☒ | 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 |
of
450 Lexington Avenue New York, New York | 10017 | |
(Address Of Principal Executive Offices) | (Zip Code) |
Symbol(s) on which registered
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||||||
Emerging growth company | ☒ |
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Item 2. | ||||||
Item 3. | ||||||
Item 4. | ||||||
Item 1. | ||||||
Item 1A. | ||||||
Item 2. | ||||||
Item 3. | ||||||
Item 4. | ||||||
Item 5. | ||||||
Item 6. |
Item 1. | Condensed Financial Statements |
March 31, 2021 | December 31, 2020 | |||||||
(Unaudited) | ||||||||
Assets: | ||||||||
Current assets: | ||||||||
Cash | $ | 1,813,110 | $ | — | ||||
Prepaid expenses | 874,176 | 11,758 | ||||||
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Total current assets | 2,687,286 | 11,758 | ||||||
Deferred offering costs associated with proposed public offering | — | 81,600 | ||||||
Investments held in Trust Account | 250,000,869 | — | ||||||
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Total Assets | $ | 252,688,155 | $ | 93,358 | ||||
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Liabilities and Shareholders’ Equity: | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 12,500 | $ | — | ||||
Accrued expenses | 344,965 | 81,600 | ||||||
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Total current liabilities | 357,465 | 81,600 | ||||||
Derivative warrant liabilities | 10,643,330 | — | ||||||
Deferred underwriting commissions | 8,750,000 | — | ||||||
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Total liabilities | 19,750,795 | 81,600 | ||||||
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Commitments and Contingencies | ||||||||
Class A ordinary shares, $0.0001 par value; 22,793,735 and -0- shares subject to possible redemption at $10.00 per share as of March 31, 2021 and December 31, 2020, respectively | 227,937,350 | — | ||||||
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Shareholders’ Equity: | ||||||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding as of March 31, 2021 and December 31, 2020 | — | — | ||||||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 2,206,265 and -0- shares issued and outstanding (excluding 22,793,735 and -0- shares subject to possible redemption) as of March 31, 2021 and December 31, 2020, respectively | 221 | — | ||||||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 7,187,500 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively (1) | 719 | 719 | ||||||
Additional paid-in capital | 3,660,246 | 24,281 | ||||||
Retained earnings (accumulated deficit) | 1,338,824 | (13,242 | ) | |||||
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Total shareholders’ equity | 5,000,010 | 11,758 | ||||||
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Total Liabilities and Shareholders’ Equity | $ | 252,688,155 | $ | 93,358 | ||||
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June 30, 2021 | December 31, 2020 | |||||||
(Unaudited) | ||||||||
Assets: | ||||||||
Current assets: | ||||||||
Cash | $ | 1,744,109 | $ | — | ||||
Prepaid expenses | 755,382 | 11,758 | ||||||
Total current assets | 2,499,491 | 11,758 | ||||||
Deferred offering costs associated with initial public offering | — | 81,600 | ||||||
Investments held in Trust Account | 283,426,810 | — | ||||||
Total Assets | $ | 285,926,301 | $ | 93,358 | ||||
Liabilities and Shareholders’ Equity: | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 16,507 | $ | — | ||||
Accrued expenses | 592,700 | 81,600 | ||||||
Total current liabilities | 609,207 | 81,600 | ||||||
Derivative warrant liabilities | 15,110,560 | — | ||||||
Deferred underwriting commissions | 9,919,751 | — | ||||||
Total liabilities | 25,639,518 | 81,600 | ||||||
Commitments and Contingencies | 0 | 0 | ||||||
Class A ordinary shares, $0.0001 par value; 25,528,678 and -0- | 255,286,780 | — | ||||||
