the Founder Shares would represent 20% of the Company’s issued and outstanding shares after the Initial Public Offering
plus the number of ordinary shares to be sold pursuant to the Forward Purchase Agreement (as defined below). On September 17, 2020, the
underwriters notified the Company that the over-allotment option was not exercised; as a result, these Founder Shares were forfeited,
effective as of September 19, 2020.
The
Sponsor agreed, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier to occur of:
(x) one year after the date of the completion of the initial Business Combination or earlier if, subsequent to the initial Business Combination,
the last reported sale price of the ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share dividends,
reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing at least 150 days after the
initial Business Combination, or (y) the Company consummates a subsequent liquidation, merger, stock exchange or other similar transaction
which results in all of the Company’s shareholders having the right to exchange their ordinary shares for cash, securities or other
property.
Related
Party Loans
On
June 10, 2020, the Sponsor agreed to loan the Company up to $200,000 to be used for the payment of costs related to the Initial Public
Offering pursuant to a promissory note (the “Note”). The Note was non-interest bearing, unsecured and due upon the date the
Company consummated the Initial Public Offering. The Company borrowed approximately $191,000 under the Note and repaid the Note in full
on August 12, 2020.
In
addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor,
or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working
Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the
proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside
the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the
Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital
Loans. 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 warrants of
the post Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants.
As of June 30, 2021 and December 31, 2020, the Company had no borrowings under the Working Capital Loans.
Administrative
Services Agreement
Commencing
on the date that of the Company’s final prospectus, the Company agreed to pay an affiliate of the Sponsor a total of up to $10,000
per month for office space, administrative and support services. For the three and six months ended June 30, 2021, the Company did not
incur any expense for these services. Upon completion of the Initial Business Combination or the Company’s liquidation, the Company
will cease paying these monthly fees.
KISMET
ACQUISITION ONE CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Forward
Purchase Agreement
On
August 5, 2020, the Company entered into a forward purchase agreement (the “Forward Purchase Agreement”) with the Sponsor,
which provides for the purchase of $20,000,000 of units, with each unit consisting of one ordinary share (the “Forward Purchase
Shares”) and one half of one warrant to purchase one ordinary share at $11.50 per share (the “Forward Purchase Warrants”),
for a purchase price of $10.00 per unit, in a private placement to occur concurrently with the closing of the initial Business Combination.
The purchase under the Forward Purchase Agreement is required to be made regardless of whether any ordinary shares are redeemed by the
Public Shareholders. The Forward Purchase Shares and Forward Purchase Warrants will be issued only in connection with the closing of
the initial Business Combination. The proceeds from the sale of Forward Purchase Shares and Forward Purchase Warrants may be used as
part of the consideration to the sellers in the initial Business Combination, expenses in connection with the initial Business Combination
or for working capital in the post-transaction company. The forward purchase agreement is accounted for as equity on the balance
sheets.
Amended
and Restated Forward Purchase Agreement
On
January 31, 2021, the Company, Pubco and the Sponsor entered into the Amended and Restated Forward Purchase Agreement (the “A&R
Forward Purchase Agreement”). The A&R Forward Purchase Agreement amends the Forward Purchase Agreement by, among other things,
increasing the Sponsor’s purchase commitment thereunder from $20.0 million to $50.0 million and replacing the Sponsor’s commitment
to acquire the Company’s public units with a commitment to acquire Pubco ordinary shares and Pubco public warrants in a private
placement to occur after, and subject to, the Merger closing and prior to the Share Acquisition closing.
Directors
Compensation
Commencing
on August 6, 2020 through the earlier of consummation of the initial Business Combination and the Company’s liquidation, the Company
agreed to pay its directors $40,000 each and granted each of the independent directors an option to purchase 40,000 ordinary shares at
an exercise price of $10.00 per share, which will vest upon the consummation of the initial Business Combination and will expire five
years after the date on which it first became exercisable. In addition, the Sponsor, executive officers and directors, or any of their
respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on the Company’s
behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. The Company’s
audit committee will review on a quarterly basis all payments that were made to the Sponsor, officers or directors, or the Company’s
or their affiliates. During the three and six months ended June 30, 2021, the Company paid $80,000 director compensation.
NOTE
6 – Commitments and Contingencies
Registration
Rights
The
holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and
any ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working
Capital Loans) are entitled to registration rights pursuant to a registration rights agreement, requiring the Company to register such
securities for resale. The holders of the majority of these securities are entitled to make up to three demands, excluding short form
demands, that the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights
with respect to registration statements filed subsequent to the completion of the initial Business Combination and rights to require
the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses
incurred in connection with the filing of any such registration statements.
KISMET
ACQUISITION ONE CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Underwriting
Agreement
The
Company granted the underwriters a 45-day option from the date of the prospectus to purchase up to 3,750,000 additional Units at the
Initial Public Offering price less the underwriting discounts and commissions. On September 17, 2020, the underwriters notified the Company
that the over-allotment option was not exercised; as a result, 937,500 Founder Shares were forfeited, effective as of September 19, 2020.
