VPC Impact Acquisition Holdings II - Quarter Report: 2021 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM

 

(MARK ONE)

For the quarterly period ended September 30, 2021

For the transition period fromto

Commission file

 

VPC IMPACT ACQUISITION HOLDINGS II

(Exact Name of Registrant as Specified in Its Charter)

 

Victory Park Capital Advisors, LLC

150 North Riverside Plaza, Suite 5200

Chicago, IL 60606

(Address of principal executive offices)

(Issuer’s telephone number)

 

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

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    ☒

S-T

Rule 12b-2of

Rule12b-2of

12

VPC IMPACT ACQUISITION HOLDINGS II

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

TABLE OF CONTENTS

VPC IMPACT ACQUISITION HOLDINGS II

CONDENSED BALANCE SHEET

SEPTEMBER 30, 2021

(UNAUDITED)

VPC IMPACT ACQUISITION HOLDINGS II

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

VPC IMPACT ACQUISITION HOLDINGS II

CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS’ DEFICIT

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021 AND FOR THE PERIOD FROM JANUARY 13, 2021 (INCEPTION) THROUGH SEPTEMBER 30, 2021

(UNAUDITED)

 

The accompanying notes are an integral part of the unaudited condensed financial statements.

 

4

VPC Impact Acquisition Holdings II (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on January 13, 2021. The Company was formed for the purpose of effecting a merger, share capital, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities (a “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 September 30, 2021, the Company had not commenced any operations. All activity for the period from January 13, 2021 (inception) through September 30, 2021 relates to the Company’s formation, its initial public offering (“Initial Public Offering”), which is described below, and subsequent to the Initial Public Offering, identifying a target for a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company generates 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 March 4, 2021. On March 9, 2021 the Company consummated the Initial Public Offering of 25,578,466 units (the “Units”) which includes the partial exercise by the underwriters of their over-allotment option in the amount of 3,078,466 Units, at $10.00 per Unit, generating gross proceeds of $255,784,660, which is described in Note 4.

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 5,127,129 warrants (the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant in a private placement to VPC Impact Acquisition Holdings Sponsor II, LLC (the “Sponsor”), generating gross proceeds of $7,690,693, which is described in Note 5.

Transaction costs amounted to $14,564,011, consisting of $5,115,693 of underwriting fees, $8,952,463 of deferred underwriting fees and $495,855 of other offering costs.

Following the closing of the Initial Public Offering on March 9, 2021, an amount of $255,784,660 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”) and will be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund investing solely in U.S. Treasuries and meeting certain conditions under the Investment Company Act, as determined by the Company, until the earliest of: (i) the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described below.

On August 2, 2021, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”), by and among, the Company, AG1 Holdings, Ltd., an exempted company incorporated in the Cayman Islands with limited liability (“Holdco”), AG2 Holdings, Ltd., an exempted company incorporated in the Cayman Islands with limited liability (“Merger Sub”), FinAccel Pte. Ltd., a Singapore private company limited by shares (the “Target Company”), each shareholder of the Target Company as set forth on Schedule 1 of the Business Combination Agreement (the “Target Company Shareholders”), and Akshay Garg in his capacity as “Shareholders Representative”, pursuant to which, among other things: (i) on the business day prior to the consummation of the acquisition by Holdco of the Target Company contemplated in the Business Combination Agreement (such consummation, the “Closing”), Merger Sub will merge with and into the Company, with Merger Sub continuing as the “Surviving VIH Company” (the “VIH Merger”, with the effective time of such merger, the “VIH Merger Effective Time”), as a result of which, (a) the Surviving VIH Company will become a wholly-owned subsidiary of Holdco and (b) immediately after the VIH Share Recapitalization (as defined below), each Class A ordinary share of the Company, par value $0.0001 per share (the “VIH Class A Ordinary Shares”) issued and outstanding and Class B ordinary shares of the Company, par value $0.0001 per share (“VIH Class B Ordinary Shares”, and together with the VIH Class A Ordinary Shares, the “VIH Ordinary Shares”) immediately prior to the VIH Merger Effective Time shall no longer be outstanding as of the VIH Merger Effective Time and shall automatically be cancelled and cease to exist in exchange for one Class A ordinary share of Holdco (“Holdco Class A Ordinary Share”) (in the form of one American Depository Share representing a Holdco Class A Ordinary Share, each a “Holdco Class A ADS”) and each outstanding warrant to purchase VIH Ordinary Shares will become exercisable for Holdco Class A Ordinary Shares (in the form of Holdco Class A ADSs) on identical terms, and (ii) at the Closing, among other things, (x) Holdco will acquire all of the issued and outstanding ordinary shares of the Target Company (the “Target Company Ordinary Shares”) and the issued and outstanding preference Shares of the Target Company (the “Target Company Preference Shares”) from the Target Company Shareholders in exchange for the Holdco Class A Ordinary Shares (in the form of Holdco Class A ADSs) or Class V Ordinary Shares of Holdco (“Holdco Class V Ordinary Share”, and together with the Holdco Class A Ordinary Shares, the “Holdco Ordinary Shares”) (in the form of American Depository Share representing a Holdco Class V Ordinary Share, each a “Holdco Class V ADS”, and together with the Holdco Class A ADSs, the “Holdco ADSs”), as the case may be, (b) each option to acquire Target Company Ordinary Shares granted under the FinAccel Employee Share Options Scheme (the “Target Company Options”) and each Assumed Warrant (as defined below) will be converted into the right to receive an option or a warrant to purchase Holdco Class A Ordinary Shares (in the form of Holdco Class A ADSs), respectively, and (c) each Target Company

