NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
NOTE 1 — DESCRIPTION OF ORGANIZATION
AND BUSINESS OPERATIONS
Natural Order Acquisition
Corp. (the “Company”) was incorporated in Delaware on August 10, 2020. The Company was formed for the purpose of effecting
a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses
(the “Business Combination”).
The Company is not limited
to a particular industry or sector for purposes of consummating a Business Combination. The Company is an early stage and emerging growth
company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of June 30, 2021, the
Company had not commenced any operations. All activity for the period from August 10, 2020 (inception) through December 31, 2020, and
for the three and six months ended June 30, 2021, relates to the Company’s formation and the initial public offering (“Initial
Public Offering”) and expenses incurred in relation to the pursuit of a business combination, which are described below. The Company
will not generate any operating revenues until after the completion of a 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 November 10, 2020. On November 13, 2020 the Company consummated
the Initial Public Offering of 23,000,000 units (the “Units” and, with respect to the shares of common stock included in the
Units sold, the “Public Shares”), which includes the full exercise by the underwriters of their over-allotment option in the
amount of 3,000,000 Units, at $10.00 per Unit, generating gross proceeds of $230,000,000 which is described in Note 3.
Simultaneously with the closing
of the Initial Public Offering, the Company consummated the sale of 6,800,000 warrants (the “Private Warrants”) at a price
of $1.00 per Private Warrant in a private placement to Natural Order Sponsor LLC (the “Sponsor”), generating gross proceeds
of $6,800,000, which is described in Note 4.
Transaction costs amounted
to $13,173,201, consisting of $4,600,000 in cash underwriting fees, $8,050,000 of deferred underwriting fees and $523,201 of other offering
costs. Of these total transaction costs, $8,714 related to the issuance of the Private Warrants and were charged to expense and the remaining
$13,164,487 were charged to equity.
Following the closing of
the Initial Public Offering on November 13, 2020, an amount of $230,000,000 ($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 Warrants was placed in a trust account (the “Trust Account”),
located in the United States and invested only 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 any open-ended investment company that holds itself out as a money market fund 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 or (ii) the distribution of the funds held in the Trust Account, as described below.
The Company’s management
has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of Private
Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination.
There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete one or
more initial Business Combinations 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 deferred underwriting commissions and taxes payable on the interest earned on the
Trust Account). 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 business sufficient for it
not to be required to register as an investment company under the Investment Company Act.
The Company will provide
the holders of the outstanding Public Shares (the “Public Stockholders”) 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 stockholder meeting called to approve
the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval
of a Business Combination or conduct a tender offer will be made by the Company. The Public Stockholders will be entitled to redeem their
Public Shares for a pro rata portion of the amount then in the Trust Account (initially $10.00 per Public Share, plus any pro rata interest
then in the Trust Account, net of taxes payable). There will be no redemption rights upon the completion of a Business Combination with
respect to the Company’s warrants.
NATURAL ORDER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
The Company will only proceed
with a Business Combination if the Company has net tangible assets of at least $5,000,001 following any related redemptions and, if the
Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote
is not required by applicable law or stock exchange listing requirements and the Company does not decide to hold a stockholder vote for
business or other reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Certificate
of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”)
and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction
is required by applicable law or stock exchange listing requirements, or the Company decides to obtain stockholder 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 stockholder approval in connection with a Business Combination, the Company’s
Sponsor and any of the Company’s officers or directors that may hold Founder Shares (as defined in Note 5) (the “Initial Stockholders”)
have agreed to vote their Founder Shares and any Public Shares purchased during or after the Initial Public Offering in favor of approving
a Business Combination. Additionally, in order for a public stockholder to have his shares redeemed for cash in connection with any proposed
Business Combination, that public stockholder must vote either in favor of or against a proposed Business Combination. If a public stockholder
fails to vote in favor of or against a proposed Business Combination, whether that stockholder abstains from the vote or simply does not
vote, that stockholder would not be able to have his shares of Common Stock so redeemed to cash in connection with such Business Combination.