The
underwriters were entitled to an underwriting commission of $0.20 per unit, or $5.0 million in the aggregate, paid upon the closing of
the Initial Public Offering. In addition, the underwriters were entitled to a deferred underwriting commission of $0.35 per unit, or
approximately $8.8 million in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust
Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
Risks
and Uncertainties
Management
is continuing to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible
that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a
target company and the close of the business combination, the specific impact is not readily determinable as of the date of these financial
statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE
7 – Warrants
Public
Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the Units
and only whole Public Warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion
of a Business Combination or (b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company has
an effective registration statement under the Securities Act covering the ordinary shares issuable upon exercise of the Public Warrants
and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the
securities, or blue sky, laws of the state of residence of the holder (or the Company permit holders to exercise their warrants on a
cashless basis under certain circumstances).
The
Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of the initial Business
Combination, the Company will use its commercially reasonable efforts to file with the SEC a registration statement for the registration,
under the Securities Act, of the ordinary shares issuable upon exercise of the warrants. The Company will use its commercially reasonable
efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and its prospectus relating
thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above,
if the ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies
the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require
holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9)
of the Securities Act and, in the event the Company so elects, it will not be required to file or maintain in effect a registration statement
or register or qualify the shares under applicable blue sky laws to the extent an exemption is available.
The
warrants have an exercise price of $11.50 per share and will expire in five years after the completion of a Business Combination or earlier
upon redemption or liquidation.
The
Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that
the Private Placement Warrants and the ordinary shares issuable upon exercise of the Private Placement Warrants will not be transferable,
assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally,
the Private Placement Warrants will be non-redeemable so long as they are held by the initial purchasers or such purchasers’ permitted
transferees. If the Private Placement Warrants are held by someone other than the Sponsor or its 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.
KISMET
ACQUISITION ONE CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Once
the warrants become exercisable, the Company may redeem the outstanding warrants (excluding the Private Placement Warrants), in whole
and not in part, at a price of $0.01 per warrant:
|
●
|
upon
a minimum of 30 days’ prior written notice of redemption;
|
|
●
|
if,
and only if, the last reported sale price of the ordinary shares equals or exceeds $18.00 per share (as adjusted for share splits,
share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within
a 30 trading day period ending three business days before we send the notice of redemption to the warrant holders.
|
Once
the warrants become exercisable, the Company may redeem the outstanding warrants, in whole and not in part, at a price of $0.10 per warrant:
|
●
|
upon
a minimum of 30 days’ prior written notice of redemption, provided that holders will be able to exercise their warrants on
a cashless basis prior to redemption and receive that number of shares determined by reference to an agreed table set forth based
on the redemption date and the “fair market value” of the ordinary shares;
|
|
●
|
if,
and only if, the closing price of the ordinary shares equals or exceeds $10.00 per Public Share (as adjusted for share splits, share
dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) 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 ordinary shares for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like), 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 the ordinary shares for the above purpose shall mean the volume weighted average price of the ordinary
shares during the ten trading days immediately following the date on which the notice of redemption is sent to the holders of warrants.
The Company will provide the warrant holders with the final fair market value no later than one business day after the ten-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
ordinary shares per warrant (subject to adjustment).
The
exercise price and number of ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances including
in the event of a share capitalization, or recapitalization, reorganization, merger or consolidation. However, the warrants will not
be adjusted for issuance of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required
to net cash settle the warrants shares. 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.
The
Public Warrants are accounted for as equity and the Private Placement warrants are accounted for as liabilities on the balance sheet.
KISMET
ACQUISITION ONE CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE
8 – Shareholders’ Equity
Ordinary
Shares
The
Company is authorized to issue unlimited ordinary shares with no par value. Holders of the Company’s ordinary shares are entitled
to one vote for each share. On June 8, 2020, the Company issued 6,250,000 ordinary shares. In July 2020, the Company performed a 1.23
share split resulting in the Sponsor holding an aggregate of 7,687,500 Founder Shares. All shares and associated amounts have been retroactively
restated to reflect the share capitalization. Of these 7,687,500 Founder Shares, 937,500 were subject to forfeiture by the Sponsor (or
its permitted transferees) on a pro rata basis depending on the extent to which the underwriters’ option to purchase additional
units was exercised. On September 17, 2020, the underwriters notified the Company that the over-allotment option was not exercised; thus,
the 937,500 ordinary shares were forfeited, effective as of September 19, 2020. As of June 30, 2021 and December 31, 2020, there were
31,750,000 ordinary shares issued and outstanding, consisting of 6,750,000 Founder Shares and 25,000,000 Public Shares (of which 22,591,546
and 22,925,656 shares are subject to possible redemption, respectively).
