2)
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
This Amendment No. 1 (“Amendment No. 1”)
On April 12, 2021, the staffits accounting classification of the Securities and Exchange Commissionredeemable shares of Class A common stock, par value $0.0001 per share (the “SEC Staff”“Public Shares”), issued a public statement entitled “Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies (“SPACs”) (the “SEC Staff Statement”). Inas part of the SEC Staff Statement, the SEC Staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPAC’s balance sheet as opposed to being treated as equity. Since their issuance on December 11, 2020 at the time ofunits sold in the Company’s initial public offering our warrants(the “initial public offering”) on December 11, 2020. Historically, a portion of the Public Shares were accountedclassified as permanent equity to maintain stockholders’ equity greater than $5,000,000 on the basis that the Company will not redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001, as described in the Company’s amended and restated certificate of incorporation (the “Charter”). Previously, the Company did not consider redeemable stock classified as temporary equity as part of net tangible assets. Effective with these financial statements, the Company has revised this interpretation to include temporary equity in net tangible assets. Pursuant to such re-evaluation, the Company’s management has determined that the Public Shares include certain provisions that require classification of all of the Public Shares as temporary equity. In addition, in connection with the change in presentation for the Public Shares, the Company determined it should restate its earnings per share calculation to allocate income and losses shared pro rata between both Class A and Class B common stock. This presentation contemplates a Business Combination as equity within our balance sheet,the most likely outcome, in which case, both classes of common stock share pro rata in the income and after discussion and evaluation, including with our independent auditors, we have concluded that our warrants should be presented as liabilities with subsequent fair value remeasurement.
loss of the Company.
Historically, certain of our outstanding warrants As such, the Company will restate its financial statements for the Affected Periods. The Post IPO Balance Sheet and the FY 2020 Financial Statements are being restated in this Amendment No. 2 and the Q1 2021 Financial Statements and Q2 2021 Financial Statements will be restated in an amendment to purchase common stockthe Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021, to be filed with the SEC (the “Warrants”“Q3 2021 Form 10-Q/A”) were reflected as a component of equity as opposed to liabilities.
the Q3 2021 Form 10-Q/A.
The change in accounting foror the Warrants did not have any impact on our liquidity, cash flows, revenues or costs of operating our business and the other non-cash adjustments to the Financial Statements, in the Affected Period or in any of the periods included in Item 8, Financial Statements and Supplementary Data inFirst Amended Filing. Accordingly, this filing. The change in accounting for the Warrants does not impact the amounts previously reported for the Company’s cash and cash equivalents, investments held in trust account, operating expenses or total cash flows from operations for the Affected Period.
In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Item 1A, Risk Factors, is hereby amended to add additional risk factors, and Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operation, and Item 8, Financial Statements and Supplementary Data, of the Original Filing are hereby amended and restated in their entirety. This Amendment No. 12 should be read in conjunction with the Original Filing and the First Amended Filing and with our other filings with the SEC subsequent to the Original Filing.
management at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem no more than
To respond to thisas of September 30, 2020, for the three months ended September 30, 2020, and the period from August 12, 2020 (inception) through September 30, 2020. For a discussion of management’s consideration of the material weakness we have devotedidentified related to our accounting for a significant effort and resourcesunusual transaction related to the remediation and improvement of our internal control over financial reporting,warrants we issued in connection with the December 2020 initial public offering, see “Note 2—Restatement of Previously Issued Financial Statements” to the accompanying consolidatedfinancial statements, as well as Part II, Item 9A: Controls and Procedures included in the First Amended Filing.
In addition, even if we are successful in strengthening our controls and procedures, in the future those controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our financial statements.
reporting.
Market Information
The restatement is more fully described in Note 2 of the notes to the financial statements included herein.
Company.
As a result of the restatement described in Note 2 of the notes to the financial statements included herein, we classify the warrants issued in connection with our Public Offering and Private Placement as liabilities at their fair value and adjust the warrant instruments to fair value at each reporting period. These liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations.
We complyStock
The Company’s statement of operations includes a presentation of income per share for Class A common stock subject to possible redemption in a manner similar to the two-class method of loss per common stock. Net income per Class A common stock, basic and diluted, for redeemable Class A common stock is calculated by dividing the interest income earned on the Trust Account, net of applicable franchise and income taxes, by the weighted average number of redeemable common stock outstanding since original issuance.
Net loss per common stock, basic and diluted, for non-redeemable Class A and B common stock is calculated by dividing the net loss, adjusted for income attributable to redeemable common stock, by the weighted average number of non-redeemable Class A and B common stock outstanding for the periods. Non-redeemable common stock includes the Founder Shares as these common stocks do not have any redemption features and do not participate in the income earned on the Trust Account.
periods presented.
