The accompanying notes are an integral part of
these unaudited condensed financial statements.
The accompanying notes are an integral part of
these unaudited condensed financial statements.
The accompanying notes are an integral part of
these unaudited condensed financial statements.
The accompanying notes are an integral part of
these unaudited condensed financial statements.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
Note 1 — Description of Organization and Business
Operations
Malacca Straits Acquisition Company Limited (formerly
known as Bilbao Street Limited, the “Company”) was incorporated in the Cayman Islands on July 17, 2019. The Company was formed
for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination
with one or more businesses (the “Business Combination”). The Company changed its name to Malacca Straits Acquisition Company
Limited on February 26, 2020.
While the Company is not limited to a particular
industry or geographic region for purposes of consummating a Business Combination, the Company intends to focus its search on businesses
which are currently part of Southeast Asian business conglomerates in the media, food processing, renewable energy and healthcare industries.
The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early
stage and emerging growth companies.
All activity through June 30, 2021 relates to
the Company’s formation, the initial public offering (the “Initial Public Offering”), which is described below, and,
subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any
operating revenues until after the completion of 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 registration statement for the Company’s
Initial Public Offering was declared effective on July 14, 2020. On July 17, 2020, the Company consummated the Initial Public Offering
of 12,500,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units being offered,
the “Public Shares”), generating gross proceeds of $125,000,000 which is described in Note 3.
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the sale of 4,000,000 warrants (the “Private Placement Warrants”) at a price of $1.00
per warrant in a private placement to Malacca Straits Management Company Limited (the “Sponsor”), generating gross proceeds
of $4,000,000, which is described in Note 4.
Following the closing of the Initial Public Offering
on July 17, 2020, an amount of $125,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering
and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”), located in the United States,
which has been invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company
Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in money market funds
selected by the Company meeting certain conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until
the earlier of (i) the completion of a Business Combination and (ii) the redemption of any Public Shares properly tendered in connection
with a shareholder vote to amend the Amended and Restated Memorandum and Articles of Association to (A) modify the substance or timing
of the Company’s obligation to allow redemption in connection with its initial Business Combination or to redeem 100% of its Public
Shares if the Company does not complete its initial Business Combination within the Combination Period (as defined below) or (B) with
respect to any other provision relating to shareholders’ rights or pre-Business Combination activity and (iii) the redemption of
all of the Public Shares if the Company is unable to complete its initial Business Combination within the Combination Period (as defined
below), subject to applicable law.
MALACCA STRAITS ACQUISITION COMPANY LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
On July 21, 2020, the underwriters exercised their
over-allotment option in full, resulting in an additional 1,875,000 Units issued for an aggregate amount of $18,750,000. In connection
with the underwriters’ exercise of their over-allotment option, the Company also consummated the sale of an additional 375,000 Private
Placement Warrants at $1.00 per Private Placement Warrant, generating total proceeds of $375,000. A total of $18,750,000 was deposited
into the Trust Account, bringing the aggregate proceeds held in the Trust Account to $143,750,000.
Transaction costs amounted to $8,394,954, consisting
of $2,875,000 of underwriting fees, $5,031,250 of deferred underwriting fees and $488,704 of other offering costs. Transaction costs of
$186,456 attributable to the warrants were expensed.
The Company’s management has broad discretion
with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of Private Placement Warrants,
although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The rules
of the stock exchange that the Company lists its securities on require that the Company’s initial Business Combination must be with
one or more target businesses that have an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding
the deferred underwriting commissions and taxes payable on the income earned on the Trust Account) at the time of the Company signing
a definitive agreement in connection with the initial Business Combination. The Company will only complete a Business Combination if the
post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires
a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company
Act. There is no assurance that the Company will be able to complete a Business Combination successfully.
The Company will provide the holders of its issued
and outstanding Public Shares (the “public shareholders”) with the opportunity to redeem all or a portion of their Public
Shares upon the completion of a Business Combination either (i) in connection with a general meeting called to approve the Business
Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business
Combination or conduct a tender offer will be made by the Company. The public shareholders will be entitled to redeem their Public Shares,
equal to the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination
(initially $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and net of taxes payable),
divided by the number of then issued and outstanding Public Shares. 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 5). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.