Preferred
Shares
The
Company is authorized to issue without shareholder approval of an unlimited number of preferred shares with no par value, divided into
five classes, through Class E (collectively, the “preferred shares”) each with such designation, rights and preferences as
may be determined by a resolution of the Company’s board of directors to amend the Amended and Restated Memorandum and Articles
of Association to create such designations, rights and preferences. As of June 30, 2021 and December 31, 2020, there were no preferred
shares issued or outstanding.
Share
Options
In
August 2020, the Company granted option awards to three of its independent directors that contain both a performance condition and service
condition. Each option award is an option to purchase 40,000 ordinary shares at an exercise price of $10.00 per share which vest upon
the consummation of the initial Business Combination and will expire in five years after the date on which they first become exercisable.
The Company has determined that the consummation of an initial Business Combination is a performance condition subject to significant
uncertainty. As such, the achievement of the performance is not deemed to be probable of achievement until the consummation of the event,
and therefore no compensation has been recognized for the three and six months ended June 30, 2021.
NOTE
9 – Fair Value Measurements
The
following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a
recurring basis as of June 30, 2021 and December 31, 2020 by level within the fair value hierarchy:
|
|
Fair
Value Measured as of June 30, 2021
|
|
|
|
Level
1
|
|
|
Level
2
|
|
|
Level
3
|
|
|
Total
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments
held in Trust Account - U.S. Treasury bills
|
|
$
|
250,087,787
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
250,087,787
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
warrant liabilities - private warrants
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
8,100,000
|
|
|
$
|
8,100,000
|
|
|
|
Fair
Value Measured as of December 31, 2020
|
|
|
|
Level
1
|
|
|
Level
2
|
|
|
Level
3
|
|
|
Total
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments
held in Trust Account - U.S. Treasury bills
|
|
$
|
250,064,076
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
250,064,076
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
warrant liabilities - private placement warrants
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
7,492,500
|
|
|
$
|
7,492,500
|
|
Transfers
to/from Levels 1, 2 and 3 are recognized at the beginning of the reporting period. There were no transfers between levels for the three
and six months ended June 30, 2021.
The
fair value of marketable securities held in Trust Account is determined using quoted prices in active markets.
The
fair value of the Private Placement Warrants has been estimated using a Black-Scholes Option Pricing model at each balance sheet date.
For the three and six months ended June 30, 2021, the Company recognized an increase in the fair value of derivative warrant liabilities
of approximately $2.6 million and $0.6 million, respectively, which is presented as change in fair value of derivative warrant liabilities
in the accompanying unaudited condensed statements of operations.
KISMET
ACQUISITION ONE CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The
change in the fair value of the derivative warrant liabilities, measured with Level 3 inputs, for three and six months ended June 30,
2021 is summarized as follows:
Derivative
warrant liabilities at December 31, 2020
|
|
$
|
7,492,500
|
|
Change
in fair value of derivative warrant liabilities
|
|
|
(2,025,000
|
)
|
Derivative
warrant liabilities at March 31, 2021
|
|
$
|
5,467,500
|
|
Change
in fair value of derivative warrant liabilities
|
|
|
2,632,500
|
|
Derivative
warrant liabilities at June 30, 2021
|
|
$
|
8,100,000
|
|
The
estimated fair value of derivative warrant liabilities is determined using Level 3 inputs. Inherent in a Black-Scholes model are assumptions
related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. However, inherent uncertainties
are involved. If factors or assumptions change, the estimated fair values could be materially different. The Company estimates the volatility
of its ordinary shares based on historical volatility of select peer companies that matches the expected remaining life of the warrants.
The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected
remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. 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 at their measurement dates for measurement
of warrant liabilities:
|
|
June 30,
2021
|
|
|
December 31,
2020
|
|
Exercise
price
|
|
$
|
11.50
|
|
|
$
|
11.50
|
|
Share
price
|
|
$
|
9.91
|
|
|
$
|
10.10
|
|
Term
(in years)
|
|
|
5.13
|
|
|
|
5.42
|
|
Volatility
|
|
|
18.20
|
%
|
|
|
18.00
|
%
|
Risk-free
interest rate
|
|
|
0.89
|
%
|
|
|
0.42
|
%
|
Dividend
yield
|
|
|
-
|
|
|
|
-
|
|
NOTE
10 – Subsequent Events
On
July 7, 2021, the Sponsor agreed to loan the Company an aggregate of $400,000 pursuant to a promissory note in order to finance the Company’s
working capital needs. The note is non-interest bearing and up to $1,500,000 of such loan may be convertible into Private Placement Warrants
at a price of $1.00 per warrant at the option of the Sponsor.
On July 17, 2021, the Company and certain of the
other relevant parties to the Business Combination Agreement entered into Amendment No. 1 to the Business Combination Agreement (the “Amendment”).
