10-Q/A
☒ | 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 |
Title of each class | Trading Symbol(s) |
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Units, each consisting of one share of Class A ordinary shares, $0.0001 par value, and one-third of one redeemable warrant | DHCAU | The Nasdaq Stock Market LLC | ||
Class A ordinary shares included as part of the units | DHCA | The Nasdaq Stock Market LLC | ||
Redeemable warrants included as part of the units, each whole warrant exercisable for one Class A ordinary share at an exercise price of $11.50 | DHCAW | The Nasdaq Stock Market LLC |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
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March 31, 2021 | December 31, 2020 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 1,573,788 | — | |||||
Prepaid expenses | 872,378 | — | ||||||
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Total Current Assets | 2,446,166 | — | ||||||
Deferred offering costs | — | 71,546 | ||||||
Cash held in Trust Account | 309,450,720 | — | ||||||
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TOTAL ASSETS | $ | 311,896,886 | $ | 71,546 | ||||
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LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Accrued Expenses | $ | 50,738 | $ | — | ||||
Accrued offering expenses | 17,000 | 37,905 | ||||||
Promissory note – related party | — | 13,641 | ||||||
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Total Current Liabilities | 67,738 | 51,546 | ||||||
Warrant Liabilities | 16,934,265 | — | ||||||
Deferred underwriting fee payable | 10,830,775 | — | ||||||
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Total Liabilities | 27,832,778 | 51,546 | ||||||
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Commitments and Contingencies | ||||||||
Class A ordinary shares subject to possible redemption; 27,906,410 and no shares at a redemption value of $10.00 per share at March 31, 2021 and December 31, 2020, respectively | 279,064,100 | — | ||||||
Shareholders’ Equity | ||||||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding | — | — | ||||||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 3,038,662 and no shares issued and outstanding (excluding 27,906,410 and no shares subject to possible redemption) at March 31, 2021 and December 31, 2020, respectively | 304 | — | ||||||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 8,625,000 shares issued and outstanding at March 31, 2021 and December 31, 2020 (1) | 863 | 863 | ||||||
Additional paid-in capital | 6,407,837 | 24,137 | ||||||
Accumulated deficit | (1,408,996 | ) | (5,000 | ) | ||||
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Total Shareholders’ Equity | 5,000,008 | 20,000 | ||||||
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 311,896,886 | $ | 71,546 | ||||
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September 30, 2021 | December 31, 2020 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 979,939 | — | |||||
Prepaid expenses | 554,997 | — | ||||||
Total Current Assets | 1,534,936 | — | ||||||
Deferred offering costs | — | 71,546 | ||||||
Investment held in Trust Account | 309,450,720 | 0 | ||||||
TOTAL ASSETS | $ | 310,985,656 | $ | 71,546 | ||||
LIABILITIES, CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ (DEFICIT) EQUITY | ||||||||
Current liabilities | ||||||||
Accrued expenses | $ | 334,597 | $ | — | ||||
Accrued offering expenses | 0 | 37,905 | ||||||
Advance from related party | 123,780 | — | ||||||
Promissory note – related party | — | 13,641 | ||||||
Total Current Liabilities | 458,377 | 51,546 | ||||||
Warrant liabilities | 11,508,724 | 0 | ||||||
Deferred underwriting fee payable | 10,830,775 | 0 | ||||||
Total Liabilities | 22,797,876 | 51,546 | ||||||
Commitments and Contingencies | 0 | 0 | ||||||
Class A ordinary shares subject to possible redemption; 30,945,072 and 0 shares at a redemption value of $10.00 per share at September 30, 2021 and December 31, 2020, respectively | 309,450,720 | — | ||||||
Shareholders’ (Deficit) Equity | ||||||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; 0ne issued and outstanding | 0— | 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; 7,736,268 and 8,625,000 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 774 | 863 | ||||||
Additional paid-in capital | 0 | 24,137 | ||||||
Accumulated deficit | (21,263,714 | ) | (5,000 | ) | ||||
