☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
☒ | QUARTERLY 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
2021
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 85-2320197 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
|
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Units, each consisting of one share of Class A Common Stock and one-half of one Redeemable Warrant | MUDSU | The Nasdaq Stock Market LLC | ||
Class A Common Stock, par value $0.0001 per share | MUDS | The Nasdaq Stock Market LLC | ||
Redeemable Warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50 | MUDSW | The Nasdaq Stock Market LLC |
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Large accelerated filer | ||||||
Accelerated filer | ☐ | |||||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
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As☐
2021
i
SEPTEMBER 30, 2020
(Unaudited)
ASSETS | ||||
Deferred offering costs | $ | 118,290 | ||
TOTAL ASSETS | $ | 118,290 | ||
LIABILITIES AND STOCKHOLDER’S EQUITY | ||||
Current liabilities | ||||
Accrued offering costs | $ | 2,000 | ||
Promissory notes — related party | 92,541 | |||
Total Current Liabilities | 94,541 | |||
Stockholder’s Equity | ||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding | — | |||
Class A common stock, $0.0001 par value; 100,000,000 shares authorized; none issued and outstanding | — | |||
Class B common stock, $0.0001 par value; 10,000,000 shares authorized; 7,906,250 shares issued and outstanding (1) | 791 | |||
Additional paid-in capital | 24,209 | |||
Accumulated deficit | (1,251 | ) | ||
Total Stockholder’s Equity | 23,749 | |||
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY | $ | 118,290 |
SHEETS
September 30, 2021 | December 31, 2020 | |||||||
(Unaudited) | (Revised) | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 184,877 | $ | 1,117,679 | ||||
Prepaid expenses | 125,401 | 167,708 | ||||||
Total Current Assets | 310,278 | 1,285,387 | ||||||
Investments held in Trust Account | 321,019,295 | 321,002,166 | ||||||
TOTAL ASSETS | $ | 321,329,573 | $ | 322,287,553 | ||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued expenses | $ | 4,996,335 | $ | 102,348 | ||||
Advance from related party | 480 | — | ||||||
Total Current Liabilities | 4,996,815 | 102,348 | ||||||
Warrant liabilities | 18,050,193 | 24,560,101 | ||||||
Deferred underwriting fee payable | 11,068,750 | 11,068,750 | ||||||
TOTAL LIABILITIES | 34,115,758 | 35,731,199 | ||||||
Commitments and Contingencies | 0 | 0 | ||||||
Class A common stock subject to possible redemption 31,625,000 shares at approximately $10.15 per share as of September 30, 2021 and December 31, 2020 | 320,993,750 | 320,993,750 | ||||||
Stockholders’ Deficit | ||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 0shares issued and outstanding | 0— | 0— | ||||||
Class A common stock, $0.0001 par value; 100,000,000 shares authorized | 0 | 0 | ||||||
Class B common stock, $0.0001 par value; 10,000,000 shares authorized; 7,906,250 shares issued and outstanding, as of September 30, 2021 and December 31, 2020, respectively | 791 | 791 | ||||||
Additional paid-in capital | 0 | 0 | ||||||
Accumulated deficit | (33,780,726 | ) | (34,438,187 | ) | ||||
Total Stockholders’ Deficit | (33,779,935 | ) | (34,437,396 | ) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | 321,329,573 | $ | 322,287,553 | ||||
FOR THE PERIOD FROM JULY 30, 2020 (INCEPTION) THROUGH SEPTEMBER 30, 2020
Three Months Ended September 30, 2021 | Nine Months Ended September 30, 2021 | For the Period from July 30, 2020 (inception) through September 30, 2020 | ||||||||||
General and administrative expenses | $ | 2,108,263 | $ | 5,904,684 | $ | 1,251 | ||||||
Loss from operations | (2,108,263 | ) | (5,904,684 | ) | (1,251 | ) | ||||||
Other income: | ||||||||||||
Interest earned on investments held in Trust Account | 17,658 | 52,237 | 0 | |||||||||
Change in fair value of warrant liabilities | 114,371,811 | 6,509,908 | 0 | |||||||||
Total other income | 114,389,469 | 6,562,145 | 0 | |||||||||
Net income (loss) | $ | 112,281,206 | $ | 657,461 | $ | (1,251 | ) | |||||
Weighted average shares outstanding, Class A common stock | 31,625,000 | 31,625,000 | 0 | |||||||||
Basic and diluted net income per share, Class A common stock | $ | 2.84 | $ | 0.02 | $ | 0 | ||||||
Weighted average shares outstanding, Class B common stock | 7,906,250 | 7,906,250 | 6,875,000 | |||||||||