The Amendment, among other things, permits the Company and Pubco to enter into the Subscription Agreements (defined below) and consummate
the PIPE (defined below), provides that the proceeds of the PIPE will count toward the satisfaction of the $100 million minimum cash closing
condition contained in the Business Combination, and changes the “Outside Date” for the parties to consummate the Transactions
to September 30, 2021. The Amendment also replaces (i) the form of Registration Rights Agreement to be entered into at the Closing with
a new form of such agreement, providing for shelf registration rights to certain holders thereunder, and (ii) the form of Sponsor Lock-Up
Agreement to be entered into at the Closing with a new form of such agreement, to permit the transfer of certain private placement warrants
held by the Sponsor to the Subscribers (defined below) pursuant to the terms of the Subscription Agreements.
Private Placement and Subscription Agreements
On July 16, 2021, in support of the Transactions,
the Company Pubco and the Sponsor entered into separate subscription agreements (each as amended, restated or supplemented from time to
time, a “Subscription Agreement”) with certain institutional investors with whom the Sponsor had prior business relationships
(each, a “Subscriber”), pursuant to which the Subscribers agreed to subscribe for and purchase an aggregate of 5,000,000 shares
of Pubco’s ordinary shares for a purchase price of $10.00 per share for an aggregate commitment of $50,000,000 in a private placement
(the “PIPE”) to be consummated substantially concurrently with the closing of the transactions (the “Closing”).
The PIPE is conditioned on the substantially concurrent closing of the Transactions and other customary closing conditions. Also pursuant
to the Subscription Agreements, the Sponsor agreed to transfer to the Subscribers, on the date of the Closing immediately after the issuance
by Pubco of ordinary shares pursuant to the PIPE, an aggregate of 1,625,000 of the private placement warrants held by the Sponsor. The
Subscribers were also given registration rights in the Subscription Agreements. The purpose of the PIPE is to raise additional capital
for use in connection with the Transactions, to meet the minimum cash requirement provided in the Business Combination Agreement, and
to otherwise provide working capital and funds for corporate purposes for Pubco following the Closing.
Management has evaluated subsequent events to
determine if events or transactions occurring through the date the financial statements were issued. Based upon this review, other than
disclosed herein and in Note 1, the Company did not identify any subsequent event that would have required adjustment or disclosure in
the condensed financial statements.
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
References
to “we,” “us,” “our” or the “Company” are to Kismet Acquisition One Corp, except where
the context requires otherwise. The following discussion should be read in conjunction with our unaudited condensed financial statements
and related notes thereto included elsewhere in this report.
Cautionary
Note Regarding Forward-Looking Statements
This
Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s
expectations, hopes, beliefs, intentions or strategies regarding the future, including the proposed business combination and the PIPE
transactions. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances,
including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,”
“could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,”
“possible,” “potential,” “predict,” “project,” “should,” “would”
and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not
forward-looking. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that
may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels
of activity, performance or achievements expressed or implied by such 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 Annual Report on Form 10-K/A (defined below) filed with the U.S. Securities and Exchange
Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website
at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update
or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
Kismet
Acquisition One Corp was newly incorporated in the British Virgin Islands on June 3, 2020 as a business company with limited liability
and formed for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation, contractual control arrangement
with, purchasing all or substantially all of the assets of, or engaging in any other similar initial business combination with one or
more businesses or entities (“Business Combination”). Although we are not limited to a particular industry or geographic
region for purposes of consummating a Business Combination, we intend to focus on companies in the telecommunications infrastructure,
internet and technology and consumer goods and services sectors operating in Russia. We are an emerging growth company and, as such,
we are subject to all of the risks associated with emerging growth companies.
At
June 30, 2021, we had not yet commenced operations. All activity for the period from June 3, 2020 (inception) through June 30, 2021 relates
to our formation, our initial public offering (the “Initial Public Offering”), which is described below, and since the Initial
Public Offering, the search for a potential target. We will not generate any operating revenues until after the completion of our initial
Business Combination, at the earliest. We generates non-operating income in the form of net gain from investments held in a trust account
from the proceeds derived from the Initial Public Offering.
Our
sponsor is Kismet Sponsor Limited, a business company incorporated in the British Virgin Islands with limited liability (the “Sponsor”).
The registration statement for our Initial Public Offering was declared effective on August 5, 2020. On August 10, 2020, we consummated
our Initial Public Offering of 25,000,000 Units, at $10.00 per Unit, generating gross proceeds of $250.0 million, and incurring offering
costs of approximately $14.3 million, inclusive of approximately $8.8 million in deferred underwriting commissions.
Simultaneously
with the closing of the Initial Public Offering, we consummated a private placement (the “Private Placement”) of 6,750,000
warrants (the “Private Placement Warrants”), at a price of $1.00 per Private Placement Warrant, to our Sponsor, generating
gross proceeds of approximately $6.8 million, and incurring offering costs of approximately $11,000.
Upon
the closing of the Initial Public Offering and the Private Placement in August 2020, $250.0 million ($10.00 per Unit) of the net proceeds
of the Initial Public Offering and certain of the proceeds of the Private Placement were placed in a trust account (“Trust Account”)
initially invested in cash and subsequently in U.S. “government securities” within the meaning of Section 2(a)(16) of the
Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated
under the Investment Company Act which invest only in direct U.S. government treasury obligations, until the earlier of: (i) the completion
of a Business Combination and (ii) the distribution of the Trust Account as described below.