Notwithstanding the foregoing,
if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules,
the Certificate of Incorporation provides that a Public Stockholder, together with any affiliate of such stockholder or any other person
with whom such stockholder 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% of the Public Shares.
The Initial Stockholders
have agreed (a) to waive their redemption rights with respect to the Founder Shares and Public Shares held by them in connection
with the completion of a Business Combination and (b) not to propose an amendment to the Certificate of Incorporation (i) to
modify the substance or timing of the Company’s obligation to allow redemptions in connection with a Business Combination or to
redeem 100% of its Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below)
or (ii) with respect to any other provision relating to stockholders’ rights or pre-business combination activity, unless the
Company provides the Public Stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
The Company has until November
13, 2022 (the “Combination Period”) to complete a Business Combination. If the Company has not consummated a Business Combination
by 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 pay taxes (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 Stockholders’ rights as stockholders (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 stockholders and the Company’s board of directors, dissolve and liquidate, subject in
each case to the Company’s obligations under Delaware 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.
The Initial Stockholders
have agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination
within the Combination Period. However, if the Initial Stockholders acquire 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
6) 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 Initial Stockholders have agreed to 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 discussed entering
into a transaction agreement, reduce the amount of funds in the Trust Account to below $10.00 per Public Share, 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 monies held
in the Trust Account 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 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 Initial Stockholders 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 Initial Stockholders
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 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.
NATURAL ORDER ACQUISITION CORP.
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 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/A for the
year ended December 31, 2020 as filed with the SEC on May 24, 2021, which contains the audited financial statements and notes
thereto. The financial information as of December 31, 2020 is derived from the audited financial statements presented in the
Company’s Annual Report on Form 10-K/A for the year ended December 31, 2020. 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 of 1933, as amended (the “Securities Act”), as modified
by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from
various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not
limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404
of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements,
and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden
parachute payments not previously approved.
Further, Section 102(b)(1)
of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until
private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class
of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS
Act provides that 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 the 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 confirming events. Accordingly, the actual results could differ significantly
from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity
of three months or less when purchased to be cash equivalents. The Company had $1,130,142 and $1,401,165 M in cash as of June 30,
2021 and December 31, 2020, respectively. The Company did not have any cash equivalents, outside of the funds held in the Trust Account,
as of June 30, 2021 or December 31, 2020.
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 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.
Marketable Securities Held in Trust Account
At June 30, 2021 substantially
all of the assets held in the Trust Account were held in a money market mutual fund. At December 31, 2020 substantially all of the assets
held in the Trust Account were held in U.S. treasury securities.
NATURAL ORDER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
Common Stock Subject to Possible Redemption
The Company accounts for
its common stock subject to possible redemption, if any, in accordance with the guidance in Accounting Standards Codification (“ASC”)
Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability
instrument and is measured at fair value. Conditionally redeemable common stock (including common stock 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, common stock is classified as stockholders’ equity.
The Company’s common stock 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 March 31, 2021, common stock subject to possible redemption is presented
as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet.
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 $13,164,487 were charged to stockholders’ equity upon the completion of the Initial
Public Offering.
Income Taxes
The Company follows the
asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and
liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements
carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the
period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the
amount expected to be realized. As of June 30, 2021, the Company had a deferred tax asset of approximately $97,000 which had a full
valuation allowance recorded against it.
ASC 740 prescribes a recognition
threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be
taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination
by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.
There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2021 and December 31, 2020. The
Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from
its position. The Company is subject to income tax examinations by major taxing authorities since inception.
Net Income (Loss) per Common Share
Net income (loss) per common
share is computed by dividing net income (loss) by the weighted average number of common 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 14,900,000 shares of 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.
