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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No.1)

(MARK ONE)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended September 30, 2021

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                  to

Commission file number: 001-40018

APOLLO STRATEGIC GROWTH CAPITAL II

(Exact Name of Registrant as Specified in Its Charter)

Cayman Islands

    

98-0598286

(State or other jurisdiction of
incorporation or organization)

 

(I.R.S. Employer
Identification No.) 

9 West 57th Street, 43rd Floor

New York, NY 10019

(Address of principal executive offices)

(212) 515-3200

(Issuer’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Units, each consisting of one Class A ordinary share, $0.00025 par value, and one-fifth of one warrant

 

APGB.U

 

New York Stock Exchange

Class A ordinary share

 

APGB

 

New York Stock Exchange

Warrants included as part of the units

 

APGB WS

 

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes   No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

    

Accelerated filer

    

Non-accelerated filer

Smaller reporting company

 

 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   No 

As of December 6, 2021, there were 69,000,000 Class A ordinary shares, par value $0.00025 per share, and 17,250,000 Class B ordinary shares, par value $0.0000625 per share, issued and outstanding.

Table of Contents

APOLLO STRATEGIC GROWTH CAPITAL II

FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2021

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

3

Item 1. Interim Condensed Financial Statements (Restated)

3

Condensed Balance Sheets

3

Condensed Statements Of Operations (Unaudited)

4

Condensed Statements Of Changes In Shareholders’ Equity (Deficit) (Unaudited) For The Three Months Ended September 30, 2021 For The Three Months Ended September 30, 2020 (Unaudited)

5

Condensed Statements Of Changes In Shareholders' Equity (Deficit) (Unaudited) For The Nine Months Ended September 30, 2021 For The Nine Months Ended September 30, 2020 (Unaudited)

6

Condensed Statements Of Cash Flows (Unaudited)

7

Notes To The Financial Statements (As Restated)

8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

24

Item 3. Quantitative and Qualitative Disclosures About Market Risk

27

Item 4. Controls and Procedures (Restated)

27

PART II - OTHER INFORMATION

29

Item 1. Legal Proceedings.

29

Item 1A. Risk Factors.

29

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

29

Item 3. Defaults Upon Senior Securities.

30

Item 4. Mine Safety Disclosures.

30

Item 5. Other Information.

30

Item 6. Exhibits (Restated)

31

PART III SIGNATURES

32

i

Table of Contents

EXPLANATORY NOTE

Apollo Strategic Growth Capital II (the “Company,” “we,” “our” or “us”) is filing this Amendment No. 1 to the Quarterly Report on Form 10-Q/A (“Amendment No. 1”, the “Amendment” or this “Form 10-Q/A”), to amend our Quarterly Report on Form 10-Q as of and for the quarter ended September 30, 2021, as filed with the Securities and Exchange Commission (the “SEC”) on November 12, 2021 (the “Q3 Form 10-Q”).

Restatement Background

The Company has followed Accounting Standards Codification Topic 480, “Distinguishing Liabilities from Equity,” (“ASC 480”) in accounting for its redeemable Class A ordinary shares, par value $0.00025 per share (the “Public Shares”). This included recording the Public Shares in permanent equity on its balance sheet. However, the Company maintained shareholders’ equity of at least $5,000,001 as the Company will not redeem Public Shares that would cause the Company’s net tangible assets to be less than $5,000,001 following such redemptions.

In September 2021, the Company’s management re-evaluated and ultimately concluded that the classification of $5,000,001 in permanent equity was not appropriate and that the Public Shares should be reclassified as temporary equity. In connection with the preparation of the financial statements as of and for the three and nine months ended September 30, 2021 that were included in the Q3 Form 10-Q, the Company concluded that it would change its accounting and reflect the full amount of all redeemable Public Shares in temporary equity. This was a change from the Company’s previous accounting practice whereby it maintained shareholders’ equity of at least $5,000,001 as the Company will not redeem Public Shares that would cause the Company’s net tangible assets to be less than $5,000,001 following such redemptions. In connection with the change in presentation for the Public Shares subject to possible redemption, the Company also revised its earnings per share to allocate net income (loss) evenly to all Public Shares and Class B ordinary shares.

On December 3, 2021, the Company’s management and the audit committee of the Company’s board of directors (the “Audit Committee”) concluded that the Company’s previously issued (i) audited balance sheet as of February 12, 2021 (the “Post-IPO Balance Sheet”), as previously revised in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, filed with the SEC on May 27, 2021 (the “Q1 Form 10-Q”), (ii) unaudited interim financial statements as of and for the three months ended March 31, 2021, included in the Q1 Form 10-Q, (iii) unaudited interim financial statements as of and for the three and six months ended June 30, 2021 included in the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 12, 2021, and (iv) unaudited interim financial statements as of and for the three and nine months ended September 30, 2021 included in the Q3 Form 10-Q (collectively, the “Affected Periods”), in each case, should be restated to classify all of the Public Shares as temporary equity and should no longer be relied upon. As a result, the Company is restating its financial statements for the Affected Periods in a Form 10-Q/A.

The restatement does not have an impact on its cash position and cash held in the trust account (the “Trust Account”) established in connection with the initial public offering.

The financial information that has been previously filed or otherwise reported is superseded by the information in this Amendment, and the financial statements and related financial information contained in such previously filed report should no longer be relied upon.

The restatement is more fully described in Note 2 of the notes to the financial statements included herein.

Internal Control and Disclosure Controls Considerations

Following the conclusion that the classification of $5,000,0001 in permanent equity was not appropriate and that the Public Shares should be reclassified as temporary equity, the Company’s management has concluded that, solely due to the events that led to this Amendment, a material weakness existed solely related to our accounting for complex financial instruments and the Company’s disclosure controls and procedures were not effective.

The material weakness is more fully described in Item 4: Controls and Procedures, contained herein.