Total Shareholders’ (Deficit) Equity | (21,262,940 | ) | 20,000 | |||||
TOTAL LIABILITIES, CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ (DEFICIT) EQUITY | $ | 310,985,656 | $ | 71,546 | ||||
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For The Three Months Ended September 30, 2021 | For The Nine Months Ended September 30, 2021 | |||||||
General and administrative expenses | $ | 549,272 | $ | 1,461,885 | ||||
Loss from operations | (549,272 | ) | (1,461,885 | ) | ||||
Other income (expense): | ||||||||
Change in fair value of warrant liabilities | 5,322,390 | 4,767,900 | ||||||
Transaction costs allocated to warrant liabilities | 0 | (586,339 | ) | |||||
Total other income (expense) | 5,322,390 | 4,181,561 | ||||||
Net income | $ | 4,773,118 | $ | 2,719,676 | ||||
Basic weighted average shares outstanding, Class A ordinary shares | 30,945,072 | 23,913,792 | ||||||
Basic net income per share, Class A ordinary shares | $ | 0.12 | $ | 0.09 | ||||
Basic weighted average shares outstanding, Class B ordinary shares | 7,736,268 | 7,681,745 | ||||||
Basic net income per share, Class B ordinary shares | $ | 0.12 | $ | 0.09 | ||||
Diluted weighted average shares outstanding, Class B ordinary shares | 7,736,268 | 7,736,268 | ||||||
Diluted net income per share, Class B ordinary shares | $ | 0.12 | $ | 0.09 | ||||
CHANGES IN SHAREHOLDERS’ (DEFICIT) EQUITY
Operating and formation costs | $ | 160,016 | ||
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Loss from operations | (160,016 | ) | ||
Other expense: | ||||
Change in fair value of warrant liabilities | (657,641 | ) | ||
Transaction costs allocated to warrant liabilities | (586,339 | ) | ||
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Other expense | (1,243,980 | ) | ||
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Net loss | $ | (1,403,996 | ) | |
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Weighted average shares outstanding, Class A redeemable ordinary shares | 30,945,072 | |||
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Basic and diluted net income per share, Class A redeemable ordinary shares | $ | (0.00 | ) | |
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Weighted average shares outstanding, Class B non-redeemable ordinary shares (1) | 7,570,880 | |||
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Basic and diluted net loss per share, Class B non-redeemable ordinary shares | $ | (0.19 | ) | |
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Class B Ordinary Shares | Additional Paid-in | Accumulated | Total Shareholders’ | |||||||||||||||||
Shares | Amount | Capital | Deficit | Equity (Deficit) | ||||||||||||||||
Balance — January 1, 2021 | 8,625,000 | $ | 863 | $ | 24,137 | $ | (5,000 | ) | $ | 20,000 | ||||||||||
Cash Paid in excess of fair value for private warrants | — | — | 3,133,522 | — | 3,133,522 | |||||||||||||||
Forfeiture of Founder Shares | (888,732 | ) | (89 | ) | 89 | — | — | |||||||||||||
Accretion for Class A ordinary shares to redemption amount | — | — | (3,157,748 | ) | (23,978,390 | ) | (27,136,138 | ) | ||||||||||||
Net loss | — | — | — | (1,403,996 | ) | (1,403,996 | ) | |||||||||||||
Balance – March 31, 2021 , as restated – see Note 2 (unaudited) | 7,736,268 | $ | 774 | $ | 0— | $ | (25,387,386 | ) | $ | (25,386,612 | ) | |||||||||
Net loss | — | — | — | (649,446 | ) | (649,446 | ) | |||||||||||||
Balance – June 30, 2021 , as restated – see Note 2 (unaudited) | 7,736,268 | $ | 774 | $ | 0— | $ | (26,036,832 | ) | $ | (26,036,058 | ) | |||||||||
Net income | — | — | — | 4,773,118 | 4,773,118 | |||||||||||||||
Balance – September 30, 2021 (unaudited) | 7,736,268 | $ | 774 | $ | 0— | $ | (21,263,714 | ) | $ | (21,262,940 | ) | |||||||||
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THREECASH FLOWS
Class A Ordinary Shares | Class B (1) Ordinary Shares | Additional Paid-in | Accumulated | Total Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
Balance — January 1, 2021 | — | $ | — | 8,625,000 | $ | 863 | $ | 24,137 | $ | (5,000 | ) | $ | 20,000 | |||||||||||||||
Sale of 30,945,072 Units, net of underwriting discounts, fair value of Public Warrants and offering costs | 30,945,072 | 3,095 | — | — | 282,311,487 | — | 282,314,582 | |||||||||||||||||||||
Cash Paid in excess of fair value for private warrants | — | — | — | — | 3,133,522 | — | 3,133,522 | |||||||||||||||||||||
Ordinary shares subject to possible redemption | | (27,906,410 | ) | (2,791 | ) | — | — | | (279,061,309 | ) | — | | (279,064,100 | ) | ||||||||||||||
