☒ | QUARTERLY 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 |
TM
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
Statements
SEPTEMBER 30, 2020
Assets: | ||||
Current assets: | ||||
Cash | $ | 1,446,374 | ||
Prepaid expenses | 511,392 | |||
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Total current assets | 1,957,766 | |||
Cash equivalents held in Trust Account | 414,001,134 | |||
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Total assets | $ | 415,958,900 | ||
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Liabilities and Stockholders’ Equity: | ||||
Current liabilities: | ||||
Accounts payable | $ | 520,730 | ||
Accrued expenses | 94,536 | |||
Franchise tax payable | 54,297 | |||
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Total current liabilities | 669,563 | |||
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Commitments and Contingencies | ||||
Class A common stock; 16,411,573 shares subject to possible redemption at $25.00 per share | 410,289,325 | |||
Stockholders’ Equity: | ||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding | — | |||
Class A common stock, $0.0001 par value; 380,000,000 shares authorized; 394,027 shares issued and outstanding (excluding 16,411,573 shares subject to possible redemption) | 39 | |||
Class B common stock, $0.0001 par value; 1,000,000 shares authorized; 120,000 shares issued and outstanding | 12 | |||
Class F common stock, $0.0001 par value; 50,000,000 shares authorized; 828,000 shares issued and outstanding | 83 | |||
Additional paid-in capital | 5,105,347 | |||
Accumulated deficit | (105,469 | ) | ||
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Total stockholders’ equity | 5,000,012 | |||
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Total Liabilities and Stockholders’ Equity | $ | 415,958,900 | ||
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SHEETS
June 30, 2021 | December 31, 2020 | |||||||
(Unaudited) | ||||||||
Assets: | ||||||||
Current assets: | ||||||||
Cash | $ | 371,039 | $ | 888,097 | ||||
Prepaid expenses | 325,730 | 440,771 | ||||||
Total current assets | 696,769 | 1,328,868 | ||||||
Investments held in Trust Account | 414,032,104 | 414,011,571 | ||||||
Total Assets | $ | 414,728,873 | $ | 415,340,439 | ||||
Liabilities and Stockholders’ Equity: | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 123,174 | $ | 80,044 | ||||
Accrued expenses | 156,000 | 107,000 | ||||||
Franchise tax payable | 140,107 | 104,159 | ||||||
Total current liabilities | 419,281 | 291,203 | ||||||
Warrant liabilities | 9,990,605 | 10,929,780 | ||||||
Total Liabilities | 10,409,886 | 11,220,983 | ||||||
Commitments and Contingencies | 0 | 0 | ||||||
Class A common stock; $0.0001 par value; 39,931,898 and 39,911,945 shares subject to possible redemption at $10.00 per share as of June 30, 2021 and December 31, 2020, respectively | 399,318,980 | 399,119,450 | ||||||
Stockholders’ Equity: | ||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; NaN issued and outstanding as of June 30, 2021 and December 31, 2020 | 0 | 0 | ||||||
Class A common stock, $0.0001 par value; 380,000,000 shares authorized; 2,082,102 and 2,102,055 shares issued and outstanding (excluding 39,931,898 and 39,911,945 shares subject to possible redemption) as of June 30, 2021 and December 31, 2020, respectively | 208 | 210 | ||||||
Class B common stock, $0.0001 par value; 1,000,000 shares authorized; 300,000 shares issued and outstanding as of June 30, 2021 and December 31, 2020 | 30 | 30 | ||||||
Class F common stock, $0.0001 par value; 50,000,000 shares authorized; 828,000 shares issued and outstanding as of June 30, 2021 and December 31, 2020 | 83 | 83 | ||||||
Additional paid-in capital | 2,491,905 | 2,691,433 | ||||||
Retained earnings | 2,507,781 | 2,308,250 | ||||||
Total stockholders’ equity | 5,000,007 | 5,000,006 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 414,728,873 | $ | 415,340,439 | ||||
For the three months ended September 30, 2020 | For the period from June 22, 2020 (inception) through September 30, 2020 | |||||||
General and administrative expenses | $ | 44,807 | $ | 52,307 | ||||
Franchise tax expense | 49,863 | 54,296 | ||||||
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Loss from operations | (94,670 | ) | (106,603 | ) | ||||
Interest earned on cash equivalents held in Trust Account | 1,134 | 1,134 | ||||||
