| ☒ | 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 29th floor,Floor, Suite B
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
| Emerging growth company | ☒ | |||||
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Item 4. | 24 | |||||
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Item 6. | 25 | |||||
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Item 1. | Condensed Financial Statements |
MARCH 31, 2021
| March 31, 2021 | December 31, 2020 | |||||||
| (Unaudited) | ||||||||
Assets: | ||||||||
Current assets: | ||||||||
Cash | $ | 1,676,347 | $ | — | ||||
Prepaid expenses | 1,416,960 | 13,162 | ||||||
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Total current assets | 3,093,307 | 13,162 | ||||||
Investments held in Trust Account | 495,914,245 | — | ||||||
Deferred offering costs associated with initial public offering | — | 111,335 | ||||||
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Total Assets | $ | 499,007,552 | $ | 124,497 | ||||
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Liabilities and Shareholders’ Equity: | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 117,985 | $ | 52,989 | ||||
Accrued expenses | 73,698 | 58,385 | ||||||
Note payable - related party | — | 4,053 | ||||||
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Total current liabilities | 191,683 | 115,427 | ||||||
Deferred underwriting commissions | 17,356,818 | — | ||||||
Derivative warrant liabilities | 18,047,120 | — | ||||||
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Total liabilities | 35,595,621 | 115,427 | ||||||
Commitments and Contingencies | ||||||||
Class A ordinary shares; 45,841,193 and -0- shares subject to possible redemption at $10.00 per share at March 31, 2021 and December 31, 2020, respectively | 458,411,930 | — | ||||||
Shareholders’ Equity: | ||||||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding at March 31, 2021 and December 31, 2020 | — | — | ||||||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 3,749,715 and -0- shares issued and outstanding (excluding 45,841,193 and -0- shares subject to possible redemption) at March 31, 2021 and December 31, 2020, respectively | 375 | — | ||||||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 12,506,250 shares issued and outstanding at March 31, 2021 and December 31, 2020(1) | 1,251 | 1,251 | ||||||
Additional paid-in capital | 2,711,759 | 23,749 | ||||||
Retained earnings (Accumulated deficit) | 2,286,616 | (15,930 | ) | |||||
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Total shareholders’ equity | 5,000,001 | 9,070 | ||||||
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Total Liabilities and Shareholders’ Equity | $ | 499,007,552 | $ | 124,497 | ||||
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SHEETS
September 30, 2021 | December 31, 2020 | |||||||
| (Unaudited) | ||||||||
Assets: | ||||||||
Current assets: | ||||||||
Cash | $ | 1,435,699 | $ | — | ||||
Prepaid expenses | 1,015,642 | 13,162 | ||||||
Total current assets | 2,451,341 | 13,162 | ||||||
Investments held in Trust Account | 495,938,352 | — | ||||||
Deferred offering costs associated with initial public offering | — | 111,335 | ||||||
Total Assets | $ | 498,389,693 | $ | 124,497 | ||||
Total Liabilities,- Shares Subject To Possible Redemption and Shareholders’ Equity (Deficit): | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 66,490 | $ | 52,989 | ||||
Accrued expenses | 102,375 | 58,385 | ||||||
Note payable - related party | — | 4,053 | ||||||
Total current liabilities | 168,865 | 115,427 | ||||||
Deferred underwriting commissions | 17,356,818 | — | ||||||
Derivative warrant liabilities | 19,946,820 | — | ||||||
Total liabilities | 37,472,503 | 115,427 | ||||||
Commitments and Contingencies | 0 | 0 | ||||||
Class A ordinary shares subject to possible redemption; 49,590,908 and -0- | 495,909,080 | — | ||||||
Shareholders’ Equity (Deficit): | ||||||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; 0ne issued and outstanding at September 30, 2021 and December 31, 2020 | 0— | — | ||||||
Class A ordinary shares, $0.0001 par value; 500,000,000 0 nonredeemable Class A ordinary shares issued or outstandinshares authorized; g | — | — | ||||||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 12,397,727 and 12,506,250 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 1,240 | 1,251 | ||||||
Additional paid-in capital | — | 23,749 | ||||||
Accumulated deficit | (34,993,130 | ) | (15,930 | ) | ||||
Total shareholders’ equity (deficit) | (34,991,890 | ) | 9,070 | |||||
Total Liabilities, Class A Ordinary Shares Subject To Possible Redemption and Shareholders’ Equity (Deficit) | $ | 498,389,693 | $ | 124,497 | ||||