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purpose of liquidating. The date for mandatory liquidation and subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Assets: | ||||
Current Assets | ||||
Cash and cash equivalents | $ | 764,329 | ||
Prepaid expense | 634,511 | |||
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Total current assets | 1,398,840 | |||
Investments held in Trust Account | 300,000,082 | |||
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Total assets | $ | 301,398,922 | ||
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Liabilities and Stockholders’ Equity: | ||||
Current Liabilities | ||||
Accounts payable | 137,179 | |||
Due to related party | 2,885 | |||
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Total current liabilities | 140,064 | |||
Warrant liability | 33,807,463 | |||
Deferred underwriting fee | 10,500,000 | |||
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Total liabilities | 44,447,527 | |||
Commitments and Contingencies | — | |||
Class A common stock subject to possible redemption, 25,195,139 shares subject to possible redemption at redemption value | 251,951,390 | |||
Stockholders’ equity: | ||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding | ||||
Class A common stock, $0.0001 par value, 280,000,000 shares authorized, 4,804,861 shares issued and outstanding (excluding 25,195,139 shares subject to possible redemption) | 481 | |||
Class B common stock, $0.0001 par value, 20,000,000 shares authorized, 7,500,000 shares issued and outstanding | 750 | |||
Additional paid-in capital | 12,116,008 | |||
Accumulated deficit | (7,117,234 | ) | ||
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Total stockholders’ equity | 5,000,005 | |||
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Total liabilities and stockholders’ equity | $ | 301,398,922 | ||
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AS RESTATED)
Assets: | ||||
Current Assets | ||||
Cash and cash equivalents | $ | 764,329 | ||
Prepaid expense | 634,511 | |||
Total current assets | 1,398,840 | |||
Investments held in Trust Account | 300,000,082 | |||
Total assets | $ | 301,398,922 | ||
Liabilities and Stockholders’ Deficit: | ||||
Current Liabilities | ||||
Accounts payable | 137,178 | |||
Due to related party | 2,885 | |||
Total current liabilities | 140,063 | |||
Warrant liability | 33,807,463 | |||
Deferred underwriting fee | 10,500,000 | |||
Total liabilities | 44,447,526 | |||
Commitments and Contingencies | 0 | |||
Class A common stock subject to possible redemption, 30,000,000 shares issued and outstanding at redemption value of $10.00 per share | 300,000,000 | |||
Stockholders’ deficit: | ||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 0 shares issued or outstanding | 0— | |||
Class A common stock, $0.0001 par value, 280,000,000 shares authorized, 0 shares issued or outstanding (excluding 30,000,000 shares subject to possible redemption) | 0— | |||
Class B common stock, $0.0001 par value, 20,000,000 shares authorized, 7,500,000 shares issued and outstanding | 750 | |||
Additional paid-in capital | 0— | |||
Accumulated deficit | (43,049,354 | ) | ||
Total stockholders’ deficit | (43,048,604 | ) | ||
Total liabilities and stockholders’ deficit | $ | 301,398,922 | ||
Formation and operating costs | $ | 159,383 | ||
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Loss from operations | (159,383 | ) | ||
Other income (expense) | ||||
Interest Income | 216 | |||
Interest income earned on Trust | 82 | |||
Warrant issuance costs | (1,138,086 | ) | ||
Loss on sale of private placement warrants | (2,871,152 | ) | ||
Unrealized loss on change in fair value of warrants | (2,948,911 | ) | ||
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Total other expense | (6,957,851 | ) | ||
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Net loss | $ | (7,117,234 | ) | |
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Basic and diluted weighted average shares outstanding, Class A common stock | 30,000,000 | |||
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Basic and diluted net income per share, Class A common stock | $ | 0.00 | ||
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Basic and diluted weighted average shares outstanding, common stock | 7,500,000 | |||
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Basic and diluted net loss per share, Class B common stock | $ | (0.95 | ) | |
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AS RESTATED)
Formation and operating costs | $ | 159,383 | ||
Loss from operations | (159,383 | ) | ||
Other income | ||||
Interest income | 216 | |||
Interest income earned on Trust | 82 | |||
Warrant issuance costs | (1,138,086 | ) | ||
Loss on sale of private placement warrants | (2,871,152 | ) | ||
Unrealized loss on change in fair value of warrants | (2,948,911 | ) | ||
Total other income (loss) | (6,957,851 | ) | ||
Net loss | $ | (7,117,234 | ) | |
Basic and diluted weighted average shares outstanding, Class A common stock | 4,071,429 | |||
Basic and diluted net income (loss) per share, Class A common stock | $ | (0.56 | ) | |
Basic and diluted weighted average shares outstanding, Class B common stock | 8,682,402 | |||
Basic and diluted net loss per share, Class B common stock | $ | (0.56 | ) | |
DEFICIT
Class A | Class B | Additional | Total | |||||||||||||||||||||||||
Common Stock | Common Stock | Paid-In | Accumulated | Stockholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares (1) | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
Balance as of August 12, 2020 (inception) | — | $ | — | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Issuance of Class B common stock to initial stockholders | — | — | 7,503,750 | 750 | $ | 24,250 | — | 25,000 | ||||||||||||||||||||
Forfeiture of Class B common stock | — | — | (3,750 | ) | — | — | — | — | ||||||||||||||||||||