Net loss | — | — | — | — | — | (1,403,996 | ) | (1,403,996 | ) | |||||||||||||||||||
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Balance – March 31, 2021 | 3,038,662 | $ | 304 | 8,625,000 | $ | 863 | $ | 6,407,837 | $ | (1,408,996 | ) | $ | 5,000,008 | |||||||||||||||
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Cash Flows from Operating Activities: | ||||
Net income | $ | 2,719,676 | ||
Adjustments to reconcile net income to net cash used in operating activities: | ||||
Change in fair value of warrant liabilities | (4,767,900 | ) | ||
Transaction costs allocated to warrant liabilities | 586,339 | |||
Changes in operating assets and liabilities: | ||||
Prepaid expenses | (528,197 | ) | ||
Accrued expenses | 334,597 | |||
Net cash used in operating activities | (1,655,485 | ) | ||
Cash Flows from Investing Activities: | ||||
Investment of cash in Trust Account | (309,450,720 | ) | ||
Net cash used in investing activities | (309,450,720 | ) | ||
Cash Flows from Financing Activities: | ||||
Proceeds from sale of Units, net of underwriting discounts paid | 303,261,706 | |||
Proceeds from sale of Private Placement Warrants | 9,189,015 | |||
Proceeds from advance from related party | 123,780 | |||
Repayment of promissory note – related party | (171,357 | ) | ||
Payment of offering costs | (317,000 | ) | ||
Net cash provided by financing activities | 312,086,144 | |||
Net Change in Cash | 979,939 | |||
Cash – Beginning of period | 0— | |||
Cash – End of period | $ | 979,939 | ||
Non-Cash investing and financing activities: | ||||
Offering costs paid through promissory note | $ | 130,916 | ||
Payment of prepaid expenses through promissory note | $ | 26,800 | ||
Deferred underwriting fee payable | $ | 10,830,775 | ||
Forfeiture of Founder Shares | $ | (89 | ) | |
CONDENSED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2021
(UNAUDITED)
Cash Flows from Operating Activities: | ||||
Net loss | $ | (1,403,996 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Change in fair value of warrant liabilities | 657,641 | |||
Transaction costs allocated to warrant liabilities | 586,339 | |||
Changes in operating assets and liabilities: | ||||
Prepaid expenses | (845,578 | ) | ||
Accrued expenses | 50,738 | |||
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Net cash used in operating activities | (954,856 | ) | ||
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Cash Flows from Investing Activities: | ||||
Investment of cash in Trust Account | (309,450,720 | ) | ||
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Net cash used in investing activities | (309,450,720 | ) | ||
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Cash Flows from Financing Activities: | ||||
Proceeds from sale of Units, net of underwriting discounts paid | 303,261,706 | |||
Proceeds from sale of Private Placement Warrants | 9,189,015 | |||
Repayment of promissory note – related party | (171,357 | ) | ||
Payment of offering costs | (300,000 | ) | ||
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Net cash provided by financing activities | 311,979,364 | |||
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Net Change in Cash | 1,573,788 | |||
Cash – Beginning of period | — | |||
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Cash – End of period | $ | 1,573,788 | ||
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Non-Cash investing and financing activities: | ||||
Offering costs included in accrued offering costs | $ | 17,000 | ||
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Offering costs paid through promissory note | $ | 130,916 | ||
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Payment of prepaid expenses through promissory note | $ | 26,800 | ||
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Initial classification of Class A ordinary shares subject to possible redemption | 271,198,440 | |||
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Change in value of Class A ordinary shares subject to redemption | $ | 7,865,660 | ||
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Deferred underwriting fee payable | $ | 10,830,775 | ||
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Forfeiture of Founder Shares | $ | (89 | ) | |
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The accompanying notes are an integral part of the unaudited condensed financial statements.