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For the Three Months Ended September 30, 2021 | For the Nine Months Ended September 30, 2021 | |||||||
General and administrative expenses | $ | 278,803 | $ | 659,378 | ||||
Administrative expenses - related party | 30,000 | 67,419 | ||||||
Loss from operations | (308,803 | ) | (726,797 | ) | ||||
Other income (expenses) | ||||||||
Change in fair value of derivative warrant liabilities | 1,139,810 | 1,139,810 | ||||||
Financing costs - derivative warrant liabilities | — | (634,480 | ) | |||||
Interest income from investments held in Trust Account | 6,381 | 29,272 | ||||||
Net income (loss) | $ | 837,388 | $ | (192,195 | ) | |||
Weighted average number of Class A ordinary shares - basic and diluted | 49,590,908 | 37,056,942 | ||||||
Basic and diluted net income (loss) per share, Class A | $ | 0.01 | $ | (0.00 | ) | |||
Weighted average number of Class B ordinary shares – basic and diluted | 12,397,727 | 12,007,284 | ||||||
Basic and diluted net income (loss) per share, Class B | $ | 0.01 | $ | (0.00 | ) | |||
| Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||
| Class A | Class B | Paid-in | Accumulated | Shareholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares (1) | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
Balance - December 31, 2020 | — | $ | — | 12,506,250 | $ | 1,251 | $ | 23,749 | $ | (15,930 | ) | $ | 9,070 | |||||||||||||||
Sale of units in initial public offering, less fair value of public warrants | 49,590,908 | 4,959 | — | — | 484,894,941 | — | 484,899,900 | |||||||||||||||||||||
Offering costs | — | — | — | — | (27,340,317 | ) | — | (27,340,317 | ) | |||||||||||||||||||
Excess of cash received over fair value of private placement warrant | — | — | — | — | 3,540,732 | — | 3,540,732 | |||||||||||||||||||||
Shares subject to possible redemption | (45,841,193 | ) | (4,584 | ) | — | — | (458,407,346 | ) | — | (458,411,930 | ) | |||||||||||||||||
Net income | — | — | — | — | — | 2,302,546 | 2,302,546 | |||||||||||||||||||||
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Balance - March 31, 2021 | 3,749,715 | $ | 375 | 12,506,250 | $ | 1,251 | $ | 2,711,759 | $ | 2,286,616 | $ | 5,000,001 | ||||||||||||||||
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Ordinary Shares | Additional Paid-in Capital | Total Shareholders’ Equity (Deficit) | ||||||||||||||||||||||||||
Class A | Class B | Accumulated Deficit | ||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance - December 31, 2020 | 0 | $ | 0 | 12,506,250 | $ | 1,251 | $ | 23,749 | $ | (15,930 | ) | $ | 9,070 | |||||||||||||||
Excess of cash received over fair value of private placement warrants | — | — | — | — | 3,540,732 | — | 3,540,732 | |||||||||||||||||||||
Accretion of Class A ordinary shares subject to possible redemption | — | — | — | — | (3,564,481 | ) | (34,785,016 | ) | (38,349,497 | ) | ||||||||||||||||||
Net income | — | — | — | — | — | 2,302,546 | 2,302,546 | |||||||||||||||||||||
Balance - March- 31, 2021 (unaudited) (restated) (1) | 0 | 0 | 12,506,250 | 1,251 | 0 | (32,498,400 | ) | (32,497,149 | ) | |||||||||||||||||||
Forfeiture of Class B ordinary shares | — | — | (108,523 | ) | (11 | ) | 11 | — | — | |||||||||||||||||||
Accretion of Class A ordinary shares subject to possible redemption | — | — | — | — | (11 | ) | 11 | — | ||||||||||||||||||||
Net loss | — | — | — | — | — | (3,332,129 | ) | (3,332,129 | ) | |||||||||||||||||||
Balance - June 30, 2021 (unaudited) (restated) (1) | 0 | 0 | 12,397,727 | 1,240 | 0 | (35,830,518 | ) | (35,829,278 | ) | |||||||||||||||||||
Net income | — | — | — | — | — | 837,388 | 837,388 | |||||||||||||||||||||
Balance - September 30, 2021 (unaudited) | 0 | $ | 0 | 12,397,727 | $ | 1,240 | $ | 0 | $ | (34,993,130 | ) | $ | (34,991,890 | ) | ||||||||||||||
(1) |
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Cash Flows from Operating Activities: | ||||
Net income | $ | 2,302,546 | ||
Adjustments to reconcile net income to net cash used in operating activities: | ||||
Interest income from investments held in Trust Account | (5,165 | ) | ||
Change in fair value of derivative warrant liabilities | (3,039,510 | ) | ||
Financing costs - derivative warrant liabilities | 634,480 | |||
Changes in operating assets and liabilities: | ||||
Prepaid expenses | (1,403,798 | ) | ||
Accounts payable | 102,496 | |||
Accrued expenses | 3,698 | |||
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Net cash used in operating activities | (1,405,253 | ) | ||
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Cash Flows from Investing Activities: | ||||
Cash deposited in Trust Account | (495,909,080 | ) | ||
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Net cash used in investing activities | (495,909,080 | ) | ||
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Cash Flows from Financing Activities: | ||||