Sale of Units in Initial Public Offering net of underwriter discount and offering cost less fair value of warrants | 30,000,000 | 3,000 | — | — | 264,040,629 | — | 264,043,629 | |||||||||||||||||||||
Change in value of Class A common stock subject to possible redemption | (25,195,139 | ) | (2,519 | ) | — | — | (251,948,871 | ) | — | (251,951,390 | ) | |||||||||||||||||
Net loss | — | — | — | — | — | (7,117,234 | ) | (7,117,234 | ) | |||||||||||||||||||
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Balance as of December 31, 2020 | 4,804,861 | $ | 481 | 7,500,000 | $ | 750 | $ | 12,116,008 | $ | (7,117,234 | ) | $ | 5,000,005 | |||||||||||||||
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AS RESTATED)
Class A | Class B | Additional | Total | |||||||||||||||||||||||||
Common Stock | Common Stock | Paid-In | Accumulated | Stockholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
Balance as of August 12, 2020 (inception) | 0 | $ | 0 | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||
Issuance of Class B common stock to initial stockholders | — | — | 7,503,750 | 750 | 24,250 | — | 25,000 | |||||||||||||||||||||
Forfeiture of Class B common stock | — | — | (3,750 | ) | — | — | — | — | ||||||||||||||||||||
Accretion of Class A common stock to redemption value | — | — | — | — | (24,250 | ) | (35,932,120 | ) | (35,956,370 | ) | ||||||||||||||||||
Net loss | — | — | — | — | — | (7,117,234 | ) | (7,117,234 | ) | |||||||||||||||||||
Balance as of December 31, 2020 | 0 | $ | 0 | 7,500,000 | $ | 750 | $ | 0 | $ | (43,049,354 | ) | $ | (43,048,604 | ) | ||||||||||||||
Cash Flows from Operating Activities: | ||||
Net loss | $ | (7,117,234 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Interest earned on marketable securities held in Trust Account | (82 | ) | ||
Loss on sale of private placement warrants | 2,871,152 | |||
Warrant issuance costs | 1,138,086 | |||
Unrealized loss on change in fair value of warrants | 2,948,911 | |||
Changes in current assets and current liabilities: | ||||
Prepaid assets | (634,511 | ) | ||
Due to related party | 2,885 | |||
Accounts payable | 137,179 | |||
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Net cash used in operating activities | (653,614 | ) | ||
Cash Flows from Investing Activities: | ||||
Investment held in Trust Account | (300,000,000 | ) | ||
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Net cash used in investing activities | (300,000,000 | ) | ||
Cash Flows from Financing Activities: | ||||
Proceeds from Initial Public Offering, net of underwriters’ fees | 294,000,000 | |||
Proceeds from private placement | 8,000,000 | |||
Proceeds from issuance of founder shares | 25,000 | |||
Advances from Sponsor | 634,447 | |||
Proceeds from issuance of promissory note to related party | 275,000 | |||
Repayment of promissory note to related party | (275,000 | ) | ||
Repayment of advances from Sponsor | (634,447 | ) | ||
Payments of offering costs | (607,057 | ) | ||
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Net cash provided by financing activities | 301,417,943 | |||
Net Change in Cash | 764,329 | |||
Cash—Beginning | — | |||
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Cash—Ending | $ | 764,329 | ||
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Supplemental Disclosure of Non-cash Financing Activities: | ||||
Change in value of Class A common stock subject to possible redemption | $ | (3,121,510 | ) | |
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Initial value of Class A common stock subject to possible redemption | $ | 255,072,900 | ||
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Deferred underwriting commissions charged to additional paid-in capital | $ | 10,500,000 | ||
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Initial classification of warrant liability | $ | 27,987,400 | ||
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AS RESTATED)
Cash Flows from Operating Activities: | ||||
Net loss | $ | (7,117,234 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Interest earned on marketable securities held in Trust Account | (82 | ) | ||
Loss on sale of private placement warrants | 2,871,152 | |||
Warrant issuance costs | 1,138,086 | |||
Unrealized loss on change in fair value of warrants | 2,948,911 | |||
Changes in current assets and current liabilities: | ||||
Prepaid assets | (634,512 | ) | ||
Due to related party | 2,885 | |||
Accounts payable | 137,179 | |||
Net cash used in operating activities | (653,615 | ) | ||
Cash Flows from Investing Activities: | ||||
Investment held in Trust Account | (300,000,000 | ) | ||
Net cash used in investing activities | (300,000,000 | ) | ||
Cash Flows from Financing Activities: | ||||
Proceeds from Initial Public Offering, net of underwriters’ fees | 294,000,000 | |||
Proceeds from private placement | 8,000,000 | |||
Proceeds from issuance of founder shares | 25,000 | |||
Advances from Sponsor | 634,447 | |||
Proceeds from issuance of promissory note to related party | 275,000 | |||
Repayment of promissory note to related party | (275,000 | ) | ||
Repayment of advances from Sponsor | (634,447 | ) | ||
Payments of offering costs | (607,056 | ) | ||
Net cash provided by financing activities | 301,417,944 | |||
Net Change in Cash | 764,329 | |||
Cash—Beginning | 0 | |||
Cash—Ending | $ | 764,329 | ||
Supplemental Disclosure of Non-cash Financing Activities: | ||||
Year-end value of Class A common stock subject to possible redemption | $ | 300,000,000 | ||
Initial classification of warrant liability | $ | 27,987,400 | ||
Deferred underwriting commissions charged to additional paid-in capital | $ | 10,500,000 | ||
The shares of common stock subject to redemption will be recorded at a redemption value and classified as temporary equity upon the completion of the Proposed Public Offering, in accordance with Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the issued and outstanding shares voted are voted in favor of the Business Combination.