Our
management has broad discretion with respect to the specific application of the net proceeds of its Initial Public Offering and the sale
of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating
a Business Combination.
If
we are unable to complete a Business Combination within 24 months from the closing of the Initial Public Offering, or August 10, 2022
(as may be extended by approval of our shareholders, the “Combination Period”), we 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 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 us to pay our taxes, if any (less up to $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 liquidation distributions, if any), subject to applicable
law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and
our board of directors, commence a voluntary liquidation and thereby a formal dissolution of us, subject in each case to our obligations
under British Virgin Islands law to provide for claims of creditors and the requirements of other applicable law.
Proposed
Business Combination
On
January 31, 2021, we entered into a Business Combination Agreement (the “Business Combination Agreement”) with Nexters Inc.,
a British Virgin Islands business company (“Pubco”), our Sponsor, solely in its capacity as our Representative, Nexters Global
Ltd. (“Nexters Global”), a private limited liability company domiciled in Cyprus, Fantina Holdings Limited, a private limited
liability company domiciled in Cyprus, solely in its capacity as Nexters Global Shareholders Representative, and the shareholders of
Nexters Global. Pursuant to the Business Combination Agreement, among other things, we agreed to combine with Nexters Global in a business
combination whereby we will merge with and into Pubco and Pubco will purchase all shares of Nexters Global, making Nexters Global a direct
wholly-owned subsidiary of Pubco (the “Transactions”). Pubco is a newly formed entity that was formed for the sole purpose
of entering into and consummating the transactions set forth in the Business Combination Agreement. Nexters Global is one of the largest
and most seasoned European gaming unicorns with deep expertise in mobile game development and marketing. It is a developer and publisher
of Hero Wars mid-core RPG franchise, currently available on mobile (iOS, Android) and PC (via web and Facebook) and is looking to launch
three new titles in 2021.
The
proposed business combination is subject to certain conditions, including: (i) our shareholders having approved, among other things,
the transactions contemplated by the Business Combination Agreement; (ii) the absence of any law or governmental order that would
prohibit the proposed transactions; (iii) the termination or expiration of all required waiting periods under the Hart-Scott-Rodino
Act; (iv) our company having at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange
Act) remaining after the closing; (v) our company and Pubco having at least $100 million of cash either in or outside of the Trust Account,
after taking into accounts payments by us for the redemption and any proceeds received by Pubco under the Amended and Restated Forward
Purchase Agreement (the “A&R Forward Purchase Agreement”); (vi) the Registration Statement having been declared effective
by the SEC and remaining effective; and (vii) the Pubco ordinary shares and Pubco warrants having been approved for listing on Nasdaq,
subject only to official notice thereof. The proposed business combination is more fully described in Note 1 to the financial statements
included in Item 1 of this Quarterly Report.
On
July 17, 2021, we and certain of the other relevant parties to the Business Combination Agreement entered into Amendment No. 1 to the
Business Combination Agreement (the “Amendment”). The Amendment, among other things, permits us and Pubco to enter into the
Subscription Agreements (defined below) and consummate the PIPE (defined below), provides that the proceeds of the PIPE will count toward
the satisfaction of the $100 million minimum cash closing condition contained in the Business Combination, and changes the “Outside
Date” for the parties to consummate the Transactions to September 30, 2021. The Amendment also replaces (i) the form of Registration
Rights Agreement to be entered into at the Closing with a new form of such agreement, providing for shelf registration rights to certain
holders thereunder, and (ii) the form of Sponsor Lock-Up Agreement to be entered into at the Closing with a new form of such agreement,
to permit the transfer of certain private placement warrants held by the Sponsor to the Subscribers (defined below) pursuant to the terms
of the Subscription Agreements.
Private
Placement and Subscription Agreements
On
July 16, 2021, in support of the Transactions, we, Pubco and the Sponsor entered into separate subscription agreements (each as amended,
restated or supplemented from time to time, a “Subscription Agreement”) with certain institutional investors with whom the
Sponsor had prior business relationships (each, a “Subscriber”), pursuant to which the Subscribers agreed to subscribe for
and purchase an aggregate of 5,000,000 shares of Pubco’s ordinary shares for a purchase price of $10.00 per share for an aggregate
commitment of $50,000,000 in a private placement (the “PIPE”) to be consummated substantially concurrently with the closing
of the transactions (the “Closing”). The PIPE is conditioned on the substantially concurrent closing of the Transactions
and other customary closing conditions. Also pursuant to the Subscription Agreements, the Sponsor agreed to transfer to the Subscribers,
on the date of the Closing immediately after the issuance by Pubco of ordinary shares pursuant to the PIPE, an aggregate of 1,625,000
of the private placement warrants held by the Sponsor. The Subscribers were also given registration rights in the Subscription Agreements.