1

Table of Contents

Items Amended in This Amendment

For the convenience of the reader, this Amendment sets forth the Q3 Form 10-Q, as amended to reflect the restatement in connection with the reclassification of the Public Shares as temporary equity. No attempt has been made in this Amendment to update other disclosures presented in the Q3 Form 10-Q, except as required to reflect the effects of the restatement. The following items have been amended as a result of the restatement:

Part I – Item 1. Financial Statements.
Part I – Item 4. Controls and Procedures.
Part II – Item 6. Exhibits.

This Amendment replaces the Q3 Form 10-Q.

The Company's Chief Executive Officer and Chief Financial Officer are providing currently dated certifications in connection with this Form 10-Q/A. See Exhibits 31.1, 31.2, 32.1 and 32.2.

2

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Interim Condensed Financial Statements (Restated)

Apollo Strategic Growth Capital II

(formerly known as APH I (Sub I), Ltd.)

CONDENSED BALANCE SHEETS

    

September 30, 

December 31, 

2021

    

2020

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

1,585,629

$

Prepaid expenses

 

1,108,409

 

1,704

Deferred offering costs

448,186

Total current assets

2,694,038

449,890

Investments held in Trust Account

690,063,006

Total assets

$

692,757,044

$

449,890

LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS’ EQUITY

 

  

 

  

Current liabilities:

Accounts payable and accrued expenses

$

4,045,406

$

398,000

Accrued offering costs

50,186

Note payable - sponsor

3,000,000

Total current liabilities

7,045,406

448,186

Derivative warrant liability

 

22,527,182

 

Deferred underwriting compensation

 

24,150,000

 

Total liabilities

 

53,722,588

 

448,186

Commitments and contingencies (Note 7)

Temporary equity:

Class A ordinary shares subject to possible redemption (69,000,000 and 0 shares at approximately $10.00 per share as of September 30, 2021 and December 31, 2020, respectively)

690,000,000

Shareholders’ equity:

 

  

 

  

Preferred shares, $0.00025 par value; 1,000,000 shares authorized; none issued and outstanding

 

 

Class A ordinary shares, $0.00025 par value, 180,000,000 shares authorized, 0 shares issued and outstanding at September 30, 2021 and December 31, 2020 (excluding 69,000,000 shares subject to possible redemption)

 

 

Class B ordinary shares, $0.0000625 par value, 46,000,000 shares authorized, 17,250,000 shares issued and outstanding as of September 30, 2021 and December 31, 2020

 

1,078

 

1,078

Additional paid-in capital

 

 

32,529

Accumulated deficit

 

(50,966,622)

 

(31,903)

Total shareholders’ (deficit) equity

 

(50,965,544)

 

1,704

Total liabilities, temporary equity and shareholders’ equity

$

692,757,044

$

449,890

See accompanying notes to unaudited condensed interim financial statements

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Table of Contents

Apollo Strategic Growth Capital II

(formerly known as APH I (Sub I), Ltd.)

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

For the Three Months Ended

For the Nine Months Ended

September 30, 

September 30, 

    

2021

    

2020

    

2021

    

2020

REVENUE

$

$

$

$

EXPENSES

Administration fee - related party

50,001

126,788

General and administrative

1,614,271

4,730,014

1,854

TOTAL EXPENSES

1,664,272

4,856,802

1,854

OTHER INCOME (EXPENSES)

Investment income earned on investment held in Trust Account

8,880

63,006

Interest expense

(528)

(1,070)

Transaction costs allocable to warrant liability

(1,494,398)

Change in fair value of derivative warrants

8,212,338

19,385,278

TOTAL OTHER INCOME (EXPENSES) - NET

8,220,690

17,952,816

Net income (loss) attributable to ordinary shares

$

6,556,418

$

$

13,096,014

$

(1,854)

Weighted average number of Class A ordinary shares outstanding, basic and diluted

 

69,000,000

 

 

58,384,615

 

Basic and diluted net income per Class A ordinary share

$

0.08

$

$

0.17

$

Weighted average number of Class B ordinary shares outstanding, basic and diluted

 

17,250,000

 

15,000,000

 

16,903,846

 

15,000,000

Basic and diluted net income (loss) per Class B ordinary share

$

0.08

$

(0.00)

$

0.17

$

(0.00)

See accompanying notes to unaudited condensed interim financial statements

4

Table of Contents

Apollo Strategic Growth Capital II

(formerly known as APH I (Sub I), Ltd.)

CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)

(UNAUDITED)

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021

Class B Ordinary

Additional

Shareholders’

 Shares

Paid-in

Accumulated

Equity

    

Shares

    

Amount

    

Capital

    

Deficit

    

(Deficit)

Balance as of June 30, 2021

17,250,000

$

1,078

$

$

(57,523,040)

$

(57,521,962)

Net income

 

 

 

6,556,418

6,556,418

Balance as of September 30, 2021

17,250,000

$

1,078

$

$

(50,966,622)

$

(50,965,544)

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020

Class B Ordinary

Additional

Shares

Paid-in

Accumulated

Shareholders’

    

Shares

    

Amount

    

Capital

    

Deficit

    

Equity

Balance as of June 30, 2020

17,250,000

$

1,078

$

32,529

$

(31,903)

$

1,704

Net income

 

 

 

 

Balance as of September 30, 2020

17,250,000

$

1,078

$

32,529

$

(31,903)

$

1,704

See accompanying notes to unaudited condensed interim financial statements

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Table of Contents

Apollo Strategic Growth Capital II

(formerly known as APH I (Sub I), Ltd.)

CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)

(UNAUDITED)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021

Class B Ordinary

Additional

Shareholders’

Shares

Paid-in

Accumulated

Equity

    

Shares

    

Amount

    

Capital

    

Deficit

    

(Deficit)

Balance as of December 31, 2020 (audited)

17,250,000

$

1,078

$

32,529

$

(31,903)

$

1,704

Accretion for Class A ordinary shares to redemption amount

(32,529)

(64,030,733)

(64,063,262)

Net income

 

 

13,096,014

 

13,096,014

Balance as of September 30, 2021

17,250,000

$

1,078

$

$

(50,966,622)

$

(50,965,544)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020

Class B Ordinary

Additional

Shares

Paid-in

Accumulated

Shareholders’

    

Shares

    

Amount

    

Capital

    

Deficit

    

Equity

Balance as of December 31, 2019 (audited)

17,250,000

$

1,078

$

30,825

$

(30,049)

$

1,854

Capital contributions

1,704

1,704

Net loss

 

 

(1,854)

 

(1,854)

Balance as of September 30, 2020

17,250,000

$

1,078

$

32,529

$

(31,903)

$

1,704

See accompanying notes to unaudited condensed interim financial statements

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Apollo Strategic Growth Capital II

(formerly known as APH I (Sub I), Ltd.)

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

For the Nine Months

Ended September 30,

    

2021

    

2020

Cash Flows From Operating Activities:

    

  

Net income (loss)

$

13,096,014

$

(1,854)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

 

 

Investment income earned on investment held in Trust Account

(63,006)

Change in fair value of derivative liabilities

(19,385,278)

Transaction costs allocable to warrant liability

1,494,398

Changes in operating assets and liabilities:

Prepaid expenses

 

(1,106,705)

 

(1,854)

Accounts payable and accrued expenses

4,273,415

Net Cash Used In Operating Activities

 

(1,691,162)

 

Cash Flows From Investing Activities:

Cash deposited into Trust Account

(690,000,000)

Net Cash Used In Investing Activities

(690,000,000)

 

  

 

  

Cash Flows From Financing Activities:

 

  

 

  

Proceeds from sale of Units in Public Offering, net of underwriting fee

 

674,903,096

 

Proceeds from sale of Private Placement Warrants

15,600,000

Proceeds from Sponsor note

3,000,000

Repayment of advances from Sponsor

 

(226,305)

 

Net Cash Provided By Financing Activities

 

693,276,791

 

 

 

Net change in cash

 

1,585,629

 

Cash at beginning of period

 

 

Cash at end of period

$

1,585,629

$

 

 

Supplemental disclosure of non-cash financing activities:

 

 

Deferred underwriters’ commissions charged to additional paid-in capital in connection with the Public Offering

$

24,150,000

$

Initial classification of Class A ordinary shares subject to possible redemption

$

690,000,000

$

Initial classification of fair value of Public warrants

$

41,912,460

$

Operating costs paid by related party which were charged to additional paid-in capital

$

$

1,704

Deferred offering costs paid by related party

$

626,009

$

See accompanying notes to unaudited condensed interim financial statements

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Table of Contents

Apollo Strategic Growth Capital II

(formerly known as APH I (Sub I), Ltd.)

NOTES TO THE FINANCIAL STATEMENTS (AS RESTATED)

NOTE 1 — DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN

Organizational and General

Apollo Strategic Growth Capital II (formerly known as APH I (Sub I), Ltd.) (the “Company”) was initially incorporated in Cayman Islands on October 10, 2008 under the name of APH I (Sub I), Ltd. 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 “Initial Business Combination”). 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”). On December 23, 2020, the Company formally changed its name to Apollo Strategic Growth Capital II.

At September 30, 2021, the Company had not commenced any operations. All activity for the period from October 10, 2008 through September 30, 2021 relates to the Company’s formation and the initial public offering (the “Public Offering”) described below and search for a target company. The Company will not generate any operating revenues until after completion of its Initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the net proceeds derived from the Public Offering.

Sponsor and Public Offering

On February 12, 2021, the Company consummated the Public Offering of 69,000,000 units (“Units” and, with respect to the Company’s Class A ordinary shares, $0.00025 par value per share included in the Units being offered, the “Public Shares”), including the issuance of 9,000,000 Units as a result of the underwriters’ full exercise of their over-allotment option, generating gross proceeds of $690,000,000, which is described in Note 3.

The Company’s sponsor is APSG Sponsor II, L.P., a Cayman Islands limited partnership (the “Sponsor”). The Company intends to finance its Initial Business Combination with proceeds from the $690,000,000 Public Offering and the $15,600,000 private placement (Note 4). Upon the closing of the Public Offering and the private placement, $690,000,000 was placed in a trust account (the “Trust Account”) (discussed below).

Simultaneously to the Public Offering the Sponsor purchased an aggregate of 10,400,000 warrants (the “Private Placement Warrants”) at a purchase price of $1.50 per warrant, or approximately $15,600,000 in the aggregate, in a private placement simultaneously with the closing of the Public Offering (the “Private Placement”).

The transaction costs amounted to $40,561,088 consisting of $13,800,000 of underwriting fees, $24,150,000 of deferred underwriting fees payable (which are held in the Trust Account with Continental Stock Transfer and Trust Company acting as trustee) and $1,116,690 of Public Offering costs. Of these costs $39,066,690 were charged to additional paid-in capital upon completion of the Public Offering. In addition, $1,494,398 were allocated to the Public Warrants and Private Placement Warrants and were included in the statements of operations as a component of other income/(expense). Cash of $1,585,629 was held outside of the Trust Account on September 30, 2021 and is available for working capital purposes. As described in Note 6, the $24,150,000 deferred underwriting fee payable is contingent upon the consummation of an Initial Business Combination by February 12, 2023 (or by May 12, 2023 if the Company has executed a letter of intent, agreement in principle or definitive agreement for the Initial Business Combination by February 12, 2023) (the “Completion Window”).

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Trust Account

The proceeds held in the Trust Account are invested only in U.S. government securities with a maturity of one hundred eighty (180) days or less or in money market funds that meet certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended, and that invest only in direct U.S. government treasury obligations, as determined by the Company. Funds will remain in the Trust Account until the earlier of (i) the consummation of the Initial Business Combination or (ii) the distribution of the Trust Account proceeds as described below. The remaining proceeds outside the Trust Account may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. At September 30, 2021, the proceeds of the Public Offering of $690,063,006 were held in U.S. government securities, as specified above.

