| ☒ | 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 |
I-A ofI—A
450 Lexington Avenue New York, New York | 10017 | |
(Address Of Principal Executive Offices) | (Zip Code) | |
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||||||
| Emerging growth company | ☒ | |||||||||
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Item 3. | ||||||
Item 4. | ||||||
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Item 5. | ||||||
Item 6. | ||||||
| 27 | ||||||
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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September 30, 2021 | December 31, 2020 | |||||||
Assets: | (Unaudited) | |||||||
Current assets: | ||||||||
Cash | $ | 1,642,450 | $ | — | ||||
Prepaid expenses | 634,484 | 11,758 | ||||||
Total current assets | 2,276,934 | 11,758 | ||||||
Deferred offering costs associated with initial public offering | — | 81,600 | ||||||
Investments held in Trust Account | 283,431,128 | 0 | ||||||
| �� | ||||||||
Total Assets | $ | 285,708,062 | $ | 93,358 | ||||
Liabilities and Shareholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 17,103 | $ | — | ||||
Accrued expenses | 745,375 | 81,600 | ||||||
Total current liabilities | 762,478 | 81,600 | ||||||
Derivative warrant liabilities | 12,248,710 | — | ||||||
Deferred underwriting commissions | 9,919,751 | — | ||||||
Total liabilities | 22,930,939 | 81,600 | ||||||
Commitments and Contingencies | 0 | 0 | ||||||
Class A ordinary shares subject to possible redemption, $0.0001 par value; 28,342,178 and -0- | 283,421,780 | — | ||||||
Shareholders’ Equity (Deficit): | ||||||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; NaN issued and outstanding as of September 30, 2021 and December 31, 2020 | 0— | — | ||||||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized | 0 | — | ||||||
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 September 30, 2021 and December 31, 2020, respectively | 709 | 719 | ||||||
Additional paid-in capital | 0— | 24,281 | ||||||
Accumulated deficit | (20,645,366 | ) | (13,242 | ) | ||||
Total shareholders’ equity (deficit) | (20,644,657 | ) | 11,758 | |||||
Total Liabilities and Shareholders’ Equity | $ | 285,708,062 | $ | 93,358 | ||||
For The Three Months Ended March 31, 2021 (Unaudited)
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For the Three Months Ended September 30, 2021 | For the Nine Months Ended September 30, 2021 | |||||||
(Unaudited) | (Unaudited) | |||||||
General and administrative expenses | $ | 345,816 | $ | 895,456 | ||||
General and administrative expenses - related party | 30,000 | 70,000 | ||||||
Loss from operations | (375,816 | ) | (965,456 | ) | ||||
Other income (expense) | ||||||||
Change in fair value of derivative warrant liabilities | 2,861,850 | 1,402,100 | ||||||
Offering costs associated with derivative warrant liabilities | 0 | (396,570 | ) | |||||
Income from investments held in Trust Account | 4,317 | 9,347 | ||||||
Net income | $ | 2,490,351 | $ | 49,421 | ||||
Weighted average shares outstanding of Class A ordinary shares | 28,342,178 | 20,872,224 | ||||||
Basic and diluted net income per share, Class A ordinary shares | 0.07 | 0.00 | ||||||
Basic weighted average shares outstanding of Class B ordinary shares | 7,085,544 | 6,758,060 | ||||||
Basic net income per share, Class B ordinary shares | 0.07 | 0.00 | ||||||
Diluted weighted average shares outstanding of Class B ordinary shares | 7,085,544 | 7,085,544 | ||||||
Diluted net income per share, Class B ordinary shares | 0.07 | 0.00 | ||||||
For The Three Months Ended March 31, (DEFICIT)
| 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)
Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||
Class A | Class B | Paid-in | Accumulated | Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Equity (Deficit) | ||||||||||||||||||||||
Balance - December 31, 2020 | — | $ | — | 7,187,500 | $ | 719 | $ | 24,281 | $ | (13,242 | ) | $ | 11,758 | |||||||||||||||
Excess cash received over the fair value of the private warrants | — | — | — | — | 1,546,670 | — | 1,546,670 | |||||||||||||||||||||
Accretion of Class A ordinary shares subject to possible redemption amount | — | — | — | — | (1,570,951 | ) | (18,402,183 | ) | (19,973,134 | ) | ||||||||||||||||||