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Loss before income tax benefit | (93,536 | ) | (105,469 | ) | ||||
Income tax benefit | — | — | ||||||
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Net loss | $ | (93,536 | ) | $ | (105,469 | ) | ||
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Weighted average shares outstanding of Class A common stock | 16,805,600 | 16,805,600 | ||||||
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Basic and diluted net income per share, Class A | $ | — | $ | — | ||||
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Weighted average shares outstanding of Class B & Class F common stock | 840,000 | 840,000 | ||||||
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Basic and diluted net loss per share, Class B & Class F | $ | (0.11 | ) | $ | (0.13 | ) | ||
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For the Three Months Ended June 30, 2021 | For the Six Months Ended June 30, 2021 | For the Period from June 22, 2020 (Inception) through June 30, 2020 | ||||||||||
Operating expenses | ||||||||||||
General and administrative expenses | $ | 264,448 | $ | 540,999 | $ | 7,500 | ||||||
Administrative fee – related party | 60,000 | 120,000 | 0 | |||||||||
Franchise tax expense | 49,863 | 99,178 | 4,434 | |||||||||
Loss from Operations | (374,311 | ) | (760,177 | ) | (11,934 | ) | ||||||
Change in fair value of warrant liabilities | (1,058,025 | ) | 939,175 | 0 | ||||||||
Income from investments held in Trust Account | 10,324 | 20,533 | 0 | |||||||||
Net income (loss) | $ | (1,422,012 | ) | $ | 199,531 | $ | (11,934 | ) | ||||
Weighted average shares outstanding of redeemable Class A common stock, basic and diluted | 41,400,000 | 41,400,000 | 0 | |||||||||
Basic and diluted net income per share, redeemable Class A common stock | $ | 0 | $ | 0 | $ | 0 | ||||||
Weighted average shares outstanding of nonredeemable Class A, Class B and Class F common stock, basic and diluted | 2,984,000 | 2,984,000 | 2,100,000 | |||||||||
Basic and diluted net income (loss) per share, nonredeemable Class A, Class B and Class F common stock | $ | (0.48 | ) | $ | 0.06 | $ | (0.01 | ) | ||||
FOR THE THREE MONTHS ENDED SEPTEMBER
Common Stock | Total | |||||||||||||||||||||||||||||||||||
Class A | Class B | Class F | Additional Paid-In | Retained | Stockholders’ | |||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Earnings | Equity | ||||||||||||||||||||||||||||
Balance - December 31, 2020 | 2,102,055 | $ | 210 | 300,000 | $ | 30 | 828,000 | $ | 83 | $ | 2,691,433 | $ | 2,308,250 | $ | 5,000,006 | |||||||||||||||||||||
Class A common stock subject to possible redemption | (162,154 | ) | (16 | ) | — | — | — | — | (1,621,524 | ) | — | (1,621,540 | ) | |||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | 1,621,543 | 1,621,543 | |||||||||||||||||||||||||||
Balance - March 31, 2021 (unaudited) | 1,939,901 | 194 | 300,000 | 30 | 828,000 | 83 | 1,069,909 | 3,929,793 | 5,000,009 | |||||||||||||||||||||||||||
Class A common stock subject to possible redemption | 142,201 | 14 | — | — | — | — | 1,421,996 | — | 1,422,010 | |||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | (1,422,012 | ) | (1,422,012 | ) | |||||||||||||||||||||||||
Balance - June 30, 2021 (unaudited) | 2,082,102 | $ | 208 | 300,000 | $ | 30 | 828,000 | $ | 83 | $ | 2,491,905 | $ | 2,507,781 | $ | 5,000,007 | |||||||||||||||||||||
Common Stock | Total | |||||||||||||||||||||||||||||||||||
Class A | Class B | Class F | Additional Paid-In | Accumulated | Stockholders’ | |||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Equity (Deficit) | ||||||||||||||||||||||||||||
Balance - June 22, 2020 (inception) | — | $ | — | — | $ | — | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||
Issuance of Class B common stock to Sponsor (1) | — | — | 120,000 | 12 | — | — | 18,738 | — | 18,750 | |||||||||||||||||||||||||||
Issuance of Class F common stock to Sponsor (2) | — | — | — | — | 828,000 | 83 | 6,167 | — | 6,250 | |||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | (11,933 | ) | (11,933 | ) | |||||||||||||||||||||||||
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Balance - June 30, 2020 (unaudited) | — | $ | — | 120,000 | $ | 12 | 828,000 | $ | 83 | $ | 24,905 | $ | (11,933 | ) | $ | 13,067 | ||||||||||||||||||||
Sale of CAPS in initial public offering, gross | 16,560,000 | 1,656 | — | — | — | — | 413,998,344 | — | 414,000,000 | |||||||||||||||||||||||||||