NOTE
On April 12,
In further consideration9, which have been updated to reflect the restatement of the guidancefinancial statements contained in Accounting Standards Codification (“ASC”) 815-40, Derivatives and Hedging; Contracts in Entity’s Own Equity, the Company concluded that a provision in the Warrant Agreement related to certain tender or exchange offers precludes the Warrants from being accounted for as components of equity. As the Warrants meet the definition of a derivative as contemplated in ASC 815, the Warrants should be recorded as derivative liabilities on the Balance Sheet and measured at fair value at inception (on the date of the IPO) and at each reporting date in accordance with ASC 820, Fair Value Measurement, with changes in fair value recognized in the Statement of Operations in the period of change.
As a result of the above, the Company should have classified the warrants as derivative liabilities in its previously issued financial statements. Under this accounting treatment, the Company is required to measure the fair value of the warrants at the end of each reporting period and recognize changes in the fair value from the prior period in the Company’s operating results for the current period.
Notwithstanding the above mentionedwithin.
The following tables summarize the effect of the restatement on eachthe Company’s financial statement line itemstatements is reflected in the following table.
As Previously Reported | Adjustment | As Restated | ||||||||||
Balance Sheet as of December 11, 2020 (as restated in footnote 2 per Form 10-K filed on June 1, 2021) | ||||||||||||
Class A common stock subject to possible redemption | $ | 255,072,900 | $ | 44,927,100 | $ | 300,000,000 | ||||||
Class A common stock | 449 | (449 | ) | — | ||||||||
Additional paid in capital | 9,019,530 | (9,019,530 | ) | — | ||||||||
Accumulated deficit | (4,020,723 | ) | (35,907,121 | ) | (39,927,844 | ) | ||||||
Balance Sheet as of December 31, 2020 (per form 10K/A filed on June 1, 2021) | ||||||||||||
Class A common stocks subject to possible redemption | $ | 251,951,390 | $ | 48,048,610 | $ | 300,000,000 | ||||||
Class A common stock | 481 | (481 | ) | 0 | ||||||||
Additional paid in capital | 12,116,008 | (12,116,008 | ) | 0 | ||||||||
Accumulated deficit | (7,117,234 | ) | (35,932,120 | ) | (43,049,354 | ) | ||||||
Statement of Operations for the period from August 12, 2020 (inception) through December 31, 2020 (per form 10K filed on June 1, 2021) | ||||||||||||
Basic and diluted weighted average shares outstanding, Class A common stock | 30,000,000 | (25,928,571 | ) | 4,071,429 | ||||||||
Basic and diluted net income (loss) per share, Class A common stock | $ | — | $ | (0.56 | ) | $ | (0.56 | ) | ||||
Basic and diluted weighted average shares outstanding, Class B common stock | 7,500,000 | 1,182,402 | 8,682,402 | |||||||||
Basic and diluted net loss per share, Class B common stock | $ | (0.95 | ) | $ | 0.39 | $ | (0.56 | ) | ||||
Statement of Changes in Stockholders’ Equity for the period from August 12, 2020 (inception) through December 31, 2020 (per form 10-K filed on June 1, 2020) | ||||||||||||
Sale of Units in Initial Public Offering net of underwriter discount and offering cost less fair value of warrants | $ | 264,043,629 | $ | (264,043,629 | ) | $ | — | |||||
Change in value of Class A common stock subject to possible redemption | $ | (251,951,390 | ) | $ | 251,951,390 | $ | — | |||||
Accretion of Class A common stock to redemption value | $ | — | $ | (35,956,370 | ) | $ | (35,956,370 | ) | ||||
Statement of Cash Flows for the period from August 12, 2020 (inception) through December 31, 2020 (per Form 10-K filed on June 1, 2020) | ||||||||||||
Initial value of Class A common stocks subject to possible redemption | $ | 255,072,900 | $ | 44,927,100 | $ | 300,000,000 | ||||||
Change in value of Class A common stocks subject to possible redemption | $ | (3,121,510 | ) | $ | 3,121,510 | $ | — |
As Previously Reported | Adjustment | As Restated | ||||||||||
Balance Sheet at December 11, 2020 | ||||||||||||
Warrant Liability | $ | — | $ | 30,858,552 | $ | 30,858,552 | ||||||