The Company’s
statement of operations includes a presentation of income (loss) per share for common shares subject to possible redemption in a manner
similar to the two-class method of income (loss) per share. Net income per common share, basic and diluted, for redeemable common stock
is calculated by dividing the interest income earned on the Trust Account, net of applicable franchise and income tax, by the weighted
average number of redeemable common stock outstanding since original issuance. Net loss per share, basic and diluted, for non-redeemable
common stock is calculated by dividing the net loss, adjusted for income attributable to redeemable common stock, net of applicable franchise
and income taxes, by the weighted average number of non-redeemable common stock outstanding for the period. Non-redeemable common stock
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.
NATURAL ORDER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
The following table
reflects the calculation of basic and diluted net income (loss) per common share (in dollars, except per share amounts) for the
three and six months ended June 30, 2021:
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
Redeemable Common Stock
|
|
|
|
|
|
|
Numerator: Earnings allocable to Redeemable Common Stock
|
|
|
|
|
|
|
Interest and Dividend Income
|
|
$
|
17,205
|
|
|
$
|
47,175
|
|
Income Tax and Franchise Tax
|
|
|
(17,205
|
)
|
|
|
(47,175
|
)
|
Net Earnings
|
|
$
|
—
|
|
|
$
|
—
|
|
Denominator: Weighted Average Redeemable Common Stock
|
|
|
|
|
|
|
|
|
Redeemable Common Stock, Basic and Diluted
|
|
|
23,000,000
|
|
|
|
23,000,000
|
|
Earnings/Basic and Diluted Redeemable Net Income per Common
Share
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
Non-Redeemable Common Stock
|
|
|
|
|
|
|
|
|
Numerator: Net Loss minus Redeemable Net Earnings
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
|
487,499
|
|
|
$
|
353,057
|
|
Redeemable Net Earnings
|
|
|
—
|
|
|
|
—
|
|
Non-Redeemable Net Income
|
|
$
|
487,499
|
|
|
$
|
353,057
|
|
Denominator: Weighted Average Non-Redeemable Common Stock
|
|
|
|
|
|
|
|
|
Non-Redeemable Common Stock, Basic and Diluted
|
|
|
5,750,000
|
|
|
|
5,750,000
|
|
Basic and Diluted Non-Redeemable Net income per Common
Share
|
|
$
|
0.08
|
|
|
$
|
0.06
|
|
As of June 30, 2021, basic
and diluted shares are the same as there are no non-redeemable securities that are dilutive to the Company’s stockholders.
Fair Value of Financial Instruments
The fair value of the Company’s
assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximates the carrying
amounts represented in the condensed balance sheets, primarily due to their short-term nature.
Warrant Liability
The Company accounts for
warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms
and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)
480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The
assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability
pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether
the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment,
which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period
end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity
classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued
or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial
fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized
as a non-cash gain or loss on the statements of operations. As of June 30, 2021 and December 31, 2020, the Public Warrants met all of
the criteria for equity classification whereas the Private Warrants did not. See Note 8 for further discussion of the methodology used
to determine the fair value of warrants classified as liability-classified instruments.
Recent Accounting Standards
Management does not believe
that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s
financial statements.
NOTE 3 — INITIAL PUBLIC OFFERING
Pursuant to the Initial Public
Offering, the Company sold 23,000,000 Units, which includes the full exercise by the underwriters of their over-allotment option in the
amount of 3,000,000 Units, at a price of $10.00 per Unit. Each Unit consists of one share of common stock and one redeemable warrant (“Public
Warrant”). Each whole Public Warrant entitles the holder to purchase one-half share of common stock at a price of $11.50 per share,
subject to adjustment (see Note 7).