Repayment of note payable to related party | (170,558 | ) | ||
Proceeds received from initial public offering, gross | 495,909,080 | |||
Proceeds received from private placement | 13,618,182 | |||
Offering costs paid | (10,366,024 | ) | ||
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Net cash provided by financing activities | 498,990,680 | |||
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Net increase in cash | 1,676,347 | |||
Cash - beginning of the period | — | |||
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Cash - ending of the period | $ | 1,676,347 | ||
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Supplemental disclosure of noncash investing and financing activities: | ||||
Initial valuation of derivative warrant liability | $ | 21,086,630 | ||
Offering costs included in accrued expenses | $ | 70,000 | ||
Offering costs paid by related party under promissory note | $ | 129,005 | ||
Reversal of accrued expenses | $ | 58,385 | ||
Outstanding accounts payable balance paid by related party under note payable | $ | 37,500 | ||
Deferred underwriting commissions | $ | 17,356,818 | ||
Initial value of Class A ordinary shares subject to possible redemption | $ | 455,454,240 | ||
Change in value of Class A ordinary shares subject to possible redemption | $ | 2,957,690 |
Cash Flows from Operating Activities: | ||||
Net loss | $ | (192,195 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Interest income from investments held in Trust Account | (29,272 | ) | ||
Financing costs - derivative warrant liabilities | 634,480 | |||
Change in fair value of derivative warrant liabilities | (1,139,810 | ) | ||
Changes in operating assets and liabilities: | ||||
Prepaid expenses | (1,002,480 | ) | ||
Accounts payable | 51,001 | |||
Accrued expenses | 32,375 | |||
Net cash used in operating activities | (1,645,901 | ) | ||
Cash Flows from Investing Activities: | ||||
Cash deposited in Trust Account | (495,909,080 | ) | ||
Net cash used in investing activities | (495,909,080 | ) | ||
Cash Flows from Financing Activities: | ||||
Repayment of note payable to related party | (170,558 | ) | ||
Proceeds received from initial public offering, gross | 495,909,080 | |||
Proceeds received from private placement | 13,618,182 | |||
Offering costs paid | (10,366,024 | ) | ||
| Net cash provided by financing -activities | 498,990,680 | |||
Net increase - in cash | 1,435,699 | |||
Cash - beginning of the period | 0 | |||
Cash - end of the period | $ | 1,435,699 | ||
Supplemental disclosure - of noncash investing and financing activities: | ||||
Offering costs included in accrued expenses | $ | 70,000 | ||
Offering costs paid by related party under promissory note | $ | 129,005 | ||
Reversal of accrued expenses | $ | 58,385 | ||
Outstanding accounts payable balance paid by related party under note payable | $ | 37,500 | ||
Deferred underwriting commissions | $ | 17,356,818 |
INDEPENDENCE HOLDINGS CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Topic 480 “Distinguishing Liabilities from Equity.”Equity” (“ASC Topic 480”). In such case, the Company will proceed with an Initial Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of an Initial Business Combination and a majority of the shares voted are voted in favor of the Initial Business Combination. If a shareholder vote is not required by law and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to the amended and restated memorandum and articles of association which were adopted by the Company upon the consummation of the Initial Public Offering (the “Amended and Restated Memorandum and Articles of Association”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (the “SEC”), and file tender offer documents with the SEC prior to completing an Initial Business Combination. If, however, a shareholder approval of the transactions is required by law, or the Company decides to obtain shareholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each Public Shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction. If the Company seeks shareholder approval in connection with an Initial Business Combination, the holders of the Founder Shares (as defined in Note 4) prior to the Initial Public Offering (the “Initial Shareholders”) agreed to vote their Founder Shares (as defined in Note 6) and any Public Shares purchased during or after the Initial Public Offering in favor of an Initial Business Combination. In addition, the Initial Shareholders agreed to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of an Initial Business Combination. In addition, the Company agreed not to enter into a definitive agreement regarding an Initial Business Combination without the prior consent of the Sponsor.