Offering costs | — | — | — | — | — | — | (4,770,194 | ) | — | (4,770,194 | ) | |||||||||||||||||||||||||
Sale of Private Placement CAPS to Sponsor in private placement | 245,600 | 24 | — | — | — | — | 6,139,976 | — | 6,140,000 | |||||||||||||||||||||||||||
Class A common stock subject to possible redemption | (16,411,573 | ) | (1,641 | ) | — | — | — | — | (410,287,684 | ) | — | (410,289,325 | ) | |||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | (93,536 | ) | (93,536 | ) | |||||||||||||||||||||||||
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Balance - September 30, 2020 (unaudited) | 394,027 | $ | 39 | 120,000 | $ | 12 | 828,000 | $ | 83 | $ | 5,105,347 | $ | (105,469 | ) | $ | 5,000,012 | ||||||||||||||||||||
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Common Stock | Total | |||||||||||||||||||||||||||
Class B | Class F | Additional Paid-In | Accumulated | Stockholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
Balance - June 22, 2020 (inception) | 0 | $ | 0 | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||
Issuance of Class B common stock to Sponsor | 300,000 | 30 | — | — | 18,720 | — | 18,750 | |||||||||||||||||||||
Issuance of Class F common stock to Sponsor | — | — | 828,000 | 83 | 6,167 | — | 6,250 | |||||||||||||||||||||
Net loss | — | — | — | — | — | (11,934 | ) | (11,934 | ) | |||||||||||||||||||
Balance - June 30, 2020 (unaudited) | 300,000 | $ | 30 | 828,000 | $ | 83 | $ | 24,887 | $ | (11,934 | ) | $ | 13,066 | |||||||||||||||
FOR THE PERIOD FROM JUNE 22, 2020 (INCEPTION) THROUGH SEPTEMBER 30, 2020
Cash Flows from Operating Activities: | ||||
Net loss | $ | (105,469 | ) | |
Adjustments to reconcile net income to net cash used in operating activities: | ||||
General and administrative expenses paid by related party under note payable | 29,287 | |||
Interest earned on cash equivalents held in Trust Account | (1,134 | ) | ||
Changes in assets and liabilities: | ||||
Prepaid expenses | (16,392 | ) | ||
Accounts payable | 24,130 | |||
Accrued expenses | 9,536 | |||
Franchise tax payable | 54,297 | |||
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Net cash used in operating activities | (5,745 | ) | ||
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Cash Flows from Investing Activities | ||||
Cash deposited in Trust Account | (414,000,000 | ) | ||
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Net cash used in investing activities | (414,000,000 | ) | ||
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Cash Flows from Financing Activities: | ||||
Proceeds received from initial public offering, gross | 414,000,000 | |||
Proceeds received from private placement | 6,140,000 | |||
Repayment of note payable to related party | (171,450 | ) | ||
Offering costs paid | (4,516,431 | ) | ||
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Net cash provided by financing activities | 415,452,119 | |||
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Net change in cash | 1,446,374 | |||
Cash - beginning of the period | — | |||
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Cash - end of the period | $ | 1,446,374 | ||
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Supplemental disclosure of noncash activities: | ||||
Offering costs paid in exchange for issuance of Class B common stock to Sponsor | $ | 18,750 | ||
Offering costs paid in exchange for issuance of Class F common stock to Sponsor | $ | 6,250 | ||
Offering costs included in accrued expenses | $ | 85,000 | ||
Offering costs included in accounts payable | $ | 1,600 | ||
Offering costs paid through note payable | $ | 142,163 | ||
Initial value of Class A common stock subject to possible redemption | $ | 410,347,250 | ||
Change in initial value of Class A ordinary shares subject to possible redemption | $ | (57,925 | ) |
For the Period from | ||||||||
For the Six Months Ended | June 22, 2020 (Inception) | |||||||
June 30, 2021 | through June 30, 2020 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income (loss) | $ | 199,531 | $ | (11,934 | ) | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
Change in fair value of warrant liabilities | (939,175 | ) | 0 | |||||
Interest income from investments held in Trust Account | (20,533 | ) | 0 | |||||
Changes in assets and liabilities: | ||||||||
Prepaid expenses | 115,041 | 0 | ||||||