Shareholders’ Equity: | ||||||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; 0ne issued and outstanding as of June 30, 2021 and December 31, 2020 | 0— | — | ||||||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 2,813,500 and -0- -0- | 281 | — | ||||||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 7,085,544 and 7,187,500 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively | 708 | 719 | ||||||
Additional paid-in capital | 7,453,186 | 24,281 | ||||||
Accumulated deficit | (2,454,172 | ) | (13,242 | ) | ||||
Total shareholders’ equity | 5,000,003 | 11,758 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 285,926,301 | $ | 93,358 | ||||
For The Three Months Ended March 31, 2021 (Unaudited)
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For the Three Months Ended June 30, 2021 | For the Six Months Ended June 30, 2021 | |||||||
(Unaudited) | (Unaudited) | |||||||
General and administrative expenses | $ | 409,537 | $ | 549,640 | ||||
General and administrative expenses - related party | 30,000 | 40,000 | ||||||
Loss from operations | (439,537 | ) | (589,640 | ) | ||||
Other income (expense) | ||||||||
Change in fair value of derivative warrant liabilities | (3,319,750 | ) | (1,459,750 | ) | ||||
Offering costs associated with derivative warrant liabilities | (37,870 | ) | (396,570 | ) | ||||
Income from investments held in Trust Account | 4,161 | 5,030 | ||||||
Net loss | $ | (3,792,996 | ) | $ | (2,440,930 | ) | ||
Weighted average Class A ordinary shares outstanding, basic and diluted | 27,644,361 | 27,110,849 | ||||||
Basic and diluted net income per Class A ordinary share | $ | 0.00 | $ | 0.00 | ||||
Weighted average Class B ordinary shares outstanding, basic and diluted | 6,911,090 | 6,582,371 | ||||||
Basic and diluted net loss per Class B ordinary share | $ | (0.55 | ) | $ | (0.37 | ) | ||
For The Three Months Ended March 31,
Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Total Shareholders’ Equity | ||||||||||||||||||||||||||
Ordinary Shares | ||||||||||||||||||||||||||||
Class A | Class B | |||||||||||||||||||||||||||
Shares | Amount | Shares (1) | Amount | |||||||||||||||||||||||||
Balance - December 31, 2020 | — | $ | — | 7,187,500 | $ | 719 | $ | 24,281 | $ | (13,242 | ) | $ | 11,758 | |||||||||||||||
Sale of units in initial public offering, less allocation to derivative warrant liabilities | 25,000,000 | 2,500 | — | — | 243,947,500 | — | 243,950,000 | |||||||||||||||||||||
Excess cash received over the fair value of the private placement warrants | — | — | — | — | 1,546,670 | — | 1,546,670 | |||||||||||||||||||||
Offering costs | — | — | — | — | (13,923,134 | ) | — | (13,923,134 | ) | |||||||||||||||||||
Class A ordinary shares subject to possible redemption | (22,793,735 | ) | (2,279 | ) | — | — | (227,935,071 | ) | — | (227,937,350 | ) | |||||||||||||||||
Net income | — | — | — | — | — | 1,352,066 | 1,352,066 | |||||||||||||||||||||
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Balance - March 31, 2021 (unaudited) | 2,206,265 | $ | 221 | 7,187,500 | $ | 719 | $ | 3,660,246 | $ | 1,338,824 | $ | 5,000,010 | ||||||||||||||||
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(UNAUDITED)
Retained | ||||||||||||||||||||||||||||
Ordinary Shares | Additional | Earnings | Total | |||||||||||||||||||||||||
Class A | Class B | Paid-in | (Accumulated | Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit) | Equity | ||||||||||||||||||||||
Balance - December 31, 2020 | — | $ | — | 7,187,500 | $ | 719 | $ | 24,281 | $ | (13,242 | ) | $ | 11,758 | |||||||||||||||
Sale of units in initial public offering, less allocation to derivative warrant liabilities | 25,000,000 | 2,500 | — | — | 243,947,500 | — | 243,950,000 | |||||||||||||||||||||
Excess cash received over the fair value of the private placement warrants | — | — | — | — | 1,546,670 | — | 1,546,670 | |||||||||||||||||||||
Offering costs | — | — | — | — | (13,923,134 | ) | — | (13,923,134 | ) | |||||||||||||||||||
Class A ordinary shares subject to possible redemption | (22,793,735 | ) | (2,279 | ) | — | — | (227,935,071 | ) | — | (227,937,350 | ) | |||||||||||||||||
Net income | — | — | — | — | — | 1,352,066 | 1,352,066 | |||||||||||||||||||||