 

5

 

Convertible Note (as defined below) that is then outstanding and not converted into Target Company Ordinary Shares, shall be cancelled and extinguished and in exchange therefor, converted into the right to receive Holdco Class A Ordinary Shares (in the form of Holdco Class A ADSs), in each case, in accordance with the terms and conditions set forth in the Business Combination Agreement. The transactions contemplated by the Business Combination Agreement (the “Transactions”), including the VIH Merger, will constitute a “Business Combination” as contemplated by the Company’s existing amended and restated memorandum and articles of association (the “Current VIH Articles”).

All other terms of the Business Combination Agreement, which was previously filed by VIH as Exhibit 2.1 to VIH’s Current Report on on August 2, 2021, remained unchanged.

The foregoing summary description of the Amendment is subject to and qualified in its entirety by reference to the Amendment, the terms of which are incorporated by reference to Exhibit 2.1 to the Company’s Current Report on (file as filed with the SEC on September 29, 2021.

At the VIH Merger Effective Time, Merger Sub and the Company shall consummate the VIH Merger, pursuant to which the Company shall be merged with and into Merger Sub, following which the separate corporate existence of the Company shall cease and Merger Sub shall continue as the surviving company (the “Surviving VIH Company”).

At the VIH Merger Effective Time, every issued and outstanding unit of the Company (consisting of one VIH Class A Ordinary Share and of a VIH Public Warrant, as defined below, the “VIH Units”), to the extent not detached, shall be automatically detached and the holder thereof shall be deemed to hold one VIH Class A Ordinary Share a warrant of the Company.

At the VIH Merger Effective Time, every issued VIH Class B Ordinary Share will convert into one VIH Class A Ordinary Share on a basis (the “VIH Share Recapitalization”) and, immediately thereafter every issued VIH Class A Ordinary Share (other than those owned by the Company as treasury shares, which shall be canceled and extinguished without any conversion thereof or payment therefor) shall automatically be cancelled and cease to exist in exchange for one Holdco Class A Ordinary Share (in the form of one Holdco Class A ADS).

At the VIH Merger Effective Time, in accordance with the terms of the Warrant Agreement dated March 4, 2021 by and between the Company and Continental Stock Transfer & Trust Company, as warrant agent (the “Warrant Agreement”), each issued and outstanding whole warrant of the Company (consisting of either one public warrant entitling the holder to purchase one VIH Class A Ordinary Share per warrant at a price of $11.50 per VIH Class A Ordinary Share (a “VIH Public Warrant”), or a private placement warrant entitling the holder to purchase one VIH Class A Ordinary Share per warrant at a price of $11.50 per VIH Class A Ordinary Share (a “VIH Private Warrant”), collectively the “VIH Warrants”) will become exercisable for the right to receive one Holdco Class A Ordinary Share (in the form of Holdco Class A ADS(s)) at the same exercise price per share and on the same terms in effect immediately prior to the VIH Merger Effective Time, and the rights and obligations of the Company under the Warrant Agreement will be assigned and assumed by Holdco.

At the VIH Merger Effective Time, by virtue of the VIH Merger and without any action on the part of any party hereto or the holders of any shares of the Company, Holdco or Merger Sub, all of the ordinary shares of Merger Sub in issue immediately prior to the VIH Merger Effective Time, each of US$0.00001 par value in the share capital of Merger Sub, shall be converted into an equal number of ordinary shares of the Surviving VIH Company, each of US$0.00001 par value in the share capital of the Surviving VIH Company, with the same rights, powers and privileges as the shares so converted and shall constitute the only issued share capital of the Surviving VIH Company.

