☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Cayman Islands | 98-1554335 | |||
(State or other jurisdiction of
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123 E San Carlos Street, Suite 12 San Jose, California | 95112 | |||
(Address of principal executive offices) | (Zip Code) |
code)code: (650) 825-6965 Symbol(s) share of Class A ordinary shares, and one Warrant to acquire one-thirdClass A ordinary share share,shares, par value $0.0001 per share
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||||
Emerging growth company | ☒ |
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SEPTEMBER 30, 2020
Assets | ||||
Current assets: | ||||
Cash | $ | 2,563,468 | ||
Prepaid expenses | 410,350 | |||
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Total current assets | 2,973,818 | |||
Investments held in Trust Account | 299,998,798 | |||
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Total Assets | $ | 302,972,616 | ||
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Liabilities and Shareholders’ Equity | ||||
Current liabilities: | ||||
Accounts payable | $ | 526,857 | ||
Accrued expenses | 77,300 | |||
Advance - related party | 900,000 | |||
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Total current liabilities | 1,504,157 | |||
Deferred underwriting commissions | 10,500,000 | |||
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Total liabilities | 12,004,157 | |||
Commitments and Contingencies | ||||
Class A ordinary shares; 28,596,845 shares subject to possible redemption at $10.00 per share | 285,968,450 | |||
Shareholders’ Equity: | ||||
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding | — | |||
Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; 1,403,155 shares issued and outstanding (excluding 28,596,845 shares subject to possible redemption) | 140 | |||
Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 8,625,000 shares issued and outstanding (1) | 863 | |||
Additional paid-in capital | 5,060,460 | |||
Accumulated deficit | (61,454 | ) | ||
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Total shareholders’ equity | 5,000,009 | |||
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Total Liabilities and Shareholders’ Equity | $ | 302,972,616 | ||
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SHEETS
March 31, 2022 | December 31, 2021 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash | $ | 626,428 | $ | 665,940 | ||||
Prepaid expenses | 73,750 | 110,626 | ||||||
Total current assets | 700,178 | 776,566 | ||||||
Investments held in Trust Account | 324,242,004 | 324,211,180 | ||||||
Total Assets | $ | 324,942,182 | $ | 324,987,746 | ||||
Liabilities, Class A Ordinary Shares Subject to Redemption and Shareholders’ Deficit | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 488,099 | $ | 327,477 | ||||
Accrued expenses | 215,936 | 159,535 | ||||||
Total current liabilities | 704,035 | 487,012 | ||||||
Derivative warrant liabilities | 3,965,742 | 8,922,920 | ||||||
Deferred underwriting commissions | 11,342,945 | 11,342,945 | ||||||
Total Liabilities | 16,012,722 | 20,752,877 | ||||||
Commitments and Contingencies | 0 | 0 | ||||||
Class A ordinary shares subject to possible redemption, $0.0001 par value; 32,408,414 shares issued and outstanding at $10.00 per share at redemption as of March 31, 2022 and December 31, 2021 | 324,142,004 | 324,084,140 | ||||||
Shareholders’ Deficit: | ||||||||
Preference shares, $0.0001 par value; 1,000,000 shares authorized; 0 shares issued or outstanding | 0— | 0— | ||||||
Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; 0 non-redeemable shares issued or outstanding | 0 | 0 | ||||||
Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 8,102,103 shares issued and outstanding as of March 31, 2022 and December 31, 2021 | 810 | 810 | ||||||
Additional paid-in capital | 0 | 0 | ||||||
Accumulated deficit | (15,213,354 | ) | (19,850,081 | ) | ||||
Total Shareholders’ Deficit | (15,212,544 | ) | (19,849,271 | ) | ||||
Total Liabilities, Class A Ordinary Shares Subject to Redemption and Shareholders’ Deficit | $ | 324,942,182 | $ | 324,987,746 | ||||
1
FOR THE PERIOD FROM JULY 21, 2020 (INCEPTION) THROUGH SEPTEMBER 30, 2020