MALACCA STRAITS ACQUISITION COMPANY LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
The Company will proceed with a Business Combination
only if the Company has net tangible assets of at least $5,000,001 either immediately prior to or upon such consummation of a Business
Combination and after payment of underwriters’ fees and commissions or any greater net tangible asset or cash requirement which
may be contained in the agreement relating to the initial Business Combination and, if the Company seeks shareholder approval, it receives
an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of
the shareholders who attend and vote at a general meeting of the Company. If a shareholder vote is not required by applicable law or stock
exchange listing requirements and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will,
pursuant to its 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, shareholder approval of the transactions is required by applicable law or stock exchange listing
requirements, or the Company decides to obtain shareholder approval for business or other reasons, the Company will offer to redeem shares
in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks
shareholder approval in connection with a Business Combination, the Sponsor has agreed to vote any Founder Shares (as defined in Note
4) and Public Shares held by it in favor of approving a Business Combination. Additionally, public shareholders may elect to redeem their
Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination.
Notwithstanding the foregoing, if the Company
seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, 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 15% of the Public Shares, without the prior consent of the Company.
The Sponsor and the Company’s officers and
directors have agreed to waive: (i) their redemption rights with respect to any Founder Shares and Public Shares held by them in
connection with the completion of the Company’s Business Combination and (ii) their rights to liquidating distributions from
the Trust Account with respect to their Founder Shares if the Company fails to complete its initial Business Combination within the Combination
Period (as defined below) (although they will be entitled to liquidating distributions from the Trust Account with respect to any Public
Shares they hold if the Company fails to complete its initial Business Combination within the Combination Period).
The Company will have until January 17, 2022 to
complete a Business Combination (the “Combination Period”). If the Company has not completed a Business Combination within
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 tax obligations (less up to $100,000 of interest to pay dissolution expenses which interest
shall be net of taxes payable), divided by the number of then issued and outstanding Public Shares, which redemption will completely extinguish
public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as
promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and the
Company’s board of directors, liquidate and dissolve, subject in each case to the Company’s obligations under Cayman Islands
law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating
distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination
within the Combination Period.
MALACCA STRAITS ACQUISITION COMPANY LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
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 acquires Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions
from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed
to waive their rights to their deferred underwriting commission (see Note 5) 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 other funds held
in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible
that the per-share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit
($10.00).
In order to protect the amounts held in the Trust
Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party (except for the Company’s
independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business
with which the Company has discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below (i) $10.00
per Public Share or (ii) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust
Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes. This
liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the
Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against
certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover,
in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent
of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify
the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except for the Company’s independent
registered public accounting firm), prospective target businesses and other entities with which the Company does business, execute agreements
with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Liquidity and Going Concern
As of June 30, 2021, the Company had approximately
$222,000 in its operating bank accounts available to fund a Business Combination. In order to finance transaction costs in connection
with a Business Combination, the Sponsor or an affiliate of the Sponsor, may, but are not obligated to, loan the Company funds as may
be required (“Working Capital Loans”) (see Note 4).
In connection with the Company’s assessment
of going concern considerations in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards
Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,”
the Company has determined that if the Company is unable to complete a Business Combination during the Combination Period, then the Company
will cease all operations except for the purpose of liquidating. The Company’s liquidity requirements, date for mandatory liquidation
and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have
been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after the Combination Period. The
Company intends to complete a Business Combination before the mandatory liquidation date.
MALACCA STRAITS ACQUISITION COMPANY LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
Note 2 — Summary of Significant
Accounting Policies
Basis of Presentation
The accompanying unaudited condensed financial
statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”)
for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain
information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or
omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information
and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management,
the accompanying unaudited condensed interim financial statements include all adjustments, consisting of a normal recurring nature, which
are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial
statements should be read in conjunction with the Company’s Annual Report on Form 10-K (as amended) for the year ended December
31, 2020, as filed with the SEC on June 2, 2021. The interim results for the three and six months ended June 30, 2021 are not necessarily
indicative of the results to be expected for the year ending December 31, 2021 or for any future interim periods.