NATURAL ORDER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
NOTE 4 — PRIVATE PLACEMENT
Simultaneously with the closing of the Initial Public Offering, the Sponsor
purchased an aggregate of 6,800,000 Private Warrants at a price of $1.00 per Private Warrant ($6,800,000). Each Private Warrant is exercisable
to purchase one-half share of common stock at a price of $11.50 per share, subject to the same adjustment mechanism that applies to the
Public Warrants (see Note 7). The proceeds from the sale of the Private Warrants were added to the net 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 proceeds
from the sale of the Private Warrants held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the
requirements of applicable law) and the Private Warrants will expire worthless.
The Private Warrants are
identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Warrants will be exercisable
for cash (even if a registration statement covering the issuance of the common stock issuable upon exercise of such warrants is not effective)
or on a cashless basis, at the holder’s option and will not be redeemable by the Company, in each case so long as they are held
by the initial purchasers or their affiliates.
NOTE 5 — RELATED PARTIES
Founder Shares
In August 2020, the Company
issued an aggregate of 7,187,500 shares of common stock to the Initial Stockholders (the “Founder Shares”) for an aggregate
purchase price of $25,000. In October 2020, the Sponsor transferred 100,000 Founder Shares to certain officers and each director. On November
5, 2020, the Sponsor effected a cancellation and surrender of 1,437,500 Founder Shares to the Company for no consideration, resulting
in a decrease in the number of shares of common stock outstanding from 7,187,500 to 5,750,000 shares. The Founder Shares included an aggregate
of 750,000 shares that were subject to forfeiture depending on the extent to which the underwriters’ over-allotment option was exercised,
so that the number of Founder Shares would equal approximately 20% of the Company’s issued and outstanding common stock after the
Initial Public Offering. As a result of the underwriters’ election to fully exercise their over-allotment option, 750,000 Founder
Shares were no longer subject to forfeiture.
The Initial Stockholders
have agreed, subject to certain limited exceptions, not to transfer, assign or sell any of their Founder Shares until, with respect to
50% of the Founder Shares, the earlier of six months after the consummation of a Business Combination and the date on which the closing
price of the common stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations
and the like) for any 20 trading days within a 30-trading day period commencing after a Business Combination and, with respect to the
remaining 50% of the Founder Shares, until the six months after the consummation of a Business Combination, or earlier, in either case,
if, subsequent to a Business Combination, the Company completes a liquidation, merger, stock exchange or other similar transaction which
results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other
property.
Administrative Support Agreement
The Company entered into an agreement, commencing on November 10, 2020
through the earlier of the Company’s consummation of a Business Combination or its liquidation, to pay the Sponsor a total of $10,000
per month for office space, utilities and secretarial support. However, pursuant to the terms of such agreement, the Company may delay
payment of such monthly fee upon a determination by the audit committee that the Company lacks sufficient funds held outside the Trust
Account to pay actual or anticipated expenses in connection with a Business Combination. Any such unpaid amount will accrue without interest
and be due and payable no later than the date of the consummation of a Business Combination. The Company will cease to pay such fees upon
the consummation of a Business Combination. For the six months ended June 30, 2021, the Company incurred $60,000 in fees for these services
of which $10,000 is included in accrued expenses in the accompanying condensed balance sheet. As of June 30, 2021 and December 31, 2020,
amounts accrued under this agreement were equal to $10,000.
Promissory Notes — Related Party
In August 2020, the Company
entered into unsecured promissory notes (the “Promissory Notes”) with affiliates of the Sponsor, pursuant to which the Company
could borrow up to an aggregate principal amount of $200,000. The Promissory Notes were non-interest bearing and payable on the earlier
of (i) the completion of the Initial Public Offering or (ii) the date on which the Company determined not to conduct the Initial
Public Offering. The outstanding balance under the Promissory Note of $200,000 was repaid at the closing of the Initial Public Offering
on November 13, 2020.
NATURAL ORDER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
Related Party Loans
In order to finance transaction
costs in connection with a Business Combination, the Initial Stockholders, or an affiliate of the Initial Stockholders, 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”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business
Combination, without interest, or, at the lender’s discretion, up to $500,000 of the notes may be converted upon completion of a
Business Combination into warrants at a price of $1.00 per warrant. Such warrants would be identical to the Private Warrants. 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. At June 30, 2021 and December
31, 2020, no amounts were outstanding under the Working Capital Loans.