For the Period From July 21, 2020 (Inception) through September 30, 2020 | ||||
General and administrative expenses | $ | 50,264 | ||
Administrative expenses - related party | 10,000 | |||
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Loss from operations | (60,264 | ) | ||
Interest income | 12 | |||
Net loss from investments held in Trust Account | (1,202 | ) | ||
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Net loss | (61,454 | ) | ||
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Weighted average Class A ordinary shares outstanding, basic and diluted | 30,000,000 | |||
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Basic and diluted net loss per ordinary share | $ | 0.00 | ||
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Weighted average Class B ordinary shares outstanding, basic and diluted (1) | 8,102,103 | |||
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Basic and diluted net loss per ordinary share | $ | (0.01 | ) | |
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For the Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
General and administrative expenses | $ | 263,428 | $ | 491,586 | ||||
Administrative expenses - related party | 30,000 | 30,000 | ||||||
Loss from operations | (293,428 | ) | (521,586 | ) | ||||
Other income (expense) | ||||||||
Change in fair value of derivative warrant liabilities | 4,957,178 | 12,018,044 | ||||||
Interest income | 17 | 46 | ||||||
Income from investments held in Trust Account | 30,824 | 17,733 | ||||||
Net income | $ | 4,694,591 | $ | 11,514,237 | ||||
Deemed dividend - increase in redemption value of Class A ordinary shares subject to redemption | (57,864 | ) | 0 | |||||
Net income available to ordinary shareholders | $ | 4,636,727 | $ | 11,514,237 | ||||
Weighted average Class A ordinary shares outstanding, basic and diluted | 32,408,414 | 32,408,414 | ||||||
Basic and diluted net income per Class A ordinary share | $ | 0.11 | $ | 0.28 | ||||
Weighted average Class B ordinary shares outstanding, basic and diluted | 8,102,103 | 8,102,103 | ||||||
Basic and diluted net income per Class B ordinary share | $ | 0.11 | $ | 0.28 | ||||
2
DEFICIT
Ordinary Shares | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders’ Equity | |||||||||||||||||||||||||
Class A | Class B | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance - July 21, 2020 (inception) | — | $ | — | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Issuance of Class B ordinary shares to Sponsor (1) | — | — | 8,625,000 | 863 | 24,137 | — | 25,000 | |||||||||||||||||||||
Sale of units in initial public offering, gross | 30,000,000 | 3,000 | — | — | 299,997,000 | — | 300,000,000 | |||||||||||||||||||||
Offering costs | — | — | — | — | (17,095,087 | ) | — | (17,095,087 | ) | |||||||||||||||||||
Sale of private placement warrants to Sponsor | — | — | — | — | 8,100,000 | — | 8,100,000 | |||||||||||||||||||||
Shares subject to possible redemption | (28,596,845 | ) | (2,860 | ) | — | — | (285,965,590 | ) | — | (285,968,450 | ) | |||||||||||||||||
Net loss | — | — | — | — | — | (61,454 | ) | (61,454 | ) | |||||||||||||||||||
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Balance - September 30, 2020 (unaudited) | 1,403,155 | $ | 140 | 8,625,000 | $ | 863 | $ | 5,060,460 | $ | (61,454 | ) | $ | 5,000,009 | |||||||||||||||
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THREE MONTHS ENDED MARCH 31, 2022
Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||
Class A | Class B | Paid-in | Accumulated | Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
Balance - December 31, 2021 | 0 | $ | 0 | 8,102,103 | $ | 810 | $ | 0 | $ | (19,850,081 | ) | $ | (19,849,271 | ) | ||||||||||||||
Net income | — | 0 | — | 0 | 0 | 4,694,591 | 4,694,591 | |||||||||||||||||||||
Deemed dividend - increase in redemption value of Class A ordinary shares subject to redemption | — | — | — | — | — | (57,864 | ) | (57,864 | ) | |||||||||||||||||||
Balance - March 31, 2022 | 0 | $ | 0 | 8,102,103 | $ | 810 | $ | 0 | $ | (15,213,354 | ) | $ | (15,212,544 | ) | ||||||||||||||
Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||
Class A | Class B | Paid-in | Accumulated | Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