Emerging Growth Company
The Company is an “emerging growth company,”
as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS
Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies
that are not emerging growth companies, including, but not limited to, not being required to comply with the independent registered public
accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act 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.
MALACCA STRAITS ACQUISITION COMPANY LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
Further, Section 102(b)(1) of the JOBS Act
exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies
(that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company
can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but
any such election to opt 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 condensed financial statements
in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period.
Making estimates requires management to
exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set
of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate,
could change in the near term due to one or more future 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.
Ordinary Shares Subject to Possible Redemption
The Company accounts for its ordinary shares subject
to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing
Liabilities from Equity.” Ordinary shares subject to mandatory redemption is classified as a liability instrument and is measured
at fair value. Conditionally redeemable ordinary shares (including ordinary shares that features redemption rights that is either within
the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control)
is 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 occurrence
of uncertain future events. Accordingly, at June 30, 2021 and December 31, 2020, 12,261,070 and 12,232,342, respectively, shares of Class
A ordinary shares, subject to possible redemption are presented as temporary equity, outside of the shareholders’ equity section
of the Company’s unaudited condensed balance sheet.
MALACCA STRAITS ACQUISITION COMPANY LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
Offering Costs
Offering costs consist of underwriting, legal,
accounting and other expenses incurred through the Initial Public Offering that are directly related to the Initial Public Offering. Offering
costs amounting to $8,394,954 of which $8,208,498 were charged to shareholders’ equity upon the completion of the Initial Public
Offering and $186,486 of costs allocated to the warrants were charged to operations.
Warrant Liability
The Company accounts for the warrants in accordance
with the guidance contained in ASC 815-40 under which the warrants do not meet the criteria for equity treatment and must be recorded
as liabilities. Accordingly, the Company classifies the warrants as liabilities at their fair value and adjust the warrants to fair value
at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair
value is recognized in the Company’s statement of operations. The Private Placement Warrants are valued using a Modified Black Scholes
Option Pricing Model and the Public Warrants (as defined below) for periods where no observable traded price was available were valued
using a Monte Carlo simulation. For periods subsequent to the detachment of the Public Warrants from the Units, the Public Warrant quoted
market price was used as the fair value as of each relevant date.
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 Cayman Islands is the Company’s major tax jurisdiction. The Company
recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of June 30, 2021, there were
no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under
review that could result in significant payments, accruals or material deviation from its position.
The Company is considered to be an exempted Cayman
Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing
requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented.
Net Income (Loss) Per Ordinary Share
The Company complies with accounting and disclosure
requirements of ASC Topic 260, “Earnings Per Share”. Net income (loss) per share is computed by dividing net income (loss)
by the weighted average number of ordinary shares outstanding for the period. The Company has not considered the effect of warrants sold in the initial public offering and private placement to purchase 11,562,500
shares of Class A common stock in the calculation of diluted income per share, since the exercise of the warrants are contingent upon
the occurrence of future events and the inclusion of such warrants would be anti-dilutive.
MALACCA STRAITS ACQUISITION COMPANY LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
The Company’s unaudited condensed statements
of operations includes a presentation of income (loss) per share for ordinary shares subject to possible redemption in a manner similar
to the two-class method of income (loss) per share. Net income (loss) per share, basic and diluted, for Class A redeemable ordinary shares
is calculated by dividing the interest income earned on the Trust Account of $4,541 and $21,680 for the three and six months ended June
30, 2021, respectively, by the weighted average number of Class A redeemable ordinary shares outstanding since original issuance. Net
income (loss) per share, basic and diluted, for Class B non-redeemable ordinary shares is calculated by dividing the net income (loss),
adjusted for income attributable to Class A redeemable ordinary shares of $4,541 and $21,680 for the three and six months ended June 30,
2021, respectively, by the weighted average number of Class B non-redeemable ordinary shares outstanding for the period. Class B non-redeemable
ordinary shares includes the Founder Shares as these shares do not have any redemption features and do not participate in the income earned
on the Trust Account. At June 30, 2021, the Company did not have any dilutive securities and other contracts that could, potentially,
be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, net income (loss) per share
is the same as basic net income (loss) per share.