Net income | — | — | — | — | — | 1,352,066 | 1,352,066 | |||||||||||||||||||||
Balance - March 31, 2021 (unaudited) | 0 | 0 | 7,187,500 | 719 | 0 | (17,063,359 | ) | (17,062,640 | ) | |||||||||||||||||||
Excess cash received over the fair value of the private warrants, over-allotment | — | — | — | — | 209,446 | — | 209,446 | |||||||||||||||||||||
Forfeiture of Class B ordinary shares | — | — | (101,956 | ) | (10 | ) | 10 | — | — | |||||||||||||||||||
Accretion of Class A ordi n ary shares subject to possible redemption amount, over-allotment | — | — | — | — | (209,456 | ) | (2,279,362 | ) | (2,488,818 | ) | ||||||||||||||||||
Net loss | — | — | — | — | — | (3,792,996 | ) | (3,792,996 | ) | |||||||||||||||||||
Balance - June 30, 2021 (unaudited) | 0 | 0 | 7,085,544 | 709 | 0 | (23,135,717 | ) | (23,135,008 | ) | |||||||||||||||||||
Net income | — | — | — | — | 2,490,351 | 2,490,351 | ||||||||||||||||||||||
Balance - September 30, 2021 (unaudited) | 0 | $ | 0 | 7,085,544 | $ | 709 | $ | 0 | $ | (20,645,366 | ) | $ | (20,644,657) | |||||||||||||||
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 income | $ | 49,421 | ||
Adjustments to reconcile net income to net cash used in operating activities: | ||||
Income from investments held in Trust Account | (9,347 | ) | ||
Change in fair value of derivative warrant liabilities | (1,402,100 | ) | ||
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 | (622,726 | ) | ||
Accounts payable | 17,091 | |||
Accrued expenses | 410,375 | |||
Net cash used in operating activities | (1,157,663 | ) | ||
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 | (5,790,277 | ) | ||
Net cash provided by financing activities | 286,221,893 | |||
Net increase in cash | 1,642,450 | |||
Cash - beginning of the period | 0— | |||
Cash - end of the period | $ | 1,642,450 | ||
Supplemental disclosure of noncash 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 |
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
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 that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have vendors, service providers (except the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
I-A
In Aprilfor quarterly period ended September 30, 2021, the Company identified a misstatement inconcluded it should revise 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 opposedfinancial statements 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 ofclassify all Class A ordinary shares subject to redemption;possible redemption in temporary equity. In accordance with the SEC and its staff’s guidance on redeemable equity instruments, ASC 480, paragraph
presentation for the Class A ordinary shares subject to possible redemption, the Company also revised its earnings per share calculation to allocate income and losses shared pro rata between the two classes of shares. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of shares share pro rata in the income and losses of the Company.
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
sheet. There were 0 Class A ordinary shares issued or outstanding as of December 31, 2020.
For the Three Months Ended September 30, 2021 | For the Nine Months Ended September 30, 2021 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic net income per ordinary share: | ||||||||||||||||
Numerator | ||||||||||||||||
Allocation of net income | $ | 1,992,281 | $ | 498,070 | $ | 37,333 | $ | 12,088 | ||||||||
Denominator | ||||||||||||||||
Basic weighted average ordinary shares outstanding | 28,342,178 | 7,085,544 | 20,872,224 | 6,758,060 | ||||||||||||
Basic net income per ordinary share | $ | 0.07 | $ | 0.07 | $ | 0.00 | $ | 0.00 | ||||||||
For the Three Months Ended September 30, 2021 | For the Nine Months Ended September 30, 2021 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Diluted net income per ordinary share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income | $ | 1,992,281 | $ | 498,070 | $ | 36,896 | $ | 12,088 | ||||||||
Denominator: | ||||||||||||||||
Diluted weighted average ordinary shares outstanding | 28,342,178 | 7,085,544 | 20,872,224 | 7,085,544 | ||||||||||||
Diluted net income per ordinary share | $ | 0.07 | $ | 0.07 | $ | 0.00 | $ | 0.00 | ||||||||
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.