Basic and diluted net income (loss) per share, Class B common stock | $ | 2.84 | 0.02 | $ | (0.00 | ) | ||||||
2
Class A Common Stock | Class B Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
Balance – January 1, 2021 | 0 | $ | 0 | 7,906,250 | $ | 791 | $ | 0 | $ | (34,438,187 | ) | $ | (34,437,396 | ) | ||||||||||||||
Net income | — | — | — | — | — | 4,272,514 | 4,272,514 | |||||||||||||||||||||
Balance – March 31, 2021 | 0 | $ | 0 | 7,906,250 | $ | 791 | $ | 0 | $ | (30,165,673 | ) | $ | (30,164,882 | ) | ||||||||||||||
Net loss | — | — | — | — | — | (115,896,259 | ) | (115,896,259 | ) | |||||||||||||||||||
Balance – June 30, 2021 | 0 | $ | 0 | 7,906,250 | $ | 791 | $ | 0 | $ | (146,061,932 | ) | $ | (146,061,141 | ) | ||||||||||||||
Net income | — | — | — | — | — | 112,281,206 | 112,281,206 | |||||||||||||||||||||
Balance – September 30, 2021 | 0 | $ | 0 | 7,906,250 | $ | 791 | $ | 0 | $ | (33,780,726 | ) | $ | (33,779,935 | ) | ||||||||||||||
(Unaudited)
Class B | Additional Paid-in | Accumulated | Total Stockholder’s | ||||||||||||||||||
Shares | Amount | Capital | Deficit | Equity | |||||||||||||||||
Balance — July 30, 2020 (inception) | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Issuance of Class B common stock to Sponsor(1) | 7,906,250 | 791 | 24,209 | — | 25,000 | ||||||||||||||||
Net loss | — | — | — | (1,251 | ) | (1,251 | ) | ||||||||||||||
Balance — September 30, 2020 | 7,906,250 | $ | 791 | $ | 24,209 | $ | (1,251 | ) | $ | 23,749 |
Class A Common Stock | Class B Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
Balance – July 30, 2020 (inception) | 0 | $ | 0 | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||
Issuance of Class B common stock to Sponsor | 0 | 0 | 7,906,250 | 791 | 24,209 | 0 | 25,000 | |||||||||||||||||||||
Net loss | — | — | — | — | — | (1,251 | ) | (1,251 | ) | |||||||||||||||||||
Balance – September 30, 2020 | 0 | $ | 0 | 7,906,250 | $ | 791 | $ | 24,209 | $ | (1,251 | ) | $ | 23,749 | |||||||||||||||
3
FOR THE PERIOD FROM JULY 30, 2020 (INCEPTION) THROUGH SEPTEMBER 30, 2020
Cash Flows from Operating Activities: | ||||
Net loss | $ | (1,251 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Payment of formation costs through promissory note – related party | 1,251 | |||
Net cash used in operating activities | — | |||
Net Change in Cash | — | |||
Cash – Beginning | — | |||
Cash – Ending | $ | — | ||
Supplemental disclosure of non-cash investing and financing activities: | ||||
Deferred offering costs included in accrued offering costs | $ | 2,000 | ||
Deferred offering costs paid through promissory note – related party | $ | 91,290 | ||
Deferred offering costs paid directly by Sponsor in exchange for the issuance of Class B common stock | $ | 25,000 |
Nine months Ended September 30, 2021 | For the Period from July 30, 2020 (Inception) Through September 30, 2020 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income (loss) | $ | 657,461 | $ | (1,251 | ) | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
Payment of formation costs through promissory note – related party | 1,251 | |||||||
Change in fair value of warrant liabilities | (6,509,908 | ) | — | |||||
Interest earned on investments held in Trust Account | (52,237 | ) | — | |||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | 42,307 | — | ||||||
Accounts payable and accrued expenses | 4,893,987 | — | ||||||
Net cash used in operating activities | (968,390 | ) | — | |||||
Cash Flows from Investing Activities: | ||||||||
Cash withdrawn from Trust Account to pay franchise and income taxes | 35,108 | — | ||||||
Net cash provided by investing activities | 35,108 | — | ||||||
Cash Flows from Financing Activities: | ||||||||
Advances from related party | 9,883 | — | ||||||
Repayment of advances from related party | (9,403 | ) | — | |||||
Net cash provided by financing activities | 480 | — | ||||||
Net Change in Cash | (932,802 | ) | — | |||||
Cash – Beginning of period | 1,117,679 | — | ||||||
Cash – End of period | $ | 184,877 | $ | — | ||||
Supplemental disclosure of non-cash investing and financing activities: | — | 2,000 | ||||||
Deferred offering costs included in accrued offering costs | — | 91,290 | ||||||
Deferred offering costs paid through promissory note – related party | — | 25,000 | ||||||
The Company has selected December 31 as its fiscal year end.
4.
5.