The Company’s fourth amended and restated memorandum and articles of association provides that, other than the withdrawal of interest to pay our tax obligations (the “Permitted Withdrawals”), and up to $100,000 of interest to pay dissolution expenses none of the funds held in the Trust Account will be released until the earliest of: (i) the completion of the Initial Business Combination; (ii) the redemption of any Public Shares sold in the Public Offering that have been properly tendered in connection with a shareholder vote to amend the Company’s fourth amended and restated memorandum and articles of association to affect the substance or timing of its obligation to redeem 100% of such Public Shares if it has not consummated an Initial Business Combination within the Completion Window; or (iii) the redemption of 100% of the Public Shares if the Company is unable to complete an Initial Business Combination within the Completion Window. The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Company’s public shareholders.

Initial Business Combination

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering, although substantially all of the net proceeds of the Public Offering are intended to be generally applied toward consummating an Initial Business Combination. The Initial Business Combination must occur with one or more target businesses that together have a fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting discounts and commissions and taxes payable on interest earned on the Trust Account) at the time of the agreement to enter into the Initial Business Combination. Furthermore, there is no assurance that the Company will be able to successfully effect an Initial Business Combination.

The Company, after signing a definitive agreement for an Initial Business Combination, will either (i) seek shareholder approval of the Initial Business Combination at a meeting called for such purpose in connection with which shareholders may seek to redeem their Public Shares, regardless of whether they vote for or against the Initial Business Combination, for cash equal to their pro rata share of the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Initial Business Combination, including interest not previously released to the Company to make Permitted Withdrawals or (ii) provide shareholders with the opportunity to sell their Public Shares to the Company by means of a tender offer (and thereby avoid the need for a shareholder vote) for an amount in cash equal to their pro rata share of the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Initial Business Combination, including interest not previously released to the Company to make Permitted Withdrawals. The decision as to whether the Company will seek shareholder approval of the Initial Business Combination or will allow shareholders to sell their Public Shares in a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek shareholder approval, unless a vote is required by law or under New York Stock Exchange (“NYSE”) rules. If the Company seeks shareholder approval, it will complete its Initial Business Combination only if a majority of the outstanding ordinary shares voted are voted in favor of the Initial Business Combination. In the event that the redemption of the Company’s Public Shares would cause its net tangible assets to be less than $5,000,001, the Company would not proceed with the redemption of its Public Shares.

If the Company holds a shareholder vote or there is a tender offer for shares in connection with an Initial Business Combination, a shareholder will have the right to redeem his, her or its Public Shares for an amount in cash equal to his, her or its pro rata share of the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Initial Business Combination, including interest not previously released to make Permitted Withdrawals. As a result, such Public Shares are recorded at redemption amount and classified as temporary equity upon the completion of the Public Offering, in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity.”

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Table of Contents

Pursuant to the Company’s fourth amended and restated memorandum and articles of association, if the Company is unable to complete the Initial Business Combination within the Completion Window, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten (10) business days thereafter subject to lawfully available funds therefor, 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 make Permitted Withdrawals (less up to $100,000 of such net interest to pay dissolution expenses and net of taxes payable), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law, 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 (the “Board”), dissolve and liquidate, 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. The Sponsor and the Company’s officers and directors have entered into a letter agreement with the Company, pursuant to which they have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares (as defined below in Note 5) held by them if the Company fails to complete the Initial Business Combination within the Completion Window. However, if the Sponsor or any of the Company’s directors, officers or affiliates acquires Class A ordinary shares in or after the Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete the Initial Business Combination within the prescribed time period.

In the event of a liquidation, dissolution or winding up of the Company after an Initial Business Combination, the Company’s shareholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of ordinary share, if any, having preference over the ordinary shares. The Company’s shareholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the ordinary shares, except that the Company will provide its shareholders with the opportunity to redeem their Public Shares for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account, upon the completion of the Initial Business Combination, subject to the limitations described herein.

Going Concern Considerations, Liquidity and Capital Resources

As of September 30, 2021, we had investments held in the Trust Account of $690,063,006 principally invested in U.S. government securities. Interest income on the balance in the Trust Account may be used by us to pay taxes, and to pay up to $100,000 of any dissolution expenses.

In connection with the Company's assessment of going concern considerations in accordance with Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern,” management believes that the funds which the Company has available following the completion of the Public Offering as well as access to funds pursuant to a commitment letter from the Sponsor will enable it to sustain operations for a period of at least one-year from the issuance date of these financial statements. Accordingly, management has since reevaluated the Company's liquidity and financial condition and determined that following the completion of the Public Offering and the availability of funds pursuant to a commitment letter from the Sponsor sufficient capital exists to sustain operations during the Completion Window and therefore substantial doubt has been alleviated.

The Company intends to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account, excluding the deferred underwriting commissions, to complete its Initial Business Combination. To the extent that capital stock or debt is used, in whole or in part, as consideration to complete the Initial Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue growth strategies. If an Initial Business Combination agreement requires the Company to use a portion of the cash in the Trust Account to pay the purchase price or requires the Company to have a minimum amount of cash at closing, the Company will need to reserve a portion of the cash in the Trust Account to meet such requirements or arrange for third-party financing.

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Table of Contents

The Company is required to complete an Initial Business Combination within the Completion Window. If the Company is unable to complete an Initial Business Combination within this Completion Window, 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 (10) business days thereafter, and subject to having lawfully available funds therefor, 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 Trust Account deposits (which interest shall be net of taxes payable and less up to $100,000 to pay dissolution expenses), divided by the number of then-outstanding Public Shares, which redemption will completely extinguish the public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and the Board dissolve and liquidate, 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.

The underwriters have agreed to waive their rights to their deferred underwriting commissions held in the Trust Account in the event the Company does not complete an Initial Business Combination within the Completion Window and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Public Shares.