Class A common stock subject to possible redemption | 285,931,450 | (30,858,550 | ) | 255,072,900 | ||||||||
Class A common stock | 141 | 308 | 449 | |||||||||
Additional paid-in capital | 5,010,602 | 4,008,928 | 9,019,530 | |||||||||
Accumulated deficit | $ | (11,485 | ) | $ | (4,009,238 | ) | $ | (4,020,723 | ) | |||
Balance Sheet at December 31, 2020 | ||||||||||||
Warrant Liability | $ | — | $ | 33,807,463 | $ | 33,807,463 | ||||||
Class A common stock subject to possible redemption, | 285,758,850 | (33,807,460 | ) | 251,951,390 | ||||||||
Class A common stock | 142 | 339 | 481 | |||||||||
Additional paid-in capital | 5,158,201 | 6,957,807 | 12,116,008 | |||||||||
Accumulated deficit | $ | (159,085 | ) | $ | (6,958,149 | ) | $ | (7,117,234 | ) | |||
Statement of Operations for the period from August 12, 2020 (inception) through December 31, 2020 | ||||||||||||
Unrealized loss on change in fair value of warrants | $ | — | $ | (2,948,911 | ) | $ | (2,948,911 | ) | ||||
Loss on sale of private placement warrants | — | (2,871,152 | ) | (2,871,152 | ) | |||||||
Warrant issuance costs | — | (1,138,086 | ) | (1,138,086 | ) | |||||||
Net loss | $ | (159,085 | ) | $ | (6,958,149 | ) | $ | (7,117,234 | ) | |||
Basic and diluted net loss per share, Class B common stock | $ | (0.02 | ) | $ | (0.93 | ) | $ | (0.95 | ) | |||
Statement of Cash Flows for the period from August 12, 2020 (inception) through December 31, 2020 | ||||||||||||
Cash Flows from Operating Activities: | ||||||||||||
Net loss | $ | (159,085 | ) | $ | (6,958,149 | ) | $ | (7,117,234 | ) | |||
Unrealized loss on change in fair value of warrants | — | 2,948,911 | 2,948,911 | |||||||||
Warrant issuance costs | — | 1,138,086 | 1,138,086 | |||||||||
Loss on sale of private placement warrants | $ | — | $ | 2,871,152 | $ | 2,871,152 |
purpose of liquidating. The date for mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after June 11, 2022. The Company intends to complete a Business Combination before the mandatory liquidation date.
Net Loss Per Common Share
Net loss per common stock is computed by dividing net loss by The company recognizes changes in redemption value immediately as they occur and adjusts the weighted-average numbercarrying value of common stock outstanding for the period. The calculation of diluted loss per common stock does not consider the effect of the warrants issued in connection with the (i) IPO, and (ii) Private Placement since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. The warrants are exercisable to purchase 23,000,000 shares of Class A common stock in the aggregate.
The Company’s statement of operations includes a presentation of net income per share of Class A common stock subject to possible redemption to equal the redemption value at the end of each reporting period. This method would view the end of the reporting period as if it were also the redemption date for the security. Effective with the closing of the initial public offering, the Company recognized the accretion from initial book value to redemption amount, which resulted in a manner similar tocharges against additional paid-in capital (to the two-class methodextent available) and accumulated deficit.
Netwarrants to purchase the Company’s shares were excluded from diluted earnings per share for the period from August 12, 2020 (inception) through December 31, 2020 because the warrants are contingently exercisable, and the contingencies have not yet been met. As a result, diluted net loss per share of common stock is the same as basic net loss per share of common stock for the periods presented. The table below presents a reconciliation of the numerator and denominator used to compute basic and diluted for non-redeemable Class B common stock is calculated by dividing the net loss adjustedper share for income attributable to redeemable Class Beach class of common stock, by the weighted average number of non-redeemable Class B common stock outstanding for the period. Non-redeemable Class B common stock include the Founder Shares as these common stocks do not have any redemption features and do not participate in the income earned on the Trust Account.