Balance - December 31, 2020 | 0 | $ | 0 | 8,102,103 | $ | 810 | $ | 0 | $ | (35,618,082 | ) | $ | (35,617,272 | ) | ||||||||||||||
Net income | — | 0 | — | 0 | 0 | 11,514,237 | 11,514,237 | |||||||||||||||||||||
Balance - March 31, 2021 | 0 | $ | 0 | 8,102,103 | $ | 810 | $ | 0 | $ | (24,103,845 | ) | $ | (24,103,035 | ) | ||||||||||||||
3
FOR THE PERIOD FROM JULY 21, 2020 (INCEPTION) THROUGH SEPTEMBER 30, 2020
Cash Flows from Operating Activities: | ||||
Net loss | $ | (61,454 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
General and administrative expenses paid by Sponsor in exchange for issuance of Class B ordinary shares | 25,000 | |||
General and administrative expenses paid by Sponsor under note payable | 100 | |||
Net loss from investments held in Trust Account | 1,202 | |||
Changes in operating assets and liabilities: | ||||
Prepaid expenses | (410,350 | ) | ||
Accounts payable | 416,324 | |||
Accrued expenses | 2,300 | |||
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Net cash used in operating activities | (26,878 | ) | ||
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Cash Flows from Investing Activities: | ||||
Cash deposited in Trust Account | (300,000,000 | ) | ||
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Net cash used in investing activities | (300,000,000 | ) | ||
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Cash Flows from Financing Activities: | ||||
Advance - related party | 900,000 | |||
Repayment of note payable to Sponsor | (98,301 | ) | ||
Proceeds received from initial public offering, gross | 300,000,000 | |||
Proceeds received from private placement | 8,100,000 | |||
Offering costs paid | (6,311,353 | ) | ||
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Net cash provided by financing activities | 302,590,346 | |||
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Net increase in cash | 2,563,468 | |||
Cash - beginning of the period | — | |||
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Cash - ending of the period | $ | 2,563,468 | ||
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Supplemental disclosure of noncash investing and financing activities: | ||||
Offering costs included in accounts payable | $ | 110,533 | ||
Offering costs included in accrued expenses | $ | 75,000 | ||
Offering costs included in note payable | $ | 98,201 | ||
Deferred underwriting commissions | $ | 10,500,000 | ||
Initial value of Class A ordinary shares subject to possible redemption | $ | 286,032,440 | ||
Change in initial value of Class A ordinary shares subject to possible redemption | $ | 63,990 |
For the Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income | $ | 4,694,591 | $ | 11,514,237 | ||||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
Change in fair value of derivative warrant liabilities | (4,957,178 | ) | (12,018,044 | ) | ||||
Income from investments held in Trust Account | (30,824 | ) | (17,733 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | 36,876 | 73,098 | ||||||
Accounts payable | 160,622 | 369,533 | ||||||
Accrued expenses | 56,401 | 30,000 | ||||||
Net cash used in operating activities | (39,512 | ) | (48,909 | ) | ||||
Net change in cash | (39,512 | ) | (48,909 | ) | ||||
Cash - beginning of the period | 665,940 | 1,600,255 | ||||||
Cash - end of the period | $ | 626,428 | $ | 1,551,346 | ||||
Supplemental disclosure of noncash investing and financing activities: | ||||||||
Remeasurement on Class A ordinary shares subject to possible redemption | $ | (57,864 | ) | $ | 0 |
4
5
will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act.
6
distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the board of directors, liquidate and dissolve, subject, in the case of clauses (ii) and (iii), to the Company’s obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law.
and Summary of Significant Accounting Policies
2022 or any future period.
14, 2022. The Company believes that the funds currently available to it outside of the Trust Account will be sufficient to allow it to operate until September 14, 2022; however, there can be no assurances that this estimate is accurate.
7
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.