Accounts payable | 43,130 | 0 | ||||||
Accrued expenses | 49,000 | 7,500 | ||||||
Franchise tax payable | 35,948 | 4,434 | ||||||
Net cash used in operating activities | (517,058 | ) | 0 | |||||
Net change in cash | (517,058 | ) | 0 | |||||
Cash - beginning of the period | 888,097 | 0 | ||||||
Cash - end of the period | $ | 371,039 | $ | 0 | ||||
Supplemental disclosure of noncash activities: | ||||||||
Offering costs paid in exchange for issuance of Class B common stock to Sponsor | $ | — | $ | 18,750 | ||||
Offering costs paid in exchange for issuance of Class F common stock to Sponsor | $ | — | $ | 6,250 | ||||
Offering costs included in accrued expenses | $ | — | $ | 176,534 | ||||
Offering costs included in accounts payable | $ | — | $ | 8,000 | ||||
Offering costs paid through note payable | $ | — | $ | 52,250 | ||||
Change in fair value of Class A common stock subject to possible redemption | $ | 199,530 | $ | 0 |
General
effected a 2.5:1 forward stock split for each share of Class A common stock and Class B common stock issued and outstanding. All shares of Class A and Class B common stock and associated share amounts presented in these financial statements have been retroactively restated to reflect the stock split.
The CAPS
EXECUTIVE NETWORK PARTNERING CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
EXECUTIVE NETWORK PARTNERING CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
which the Company has entered into a written letter of intent, confidentiality or other similar agreement or Partnering Transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $25.00$10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $25.00$10.00 per public share due to reductions in the value of the Trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriter of thisour initial public offering against certain liabilities, including liabilities under the Securities Act.
Act of 1933, as amended (the “Securities Act”).
and Summary of Significant Accounting Policies
2021 or for any future interim periods.
thereto.
This may make comparison of the Company’s unaudited 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.
Liquidity and Capital Resources
As of September 30, 2020, the Company had approximately $1.4 million in its operating bank account, working capital of approximately $1.3 million and cash equivalents held in the Trust Account of approximately $414 million. Interest income on the balance in the Trust Account may be used to pay the Company’s franchise and income tax obligations. Through September 30, 2020, the Company has not withdrawn any interest earned on the Trust Account to pay franchise and income tax obligations. Management intends to use substantially all of the funds held in the Trust Account to complete the initial Business Combination and to pay the Company’s expenses relating thereto. To the extent that the Company’s capital stock or debt is used, in whole or in part, as consideration to complete the initial Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
EXECUTIVE NETWORK PARTNERING CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The Company’s liquidity needs up to the closing of the Initial Public Offering and the sale of Private Placement CAPS had been satisfied through a capital contribution of $25,000 from the Sponsor to purchase Class F and Class B common stock, the loan under the Note of approximately $171,000 (see Note 4) to the Company to cover for offering costs in connection with the Initial Public Offering, and the net proceeds from the consummation of the Private Placement not held in the Trust Account. The Company fully repaid the Note on September 22, 2020. In addition, in order to finance transaction costs in connection with a Business Combination, the Company’s officers, directors and initial stockholders may, but are not obligated to, provide the Company Working Capital Loans (see Note 4). To date, there were no amounts outstanding under any Working Capital Loans.
Based on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity from the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors to meet its needs through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, the Company 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.
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 do not include any adjustments that might result from the outcome of this uncertainty.
