☒ | 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 |
Delaware | 85-3869337 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Rockefeller Center 45 Rockefeller Plaza New York, New York | 10111 | ||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Units, each consisting of one share of Class A common stock, $0.0001 par value, and one-fifth of one redeemable warrant | TSIBU | The Nasdaq Stock Market LLC | ||
Class A common stock, par value $0.0001 per share | TSIB | The Nasdaq Stock Market LLC | ||
Redeemable warrants, each whole warrant exercisable for one share of Class A common stock, each at an exercise price of $11.50 per share | TSIBW | The Nasdaq Stock Market LLC |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
TISHMAN SPEYER INNOVATION CORP. II
TABLE OF CONTENTS
Page | ||||||
1 | ||||||
Item 1. | Condensed Financial Statements | 1 | ||||
Condensed Balance Sheets as of | 1 | |||||
2 | ||||||
3 | ||||||
4 | ||||||
5 | ||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 18 | ||||
Item 3. | Quantitative and Qualitative Disclosures Regarding Market Risk | 21 | ||||
Item 4. | Controls and Procedures | 21 | ||||
22 | ||||||
Item 1. | Legal Proceedings | 22 | ||||
Item 1A. | Risk Factors | 22 | ||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 22 | ||||
Item 3. | Defaults Upon Senior Securities | 22 | ||||
Item 4. | Mine Safety Disclosures | 22 | ||||
Item 5. | Other Information | 22 | ||||
Item 6. | Exhibits | 23 | ||||
25 |
June 30, 2022 | December 31, 2021 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash | $ | 10,194 | $ | 546,159 | ||||
Prepaid expenses | 246,281 | 341,014 | ||||||
Total current assets | 256,475 | 887,173 | ||||||
Prepaid expenses, non-current | — | 39,240 | ||||||
Investments held in trust account | 300,458,594 | 300,016,455 | ||||||
Total assets | $ | 300,715,069 | $ | 300,942,868 | ||||
Liabilities, Redeemable Common Stock and Stockholders’ Deficit | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | 2,106,499 | 2,461,184 | ||||||
Income taxes payable | 14,818 | — | ||||||
Due to related party | 164,286 | 104,286 | ||||||
Total current liabilities | 2,285,603 | 2,565,470 | ||||||
Deferred underwriters’ discount | 10,500,000 | 10,500,000 | ||||||
Convertible promissory note | 175,000 | — | ||||||
Derivative warrant liabilities | 1,526,667 | 9,244,272 | ||||||
Total liabilities | 14,487,270 | 22,309,742 | ||||||
Commitments and Contingencies (see Note 6) | 0 | 0 | ||||||
Class A common stock subject to possible redemption, $0.0001 par value; 250,000,000 shares authorized; 30,000,000 shares at redemption value | 300,149,131 | 300,000,000 | ||||||
Stockholders’ Deficit: | ||||||||
Preferred stock, $0.0001 par value; 2,500,000 shares authorized; 0 shares issued or outstanding | 0— | 0— | ||||||
Class B common stock, $0.0001 par value; 25,000,000 shares authorized; 7,500,000 shares issued and outstanding | 750 | 750 | ||||||
Accumulated deficit | (13,922,082 | ) | (21,367,624 | ) | ||||
Total stockholders’ deficit | (13,921,332 | ) | (21,366,874 | ) | ||||
Total Liabilities, Redeemable Common Stock and Stockholders’ Deficit | $ | 300,715,069 | $ | 300,942,868 | ||||
September 30, 2022 | December 31, 2021 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash | $ | 108,478 | $ | 546,159 | ||||
Prepaid expenses | 142,759 | 341,014 | ||||||
Total current assets | 251,237 | 887,173 | ||||||
Prepaid expenses, non-current | — | 39,240 | ||||||
Investments held in trust account | 301,609,080 | 300,016,455 | ||||||
Total Assets | $ | 301,860,317 | $ | 300,942,868 | ||||
Liabilities, Redeemable Common Stock and Stockholders’ Deficit | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 2,162,038 | $ | 2,461,184 | ||||
