Document And Entity Information
Document And Entity Information | 6 Months Ended |
Jun. 30, 2021 | |
Document and Entity Information [Abstract] | |
Document Type | S-1 |
Entity Registrant Name | Archer Aviation Inc. |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | true |
Amendment Flag | false |
Entity Central Index Key | 0001824502 |
BALANCE SHEET
BALANCE SHEET | Dec. 31, 2020USD ($) | |
Current assets: | ||
Cash | $ 925,923 | |
Prepaid expenses | 463,999 | |
Total current assets | 1,389,922 | |
Investments held in Trust Account | 500,098,582 | |
Total assets | 501,488,504 | |
Current liabilities: | ||
Accounts payable | 10,991 | |
Accrued expenses | 48,022 | |
Franchise tax payable | 69,945 | |
Total current liabilities | 128,958 | |
Warrant liabilities | 47,506,670 | |
Total liabilities | 47,635,628 | |
Commitments and contingencies (Note 8) | ||
Stockholders' deficit | ||
Redeemable convertible preferred stock | ||
Additional paid-in capital | 15,848,758 | |
Accumulated deficit | (10,850,513) | |
Total stockholders' deficit | 5,000,006 | |
Total liabilities, redeemable convertible preferred stock, and stockholders' deficit | 501,488,504 | |
Class A Common Stock | ||
Stockholders' deficit | ||
Common stock, $0.0001 par value; 143,677,090 shares authorized; 51,321,752 shares issued and outstanding as of December 31, 2020 and 77,285,983 shares authorized; 50,000,000 shares issued and outstanding as of December 31, 2019 | 511 | |
Common Class A subject to possible redemption | ||
Current liabilities: | ||
Class A common stock, $0.0001 par value, subject to possible redemption; 44,885,287 shares at redemption value | 448,852,870 | |
Class B Common Stock | ||
Stockholders' deficit | ||
Common stock, $0.0001 par value; 143,677,090 shares authorized; 51,321,752 shares issued and outstanding as of December 31, 2020 and 77,285,983 shares authorized; 50,000,000 shares issued and outstanding as of December 31, 2019 | $ 1,250 | [1] |
[1] | Excludes 1,875,000 shares of Class B common stock that were forfeited by the underwriter due to expiration of over-allotment option occurring in December 2020 (see Note 6). |
BALANCE SHEET (Parenthetical)
BALANCE SHEET (Parenthetical) - $ / shares | 4 Months Ended | |
Dec. 31, 2020 | Jun. 30, 2021 | |
Redeemable convertible preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Class A Common Stock | ||
Shares subject to possible redemption | 44,885,287 | 50,000,000 |
Common shares, par value, (per share) | $ 0.0001 | $ 0.0001 |
Common shares, shares authorized | 200,000,000 | 200,000,000 |
Common shares, shares issued | 50,000,000 | 50,000,000 |
Common shares, shares outstanding | 5,114,713 | 0 |
Common Class A subject to possible redemption | ||
Shares subject to possible redemption, par value (in dollars per share) | $ 0.0001 | |
Shares subject to possible redemption | 44,885,287 | |
Common Class A not subject to possible redemption | ||
Common shares, shares issued | 5,114,713 | |
Common shares, shares outstanding | 5,114,713 | |
Class B Common Stock | ||
Common shares, par value, (per share) | $ 0.0001 | $ 0.0001 |
Common shares, shares authorized | 20,000,000 | 20,000,000 |
Common shares, shares issued | 12,500,000 | 12,500,000 |
Common shares, shares outstanding | 12,500,000 | 12,500,000 |
Class B Common Stock | Over-allotment option | ||
Common stock, shares forfeited (in shares) | 1,875,000 |
STATEMENT OF OPERATIONS
STATEMENT OF OPERATIONS - USD ($) | 3 Months Ended | 4 Months Ended | 6 Months Ended | |
Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2021 | |
Operating and formation costs | $ 3,764,636 | $ 159,947 | $ 8,489,653 | |
Franchise tax expense | 49,726 | 69,945 | 100,209 | |
Loss from operations | (3,814,362) | (229,892) | (8,589,862) | |
Unrealized gain on investments held in Trust Account | 5,002 | 98,582 | 135,027 | |
Loss on sale of private placement warrants | (240,000) | |||
Expensed offering costs | (545,873) | |||
Change in fair value of warrant liabilities | 7,053,334 | (9,933,330) | 9,280,003 | |
Net loss and comprehensive loss | 3,252,607 | $ (2,418,806) | (10,850,513) | 833,801 |
Common Class A subject to possible redemption | ||||
Unrealized gain on investments held in Trust Account | $ 5,002 | $ 88,498 | $ 135,027 | |
Basic and diluted weighted average shares outstanding | 50,000,000 | 44,885,287 | 50,000,000 | |
Net loss per share, basic and diluted | $ 0 | $ 0 | $ 0 | |
Non-Redeemable Common Class A and B | ||||
Net loss and comprehensive loss | $ (10,850,513) | |||
Basic and diluted weighted average shares outstanding | 17,614,713 | |||
Net loss per share, basic and diluted | $ (0.62) |
STATEMENT OF CHANGES IN STOCKHO
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Class A Common StockCommon Stock | Class A Common Stock | Class B Common StockCommon Stock | Additional Paid-in Capital | Accumulated Deficit | Total | |
Balance as of end of period at Dec. 31, 2020 | $ 511 | $ 1,250 | $ 15,848,758 | $ (10,850,513) | $ 5,000,006 | ||
Balance - December 31, 2020, as restated (in Shares) at Dec. 31, 2020 | 5,114,713 | 12,500,000 | |||||
Balance as of beginning of period at Aug. 25, 2020 | $ 0 | $ 0 | 0 | 0 | 0 | ||
Balance - August 26, 2020 (inception) (in Shares) at Aug. 25, 2020 | 0 | 0 | |||||
Issuance of Class B common stock to Sponsor | [1] | $ 1,438 | 23,562 | 25,000 | |||
Number of shares exercised | [1] | 14,375,000 | |||||
Sale of 50,000,000 units in Initial Public Offering, less fair value of public warrants, net of offering costs, as restated | $ 5,000 | 464,673,389 | 464,678,389 | ||||