Pursuant to the Business Combination Agreement, the Target Company Shareholders, will receive aggregate merger consideration with an implied value of $2,000,000,000 (the “Equity Value”), consisting of a number of shares of Holdco Class A Ordinary Shares or Holdco Class V Ordinary Shares (in the form of Holdco Class A ADSs or Holdco Class V ADSs, respectively), equal to the Equity Value divided by $10.00 (the “Aggregate Share Consideration”).

Pursuant to the Business Combination Agreement, at the VIH Merger Effective Time, (a) Target Company Ordinary Shares held by the Target Company Shareholders will be cancelled and automatically converted into the right to receive, in the case of the Shareholders other than Akshay Garg and Umang Rustagi, a number of newly issued Holdco Class A Ordinary Shares (in the form of Holdco Class A ADSs) or, in the case of Akshay Garg and Umang Rustagi (the “Founders”), Holdco Class V Ordinary Shares (in the form of Holdco Class V ADSs), each with a par value of $0.00001, equal to an exchange ratio (the “Exchange Ratio”) determined by dividing the Aggregate Share Consideration by the sum of (without duplication): (a) the total number of outstanding Target Company Ordinary Shares, (b) the total number of Target Company Ordinary Shares convertible from all of the outstanding Target Company Preference Shares, (c) the total number of Target Company Ordinary Shares subject to issuance pursuant to a Target Company Option, or portion thereof, to the extent such Target Company Option (or applicable portion thereof) is vested and outstanding as of immediately prior to the Closing or would vest upon or immediately following the Closing (the “Vested Target Company Options”), (d) the maximum number of Target Company Ordinary Shares subject to issuance pursuant to the (i) the Warrant by and between the Target Company and Partners for Growth V, L.P., dated August 12, 2019 and (ii) the Warrant by and between the Target Company and Partners for Growth V, L.P., dated May 12, 2021 (collectively, the “PFG Warrants”), (e) the maximum number of Target Company Ordinary Shares subject to issuance pursuant to the Warrant to Purchase Ordinary Shares of FinAccel Pte. Ltd. by and between the Target Company and Victory Park Capital Advisors, LLC, dated July 10, 2020 (the “VPC Warrant”), and (f) the maximum number of Target Company Ordinary Shares or Target Company Ordinary Shares issuable upon conversion of Target Company Preference Shares, in each case subject to issuance pursuant to outstanding Target Company Convertible Notes, in each case of the foregoing items (a) through (f), as of immediately prior to the Closing.

As of the Closing, each Target Company Option that is then outstanding shall be converted into the right to receive an option relating to Holdco Class A Ordinary Shares (in the form of Holdco Class A ADSs) on the same terms and conditions as are in effect with respect to such Target Company Option immediately prior to the Closing (including with respect to vesting, release, and forfeiture or termination provisions) (each, a “Holdco Option”) except that (i) such Holdco Option shall relate to such number of Holdco Class A Ordinary Shares (in the form of Holdco Class A ADSs, rounded down to the nearest whole Holdco Class A Ordinary Share) as is equal to the product of (A) the number of Target Company Ordinary Shares subject to such Target Company Option multiplied by (B) the Exchange Ratio, and (ii) the exercise price per share for each such Holdco Option shall be equal to the quotient of (A) the exercise price per share of such Target Company Option in effect immediately prior to the Closing divided by (B) the Exchange Ratio (the exercise price per share, as so determined, being rounded up to the nearest full cent).

 

6

 

Each of the PFG Warrants and VPC Warrant (collectively, the “Target Company Warrants”), to the extent that it remains outstanding and unexercised immediately prior to the VIH Merger Effective Time (each, an “Assumed Warrant”), shall be converted into a warrant to purchase Holdco Class A Ordinary Shares (in the form of Holdco Class A ADSs) on the same terms and conditions as are in effect immediately prior to the VIH Merger Effective Time (the “Successor Warrant”), except that (a) each Assumed Warrant shall entitle the holder thereof to purchase such number of Holdco Class A Ordinary Shares (in the form of Holdco Class A ADSs) as is equal to the product of (i) the number of Target Company Ordinary Shares subject to such Assumed Warrant immediately prior to the VIH Merger Effective Time multiplied by (ii) the Exchange Ratio and (b) each Assumed Warrant shall have an exercise price per share (which shall be rounded up to the nearest whole cent) equal to the quotient of (i) the exercise price per share of such Assumed Warrant immediately prior to the VIH Merger Effective Time divided by (ii) the Exchange Ratio.