This may make comparison of the Company’s condensed financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Risk and Uncertainties
On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because
and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.
Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that the specific impact is not readily determinable as of the date of the balance sheet. The financial statements does not include any adjustments that might result from the outcome of this uncertainty.
Note 2—Summary of Significant Accounting Policies
statements. 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 condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. One of the more significant accounting estimates included in these condensed financial statements is the determination of the fair value of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. Measurements 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: price of such warrants. sheets. U.S. 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 condensed financial statements and the reported amounts of expenses during the reported period.Investment Securities As of March 31, 2022 and December 31, 2021, there were no cash equivalents held outside of the Trust Account. solely of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government securities and generally have a readily determinable fair value, or a combination thereof. Thesheetsheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities is included in net gain or loss onincome from investments held in Trust Account in the accompanying unaudited condensed statementstatements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information.Concentration of Credit RiskFinancial 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 Depository Insurance Coverage of $250,000, and investments held in Trust Account. At September 30, 2020, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.of Financial InstrumentsU.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.9AsSeptember 30, 2020,its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, iscarrying valuesend of cash, accounts payable, accrued expenseseach reporting period. Derivative warrant liabilities are classified asnote payable – related party approximate theirthe Private Placement Warrants are recognized as derivative liabilities in accordance with ASC 815. Accordingly, the Company recognizes the warrant instruments as liabilities at fair values duevalue and adjusts the instruments to the short-term nature of the instruments.fair value at each reporting period. The Company’s portfolio of investments heldliabilities are subject toTrust Account is comprisedCompany’s unaudited condensed statements of investments in U.S. Treasury securities with an original maturity of 185 days or less or investments in money market funds that invest in U.S. government securities, or a combination thereof.operations. The fair value for trading securities is determinedof the Public Warrants issued in connection with the Public Offering and Private Placement Warrants were initially measured at fair value using quoteda Monte Carlo simulation model and subsequently, the fair value of the Private Placement Warrants have been estimated using a Monte Carlo simulation model each measurement date. The fair value of Public Warrants issued in connection with the Initial Public Offering have subsequently been measured based on the listed market prices in active markets.feescommissions and other costs incurred that were directly related to the Initial Public Offering. Offering and thatcosts are 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 are expensed as incurred, presented as non-operating expenses in the unaudited condensed statements of operations. Offering costs associated with the Public Shares were charged against the carrying value of the Class A ordinary shares subject to shareholders’ equitypossible redemption upon the completion of the Initial Public Offering.Topic 480 “Distinguishing Liabilities from Equity.”480. Class A ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A 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, Class A 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 the occurrence of uncertain future events. Accordingly, at September 30, 2020, 28,596,845as of March 31, 2022 and December 31, 2021, an aggregate of 32,408,414 Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ equitydeficit section of the Company’s unaudited condensed balance sheet.
10
The Company’s unaudited condensed statement of operations includes As a presentation ofresult, diluted net income per share is the same as basic net income per share for ordinary shares subject to redemption in a manner similar to the two-class method of income per share. Net loss per ordinary share, basicthree months ended March 31, 2022 and diluted for2021. The initial accretion associated with the redeemable Class A ordinary shares are calculated by dividingis excluded from earnings per share as the loss recognized on investments held in the Trust Account by the weighted average numberredemption value approximates fair value. Subsequent periods accretion of Class A ordinary shares outstanding forsubject to possible redemption is recognized as a deemed dividend to shareholders in the period. Net losscalculation of the net income per ordinary share,share.
For the Three Months Ended March 31, | ||||||||||||||||
2022 | 2021 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net income per ordinary share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income available to ordinary shareholders | $ | 3,709,382 | $ | 927,345 | $ | 9,211,390 | $ | 2,302,847 | ||||||||
Denominator: | ||||||||||||||||
Basic and diluted weighted average ordinary shares outstanding | 32,408,414 | 8,102,103 | 32,408,414 | 8,102,103 | ||||||||||||
Basic and diluted net income per common share | $ | 0.11 | $ | 0.11 | $ | 0.28 | $ | 0.28 | ||||||||
11
On July 23, 2020, the Sponsor had agreed to loan the Company up to $300,000 to be used for the payment of costs related to the Initial Public Offering pursuant to a promissory note (the “Note”). The Note was non-interest bearing, unsecured and due upon the closing of the Initial Public Offering. The Company had borrowed approximately $98,000 under the Note and repaid the balance owed under the on September 16, 2020.