NOTE 6 — COMMITMENTS AND CONTINGENCIES
Risks and Uncertainties
Management continues to evaluate
the impact of the COVID-19 pandemic 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 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 November 10, 2020, the holders of the Founder Shares, Private Warrants and securities that may be issued
upon conversion of Working Capital Loans will be entitled to registration and stockholder rights. The holders of a majority of these securities
are entitled to make up to two demands that the Company registers such securities. The holders of the majority of the Founder Shares can
elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock
are to be released from escrow. The holders of a majority of the Private Warrants (and underlying securities) can elect to exercise these
registration rights at any time after the Company consummates a Business Combination. In addition, the holders have certain “piggy-back”
registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination. The registration
rights agreement does not contain liquidating 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 are entitled
to a deferred fee of $0.35 per Unit, or $8,050,000 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.
NOTE 7 — STOCKHOLDERS’ EQUITY
Preferred Stock —
The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designations,
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 shares of preferred stock issued and outstanding.
Common
stock — The Company is authorized to issue 100,000,000 shares of common stock with a par value of
$0.0001 per share. Holders of common stock are entitled to one vote for each share. There were 7,437,838 and 7,473,143 shares of
common stock issued and outstanding, excluding 21,312,162 and 21,276,857 shares of common stock classified as subject to possible
redemption, as of June 30, 2021 and December 31, 2020, respectively.
Public Warrants — Public
Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants.
The Public Warrants will become exercisable on the later of (a) the completion of a Business Combination and (b) one year from
the closing of the Initial Public Offering. The Public Warrants will expire five years from the completion of a Business Combination
or earlier upon redemption or liquidation.
NATURAL ORDER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
No Public Warrants will be
exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable
upon exercise of the warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration
statement covering the shares of common stock issuable upon exercise of the Public Warrants is not effective within 120 days from the
closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any
period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant
to an available exemption from registration under the Securities Act.
The Company may redeem the
Public Warrants:
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●
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in whole and not in part;
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|
|
|
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●
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at a price of $0.01 per warrant;
|
|
|
|
|
●
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at any time while the warrants become exercisable;
|
|
|
|
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●
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upon not less than 30 days’ prior written notice of redemption to each warrant holder;
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|
|
|
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●
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if, and only if, the reported last sale price of the Company’s common stock equals or exceeds $18.00 per share, for any 20 trading days within a 30-trading day period ending on the third business day prior to the notice of redemption to warrant holders; and
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●
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if, and only if, there is a current registration statement in effect with respect to the issuance of the common stock underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.
|
If the Company calls the
Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do
so on a “cashless basis,” as described in the warrant agreement.
The exercise price and number
of shares of common stock issuable upon exercise of the 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 warrants will not be adjusted for issuance of shares of common stock at a price below its exercise price. The Company has agreed to
use its best efforts to have declared effective a prospectus relating to the common stock issuable upon exercise of the warrants and keep
such prospectus current until the expiration of the warrants. However, if the Company does not maintain a current prospectus relating
to the common stock issuable upon exercise of the warrants, holders will be unable to exercise their warrants for cash and the Company
will not be required to net cash settle or cash settle the warrant exercise. There will be no redemption rights upon the completion of
a Business Combination with respect to the Company’s warrants. If the Company is unable to complete a Business Combination within
the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such
funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust
Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
In addition, if (x) the
Company issues additional shares of common stock 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 $9.50 per share of common stock (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 Sponsors or its affiliates, without taking into account any Founder Shares held by the Initial Stockholders or such affiliates,
as applicable, prior to such issuance), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total
equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business
Combination (net of redemptions), and (z) the volume weighted average trading price of its common stock 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 $9.50 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115%
of the Market Value and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the
Market Value.