Income taxes payable | 160,285 | — | ||||||
Due to related party | 194,286 | 104,286 | ||||||
Total current liabilities | 2,516,609 | 2,565,470 | ||||||
Deferred underwriters’ discount | 10,500,000 | 10,500,000 | ||||||
Convertible promissory note | 250,000 | — | ||||||
Working capital loan option | 3,811 | |||||||
Derivative warrant liabilities | 1,178,327 | 9,244,272 | ||||||
Total Liabilities | 14,448,747 | 22,309,742 | ||||||
Commitments and Contingencies (see Note 6) | ||||||||
Class A common stock subject to possible redemption, $0.0001 par value; 250,000,000 shares authorized; 30,000,000 shares at redemption value of $10.04 per share at September 30, 2022 and $10.00 per share at December 31, 2021 | 301,216,449 | 300,000,000 | ||||||
Stockholders’ Deficit: | ||||||||
Preferred stock, $0.0001 par value; 2,500,000 s | — | — | ||||||
Class B common stock, $0.0001 par value; 25,000,000 shares authorized; 7,500,000 shares issued and outstanding | 750 | 750 | ||||||
Accumulated deficit | (13,805,629 | ) | (21,367,624 | ) | ||||
Total Stockholders’ Deficit | (13,804,879 | ) | (21,366,874 | ) | ||||
Total Liabilities, Redeemable Common Stock and Stockholders’ Deficit | $ | 301,860,317 | $ | 300,942,868 | ||||
For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Formation and operating costs | $ | 442,483 | $ | 303,558 | $ | 550,253 | $ | 521,951 | ||||||||
Loss from operations | (442,483 | ) | (303,558 | ) | (550,253 | ) | (521,951 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Interest income on investments held in Trust Account | 418,753 | 4,559 | 442,139 | 6,613 | ||||||||||||
Change in fair value of derivative warrant liabilities | 2,911,277 | (2,305,938 | ) | 7,717,605 | (3,645,001 | ) | ||||||||||
Transaction costs allocated to derivative warrant liabilitie s | — | — | — | (521,695 | ) | |||||||||||
Total other income (expense), net | 3,330,030 | (2,301,379 | ) | 8,159,744 | (4,160,083 | ) | ||||||||||
Income before provision for income taxes | 2,887,547 | — | 7,609,491 | — | ||||||||||||
Provision for income taxes | (14,818 | ) | — | (14,818 | ) | — | ||||||||||
Net income (loss) | $ | 2,872,729 | $ | (2,604,937 | ) | $ | 7,594,673 | $ | (4,682,034 | ) | ||||||
Weighted average shares outstanding, basic and diluted—Class A common stock, subject to possible redemption | 30,000,000 | 30,000,000 | 30,000,000 | 22,209,945 | ||||||||||||
Basic and diluted net income (loss) per common stock—Class A common stock, subject to possible redemption | $ | 0.08 | $ | (0.07 | ) | $ | 0.20 | $ | (0.16 | ) | ||||||
Weighted average shares outstanding, basic and diluted—Class B common stock | 7,500,000 | 7,500,000 | 7,500,000 | 7,500,000 | ||||||||||||
Basic and diluted net income (loss) per common stock—Class B common stock | $ | 0.08 | $ | (0.07 | ) | $ | 0.20 | $ | (0.16 | ) | ||||||
For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Formation and operating costs | $ | 272,621 | $ | 427,524 | $ | 822,874 | $ | 949,475 | ||||||||
Loss from operations | (272,621 | ) | (427,524 | ) | (822,874 | ) | (949,475 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Interest income on investments held in Trust Account | 1,365,330 | 4,609 | 1,807,469 | 11,222 | ||||||||||||
Change in fair value of derivative warrant liabilities and working capital loan option | 344,529 | 10,527,846 | 8,062,134 | 6,882,845 | ||||||||||||
Transaction costs allocated to derivative warrant liabilities | — | — | — | (521,695 | ) | |||||||||||
Total other income, net | 1,709,859 | 10,532,455 | 9,869,603 | 6,372,372 | ||||||||||||
Income before provision for income taxes | 1,437,238 | 10,104,931 | 9,046,729 | 5,422,897 | ||||||||||||
Provision for income taxes | (253,467 | ) | — | (268,285 | ) | — | ||||||||||