The Company received extra funding of $900,000 to purchase up to 600,000 Private Placement Warrants if the over-allotment option is exercised in full.
12
liquidation, the Company will pay the Sponsor $10,000 per month for office space, secretarial and administrative services. The Company incurred $10,000$30,000 and $30,000
sheets.
Units.
Class A Ordinary Shares—The
Class B Ordinary Shares—The Company is authorized to issue 20,000,000 Class B ordinary shares with a par value of $0.0001 per share. On September 30, 2020, 8,625,000 Class B ordinary shares were issued and outstanding includinghad an aggregate of up to 1,125,000 Class B ordinary shares that are subject to forfeiture, to the Company by the Initial Shareholders for no consideration to the extent that the underwriters’ over-allotment option is not exercised in full or in part, so that the Initial Shareholders will collectively own 20%16,523,926 warrants outstanding, comprised of the Company’s issued10,802,804 Public Warrants and outstanding ordinary shares after the Initial Public Offering. On October 24, 2022 (the 45th day follow the Underwriting Agreement), 522,897 Class B ordinary shares were forfeited.
13
Ordinary shareholders of record are entitled to one vote for each share held on all matters to be voted on by shareholders. Except as described below, holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the shareholders except as required by law.
The Class B ordinary shares will automatically convert into Class A ordinary shares immediately upon the consummation of the initial Business Combination at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of the Initial Public Offering, plus (ii) the sum of 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 the initial Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial Business Combination and any5,721,122 Private Placement Warrants issued to the Sponsor, members of the Company’s founding team or any of their affiliates upon conversion of Working Capital Loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one to one.
Preference Shares—The Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001 per share. At September 30, 2020, there were no preference shares issued or outstanding.
Warrants—Warrants.
14
Business Combination (net of redemptions), and (z) the volume-weighted average trading price of the ordinary shares during the 20 trading day period starting on the trading day after the day on which the Company consummates its initial 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 $10.00 and 18.00 per share redemption trigger prices described below under “Redemption of warrants when the price per Class A ordinary share equal or exceed $10.00” and “Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00” will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the Market Value and the Newly Issued Price, respectively.
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15
In no event will the Company be required to net cash settle any warrant.
March 31, 2022 | December 31, 2021 | |||||||
Gross proceeds | $ | 324,084,140 | $ | 324,084,140 | ||||
Less: | ||||||||
Amount allocated to Public Warrants | (12,955,337 | ) | (12,955,337 | ) | ||||
Class A ordinary shares issuance costs | (17,680,825 | ) | (17,680,825 | ) | ||||
Plus: | ||||||||
Accretion of carrying value to redemption value | 30,694,026 | 30,636,162 | ||||||
Class A ordinary shares subject to possible redemption | $ | 324,142,004 | $ | 324,084,140 | ||||
Quoted Prices in Active Markets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | ||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | |||||||||
Assets held in Trust Account: | ||||||||||||
U.S. Treasury Securities | $ | 299,992,977 | $ | — | $ | — | ||||||
Cash equivalents – money market funds | 5,082 | — | — | |||||||||
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$ | 299,998,798 | $ | — | $ | — | |||||||
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hierarchy:
As of March 31, 2022 | ||||||||||||
Description | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||
Assets: | ||||||||||||
Investments held in Trust Account | $ | 324,242,004 | $ | 0 | $ | 0 | ||||||
Liabilities: | ||||||||||||
Derivative warrant liabilities-Public warrants | $ | 2,592,673 | $ | 0 | $ | 0 | ||||||
Derivative warrant liabilities-Private placement warrants | $ | 0 | $ | 0 | $ | 1,373,069 |
As of December 31, 2021 | ||||||||||||
Description | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||
Assets: | ||||||||||||
Investments held in Trust Account | $ | 324,211,180 | $ | 0 | $ | 0 | ||||||
Liabilities: | ||||||||||||
Derivative warrant liabilities-Public warrants | $ | 5,833,514 | $ | 0 | $ | 0 | ||||||
Derivative warrant liabilities-Private placement warrants | $ | 0 | $ | 0 | $ | 3,089,406 |
hierarchy during the three-month periods ending March 31, 2022 and 2021.