(Unaudited)
change in fair value of the warrant liabilities.
MARCH 31,
(Unaudited)
STATEMENTS
DHC ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
On April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the Securities and Exchange Commission 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 provisionsreclassification adjustment related to certain tender offers following a business combination, which terms are similar to those containedtemporary equity and permanent equity. This resulted in the warrant agreement.
In further consideration of the SEC Statement, the Company’s management further evaluated the Warrants under Accounting Standards Codification (“ASC”) Subtopic 815-40, Contracts in Entity’s Own Equity. ASC Section 815-40-15 addresses equity versus liability treatment and classification of equity-linked financial instruments, including warrants, and states that a warrant may be classified as a component of equity only if, among other things, the warrant is indexed to the issuer’s ordinary shares. Under ASC Section 815-40-15, a warrant is not indexed to the issuer’s ordinary shares if the terms of the warrant require an adjustment to the exercise price upon a specified event and that event is not an input to the fairinitial carrying value of the warrant. Based on management’s evaluation, the Company’s audit committee, in consultation with management, concluded that the Company’s Private Placement Warrants are not indexed to the Company’sClass A ordinary shares insubject to possible redemption with the manner contemplated by ASC Section 815-40-15 becauseoffset recorded to additional paid-in capital (to the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares. In addition, based on management’s evaluation, the Company’s audit committee, in consultation with management, concluded that the tender offer provision fails the “classified in shareholders’ equity” criteria as contemplated by ASC Section 815-40-25.
In accordance with ASC 825-10, 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 Warrantsextent available), accumulated deficit and Class A ordinary shares.
As a resultincome (loss) of the above, the Company should have classified the Warrants as derivative liabilities in its previously issued financial statement as of March 4, 2021. Under this accounting treatment, the Company is required to measure the fair value of the Warrants at the end of each reporting period as well as re-evaluate the treatment of the warrants and recognize changes in the fair value from the prior periodCompany.
The Company’s accounting for the Warrants as components of equity instead of as derivative liabilities did not have any effectrestatement on the Company’s previously reported investments heldfinancial statements is reflected in trust or cash.
As | ||||||||||||
Previously | As | |||||||||||
Reported | Adjustments | Revised | ||||||||||
Balance sheet as of March 4, 2021 (audited) | ||||||||||||
Warrant Liabilities | $ | — | $ | 15,840,000 | $ | 15,840,000 | ||||||
Total liabilities | 10,988,357 | 15,840,000 | 26,828,357 | |||||||||
Class A Ordinary Shares Subject to Possible Redemption | 287,038,440 | (15,840,000 | ) | 271,198,440 | ||||||||
Class A Ordinary Shares | 130 | 158 | 288 | |||||||||
Additional Paid-in Capital | 5,004,010 | 586,181 | 5,590,191 | |||||||||
Accumulated Deficit | (5,000 | ) | (586,339 | ) | (591,339 | ) |
As Previously Reported | Adjustment | As Restated | ||||||||||
Condensed Balance Sheet as of March 31, 2021 (unaudited) | ||||||||||||