As of the Closing, each note issued by the Target Company that is convertible into Target Company Ordinary Shares or Target Company Preference Shares (the “Target Company Convertible Notes”) that is then outstanding and not converted into Target Company Ordinary Shares, shall be cancelled and extinguished and in exchange therefor, converted into the right to receive with respect to such Target Company Convertible Note, Holdco Class A Ordinary Shares (in the form of Holdco Class A ADSs, rounded down to the nearest whole Holdco Class A Ordinary Shares) equal to the product of (i) the number of Target Company Ordinary Shares that such Target Company Convertible Notes were convertible into immediately prior to the Closing based on the principal amount and any accrued and unpaid interest outstanding on such Target Company Convertible Note multiplied by (ii) the Exchange Ratio.

Pursuant to the Business Combination Agreement, immediately prior to the Closing, the Current Holdco Articles will be further amended and restated (the “A&R Holdco Articles”) to, among other things, (a) establish a dual-class Holdco Ordinary Shares structure consisting of Holdco Class A Ordinary Shares and Holdco Class V Ordinary Shares, and (b) provide that each Holdco Class A Ordinary Share will be entitled to one (1) vote per share and each Holdco Class V Ordinary Share will be entitled to ten (10) votes per share (the “High Vote”). In connection with the Transactions, the VIH Ordinary Shares received as consideration by the Founders will be Holdco Class V Ordinary Shares, and will entitle the Founders to the High Vote until such time as such Holdco Class V Ordinary Shares are exchanged pursuant to the terms of the A&R Holdco Articles for an equal number of Holdco Class A Ordinary Shares (i) at the option of the holder, (ii) upon a transfer to an unaffiliated third party, (iii) upon the conversion of any Class V Ordinary Share by Holdco in any manner available under applicable law, including redeeming or repurchasing the relevant Class V Shares and applying the proceeds thereof towards payment for the new Holdco Class A Ordinary Shares, (iv) upon a Founder’s death or incapacity or (v) the date that the number of shares of Holdco, including any shares of Holdco underlying any securities (including restricted stock units, options, or other convertible instruments) convertible into or exchangeable or exercisable into shares of Holdco, held by a Founder and certain permitted transferees is less than 50% of the number of shares of Class V Ordinary Shares held by such Founder and such permitted transferees at the Closing (whichever is earlier with respect to such Holdco Class V Ordinary Shares). The Holdco Class V Ordinary Shares will provide the Founders with approximately 70.5% of the voting power of the Holdco Ordinary Shares outstanding immediately following the Closing, assuming no redemptions by the Company’s shareholders.

The parties to the Business Combination Agreement have made customary representations, warranties and covenants in the Business Combination Agreement, including, among others, covenants with respect to the conduct of the Target Company, its subsidiaries, Holdco Merger Sub, and the Company prior to the Closing. The Closing is subject to certain customary conditions.

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 the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The stock exchange listing rules require that the Business Combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the 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-Business Combination company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect a Business Combination.

The Company will provide the holders of the public shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their public shares upon the completion of the Business Combination, either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two business days prior to the consummation of the Business Combination (initially $10.00 per Public Share), including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, subject to certain limitations as described in the prospectus. The to be distributed to the Public Shareholders who properly redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 7). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.

The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 and, if the Company seeks shareholder approval, it receives an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the Company. If a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 6) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each Public Shareholder may elect to redeem their Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination.

 

7

 

Notwithstanding the foregoing, if the Company seeks shareholder approval of the Business Combination and the Company does not conduct redemptions pursuant to the tender offer rules, a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15%of the Public Shares without the Company’s prior written consent.

 

8

 

The Sponsor and certain of the Company’s officers and directors (the “initial shareholders”) have agreed (a) to waive their redemption rights with respect to any 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 Amended and Restated Memorandum and Articles of Association (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of the 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 shareholders’ rights or business combination activity, unless the Company provides the Public Shareholders with the opportunity to redeem their Public Shares upon approval of any such amendment at price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the Trust Account and not previously released to pay taxes, divided by the number of then issued and outstanding Public Shares.

The Company will have until March 9, 2023 to consummate a Business Combination (the “Combination Period”). However, if the Company has not completed a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of 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 and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued and outstanding Public Shares, which redemption will completely extinguish the rights of the Public Shareholders as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining Public Shareholders and its Board of Directors, liquidate and dissolve, subject in each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.

The initial shareholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the initial shareholders 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 7) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period, and in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).