Class A ordinary shares warrants based on implied volatility from the Company’s traded warrants and from historical volatility of select peer company’s Class A ordinary shares that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury
March 31, 2022 | December 31, 2021 | |||||||
Exercise price | $ | 11.50 | $ | 11.50 | ||||
Stock price | $ | 9.89 | $ | 9.84 | ||||
Volatility | 3.6 | % | 9.3 | % | ||||
Term | 5.46 | 5.58 | ||||||
Risk-free rate | 2.39 | % | 1.30 | % | ||||
Dividend yield | 0.0 | % | 0.0 | % |
2022 | 2021 | |||||||
Level 3 derivative warrant liabilities at January 1, | $ | 3,089,406 | $ | 9,096,584 | ||||
Change in fair value of derivative warrant liabilities | (1,716,337 | ) | (4,348,053 | ) | ||||
Level 3 derivative warrant liabilities at March 31, | $ | 1,373,069 | $ | 4,748,531 | ||||
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Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Our The registration statement for ourthe initial public offering (the “Initial Public Offering”) was declared effective on September 9, 2020.2020 (the “Initial Public Offering”). On September 14, 2020, we consummated the Initial Public Offering of 30,000,000 units (the(each, a “Unit” and collectively, the “Units” and, with respect to the Class A ordinary shares included in the Units, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $300.0 million, and incurring offering costs of approximately $17.1 million, inclusive of approximately $10.5 million in deferred underwriting commissions. The underwriters were granted a
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Company Act of 1940, as amended, or the Investment Company Act, having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule Upon closing
Account (net of amounts disbursed to management for working capital purposes, if permitted, and excluding the amount of any deferred underwriting discount) at the time we sign a definitive agreement in connection with the initial Business Combination. However, we will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act.
the Initial Public Offering.
Liquidityaccount, partially offset by approximately $492,000 in general and Capital Resources
As of September 30, 2020, we had approximately $2.6 millionadministrative expenses and $30,000 in our operating bank account, working capital of approximately $1.5 million, and no interest income available in the Trust Account to pay for our tax obligations, if any.
Prior to the completion of the Initial Public Offering, our liquidity needs had been satisfied through the payment of $25,000 from our Sponsor to cover certainadministrative expenses in exchange for the issuance of the Founder Shares, a loan of approximately $98,000 pursuant to a note agreement issued to our Sponsor (the “Note”). We repaid the Note in full on September 16, 2020. Subsequent to the consummation of the Initial Public Offering and Private Placement, our liquidity needs have been satisfied with the proceeds from the consummation of the Private Placement not held in the Trust Account. In addition, in order to finance transaction costs in connection with a Business Combination, our Sponsor may, but is not obligated to, provide us Working Capital Loans. As of September 30, 2020, there were no amounts outstanding under any Working Capital Loan.
Based on the foregoing, management believes that we will have sufficient working capital and borrowing capacity from our Sponsor or an affiliate of our Sponsor, or our officers and directors to meet our needs through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, we will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.
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We continue to evaluate the impact of the COVID-19 pandemic and has concluded that the specific impact is not readily determinable as of the date of the balance sheet. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
underwriting discounts and commissions of 5.5%, of which 2.0% (approximately $6.5 million) was paid at the closing of the Initial Public Offering and closing of sale of the Over-Allotment Units and 3.5% (approximately $11.3 million) was deferred. The deferred underwriting discounts and commissions will become payable to the underwriters upon the consummation of the Initial Business Combination and will be paid from the amounts held in the Trust Account. The underwriters are not entitled to any interest accrued on the deferred underwriting discounts and commissions.