Net income | $ | 1,183,771 | $ | 10,104,931 | $ | 8,778,444 | $ | 5,422,897 | ||||||||
Weighted average shares outstanding, basic and diluted—Class A common stock, subject to possible redemption | 30,000,000 | 30,000,000 | 30,000,000 | 24,835,165 | ||||||||||||
Basic and diluted net income per common stock—Class A common stock, subject to possible redemption | $ | 0.03 | $ | 0.27 | $ | 0.23 | $ | 0.17 | ||||||||
Weighted average shares outstanding, basic and diluted—Class B common stock | 7,500,000 | 7,500,000 | 7,500,000 | 7,500,000 | ||||||||||||
Basic and diluted net income per common stock—Class B common stock | $ | 0.03 | $ | 0.27 | $ | 0.23 | $ | 0.17 | ||||||||
Common Stock | Additional | Total | ||||||||||||||||||||||||||
Class A | Class B | Paid-In | Accumulated | Stockholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
Balance—December 31, 2021 | — | $ | — | 7,500,000 | $ | 750 | $ | — | $ | (21,367,624 | ) | $ | (21,366,874 | ) | ||||||||||||||
Net income | — | — | — | — | — | 4,721,944 | 4,721,944 | |||||||||||||||||||||
Balance—March 31, 2022 | — | $ | — | 7,500,000 | $ | 750 | $ | — | $ | (16,645,680 | ) | $ | (16,644,930 | ) | ||||||||||||||
Accretion of Class A common stock to redemption amount | (149,131 | ) | (149,131 | ) | ||||||||||||||||||||||||
Net income | — | — | — | — | — | 2,872,729 | 2,872,729 | |||||||||||||||||||||
Balance—June 30, 2022 | — | $ | — | 7,500,000 | $ | 750 | $ | — | $ | (13,922,082 | ) | $ | (13,921,332 | ) | ||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Deficit | |||||||||||||||||||||||||
Class A | Class B | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance—December 31, 2021 | — | $ | — | 7,500,000 | $ | 750 | $ | — | $ | (21,367,624 | ) | $ | (21,366,874 | ) | ||||||||||||||
Net income | — | — | — | — | — | 4,721,944 | 4,721,944 | |||||||||||||||||||||
Balance—March 31, 2022 | — | — | 7,500,000 | 750 | — | (16,645,680 | ) | (16,644,930 | ) | |||||||||||||||||||
Accretion of Class A common stock to redemption amount | (149,131 | ) | (149,131 | ) | ||||||||||||||||||||||||
Net income | — | — | — | — | — | 2,872,729 | 2,872,729 | |||||||||||||||||||||
Balance—June 30, 2022 | — | — | 7,500,000 | 750 | — | (13,922,082 | ) | (13,921,332 | ) | |||||||||||||||||||
Accretion of Class A common stock to redemption amount | (1,067,318 | ) | (1,067,318 | ) | ||||||||||||||||||||||||
Net income | — | — | — | — | — | 1,183,771 | 1,183,771 | |||||||||||||||||||||
Balance—September 30, 2022 | — | $ | — | 7,500,000 | $ | 750 | $ | — | $ | (13,805,629 | ) | $ | (13,804,879 | ) | ||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Equity (Deficit) | |||||||||||||||||||||||||
Class A | Class B | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance—December 31, 2020 | — | $ | — | 8,625,000 | $ | 863 | $ | 24,137 | $ | (998 | ) | $ | 24,002 | |||||||||||||||
Forfeiture of Class B shares by Sponsor | — | — | (1,125,000 | ) | (113 | ) | 113 | — | — | |||||||||||||||||||
Accretion of Class A common stock to redemption amount | — | — | — | — | (24,250 | ) | (25,669,000 | ) | (25,693,250 | ) | ||||||||||||||||||
Net loss | — | — | — | — | — | (2,077,097 | ) | (2,077,097 | ) | |||||||||||||||||||
Balance—March 31, 2021 | — | — | 7,500,000 | 750 | — | (27,747,095 | ) | (27,746,345 | ) | |||||||||||||||||||
Net loss | — | — | — | — | — | (2,604,937 | ) | (2,604,937 | ) | |||||||||||||||||||
Balance—June 30, 2021 | — | — | 7,500,000 | 750 | — | (30,352,032 | ) | (30,351,282 | ) | |||||||||||||||||||
Net income | — | — | — | — | — | 10,104,931 | 10,104,931 | |||||||||||||||||||||
Balance—September 30, 2021 | — | $ | — | 7,500,000 | $ | 750 | $ | — | $ | (20,247,101 | ) | $ | (20,246,351 | ) | ||||||||||||||
Common Stock | Additional | Total | ||||||||||||||||||||||||||