On December 14, 2020, the underwriters fully exercised their over-allotment option, resulting in an additional 4,125,000 Units issued for an aggregate amount of $41,250,000. In connection with the underwriters’ full exercise of their over-allotment option, the Company also consummated the sale of an additional 1,443,750 Private Placement Warrants at $1.00 per Private Placement Warrant, generating total proceeds of $1,443,750. A total of $41,868,750 was deposited into the Trust Account, bringing the aggregate proceeds held in the Trust Account to $320,993,750.
Transaction costs amounted to $17,874,801, consisting of $6,325,000 in cash underwriting fees, $11,068,750 of deferred underwriting fees and $481,051 of other offering costs. In addition, as of December 10, 2020, cash of $1,117,699 was held outside of the Trust Account (as defined below) and is available for the payment of offering costs and for working capital purposes.
Act.
6
Balance Sheet as of December 31, 2020 (audited) | As Previously Reported | Adjustment | As Revised | |||||||||
Class A common stock subject to possible redemption | $ | 281,556,345 | $ | 39,437,405 | $ | 320,993,750 | ||||||
Class A common stock | $ | 389 | $ | (389 | ) | $ | 0 | |||||
Additional paid-in capital | $ | 6,736,227 | $ | (6,736,227 | ) | $ | 0 | |||||
Accumulated deficit | $ | (1,737,398 | ) | $ | (32,700,789 | ) | $ | (34,438,187 | ) | |||
Total stockholders’ equity (deficit) | $ | 5,000,010 | $ | (39,437,405 | ) | $ | (34,437,395 | ) |
7
MUDRICK CAPITAL ACQUISITION CORPORATION II
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020 (Unaudited)
Deferred
Gross proceeds | $ | 316,250,000 | ||
Less: | ||||
Proceeds allocated to Public Warrants | $ | (12,036,716 | ) | |
Class A common stock issuance costs | (17,177,930 | ) | ||
Plus: | ||||
Accretion of carrying value to redemption value | $ | 33,958,396 | ||
Class A common stock subject to possible redemption | $ | 320,993,750 | ||
sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a
Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. As of September 30, 2021 and December 31, 2020, the Company had a deferred tax assets which had a full valuation allowance recorded against them.
The provision for income taxes was deemed to be de minimis for the period from July
2021
Three Months Ended September 30, 2021 | Nine Months Ended September 30, 2021 | For The Period From July 30, 2020 (inception) through September 30, 2020 | ||||||||||||||||||||||
Class A | Class B | Class A | Class B | Class A | Class B | |||||||||||||||||||
Basic and diluted net income (loss) per common shares | ||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||
Allocation of net income (loss), as adjusted | $ | 89,824,965 | $ | 22,456,241 | $ | 525,969 | $ | 131,492 | $ | 0 | $ | (1,251 | ) | |||||||||||
Denominator: | ||||||||||||||||||||||||
Basic and diluted weighted average shares outstanding | 31,625,000 | 7,906,250 | 31,625,000 | 7,906,250 | 0 | 7,906,250 | ||||||||||||||||||
Basic and diluted net income (loss) per common share | $ | 2.84 | $ | 2.84 | $ | 0.02 | $ | 0.02 | $ | 0 | $ | (0.00 | ) |
nature, except for the warrant liabilities (see Note 10).
MUDRICK CAPITAL ACQUISITION CORPORATION II
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020 (Unaudited)
Promissory Notes — Related Parties
On July For the three and nine months ended September 30, 2020, the Sponsor issued an unsecured promissory note to2021, the Company (the “Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal amount of $300,000. The Promissory Note is non-interest bearingincurred $30,000 and payable on the earlier of (i) March 31, 2021 or (ii) the consummation of the Initial Public Offering.$90,000 in fees for these services, respectively. As of September 30, 2021 and December 31, 2020, there was $92,541 outstanding under the Promissory Note. The outstanding balance under the Promissory Note$10,000 of $135,680 was repaid at the closing of the Initial Public Offering on December 10, 2020.
such fees included in accounts payable and accrued expenses.
MUDRICK CAPITAL ACQUISITION CORPORATION II
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020 (Unaudited)
and outstanding, which are subject to possible redemption and presented as temporary equity.
The shares of Class B common stock will automatically convert into Class A common stock at the time of a Business Combination on a one-for-one
MUDRICK CAPITAL ACQUISITION CORPORATION II
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020 (Unaudited)
The Company will not be obligated to deliver any shares of Class A common stock 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 shares of Class A common stock underlying the warrants is then effective and a current 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 shares of Class A common stock upon exercise of a warrant unless Class A common stock 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.
worthless.