For the three and six months ended June 30, 2020,
the weighted average shares were reduced for the effect of an aggregate 468,750 Class B ordinary shares that were subject to forfeiture
in connection with the over-allotment option. At June 30, 2020, the Company did not have any dilutive securities and other contracts that
could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted
net loss per share is the same as basic net loss per share.
The following table reflects the calculation of
basic and diluted net (loss) per ordinary share (in dollars, except per share amounts):
|
|
Three
Months Ended
June 30,
2021
|
|
|
Three
Months
Ended
June 30,
2020
|
|
|
Six
Months
Ended
June 30,
2021
|
|
|
Six
Months
Ended
June 30,
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable Class A Ordinary Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator: Earnings allocable to Redeemable
Class A Ordinary Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Income from Trust Account
|
|
$
|
4,541
|
|
|
$
|
-
|
|
|
$
|
21,680
|
|
|
$
|
-
|
|
Net
Earnings
|
|
$
|
4,541
|
|
|
$
|
-
|
|
|
$
|
21,680
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
Weighted Average Redeemable Class A Ordinary Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable
Class A Ordinary Shares, Basic and Diluted
|
|
|
14,375,000
|
|
|
|
-
|
|
|
|
14,375,000
|
|
|
|
-
|
|
Earnings/Basic
and Diluted Redeemable Class A Ordinary Shares
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Redeemable
Class B Ordinary Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator:
Net Income (Loss) minus Redeemable Net Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income (Loss)
|
|
$
|
(3,146,583
|
)
|
|
$
|
(792
|
)
|
|
$
|
287,280
|
|
|
$
|
(8,112
|
)
|
Redeemable
Net Earnings
|
|
|
(4,541
|
)
|
|
|
-
|
|
|
|
(21,680
|
)
|
|
|
-
|
|
Non-Redeemable
Net Income (Loss)
|
|
$
|
(3,151,124
|
)
|
|
$
|
(792
|
)
|
|
$
|
265,600
|
|
|
$
|
(8,112
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
Weighted Average Non-Redeemable Class B Ordinary Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Redeemable
Class B Ordinary Shares, Basic and Diluted
|
|
|
3,593,750
|
|
|
|
3,125,000
|
|
|
|
3,593,750
|
|
|
|
3,125,000
|
|
Earnings
(loss)/Basic and Diluted Non-Redeemable Class B Ordinary Shares(1)
|
|
$
|
(0.88
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.00
|
)
|
(1)
|
Excludes an aggregate of up to 468,750 Class B ordinary shares that were subject to forfeiture if the over-allotment option was not exercised in full or in part by the underwriters for the three and six month periods ended June 30, 2020.
|
MALACCA STRAITS ACQUISITION COMPANY LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal
Depository Insurance Corporation coverage of $250,000. The Company has not experienced losses on this account and management believes the Company
is not exposed to significant risks on such account.
Fair Value of Financial Instruments
The fair value of the Company’s assets
and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the
carrying amounts represented in the Company’s unaudited condensed balance sheet, primarily due to their short-term nature,
except for derivative warrant liabilities (see Note 8). The Company invests in U.S treasury securities with are 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 treasury obligations, or a combination thereof.
The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at
each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company
would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly
transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities,
the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of
unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value
hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the
assets and liabilities:
|
Level 1:
|
Quoted prices in active markets for identical assets or liabilities.
An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency
and volume to provide pricing information on an ongoing basis.
|
|
Level 2:
|
Observable inputs other than Level 1 inputs. Examples of
Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities
in markets that are not active.
|
|
Level 3:
|
Unobservable inputs based on our assessment of the assumptions
that market participants would use in pricing the asset or liability.
|
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 2020-06
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 2020-06 did not impact the Company’s financial position, results of operations or cash flows.
The Company’s management does not believe
that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying
financial statements.