Balance - March 31, 2021 (unaudited) | 2,206,265 | 221 | 7,187,500 | 719 | 3,660,246 | 1,338,824 | 5,000,010 | |||||||||||||||||||||
Sale of units in initial public offering, less allocation to derivative warrant liabilities (over-allotment) | 3,342,178 | 333 | — | — | 32,732,957 | — | 32,733,290 | |||||||||||||||||||||
Excess cash received over the fair value of the private placement warrants (over-allotment) | — | — | — | — | 209,446 | — | 209,446 | |||||||||||||||||||||
Offering costs (over-allotment) | — | — | — | — | (1,800,317 | ) | — | (1,800,317 | ) | |||||||||||||||||||
Forfeiture of Class B ordinary shares | — | — | (101,956 | ) | (11 | ) | 11 | — | — | |||||||||||||||||||
Class A ordinary shares subject to possible redemption | (2,734,943 | ) | (273 | ) | — | — | (27,349,157 | ) | — | (27,349,430 | ) | |||||||||||||||||
Net loss | — | — | — | — | — | (3,792,996 | ) | (3,792,996 | ) | |||||||||||||||||||
Balance - June 30, 2021 (unaudited) | 2,813,500 | $ | 281 | 7,085,544 | $ | 708 | $ | 7,453,186 | $ | (2,454,172 | ) | $ | 5,000,003 | |||||||||||||||
For The Three Months Ended March 31,
Cash Flows from Operating Activities: | ||||
Net income | $ | 1,352,066 | ||
Adjustments to reconcile net income to net cash used in operating activities: | ||||
Income from investments held in Trust Account | (869 | ) | ||
Change in fair value of derivative warrant liabilities | (1,860,000 | ) | ||
Offering costs associated with derivative warrant liabilities | 358,700 | |||
General and administrative expenses paid by related party under promissory note | 3,053 | |||
Changes in operating assets and liabilities: | ||||
Prepaid expenses | (862,419 | ) | ||
Accounts payable | 12,500 | |||
Accrued expenses | 9,965 | |||
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Net cash used in operating activities | (987,004 | ) | ||
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Cash Flows from Investing Activities: | ||||
Cash deposited in Trust Account | (250,000,000 | ) | ||
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Net cash used in investing activities | (250,000,000 | ) | ||
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Cash Flows from Financing Activities: | ||||
Repayment of note payable to related party | (78,045 | ) | ||
Proceeds received from initial public offering, gross | 250,000,000 | |||
Proceeds received from private placement | 8,000,000 | |||
Offering costs paid | (5,121,841 | ) | ||
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Net cash provided by financing activities | 252,800,114 | |||
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Net increase in cash | 1,813,110 | |||
Cash - beginning of the period | — | |||
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Cash - end of the period | $ | 1,813,110 | ||
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Supplemental disclosure of noncash investing and financing activities: | ||||
Offering costs included in accrued expenses | $ | 253,400 | ||
Offering costs paid by related party under promissory note | $ | 74,992 | ||
Deferred underwriting commissions | $ | 8,750,000 | ||
Initial value of Class A ordinary shares subject to possible redemption | $ | 226,177,820 | ||
Change in value of Class A common shares subject to possible redemption | $ | 1,759,530 | ||
Initial value of derivative warrant liabilities | $ | 12,503,330 |
(UNAUDITED)
Cash Flows from Operating Activities: | ||||
Net loss | $ | (2,440,930 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Income from investments held in Trust Account | (5,029 | ) | ||
Change in fair value of derivative warrant liabilities | 1,459,750 | |||
Offering costs associated with derivative warrant liabilities | 396,570 | |||
General and administrative expenses paid by related party under promissory note | 3,053 | |||
Changes in operating assets and liabilities: | ||||
Prepaid expenses | (743,624 | ) | ||
Accounts payable | 16,507 | |||
Accrued expenses | 257,700 | |||
Net cash used in operating activities | (1,056,003 | ) | ||