For the Year ended December 31, 2020 | ||||
Numerator: Net income allocable to Class A common stock | ||||
Amortized Interest income on marketable securities held in trust | $ | 69 | ||
Less: interest available to be withdrawn for payment of taxes | (69 | ) | ||
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Net income allocable to Class A common stock | $ | — | ||
Denominator: Weighted Average Redeemable Class A common stock | ||||
Redeemable Class A Common Stock, Basic and Diluted | 30,000,000 | |||
Basic and Diluted net income per share, Class A common stock | $ | 0.00 | ||
Non-Redeemable Common Stock | ||||
Numerator: Net Income minus Redeemable Net Earnings | ||||
Net Loss | $ | (7,117,234 | ) | |
Redeemable Net Earnings | — | |||
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Non-Redeemable Net Loss | $ | (7,117,234 | ) | |
Denominator: Weighted Average Non-Redeemable Common Stock | ||||
Basic and diluted weighted average shares outstanding, common stock | 7,500,000 | |||
Basic and diluted net loss per share, Class B common stock | $ | (0.95) |
For the period from August 12, 2020 (inception) through December 31,2020 | ||||||||
Class A | Class B | |||||||
Basic and diluted net loss per share: | ||||||||
Numerator: | ||||||||
Allocation of net loss | $ | (2,272,048 | ) | $ | (4,845,186 | ) | ||
Denominator: | ||||||||
Weighted-average shares outstanding | 4,071,429 | 8,682,402 | ||||||
Basic and diluted net loss per share | $ | (0.56 | ) | $ | (0.56 | ) | ||
Gross proceeds from IPO | $ | 300,000,000 | ||
Less: | ||||
Proceeds allocated to Public Warrants | (19,987,400 | ) | ||
Common stock issuance costs | (15,968,970 | ) | ||
Plus: | ||||
Accretion of carrying value to redemption value | 35,956,370 | |||
Class A common stock subject to possible redemption | $ | 300,000,000 | ||
December 31, 2020 | Quoted Prices In Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
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Assets: | ||||||||||||||||
Money Market Funds held in Trust Account | $ | 300,000,082 | $ | 300,000,082 | $ | — | $ | — | ||||||||
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$ | 300,000,082 | $ | 300,000,082 | $ | — | $ | — | |||||||||
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Liabilities: | ||||||||||||||||
Warrant Liability | $ | 33,807,463 | $ | — | $ | — | $ | 33,807,463 | ||||||||
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$ | 33,807,463 | $ | — | $ | — | $ | 33,807,463 | |||||||||
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December 31, 2021 | Quoted Prices In Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
Money Market Funds held in Trust Account | $ | 300,000,082 | $ | 300,000,082 | $ | — | $ | — | ||||||||
$ | 300,000,082 | $ | 300,000,082 | $ | — | $ | — | |||||||||
Liabilities: | ||||||||||||||||
Warrant Liability | $ | 33,807,463 | $ | 0 | $ | — | $ | 33,807,463 | ||||||||
$ | 33,807,463 | $ | 0 | $ | — | $ | 33,807,463 | |||||||||
December 11, 2020 | Quoted Prices In Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
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Assets: | ||||||||||||||||
Cash held in Trust Account | $ | 300,000,000 | $ | 300,000,000 | $ | — | $ | — | ||||||||
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$ | 300,000,000 | $ | 300,000,000 | $ | — | $ | — | |||||||||
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Liabilities: | ||||||||||||||||
Warrant Liability | $ | 30,858,552 | $ | — | $ | — | $ | 30,858,552 | ||||||||
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$ | 30,858,552 | $ | — | $ | — | $ | 30,858,552 | |||||||||
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December 31, 2021 | Quoted Prices In Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
Cash held in Trust Account | $ | 300,000,000 | $ | 300,000,000 | $ | — | $ | — | ||||||||
$ | 300,000,000 | $ | 300,000,000 | $ | — | $ | — | |||||||||
Liabilities: | ||||||||||||||||
Warrant Liability | $ | 30,858,552 | $ | — | $ | — | $ | 30,858,552 | ||||||||
$ | 30,858,552 | $ | — | $ | — | $ | 30,858,552 | |||||||||
Input | December 11, 2020 (Initial Measurement) | |||
Expected term (years) | 5.90 | |||
Expected volatility | 24.2 | % | ||
Risk-free interest rate | 0.49 | % | ||
Fair value of the common stock price | $ | 9.34 |
Input | December 31, 2020 | |||
Expected term (years) | 5.85 | |||
Expected volatility | 24.2 | % | ||
Risk-free interest rate | 0.48 | % | ||
Fair value of the common stock price | $ | 9.63 |
Warrant Liability | ||||
Fair value as of August 12, 2020 | $ | — | ||
Initial fair value of warrant liability upon issuance at IPO | 30,858,552 | |||
Revaluation of warrant liability included in other expense within the statement of operations for the period from August 12, 2020 (inception) through December 31, 2020 | 2,948,911 | |||
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Fair value as of December 31, 2020 | $ | 33,807,463 | ||
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Warrant Liability | ||||
Fair value as of August 12, 2020 | $ | 0 | ||
Initial fair value of warrant liability upon issuance at IPO | 30,858,552 | |||
Revaluation of warrant liability included in other expense within the statement of operations for the period from August 12, 2020 (inception) through December 31, 2020 | 2,948,911 | |||
Fair value as of December 31, 2020 | $ | 33,807,463 | ||
December 31, 2020 | ||||
Deferred tax asset | ||||
Organizational costs/startup expenses | $ | 19,143 | ||
Federal Net Operating loss | 14,265 | |||
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Total deferred tax asset | 33,408 | |||
Valuation allowance | (33,408 | ) | ||
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Deferred tax asset, net of allowance | $ | — | ||
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December 31, 2020 | ||||
Deferred tax asset | ||||
Organizational costs/startup expenses | $ | 19,143 | ||
Federal Net Operating Loss | 14,265 | |||
Total deferred tax asset | 33,408 | |||
Valuation allowance | (33,408 | ) | ||
Deferred tax asset, net of allowance | $ | — | ||
December 31, 2020 | ||||
Federal | ||||
Current | $ | — | ||
Deferred | 33,408 | |||
State | ||||
Current | — | |||
Deferred | — | |||
Change in valuation allowance | (33,408 | ) | ||
Income tax provision | $ | — | ||
Statutory federal income tax rate | 21.0 | % | ||
State taxes, net of federal tax benefit | 0.0 | % | ||
Permanent Book/Tax Differences | (20.5 | )% | ||
Change in valuation allowance | (0.5 | )% | ||
Income tax provision | % | |||
Accordingly, management believes that the financial statements included in this Second Amendment present fairly in all material respects our financial position, results of operations and cash flows for the period presented.