Note 3 — Initial Public
Offering
Pursuant to the Initial Public Offering, the Company
sold 12,500,000 Units, at a purchase price of $10.00 per Unit. Each Unit consists of one Class A ordinary share and one-half of one
redeemable warrant (“Public Warrant”). On July 21, 2020, in connection with the underwriters’ exercise of the over-allotment
option in full, the Company sold an additional 1,875,000 Units at a price of $10.00 per Unit. Each whole Public Warrant will entitle the
holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 7).
MALACCA STRAITS ACQUISITION COMPANY LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
Note 4 — Related Party Transactions
Founder Shares
In March 2020, the Sponsor paid $25,000 to cover
certain offering costs of the Company in consideration for 2,875,000 Class B ordinary shares (the “Founder Shares”).
In June 2020, the Company declared a share dividend of 0.25 of a share for each Class B ordinary share in issue, resulting in the Sponsor
holding an aggregate of 3,593,750 Founder Shares. All shares have been retroactively stated to reflect the share dividend. The Founder
Shares included an aggregate of up to 468,750 shares that were subject to forfeiture to the extent that the underwriters’ over-allotment
option was not exercised in full or in part, so that the number of Founder Shares would equal 20% of the Company’s issued and outstanding
ordinary shares after the Initial Public Offering. In connection with the underwriters’ exercise of the over-allotment option in
full, 468,750 Founder Shares are no longer subject to forfeiture.
The Sponsor has agreed, subject to limited exceptions,
not to transfer, assign or sell any Founder Shares until the earlier to occur of (i) one year after the completion of the Company’s
Business Combination or (ii) subsequent to a Business Combination, (x) if the last sale price of the Company’s Class A
ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share consolidations, share capitalizations, rights
issuances, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least
150 days after the Company’s Business Combination or (y) the date following the completion of a Business Combination on
which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of
the Company’s public shareholders having the right to exchange their Class A ordinary shares for cash, securities or other
property.
Private Placement
Simultaneously with the closing of the Initial
Public Offering, the Sponsor purchased 4,000,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, for an
aggregate purchase price of $4,000,000. On July 21, 2020, in connection with the underwriters’ exercise of the over-allotment option
in full, the Sponsor purchased an additional 375,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant. The
Private Placement Warrants were deemed to be derivative warrant liabilities at issuance and recorded at fair value. Amounts paid by the
Sponsor in excess of the warrants fair value ($2,473,094) was treated as a capital contribution. Each Private Placement Warrant is exercisable
to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 7). A portion of the proceeds
from the Private Placement Warrants were added to the proceeds from the Initial Public Offering to be held in the Trust Account. If the
Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants
will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Private Placement Warrants
will expire worthless.
Promissory Note – Related Party
On March 31, 2020, the Company issued an unsecured
promissory note (the “Promissory Note”) to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal
amount of $300,000. The Promissory Note was non-interest bearing and payable on the earlier of (i) December 31, 2020 or (ii) the
completion of the Initial Public Offering. The outstanding balance under the Promissory Note of $246,330 was repaid upon the closing
of the Initial Public Offering on July 17, 2020. On August 2, 2021 the Company entered into a Promissory Note agreement with its Sponsor
for funding of $300,000. The unsecured promissory note is non-interest bearing and payable at the earlier of (i) the date on which the
initial Business Combination is completed and (ii) the date of liquidation of the Company.
Related Party Loans
In order to finance transaction costs in connection
with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may,
but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). If the Company completes
a Business Combination, the Company may repay the Working Capital Loans. Otherwise, the Working Capital Loans may be repaid only out of
funds held outside the Trust Account. The Working Capital Loans would either be repaid upon consummation of a Business Combination or,
at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business
Combination entity at a price of $1.00 per warrant. Such warrants would be identical to the Private Placement Warrants. 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. As of June 30, 2021 and December 31, 2020, the Company had no outstanding borrowings under the Working Capital Loans.
Related Party Website Services
During the three and six months ended June 30,
2021, the Company received website services from a service provider in which the Company’s Chief Financial Officer and Director, Stanley
Wang, is a minority shareholder. For the three and six months ended June 30, 2021, the Company incurred $nil and $13,900, respectively,
for such services. There were no costs incurred for services under this agreement for the three and six-month periods ended June 30, 2020.