In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (1) $10.00 per Public Share and (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share, due to reductions in the value of trust assets, in each case net of the interest that may be withdrawn to pay taxes. This liability will not apply to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). In the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

 

9

 

In connection with the preparation of the Company’s financial statements as of September 30, 2021, management determined it should revise its previously reported financial statements. The Company determined during quarter ended September 30, 2021 that it had improperly valued its Class ordinary shares subject to possible redemption, at the closing of the Company’s Initial Public Offering and closing of the sale of shares sold pursuant to the exercise of the underwriters’ overallotment, it had improperly valued its Class A ordinary shares subject to possible redemption. The Company previously determined the Class A ordinary shares subject to possible redemption to be equal to the redemption value of $10.00 per Class A ordinary share while also taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001. Management determined that the Class A ordinary shares issued during the Initial Public Offering and pursuant to the exercise of the underwriters’ overallotment can be redeemed or become redeemable subject to the occurrence of future events considered outside the Company’s control. Therefore, management concluded that the redemption value should include all Class A ordinary shares subject to possible redemption, resulting in the Class A ordinary shares subject to possible redemption being equal to their redemption value. As a result, management has noted a reclassification adjustment related to temporary equity and permanent equity. This resulted in an adjustment to the initial carrying value of the Class A ordinary shares subject to possible redemption with the offset recorded to additional capital (to the extent available), accumulated deficit and Class A ordinary shares.

In connection with the change in presentation for the Class A ordinary shares subject to redemption, the Company also revised its earnings per share calculation to allocate net income (loss) evenly to Class A and Class B ordinary shares. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of ordinary shares share pro rata in the income (loss) of the Company.

There has been no change in the Company’s total assets, liabilities or operating results.

 

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 and Article 8 of 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 prospectus for its Initial Public Offering as filed with the SEC on March 8, 2021. The interim results for the three months ended September 30, 2021 and for the period from January 13, 2021 (inception) through September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future periods.

 

10

 

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

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 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 statement 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.

The preparation of the condensed financial statements in conformity with 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 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. One of the more significant accounting estimates included in these financial statements is the determination of the fair value of the warrant liabilities. Accordingly, the actual results could differ significantly from those estimates.

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents in its operating account as of September 30, 2021.

Offering costs consisted of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that are directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs associated with warrant liabilities were expensed as incurred in the condensed statements of operations. Offering costs associated with the Class A ordinary shares issued were charged to shareholders’ equity upon the completion of the Initial Public Offering. Offering costs amounting to$13,954,038 were charged to shareholders’ equity or period expense upon the completion of the Initial Public Offering, and $609,973 of the offering costs were related to the warrant liabilities and charged to the statement of operations.

We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued share purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815. We account 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 our 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 additionalpaid-incapital 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 anon-cashgain or loss on the statements of operations.

 

11

 

The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC 480. Class A ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s 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, Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ equity section of the Company’s condensed consolidated 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 Initial 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 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:

 

The Company accounts for income taxes under ASC Topic 740, “Income Taxes,” which prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of September 30, 2021, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented.

The Company complies with accounting and disclosure requirements of FASB ASC Topic 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 method in calculating earnings per share. Accretion associated with the redeemable shares of 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) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. The warrants are exercisable to purchase 11,521,746 Class A ordinary shares in the aggregate. As of September 30, 2021, 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.

 

12

 

The following table reflects the calculation of basic and diluted net loss per ordinary shar (in dollars, except per share amounts):

 

 

13

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal Insurance Corporation coverage limit 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 account.

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature.

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

 

 

 

In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.

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 Topic 815, “Derivatives and Hedging.” For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or based on whether or not settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update Debt — Debt with Conversion and Other Options and Derivatives and Hedging — Contracts in Entity’s Own Equity to simplify accounting for certain financial instruments. ASU2020-06eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU2020-06amends the diluted earnings per share guidance, including the requirement to use the method for all convertible instruments. ASU2020-06is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU2020-06would have on its financial position, results of operations or cash flows. Management does not believe that any other recently issued, but not yet effective, account standard updates, if currently adopted, would have a material effect on the accompanying unaudited condensed consolidated financial statements.

Pursuant to the Initial Public Offering, the Company sold 25,578,466 Units which includes a partial exercise by the underwriters of their over-allotment option in the amount of 3,078,466 Units, at a purchase price of $10.00 per Unit. Each Unit consists of one Class A ordinary share and of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one Class A ordinary share at an exercise price of $11.50 per whole share (see Note 8).

 

14

 

Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 5,127,129 Private Placement Warrants at a price of $1.50 per Private Placement Warrant, for an aggregate purchase price of $7,690,693.50. Each Private Placement Warrant is exercisable to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 8). A portion of the proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.