Cash Flows from Investing Activities: | ||||
Cash deposited in Trust Account | (283,421,780 | ) | ||
Net cash used in investing activities | (283,421,780 | ) | ||
Cash Flows from Financing Activities: | ||||
Repayment of note payable to related party | (78,045 | ) | ||
Proceeds received from initial public offering | 283,421,780 | |||
Proceeds received from private placement | 8,668,435 | |||
Offering costs paid | (5,790,278 | ) | ||
Net cash provided by financing activities | 286,221,892 | |||
Net increase in cash | 1,744,109 | |||
Cash - beginning of the period | 0— | |||
Cash - end of the period | $ | 1,744,109 | ||
Supplemental disclosure of noncash investing and financing activities: | ||||
Offering costs included in accrued expenses | $ | 253,400 | ||
Offering costs paid by related party under promissory note | $ | 74,992 | ||
Deferred underwriting commissions | $ | 9,919,751 | ||
Initial value of Class A ordinary shares subject to possible redemption | $ | 226,177,820 | ||
Change in value of Class A ordinary shares subject to possible redemption | $ | 29,108,960 |
WARBURG PINCUS CAPITAL CORPORATION I—A
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
made by the Company, solely in its discretion. Notwithstanding the foregoing, pursuant to the amended and restated memorandum and articles of association adopted upon the consummation of the Initial Public Offering (the “Amended and Restated Memorandum and Articles of Association”), in no event will the Company redeem Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001. The Public Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 $
WARBURG PINCUS CAPITAL CORPORATION I—A
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 5) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Company’s Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be only $10.00 per share initially held in the Trust Account. In order to protect the amounts held in the Trust Account, the Sponsor agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $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 $10.00 per 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 underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). In the event
WARBURG PINCUS CAPITAL CORPORATION I—A
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Current Report on Form 8-K and the final prospectus filed by the Company with the SEC on March 15, 2021 and March 8, 2021, respectively.
In April 2021, the Company identified a misstatement in its accounting treatment for warrants issued in connection with the Initial Public Offering (the “Public Warrants”) and the Private Placement Warrants (collectively, the “Warrants”) as presented in its audited balance sheet as of March 9, 2021 included in its Current Report on Form 8-K, filed March 15, 2021. The Warrants were reflected as a component of equity as opposed to liabilities on the balance sheet. Pursuant to FASB ASC Topic 250, Accounting Changes and Error Corrections, and Staff Accounting Bulletin 99, “Materiality” (“SAB 99”) issued by the SEC, the Company determined the impact of the error was immaterial. The following balance sheet items were impacted from the error correction as of March 9, 2021: an increase of $12.5 million in warrant liabilities; a decrease of $12.5 million in the amount of Class A ordinary shares subject to redemption; an increase of $358,700 in additional paid-in capital; and an increase of $358,700 in accumulated deficit.
Concentration of Credit Risk
Financial 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 Corporation limit of $250,000. As of March 31, 2021 and December 31, 2020, the Company had not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
WARBURG PINCUS CAPITAL CORPORATION I—A
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
sheets.
WARBURG PINCUS CAPITAL CORPORATION I—A
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The Company classifies deferred underwriting commissions as
There were 0 shares of Class A ordinary shares subject to possible redemption at December 31, 2020.