MALACCA STRAITS ACQUISITION COMPANY LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
Note 5 — Commitments and
Contingencies
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, the specific impact is not readily
determinable as of the date of these financial statements. The condensed financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Registration Rights
Pursuant to a registration rights agreement entered
into on July 14, 2020, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion
of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants
issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) are entitled to registration rights requiring
the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Class A ordinary
shares). The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register
such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements
filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities
pursuant to Rule 415 under the Securities Act. The registration rights agreement does not contain liquidated damages or other cash
settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred
in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriters were paid a cash underwriting
discount of $0.20 per Unit, or $2,500,000 in the aggregate. As a result of the underwriters’ election to exercise their over-allotment
in full on July 21, 2020, the underwriters were paid an additional cash underwriting discount of $375,000.
In addition, the underwriters are entitled to
a deferred fee of $0.35 per Unit, or $5,031,250 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. A portion of such amount, not to exceed 25% of the total amount of the deferred fee held in the Trust Account, may be re-allocated
or paid to unaffiliated thirds parties that assist the Company in consummating a Business Combination. The election to re-allocate or
make any such payments to unaffiliated third parties will be solely at the discretion of the Company’s management team, and such
unaffiliated third parties will be selected by the management team in their sole and absolute discretion.
Note 6 — Shareholders’
Equity
Preference Shares — The
Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001 per share, with such designations, voting and other
rights and preferences as may be determined from time to time by the Company’s board of directors. At June 30, 2021 and December
31, 2020, there were no preference shares issued or outstanding.
Class A Ordinary Shares —
The Company is authorized to issue 200,000,000 Class A ordinary shares with a par value of $0.0001 per share. Holders of the Company’s
Class A ordinary shares are entitled to one vote for each share. At June 30, 2021, there were 2,113,930 Class A ordinary shares
issued and outstanding, excluding 12,261,070 Class A ordinary shares subject to possible redemption. At December 31, 2020, there
were 2,142,658 Class A ordinary shares issued and outstanding, excluding 12,232,342 Class A ordinary shares subject to possible
redemption.
Class B Ordinary Shares —
The Company is authorized to issue 20,000,000 Class B ordinary shares with a par value of $0.0001 per share. Holders of Class B
ordinary shares are entitled to one vote for each share. At June 30, 2021 and December 31, 2020, there were 3,593,750 Class B ordinary
shares issued and outstanding.
Holders of Class A ordinary shares and Class B
ordinary shares will vote together as a single class on all other matters submitted to a vote of shareholders, except as required by law;
provided that only holders of Class B ordinary shares have the right to vote on the appointment of directors prior to the Company’s
initial Business Combination.
MALACCA STRAITS ACQUISITION COMPANY LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
The Class B ordinary shares will automatically
convert into Class A ordinary shares at the time of a Business Combination on a one-for-one basis, subject to adjustment. In the
case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts
sold in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which Class B ordinary shares
shall convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the issued and outstanding Class B
ordinary shares agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number
of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, 20% of the
sum of all ordinary shares issued and outstanding upon completion of the Initial Public Offering plus all Class A ordinary shares
and equity-linked securities issued or deemed issued in connection with the Business Combination (excluding any shares or equity-linked
securities issued, or to be issued, to any seller in the Business Combination and any private placement-equivalent warrants issued to
the Sponsor or its affiliates upon conversion of loans made to the Company).
Note 7 — Warrants
Warrants — Public Warrants
may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole
warrants will trade. The Public Warrants will become exercisable on the later of (a) 12 months from the closing of the Initial Public
Offering or (b) 30 days after the completion of a Business Combination. The Public Warrants will expire five years after the completion
of a Business Combination or earlier upon redemption or liquidation.
The Company will not be obligated to deliver
any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant
exercise unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares underlying
the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations
with respect to registration. No Public Warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated
to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered
or qualified under the securities laws of the state of the exercising holder, or an exemption is available.