Class A | Class B | Paid-In | Accumulated | Stockholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Equity (Deficit) | ||||||||||||||||||||||
Balance—December 31, 2020 | — | $ | — | 8,625,000 | $ | 863 | $ | 24,137 | $ | (998 | ) | $ | 24,002 | |||||||||||||||
Forfeiture of Class B shares by Sponsor | — | — | (1,125,000 | ) | (113 | ) | 113 | — | — | |||||||||||||||||||
Accretion of Class A common stock to redemption amount | — | — | — | — | 24,250 | (25,669,000 | ) | (25,693,250 | ) | |||||||||||||||||||
Net loss | — | — | — | — | — | (2,077,097 | ) | (2,077,097 | ) | |||||||||||||||||||
Balance—March 31, 2021 | — | $ | — | 7,500,000 | $ | 750 | $ | — | $ | (27,747,095 | ) | $ | (27,746,345 | ) | ||||||||||||||
Net loss | — | — | — | — | — | (2,604,937 | ) | (2,604,937 | ) | |||||||||||||||||||
Balance—June 30, 2021 | — | $ | — | 7,500,000 | $ | 750 | $ | — | $ | (30,352,032 | ) | $ | (30,351,282 | ) | ||||||||||||||
For the six months ended June 30, | ||||||||
2022 | 2021 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income (loss) | $ | 7,594,673 | $ | (4,682,034 | ) | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
Interest earned on investments held in Trust Account | (442,139 | ) | (6,613 | ) | ||||
Change in fair value of derivative warrant liabilitie s | (7,717,605 | ) | 3,645,001 | |||||
Transaction costs allocated to derivative warrant liabilitie s | — | 521,695 | ||||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | 133,973 | (562,611 | ) | |||||
Income taxes payable | 14,818 | — | ||||||
Accounts payable and accrued expenses | (354,685 | ) | 534,101 | |||||
Due to related party | 60,000 | 44,286 | ||||||
Net cash used in operating activities | (710,965 | ) | (506,175 | ) | ||||
Cash Flows from Investing Activities: | ||||||||
Investment in trust account | — | (300,000,000 | ) | |||||
Net cash used in investing activities | — | (300,000,000 | ) | |||||
Cash flows from Financing Activities: | ||||||||
Proceeds from Initial Public Offering, net of underwriters’ discount | — | 294,000,000 | ||||||
Proceeds from issuance of convertible promissory note | 175,000 | — | ||||||
Proceeds from issuance of private placement warrants | — | 8,000,000 | ||||||
Payments of offering costs | — | (496,635 | ) | |||||
Net cash provided by financing activities | 175,000 | 301,503,365 | ||||||
Net change in cash | (535,965 | ) | 997,190 | |||||
Cash, beginning of the period | 546,159 | 1,975 | ||||||
Cash, end of the period | $ | 10,194 | $ | 999,165 | ||||
Supplemental Disclosure of Non-cash Financing Activities: | ||||||||
Deferred underwriters’ discount payable charged to temporary equity | $ | — | $ | 10,500,000 | ||||
For the nine months ended September 30, | ||||||||
2022 | 2021 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income | $ | 8,778,444 | $ | 5,422,897 | ||||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
Interest earned on investments held in Trust Account | (1,807,469 | ) | (11,222 | ) | ||||
Change in fair value of derivative warrant liabilities and working capital loan option | (8,062,134 | ) | (6,882,845 | ) | ||||
Transaction costs allocated to derivative warrant liabilities | — | 521,695 | ||||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | 237,495 | (472,422 | ) | |||||
Income taxes payable | 160,285 | — | ||||||
Accounts payable and accrued expenses | (299,146 | ) | 440,982 | |||||
Due to related party | 90,000 | 74,286 | ||||||
Net cash used in operating activities | (902,525 | ) | (906,629 | ) | ||||
Cash Flows from Investing Activities: | ||||||||
Investment in trust account | — | (300,000,000 | ) | |||||
Withdrawal from Trust Account to pay tax liability | 214,844 | — | ||||||
Net cash provided by (used in) investing activities | 214,844 | (300,000,000 | ) | |||||