Sale of 50,000,000 units in Initial Public Offering, less fair value of public warrants, net of offering costs, as restated (in shares) | 50,000,000 | 50,000,000 | |||||
Forfeiture of Class B common stock | [1] | $ (188) | 188 | ||||
Forfeiture of Class B common stock (in shares) | [1] | (1,875,000) | |||||
Class A common stock subject to possible redemption, as restated | $ 4,489 | 448,848,381 | 448,852,870 | ||||
Class A common stock subject to possible redemption, as restated (in shares) | (44,885,287) | ||||||
Net loss | (10,850,513) | (10,850,513) | |||||
Balance as of end of period at Dec. 31, 2020 | $ 511 | $ 1,250 | 15,848,758 | (10,850,513) | 5,000,006 | ||
Balance - December 31, 2020, as restated (in Shares) at Dec. 31, 2020 | 5,114,713 | 12,500,000 | |||||
Class A common stock subject to possible redemption, as restated | $ 511 | 15,825,008 | 35,478,970 | 51,304,489 | |||
Net loss | (2,418,806) | (2,418,806) | |||||
Balance as of end of period at Mar. 31, 2021 | $ 1,250 | 23,750 | (48,748,289) | (48,723,289) | |||
Balance as of beginning of period at Dec. 31, 2020 | $ 511 | $ 1,250 | 15,848,758 | (10,850,513) | 5,000,006 | ||
Balance - August 26, 2020 (inception) (in Shares) at Dec. 31, 2020 | 5,114,713 | 12,500,000 | |||||
Net loss | 833,801 | ||||||
Balance as of end of period at Jun. 30, 2021 | $ 1,250 | 23,750 | (45,481,339) | (45,456,339) | |||
Balance as of beginning of period at Mar. 31, 2021 | 1,250 | 23,750 | (48,748,289) | (48,723,289) | |||
Class A common stock subject to possible redemption, as restated | (14,343) | (14,343) | |||||
Class A common stock subject to possible redemption, as restated (in shares) | (5,114,713) | ||||||
Net loss | 3,252,607 | 3,252,607 | |||||
Balance as of end of period at Jun. 30, 2021 | $ 1,250 | $ 23,750 | $ (45,481,339) | $ (45,456,339) | |||
[1] | Includes up to 1,875,000 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriter.Upon the expiration of the over-allotment option in December 2020, 1,875,000 shares of Class B common stock were forfeited (see Note 6). |
STATEMENT OF CHANGES IN STOCK_2
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
Class A Common Stock | ||
Number of units issued | 50,000,000 | |
Offering costs as a reduction of equity | $ 9,988,271 | |
Over-allotment option | Class B Common Stock | ||
Common stock, shares forfeited (in shares) | 1,875,000 |
STATEMENT OF CASH FLOWS
STATEMENT OF CASH FLOWS | 4 Months Ended |
Dec. 31, 2020USD ($) | |
Cash Flows from Operating Activities: | |
Net loss | $ (10,850,513) |
Adjustments to reconcile net income to net cash used in operating activities: | |
Expensed offering costs on issuance of Public Warrants | 545,873 |
Unrealized gain on investments held in Trust Account | (98,582) |
Loss on sale of private placement warrants | 240,000 |
Change in fair value of warrant liabilities | 9,933,330 |
Changes in operating assets and liabilities: | |
Prepaid expenses | (463,999) |
Accounts payable | 10,991 |
Accrued expenses | 48,022 |
Franchise tax payable | 69,945 |
Net cash used in operating activities | (564,933) |
Cash flows from investing activities | |
Cash deposited in Trust Account | (500,000,000) |
Net cash used in investing activities | (500,000,000) |
Cash Flows from Financing Activities: | |
Proceeds from issuance of Class B common stock to Sponsor | 25,000 |
Proceeds from issuance of promissory note | 300,000 |
Repayment of promissory note | (300,000) |
Proceeds from initial public offering, net of underwriter's discount paid | 490,000,000 |
Proceeds from sale of private placement warrants | 12,000,000 |
Payment of offering costs | (534,144) |
Net cash provided by financing activities | 501,490,856 |
Net decrease in cash and cash equivalents | 925,923 |
Cash and cash equivalents, beginning of period | 925,923 |
Cash and cash equivalents, end of period | 925,923 |
Supplemental disclosures of non-cash investing and financing activities: | |
Class A common stock subject to possible redemption | 448,852,870 |
Initial classification of warrant liabilities | 37,573,340 |
Forfeiture of Class B common stock | $ 188 |
DESCRIPTION OF ORGANIZATION AND
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
Formation and Nature of Business | ||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Atlas Crest Investment Corp. (the “Company” or “Atlas”) is a blank check company incorporated in Delaware on August 26, 2020. The Company was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses (the “Business Combination”). The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. As of December 31, 2020, the Company had not commenced any operations. All activity for the period from August 26, 2020 (inception) through December 31, 2020 relates to the Company’s formation, the initial public offering (“Initial Public Offering”) as described below, and since the closing of the Initial Public Offering, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income or gains on investments on the cash and investments held in a trust account from the proceeds derived from the Initial Public Offering. The registration statement for the Company’s Initial Public Offering was declared effective on October 27, 2020. On October 30, 2020, the Company consummated the Initial Public Offering of 50,000,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $500,000,000, which is discussed in Note 4. Following the closing of the Initial Public Offering on October 30, 2020, an amount of $500,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants (as defined in Note 5) was placed in a trust account (the “Trust Account”), invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the funds in the Trust Account to the Company’s stockholders, as described below. Transaction costs related to the issuances described above amounted to $10,534,144, consisting of $10,000,000 of underwriting fees and $534,144 of other costs. In addition, at December 31, 2020, $925,923 of cash was held outside of the Trust Account and is available for working capital purposes. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. New York Stock Exchange rules provide that the Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (excluding taxes payable on income earned on the Trust Account) at the time of the signing of a definitive agreement to enter a Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940. There is no assurance that the Company will be able to successfully effect a Business Combination. The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders are entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Public Shares subject to redemption are recorded at redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity The Company will proceed with the Business Combination only if the Company has net tangible assets of at least $5,000,001 either prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its amended and restated Certificate of Incorporation, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the Business Combination is required by law, or the Company decides to obtain stockholder approval for business or other 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. If the Company seeks stockholder approval in connection with a Business Combination, Atlas Crest Investment LLC (the "Sponsor") has agreed to vote its Founder Shares (as defined in Note 6) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed Business Combination or do not vote at all. Notwithstanding the above, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the amended and restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company. The Sponsor has agreed (a) to waive its redemption rights with respect to its Founder Shares and Public Shares held by it in connection with the completion of a Business Combination, (b) to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within 24 months from the closing of the Initial Public Offering and (c) not to propose an amendment to the amended and restated Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment. The Company will have until 24 months from the closing of the Initial Public Offering to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as 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”). Moreover, 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 all 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. Liquidity As of December 31, 2020, the Company had $925,923 in cash held outside of the Trust Account and working capital of $1,260,964. The Company’s liquidity needs prior to the consummation of the Initial Public Offering were satisfied through the proceeds of $25,000 from the sale of the Founder Shares, and a loan of $300,000 under an unsecured and non-interest bearing promissory note (see Note 6). Subsequent to the consummation of the Initial Public Offering, the Company’s liquidity will be satisfied through the net proceeds from the private placement held outside of the Trust Account. Based on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, the Company will be using the funds held outside of the Trust Account for paying existing accounts payable and accrued liabilities, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination. Risks and Uncertainties Management is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. | NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Atlas Crest Investment Corp. (the “Company” or “Atlas”) is a blank check company incorporated in Delaware on August 26, 2020. The Company was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses (the “Business Combination”). The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. As of June 30, 2021, the Company had not commenced any operations. All activity through June 30, 2021 relates to the Company's formation, the initial public offering (“Initial Public Offering”) as described below, and since the closing of the Initial Public Offering, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income or gains on investments on the cash and investments held in a trust account from the proceeds derived from the Initial Public Offering. The registration statement for the Company’s Initial Public Offering was declared effective on October 27, 2020. On October 30, 2020, the Company consummated the Initial Public Offering of 50,000,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $500,000,000 , which is discussed in Note 3. Following the closing of the Initial Public Offering on October 30, 2020, an amount of $500,000,000 ( $10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants (as defined in Note 4) was placed in a trust account (the “Trust Account”), invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with maturities of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the funds in the Trust Account to the Company’s stockholders, as described below. Transaction costs related to the issuances described above amounted to $10,534,144 , consisting of $10,000,000 of underwriting fees and $534,144 of other costs. In addition, at June 30, 2021, $297,376 of cash was held outside of the Trust Account and is available for working capital purposes. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. New York Stock Exchange rules provide that the Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (excluding taxes payable on income earned on the Trust Account) at the time of the signing of a definitive agreement to enter a Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940. There is no assurance that the Company will be able to successfully effect a Business Combination. The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders are entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Public Shares subject to redemption are recorded at redemption value and classified as temporary equity in accordance with the Financial Accounting Standards Board's Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity . The Company will proceed with the Business Combination only if the Company has net tangible assets of at least $5,000,001 either prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its amended and restated Certificate of Incorporation, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the Business Combination is required by law, or the Company decides to obtain stockholder approval for business or other 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. If the Company seeks stockholder approval in connection with a Business Combination, Atlas Crest Investment LLC (the “Sponsor”) has agreed to vote its Founder Shares (as defined in Note 6) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed Business Combination or do not vote at all. Notwithstanding the above, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the amended and restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company. The Sponsor has agreed (a) to waive its redemption rights with respect to its Founder Shares and Public Shares held by it in connection with the completion of a Business Combination, (b) to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within 24 months from the closing of the Initial Public Offering and (c) not to propose an amendment to the amended and restated Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment. The Company will have until 24 months from the closing of the Initial Public Offering to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period. In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as 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”). Moreover, 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 all 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. Business Combination Agreement On February 10, 2021, the Company entered into a Business Combination Agreement (as amended and restated on July 29, 2021 and as it may be further amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among the Company, Artemis Acquisition Sub Inc., a Delaware corporation (“Artemis Merger Sub”), and Archer Aviation Inc., a Delaware corporation (“Archer”). The Business Combination Agreement and the transactions contemplated thereby were approved by the boards of directors of each of the Company and Archer. The Business Combination Agreement provides for, among other things, the following transactions on the date of closing of the Business Combination (the “Closing”): (i) Atlas will amend and restate its certificate of incorporation (the “Post-Closing Atlas Certificate of Incorporation”), pursuant to which, among other things, Atlas will have a dual class share structure with (A) shares of Class A common stock that will carry voting rights in the form of one vote per share (the “New Class A Common Stock”), and (B) shares of Class B common stock that will carry voting rights in the form of ten votes per share (the “New Class B Common Stock” and, together with the New Class A Common Stock, the “New Atlas Common Stock”), and (ii) Artemis Merger Sub will merge with and into Archer, with Archer as the surviving company in the merger and, after giving effect to such merger, continuing as a wholly-owned subsidiary of Atlas (the “Merger”). The Merger and the other transactions contemplated by the Business Combination Agreement are hereinafter referred to as the “Business Combination”. The Business Combination is subject to customary closing conditions, including, without limitation, the required approval by Atlas’ stockholders. In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the effective time of the Merger, (i) outstanding shares of common stock and preferred stock of Archer will be converted into a right to receive a number of shares of New Class B Common Stock determined on the basis of an implied Archer equity value of $1,480,000,000 (the “Implied Equity Value”), (ii) all stock awards (whether vested or unvested) to purchase Archer common stock will be converted into stock awards to purchase a number of shares of New Class B Common Stock based on an exchange ratio derived from the Implied Equity Value, and (iii) outstanding warrants (whether vested or unvested) to purchase Archer common stock will be converted into warrants to purchase a number of shares of New Archer Class A Shares or New Class B Common Stock, as applicable, determined on the basis of the Implied Equity Value. The former Archer equity holders will have the right to convert their shares of New Class B Common Stock into shares of New Class A Common Stock pursuant to the Post-Closing Atlas Certificate of Incorporation. The Business Combination Agreement contains representations, warranties and covenants of each of the parties thereto that are customary for transactions of this type. Atlas has also agreed