The Company has agreed that as soon as practicable,
but in no event later than 15 business days after the closing of the Company’s Business Combination, the Company will use its best
efforts to file, and within 60 business days following the Business Combination to have declared effective, a registration statement
covering the Class A ordinary shares issuable upon exercise of the warrants. The Company will use its best efforts to cause the
same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto,
until the expiration of the warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if the Class A
ordinary shares are, at the time of any exercise of a warrant, not listed on a national securities exchange such that they satisfy 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, the Company will not be required to file or maintain in effect a registration
statement, but will use its best efforts to qualify the shares under applicable blue sky laws to the extent an exemption is not available.
Once the warrants become exercisable, the Company
may redeem the Public Warrants for redemption:
|
●
|
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 to each warrant holder; and
|
|
●
|
if, and only if, the last sale price of the Company’s Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share subdivisions, share consolidations, share capitalizations, rights issuances, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date we send to the notice of redemption to the warrant holders.
|
MALACCA STRAITS ACQUISITION COMPANY LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
If and when the warrants become redeemable by
the Company, the Company may not exercise its redemption right if the issuance of shares upon exercise of the warrants is not exempt
from registration or qualification under applicable state blue sky laws or the Company is unable to effect such registration or qualification.
If the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder
that wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise
price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including
in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except
as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally,
in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination
within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive
any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held
outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.
In addition, if (x) the Company issues additional
Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination
at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue
price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or
its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance)
(the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total
equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business
Combination (net of redemptions), and (z) the volume weighted average trading price of its Class A ordinary shares during the
20 trading day period starting on the trading day prior to the day on which the Company consummates its Business Combination (such price,
the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to
be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will
be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
The Private Placement Warrants are identical
to the Public Warrants underlying the Units sold in the Initial Public Offering, except that (x) the Private Placement Warrants
and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable
or saleable until 30 days after the completion of a Business Combination, subject to certain limited exceptions, (y) the Private
Placement Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or
their permitted transferees and (z) the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise
of the Private Placement Warrants will be entitled to registration rights. If the Private Placement Warrants are held by someone other
than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable
by such holders on the same basis as the Public Warrants.
Note 8 — Fair Value Measurements
At June 30, 2021, assets
held in the Trust Account were comprised of $138 in cash and $143,837,286 held in money market funds, which were invested in U.S. treasury
securities. During the period ended June 30, 2021, the Company did not withdraw any interest income from the Trust Account.
MALACCA STRAITS ACQUISITION COMPANY LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
The following table presents information about
the Company’s assets that are measured at fair value on a recurring basis at June 30, 2021 and indicates the fair value hierarchy
of the valuation inputs the Company utilized to determine such fair value.
|
|
Level
|
|
|
Fair
Value
|
|
Money Market Funds
|
|
|
1
|
|
|
$
|
143,837,286
|
|
At December 31, 2020, assets held in the Trust
Account were comprised of $273 in cash and $143,815,471 in U.S. treasury securities. During the year ended December 31, 2020, the
Company did not withdraw any interest income from the Trust Account.
The gross holding gains and fair value of held-to-maturity
securities at December 31, 2020 are as follows:
|
|
Held-To-Maturity
|
|
Level
|
|
Amortized
Cost
|
|
|
Gross
Holding
Gain
|
|
|
Fair
Value
|
|
December 31, 2020
|
|
U.S. Treasury Securities (Mature on 1/12/2021)
|
|
1
|
|
$
|
143,815,471
|
|
|
$
|
2,091
|
|
|
$
|
143,817,562
|
|
The following table presents information about
the Company’s liabilities that are measured at fair value on a recurring basis at June 30, 2021 and indicates the fair value hierarchy
of the valuation inputs the Company utilized to determine such fair value. The fair value of the derivative warrant liabilities at June
30, 2021 are as follows:
Description
|
|
Level
|
|
Fair
Value
|
|
Derivative Warrant Liabilities – Public Warrants
|
|
1
|
|
$
|
7,007,813
|
|
Derivative Warrant Liabilities –
Private Placement Warrants
|
|
3
|
|
|
4,291,875
|
|
|
|
|
|
$
|
11,299,688
|
|
The fair value of the derivative warrant liabilities
at December 31, 2020 are as follows:
Description
|
|
Level
|
|
Fair
Value
|
|
Derivative Warrant Liabilities – Public Warrants
|
|
1
|
|
$
|
7,546,875
|
|
Derivative Warrant Liabilities – Private Placement Warrants
|
|
3
|
|
|
4,639,385
|
|
|
|
|
|
$
|
12,186,260
|
|
The Public Warrants were valued using quoted prices in an active market.