NOTE 2 — RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

The Company has followed ASC 480, “Distinguishing Liabilities from Equity,” in accounting for the redeemable Class A ordinary shares. This included recording the redeemable Class A ordinary shares in temporary equity on the balance sheet. However, the Company maintained shareholders’ equity of at least $5,000,001 as the Company will not redeem Class A ordinary shares that would cause the Company’s net tangible assets to be less than $5,000,001 following such redemptions.

In September 2021, the Company’s management re-evaluated and ultimately concluded that the classification of $5,000,001 in permanent equity was not appropriate and that the Public Shares should be reclassified as temporary equity. In connection with the preparation of the financial statements as of and for the three and nine months ended September 30, 2021 that were included in the Q3 Form 10-Q, the Company concluded that it would change its accounting and reflect the full amount of all redeemable Public Shares in temporary equity. This was a change from the Company’s previous accounting practice whereby it maintained shareholders’ equity of at least $5,000,001 as the Company will not redeem Public Shares that would cause the Company’s net tangible assets to be less than $5,000,001 following such redemptions. In connection with the change in presentation for the Public Shares subject to possible redemption, the Company also revised its earnings per share to allocate net income (loss) evenly to all Public Shares and Class B ordinary shares.

On December 3, 2021, the Company’s management and the Audit Committee concluded that all of the Company’s previously issued financial statements, including the Post-IPO Balance Sheet, should be restated to classify all of the Public Shares as temporary equity and should no longer be relied upon.

Impact of the Restatement

The following tables summarize the effect of the restatement on each of the line items in the financial statements as of the dates and for the periods, indicated:

    

As Previously

    

    

Revised on

Balance sheet as of February 12, 2021

Form 10-Q

Adjustments

As Restated

Total assets

$

691,006,645

$

$

691,006,645

Total liabilities

$

71,065,024

$

$

71,065,024

Class A ordinary shares subject to redemption

$

614,941,620

$

75,058,380

$

690,000,000

Shareholders’ equity (deficit)

 

  

 

  

 

  

Class A ordinary shares

 

1,876

 

(1,876)

 

Class B ordinary shares

 

1,078

 

 

1,078

Additional paid-in capital

 

11,025,763

 

(11,025,763)

 

Accumulated deficit

 

(76,028,717)

 

(64,030,741)

 

(70,059,457)

Total shareholders’ equity (deficit)

$

5,000,001

$

(75,058,380)

$

(70,058,379)

Total liabilities, Class A ordinary shares subject to redemption and shareholders’ equity (deficit)

$

691,006,645

$

$

691,006,645

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Table of Contents

    

As Previously

    

    

Balance sheet as of March 31, 2021

Reported

Adjustments

As Restated

Total assets

$

692,344,946

$

$

692,344,946

Total liabilities

$

58,783,697

$

$

58,783,697

Class A ordinary shares subject to redemption

$

628,561,240

$

61,438,760

$

690,000,000

Shareholders’ equity (deficit)

 

  

 

  

 

  

Class A ordinary shares

 

1,536

 

(1,536)

 

Class B ordinary shares

 

1,078

 

 

1,078

Additional paid-in capital

 

 

 

Retained earnings (accumulated deficit)

 

4,997,395

 

(61,437,224)

 

(56,439,829)

Total shareholders’ equity (deficit)

$

5,000,009

$

(61,438,760)

$

(56,438,751)

Total liabilities, Class A ordinary shares subject to redemption and shareholders’ equity (deficit)

$

692,344,946

$

$

692,344,946

    

As Previously

    

    

Statement of Operations – Three Months ended March 31, 2021

Reported

Adjustments

As Restated

Net income

 

$

7,622,807

 

$

 

$

7,622,807

Basic and diluted weighted average shares outstanding, Class A ordinary shares

 

69,000,000

 

(32,200,000)

 

36,800,000

Basic and diluted net income per share of Class A ordinary shares

$

$

0.14

$

0.14

Weighted average number of shares of shares outstanding, Class B ordinary shares

 

16,725,000

 

(525,000)

 

16,200,000

Basic and diluted net income per share of Class B ordinary shares

$

0.45

$

(0.31)

$

0.14

    

As Previously

    

    

Statement of Changes in Shareholders’ Equity (Deficit) – Three Months ended March 31, 2021

Reported

Adjustments

As Restated

Sale of Units in the Public Offering, less fair value of the Public Warrants, net of offering costs

$

625,936,738

$

(625,936,738)

 

Change in Class A ordinary shares subject to possible redemption

$

(628,561,240)

$

628,561,240

 

Accretion for Class A ordinary shares to redemption amount

$

$

(64,063,262)

$

(64,063,262)

Class A ordinary shares

6,143,876

(6,143,876)

    

As Previously

    

    

Balance sheet as of June 30, 2021

Reported

Adjustment

As Restated

Total assets

$

692,056,347

$

$

692,056,347

Total liabilities

$

59,578,309

$

$

59,578,309

Class A ordinary shares subject to redemption

$

627,478,030

$

62,521,970

$

690,000,000

Shareholders’ equity (deficit)

 

  

 

  

 

  

Class A ordinary shares

 

1,563

 

(1,563)

 

Class B ordinary shares

 

1,078

 

 

1,078

Additional paid-in capital

 

1,083,183

 

(1,083,183)

 

Retained earnings (accumulated deficit)

 

3,914,184

 

(61,437,224)

 

(57,523,040)

Total shareholders’ equity (deficit)

$

5,000,008

$

(62,521,970)

$

(57,521,962)

Total liabilities, Class A ordinary shares subject to redemption and shareholders’ equity (deficit)

$

692,056,347

$

$

692,056,347

    

As Previously

    

    

Statement of Operations – Three Months ended June 30, 2021

Reported

Adjustments

As Restated

Net loss

 

$

(1,083,211)

 

$

 

$

(1,083,211)

Basic and diluted weighted average shares outstanding, Class A ordinary shares

 

69,000,000

 

 

69,000,000

Basic and diluted net loss per share of Class A ordinary shares

$

$

(0.01)

$

(0.01)

Weighted average number of shares of shares outstanding, Class B ordinary shares

 