For the Three Months Ended June 30, 2021 | For the Six Months Ended June 30, 2021 | |||||||
Class A ordinary shares | ||||||||
Numerator: Income allocable to Class A ordinary shares | ||||||||
Income from investments held in Trust Account | $ | 4,161 | $ | 5,030 | ||||
Less: Company’s portion available to be withdrawn to pay taxes | 0 | 0 | ||||||
Net income attributable | $ | 4,161 | $ | 5,030 | ||||
Denominator: Weighted average Class A ordinary shares | ||||||||
Basic and diluted weighted average shares outstanding, Class A ordinary shares | 27,644,361 | 27,110,849 | ||||||
Basic and diluted net income per share, Class A ordinary shares | $ | 0.00 | $ | 0.00 | ||||
Class B ordinary shares | ||||||||
Numerator: Net loss minus net income allocable to Class A ordinary shares | ||||||||
Net loss | $ | (3,792,996 | ) | $ | (2,440,930 | ) | ||
Net income allocable to Class A ordinary shares | 4,161 | 5,030 | ||||||
Net income (loss) attributable | $ | (3,797,157 | ) | $ | (2,445,960 | ) | ||
Denominator: weighted average Class B ordinary shares | ||||||||
Basic and diluted weighted average shares outstanding, Class B ordinary shares | 6,911,090 | 6,582,371 | ||||||
Basic and diluted net loss per share, Class B ordinary shares | $ | (0.55 | ) | $ | (0.37 | ) | ||
Net Income (Loss) per Ordinary Share
Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted-average number of shares of ordinary shares outstanding during the period. The Company has not considered the effect of the warrants sold in the Initial Public Offering and private placement to purchase an aggregate of 10,333,333 shares in the calculation of diluted loss per share, since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.
The Company’s unaudited condensed statement of operations includes a presentation of income (loss) per ordinary share for ordinary shares subject to possible redemption in a manner similar to the two-class method of income (loss) per ordinary share. Net income (loss) per ordinary share, basic and diluted, for Class A ordinary shares for the three months ended March 31, 2021, is calculated by dividing the income or loss on investments held in the Trust Account of approximately $869 for the three months ended March 31, 2021, by the weighted average number of Class A ordinary shares outstanding for the period.
WARBURG PINCUS CAPITAL CORPORATION I—A
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Net income (loss) per ordinary share, basic and diluted, for Class B ordinary shares is calculated by dividing the net income (loss), adjusted for income or loss attributed to Class A ordinary shares, by the weighted average number of shares of Class B ordinary shares outstanding for the period.
At March 31, 2021, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then participate in the earnings. As a result, diluted income per ordinary share is the same as basic net income per ordinary share for the period presented.
million, and the incurrence of approximately $1.8 million in offering costs, of which approximately $1.2 million was for deferred underwriting commissions.
WARBURG PINCUS CAPITAL CORPORATION I—A
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
transferees, except as described in Note 7.
Subsequent to the repayment, the facility was no longer available to the Company.
WARBURG PINCUS CAPITAL CORPORATION I—A
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
WARBURG PINCUS CAPITAL CORPORATION I—A
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities (as defined herein) 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 any private placement warrants issued to the Sponsor, its affiliates or any member of the management team upon conversion of Working Capital Loans. Any conversion of Class B ordinary shares described herein will take effect as a compulsory redemption of Class B ordinary shares and an issuance of Class A ordinary shares as a matter of Cayman Islands law. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than
at December 31, 2020.