Cash flows from Financing Activities: | ||||||||
Proceeds from Initial Public Offering, net of underwriters’ discount | — | 294,000,000 | ||||||
Proceeds from issuance of convertible promissory note | 250,000 | — | ||||||
Proceeds from issuance of private placement warrants | — | 8,000,000 | ||||||
Payments of offering costs | — | (496,635 | ) | |||||
Net cash provided by financing activities | 250,000 | 301,503,365 | ||||||
Net change in cash | (437,681 | ) | 596,736 | |||||
Cash, beginning of the period | 546,159 | 1,975 | ||||||
Cash, end of the period | $ | 108,478 | $ | 598,711 | ||||
Supplemental Disclosure of Non-cash Financing Activities: | ||||||||
Deferred underwriters’ discount payable charged to temporary equity | $ | — | $ | 10,500,000 | ||||
Supplemental cash flow information: | ||||||||
Cash paid for income taxes | $ | 108,000 | $ | — |
Gross proceeds | $ | 300,000,000 | ||
Less: Proceeds allocated to Public Warrants | (9,196,283 | ) | ||
Less: Class A common stock issuance costs | (16,496,967 | ) | ||
Add: Accretion of carrying value to redemption value | 25,693,250 | |||
Class A common stock subject to possible redemption, December 31, 2021 | $ | 300,000,000 | ||
Add: Accretion of carrying value to redemption value | 149,131 | |||
Class A common stock subject to possible redemption, June 30, 2022 | 300,149,131 | |||
Gross proceeds | $ | 300,000,000 | ||
Less: Proceeds allocated to Public Warrants | (9,196,283 | ) | ||
Less: Class A common stock issuance costs | (16,496,967 | ) | ||
Add: Accretion of carrying value to redemption value | 25,693,250 | |||
Class A common stock subject to possible redemption, December 31, 2021 | 300,000,000 | |||
Add: Accretion of carrying value to redemption value | 1,216,449 | |||
Class A common stock subject to possible redemption, September 30, 2022 | $ | 301,216,449 | ||
For the three months ended June 30, 2022 | For the six months ended June 30, 2022 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net income per share | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income | $ | 2,298,183 | $ | 574,546 | $ | 6,075,738 | $ | 1,518,935 | ||||||||
Denominator: | ||||||||||||||||
Weighted-average shares outstanding | 30,000,000 | 7,500,000 | 30,000,000 | 7,500,000 | ||||||||||||
Basic and diluted net income per share | $ | 0.08 | $ | 0.08 | $ | 0.20 | $ | 0.20 |
For the three months ended September 30, 2022 | For the nine months ended September 30, 2022 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net income per share | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income | $ | 947,017 | $ | 236,754 | $ | 7,022,755 | $ | 1,755,689 | ||||||||
Denominator: | ||||||||||||||||
Weighted-average shares outstanding | 30,000,000 | 7,500,000 | 30,000,000 | 7,500,000 | ||||||||||||
Basic and diluted net income per share | $ | 0.03 | $ | 0.03 | $ | 0.23 | $ | 0.23 |
For the three months ended June 30, 2021 | For the six months ended June 30, 2021 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net loss per share | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net loss | $ | (2,083,950 | ) | $ | (520,987 | ) | $ | (3,745,627 | ) | $ | (936,407 | ) | ||||
Denominator: | ||||||||||||||||
Weighted-average shares outstanding | 30,000,000 | 7,500,000 | 22,209,945 | 7,500,000 | ||||||||||||
Basic and diluted net loss per share | $ | (0.07 | ) | $ | (0.07 | ) | $ | (0.16 | ) | $ | (0.16 | ) |
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 and diluted net income per share | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income | $ | 8,083,945 | $ | 2,020,986 | $ | 4,165,080 | $ | 1,257,817 | ||||||||
Denominator: | ||||||||||||||||
Weighted-average shares outstanding | 30,000,000 | 7,500,000 | 24,835,165 | 7,500,000 | ||||||||||||