to take all action within its power as may be necessary or appropriate such that, effective immediately after the Closing, the Atlas board of directors will be divided into three classes and be composed of a total of seven directors, which directors shall include an individual designated by Atlas, three individuals designated by Archer and three individuals to be identified by Archer in consultation with Atlas who qualify as “independent directors” under the listing rules of the New York Stock Exchange. The obligations of Atlas and Archer to consummate the Business Combination are subject to certain closing conditions, including, but not limited to, (i) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) the absence of any law or governmental order or other legal restraint or prohibition preventing the consummation of the Business Combination, (iii) the Registration Statement (as defined below) being declared effective under the Securities Act of 1933, as amended (the “Securities Act”), (iv) the shares of New Class A Common Stock to be issued in connection with the Business Combination having been approved for listing on the New York Stock Exchange, (v) the approval of Atlas’ stockholders, (vi) the approval of Archer’s stockholders and (vii) Atlas having at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Securities Exchange Act of 1934, as amended) remaining after the Closing. In addition, the obligation of Archer to consummate the Business Combination is subject to, among other conditions, the aggregate cash proceeds from Atlas’ trust account, together with the proceeds from the PIPE Financing (as defined below), equaling no less than $600,000,000 (after deducting any amounts paid to Atlas shareholders that exercise their redemption rights in connection with the Business Combination). The Business Combination will be accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Under this method of accounting, Atlas will be treated as the “accounting acquiree” and Archer as the “accounting acquirer” for financial reporting purposes. PIPE Financing (Private Placement) Concurrently with the execution of the Business Combination Agreement, the Company entered into subscription agreements (the “Subscription Agreements”) with certain investors. Pursuant to the Subscription Agreements, each investor agreed to subscribe for and purchase, and the Company agreed to issue and sell to such investors, on the Closing Date (as defined in the Business Combination Agreement) substantially concurrently with the Closing (as defined in the Business Combination Agreement), an aggregate of 60,000,000 shares of the Company’s Class A Common Stock for a purchase price of $10.00 per share, for aggregate gross proceeds of $600 million (the “PIPE Financing”). The closing of the PIPE Financing is contingent upon, among other things, the substantially concurrent consummation of the Business Combination. The Subscription Agreements provide that Atlas will grant the investors in the PIPE Financing certain customary registration rights. Going Concern Consideration As of June 30, 2021, the Company had $297,376 in cash held outside of the Trust Account and a working capital deficit of $7,308,241 . The Company has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of time within one year after the date that the financial statements are issued. Management plans to address this uncertainty through the Business Combination as discussed above. There is no assurance that the Company’s plans to consummate the Business Combination will be successful or successful within the Combination Period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Risks and Uncertainties Management continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
RESTATEMENT OF PREVIOUSLY ISSUE
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS | 4 Months Ended |
Dec. 31, 2020 | |
RESTATEMENT OF PRESVIOUSLY ISSUED FINANCIAL STATEMENTS | |
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS | NOTE 2. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS On 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 16,666,667 redeemable warrants (the “Public Warrants”) that were included in the units issued by the Company in its initial public offering (the “IPO”) and (ii) the 8,000,000 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 Fair Value Measurement In accordance with ASC Topic 340, Other Assets and Deferred Costs 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 flows or cash. The following tables summarize the effect of the restatement on each financial statement line item as of the dates, and for the period, indicated: As Previously Reported Adjustment As Restated Balance Sheet as of October 30, 2020 (audited) Warrant liabilities $ — $ 37,573,340 $ 37,573,340 Total liabilities — 37,573,340 37,573,340 Class A common stock subject to possible redemption 496,488,280 (37,573,340) 458,914,940 Class A common stock 35 376 411 Additional paid-in capital 5,001,103 785,497 5,786,600 Accumulated deficit (2,568) (785,873) (788,441) Balance Sheet as of December 31, 2020 (audited) Warrant liabilities $ — $ 47,506,670 $ 47,506,670 Total liabilities 128,958 47,506,670 47,635,628 Class A common stock subject to possible redemption 496,359,540 (47,506,670) 448,852,870 Class A common stock 36 475 511 Additional paid-in capital 5,130,030 10,718,728 15,848,758 Accumulated deficit (131,310) (10,719,203) (10,850,513) Stockholders' equity 5,000,006 — 5,000,006 Statement of Operations for the period from August 26, 2020 (inception) to December 