Class A ordinary shares subject to possible redemption | $ | 279,064,100 | $ | 30,386,620 | $ | 309,450,720 | ||||||
Class A ordinary shares | $ | 304 | $ | (304 | ) | $ | 0 | |||||
Additional paid-in capital | $ | 6,407,837 | $ | (6,407,837 | ) | $ | 0 | |||||
Accumulated deficit | $ | (1,408,996 | ) | $ | (23,978,479 | ) | $ | (25,387,475 | ) | |||
Total Shareholders’ Equity (Deficit) | $ | 5,000,008 | $ | (30,386,620 | ) | $ | (25,386,612 | ) | ||||
Number of shares subject to redemption | 27,906,410 | 3,038,662 | 30,945,072 | |||||||||
Condensed Balance Sheet as of June 30, 2021 (unaudited) | ||||||||||||
Class A ordinary shares subject to possible redemption | $ | 278,414,660 | $ | 31,036,030 | $ | 309,450,720 | ||||||
Class A ordinary shares | $ | 311 | $ | (311 | ) | $ | 0 | |||||
Additional paid-in capital | $ | 7,057,359 | $ | (7,057,359 | ) | $ | 0 | |||||
Accumulated deficit | $ | (2,058,442 | ) | $ | (23,978,390 | ) | $ | (26,036,832 | ) | |||
Total Shareholders’ Equity (Deficit) | $ | 5,000,002 | $ | (31,036,030 | ) | $ | (26,036,058 | ) | ||||
Number of shares subject to redemption | 27,841,466 | 3,103,606 | 30,945,072 | |||||||||
Condensed Statement of Operations for the three months ended March 3 1 , 2021 (unaudited) | ||||||||||||
Weighted average shares outstanding, Class A ordinary shares | 30,945,072 | (21,661,550 | ) | 9,283,522 | ||||||||
Basic and diluted loss income per share, Class A ordinary shares | $ | 0 | $ | (0.08 | ) | $ | (0.08 | ) | ||||
Weighted average shares outstanding, Class B ordinary shares | 7,570,880 | 0 | 7,570,880 | |||||||||
Basic and diluted net loss per share, Class B ordinary shares | $ | (0.19 | ) | $ | 0.11 | $ | (0.08 | ) | ||||
Condensed Statement of Operations for the three months ended June 3 0 , 2021 ( un audited) | ||||||||||||
Weighted average shares outstanding, Class A ordinary shares | 30,945,072 | 0 | 30,945,072 | |||||||||
Basic and diluted net loss per share, Class A ordinary shares | $ | 0 | $ | (0.02 | ) | $ | (0.02 | ) | ||||
Weighted average shares outstanding, Class B ordinary shares | 7,736,268 | 0 | 7,736,268 | |||||||||
Basic and diluted net loss per share, Class B ordinary shares | $ | (0.08 | ) | $ | 0.06 | $ | (0.02 | ) | ||||
Condensed Statement of Operations for the six months ended June 3 0 , 2021 ( un audited) | ||||||||||||
Weighted average shares outstanding, Class A ordinary shares | 30,945,072 | (10,770,937 | ) | 20,174,135 | ||||||||
Basic and diluted net loss per share, Class A ordinary shares | $ | 0 | $ | (0.07 | ) | $ | (0.07 | ) | ||||
Weighted average shares outstanding, Class B ordinary shares | 7,654,031 | 0 | 7,654,031 | |||||||||
Basic and diluted net loss per share, Class B ordinary shares | $ | (0.27 | ) | $ | 0.20 | $ | (0.07 | ) | ||||
Statement of Cash Flows for the three months ended March 31, 2021 (unaudited) | ||||||||||||
Non-Cash Investing and Financing Activities | ||||||||||||
Initial classification of Class A ordinary shares subject to possible redemption | $ | 271,198,440 | $ | (271,198,440 | ) | $ | 0 | |||||
Change in value of Class A ordinary shares subject to possible redemption | $ | 7,865,660 | $ | (7,865,660 | ) | $ | 0 | |||||
Statement of Cash Flows for the six months ended June 30, 2021 ( un audited) | ||||||||||||
Non-Cash Investing and Financing Activities | ||||||||||||
Initial classification of Class A ordinary shares subject to possible redemption | $ | 271,198,440 | $ | (271,198,440 | ) | $ | 0 | |||||
Change in value of Class A ordinary shares subject to possible redemption | $ | 7,216,220 | $ | (7,216,200 | ) | $ | 0 |
2021.