On January 14, 2021, the Sponsor paid $25,000 to cover certain offering costs of the Company in consideration for 7,187,500 Class B ordinary shares (the “Founder Shares”). On January 15, 2021, the Sponsor forfeited 718,750 Founder Shares back to the Company for no consideration, resulting in an aggregate of 6,468,750 Founder Shares outstanding. On January 18, 2021, the Sponsor transferred an aggregate of 60,000 Founder Shares to members of the Company’s board of directors, resulting in the Sponsor holding 6,408,750 Founder Shares. The Founder Shares included an aggregate of up to 843,750 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, on an basis, approximately 20% of the Company’s issued and outstanding shares after the Initial Public Offering. In connection with the underwriters’ partial exercise of the over-allotment option and the forfeiture of the remaining over-allotment option, 74,133 Founder Shares were forfeited and 769,617 Founder Shares are no longer subject to forfeiture resulting in an aggregate of 6,394,617 Founder Shares outstanding.

The initial shareholders have agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earliest of: (A) one year after the completion of a Business Combination and (B) subsequent to a Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within period commencing at least 150 days after a 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 Public Shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.

 

15

 

On January 14, 2021, the Company issued an unsecured promissory note (the “Promissory Note”) to the Sponsor, pursuant to which the Company could borrow up to an aggregate principal amount of $300,000. The Promissory Note was bearing and payable on the earlier of (i) December 31, 2021 or (ii) the completion of the Initial Public Offering. The outstanding balance under the Promissory Note of $93,142 was repaid at the closing of the Initial Public Offering on March 9, 2021. Borrowings under the Promissory Note are no longer available.

The Company entered into an agreement, commencing on March 4, 2021, to pay the Sponsor up to $10,000per month for office space, utilities, secretarial and administrative support services. Upon completion of a Business Combination or its liquidation, the Company will cease paying these monthly fees. For the three months ended and for the period from January 13, 2021 (Inception) through September 30, 2021, the Company incurred and included in accrued expenses $30,000 and $70,000 in fees for these services, respectively.

In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). 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 $1,500,000 of notes may be converted upon completion of a Business Combination into warrants at a price of $1.50 per warrant. Such warrants would be identical to the Private Placement 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. As of September 30, 2021, the Company had no outstanding borrowings under the Working Capital Loans.

Management continues to evaluate the impact of theCOVID-19pandemic 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.

Pursuant to a registration rights agreement entered into on March 4, 2021, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of the Working Capital Loans) are entitled to registration rights requiring the Company to register a sale of any of its securities held by them. The holders of these securities will be entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

The underwriters are entitled to a deferred fee of $0.35 per Unit, or $8,952,463 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.

Concurrently with entering into the Business Combination Agreement, Holdco has entered into subscription agreements with certain investors (the “PIPE Investors”) (the “Subscription Agreements”), pursuant to which such investors would subscribe for Holdco Class A Ordinary Shares (in the form of Holdco Class A ADSs) in a private placement for $10.00 per share substantially concurrently at the Closing for an aggregate purchase price of $120 million. The proceeds from the private placement will be used for general working capital purposes following the Closing. Each Subscription Agreement will terminate upon the earlier to occur of (a) the termination of the Business Combination Agreement in accordance with its terms, (b) the mutual written agreement of the parties to such Subscription Agreement, (c) if specified conditions to closing of such Subscription Agreement are not satisfied or waived prior to Closing, and (d) August 2, 2022, if the Closing has not occurred by such date.

 

16

 

On August 2, 2021, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”), by and among, the Company, AG1 Holdings, Ltd., an exempted company incorporated in the Cayman Islands with limited liability (“Holdco”), AG2 Holdings, Ltd., an exempted company incorporated in the Cayman Islands with limited liability (“Merger Sub”), FinAccel Pte. Ltd., a Singapore private company limited by shares (the “Target Company”), each shareholder of the Target Company as set forth on Schedule 1 of the Business Combination Agreement (the “Target Company Shareholders”), and Akshay Garg in his capacity as “Shareholders Representative”, pursuant to which, among other things: (i) on the business day prior to the consummation of the acquisition by Holdco of the Target Company contemplated in the Business Combination Agreement (such consummation, the “Closing”), Merger Sub will merge with and into the Company, with Merger Sub continuing as the “Surviving VIH Company” (the “VIH Merger”, with the effective time of such merger, the “VIH Merger Effective Time”), as a result of which, (a) the Surviving VIH Company will become a wholly-owned subsidiary of Holdco and (b) immediately after the VIH Share Recapitalization (as defined below), each Class A ordinary share of the Company, par value $0.0001 per share (the “VIH Class A Ordinary Shares”) issued and outstanding and Class B ordinary shares of the Company, par value $0.0001 per share (“VIH Class B Ordinary Shares”, and together with the VIH Class A Ordinary Shares, the “VIH Ordinary Shares”) immediately prior to the VIH Merger Effective Time shall no longer be outstanding as of the VIH Merger Effective Time and shall automatically be cancelled and cease to exist in exchange for one Class A ordinary share of Holdco (“Holdco Class A Ordinary Share”) (in the form of one American Depository Share representing a Holdco Class A Ordinary Share, each a “Holdco Class A ADS”) and each outstanding warrant to purchase VIH Ordinary Shares will become exercisable for Holdco Class A Ordinary Shares (in the form of Holdco Class A ADSs) on identical terms, and (ii) at the Closing, among other things, (x) Holdco will acquire all of the issued and outstanding ordinary shares of the Target Company (the “Target Company Ordinary Shares”) and the issued and outstanding preference Shares of the Target Company (the “Target Company Preference Shares”) from the Target Company Shareholders in exchange for the Holdco Class A Ordinary Shares (in the form of Holdco Class A ADSs) or Class V Ordinary Shares of Holdco (“Holdco Class V Ordinary Share”, and together with the Holdco Class A Ordinary Shares, the “Holdco Ordinary Shares”) (in the form of American Depository Share representing a Holdco Class V Ordinary Share, each a “Holdco Class V ADS”, and together with the Holdco Class A ADSs, the “Holdco ADSs”), as the case may be, (b) each option to acquire Target Company Ordinary Shares granted under the FinAccel Employee Share Options Scheme (the “Target Company Options”) and each Assumed Warrant (as defined below) will be converted into the right to receive an option or a warrant to purchase Holdco Class A Ordinary Shares (in the form of Holdco Class A ADSs), respectively, and (c) each Target Company Convertible Note (as defined below) that is then outstanding and not converted into Target Company Ordinary Shares, shall be cancelled and extinguished and in exchange therefor, converted into the right to receive Holdco Class A Ordinary Shares (in the form of Holdco Class A ADSs), in each case, in accordance with the terms and conditions set forth in the Business Combination Agreement. The transactions contemplated by the Business Combination Agreement (the “Transactions”), including the VIH Merger, will constitute a “Business Combination” as contemplated by the Company’s existing amended and restated memorandum and articles of association (the “Current VIH Articles”).

The foregoing summary description of the Amendment is subject to and qualified in its entirety by reference to the Amendment, the terms of which are incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K (file as filed with the SEC on September 29, 2021.

—The Company is authorized to issue 5,000,000 preference shares with a par value of $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At September 30, 2021, there were no preference shares issued or outstanding.

—The Company is authorized to issue 500,000,000 Class A ordinary shares, with a par value of $0.0001 per share. Holders of Class A ordinary shares are entitled to one vote for each share. At September 30, 2021, there were 25,578,466 Class A ordinary shares issued and outstanding which are presented as temporary equity.

—The Company is authorized to issue 50,000,000 Class B ordinary shares, with a par value of $0.0001 per share. Holders of the Class B ordinary shares are entitled to one vote for each share. At September 30, 2021, there were 6,394,617 Class B ordinary shares issued and outstanding.

The Class B ordinary shares will automatically convert into Class A ordinary shares concurrently with or immediately following the consummation of a Business Combination on a basis, subject to adjustment. In the case that additional Class A ordinary shares or equity-linked securities are issued or deemed issued in connection with a Business Combination, the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, 20% of the total number of Class A ordinary shares outstanding after such conversion (after giving effect to any redemptions of Class A ordinary shares by Public Shareholders), including the total number of Class A ordinary shares issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of a Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in a Business Combination and any Private Placement Warrants issued to the Sponsor, officers or directors upon conversion of Working Capital Loans; provided that such conversion of Founder Shares will never occur on a less than basis.

 

17

 

As of September 30, 2021, there are 6,394,617 Public Warrants outstanding and 5,127,129 Private Placement Warrants outstanding. 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 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.

The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A ordinary shares underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue a Class A ordinary share upon exercise of a warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.

The Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of a Business Combination, it will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement and a current prospectus relating thereto until the expiration of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the sixtieth (60th) business day after 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 will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, it will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

 Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described with respect to the Private Placement Warrants):

 

 

 

 

If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.

 

18

 

. Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described with respect to the Private Placement Warrants):

 

 

 

 

 

If the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.

In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the initial shareholders or their affiliates, without taking into account any Founder Shares held by the initial shareholders or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Class A ordinary shares during the 10 trading day period starting on the trading day prior to the day on which the Company consummates a Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.

The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be except as described above, so long as they are held by the initial purchasers or their 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.

 

19

 

At September 30, 2021, assets held in the Trust Account were comprised of $255,800,954 in Money Market Funds which are invested primarily in U.S. Treasury Securities. During the period ended September 30, 2021, the Company did not withdraw any interest income from the Trust Account.