Our internal control over financial reporting did not result in the proper classification of the warrants we issued in connection with our initial public offering and private placement which, due to its impact on our financial statements, we determined to be a material weakness. This mistake in classification was brought to our attention only when the SEC issued a Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”) dated April 12, 2021 (the “SEC Staff Statement”). The SEC Staff Statement addresses certain accounting and reporting considerations related to warrants of a kind similar to those we issued at the time of our initial public offering in December 2020. In response to this material weakness, the Company’s management has expended, and will continue to expend, a substantial amount of effort and resources for the remediation and improvement of our internal control over financial reporting. While we have processes to properly identify and evaluate the appropriate accounting technical pronouncements and other literature for all significant or unusual transactions, we are improving these processes to ensure that the nuances of such transactions are effectively evaluated in the context of the increasingly complex accounting standards. Our plans at this time include acquiring enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we may consult regarding the application of complex accounting transactions. Our remediation plan can only be accomplished over time and will be continually reviewed to determine that it is achieving its objectives. We can offer no assurance that these initiatives will ultimately have the intended effects.
NAME | AGE | POSITION | ||
Gary Teplis | 52 | President, Chief Executive Officer and Director | ||
Farris Griggs | 49 | Chief Financial Officer | ||
Kevin Schubert | 44 | Chief Operating Officer | ||
Adeel Rouf | 29 | Senior Vice President of Corporate Finance | ||
Gavin Isaacs | 56 | Chairman | ||
Thomas Breitling | 51 | Vice Chairman | ||
Sam Galeotos | 62 | Director | ||
Hilton Sturisky | 50 | Director | ||
Michel Taride | 64 | Director |
INDIVIDUAL | ENTITY | ENTITY’S BUSINESS | AFFILIATION | |||
Gary Teplis | Teplis Travel Altitude Acquisition Corp. II Altitude Acquisition Corp. III | Travel and tourism Travel and tourism Travel and tourism | Chief Executive Officer President and Chief Executive Officer, Director President and Chief Executive Officer, Director | |||
Farris Griggs | Teplis Travel
| Travel and tourism Travel and tourism Travel and tourism | Vice President of Finance Chief Financial Officer Chief Financial Officer | |||
Thomas Breitling | Breitling Ventures College Loan Corporation Shriners Hospitals for Children Open
| Private investment management Financing Education and sports Education Travel and tourism Travel and tourism | Chief Executive Officer Director Vice-Chairman of the Executive Committee
Vice Chairman Nominee Vice Chairman Nominee | |||
Gavin Isaacs | DraftKings, Inc.
Altitude Acquisition Corp. III | Gaming and lottery entertainment Gaming and lottery entertainment Online lottery Developer and talent source Travel and tourism Travel and tourism | Director Director Advisor Advisor Non-Executive Chairman Nominee Non-Executive Chairman Nominee | |||
Sam Galeotos | Lunavi, Inc. Shellback Management | Data and technology Real estate and investment management | Executive Chairman President | |||
Hilton Sturisky | William Hill Bain & Company | Betting and gaming Management consulting | Chief Information Officer Senior Advisor | |||
Michel Taride | Orfeo Partners Ltd. Drake Star Partners Afiniti C4 Ventures Knighthood Capital Partners Altitude Acquisition Corp. II Altitude Acquisition Corp. III | Travel and tourism Investment banking Data and software Venture fund Financial advisory Travel and tourism Travel and tourism | Managing Director, Strategic Advisor Senior Advisor Senior Advisor Operating Partner
Director Nominee
|
NAME AND ADDRESS OF BENEFICIAL OWNER (1) | NUMBER OF SHARES BENEFICIALLY OWNED (2) | APPROXIMATE PERCENTAGE OF OUTSTANDING COMMON STOCK | ||||||
Directors, Executive Officers and Founders | ||||||||
Altitude Acquisition Holdco LLC (our Sponsor) (3) | 7,500,000 | 20 | % | |||||
Gary Teplis (3) | 7,500,000 | 20 | % | |||||
Farris Griggs | — | — | ||||||
Kevin Schubert | — | — | ||||||
Adeel Rouf | — | — | ||||||
Gavin Isaacs | — | — | ||||||
Thomas Breitling | — | — | ||||||
Sam Galeotos | — | — | ||||||
Hilton Sturisky | — | — | ||||||
Michel Taride | — | — | ||||||
All executive officers and directors and director nominees as a group (nine individuals) | 7,500,000 | 20 | % |
NAME AND ADDRESS OF BENEFICIAL OWNER | NUMBER OF SHARES BENEFICIALLY OWNED | APPROXIMATE PERCENTAGE OF OUTSTANDING COMMON STOCK | ||||||