The purpose of the PIPE is to raise additional capital for use in connection with the Transactions, to meet the minimum cash requirement
provided in the Business Combination Agreement, and to otherwise provide working capital and funds for corporate purposes for Pubco following
the Closing.
Results
of Operations
Our
entire activity since inception up to June 30, 2021 was in preparation for our formation and the preparation of the Initial Public Offering,
and since our Initial Public Offering, our activity has been limited to the search for and completion of a prospective initial Business
Combination. We will not be generating any operating revenues until the closing and completion of our initial Business Combination, at
the earliest.
For
the three months ended June 30, 2021, we had a net loss of approximately $3.2 million, which consisted of approximately $528,000 in general
and administrative expenses and an increase in fair value of derivative warrant liabilities of approximately $2.6 million offset by approximately
$6,000 gain from investments held in Trust Account.
For
the six months ended June 30, 2021, we had a net loss of approximately $3.3 million, which consisted of approximately $2.8 million in
general and administrative expenses and an increase in fair value of derivative warrant liabilities of approximately $608,000 offset
by approximately $24,000 gain from investments held in Trust Account.
For
the period from June 3, 2020 (inception) through June 30, 2020, we had a net loss of approximately $10,000 consisting solely of general
and administrative expenses.
Liquidity
and Capital Resources
As
of June 30, 2021, we had approximately $9,000 in our operating bank account, and working capital deficit of approximately $2.3 million.
Through
June 30, 2021, our liquidity needs have been satisfied through a payment of $25,000 from our Sponsor to cover certain offering costs
in exchange for the issuance of the Founder Shares, a loan from our Sponsor pursuant to a promissory note (the “Note”) of
$191,000, and the net proceeds from the consummation of the Private Placement not held in the Trust Account. We fully repaid the Note
balance of approximately $191,000 on August 12, 2020. In addition, in order to finance transaction costs in connection with a Business
Combination, our Sponsor or an affiliate of our Sponsor, or certain of our officers and directors may, but are not obligated to, provide
us with loans (the “Working Capital Loans”). As of June 30, 2021 and December 31, 2020, there were no amounts outstanding
under the Working Capital Loans.
On
July 7, 2021, the Sponsor agreed to loan us an aggregate of $400,000 pursuant to a promissory note in order to finance our working capital
needs. The note is non-interest bearing and up to $1,500,000 of such loan may be convertible into Private Placement Warrants at a price
of $1.00 per warrant at the option of the Sponsor.
On
July 16, 2021, we, Pubco and the Sponsor entered into separate Subscription Agreements with certain Subscribers, pursuant to which the
Subscribers agreed to subscribe for and purchase an aggregate of 5,000,000 shares of Pubco’s ordinary shares for a purchase price
of $10.00 per share for an aggregate commitment of $50,000,000 in a PIPE to be consummated substantially concurrently with the Closing.
Based
on the foregoing, our management believes that we will have sufficient working capital and borrowing capacity from our Sponsor or an
affiliate of our Sponsor, or certain of our officers and directors to meet our needs through the earlier of the consummation of a Business
Combination or one year from this filing. Over this time period, we will be using these funds for paying existing accounts payable, identifying
and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying
for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business
Combination.
Management
continues to evaluate the impact of the COVID-19 pandemic and has concluded that the specific impact is not readily determinable as of
the date of the financial statements. The financial statements do not include any adjustments that might result from the outcome of this
uncertainty.
Related
Party Transactions
Founder
Shares
On
June 8, 2020, we issued 6,250,000 ordinary shares to our Sponsor (the “Founder Shares”). Our Sponsor paid for certain offering
costs of $25,000 on behalf of the Company in exchange for issuance of the Founder Shares. In July 2020, we performed a 1.23 share split
resulting in our Sponsor holding an aggregate of 7,687,500 Founder Shares. All shares and associated amounts have been retroactively
restated to reflect the share capitalization. The Sponsor had agreed to forfeit up to an aggregate of 937,500 Founder Shares, on a pro
rata basis, to the extent that the option to purchase additional units is not exercised in full by the underwriters so that the Founder
Shares would represent 20% of the Company’s issued and outstanding shares after the Initial Public Offering plus the number of
ordinary shares to be sold pursuant to the Forward Purchase Agreement (as defined below). On September 17, 2020, the underwriters notified
us that the over-allotment option was not exercised; as a result, these Founder Shares were forfeited, effective as of September 19,
2020.
Our
Sponsor agreed, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier to occur of:
(x) one year after the date of the completion of the initial Business Combination or earlier if, subsequent to the initial Business Combination,
the last reported sale price of the ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share dividends,
reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing at least 150 days after the
initial Business Combination, or (y) we consummate a subsequent liquidation, merger, stock exchange or other similar transaction which
results in all of our shareholders having the right to exchange their ordinary shares for cash, securities or other property.