16,725,000

 

525,000

 

17,250,000

Basic and diluted net loss per share of Class B ordinary shares

$

(0.07)

$

0.06

$

(0.01)

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Table of Contents

    

As Previously

    

    

Statement of Operations – Six Months ended June 30, 2021

Reported

Adjustments

As Restated

Net income

 

$

6,539,596

 

$

 

$

6,539,596

Basic and diluted weighted average shares outstanding, Class A ordinary shares

 

69,000,000

 

(16,011,050)

 

52,988,950

Basic and diluted net income per share of Class A ordinary shares

$

$

0.09

$

0.09

Weighted average number of shares of shares outstanding, Class B ordinary shares

 

16,725,000

 

2,901

 

16,727,901

Basic and diluted net income per share of Class B ordinary shares

$

0.39

$

(0.30)

$

0.09

    

As Previously

    

    

Statement of Changes in Shareholders’ Equity (Deficit) – Three Months ended June 30, 2021

Reported

Adjustments

As Restated

Sale of Units in the Public Offering, less fair value of the Public Warrants, net of offering costs

$

(1,083,211)

$

1,083,211

 

Class A ordinary shares

6,252,197

(6,252,197)

NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Certain information and note disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed. As such, the information included in these condensed financial statements should be read in conjunction with the audited financial statements as of December 31, 2020 included in the registration statement on Form S-1 (File No. 333-251920) filed with the SEC. In the opinion of the Company's management, these condensed financial statements include all adjustments, which are only of a normal and recurring nature, necessary for a fair statement of the financial position of the Company as of September 30, 2021 and its results of operations and cash flows for the nine months ended September 30, 2021. The results of operations for the nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2021.

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by 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 shareholder approval of any golden parachute payments not previously approved.

Further, section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (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 financial statements in conformity with US GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

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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. One of the more significant accounting estimates included in these condensed 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.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times, may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

Offering Costs associated with a Public Offering

The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering.” Offering costs of $1,116,690 consist principally of costs incurred in connection with formation and preparation for the Public Offering. These costs, together with the underwriter discount of $37,950,000, were charged to additional paid-in capital upon completion of the Public Offering. In addition, $1,494,398 of costs were allocated to the Public Warrants and Private Placement Warrants, and expensed when incurred.

Class A Ordinary Shares Subject to Possible Redemption

The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC 480, “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption are classified as liability instruments and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at September 30, 2021 and December 31, 2020, 69,000,000 Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ equity section of the Company’s condensed balance sheets.

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable Class A ordinary shares resulted in charges against additional paid-in capital and accumulated deficit.

At September 30, 2021, the Class A ordinary shares reflected in the condensed balance sheets are reconciled in the following table:

Gross proceeds

    

$

690,000,000

Less:

 

  

Proceeds allocated to Public Warrants

(26,312,460)

Class A ordinary shares issuance costs

(37,750,802)

Plus:

  

Accretion of carrying value to redemption value

64,063,262

Class A ordinary shares subject to possible redemption

$

690,000,000

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Income Taxes

ASC 740, “Income Taxes,” 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 only major tax jurisdiction. There were no unrecognized tax benefits as of September 30, 2021. Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s financial statements.

Net Income (Loss) per Ordinary Share

The Company complies with accounting and disclosure requirements of ASC 260, “Earnings Per Share.” Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. Accretion associated with the redeemable Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value.

The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. As of September 30, 2021 and 2020, the Company did not have any dilutive securities or 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 ordinary share is the same as basic net loss per ordinary share for the periods presented.

The following table reflects the calculation of basic and diluted net income (loss) per ordinary share:

    

Three Months Ended

    

Three Months Ended

September 30, 2021

September 30, 2020

    

Class A

    

Class B

    

Class A

    

Class B

Basic and diluted net income per ordinary share

 

  

 

  

 

  

 

  

Numerator:

 

  

 

  

 

  

 

  

Allocation of net income, as adjusted

$

5,245,134

$

1,311,284

$

$

Denominator:

 

  

 

  

 

  

 

  

Basic and diluted weighted average shares outstanding

 

69,000,000

 

17,250,000

 

 

15,000,000

Basic and diluted net income per ordinary share

$

0.08

$

0.08

$

$

    

Nine Months Ended

Nine Months Ended

September 30, 2021

September 30, 2020

    

Class A

    

Class B

    

Class A

    

Class B

Basic and diluted net income (loss) per ordinary share

 

  

 

  

 

  

 

  

Numerator:

 

  

 

  

 

  

 

  

Allocation of net income (loss), as adjusted

$

10,476,811

$

2,619,203

$

$

(1,854)

Denominator:

 

  

 

  

 

  

 

  

Basic and diluted weighted average shares outstanding

 

58,384,615

 

16,903,846

 

 

15,000,000

Basic and diluted net income (loss) per ordinary share

$

0.17

$

0.17

$

$

(0.00)

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Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC 815, “Derivatives and Hedging.” The Company’s derivative instruments are recorded at fair value as of the Public Offering (February 12, 2021) and re-valued at each reporting date, with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified on the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The Company has determined the Warrants are a derivative instrument. As the Warrants meet the definition of a derivative the Warrants are measured at fair value at issuance and at each reporting date in accordance with ASC 820, “Fair Value Measurement,” with changes in fair value recognized in the statement of operations in the period of change.

Warrant Instruments

The Company accounts for the Warrants issued in connection with the Public Offering and Private Placement in accordance with the guidance contained in ASC 815, “Derivatives and Hedging,” whereby under that provision the Warrants do not meet the criteria for equity treatment and must be recorded as a liability. Accordingly, the Company classifies the Warrants as a liability at fair value and adjust the instrument to fair value at each reporting period. This liability will be re-measured at each balance sheet date until the Warrants are exercised or expire, and any change in fair value will be recognized in the Company’s statement of operations. The fair value of Warrants will be estimated using an internal valuation model. Our valuation model utilizes inputs and other assumptions and may not be reflective of the price at which they can be settled. Such Warrant classification is also subject to re-evaluation at each reporting period.