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

 

As of September 30, 2021, the carrying values of prepaid expenses, accounts payable, and accrued expenses approximate their fair values due to the short-term nature of the instruments.

Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs. The estimated fair value of the Public Warrants transferred from a Level 3 measurement to a Level 1 fair value measurement from January 13, 2021 (inception) through September 30, 2021.

The Warrants were accounted for as liabilities in accordance with ASC815-40and are presented within warrant liabilities on our balance sheet. 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.

The Private Placement Warrants were initially valued using a Modified Black Scholes Option Pricing Model, which is considered to be a Level 3 fair value measurement. The Modified Black Scholes model’s primary unobservable input utilized in determining the fair value of the Private Placement Warrants is the expected volatility of the ordinary shares. The expected volatility as of the IPO date was derived from observable public warrant pricing on comparable ‘blank-check’ companies without an identified target. The expected volatility as of subsequent valuation dates was implied from the Company’s own public warrant pricing. A Monte Carlo simulation methodology was used in estimating the fair value of the public warrants for periods where no observable traded price was available, using the same expected volatility as was used in measuring the fair value of the Private Placement Warrants. For periods subsequent to the detachment of the warrants from the Units, the close price of the public warrant price was used as the fair value as of each relevant date.

The key inputs into the Monte Carlo simulation model Public Warrants and the Black-Scholes-Merton model for the Private Placement Warrants were as follows:

 

 

20

		Private Placement(1)				Public				Warrant Liabilities
Fair value as of January 13, 2021 (inception)		$	—			$	—			$	—
Initial measurement on March 9, 2021			9,075,018				10,423,226				19,498,244
Change in valuation inputs or other assumptions			(256,356	)			(255,785	)			(512,141	)
Transfer to Level 1			—				(10,167,441	)			(10,167,441	)
Fair value as of March 31, 2021			8,818,662				—				8,818,662
Change in valuation inputs or other assumptions			325,080				—				325,080
Fair value as of June 30, 2021		$	9,143,742			$	—			$	9,143,742
Change in fair value			(20,943	)							(20,943	)
Fair value as of September 30, 2021		$	9,122,799			$	—			$	9,122,799

(1)

As a result of the difference in fair value of $1.77 per share of the Private Placement warrants and the purchase of $1.50 per share (see Note 6), the Company recorded a charge of $1.4 million as of the date of the Private Placement which is included in the private placement liability initial measurement within this table but is reported as part of the change in fair value of the warrant liability in the statement of operations.

Business Combination Agreement

VIH Merger

and one-fourth of

and one-fourth of

Target Company Shareholder Consideration

High Vote Shares

non-operating

Off-Balance

off-balance

off-balance

off-balance

non-financial

Subscription Agreement

Warrant Liabilities

Class A Ordinary Shares Subject to Possible Redemption

 

27

Factors that could cause our actual results to differ materially from those in this report include the risk factors described in our final prospectus for its Initial Public Offering filed with the SEC. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in our final prospectus for its Initial Public Offering filed with the SEC and the Quarterly Report on for the quarter ended September 30, 2021.

 

28

On March 9, 2021 the Company consummated the Initial Public Offering of 25,578,466 units (the “Units”) which includes the partial exercise by the underwriters of their over-allotment option in the amount of 3,078,466 Units, at $10.00 per Unit, generating gross proceeds of $255,784,660. Citigroup and Jefferies acted as book-running managers of the Initial Public Offering. The securities in the offering were registered under the Securities Act on registration statement on The Securities and Exchange Commission declared the registration statements effective on March 4, 2021.

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 5,127,129 warrants (the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant in a private placement to VPC Impact Acquisition Holdings Sponsor II, LLC (the “Sponsor”), generating gross proceeds of $7,690,693. Each whole Private Placement Warrant is exercisable to purchase one ordinary share at an exercise price of $11.50 per share. The issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.

The Private Placement Warrants are identical to the warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants are not transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions.

Transaction costs amounted to $14,564,011, consisting of $5,115,693 of underwriting fees, $8,952,463 of deferred underwriting fees and $495,855 of other offering costs. In addition, at March 9, 2021 cash of $789,218 was held outside of the Trust Account (as defined below) and is available for working capital purposes.

Following the closing of the Initial Public Offering on March 9, 2021, an amount of $255,784,660 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”) and will be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund investing solely in U.S. Treasuries and meeting certain conditions under of the Investment Company Act, as determined by the Company, until the earliest of: (i) the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders.

For a description of the use of the proceeds generated in our Initial Public Offering, see Part I, Item 2 of this

None

None

None

 

29

 

30

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

31