Social Capital Hedosophia Holdings Corp. IV

FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2022

NOTE 9. FAIR VALUE MEASUREMENTS

The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Level 1:

Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2:

Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Level 3:

Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability.

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at March 31, 2022 and December 31, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:


		March 31,		December 31,
Description	Level	2022		2021
Assets:
Marketable securities held in Trust Account⁽¹⁾	1	$	460,096,850	$	460,055,839
Liabilities:
Public Warrants⁽²⁾	1		10,925,000		23,460,000
Private Placement Warrants⁽²⁾	2	$	4,750,000	$	10,200,000

(1)	The fair value of the marketable securities held in the Trust Account approximates the carrying amount primarily due to their short-term nature.

(2)	Measured at fair value on a recurring basis.

Warrants

The Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities in the condensed balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the condensed statements of operations.

The Warrants are measured at fair value on a recurring basis. The measurement of the Public Warrants as of March 31, 2022 and December 31, 2021 is classified as Level 1 due to the use of an observable market quote in an active market under the ticker IPOD.WS. As the transfer of Private Placement Warrants to anyone outside of a small group of individuals who are permitted transferees would result in the Private Placement Warrants having substantially the same terms as the Public Warrants, the Company determined that the fair value of each Private Placement Warrant is equivalent to that of each Public Warrant, with an insignificant adjustment for short-term marketability restrictions. As such, the Private Placement Warrants are classified as Level 2. There were no transfers in or out of Level 3 from other levels in the fair value hierarchy during the three months ended March 31, 2022

As of March 31, 2022, the aggregate values of the Public Warrants and Private Placement Warrants were $10.9 million and $4.8 million, respectively, based on a fair value of $0.95 per warrant. As of December 31, 2021, the aggregate values of the Public Warrants and Private Placement Warrants were $23.5 million and $10.2 million, respectively, based on a fair value of $2.04 per warrant.

The following table presents the changes in the fair value of warrant liabilities:


	Private Placement		Public		Warrant Liabilities
Fair value as of January 1, 2022	$	10,200,000		23,460,000	$	33,660,000
Change in valuation inputs or other assumptions		(5,450,000)		(12,535,000)		(17,985,000)
Fair value as of March 31, 2022	$	4,750,000		10,925,000	$	15,675,000