Note 2—Summary of Significant Accounting Policies
Cash Equivalents HeldU.S. government securities, within the meaning set forth in Trust Account
Upon the closingSection 2(a)(16) of the Initial Public Offering and the saleInvestment Company Act, with a maturity of Private Placement CAPS, approximately $414 million, was placed in the Trust Account and invested185 days or less, or investments in money market funds that invest in U.S. government securities. All ofsecurities and generally have a readily determinable fair value, or a combination thereof. When the Company’s investments held in the Trust Account are comprised of U.S. government securities, the investments are classified as trading securities. When the Company’s investments held in the Trust Account are comprised of money market funds, the investments are recognized at fair value. Trading securities and investments in money market funds are presented on the balance sheetsheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities are included in net gain from investments held in Trust Account in the accompanying unaudited condensed statement of operations. The estimated fair values of investments held in the Trust Account are determined using available market information, other than for investments in open-ended money market funds with published daily net asset values (“NAV”), in which case the Company uses NAV as a practical expedient to fair value. The NAV on these investments is typically held constant at $1.00 per unit.
information.
EXECUTIVE NETWORK PARTNERING CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
As
sheets.
EXECUTIVE NETWORK PARTNERING CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
positions taken or expected to be taken in a tax return. For taxthose benefits to be recognized, a tax position must be more likely thanmore-likely-than- not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of September 30, 2020. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment
Net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common stock outstanding during the periods. Stock
periods.
For the Three Months Ended June 30, 2021 | For the Six Months Ended June 30, 2021 | For the Period from June 22, 2020 (Inception) through June 30, 2020 | ||||||||||
Redeemable Class A common stock | ||||||||||||
Numerator: | ||||||||||||
Interest income from investments held in Trust Account | $ | 10,324 | $ | 20,533 | $ | — | ||||||
Less: Company’s portion available to be withdrawn to pay taxes | (10,324 | ) | (20,533 | ) | — | |||||||
Net income attributable to redeemable Class A common stock | $ | 0 | $ | 0 | $ | — | ||||||
Denominator: | ||||||||||||
Weighted average shares outstanding of redeemable Class A common stock , basic and diluted | 41,400,000 | 41,400,000 | — | |||||||||
Basic and diluted net income per share, redeemable Class A common stock | $ | 0 | $ | 0 | $ | — | ||||||
Nonredeemable Class A, Class B and Class F common stock | ||||||||||||
Numerator: | ||||||||||||
Net (loss) income | $ | (1,422,012 | ) | $ | 199,531 | $ | (11,934 | ) | ||||
Less: Net income attributable to redeemable Class A common stock | 0 | 0 | — | |||||||||
Net (loss) income attributable to nonredeemable Class A, Class B and Class F common stock | $ | (1,422,012 | ) | $ | 199,531 | $ | (11,934 | ) | ||||
Denominator: | ||||||||||||
Weighted average shares outstanding of nonredeemable Class A, Class B and Class F common stock, basic and diluted | 2,984,000 | 2,984,000 | 2,100,000 | |||||||||
Basic and diluted net (loss) income per share, nonredeemable Class A, Class B and Class F common stock | $ | (0.48 | ) | $ | 0.07 | $ | (0.01 | ) | ||||
Management
EXECUTIVE NETWORK PARTNERING CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
of $18,750, or $15.625 per share. On July 17, 2020 and March 24, 2021, the Company effected a 100:1 and a 2.5:1 forward stock split for each share of Class B common stock, respectively, resulting in an aggregate of 120,000300,000 Performance Shares outstanding. On July 29, 2020, the Company effected a reverse stock split for Class F common stock, resulting in an aggregate of 690,000 shares of Class F common stock.stock outstanding. On September 17, 2020, the Company effected a 1 for 1.2 forward stock split that increased the outstanding Class F common stock from 690,000 shares to 828,000 shares. All shares and associated amounts have been retroactively restated to reflect the 100:1 stock split for Class B common stock, the reverse stock split on July 29, 2020 and the 1 for 1.2 forward stock split on September 17, 2020 for Class F common stock.splits. Of the 828,000 Founder Shares outstanding, up to 108,000 of the Founder Shares would be forfeited depending on the extent to which the underwriter’s over-allotment is exercised, so that such Founder Shares would represent 5% of the outstanding shares issued in the Initial Public Offering. The underwriters fully exercised their over-allotment option on September 18, 2020; thus, these 108,000 Founder Shares were no longer subject to forfeiture. The Founder Shares are entitled to (together with the Performance Shares) a number of votes representing 20% of the Company’s outstanding common stock (not including the private placement shares) prior to the completion of the Partnering Transaction.