Private
Placement Warrants
Simultaneously
with the closing of the Initial Public Offering, we consummated a Private Placement of 6,750,000 Private Placement Warrants, at a price
of $1.00 per Private Placement Warrant, to our Sponsor, generating gross proceeds of approximately $6.8 million, and incurring offering
costs of approximately $11,000.
Each
whole Private Placement Warrant is exercisable for one whole ordinary share at a price of $11.50 per share. A portion of the proceeds
from the Private Placement Warrants was added to the proceeds from the Initial Public Offering held in the Trust Account. If we do not
complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless. The Private Placement
Warrants will be non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees.
Related
Party Loans
On
June 10, 2020, our Sponsor agreed to loan us up to $200,000 to be used for the payment of costs related to the Initial Public Offering
pursuant to the Note. The Note was non-interest bearing, unsecured and due upon the date the Company consummated the Initial Public Offering.
The Company repaid the balance of the Note of approximately $191,000 in full on August 12, 2020.
In
addition, in order to finance transaction costs in connection with a Business Combination, our Sponsor or an affiliate of our Sponsor,
or certain of our officers and directors may, but are not obligated to, loan us funds pursuant to the Working Capital Loans. If we complete
a Business Combination, we would repay the Working Capital Loans out of the proceeds of the Trust Account released to 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, we 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 warrants of the post Business Combination entity at a price of $1.00 per warrant. The warrants
would be identical to the Private Placement Warrants. As of June 30, 2021 and December 31, 2020, there were no amounts outstanding under
the Working Capital Loans.
On
July 7, 2021, the Sponsor agreed to loan us an aggregate of $400,000 pursuant to a promissory note in order to finance our working capital
needs. The note is non-interest bearing and up to $1,500,000 of such loan may be convertible into Private Placement Warrants at a price
of $1.00 per warrant at the option of the Sponsor.
Administrative
Services Agreement
Commencing
on the date of the final prospectus for the Initial Public Offering, we agreed to pay an affiliate of our Sponsor a total of up to $10,000
per month for office space, administrative and support services. For the three and six months ended June 30, 2021, we did not incur any
expense for these services. Upon completion of the Initial Business Combination or our liquidation, we will cease paying these monthly
fees.
Forward
Purchase Agreement
On
August 5, 2020, we entered into a forward purchase agreement (the “Forward Purchase Agreement”) with our Sponsor, which provides
for the purchase of $20.0 million of units, with each unit consisting of one ordinary share (the “Forward Purchase Shares”)
and one half of one warrant (the “Forward Purchase Warrants”), for a purchase price of $10.00 per unit, in a private placement
to occur concurrently with the closing of the initial Business Combination. The purchase under the Forward Purchase Agreement is required
to be made regardless of whether any ordinary shares are redeemed by the Public Shareholders. The Forward Purchase Shares and Forward
Purchase Warrants will be issued only in connection with the closing of the initial Business Combination. The proceeds from the sale
of Forward Purchase Shares and Forward Purchase Warrants may be used as part of the consideration to the sellers in the initial Business
Combination, expenses in connection with the initial Business Combination or for working capital in the post-transaction company.
Amended
and Restated Forward Purchase Agreement
On
January 31, 2021, we, Pubco and our sponsor entered into the A&R Forward Purchase Agreement. The A&R Forward Purchase Agreement
amends the forward purchase agreement by, among other things, increasing the sponsor’s purchase commitment thereunder from $20.0
million to $50.0 million and replacing the sponsor’s commitment to acquire our public units with a commitment to acquire Pubco
ordinary shares and Pubco public warrants in a private placement to occur after, and subject to, the Merger closing and prior to the
Share Acquisition closing.
Commitments
and Contingencies
Registration
Rights Agreement
The
holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and
any ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working
Capital Loans) are entitled to registration rights pursuant to a registration rights agreement, requiring us to register such securities
for resale. The holders of the majority of these securities are entitled to make up to three demands, excluding short form demands, that
we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration
statements filed subsequent to the completion of the initial Business Combination and rights to require us to register for resale such
securities pursuant to Rule 415 under the Securities Act.
In
connection with the Transactions, Pubco, our sponsor and three of Holders will enter into the New Registration Rights Agreement, pursuant
to which, among other things, subject to certain requirements and customary conditions, including with regard to the number of demand
rights that may be exercised, the Holders may demand at any time or from time to time, that Pubco file a registration statement with
the SEC to register the securities of Pubco held by such Holders. The New Registration Rights Agreement will also provide the Holders
with “piggy-back” registration rights, subject to certain requirements and customary conditions.
Underwriting
Agreement
We
granted the underwriters a 45-day option from the date of the prospectus for the Initial Public Offering to purchase up to 3,750,000
additional Units at the Initial Public Offering price less the underwriting discounts and commissions. On September 17, 2020, the underwriters
notified us that the over-allotment option was not exercised; as a result, 937,500 Founder Shares were forfeited, effective as of September
19, 2020.