MARCH 31,
(Unaudited)
Cash
a checking account held by Continental Stock Transfer & Trust Company.
Gross proceeds | $ | 309,450,720 | ||
Less: | ||||
Proceeds allocated to Public Warrants | $ | (10,211,874 | ) | |
Class A ordinary shares issuance costs | $ | (16,924,264 | ) | |
Plus: | ||||
Accretion of carrying value to redemption value | $ | 27,136,138 | ||
Class A ordinary shares subject to possible redemption | $ | 309,450,720 | ||
DHC ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
The Company’s statement of operations includesthe Company. As a presentation ofresult, diluted net income (loss) per ordinary share for ordinary shares subject to possible redemption in a manner similar tois the two-class method ofsame as basic net income (loss) per share. Net income per ordinary share basic and diluted, for Class A redeemable ordinary shares is calculated by dividing the interest income earned on the Trust Account, by the weighted average number of Class A redeemable ordinary shares outstanding since original issuance. Net loss per share, basic and diluted, for Class B non-redeemable ordinary shares is calculated by dividing the net loss, adjusted for income attributable to Class A redeemable ordinary shares, by the weighted average number of Class B non-redeemable ordinary shares outstanding for the period. Class B non-redeemable ordinary shares includes the Founder Shares as these shares do not have any redemption features and do not participate in the income earned on the Trust Account.
periods presented.
Three Months Ended March 31, | ||||
2021 | ||||
Redeemable Class A Ordinary Shares | ||||
Numerator: Earnings allocable to Redeemable Class A Ordinary Shares | ||||
Interest Income | $ | — | ||
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Net Earnings | $ | — | ||
Denominator: Weighted Average Redeemable Class A Ordinary Shares | ||||
Redeemable Class A Ordinary Shares, Basic and Diluted | 30,945,072 | |||
Earnings/Basic and Diluted Redeemable Class A Ordinary Shares | $ | — | ||
Non-Redeemable Class B Ordinary Shares | ||||
Numerator: Net Loss minus Redeemable Net Earnings | ||||
Net Loss | $ | (1,393,996 | ) | |
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Non-Redeemable Net Loss | $ | (1,393,996 | ) | |
Denominator: Weighted Average Non-Redeemable Class B Ordinary Shares | ||||
Non-Redeemable Class B Ordinary Shares, Basic and Diluted (1) | 7,570,880 | |||
Loss/Basic and Diluted Non-Redeemable Class B Ordinary Shares | $ | (0.18 | ) |
Note: As of March 31, 2021, basic and diluted shares are the same as there are no non-redeemable securities that are dilutive to the Company’s shareholders.
Three Months Ended September 30, 2021 Class A | Nine Months Ended September 30, 2021 Class A | |||||||
Basic and Diluted net income per ordinary share | ||||||||
Numerator: | ||||||||
Allocation of net income, as adjusted | $ | 3,818,494 | $ | 2,058,448 | ||||
Denominator: | ||||||||
Basic and diluted weighted average ordinary shares outstanding | 30,945,072 | 23,913,792 | ||||||
Basic and diluted net income per ordinary share | 0.12 | 0.09 |
Three Ended September 2021 Class B | Nine Months Ended September 2021 Class B | |||||||
Basic net income per ordinary share | ||||||||
Numerator: | ||||||||
Allocation of net income, as adjusted | $ | 954,624 | $ | 661,228 | ||||
Denominator: | ||||||||
Basic weighted average ordinary shares outstanding | 7,736,268 | 7,681,745 | ||||||
Basic net income per ordinary share | 0.12 | 0.09 | ||||||
Diluted net income per ordinary share | ||||||||
Numerator: | ||||||||
Allocation of net income, as adjusted | $ | 954,624 | $ | 664,774 | ||||
Denominator: | ||||||||
Diluted weighted average ordinary shares outstanding | 7,736,268 | 7,736,268 | ||||||
Diluted net income per ordinary share | 0.12 | 0.09 |
DHC ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
DHC ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
Borrowings under the Promissory Note are no longer available.