NATURAL ORDER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2021
(Unaudited)
NOTE 8 — FAIR VALUE MEASUREMENTS
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.
|
The Company classifies its
U.S. Treasury and equivalent securities as held-to-maturity in accordance with ASC Topic 320 “Investments - Debt and Equity Securities.”
Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity
treasury securities are recorded at amortized cost on the accompanying balance sheets and adjusted for the amortization or accretion of
premiums or discounts.
At June 30, 2021 assets held
in the Trust Account were comprised of $230,066,459 of money market securities. At December 31, 2020, assets held in the Trust Account
were comprised of $842 in cash and $230,019,766 in U.S. Treasury securities.
The following tables present
information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at June 30, 2021 and
December 31, 2020 and indicate the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. The
gross holding gains and fair value of held-to-maturity securities at March 31, 2021 and December 31, 2020 are as follows:
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|
|
|
June 30, 2021
|
|
|
Held-To-Maturity
|
|
Level
|
|
Fair Value
|
|
Assets
|
|
Money Market Securities
|
|
1
|
|
$
|
230,066,459
|
|
Liabilities
|
|
Private Warrants
|
|
3
|
|
$
|
4,964,000
|
|
|
|
|
|
December 31, 2020
|
|
|
|
Held-To-Maturity
|
|
Level
|
|
|
Amortized
Cost
|
|
|
Gross
Holding
Gain
|
|
|
Fair Value
|
|
Assets
|
|
U.S. Treasury Securities (Matured on 2/11/2021)(1)
|
|
|
1
|
|
|
$
|
230,019,766
|
|
|
$
|
3,451
|
|
|
$
|
230,023,217
|
|
Liabilities
|
|
Private Warrants
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
$
|
5,780,000
|
|
|
(1)
|
At
maturity on February 11, 2021, proceeds were invested in additional U.S. Treasury Securities with a maturity date of June 10, 2021. Upon
Maturity in June, proceeds were invested in a money market mutual fund.
|
Transfers to/from Levels
1, 2 and 3 are recognized at the end of the reporting period. There were no transfers during the period.
The Private Warrants are
accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the Company’s condensed
balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented
within change in fair value of warrant liabilities in the condensed statement of operations.
NATURAL ORDER ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
June 30, 2021
(Unaudited)
Fair Value Measurement
The Private Warrants are
measured at fair value on a recurring basis, using a Black-Scholes Model. The key inputs into the Black-Scholes Model for the Private
Warrants were as follows:
|
|
June 30, 2021
|
|
|
December 31, 2020
|
|
Risk-free interest rate
|
|
|
0.96
|
%
|
|
|
0.49
|
%
|
Expected term (years)
|
|
|
5
|
|
|
|
5
|
|
Expected volatility
|
|
|
20.6
|
%
|
|
|
22.0
|
%
|
Exercise price
|
|
$
|
11.50
|
|
|
$
|
11.50
|
|
Stock price
|
|
$
|
9.78
|
|
|
$
|
10.03
|
|
Dividend yield
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
The following table presents
the changes in the fair value of warrant liability:
|
|
Warrant
Liability
|
|
Warrant liability on August 10, 2020
|
|
$
|
-
|
|
Issuance of Private Warrants
|
|
|
3,944,000
|
|
Change in fair value of warrant liability
|
|
|
1,836,000
|
|
Fair value as of December 31, 2020
|
|
|
5,780,000
|
|
Change in fair value of warrant liability
|
|
|
(68,000
|
)
|
Fair value as of March 31, 2021
|
|
|
5,712,000
|
|
Change in fair value of warrant liability
|
|
|
(748,000
|
)
|
Fair value as of June 30, 2021
|
|
$
|
4,964,000
|
|
NOTE 9 — SUBSEQUENT EVENTS
The Company evaluated subsequent
events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based upon
this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.