The
underwriters were entitled to an underwriting commission of $0.20 per unit, or $5.0 million in the aggregate, paid upon the closing of
the Initial Public Offering. In addition, the underwriters were entitled to a deferred underwriting commission of $0.35 per unit, or
approximately $8.8 million in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust
Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.
Critical
Accounting Policies and Estimates
This
management’s discussion and analysis of our financial condition and results of operations is based on our unaudited condensed financial
statements, which have been prepared in accordance with U.S. GAAP. The preparation of these unaudited condensed financial statements
requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure
of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including
those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends
and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results
may differ from these estimates under different assumptions or conditions. We have identified the following as our critical accounting
policies:
Investments
Held in Trust Account
Our
portfolio of investments held in the Trust Account 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 our investments held in the
Trust Account are comprised of U.S. government securities, the investment are classified as trading securities. When our 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 net gain on 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.
Derivative
Warrant Liabilities
We
do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial
instruments, including issued stock 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 ASC 815-40. 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.
Simultaneously
with the closing of the initial public offering, we consummated a Private Placement of 6,750,000 Private Placement Warrants, at a price
of $1.00 per Private Placement Warrant, to our sponsor, which are recognized as derivative warrant liabilities in accordance with ASC
815-40. Accordingly, we recognize the Private Placement Warrants as liabilities at fair value and adjust 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 our statements of operations. The fair value of our Private Placement Warrants is measured using Black-Scholes
Option Pricing model at each balance sheet date. The determination of the fair value of the warrant liabilities may be subject to change
as more current information becomes available and accordingly the actual results could differ significantly. Derivative warrant liabilities
are classified 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.
Ordinary
Shares Subject to Possible Redemption
We
account for our ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing
Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and
are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are
either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control)
are classified as temporary equity. At all other times, ordinary shares are classified as stockholders’ equity. Our ordinary shares
feature certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future
events. Accordingly, at June 30, 2021 and December 31, 2020, 22,591,546 and 22,925,656 ordinary shares subject to possible redemption
are presented as temporary equity, respectively, outside of the stockholders’ equity section of the accompanying unaudited condensed
balance sheets.
Net
Income (Loss) per Ordinary Share
Our
unaudited condensed statements of operations includes a presentation of income (loss) per ordinary share subject to redemption in a manner
similar to the two-class method of income (loss) per share. Net income per ordinary share, basic and diluted, is calculated by dividing
the investment income earned on the Trust Account by the weighted average number of redeemable ordinary shares outstanding for the periods.
Net loss per Founder Share, basic and diluted, is calculated by dividing the net loss, less income attributable to redeemable ordinary
shares, by the weighted average number of Founder Shares outstanding for the periods.
The
calculation of diluted net income (loss) per ordinary share does not consider the effect of the warrants issued in connection with the
(i) IPO, (ii) exercise of over-allotment and (iii) Private Placement since the exercise price of the warrants is in excess of the average
ordinary shares price for the period and therefore the inclusion of such warrants would be anti-dilutive.
Share-based
Compensation
We
comply with the accounting and disclosure requirement of ASC Topic 718, “Compensation – Stock Compensation.” We record
share-based compensation to employees and non-employees over the requisite service period based on the estimated grant-date fair value
of the awards. Share-based awards with graded-vesting schedules are recognized on a straight-line basis over the requisite service period
for each separately vesting portion of the award. We recognize the expense for share-based compensation awards subject to performance-based
milestone vesting over the remaining service period when management determines that achievement of the milestone is probable. Management
evaluates when the achievement of a performance-based milestone is probable based on the expected satisfaction of the performance conditions
at each reporting date. Share-based compensation will be recognized in general and administrative expense in the condensed statements
of operations. In August 2020, the Company has issued option awards that contain both a performance condition and service condition.
The option awards vest upon the consummation of the initial Business Combination and will expire in five years after the date on which
they first become exercisable. We have determined that the consummation of an initial Business Combination is a performance condition
subject to significant uncertainty. As such, the achievement of the performance is not deemed to be probable of achievement until the
consummation of the event, and therefore no compensation has been recognized for the three and six months ended June 30, 2021.
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 generally accepted accounting principles. 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. We adopted ASU 2020-06 on January 1, 2021. Adoption of the ASU did not impact our financial
position, results of operations or cash flows.
Our
management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have
a material impact on our unaudited condensed financial statements.
Off-Balance Sheet Arrangements
As
of June 30, 2021, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K. No unaudited
quarterly operating data is included in this quarterly report 10-Q, as we have conducted no operations to date.
JOBS
Act
The
Jumpstart Our Business Startups Act of 2012, or JOBS Act, contains provisions that, among other things, relax certain reporting requirements
for qualifying public companies. We qualify as an “emerging growth company” and under the JOBS Act are 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 companies. As a result, the unaudited condensed
financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of 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 controls over
financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth
public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted
by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about
the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items
such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee
compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until
we are no longer an “emerging growth company,” whichever is earlier.