INDEPENDENCE HOLDINGS CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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, expenses relating to the administration of the trust account and limited withdrawals for working capital, 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.
NOTE 2. REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
In April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the SEC Statement”). Specifically, the SEC Statement focused on certain settlement terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in the warrant agreement governing the Company’s warrants. As a result of the SEC Statement, the Company reevaluated the accounting treatment of (i) the 9,918,182 redeemable warrants (the “Public Warrants”) that were included in the units issued by the Company in its Initial Public Offering and (ii) the 9,078,788 redeemable warrants that were issued to the Company’s sponsor in a private placement that closed concurrently with the closing of the Initial Public Offering together with the Public Warrants, the “Warrants”). The Company previously accounted for the Warrants as components of equity.
In further consideration of the guidance in Accounting Standards Codification (“ASC”) 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity (“ASC 815”), the Company concluded that a provision in the warrant agreement related to certain tender or exchange offers precludes the Warrants from being accounted for as components of equity. As the Warrants meet the definition of a derivative as contemplated in ASC 815, the Warrants should be recorded as derivative liabilities on the balance sheet and measured at fair value at inception (on the date of the Initial Public Offering) and at each reporting date in accordance with ASC 820, Fair Value Measurement, with changes in fair value recognized in the Statements of Operations in the period of change.
In accordance with ASC Topic 340, Other Assets and Deferred Costs, as a result of the classification of the Warrants as derivative liabilities, the Company expensed a portion of the offering costs originally recorded as a reduction in equity. The portion of offering costs that was expensed was determined based on the relative fair value of the Public Warrants and Class A ordinary shares included in the Units.
The Company’s accounting for the warrants as components of equity instead of as derivative liabilities did not have any effect on the Company’s previously reported cash.
The following tables summarize the effect of the revision on each financial statement line item as of the dates, and for the period, indicated:
| As of March 11, 2021 | ||||||||||||
| As Previously Reported | Adjustment | As Corrected | ||||||||||
Derivative warrant liabilities | $ | — | $ | 21,086,630 | $ | 21,086,630 | ||||||
Total liabilities | 17,918,408 | 21,086,630 | 39,005,038 | |||||||||
Class A common stock, $0.0001 par value; shares subject to possible redemption | 476,540,870 | (21,086,630 | ) | 455,454,240 | ||||||||
Class A common stock, $0.0001 par value | 194 | 211 | 405 | |||||||||
Additional paid-in-capital | 5,042,876 | 634,269 | 5,677,145 | |||||||||
Accumulated deficit | (44,314 | ) | (634,480 | ) | (678,794 | ) | ||||||
Presentation
2021.