This management’s discussion and analysis
Class A Ordinary Shares Subject to Possible Redemption
Class A ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A ordinary shares that feature redemption rights that are either withinpolicies during 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, Class A ordinary shares are classified as shareholders’ equity. Our Class A ordinary shares feature certain redemption rights that are considered to be outside of our control and subjectthree months ended March 31, 2022.
Net Income Per Ordinary Share
Net income per share is computed by dividing net income by the weighted-average number of ordinary shares outstanding during the periods. We have not considered the effect of the warrants sold in the Initial Public Offering and the Private Placement to purchase an aggregate of 15,400,000 of the Company’s Class A ordinary shares in the calculation of diluted income per share, since their inclusion would be anti-dilutive under the treasury stock method.
Our unaudited condensed statementfinancial statements included in Part I, Item 1 of operations includesthis Quarterly Report for a presentationdiscussion of income per share for ordinary shares subject to redemption in a manner similar to the two-class method of income per share. Net loss per ordinary share, basic and diluted for Class A ordinary shares are calculated by dividing the loss recognized on investments held in the Trust Account by the weighted average number of Class A ordinary shares outstanding for the period. Net loss per ordinary share, basic and diluted for Class B ordinary shares is calculated by dividing the net loss, less loss attributable to Class A ordinary shares by the weighted average number of Class B ordinary shares outstanding for the period.
Recent Accounting Pronouncements
Our management does not believe that any recently issued, but not yet effective,recent accounting standards if currently adopted would have a material effect on the accompanying financial statements.
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Off-Balance Sheet Arrangements
As of September 30, 2020, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
not effective as of March 31, 2022, because of a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Specifically, the Company’s management has concluded that our internal controls around the interpretation and accounting for certain equity and equity-linked instruments issued by the Company was not effectively designed or maintained. This material weakness resulted in the restatement of the Company’s balance sheet as of September 14, 2020, its annual financial statements for the period ended December 31, 2020 and its interim financial statements for the quarters ended September 30, 2020, March 31, 2021 and June 30, 2021. Additionally, this material weakness could result in a misstatement of the carrying value of equity, equity-linked instruments and related accounts and disclosures that would result in a material misstatement of the financial statements that would not be prevented or detected on a timely basis. As a result, our management performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with generally accepted in the United States of America. Accordingly, management believes that the financial statements included in this Quarterly Report on Form 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,March 31, 2022, as such term is defined in Ruleschiefprincipal executive officer and chiefprincipal financial officer havehas concluded that during the period covered by this report, our disclosure controls and procedures were effective.by us in our reports filed or submitted under the Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms,forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our principalchief executive officer and principalchief financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.period from July 21, 2020 (inception) through September 30, 2020,fiscal quarter ended March 31, 2022 covered by this Quarterly Report on Form20
Item 1. | Legal Proceedings |
None.
Item 1A. | Risk Factors. |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities |
On July 23, 2020, the Sponsor paid an aggregate of $25,000 for certain expenses on behalf of the Company in exchange for issuance of 8,625,000 Class B ordinary shares (the “Founder Shares”). The holders of the Founder Shares have agreed to forfeit up to an aggregate of 1,125,000 Founder Shares, on a pro rata basis, to the extent that the option to purchase additional units is not exercised in full by the underwriters, so that the Founder Shares will represent 20% of the Company’s issued and outstanding shares after the Initial Public Offering. On September 3, 2020, the Sponsor transferred 20,000 Founder Shares to each of Cathleen Benko, Roger Crockett, Dixon Doll, Keyur Patel and Joanna Strober.