31, 2020 (audited) Expensed offering costs $ — $ 545,873 $ 545,873 Loss on sale of private placement warrants — (240,000) (240,000) Change in fair value of warrant liabilities — (9,933,330) (9,933,330) Net loss (131,310) (10,719,203) (10,850,513) Basic and diluted net loss per share, Non-redeemable Class A and Class B common stock (0.01) (0.61) (0.62) Statement of Cash Flows for the period from August 26, 2020 (inception) to December 31, 2020 (audited) Cash flow from operating activities: Net loss $ (131,310) $ (10,719,203) $ (10,850,513) Adjustments to reconcile net loss to net cash used in operating activities: Expensed offering costs in connection with the issuance of the Public Warrants included in the Units — 545,873 545,873 Loss on sale of private placement warrants — 240,000 240,000 Change in fair value of warrant liabilities — 9,933,330 9,933,330 Supplemental disclosure of non-cash investing and financing activities: Initial measurement of warrants issued in connection with the Initial Public Offering accounted for as liabilities — 37,573,340 37,573,340 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
Summary of Significant Accounting Policies | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it 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 independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, 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 stockholder approval of any golden parachute payments not previously approved. 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 a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2020. Investments Held in Trust Account At December 31, 2020, the assets held in the Trust Account were held in U.S. Treasury securities and classified as trading. Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480, Distinguishing Liabilities from Equity Offering Costs associated with the Initial Public Offering The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A - Expenses of Offering underwriting discount and $534,144 of other offering costs). The Company recorded $9,988,271 of offering costs as a reduction of equity in connection with the shares of Class A common Stock included in the Units. The Company immediately expensed $545,873 of Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The initial fair value of the Public Warrants was estimated using a Monte Carlo simulation approach and the fair value of the Private Placement Warrants was estimated using a Modified Black-Scholes model (see Note 11). Income Taxes The Company complies with the accounting and reporting requirements of ASC Topic 740, Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. Net Earnings ( Loss) Per Share Net earnings (loss) per share is computed by dividing net earnings (loss) by the weighted-average number of shares of common stock outstanding during the period. The Company has not considered the effect of the warrants sold in the Public Offering and Private Placement to purchase an aggregate of 24,666,667 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 statement of operations includes a presentation of income per share for common shares subject to possible redemption and applies the two-class method in calculating income per share. Net earnings per common share, basic and diluted, for Class A redeemable common stock is calculated by dividing the allocable interest income earned on the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Class A redeemable common stock outstanding since original issuance. Net loss per share, basic and diluted, for Class A and Class B non-redeemable common stock is calculated by dividing the net loss, adjusted for income attributable to Class A redeemable common stock, by the weighted average number of Class B non-redeemable common stock outstanding for the period. Class B non-redeemable common stock 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. The following table reflects the calculation of basic and diluted net earnings (loss) per common share (in dollars, except per share amounts): For the Period from August 26,2020 (Inception) through December 31, 2020 Class A Common Stock subject to possible redemption Numerator: Earnings attributable to Class A Common Stock subject to possible redemption Unrealized gain on investments held in Trust Account $ 88,498 Less: Unrealized gain available to be withdrawn for payment of taxes (62,790) Net earnings attributable to Class A Common Stock subject to possible redemption $ 25,708 Denominator: Weighted average Class A Common Stock subject to possible redemption Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption 44,885,287 Basic and diluted net earnings per share, Class A Common Stock subject to possible redemption $ 0.00 Non-Redeemable Class A and Class B Common Stock Numerator: Net loss minus net earnings Net loss $ (10,850,513) Less: Net earnings attributable to Class A Common Stock subject to possible redemption (25,708) Non-redeemable net loss $ (10,876,221) Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock 17,614,713 Basic and diluted net loss per share, Non-Redeemable Class A and Class B Common Stock $ (0.62) Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. Fair Value of Financial Instruments The Company applies ASC 820, which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances. The carrying amounts reflected in the balance sheet for cash, prepaid expenses and accrued offering costs approximate fair value due to their short-term nature. Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. See Note 11 for additional information on assets and liabilities measured at fair value. 