As of March 11, 2021 | As Reported, As Revised | Adjustment | As Restated | |||||||||
Class A ordinary shares subject to redemption at $10.00 per share | $ | 455,454,240 | $ | 40,454,840 | $ | 495,909,080 | ||||||
Class A ordinary shares | 405 | (405 | ) | — | ||||||||
Additional paid-in capital | 5,677,145 | (5,677,145 | ) | — | ||||||||
Accumulated deficit | (678,794 | ) | (34,777,290 | ) | (35,456,084 | ) | ||||||
Total shareholders’ equity (deficit) | $ | 5,000,007 | $ | (40,454,840 | ) | $ | (35,454,833 | ) | ||||
Number of Class A ordinary shares subject to redemption | 45,545,424 | 4,045,484 | 49,590,908 | |||||||||
Number of Class A ordinary shares in permanent equity | 4,045,484 | (4,045,484 | ) | — | ||||||||
As of March 31, 2021 | As Previously Reported | Adjustment | As Restated | |||||||||
Class A ordinary shares subject to redemption at $10.00 per share | $ | 458,411,930 | $ | 37,497,150 | $ | 495,909,080 | ||||||
Class A ordinary shares | 375 | (375 | ) | — | ||||||||
Additional paid-in capital | 2,711,759 | (2,711,759 | ) | — | ||||||||
Retained earnings (accumulated deficit) | 2,286,616 | (34,785,016 | ) | (32,498,400 | ) | |||||||
Total shareholders’ equity (deficit) | $ | 5,000,001 | $ | (37,497,150 | ) | $ | (32,497,149 | ) | ||||
Number of Class A ordinary shares subject to redemption | 45,841,193 | 3,749,715 | 49,590,908 | |||||||||
Number of Class A ordinary shares in permanent equity | 3,749,715 | (3,749,715 | ) | — | ||||||||
Three Months Ended March 31, 2021 | As Previously Reported | Adjustment | As Restated | |||||||||
Sale of Shares in Initial Public Offering, Gross | ||||||||||||
Class A ordinary shares, par value $0.0001 | $ | 4,959 | $ | (4,959 | ) | $ | — | |||||
Additional paid-in capital | $ | 484,894,941 | $ | (484,894,941 | ) | $ | — | |||||
Total shareholders’ equity (deficit) | $ | 484,899,900 | $ | (484,899,900 | ) | $ | — | |||||
Offering Costs | ||||||||||||
Additional paid-in capital | $ | (27,340,317 | ) | $ | 27,340,317 | $ | — | |||||
Total shareholders’ equity (deficit) | $ | (27,340,317 | ) | $ | 27,340,317 | $ | — | |||||
Class A ordinary shares Subject to Possible Redemption | ||||||||||||
Class A ordinary shares, par value $0.0001 | $ | (4,584 | ) | $ | 4,584 | $ | — | |||||
Additional paid-in capital | $ | (458,407,346 | ) | $ | 458,407,346 | $ | — | |||||
Total shareholders’ equity (deficit) | $ | (458,411,930 | ) | $ | 458,411,930 | $ | — | |||||
Accretion of Class A ordinary shares to Redemption Amount | ||||||||||||
Additional paid-in capital | $ | — | $ | (3,564,481 | ) | $ | (3,564,481 | ) | ||||
Accumulated deficit | $ | — | $ | (34,785,016 | ) | $ | (34,785,016 | ) | ||||
Total shareholders’ equity (deficit) | $ | — | $ | (38,349,497 | ) | $ | (38,349,497 | ) | ||||
Form 10-Q: three months ended March 31, 2021 | ||||||||||||
As Previously Reported | Adjustment | As Restated | ||||||||||
Supplemental Disclosure of Noncash Financing Activities | ||||||||||||
Initial value of Class A ordinary shares subject to possible redemption | $ | 455,454,240 | $ | (455,454,240 | ) | $ | — | |||||
Change in value of Class A ordinary shares subject to possible redemption | $ | 2,957,690 | $ | (2,957,690 | ) | $ | — | |||||
As of June 30, 2021 | As Previously Reported | Adjustment | As Restated | |||||||||
Class A ordinary shares subject to redemption at $10.00 per share | $ | 455,079,800 | $ | 40,829,280 | $ | 495,909,080 | ||||||
Class A ordinary shares | 408 | (408 | ) | — | ||||||||
Additional paid-in capital | 6,043,867 | (6,043,867 | ) | — | ||||||||
Accumulated deficit | (1,045,513 | ) | (34,785,005 | ) | (35,830,518 | ) | ||||||
Total shareholders’ equity (deficit) | $ | 5,000,002 | $ | (40,829,280 | ) | $ | (35,829,278 | ) | ||||
Number of Class A ordinary shares subject to redemption | 45,507,980 | 4,082,928 | 49,590,908 | |||||||||
Number of Class A ordinary shares in permanent equity | 4,082,928 | (4,082,928 | ) | — | ||||||||
Three Months Ended June 30, 2021 | As Previously Reported | Adjustment | As Restated | |||||||||
Class A ordinary shares Subject to Possible Redemption | ||||||||||||
Class A ordinary shares, par value $0.0001 | $ | 33 | $ | (33 | ) | $ | — | |||||
Additional paid-in capital | $ | 3,332,097 | $ | (3,332,097 | ) | $ | — | |||||
Total shareholders’ equity (deficit) | $ | 3,332,130 | $ | (3,332,130 | ) | $ | — | |||||
Accretion of Class A ordinary shares to Redemption Amount | ||||||||||||
Additional paid-in capital | $ | — | $ | (11 | ) | $ | (11 | ) | ||||