On September 9, 2020, Prime Impact Acquisition I (the “Company”) entered into an Underwriting Agreement (the “Underwriting Agreement”) with Goldman Sachs & Co. LLC and BofA Securities, Inc. (the “Underwriters”), pursuant to which the Company agreed to issue and sell 30,000,000 units (the “Units”), with each Unit consisting of one Class A ordinary share, $0.0001 par value per share (the “Class A Ordinary Shares”), and one-third of one redeemable warrant (the “Public Warrants”), each whole Public Warrant entitling the holder thereof to purchase one Class A Ordinary Share at an exercise price of $11.50 per share, subject to adjustment, to the Underwriters in its initial public offering (“IPO”). On September 14, 2020, the Company consummated the IPO. Pursuant to the Underwriting Agreement, the Company also granted the Underwriters a 45-day option from the date of the Underwriting Agreement to purchase up to 4,500,000 additional Units to cover over-allotments, if any (the “Over-allotment Option”). On October 2, 2020, the Underwriters partially exercised the Over-allotment Option to purchase as additional 2,408,414 units (the “Option Units”). Each Option Unit consists of one Class A Ordinary Share and one-third of one Public Warrant. On October 6, 2020, the Company completed the sale of the Option Units to Underwriters for net proceeds of approximately $23,602,457 in the aggregate after deducting the underwriter discount (the “Option Unit Proceeds”). As thus, on October 24, 2022 (the 45th day follow the Underwriting Agreement), 522,897 Class B ordinary shares were forfeited.
Simultaneously with the issuance and sale of the Option Units, the Company consummated the private placement with Prime Impact Cayman, LLC (the “Sponsor”) of 321,122 warrants to purchase Class A Ordinary Shares for $1.50 per warrant in a private placement with each whole warrant entitling the holder thereof to purchase one Class A Ordinary Share at $11.50 per share, subject to adjustment (the “Additional Private Placement Warrants”), generating total proceeds of $481,683 (the “Private Placement Proceeds” and, together with the “Option Unit Proceeds”, the “Proceeds”). The Additional Private Placement Warrants have been issued pursuant to that certain Private Placement Warrant Purchase Agreement, dated September 9, 2020, between the Company and the Sponsor and the Additional Private Placement Warrants are governed by that certain Warrant Agreement, dated September 9, 2020, between the Company and Continental Stock Transfer & Trust Company, as warrant agent.
The Proceeds were placed in a U.S.-based trust account at J.P. Morgan Chase Bank, N.A., maintained by Continental Stock Transfer & Trust Company, acting as trustee. Except with respect to interest earned on the funds in the trust account that may be released to the Company to pay its income taxes, if any, the Proceeds held in the trust account will not be released from the trust account (1) to the Company until the completion of its initial business combination, or (2) to the Company’s public shareholders, until the earliest of: (a) the completion of the Company’s initial business combination, and then only in connection with those Class A Ordinary Shares that such shareholders properly elect to redeem, subject to certain limitations, (b) the redemption of any public shares properly tendered in
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connection with a (i) shareholder vote to amend the Company’s amended and restated memorandum and articles of association to modify the substance or timing of its obligation to provide holders of its Class A Ordinary Shares the right to have their shares redeemed in connection with its initial business combination within 24 months from the closing of the IPO or (ii) with respect to any other provisions relating to shareholders’ rights of holders of the Company’s Class A Ordinary Shares or pre-initial business combination activity and (c) the redemption of all of the Company’s public shares if the Company has not completed its initial business combination within 24 months from the closing of the IPO, subject to applicable law.
Item 3. | Defaults Upon Senior Securities |
Item 4. | Mine Safety Disclosures |
Item 5. | Other Information |
Item 6. |
Exhibits |
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* | These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. |
SIGNATURES
Dated: | PRIME IMPACT ACQUISITION I | |||||||
By: | /s/ Michael Cordano | |||||||
Name: | Michael Cordano | |||||||
Title: |
| |||||||
(Principal Executive Officer) | ||||||||
By: | /s/ Mark Long | |||||||
Name: | Mark Long | |||||||
Title: |
| |||||||
(Principal Financial and Accounting Officer) |