WARBURG PINCUS CAPITAL CORPORATION I—A
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be
WARBURG PINCUS CAPITAL CORPORATION I—A
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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 - money market funds | $ | 283,426,810 | $ | — | $ | — | ||||||
Liabilities: | ||||||||||||
Derivative warrant liabilities - Public warrants | $ | — | $ | — | $ | 7,482,340 | ||||||
Derivative warrant liabilities - Private placement warrants | $ | — | $ | — | $ | 7,628,220 |
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 - money market funds | $ | 250,000,869 | $ | — | $ | — | ||||||
Liabilities: | ||||||||||||
Derivative warrant liabilities - Public warrants | $ | — | $ | — | $ | 5,150,000 | ||||||
Derivative warrant liabilities - Private placement warrants | $ | — | $ | — | $ | 5,493,330 |
Level 1 assets include investments in money market funds that invest solely in U.S. Treasury securities. The Company uses inputs such as actual trade data, benchmark yields, quoted market prices from dealers or brokers, and other similar sources to determine the fair value
March 9, 2021 | March 31, 2021 | |||||||
Exercise price | $ | 11.50 | $ | 11.50 | ||||
Unit price | $ | 10.07 | $ | 10.08 | ||||
Volatility | 17.0 | % | 14.5 | % | ||||
Term (years) | 6.0 | 5.9 | ||||||
Risk-free rate | 1.03 | % | 1.15 | % |
WARBURG PINCUS CAPITAL CORPORATION I—A
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
March 9, 2021 | March 31, 202 1 | April 20, 2021 | June 30, 2021 | |||||||||||||
Exercise price | $ | 11.50 | $ | 11.50 | $ | 11.50 | $ | 11.50 | ||||||||
Unit price | $ | 10.07 | $ | 10.08 | $ | 10.08 | $ | 9.80 | ||||||||
Volatility | 17.0 | % | 14.5 | % | 14.5 | % | 19.1 | % | ||||||||
Term (years) | 6.0 | 5.9 | 5.9 | 5.7 | ||||||||||||
Risk-free rate | 1.03 | % | 1.15 | % | 1.15 | % | 0.99 | % |
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Derivative warrant liabilities at January 1, 2021 | $ | 0— | ||
Issuance of Public and Private Warrants | 12,503,330 | |||
Change in fair value of derivative warrant liabilities | (1,860,000 | ) | ||
Derivative warrant liabilities at March 31, 2021 | $ | 10,643,330 | ||
Issuance of Public and Private Warrants - over-allotment | 1,147,480 | |||
Change in fair value of derivative warrant liabilities | 3,319,750 | |||
Derivative warrant liabilities at June 30, 2021 | $ | 15,110,560 | ||
On April 26, 2021, the Public Shares and Public Warrants underlying the Units sold in the IPO began trading separately.
such director.
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
million, and the incurrence of approximately $1.8 million in offering costs, of which approximately $1.2 million was for deferred underwriting commissions. “Warburg of 1933, as amended, and Section 21E of the Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings.merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”).Business Combination. We are an emerging growth company and, as such, we are subject to all of the risks associated with emerging growth companies.sponsorSponsor is Warburg Pincus Capital Corporation I—A Sponsor, L.P., a Cayman Islands exempted limited partnership (“Sponsor”). The registration statement for our Initial Public Offering was declared effective on March 4, 2021. On March 9, 2021, we consummated its Initial Public Offering of 25,000,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units, being offered, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $250.0 million, and incurring offering costs of approximately $14.3 million, of which approximately $8.8 million was for deferred underwriting commissions (Note 6). On April 16, 2021, the underwriters partially exercised the over-allotment option, and the closing of the issuance and sale of the additional 3,342,178 Over-Allotment Units (the “Over-Allotment Units”) occurred on April 20, 2021. The issuance by the Companyus of the Over-Allotment Units at a price of $10.00 per unitsuch units resulted in total gross proceeds of approximately $33.4 million.the Companywe consummated the private placement (“Private Placement”)Placement of 5,333,333 warrants (each, a “PrivatePrivate Placement Warrant” and collectively, the “Private Placement Warrants”),Warrants, at a price of $1.50 per Private Placement Warrant with the Sponsor, generating gross proceeds of $8.0 million (Note 4). On April 20, 2021, simultaneously with the issuance and sale of the Over-Allotment Units, the Companywe consummated the sale of an additional 445,624 Private Placement Warrants (the “Over-Allotmentpursuant to the Over-Allotment Private Placement” and, together with the IPO Private Placement, the “Private Placements”), generating gross proceeds of approximately $668,000.net proceedsOffering Proceeds from the IPO (includingInitial Public Offering and the Over-Allotment Units)Units, together with certain of the proceeds from the Private Placements approximately(approximately $283.4 million in the aggregate (the “Offering Proceeds”)aggregate), were placed in a trust account (“the Trust Account”)Account with Continental Stock Transfer & Trust Company acting as trustee and will be invested in United States government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule the Investment Company Act of 1940, as amended, or the Investment Company Act, as determined by us, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below.