Accumulated deficit | $ | — | $ | 11 | $ | 11 | ||||||
Form 10-Q: six months ended June 30, 2021 | ||||||||||||
As Previously Reported | Adjustment | As Restated | ||||||||||
Supplemental Disclosure of Noncash Financing Activities | ||||||||||||
Initial value of Class A ordinary shares subject to possible redemption | $ | 455,454,240 | $ | (455,454,240 | ) | $ | — | |||||
Change in value of Class A ordinary shares subject to possible redemption | $ | (374,440 | ) | $ | 374,440 | $ | — | |||||
previously reported in the Company’s unaudited condensed statements of operations, is presented below for the Affected Quarterly Periods:
EPS for Class A ordinary share (redeemable) | ||||||||||||
As Previously Reported | Adjustment | As Restated | ||||||||||
Form 10-Q (March 31, 2021) - three months ended March 31, 2021 | ||||||||||||
Weighted average shares outstanding | 45,559,508 | (33,988,296 | ) | 11,571,212 | ||||||||
Basic and diluted earnings per share | $ | — | $ | 0.10 | $ | 0.10 | ||||||
Form 10-Q (June 30, 2021) - three months ended June 30, 2021 | ||||||||||||
Weighted average shares outstanding | 45,837,531 | 3,753,377 | 49,590,908 | |||||||||
Basic and diluted earnings per share | $ | — | $ | (0.05 | ) | $ | (0.05 | ) | ||||
Form 10-Q (June 30, 2021) - six months ended June 30, 2021 | ||||||||||||
Weighted average shares outstanding | 45,785,402 | (15,099,315 | ) | 30,686,087 | ||||||||
Basic and diluted earnings per share | $ | — | $ | (0.02 | ) | $ | (0.02 | ) | ||||
EPS for Class B ordinary share (non-redeemable) | ||||||||||||
As Previously Reported | Adjustment | As Restated | ||||||||||
Form 10-Q (March 31, 2021) - three months ended March 31, 2021 | ||||||||||||
Weighted average shares outstanding - basic | 12,154,044 | (940,660 | ) | 11,213,384 | ||||||||
Weighted average shares outstanding - diluted | 12,154,044 | 243,683 | 12,397,727 | |||||||||
Basic and diluted earnings per share | $ | 0.19 | $ | (0.09 | ) | $ | 0.10 | |||||
Form 10-Q (June 30, 2021) - three months ended June 30, 2021 | ||||||||||||
Weighted average shares outstanding | 16,151,104 | (3,753,377 | ) | 12,397,727 | ||||||||
Basic and diluted earnings per share | $ | (0.21 | ) | $ | 0.16 | $ | (0.05 | ) | ||||
Form 10-Q (June 30, 2021) - six months ended June 30, 2021 | ||||||||||||
Weighted average shares outstanding | 14,163,615 | (2,354,788 | ) | 11,808,827 | ||||||||
Basic and diluted earnings per share | $ | (0.07 | ) | $ | 0.05 | $ | (0.02 | ) | ||||
” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As an emerging growth company, the Company may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
INDEPENDENCE HOLDINGS CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to
Estimates
Credit Risk
2020.
INDEPENDENCE HOLDINGS CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
As of March 31, 2021, the carrying values of cash, prepaid expenses, accounts payable, and accrued expenses approximate their fair values due to the short-term nature of the instruments.
As of March 31, 2021, the carrying values of cash, prepaid expenses, accounts payable, accrued expenses, and note payable – related party approximate their fair values due to the short-term nature of the instruments. The Company’s investments held in Trust Account is comprised of investments in U.S. Treasury securities with an original maturity of 185 days or less and are recognized at fair value. The fair value of investments in Trust Account is determined using quoted prices in active markets.
The fair value of Public Warrants issued in connection with the Initial Public Offering have subsequently been measured based on the listed market price of such warrants. Subsequently, the fair value of the Private Placement Warrants has been estimated by reference to the trading price of the Public Warrants. Derivative warrant liabilities are classified as
The Company classifies deferred underwriting commissions as
Net Income per Ordinary Share
Net income per ordinary share is computed by dividing net income 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 18,996,969 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 per ordinary share for ordinary shares subject to possible redemption in a manner similar to the two-class method of income per ordinary share. Net income per ordinary share, basic and diluted, for There were no Class A ordinary shares subject to possible redemption is calculated by dividing the proportionate shareissued or outstanding at December 31, 2020.