0 working capital loans outstanding.
DHC ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
Class
The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of a Business Combination on a
WARRANT LIABILITIES
DHC ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
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Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | |||
Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |||
Level 3: | Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. |
Description | Level | March 31, 2021 | December 31, 2020 | |||||||||
Liabilities: | ||||||||||||
Warrant Liability – Public Warrants | 3 | $ | 10,624,475 | $ | — | |||||||
Warrant Liability – Private Placement Warrants | 3 | $ | 6,309,790 | $ | — |
Description | Level | September 30, 2021 | ||||||
Liabilities: | ||||||||
Warrant Liability – Public Warrants | 1 | $ | 7,220,517 | |||||
Warrant Liability – Private Placement Warrants | 2 | $ | 4,288,207 |
MARCH 31,
(Unaudited)
Initial Measurement
operations
The key inputs intoan observable market quote in an active market under the Monte Carlo simulation model for the Private Placement Warrants and Public Warrants were as follows at initial measurement:
Input | March 4, 2021 (Initial Measurement and Over- allotment) | |||
Risk-free interest rate | 1.03 | % | ||
Expected Term (Years) | 5.0 | |||
Expected volatility | 25.0 | % | ||
Exercise price | $ | 11.50 | ||
Unit Price | $ | 9.67 |
On March 4, 2021, inclusive of over-allotment, the Private Placement Warrants and Public Warrants were determined to be $0.99 per warrant for aggregate values of $6.06 million and $10.21 million, respectively.
Subsequent Measurement
The Warrants are measured at fair value on a recurring basis.ticker DHCAW. The subsequent measurement of the Public Warrants and the Private Placement Warrants was calculated using a Monte Carlo Simulation which is considered a Level 3 measurement.
Input | ||||
Risk-free interest rate | 1.38 | % | ||
Expected Term (Years) | 5.0 | |||
Expected volatility | 25.0 | % | ||
Exercise price | $ | 11.50 | ||
Unit Price | $ | 9.65 |
As of March 31, 2021, the aggregate values of the Private Placement Warrants and Public Warrants were determined to be $1.03 per warrant for aggregate values of $6.31 million and $10.62 million, respectively.
follows:
Input | September 30, 2021 | |||
Risk-free interest rate | 1.13 | % | ||
Expected Term (Years) | 5.0 | |||
Expected volatility | 12 | % | ||
Exercise price | $ | 11.50 | ||
Unit Price | $ | 9.77 |
Private Placement | Public | Warrant Liabilities | ||||||||||
Fair value as of January 1, 2021 | $ | — | $ | — | $ | — | ||||||
Initial measurement on March 4, 2021 (IPO) | 5,940,000 | 9,900,000 | 15,840,000 | |||||||||
Initial measurement on March 5, 2021 (Over allotment) | 124,750 | 311,874 | 436,624 | |||||||||
Change in fair value | 245,040 | 412,601 | 657,641 | |||||||||
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Fair value as of March 31, 2021 | $ | 6,309,790 | $ | 10,624,475 | $ | 16,934,265 | ||||||
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Private Placement | Public | Warrant Liabilities | ||||||||||
Fair value as of January 1, 2021 | $ | 0— | $ | 0— | $ | 0— | ||||||
Initial measurement on March 4, 2021 (IPO) | 5,940,000 | 9,900,000 | 15,840,000 | |||||||||
Initial measurement on March 5, 2021 (Over allotment) | 124,750 | 311,874 | 436,624 | |||||||||
Change in fair value | 245,040 | 412,621 | 657,641 | |||||||||
Fair value as of March 31, 2021 | $ | 6,309,790 | $ | 10,624,475 | $ | 16,934,265 | ||||||
Change in fair value | — | (103,151 | ) | (103,151 | ) | |||||||
Transfer to Level 1 | — | (10,521,324 | ) | (10,521,324 | ) | |||||||
Fair value as of June 30, 2021 | $ | 6,309,790 | $ | — | $ | 6,309,790 | ||||||
Change in fair value | (2,021,583 | ) | 0 | (2,021,583 | ) | |||||||
Transfer to Level 2 | (4,288,207 | ) | — | (4,288,207 | ) | |||||||
Fair value as of September 30, 2021 | $ | 0 | $ | 0 | $ | 0 | ||||||
MARCH 31,
(Unaudited)
Liabilities