For the three months ended March 31,June 30, 2021, we had a net incomeloss of approximately $1.3 million,$3,787,000, which consisted of approximately a $1.9 million $4,000 of income from investments held in the Trust Account, offset by approximately $3,320,000 in gain lossand approximately $1,000 of income from investments held in trust account, partially offset by approximately $150,000 in general and administrative expenses, and approximately $359,000$38,000 in offering costs associated with derivative warrant liabilities.
liabilities, and approximately $434,000 in general and administrative expenses.
The 5,000,000 warrants issued in connection with the Initial Public Offering (the “Public Warrants”) and the 5,333,333 Private Placement Warrants are recognized as derivative liabilities in accordance with ASC 815. Accordingly, we recognizethe Company recognizes the warrant instruments as liabilities at fair value and adjustadjusts the carrying value of the instruments to fair value at each reporting period. The liabilitiesperiod until they are subject to re-measurement at each balance sheet date until exercised. The initial fair value of the Public Warrants issued in connection with the Initial Public Offering and the fair value of the Private Placement Warrants have been estimated using a binomial lattice model in a risk-neutral framework.
As the transfer of Private Placement Warrants to anyone who is not a permitted transferee would result in the Private Placement Warrants having substantially the same terms as the Public Warrants, the Company determined that the fair value of each Private Placement Warrant is equivalent to that of each Public Warrant. The fair value of the Warrants as of June 30, 2021 is based on observable listed prices for such Warrants. Derivative warrant liabilities are classified as
Possible Redemption
There were no shares of Class A ordinary shares subject to possible redemption at December 31, 2020.
Net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of shares of ordinary shares outstanding during the period. The Company has not considered the effect of the warrants sold in the Initial Public Offering and private placement to purchase an aggregate of 10,333,333 shares in the calculation of diluted loss per share, since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.
The Company’s unaudited condensed statement of operations includes a presentation of income (loss) per ordinary share for Class A ordinary shares subject to possible redemption in a manner similar to thefor the three months ended March 31, 2021, is calculated by dividing the interest income or lossearned on investments held in the Trust Account, of approximately $869less interest available to be withdrawn for the three months ended March 31, 2021,payment of taxes, by the weighted average number of Class A ordinary shares outstanding for the period.
periods. Net income (loss) per ordinary share, basic and diluted, for Class B ordinary shares is calculated by dividing the net income (loss), adjusted for income or loss attributedattributable to Class A ordinary shares, by the weighted average number of Class B Ordinary shares ofoutstanding for the periods. Class B ordinary shares outstandinginclude the Founder Shares as these ordinary shares do not have any redemption features and do not participate in the income earned on the Trust Account. Accretion associated with the redeemable Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value.
period and therefore the inclusion of such Warrants would be anti-dilutive.
Management
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
end of the fiscal quarter ended March 31,June 30, 2021, as such term is defined in RulesMarch 31,June 30, 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.GAAP. Accordingly, management believes that the financial statements included in this Quarterly Report on Form 10-Q (this “Quarterly Report”) present fairly in all material respects our financial position, results of operations and cash flows for the period presented.ThereMarch 31,June 30, 2021 covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting as the circumstances that led to the revision of our financial statements had not yet been identified.reporting. Management has implemented remediation steps to address the material weakness and to improve our internal control over financial reporting. Specifically, we expanded and improved our review process for complex securities and related accounting standards.
Item 1A. | Risk Factors |
Our warrants are accounted for as liabilities and the changes in value
The securities in which we invest the funds held in the trust account could bear a negative rate of interest, which 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.
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, 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 Europe 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 memorandum and articles of association, 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 income 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.
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
Warrants pursuant to the Over-Allotment Private Placement.
Item 3. | Defaults Upon Senior Securities |
Item 4. | Mine Safety Disclosures. |
Item 5. | Other Information. |
Item 6. | Exhibits. |
* | Filed herewith |
+ | 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. |
Dated: | WARBURG PINCUS CAPITAL CORPORATION I—A | |||||
By: | /s/ Christopher H. Turner | |||||
Name: | Christopher H. Turner | |||||
Title: | Chief Executive Officer and Chairman of the Board of Directors |
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