Five Percent Holders | ||||||||
HGC Investment Management Inc. (4) | 1,600,000 | 5.3 | % | |||||
Linden Capital L.P.(5) | 1,500,000 | 5.0 | % | |||||
Linden GP LLC(5) | — | — | ||||||
Linden Advisors LP(5) | — | — | ||||||
Siu Min (Joe) Wong (5) | — | — |
NAME AND ADDRESS OF BENEFICIAL OWNER (1) | NUMBER OF SHARES BENEFICIALLY OWNED (2) | APPROXIMATE PERCENTAGE OF OUTSTANDING COMMON STOCK | ||||||
Directors, Executive Officers and Founders | ||||||||
Altitude Acquisition Holdco LLC (our Sponsor) (3) | 7,500,000 | 20 | % | |||||
Gary Teplis (3) | 7,500,000 | 20 | % | |||||
Farris Griggs | ||||||||
Kevin Schubert | ||||||||
Adeel Rouf | ||||||||
Gavin Isaacs | ||||||||
Thomas Breitling | ||||||||
Sam Galeotos | ||||||||
Hilton Sturisky | ||||||||
Michel Taride | ||||||||
All executive officers and directors and director nominees as a group (nine individuals) | 7,500,000 | 20 | % | |||||
NAME AND ADDRESS OF BENEFICIAL OWNER | NUMBER OF SHARES BENEFICIALLY OWNED | APPROXIMATE PERCENTAGE OF OUTSTANDING COMMON STOCK | ||||||
Five Percent Holders | ||||||||
HGC Investment Management Inc. (4) | 1,600,000 | 5.3 | % | |||||
Linden Capital L.P. (5) | 1,500,000 | 5.0 | % | |||||
Linden GP LLC (5) | ||||||||
Linden Advisors LP (5) | ||||||||
Siu Min (Joe) Wong (5) |
(1) | The principal business address of each of the following entities or individuals is c/o Altitude Acquisition Corp., 400 Perimeter Center Terrace Suite 151 Atlanta, Georgia 30346. |
(2) | Interests shown consist of founder shares, classified as shares of Class B common stock. Such shares are convertible into shares of Class A common stock on a one-for-one |
(3) | Represents shares held by Altitude Acquisition Holdco LLC, our Sponsor. Mr. Teplis is the sole managing member of Altitude Acquisition Holdco LLC. Mr. Teplis has sole voting and investment discretion and sole dispositive power with respect to the common stock held of record by Altitude Acquisition Holdco LLC. Each of our officers and directors other than Mr. Teplis disclaims any beneficial ownership of any shares held by Altitude Acquisition Holdco LLC. Each such person disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary interest they may have therein, directly or indirectly. |
(4) | According to a Schedule 13G filed with the SEC on February 16, 2021 on behalf of HGC Investment Management Inc. (“HGC Investment Management”). HGC Investment Management has sole voting and dispositive power over 1,600,000 shares of the Company’s Class A common stock (the “Shares”). The principal business address of HGC Investment Management is 366 Adelaide, Suite 601, Toronto, Ontario M5V 1R9, Canada. |
(5) | According to a Schedule 13G/A filed with the SEC on February 8, 2021 on behalf of Linden Capital L.P. (“Linden Capital”), Linden Advisors LP (“Linden Advisors”), Linden GP LLC (“Linden GP”) and Mr. Siu Min (Joe) Wong (“Mr. Wong”). Each of Linden Advisors and Mr. Wong may be deemed the beneficial owner of 1,500,000 Shares, which consists of 1,365,764 Shares held by Linden Capital and 134,236 Shares held by separately managed accounts. Each of Linden GP and Linden Capital may be deemed the beneficial owner of the 1,365,764 Shares held by Linden Capital. The principal business address for Linden Capital is Victoria Place, 31 Victoria Street, Hamilton HM10, Bermuda. The principal business address for each of Linden Advisors, Linden GP and Mr. Wong is 590 Madison Avenue, 15th Floor, New York, New York 10022. |
(a) | The following documents are filed as part of this Annual Report on Form 10-K: |
1. | Financial Statements: See “Index to Financial Statements” at “Item 8. Financial Statements and Supplementary Data” herein. |
(b) | Financial Statement Schedules. All schedules are omitted for the reason that the information is included in the financial statements or the notes thereto or that they are not required or are not applicable. |
(c) | Exhibits: The exhibits listed in the Exhibit Index below are filed or incorporated by reference as part of this Annual Report on Form 10-K. |
* | Filed herewith. |
** | Furnished herewith. |
Date: | ALTITUDE ACQUISITION CORP. | |||||
By: | /s/ Gary Teplis | |||||
Name: Gary Teplis | ||||||
Title: President, Chief Executive Officer and Director |
/s/ Gary Teplis Gary Teplis | President, Chief Executive Officer and Director (Principal Executive Officer) | |||
* Farris Griggs | Chief Financial Officer (Principal Financial and Accounting Officer) | |||
* Gavin Isaacs | Chairman | |||
* Thomas Breitling | Vice Chairman | |||
* Sam Galeotos | Director | |||
* Hilton Sturisky | Director | |||
* Michel Taride | Director | |||
* By: /s/ Gary Teplis Attorney-in-Fact |