There was 0 outstanding balance under this agreement as of December 31, 2020.
WARBURG PINCUS CAPITAL CORPORATION I—A
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Gross proceeds from Initial Public Offering | $ | 283,421,780 | ||
Less: | ||||
Fair value of Public Warrants at issuance | (6,738,490 | ) | ||
Offering costs allocated to Class A ordinary shares subject to possible redemption | (15,723,462 | ) | ||
Plus: | ||||
Accretion on Class A ordinary shares subject to possible redemption amount | 22,461,952 | |||
Class A ordinary shares subject to possible redemption | $ | 283,421,780 | ||
issued and outstanding.
respectively.
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
as of December 31, 2020.
I-A
I-A
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 | $ | 283,431,128 | $ | — | $ | — | ||||||
Liabilities: | ||||||||||||
Derivative warrant liabilities—Public warrants | $ | — | $ | — | $ | 6,065,230 | ||||||
Derivative warrant liabilities—Private placement warrants | $ | — | $ | — | $ | 6,183,480 | ||||||
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.
For periods where no observable traded price was available, the fair value of the Public and Private Placement Warrants, issued in connection with the Initial Public Offering, has been estimated using a binomial lattice model. For periods subsequent to the detachment of the Public Warrants from the Units, the Public Warrants’ traded market price was used as the fair value. The estimated fair value of the Public and Private Placement Warrants prior to Public Warrants being traded in an active market, is determined using Level 3 inputs. Inherent in a binomial lattice model are assumptions related to the Unit price, expected volatility, risk-free interest rate, term to expiration, and dividend yield. The Unit price is based on the publicly traded price of the Units as of the measurement date. The Company estimated the volatility for the Public and Private Placement Warrants based on the implied volatility from the traded prices of warrants issued by other special purpose acquisition companies. The risk-free interest rate is based on interpolated U.S. Treasury rates, commensurate with a similar term to the Public and Private Placement Warrants. The term to expiration was calculated as the contractual term of the Public and Private Placement Warrants, assuming one year to a Business Combination from the IPOInitial Public Offering date. Finally, the Company does not anticipate paying a dividend.
| 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 | % | ||||
March 9, 2021 | March 31, 2021 | June 30, 2021 | September 30, 2021 | |||||||||||||
Exercise price | $ | 11.50 | $ | 11.50 | $ | 11.50 | $ | 11.50 | ||||||||
Unit price | $ | 10.07 | $ | 10.08 | $ | 9.80 | $ | 9.82 | ||||||||
Volatility | 17.0 | % | 14.5 | % | 19.1 | % | 16.3 | % | ||||||||
Term (years) | 6.0 | 5.9 | 5.7 | 5.4 | ||||||||||||
Risk-free rate | 1.03 | % | 1.15 | % | 0.99 | % | 1.05 | % | ||||||||
I-A
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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 | |||
Change in fair value of derivative warrant liabilities | (2,861,850 | ) | ||
Derivative warrant liabilities at September 30, 2021 | $ | 12,248,710 | ||
On April 20, 2021, the Company issued an additional 3,342,178 Units at a price of $10.00 per unit in connection with the underwriters’ partial exercise of their over-allotment option. As a result, the Sponsor forfeited 101,956 shares of Class B ordinary shares following the expiration of the unexercised portion of the underwriters’ over-allotment option. Simultaneously with the closing of the underwriters’ over-allotment option, the Company issued an additional 445,624 Private Placement Warrants to the Sponsor. The Private Placement Warrants were sold at a price of $1.50 per Private Placement Warrant, generating aggregate gross proceeds of $668,436. Offering costs associated with the closing of the underwriters’ over-allotment option amounted to $1,838,198 consisting of $668,436 of underwriting commissions and $1,169,762 of deferred underwriters’ commissions.
On April 26, 2021, the Public Shares and Public Warrants underlying the Units sold in the IPO began trading separately.
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 , 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,September 30, 2021, we had a net income of approximately $1.3$2.5 million, which consisted of approximately a $1.9$4,000 of income from investments held in the Trust Account, approximately $2.9 million in$1,000$375,000 in general and administrative expenses.
liabilities, and approximately $965,000 in general and administrative expenses.