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
September 30, 2021 | September 30, 2021 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net income per ordinary share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income (loss)- basic and diluted | $ | 669,910 | $ | 167,478 | $ | (145,160 | ) | $ | (47,035 | ) | ||||||
Denominator: | ||||||||||||||||
Basic and diluted weighted average common shares outstanding | 49,590,908 | 12,397,727 | 37,056,942 | 12,007,284 | ||||||||||||
Basic and diluted net income (loss) per ordinary share | $ | 0.01 | $ | 0.01 | $ | (0.00 | ) | $ | (0.00 | ) | ||||||
Diluted net income per ordinary share | $ | 0.01 | $ | 0.01 | $ | (0.00 | ) | $ | (0.00 | ) | ||||||
Accounting Pronouncements
INDEPENDENCE HOLDINGS CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
days within any
INDEPENDENCE HOLDINGS CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
$18.00:
$10.00:
|
Gross proceeds | $ | 495,909,080 | ||
Less: | ||||
Proceeds allocated to public warrants | (11,009,180 | ) | ||
Class A ordinary share issuance costs | (27,340,317 | ) | ||
Plus: | ||||
Accretion of carrying value to redemption value | 38,349,497 | |||
Class A ordinary share subject to possible redemption | $ | 495,909,080 | ||
issued or outstanding.
accordingly resulting in 12,397,727 Class B ordinary shares outstanding, NaNsubject to
INDEPENDENCE HOLDINGS CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the Initial Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the Initial Business Combination and any Private Placement Warrants issued to the Sponsor, its affiliates or any member of the management team upon conversion of Working Capital Loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than
NOTE 9. FAIR VALUE MEASUREMENTS
INDEPENDENCE HOLDINGS CORP.
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 | $ | 495,914,245 | $ | — | $ | — | ||||||
Liabilities: | ||||||||||||
Derivative warrant liabilities | $ | — | $ | — | $ | 18,047,120 | ||||||
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 | $ | 495,938,352 | $ | 0— | $ | 0— | ||||||
Liabilities: | ||||||||||||
Derivative warrant liabilities - Public | $ | 10,414,090 | $ | 0— | $ | — | ||||||
Derivative warrant liabilities - Private | $ | 0— | $ | 9,532,730 | $ | 0— | ||||||
The following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates:
| As of March 9, 2021 | As of March 31, 2021 | |||||||
Volatility | 17.0 | % | 15.0 | % | ||||
Stock price | $ | 10.00 | $ | 10.00 | ||||
Expected life of the options to convert | 5 | 5 | ||||||
Risk-free rate | 0.83 | % | 0.92 | % | ||||
Dividend yield | 0.0 | % | 0.0 | % | ||||
Level 3- Derivative warrant liabilities at December 31, 2020 | $ | — | ||
Issuance of derivative warrant liabilities | 21,086,630 | |||
Change in fair value of derivative warrant liabilities | (3,039,510 | ) | ||
Level 3 -Derivative warrant liabilities at March 31, 2021 | $ | 18,047,120 | ||
|
|
Level 3 - Derivative warrant liabilities at December 31, 2020 | $ | 0 | ||
Issuance of derivative warrant liabilities | (21,086,630 | ) | ||
Change in fair value of derivative warrant liabilities | (3,039,510 | ) | ||
Level 3 - Derivative warrant liabilities at March 31, 2021 | (18,047,120 | ) | ||
Transfer of Public Warrants to Level 1 | (9,422,270 | ) | ||
Transfer of Private Warrants to Level 2 | (8,624,850 | ) | ||
Level 3 - Derivative warrant liabilities at June 30, 2021 | 0 | |||
Change in fair value of derivative warrant liabilities | 0 | |||
Level 3 - Derivative warrant liabilities at September 30, 2021 | $ | 0 | ||
Item 2. | Management’s Discussion and Analysis of |
Liquidity
-Transactions
-Shares
Effective with the closing of the Initial Public Offering, we recognized the accretion from initial book value to redemption amount, which resulted in charges against additional
Our unaudited condensed consolidated statement of operations includes a presentation of income per share for ordinary shares subject to redemption in a manner similar to the two-class method of income per share. Net income per ordinary share, basic and diluted forredeemable Class A ordinary shares are calculated by dividingis excluded from earnings per share as the interest income earned on investment securities held in the Trust Account, net of applicable taxes available to be withdrawn from the Trust Account, which was approximately $5,000 for the three months ended March 31, 2021, by the weighted average number of Class A ordinary shares outstanding for the period. Net income per ordinary share, basic and diluted for Class B ordinary shares is calculated by dividing the net income of approximately $2.3 million, less income attributable to Class A ordinary shares, by the weighted average number of Class B ordinary shares outstanding for the period ordinary share.
redemption value approximates fair value.
among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required ofCEO’sChief Executive Officer’s compensation to median employee compensation.