Basic and diluted net income per share | $ | 0.27 | $ | 0.27 | $ | 0.17 | $ | 0.17 |
June 30, 2022 | ||||||||||||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||
Assets: | ||||||||||||||||||||
Investments held in Trust Account | $ | 300,458,594 | $ | 300,458,594 | $ | — | $ | — | ||||||||||||
Liabilities: | ||||||||||||||||||||
Warrant liabilities | $ | 1,526,667 | $ | $ | 780,000 | $ | — | $ | 746,667 |
September 30, 2022 | ||||||||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Investments held in Trust Account | $ | 301,609,080 | $ | 301,609,080 | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Working capital loan option | $ | 3,811 | $ | — | $ | — | $ | 3,811 | ||||||||
Warrant liabilities | $ | 1,178,327 | $ | — | $ | 600,000 | $ | 578,327 |
December 31, 2021 | ||||||||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Investments held in Trust Account | $ | 300,016,455 | $ | 300,016,455 | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Warrant liabilities | $ | 9,244,272 | $ | 4,626,600 | $ | — | $ | 4,617,672 |
June 30, 2022 | December 31, 2021 | |||||||
Stock price | $ | 9.79 | $ | 9.75 | ||||
Strike price | $ | 11.5 | $ | 11.5 | ||||
Term (in years) | 5.64 | 5.58 | ||||||
Volatility | 2.4 | % | 14.9 | % | ||||
Risk-free rate | 3.02 | % | 1.31 | % | ||||
Dividend yield | 0.0 | % | 0.0 | % |
September 30, 2022 | December 31, 2021 | |||||||
Stock price | $ | 9.85 | $ | 9.75 | ||||
Strike price | $ | 11.5 | $ | 11.5 | ||||
Term (in years) | 5.38 | 5.58 | ||||||
Volatility | 13.3 | % | 14.9 | % | ||||
Risk-free rate | 4.04 | % | 1.31 | % | ||||
Dividend yield | 0.0 | % | 0.0 | % |
Derivative warrant liabilities | ||||
Fair Value at January 1, 2022 | $ | 4,617,672 | ||
Change in fair value | (2,459,728 | ) | ||
Fair Value at March 31, 2022 | $ | 2,157,944 | ||
Change in fair value | (1,411,277 | ) | ||
Fair Value at June 30, 2022 | $ | 746,667 | ||
Derivative warrant liabilities | ||||
Fair value at January 1, 2021 | $ | 0— | ||
Initial value at IPO date | 17,509,557 | |||
Change in fair value | 1,025,789 | |||
Fair Value at March 31, 2021 | $ | 18,535,346 | ||
Change in fair value | 2,305,938 | |||
Transfer of Public warrants from Level 3 to Level 1 | (7,619,400 | ) | ||
Fair Value at June 30, 2021 | $ | 13,221,884 | ||
Fair Value at January 1, 2022 | $ | 4,617,672 | ||
Change in fair value | (2,459,728 | ) | ||
Fair Value at March 31, 2022 | 2,157,944 | |||
Change in fair value | (1,411,277 | ) | ||
Fair Value at June 30, 2022 | 746,667 | |||
Change in fair value | (164,529 | ) | ||
Fair Value at September 30, 2022 | $ | 582,138 | ||
Fair value at January 1, 2021 | $ | — | ||
Initial value at IPO date | 17,509,557 | |||
Change in fair value | 1,025,789 | |||
Fair Value at March 31, 2021 | 18,535,346 | |||
Change in fair value | 2,305,938 | |||
Transfer of Public warrants from Level 3 to Level 1 | (7,619,400 | ) | ||
Fair Value at June 30, 2021 | 13,221,884 | |||
Change in fair value | (7,948,446 | ) | ||
Fair Value at September 30, 2021 | $ | 5,273,438 | ||
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
References in this report to “we,” “us” or the “Company” refer to Tishman Speyer Innovation Corp. II, a Delaware corporation, to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Tishman Speyer Innovation Sponsor II, L.L.C., a Delaware limited liability company. “Tishman Speyer” refers to Tishman Speyer Properties, L.P., a New York limited partnership, and the parent of our Sponsor. References to our “initial stockholders” refer to our Sponsor and to our independent directors, Joshua Kazam, Jennifer Rubio, Ned Segal and Michelangelo Volpi. Refer to the glossary at the end of this report for additional terms.