Fair Value Measurements

Fair value is defined as the price that would be received for sale of an asset or paid to transfer of a liability, in an orderly transaction between market participants at the measurement date. US GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Recent Accounting Standards

In August 2020, the FASB issued Accounting Standards Update ("ASU") No. 2020-06, “Debt -Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging --Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06")”, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The Company adopted ASU 2020-06 on January 1, 2021. Adoption of the ASU did not impact the Company's financial position, results of operations or cash flows.

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.

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NOTE 4 — INITIAL PUBLIC OFFERING

Pursuant to the Public Offering, the Company sold 69,000,000 Units at a purchase price of $10.00 per Unit, including the issuance of 9,000,000 Units as a result of the underwriters' full exercise of their over-allotment option, generating gross proceeds to the Company in the amount of $690,000,000. Each Unit consists of one share of the Company’s Class A ordinary shares, par value $0.00025 per share (the “Class A ordinary shares”), and one- fifth of one redeemable warrant of the Company (each whole warrant, a “Public Warrant”), with each Public Warrant entitling the holder thereof to purchase one whole Class A ordinary share at a price of $11.50 per share, subject to adjustment.

NOTE 5 — PRIVATE PLACEMENT

Simultaneously with the closing of the Public Offering, the Company consummated the Private Placement of an aggregate of 10,400,000 Private Placement Warrants to the Sponsor at a purchase price of $1.50 per Private Placement Warrant, generating gross proceeds to the Company in the amount of $15,600,000.

A portion of the proceeds from the Private Placement Warrants was added to the proceeds from the Public Offering held in the Trust Account. If the Company does not complete an Initial Business Combination within the Completion Window, the proceeds from the sale of the Private Placement 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 Placement Warrants will be worthless.

The Sponsor and the Company’s officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants until 30 days after the completion of the Initial Business Combination.

NOTE 6 — RELATED PARTIES

Founder Shares

In October 2008, the Company was formed by Apollo Principal Holdings III, L.P. (“Holdings”), at which point, one ordinary share was issued in exchange for the payment of operating and formation expenses of the Company. In December 2020, Holdings transferred its ownership in the Company, consisting of one ordinary share, to the Sponsor for no consideration. On December 23, 2020, the Company completed a share split of its ordinary shares and, as a result, 11,500,000 shares of the Company’s Class B ordinary shares, par value $0.0000625 per share, were outstanding (the “Founder Shares”). In February 2021, the Company subdivided its authorized and outstanding founder shares, resulting in 17,250,000 shares of the Company’s Class B ordinary shares outstanding. The share amounts have been retroactively restated to account for the share split. The Founder Shares represent 20.0% of the Company’s issued and outstanding shares.

The Founder Shares are identical to the Class A ordinary shares included in the Units sold in the Public Offering except that the Founder Shares are Class B ordinary shares which automatically convert into Class A ordinary shares at the time of the Company’s Initial Business Combination and are subject to certain transfer restrictions, as described in more detail below. The number of Founder Shares issued in the share split was determined based on the expectation that the total size of the Public Offering would be a maximum of 69,000,000 Units if the underwriters’ over-allotment option was exercised in full, and therefore that such Founder Shares would represent 20% of the issued and outstanding ordinary shares after the Public Offering.

The holders of the Founder Shares agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of the Initial Business Combination or (B) subsequent to the Initial 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 splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the Company’s shareholders having the right to exchange their ordinary shares for cash, securities or other property.

In January 2020, 25,000 Founder Shares were purchased by each of our three independent directors at a purchase price of $0.002174 per share. The independent directors paid $163.05 in the aggregate for 75,000 shares. On February 3, 2021, our Sponsor surrendered 8,550,000 founder shares to continue to hold 14,300,000 founder shares and each of our independent directors surrendered 25,000 founder shares to continue to hold 25,000 founder shares. On February 12, 2021, the Company also subdivided our authorized and outstanding founder shares and the Sponsor surrendered 11,425,000 founder shares to continue to hold 17,175,000 founder shares while each of our independent directors surrendered 25,000 founder shares to continue to hold 25,000 shares.

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Related Party Loans

On December 28, 2020, the Sponsor agreed to loan the Company an aggregate of up to $750,000 to cover expenses related to the Proposed Public Offering pursuant to an unsecured promissory note (the “Promissory Note”). This Promissory Note bears interest at a rate of 0.15% per annum and is payable on September 30, 2021. As of December 31, 2020, the Company had not borrowed on the Promissory Note and the Promissory Note expired upon the closing of the Public Offering on February 12, 2021.

In addition, in order to finance transaction costs in connection with an Initial Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company's officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes an Initial Business Combination, the Company will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of the funds held outside the Trust Account. In the event that an Initial Business Combination does not close, the Company may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consumptions of an Initial Business Combination or, at the lenders' discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants.

On March 1, 2021, the Sponsor agreed to loan the Company an aggregate of up to $1,500,000 to cover expenses related to the Public Offering pursuant to an unsecured promissory note (the “March Note”). The March Note bears interest at a rate of 0.11% per annum and is payable on the date of an Initial Business Combination or the liquidation of the Company. As of September 30, 2021, the outstanding balance under the March Note was $1,500,000.

On September 14, 2021, the Sponsor executed an unsecured promissory note (the “September Note”) to loan the Company an aggregate principal amount of $1,500,000. The September Note bears interest at a rate of 0.17% per annum and is payable on the earlier of an Initial Business Combination or the liquidation of the Company. As of September 30, 2021, the outstanding balance on the September Note was $1,500,000.

Advances from Related Parties

Affiliates of the Sponsor paid certain administrative expenses and offering costs on behalf of the Company. These advances are due on demand and are non-interest bearing. For the period from October 10, 2008 (inception) through September 30, 2021, the related parties paid $249,995 of offering costs and other expenses on behalf of the Company which were repaid during the six months ended September 30, 2021. As of September 30, 2021 and December 31, 2020, there was $0 and $50,186 due to the related parties, respectively.