Private Warrants
The Private Placement Warrants were valued using
a Modified Black Scholes Model, which is considered to be a Level 3 fair value measurement. The Modified Black Scholes Model uses a Black
Scholes Option Pricing Model that is modified to reduce the value of the Private Placement Warrants for a discount on the lack of marketability
of the instrument as well as for the probability of consummation of the Business Combination. The primary unobservable inputs utilized
in determining the fair value of the Private Placement Warrants is the discount for lack of marketability and the probability of consummation
of the Business Combination. The probability assigned to the consummation of the Business Combination was 80% which was determined based
on a hybrid approach of both observed success rates of business combinations for special purpose acquisition companies and the Sponsors’
track record for consummating similar transactions.
MALACCA STRAITS ACQUISITION COMPANY LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
The key inputs into the Modified Black Scholes Model for the Private
Warrants were as follows at June 30, 2021:
Input
|
|
June 30,
2021
|
|
Expected term (years)
|
|
|
0.25
|
|
Expected volatility
|
|
|
15.3
|
%
|
Risk-free interest rate
|
|
|
0.91
|
%
|
Exercise price
|
|
$
|
11.50
|
|
Fair value of the ordinary share stock price
|
|
$
|
9.90
|
|
The key inputs into the Modified Black Scholes Model for the Private Warrants were as follows at December 31, 2020:
Input
|
|
December 31,
2020
|
|
Expected term (years)
|
|
|
0.52
|
|
Expected volatility
|
|
|
15.0
|
%
|
Risk-free interest rate
|
|
|
0.34
|
%
|
Exercise price
|
|
$
|
11.50
|
|
Fair value of the ordinary share price
|
|
$
|
10.00
|
|
The following table
presents the changes in the fair value of the Private Placement Warrant liabilities:
|
|
Private
Warrants
|
|
Fair value as of January 1, 2021
|
|
$
|
4,639,385
|
|
Change in fair value of derivative warrant
liabilities
|
|
|
(347,510
|
)
|
Fair value as of June 30, 2021
|
|
$
|
4,291,875
|
|
Level 3 financial liabilities consist of the
Private Placement Warrant liability for which there is no current market for these securities such that the determination of fair value
requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy
are analyzed each period based on changes in estimates or assumptions and recorded as appropriate.
Note 9 — Business Combination
On March 22, 2021, the Company issued a press
release announcing the execution of a definitive Business Combination Agreement, dated as of March 21, 2021 (the “Business Combination
Agreement”), with PT Asia Vision Network, an Indonesian limited liability company (“AVN”) and indirect 99.99% owned
subsidiary of PT MNC Vision Networks TBK, an Indonesian public limited liability company (“MNC Group”), the Sponsor and MNC
Entertainment Ltd, a Cayman Islands exempted company and a wholly-owned subsidiary of AVN (“Merger Sub”). Pursuant to the
Business Combination Agreement, subject to the terms and conditions set forth therein, Merger Sub will merge with and into the Company,
with the Company surviving the merger as a wholly-owned subsidiary of AVN, and with AVN becoming the successor US-listed company to the
Company. For additional information including the definitive Business Combination Agreement, please refer to the Form 8-Ks filed with
the SEC on March 25, 2021 and May 21, 2021.
Note 10 — Subsequent Events
The Company evaluated subsequent events and transactions
that occurred after the unaudited condensed balance sheet date up to the date that the unaudited condensed financial statements were
issued. Based upon this review, except as disclosed, the Company did not identify any other subsequent events that would have required
adjustment or disclosure in the unaudited condensed financial statements.