(“by us in our reports filed or submitted under the Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms,forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.our principalthe chief executive officer and principalchief financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.Under the supervision andmanagement, including our principalchief executive officer and principalchief financial and accounting 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 Rule 13a-15(b) under the Exchange Act. Based on thisupon that evaluation, our principal executive officer and principal financial and accounting officer haveCertifying Officers concluded that, duringdue to the period covered by this report, solely dueevents that led to the Company’s restatement of its financial statements to reclassify the Company’s warrants as described in the Explanatory Note 2 to the Financial Statement herein,this Amendment, as of September 30, 2021, our disclosure controls and procedures were not effective as of March 31, 2021, and that the foregoing arose aseffective. As a result, of a material weakness in the Company’s internal control over financial reporting. In light of this material weakness, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the financial statements included in this Quarterly Report on Form 10-Q10-Q/A present fairly, in all material respects, our financial position, resultsresult of operations and cash flows forof the periods presented.waswere no changeother changes in our internal control over financial reporting that occurred(as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter of 2021 covered by this Quarterly Report on Form 10-Qthat hashave materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting as the circumstances that led to the restatement of the financial statements had not yet been identified. However, as managementreporting. Management has identified a material weakness in our internal control over financial reporting with respectcontrols related to the classification of the Company’s Warrants as components of equity instead of as liabilities, as well as the related determination of the fair value of warrant liabilities, additional paid-in capital and accumulated deficit, and relatedaccounting for complex financial disclosures, the Company intends to address this material weakness by enhancing itsinstruments. While we have processes to identify and appropriately apply applicable accounting requirements, we plan to better evaluate its researchcontinue to enhance our system of evaluating and understanding ofimplementing the nuances of the complex accounting standards that apply to itsour financial statements. The Company’s current plans include providingstatements, including through enhanced access to accounting literature, research materials and documents and increased communication among itsanalyses by our personnel and third-party professionals with whom it consultswe consult regarding complex accounting applications. The Company has also retainedelements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the services of a valuation expert to assist in valuation analysis of the Warrants on a quarterly basis.II - II—OTHER INFORMATION
for the below risk factors. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
On April 12, 2021,
Our warrants are accounted for as a warrant liability and will be recorded at fair value with changes in fair value each period reported in earnings, which may have an adverse effect on the market price of our Class A ordinary shares or may make it more difficult for us to consummate an initial business combination.
In connection with our initial public offering and the concurrent private placement of warrants, we issued an aggregate of 16,441,034 warrants (including 10,315,024 warrants included in the units and 6,126,010 private placement warrants). We account for these as a warrant liability and will record at fair value any changes in fair value each period reported in earnings as determined by us based upon a valuation report obtained from an independent third-party valuation firm. The impact of changes in fair value on earnings may have an adverse effect on the market price of our Class A ordinary shares. In addition, potential targets may seek a special purpose acquisition company that does not have warrants or that does not have warrants that are accounted for as a warrant liability, which may make it more difficult for us to consummate an initial business combination with a target business.
32.2* | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101.INS* | XBRL Instance Document | |
101.SCH* | XBRL Taxonomy Extension Schema Document | |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB* | XBRL Taxonomy Extension Labels Linkbase Document | |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
* | Filed herewith. |
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DHC ACQUISITION CORP. | ||||||||
Date: | By: | /s/ Christopher Gaertner | ||||||
Name: | Christopher Gaertner | |||||||
Title: | Co-Chief Executive Officer | |||||||
(Principal Executive Officer) | ||||||||
Date: | By: | /s/ Christopher Gaertner | ||||||
Name: | Christopher Gaertner | |||||||
Title: | Chief Financial Officer | |||||||
(Principal Financial and Accounting Officer) |
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