Administrative Service Fee

Commencing on the date the Units are first listed on the NYSE, the Company entered into an agreement with the Sponsor and has agreed to pay the Sponsor a total of $16,667 per month for office space, utilities and secretarial and administrative support for up to 27 months. Upon completion of the Initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. During the three and nine months ended September 30, 2021, the Company recorded $50,001 and $126,788, respectively, pursuant to this agreement.

NOTE 7 — 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.

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Registration Rights

The holders of the Founder Shares, Private Placement Warrants and Private Placement Warrants that may be issued upon conversion of Working Capital Loans, if any, (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and Private Placement Warrants that may be issued upon conversion of Working Capital Loans) are entitled to registration rights pursuant to a registration rights agreement. The holders of these securities are entitled to demand 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 consummation of an Initial Business Combination. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriting Agreement

The Company granted the underwriters a 30-day option from the date of the final prospectus to purchase up to 9,000,000 additional Units to cover over-allotments, if any, at the Public Offering price less the underwriting discounts and commissions. The underwriters elected to exercise the over-allotment at closing.

Upon the closing of the IPO and the full over-allotment, the underwriters were entitled to an underwriting discount of $0.20 per unit, or $13,800,000, after the underwriters’ exercised their over-allotment option in full, which was paid in the aggregate upon the closing of the Public Offering. In addition, the underwriters are entitled to an underwriting discount of $0.35 per unit, or $24,150,000 in the aggregate is payable to the underwriters for deferred underwriting commissions. The deferred fee becomes payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes an Initial Business Combination, subject to the terms of the underwriting agreement for the offering.

NOTE 8 — SHAREHOLDERS’ EQUITY

Preferred Shares

The Company is authorized to issue 1,000,000 shares of preferred shares with a par value of $0.00025 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 September 30, 2021 and December 31, 2020, there were no preferred shares issued or outstanding.

Ordinary Shares

The authorized ordinary shares of the Company include up to 180,000,000 Class A ordinary shares and 46,000,000 Class B ordinary shares. If the Company enters into an Initial Business Combination, it may (depending on the terms of such an Initial Business Combination) be required to increase the number of Class A ordinary shares which the Company is authorized to issue at the same time as the Company’s shareholders vote on the Initial Business Combination to the extent the Company seeks shareholder approval in connection with the Initial Business Combination. Holders of the Company’s ordinary shares are entitled to one vote for each ordinary share. As of September 30, 2021, there were 69,000,000 Class A ordinary shares subject to possible conversion that were classified as temporary equity in the accompanying condensed balance sheets.

The Class B ordinary shares will automatically convert into our Class A ordinary shares at the time of completion of our Initial Business Combination on a one-for-one basis, subject to adjustment for share splits, dividends, reorganizations, recapitalizations and the like and subject to further adjustment as provided herein. 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 Public Offering and related to the closing of the Initial Business Combination, the ratio at which Class B ordinary shares will convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the outstanding Class B ordinary shares agree to waive such 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, on an as-converted basis, 20% of the sum of the total number of all ordinary shares outstanding upon the completion of the Public Offering plus all Class A ordinary shares and equity-linked securities issued or deemed issued in connection with the Initial Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the business combination). As of September 30, 2021 and December 31, 2020, there were 17,250,000 shares of Class B ordinary shares issued and outstanding.

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NOTE 9 — 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) 30 days after the completion of an Initial Business Combination or (b) 12 months from the closing of the Public Offering; provided in each case that the Company has an effective registration statement under the Securities Act covering the ordinary shares issuable upon exercise of the Public Warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their Public Warrants on a cashless basis and such cashless exercise is exempt from registration under the Securities Act). The Company has agreed that as soon as practicable, but in no event later than fifteen (15) business days after the closing of an Initial Business Combination, the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the ordinary shares issuable upon exercise of the Public 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 Public Warrants in accordance with the provisions of the warrant agreement. Notwithstanding the foregoing, if the Company’s ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under the Securities Act, the Company, at its option, may 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. The Public Warrants will expire five years after the completion of an Initial Business Combination or earlier upon the Company’s redemption or liquidation. 

The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants and the ordinary shares issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of an Initial Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be non-redeemable so long as they are held by the initial purchasers or such purchasers’ permitted transferees. If the Private Placement Warrants are held by someone other than the 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.

The Company may redeem the Public Warrants:

in whole and not in part;
at a price of $0.01 per warrant;
upon a minimum of 30 days’ prior written notice of redemption; and
if, and only if, the last reported closing price of the Company’s ordinary shares equals or exceeds $18.00 per share (as adjusted for share splits, share capitalizations, 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 on which the Company sends the notice of redemption to the warrant holders.

If, and only if, there is a current registration statement in effect with respect to the ordinary shares underlying such warrants at the time of redemption and a current prospectus relating to those ordinary shares is available throughout the 30-day trading period referred to above.

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 will be described in the warrant agreement.

The exercise price and number of the ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete an Initial Business Combination within the Completion Window 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.

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The Company accounts for the 24,200,000 warrants issued in connection with the Public Offering (including 13,800,000 Public Warrants and 10,400,000 Private Placement Warrants) in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Upon issuance of the derivative warrants the Company recorded a liability of $22,527,182 on the balance sheet.

The accounting treatment of derivative financial instruments requires that the Company record a derivative liability upon the closing of the Public Offering. Accordingly, the Company classifies each warrant as a liability at its fair value and the warrants will be allocated a portion of the proceeds from the issuance of the Units equal to its fair value determined by the Monte Carlo simulation up until separation for the Public Warrants (subsequent to separation, the public warrants will be valued using publicly available trading price) and a modified Black-Scholes model for the Private Placement Warrants. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s statements of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification.

NOTE 10 — FAIR VALUE MEASUREMENTS

The Company follows the guidance in ASC 820, “Fair Value Measurement,” 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: