The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under "Cautionary Note Regarding Forward-Looking Statements and Risk Factor Summary," "Item 1A. Risk Factors" and elsewhere in this report.
Overview
We are a blank check company formed under the laws of the
We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering and the private placement, our capital stock, debt or a combination of cash, stock and debt. We are incurring and expect to continue to incur significant costs in the pursuit of our acquisition plans, including in connection with the Proposed Transaction. We cannot assure you that our plans to complete the Proposed Transaction, or any other initial business combination, will be successful.
Proposed Transaction
Subsequent to the period covered by this report, onFebruary 7, 2022 , we entered into the Transaction Agreement with NewCo, Merger Sub, CallCo, ExchangeCo and D-Wave relating to the Proposed Transaction with D-Wave. NewCo will file with theSEC the NewCo Form S-4 that will include a prospectus with respect to NewCo's securities to be issued in connection with the Proposed Transaction and a proxy statement with respect to the meeting of our stockholders to vote on the Proposed Transaction. There can be no assurance as to whether or when the Proposed Transaction will be completed.
Transaction Agreement
Pursuant to the Transaction Agreement, among other things, (a) on the Closing Date, Merger Sub will merge with and into our company, with our company continuing as the surviving company after the Merger, as a result of which we will become a direct, wholly owned subsidiary of NewCo, with our stockholders receiving NewCo Common Shares in the Merger; and (b) immediately following the Merger, by means of the Plan of Arrangement, (i) CallCo will acquire a portion of the D-Wave Shares from certain holders in the NewCo Share Exchange, (ii) CallCo will contribute such D-Wave Shares to ExchangeCo in exchange for ExchangeCo Common Shares, (iii) following the NewCo Share Exchange, ExchangeCo will acquire the remaining issued and outstanding D-Wave Shares from the remaining holders of D-Wave Shares in exchange for the Exchangeable Shares and (iv) as a result of the foregoing, D-Wave will become a wholly-owned subsidiary of ExchangeCo. The holders of the Exchangeable Shares will have certain rights as specified in the Exchangeable Share Term Sheet, including the right to exchange Exchangeable Shares for NewCo Common Shares. 41
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The Transaction Agreement contains customary representations and warranties, covenants and closing conditions, including, but not limited to, approval by our stockholders of the Transaction Agreement and the Proposed Transaction. The terms of the Transaction Agreement and other related ancillary agreements entered into or to be entered into in connection with the Closing of the Proposed Transaction, including those briefly described below, are summarized in more detail in our Current Report on Form 8-K filed with theSEC onFebruary 11, 2022 and will be summarized in greater detail
in the NewCo Form S-4 when available. Sponsor Support Agreement
Concurrently with the execution of the Transaction Agreement, we entered into the Sponsor Support Agreement with our sponsor, NewCo and D-Wave, pursuant to which, among other things, our sponsor agreed to (i) vote in favor of the Transaction Agreement and the Proposed Transaction, (ii) a certain number of NewCo Common Shares becoming subject to certain vesting conditions immediately prior to, and contingent upon, the Closing, (iii) reimburse or otherwise compensate our company for certain expenses in excess of our permitted expenses under the Transaction Agreement and (iv) the forfeiture of certain founder shares.
Transaction Support Agreements
Concurrently with the execution of the Transaction Agreement, we entered into the Transaction Support Agreements with D-Wave and the Supporting Shareholders, pursuant to which each such Supporting Shareholder agreed to, among other things, support and vote in favor of the Company Arrangement Resolution.
PIPE Subscription Agreements
Concurrently with the execution of the Transaction Agreement, we entered into
the PIPE Subscription Agreements with NewCo and the
Registration Rights and Lock-Up Agreement At the Closing of the Proposed Transaction, NewCo, our sponsor, the other holders of founder shares and each D-Wave shareholder party thereto will, pursuant to the Plan of Arrangement, become parties to the Registration Rights and Lock-Up Agreement, pursuant to which, among other things, the Holders (a) will agree not to effect any sale or distribution of certain equity securities of NewCo held by any of them during the lock-up period described therein and (b) will be granted certain registration rights with respect to their respective NewCo Common Shares, in each case, on the terms and subject to the conditions set forth therein.