Special Note Regarding Forward-Looking Statements
This discussion contains forward-looking statements reflecting our current expectations, estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. The forward-looking statements contained in this report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the “Risk Factors” section of the final prospectus for our initial public offering filed with the SEC and in our Annual Report on Form
Overview
We are a blank check company, originally incorporated in Delaware on November 12, 2020, and formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination.
Following the closing of our initial public offering (the “IPO”), on February 17, 2021, $300,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was placed in the Trust Account and invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or in money market funds meeting certain conditions under Rule
Our management has broad discretion with respect to the specific application of the net proceeds of the IPO and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination.
Results of Operations
As of JuneSeptember 30, 2022, we had not commenced any operations. All activity for the period from November 12, 2020 (inception) through JuneSeptember 30, 2022, relates to preparation and consummation of the IPO and our search for a target to consummate a Business Combination. We will not generate any operating revenues until after the completion of a Business Combination, at the earliest. We will generate
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For the three and six months ended JuneSeptember 30, 2022, we had a net income of $2,872,729$1,183,771, consisting of a change in fair value of warrant liabilities and $7,594,673,working capital loan option of $344,529 and interest income from investments held in trust of $1,365,330, partially offset by $272,621 in operating costs and income taxes of $253,467.
For the nine months ended September 30, 2022, we had a net income of $8,778,444, consisting of a change in fair value of warrant liabilities and working capital loan option of $8,062,134 and interest income from investments held in trust of $1,807,469, partially offset by $822,874 in operating costs and income taxes of $268,285.
For the three months ended September 30, 2021, we had a net income of $10,104,931, consisting of a change in fair value of warrant liabilities of $2,911,277 and $7,717,605$10,527,846 and interest income from investments held in trust of $418,753 and $442,139,$4,609, partially offset by $442,483 and $550,253$427,524 in formation and operating costs and income taxes of $14,818 and $14,818, respectively.
For the three and sixnine months ended JuneSeptember 30, 2021, we had a net lossincome of $2,604,937 and $4,682,034,$5,422,897, consisting mostly of a change in fair value of warrant liabilities of $2,305,938$6,882,845 and $3,645,001, interest income from investments held in trust of $4,559 and $6,613 and transaction costs allocated to warrant liabilities of $0 and $521,695,$11,222, offset by $303,558 and $521,951$949,475 in formation and operating costs respectively.
Liquidity, Capital Resources and Capital Resources
As of JuneSeptember 30, 2022, we had cash outside our trust account of $10,194,$108,478, available for working capital needs and a working capital deficiency of $1,996,449,$1,872,741, excluding franchise and income taxes payable. All remaining cash was held in the trust account and is generally unavailable for our use, prior to an initial business combination.
In order to finance transaction costs in connection with a Business Combination or liquidate, the Sponsors or an affiliate of the Sponsors or certain of our officers and directors may, but are not obligated to, loan our funds as may be required (the “Working Capital Loans”). If we complete an initial Business Combination, we would repay such loaned amounts out of the proceeds of the Trust Account released to the us. Otherwise, such loans would be repaid only out of funds held outside the Trust Account. In the event that the initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants, including as to exercise price, exercisability and exercise period. As of JuneSeptember 30, 2022 and December 31, 2021, $175,000$250,000 and $0 Working Capital Loans were outstanding.
We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (excluding deferred underwriting commissions) to complete our Business Combination. We may withdraw interest to pay our taxes. We estimate our annual franchise tax obligations, based on the number of shares of our common stock authorized and outstanding after the completion of the IPO, to be $200,000, which is the maximum amount of annual franchise taxes payable by us as a Delaware corporation per annum, which we may pay from funds from the IPO held outside of the Trust Account or from interest earned on the funds held in the Trust Account and released to us for this purpose. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the Trust Account. We expect the interest earned on the amount in the Trust Account will be sufficient to pay our income taxes. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
Further, our Sponsor, officers and directors or their respective affiliates may, but are not obligated to, loan us funds as may be required (the “Working Capital Loans”). If we complete a Business Combination, we would repay the Working Capital Loans out of the proceeds of the Trust Account released to us. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, we may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.50 per warrant. The warrants would be identical to the Private Placement Warrants. To date, we had $175,000$250,000 in borrowings under the Working Capital Loans.