EXECUTIVE NETWORK PARTNERING CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
In addition, the Sponsor, executive officers and directors, or any of their respective affiliates will be reimbursed for any
5.
6. Stockholders’ Equity
Class A Common Stock—The Company is authorized to issue 380,000,000 shares
For so long as any shares of Class F common stock remain outstanding, the Company may not, without the prior vote or written consent of the holders of a majority of the shares of Class F common stock then outstanding, voting separately as a single class, amend, alter or repeal any provision of the Company’s certificate of incorporation, whether by merger, consolidation or otherwise, if such amendment, alteration or repeal would alter or change the powers, preferences or relative, participating, optional or other or special rights of the shares of Class F common stock. Any action required or permitted to be taken at any meeting of the holders of shares of Class F common stock may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of the outstanding shares of Class F common stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of Class F common stock were present and voted.
Class B Common Stock—The Company is authorized to issue 1,000,000 shares of Class B common stock with a par value of $0.0001 per share. On July 17, 2020, the Company effected a 100:1 stock split for each share of Class B common stock, resulting in an aggregate of 120,000 shares of Class B common stock outstanding. All shares and associated amounts have been retroactively restated to reflect the stock split. As of September 30, 2020, there were 120,000 shares of Class B common stock issued and outstanding.
Each year following the completion of a Partnering Transaction, 10,000 shares of the Company’s Class B shares will convert into 1,000 shares of Class A common stock. However, if the price of a share of the Company’s Class A common stock exceeds $27.50 for 20 out of any 30 trading days following the completion of the Partnering Transaction, then the number of shares of Class A common stock deliverable (“conversion shares”) will be calculated as the greater of: (1) (a) 20% of the increase in the price of one Class A, year-over-year (but only after the price exceeds the “price threshold” being initially $25.00 and adjusted at the beginning of each year to be equal to the greater of: (i) the price of the Class A common stock for the previous year; and (ii) the price threshold at the end of the previous year) multiplied by (b) the number of shares of Class A common stock outstanding at the close of the Partnering Transaction, excluding those shares of Class A common stock received by the Sponsor through the Class F common stock; and (2) 1,000 shares of Class A common stock. This calculation shall be based on the Company’s fiscal year which may change as a result of the Partnering Transaction. The increase in the price of the Class A common stock, shall be based on the Company’s annual volume weighted average price (“VWAP”) for the Company’s fiscal year provided that with respect to the 12th fiscal year end following the Partnering Transaction the conversion calculation for the remaining 10,000 shares of Class B shares, the calculation shall be the greater of (i) such annual VWAP and (ii) the VWAP of the last 20 trading days of such fiscal year.
The conversion shares will be calculated not only on the increase of the price of one share of Class A common stock but also on any dividends paid on one share of Class A common stock in such year. The price threshold for a particular year will be reduced by the dividends per shares of Class A common stock paid in such year.
Upon a change of control, holders of the Class B shares shall receive the greater of: (a) the value of 2,400,000 shares of Class A common stock at the time of the announcement of the change of control or $60,000,000. Such calculation shall decrease by 1/12 each year.
For so long as any shares of Class B common stock remain outstanding, the Company may not, without the prior vote or written consent of the holders of a majority of the shares of Class B common stock then outstanding, voting separately as a single class, amend, alter or repeal any provision the Company’s amended and restated certificate of incorporation, whether by merger, consolidation or otherwise, if such amendment, alteration or repeal would alter or change the powers, preferences or relative, participating, optional or other or special rights of the Class B common stock.
Preferred stock—The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share. At September 30, 2020, there are no shares of preferred stock issued or outstanding.