Previously Terminated Business Combination Agreement
On
OnJuly 23, 2021 , we entered into Termination Agreement with VNNA Merger Sub, our sponsor,Jam City andNew JC LLC , pursuant to which the parties agreed to mutually terminate the Jam City BCA effective as ofJuly 23, 2021 . As a result of the termination of the Jam City BCA, the Jam City BCA is void and there is no liability under the Jam City BCA on the part of any party thereto, except as set forth in the Jam City BCA, and each of the transaction agreements entered into in connection with the Jam City BCA, including, but not limited to, (i) the Sponsor Support Agreement, dated as ofMay 19, 2021 , by and among our company, our sponsor,Jam City andNew JC LLC , (ii) the Stockholder Support Agreement, dated as ofMay 19, 2021 , by and among our company and certain stockholders of Jam City, and (iii) the subscription agreements entered into between our company and certain investors concurrently with the execution of the Jam City BCA, dated as ofMay 19, 2021 , were automatically either terminated in accordance with their terms or of no further force and effect. Pursuant to the Termination Agreement, subject to certain exceptions, we and Jam City also agreed, on behalf of ourselves and our respective related parties, to a release of claims relating to the Jam City Business Combination. We intend to pursue the Proposed Business
Combination with D-Wave described above. Results of Operations We have neither engaged in any operations nor generated any revenues to date. Our only activities throughDecember 31, 2021 were organizational activities, those necessary to prepare for our initial public offering and, since our initial public offering, our activity has been limited to identifying a target company for a business combination. We do not expect to generate any operating revenues until after the completion of our initial business combination. We generate non-operating income in the form of interest 42
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income on marketable securities held in the trust account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with searching for, and completing, a business combination, including the Proposed Transaction.
For the year ended
For the period from
Liquidity and Capital Resources
Until the consummation of our initial public offering, our only source of liquidity was an initial purchase of founder shares by our sponsor and loans from our sponsor.
On
Following our initial public offering and the sale of the private placement
warrants, a total of
For the year ended
For the period from
As of
We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (less deferred underwriting commissions and income taxes payable), to complete our initial business combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our 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 our growth strategies.
As of
In order to fund working capital deficiencies or finance transaction costs in
connection with a business combination, our sponsor or an affiliate of our
sponsor or certain of our directors and officers may, but are not obligated to,
loan us funds as may be required. If we complete our initial business
combination, we would repay such loaned amounts. In the event that our initial
business combination does not close, we may use a portion of the working capital
held outside the trust account to repay such loaned amounts but no proceeds from
the trust account would be used for such repayment. Up to
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We will need to raise additional capital through loans or additional investments from our sponsor or an affiliate of our sponsor or certain of our directors and officers. Our sponsor or an affiliate of our sponsor or certain of our directors and officers may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet our working capital needs. Accordingly, we may not be able to obtain additional financing. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction and reducing overhead expenses. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all.
In connection with our assessment of going concern considerations in accordance
with
Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements as ofDecember 31, 2021 .
Contractual Obligations
We do not have any long-term debt obligations, capital lease obligations,
operating lease obligations, purchase obligations or long-term liabilities,
other than an agreement to pay our sponsor a monthly fee of
The underwriter of our initial public offering is entitled to a deferred fee of
We are also party to the Transaction Agreement and related ancillary agreements, as described above.
Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in
Warrant Liabilities
We account for our warrants in accordance with the guidance contained in ASC 815-40 under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, we classify the warrants as liabilities at their fair value and adjust the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statements of operations. The private placement warrants and the public warrants for periods where no observable traded price was available are valued using a binomial lattice model. For periods subsequent to the detachment of the public warrants from the units, the public warrant quoted market price was used as the fair value as of each relevant date. 44
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Class A Common Stock Subject to Possible Redemption
We account for our Class A common stock subject to possible redemption in accordance with the guidance in ASC Topic 480 "Distinguishing Liabilities from Equity." Class A common stock subject to mandatory redemption is classified as a liability instrument and measured at fair value. Conditionally redeemable common stock (including common stock 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 our control) is classified as temporary equity. At all other times, common stock is classified as stockholders' equity. Our Class A common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, Class A common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders' equity section of our balance sheets.
Net Income (Loss) Per Common Stock
Net income (loss) per common stock is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period. We apply the two-class method in calculating income (loss) per common stock. Accretion associated with the redeemable shares of Class A common stock is excluded from income (loss) per common stock as the redemption value approximates fair value.
Recent Accounting Standards
InAugust 2020 , the FASB issued ASU No. 2020-06, "Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity" ("ASU 2020-06"), which simplifies accounting for convertible instruments by removing major separation models required under currentU.S. GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning afterDecember 15, 2023 , including interim periods within those fiscal years, with early adoption permitted.
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements.
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