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
As
Item 4. | Controls and Procedures |
We have not engaged in any hedging activities since our inception and we do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.
|
June 30, 2021.
Evaluation of Disclosure Controls and Procedures
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2021. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective as of March 31, 2021, due solely to the material weakness in our internal control over financial reporting regarding the classification of the Company’s Warrants as components of equity instead of as derivative liabilities. In light of this material weakness, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with GAAP. Accordingly, management believes that the financial statements included in this Quarterly Report on Form 10-Q present fairly in all material respects our financial position, results of operations and cash flows for the period presented.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
During the most recently completed fiscal quarter, there has been
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
|
None.
|
As of the date ofdiffer materially from those in this Quarterly Report on Form 10-Q, other than the restated risk factor below, there have been no material changes toinclude the risk factors discloseddescribed in the Amendment No. 2 to Form S-1our prospectus for our Initial Public Offering filed with the SEC on March 5,11, 2021. AnyThere have been no material changes in our risk factors since such filing, except for the following:
interim financial statements. In such a case, the Company may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in the Company’s financial reporting, the Company’s securities price may decline and the Company may face litigation as a result of the foregoing. The Company cannot assure you that the measures it has taken to date, or any measures it may take in the future, will be sufficient to avoid potential future material adversely affect our business, financial condition, or operating results. weaknesses.
The securities in which we invest the funds held in the Trust Account could bear a negative rateresults of interest, which could reduce the valueoperations..
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities |
On December 7, 2020, the Sponsor agreed to loan the Company up to an aggregate of $300,000 pursuant to an unsecured promissory note (the “Note”). The Company borrowed approximately $171,000 under the Note. The Company fully repaid the Note on the closing of the Initial Public Offering.
On December 11, 2020, our Sponsor paid an aggregate of $25,000, in exchange for issuance of 11,500,000 Class B ordinary shares. In March 2021, the Company issued to the initial shareholders an additional 1,006,250 Founders Shares, resulting in the Sponsor holding an aggregate of 12,506,250 Found Shares. On April 22, 2021, the underwriters’ over-allotment option expired, and the Sponsor forfeited 108,523 shares of Class B ordinary shares accordingly.
On March 11, 2021, the Company consummated their Initial Public Offering of 49,590,908 Units, including 6,090,908 Units as a result of the underwriters’ exercise in part of their over-allotment option, generating gross proceeds of $495,909,080, and a Private Placement of 9,078,788 Private Placement Warrants at a purchase price of $1.50 per Private Placement Warrant, generating approximately $13.6 million in proceeds. Each Private Placement Warrant is redeemable for one share of Class A ordinary share at an exercise price of $11.50 per share.
Each Unit consists of one Class A ordinary share and one-fifth of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one Class A ordinary share at an exercise price of $11.50 per share.
The net proceeds from the Initial Public Offering, together with certain of the proceeds from the Private Placement, approximately $495.9 million were placed in the Trust Account.
We incurred offering costs of approximately $28.0 million, of which approximately $17.4 million was for deferred underwriting commissions.
On April 29, 2021, our shares and warrants began separate trading.
Item 3. | Defaults Upon Senior Securities |
Item 4. | Mine Safety Disclosures |
Item 5. | Other Information |
Item 6. | Exhibits. |
| 101.INS | Inline XBRL Instance Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | |
INDEPENDENCE HOLDINGS CORP. | ||||||
| Date: | /s/ John Lawrence Furlong | |||||
| Name: | John Lawrence Furlong | |||||
| Title: | Chief Executive Officer | |||||
| (Principal Executive Officer) | ||||||
| Date: | /s/ Jaskaran Heir | |||||
| Name: | Jaskaran Heir | |||||
| Title: | Chief Financial Officer | |||||
| (Principal Financial and Accounting Officer) | ||||||
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