Description | Level | Amortized Cost | Gross Holding Gain | Fair Value | ||||||||||||||
September 30, 2021 | Assets | |||||||||||||||||
Held-to-Maturity | 1 | $ | 321,018,310 | $ | 964 | $ | 321,019,274 | |||||||||||
Liabilities: | ||||||||||||||||||
Warrant Liability – Public Warrants | 1 | — | — | 9,329,375 | ||||||||||||||
Warrant Liability – Private Placement Warrants | 3 | — | — | 8,720,818 |
Description | Level | Amortized Cost | Gross Holding Loss | Fair Value | ||||||||||||||
December 31, 2020 | Assets | |||||||||||||||||
Held-to-Maturity | 1 | $ | 321,001,741 | $ | (18,297 | ) | $ | 320,983,444 | ||||||||||
Liabilities: | ||||||||||||||||||
Warrant Liability – Public Warrants | 1 | — | — | 12,573,343 | ||||||||||||||
Warrant Liability – Private Placement Warrants | 3 | — | — | 11,986,758 |
September 30, 2021 | December 31, 2020 | |||||||
Stock price | $ | 9.07 | $ | 6.87 | ||||
Strike price | $ | 11.50 | $ | 11.50 | ||||
Term (in years) | 5.0 | 5.0 | ||||||
Volatility | 10.0 | % | 40.0 | % | ||||
Risk-free rate | 1.09 | % | 0.57 | % | ||||
Dividend yield | 0.0 | % | 0.0 | % |
Private Placement | ||||
Fair value as of December 31, 2020 | $ | 11,986,758 | ||
Change in fair value | (3,265,940 | ) | ||
Fair value as of September 30, 2021 | $ | 8,720,818 | ||
general and administrative expenses.
As of September 30, 2020, we had no cash. Until the consummation of the Initial Public Offering, our only source of liquidity was an initial purchase of common stock by the Sponsor and loans from our Sponsor.
Subsequent to the quarterly period covered by this Quarterly Report, onGoing Concern
the carrying amounts of assets or liabilities should the Company be required to liquidate after December 10, 2022.
2021. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating
Pursuant to a registration rights agreement entered into on December 7, 2020, the holders of the Founder Shares, Private Placement Warrants and securities that may be issued upon conversion of Working Capital Loans will be entitled to registration rights require us to register a sale of any of the securities held by them pursuant to a registration rights agreement. The holders of the majority of these securities will be entitled to make up to three demands, excluding short form registration demands, that we register such securities for sale under the Securities Act. In addition, these holders will have certain “piggy-back” registration rights to include their securities in other registration statements filed by us, subject to certain limitations. Notwithstanding the foregoing, Jefferies may not exercise its demand and “piggyback” registration rights after five (5) and seven (7) years, respectively, after the Initial Public Offering and may not exercise its demand rights on more than one occasion. We will bear the expenses incurred in connection with the filing of any such registration statements.
policies:
Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended September 30, 2020, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial and accounting officer have concluded that during the period covered by this report, our disclosure controls and procedures were effective at a reasonable assurance level and, accordingly, provided reasonable assurance that the information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
July 30, 2021.
On December 10, 2020, we consummated the Initial Public Offering of 27,500,000 Units. On December 14, 2020, in connection with the underwriters’ election to fully exercise their over-allotment option, we sold an additional 4,125,000 Units. The Units sold in the Initial Public Offering and the full exercise of over-allotment option sold at an offering price of $10.00 per Unit, generating total gross proceeds of $316,250,000. Jefferies LLC acted as sole book-running manager. The securities in the offering were registered under the Securities Act on a registration statement on Form S-1 (No. 333-249402 and 333-251188). The Securities and Exchange Commission declared the registration statement effective on December 7, 2020.
Simultaneous with the consummation of the Initial Public Offering and the full exercise of the over-allotment option, we consummated the private placement of an aggregate of 12,818,750 warrants at a price of $1.00 per Private Placement Warrant, generating total proceed of $12,818,750. 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 30 days after the completion of a Business Combination, subject to certain limited exceptions.
Of the gross proceeds received from the Initial Public Offering including the over-allotment option, and the Private Placement Warrants, $320,993,750 was placed in the Trust Account.
We paid a total of $6,325,000 in underwriting discounts and commissions and $481,051 for other offering costs related to the Initial Public Offering. In addition, the underwriters agreed to defer $11,068,750 in underwriting discounts and commissions.
* | Filed herewith. |
** | Furnished. |
16
MUDRICK CAPITAL ACQUISITION CORPORATION II | ||||||
Date: | By: | /s/ Jason Mudrick | ||||
Name: | Jason Mudrick | |||||
Title: | Chief Executive Officer and Chairman | |||||
(Principal Executive Officer) | ||||||
Date: | By: | /s/ Glenn Springer | ||||
Name: | Glenn Springer | |||||
Title: | Chief Financial Officer | |||||
(Principal Accounting and Financial Officer) |