Registration Rights
The holders There was no outstanding balance under this agreement as of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital) were entitled to registration rights pursuant to a registration rights agreement signed upon the effective date of the Initial Public Offering. The holders of these securities were entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination. We will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriters were entitled to an underwriting discount of $0.20 per unit, or $5.0 million in the aggregate, paid upon the closing of the Initial Public Offering. In addition, $0.35 per unit, or approximately $8.8 million in the aggregate will be payable to the underwriters for deferred underwriting commissions. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.
December 31, 2020.
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 determination of the fair value of the warrant liability may be subject to change as more current information becomes available and accordingly the actual results could differ significantly. Derivative warrant liabilities are classified as
Possible Redemption
closing of the Initial Public Offering (including exercise of the over-allotment option), we recognized the accretion from initial book value to redemption amount, which resulted in charges against additional
shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of shares. 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 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.
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 respective period.
Management
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
Under the supervision andmanagement, including our principalcurrent chief executive officer and principalchief financial officer we conducted an evaluation of(our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended March 31,September 30, 2021, as such term is defined in Rules 13a-15(e) and 15d-15(e)pursuant to Ruleand in light of the SEC Staff Statement, our Certifying Officers concluded that solely due to the Company’s misapplication of the accounting for the Company’s warrants as liabilities, our disclosure controls and procedures were not effective as of March 31,September 30, 2021. In light
financial reportingInternal Controlinternal control over Financial Reporting
applications. The foregoing actions, which we believe remediated the material weakness in internal control over financial reporting, were completed as of the date of September 30, 2021.
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Our warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results and thus may have an adverse effect on the market price of our securities.
On April 12, 2021, the staff of the SEC (the “SEC Staff”) issued a public statement entitled “Staff Statement on Accounting and Reporting Considerations for Warrants issued by SPecial Purpose Acquisition Companies (“SPACs”) (the “SEC Staff Statement”). In the SEC Staff Statement, the SEC Staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPAC’s balance sheet as opposed to equity. As a result of the SEC Staff Statement, we reevaluated the accounting treatment of our 5,000,000 Public Warrants and 5,333,333 Private Placement Warrants, and determined to classify the warrants as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings.
As a result, included on our condensed balance sheet as of March 31, 2021 contained elsewhere in this Quarterly Report are derivative liabilities related to embedded features contained within our warrants. ASC 815, Derivatives and Hedging, provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of operations. As a result of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly, based on factors, which are outside of our control. Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on our warrants each reporting period and that the amount of such gains or losses could be material. The impact of changes in fair value on earnings may have an adverse effect on the market price of our securities.
We have identified a material weakness in our internal control over financial reporting as of March 31, 2021. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may result a material adverse effect on our ability to consummate an initial business combination.
Following the issuance of the SEC Staff Statement, after consultation with our independent registered public accounting firm, management identified a material weakness in our internal control over financial reporting related to the accounting for the warrants issued in connection with our Initial Public Offering. Our internal control over financial reporting did not result in the proper accounting classification of the warrants, which, due to its impact on our financial statements, we determined to be a material weakness.
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 our annual or interim financial statements will not be prevented or detected on a timely basis. Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. Any failure to maintain internal control over our financial reporting could adversely impact our ability to report our financial position and results from operations on a timely and accurate basis, which could delay or disrupt our efforts to consummate an initial business combination. If our financial statements are not filed on a timely basis, we may also be subject to sanctions or investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities. In either case, there could result a material adverse effect on our ability to consummate an initial business combination. We have expanded and improved our review process for complex securities and related accounting standards and continue to evaluate other steps to remediate the material weakness.
In addition, as a result of such material weakness, the change in accounting for our warrants, and other matters raised or that may in the future be raised by the SEC, we face potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the material weakness in our internal control over financial reporting and the preparation of our financial statements. As of the date of this report, we have no knowledge of any such litigation or dispute. However, we can provide no assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could have a material adverse effect on our business, results of operations and financial condition or our ability to complete a Business Combination.
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 |
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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