We have until February 17, 2023 to consummate a Business Combination.Combination (with the ability to extend or reduce such period with stockholder approval, see Note 10 to the unaudited condensed financial statements). In connection with our assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”)
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Off-Balance
We did not have any
Contractual Obligations
As of JuneSeptember 30, 2022 and December 31, 2021, we did not have any long-term debt, capital or operating lease obligations.
We entered into an administrative services agreement pursuant to which we will pay our Sponsor for office space and secretarial and administrative services provided to members of our management team, in an amount not to exceed $10,000 per month.
Critical Accounting Policies and Estimates
The preparation of unaudited condensed financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:
Derivative Warrant Liabilities
We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC
We account for our 11,333,334 warrants issued in connection with its IPO (6,000,000) and Private Placement (5,333,334) as derivative warrant liabilities in accordance with ASC
Class A Common Stock Subject to Possible Redemption
We account for our common stock subject to possible redemption in accordance with the guidance in the Financial Accounting Standards Board’s Accounting Standards Codification Topic 480 “
Net Income (Loss) per Common Share
We have two classes of stock, which are referred to as Class A common stock and Class B common stock. Earnings and losses are shared pro rata between the two classes of stock. Private and public warrants to purchase 11,333,334 Class A common stock at $11.50 per share were issued on February 17, 2021. No warrants were exercised during the three and sixnine months ended JuneSeptember 30, 2022 and 2021. The calculation of diluted income per common stock does not consider the effect of the warrants issued in connection with the (i) IPO, (ii) exercise of over-allotment, and (iii) Private Placement since the exercise of the warrants are contingent upon the occurrence of future events. As a result, diluted net income per common stock is the same as basic net income per common stock for the periods presented.
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Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our unaudited condensed financial statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a “smaller reporting company,” we are not required to provide the information called for by this Item.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in Company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
As required by Rules
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting, except for the remediation efforts described below.
In light of the material weakness described above, our personnel and third-party professionals with whom we consult regarding complex accounting applications continued to perform additional analyses as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally accepted accounting principles. We plan to continue to enhance our system of evaluating and implementing the accounting standards that apply to our financial statements. We can offer no assurance that our remediation plan will ultimately have the intended effects.
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PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
As of JuneSeptember 30, 2022, to the knowledge of our management, there was no material litigation, arbitration or governmental proceeding pending against us or any members of our management team in their capacity as such, and we and the members of our management team have not been subject to any such proceeding.
ITEM 1A. RISK FACTORS.
A new 1% U.S. federal excise tax could be imposed on us in connection with future redemptions and other repurchases by us of our shares if such repurchases occur on or after January 1, 2023.
On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its stockholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. Any redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined.
On November 8, 2022, the Company filed a definitive proxy statement in connection with the meeting of stockholders, scheduled for November 29, 2022 to change the date by which the Company must consummate a business combination from February 17, 2023 to November 30, 2022. As a “smaller reporting company,”result, the IR Act is not expected to apply with respect to redemptions or other repurchases of our shares in connection with our liquidation if stockholders approve the proposed change to our completion period. However, there is no assurance that the proposed change to our completion period will be approved, and failure to obtain such approval could result in an application of the IR Act to future redemptions on or after January 1, 2023, which would reduce our cash available on hand in the case of a business combination or liquidation.
We do not intend to continue to invest the proceeds held in the Trust Account in interest-bearing securities, which will limit the interest income available for payment of taxes and dissolution expenses or for distribution to public shareholders.
On October 24, 2022, the Company instructed Continental Stock Transfer & Trust Company to hold all funds in the Trust Account in cash until the earlier of the consummation of an initial Business Combination and the liquidation of the Company. The Company no longer intends to invest the net proceeds in securities or interest-bearing accounts prior to an initial business combination. Accordingly, the amount of interest income (which we are not requiredpermitted to provide the information called for by this Item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
None.
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ITEM 6. EXHIBITS.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
TISHMAN SPEYER INNOVATION CORP. II | ||||||
By: | /s/ | |||||
Name: Paul A. Galiano | ||||||
Dated: | Title: Chief Operating Officer, Chief Financial Officer and Director (Principal Accounting Officer) |
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GLOSSARY
As used in this report, unless otherwise noted or the context otherwise requires, references to:
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Unless specified otherwise, amounts in this report are presented in United States (“U.S.”) dollars. Defined terms in the financial statements contained in this report have the meanings ascribed to them in the financial statements.statements
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