Warrants—
EXECUTIVE NETWORK PARTNERING CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
$11.50 per share, subject to adjustment as discussed below, at any time commencing on the later of 12 months from the closing of the Initial Public Offering and 30 days after the completion of a Partnering Transaction, provided in each case that the Company has an effective registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement) and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder. The Company has agreed that as soon as practicable, but in no event later than fifteen (15) business days after the closing of the Partnering Transaction, the Company will use its commercially reasonable efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the shares of Class A common stock issuable upon exercise of the warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the sixtieth (60th) business day after the closing of the Partnering Transaction, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the shares of Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)3 (a)(9) of the Securities Act and, in the event the Company so elect, it will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, it will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
EXECUTIVE NETWORK PARTNERING CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Fair Value Measured as of June 30, 2021 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets | ||||||||||||||||
Investments held in Trust Account - U.S. Treasury Securities | $ | 414,032,104 | $ | — | $ | — | $ | 414,032,104 | ||||||||
Liabilities: | ||||||||||||||||
Warrant liabilities - public warrants | 9,832,500 | — | — | 9,832,500 | ||||||||||||
Warrant liabilities - private warrants | — | — | 158,105 | 158,105 | ||||||||||||
Total fair value | $ | 423,864,604 | $ | — | $ | 158,105 | $ | 424,022,709 | ||||||||
Fair Value Measured as of December 31, 2020 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets | ||||||||||||||||
Investments held in Trust Account - U.S. Treasury Securities | $ | 414,011,571 | $ | — | $ | — | $ | 414,011,571 | ||||||||
Liabilities: | ||||||||||||||||
Warrant liabilities - public warrants | 10,764,000 | — | — | 10,764,000 | ||||||||||||
Warrant liabilities - private warrants | — | — | 165,780 | 165,780 | ||||||||||||
Total fair value | $ | 424,775,571 | $ | — | $ | 165,780 | $ | 424,941,351 | ||||||||
June 30, 2021 | December 31, 2020 | |||||||
Exercise price | $ | 11.50 | $ | 11.50 | ||||
Stock Price | $ | 9.74 | $ | 10.01 | ||||
Term (in years) | 5.00 | 5.00 | ||||||
Volatility | 17.00 | % | 17.00 | % | ||||
Risk-free interest rate | 1.00 | % | 0.56 | % | ||||
Dividend yield | 0.00 | % | 0.00 | % |
Level 3 warrant liabilities at December 31, 2020 | $ | 165,780 | ||
Change in fair value of warrant liabilities | (30,700 | ) | ||
Level 3 warrant liabilities at March 31, 2021 | 135,080 | |||
Change in fair value of warrant liabilities | 23,025 | |||
Level 3 warrant liabilities at June 30, 2021 | $ | 158,105 | ||
Partnering Transaction within 24 months) to complete its initial Partnering Transaction (the “Partnering Period”). If we do not complete a Partnering Transaction within this period of time (and stockholders do not approve an amendment to the certificate of incorporation to extend this date), we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at ashareholdersstockholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to our obligations under Delaware law to provide for claims of creditors and in all cases subject to the other requirements of applicable law.
expense.
expense.
We continue to evaluate the impact of the
operations, respectively.
sheets.
Net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common stock outstanding during the periods. Stock
Inflation
We do not believe that inflation had a material impact on our business, revenues or operating results during the period presented.
not effective as of June 30, 2021, due solely to the material weakness in our internal control over financial reporting described in “Management’s Report on Internal Control over Financial Reporting” included in our Annual Report on Form 10K/A as filed with the SEC on June 1, 2021. In light of this material weakness, we performed additional analysis as deemed necessary to ensure that our unaudited interim financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the financial statements included in this Quarterly Report on Form 10Q present fairly in all material respects our financial position, results of operations and cash flows for the period presented.
reporting, as the circumstances that led to the restatement of our previously filed financial statements described above had not yet been identified. In light of the restatement of the previously filed financial statements, we plan to enhance our processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards that apply to our financial statements. We plan to further improve this process by enhancing access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.
The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended, which invest only in direct U.S. government treasury obligations. While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in EuropeSEC on March 31, 2021 and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that we are unable to complete our initial business combination or make certain amendments to our amended and restated certificate of incorporation, our public shareholders are entitled to receive their pro-rata share of the proceeds held in the trust account, plus any interest income, net of taxes paid or payable (less, in the case we are unable to complete our initial business combination, $100,000 of interest to pay dissolution expenses). Negative interest rates could reduce the value of the assets held in trust such that the per-share redemption amount received by public shareholders may be less than $10.00 per share.
Of the gross proceeds received from the Initial Public Offering, the full exercise of the over-allotment option and the Private Placement CAPSTM
31.1 | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1* | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* | 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. |
EXECUTIVE NETWORK PARTNERING CORPORATION | ||
By: | /s/ Alex Dunn | |
Name: | Alex Dunn | |
Title: | (Principal Executive Officer & Principal Financial and Accounting Officer) |
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