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 the Company’s financial statements. | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K as filed with the SEC on March 8, 2021 and the Company’s Amended Annual Report on Form 10-K/A filed with the SEC on May 24, 2021. The interim results for the periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future interim periods. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it 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 independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, 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 stockholder approval of any golden parachute payments not previously approved. 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 a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did no t have any cash equivalents as of June 30, 2021 and December 31, 2020. Investments Held in Trust Account At June 30, 2021 and December 31, 2020, substantially all of the assets held in the Trust Account were held in money market funds, which are invested in U.S. Treasury securities. Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity . Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. As of June 30, 2021 and December 31, 2020, 50,000,000 and 44,885,287 shares of Class A common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s condensed balance sheet, respectively. Offering Costs associated with the Initial Public Offering The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A - Expenses of Offering . Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the Initial Public Offering. Offering costs directly attributable to the issuance of an equity contract to be classified in equity are recorded as a reduction in equity. Offering costs for equity contracts that are classified as assets and liabilities are expensed immediately. The Company incurred offering costs amounting to $10,534,144 as a result of the Initial Public Offering (consisting of a $10,000,000 underwriting discount and $534,144 of other offering costs). The Company recorded $9,988,271 of offering costs as a reduction of equity in connection with the shares of Class A common Stock included in the Units. The Company immediately expensed $545,873 of offering costs in connection with the Public Warrants and Private Placement Warrants that were classified as liabilities. Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The initial fair value of the Public Warrants was estimated using a Monte Carlo simulation approach and the fair value of the Private Placement Warrants was estimated using a Modified Black-Scholes model (see Note 9). Income Taxes The Company complies with the accounting and reporting requirements of ASC 740, Income Taxes , which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2021 and December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. Net Income Per Share of Common Stock Net income per common share is computed by dividing net income by the weighted-average number of shares of common stock 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 24,666,667 shares in the calculation of diluted income per share, since the warrants are contingently exercisable, and the contingencies have not yet been met. The Company’s statement of operations includes a presentation of income per share for common shares subject to possible redemption and applies the two-class method in calculating income per share. Net earnings per common share, basic and diluted, for Class A redeemable common stock is calculated by dividing the allocable unrealized gain on investments held in the Trust Account and interest and dividend income on investments held in the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Class A common stock subject to possible redemption outstanding for the period. Net income per share, basic and diluted, for Class B non-redeemable common stock is calculated by dividing the net income, adjusted for income attributable to Class A redeemable common stock, by the weighted average number of Class B non-redeemable common stock outstanding for the period. Class B non-redeemable common stock includes the Founder Shares (as defined in Note 5) as these shares do not have any redemption features and do not participate in the income earned on the Trust Account. The following table reflects the calculation of basic and diluted net income per common share (in dollars, except share and per share amounts): Three Months Ended Six Months Ended June 30, June 30, 2021 2021 Class A Common Stock subject to possible redemption Numerator: Earnings attributable to Class A Common Stock subject to possible redemption Unrealized gain on investments held in Trust Account $ 5,002 $ 135,027 Interest and dividend income on investments held in Trust Account 8,633 8,633 Less: Income available to be withdrawn for payment of taxes (13,635) (100,209) Net earnings attributable to Class A Common Stock subject to possible redemption $ — $ 43,451 Denominator: Weighted average Class A Common Stock subject to possible redemption Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption 50,000,000 50,000,000 Basic and diluted net earnings per share, Class A Common Stock subject to possible redemption $ 0.00 $ 0.00 Non-Redeemable Class B Common Stock Numerator: Non-redeemable net income Net income $ 3,252,607 $ 833,801 Less: Net earnings attributable to Class A Common Stock subject to possible redemption — (43,451) Non-redeemable net income $ 3,252,607 $ 790,350 Denominator: Weighted average Non-Redeemable Class B Common Stock Basic and diluted weighted average shares outstanding, Non-Redeemable Class B Common Stock 12,500,000 12,500,000 Basic and diluted net income per share, Non-Redeemable Class B Common Stock $ 0.26 $ 0.06 Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000 . The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. Fair Value of Financial Instruments The Company applies ASC Topic 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances. The carrying amounts reflected in the balance sheet for cash, prepaid expenses and accrued offering costs approximate fair value due to their short-term nature. Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. See Note 9 for additional information on assets and liabilities measured at fair value. Recent Accounting Standards In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows. Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. |
INITIAL PUBLIC OFFERING
INITIAL PUBLIC OFFERING | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
INITIAL PUBLIC OFFERING | ||
INITIAL PUBLIC OFFERING | NOTE 4. INITIAL PUBLIC OFFERING The registration statement for the Company’s Initial Public Offering was declared effective on October 27, 2020. On October 30, 2020, the Company completed its Initial Public Offering of 50,000,000 Units, at $10.00 per Unit, generating gross proceeds of $500,000,000. Each Unit consisted of one share of Class A common stock, $0.0001 par value, and one-third of one The Company granted the underwriter a 45-day option to purchase up to 7,500,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions. The over-allotment option expired without being exercised in any part. The underwriter was paid a cash underwriting discount of $0.20 per Unit, or $10,000,000 in the aggregate upon the closing of the Initial Public Offering. | NOTE 3. INITIAL PUBLIC OFFERING The registration statement for the Company’s Initial Public Offering was declared effective on October 27, 2020. On October 30, 2020, the Company completed its Initial Public Offering of 50,000,000 Units, at $10.00 per Unit, generating gross proceeds of $500,000,000 . Each Unit consisted of one share of Class A common stock, $0.0001 par value, and one -third of one redeemable warrant (“Public Warrant”). Each Public Warrant entitles the holder to purchase one share of Class A common stock at an exercise price of $11.50 per whole share (see Note 7). |
PRIVATE PLACEMENT
PRIVATE PLACEMENT | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
PRIVATE PLACEMENT | ||
PRIVATE PLACEMENT | NOTE 5. PRIVATE PLACEMENT Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 8,000,000 warrants at a price of $1.50 per warrant in a private placement (the “Private Placement Warrants”) to the Sponsor, generating gross proceeds of $12,000,000. Each Private Placement Warrant is exercisable to purchase one share of Class A common stock at a price of $11.50 per share. The proceeds from the sale of the Private Placement Warrants were added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless. | NOTE 4. PRIVATE PLACEMENT Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 8,000,000 warrants at a price of $1.50 per warrant in a private placement (the “Private Placement Warrants”) to the Sponsor, generating gross proceeds of $12,000,000 . Each Private Placement Warrant is exercisable to purchase one share of Class A common stock at a price of $11.50 per share. The proceeds from the sale of the Private Placement Warrants were added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
Related Party Transactions | ||
RELATED PARTY TRANSACTIONS | NOTE 6. RELATED PARTY TRANSACTIONS Founder Shares On September 4, 2020, the Sponsor paid $25,000 in consideration for 14,375,000 shares of Class B common stock (the “Founder Shares”). The Founder Shares included an aggregate of up to 1,875,000 shares subject to forfeiture by the Sponsor to the extent that the underwriter’s over-allotment was not exercised in full or in part, so that the Sponsor would collectively own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Sponsor did not purchase any Public Shares in the Initial Public Offering). Upon the expiration of the over-allotment option in December 2020, 1,875,000 shares of Class B common stock were forfeited, resulting in an aggregate of 12,500,000 Founder Shares outstanding. The Sponsor has agreed not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination, or (B) the date on which the Company completes a liquidation, merger, capital stock exchange or similar transaction that results in the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Business Combination, the Founder Shares will be released from the lock-up. Promissory Note - Related Party On September 11, 2020, the Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company received proceeds of $300,000 to cover expenses related to the Initial Public Offering. The Promissory Note was non-interest bearing and was payable on the earlier of March 31, 2021 or the completion of the Initial Public Offering. The outstanding balance under the Promissory Note of $300,000 was repaid at the closing of the Initial Public Offering on October 30, 2020. Administrative Support Agreement The Company entered into an agreement, commencing on the effective date of the Initial Public Offering, to pay the Sponsor a total of $10,000 per month for office space, secretarial and administrative support. Upon completion of the Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. See Note 7, under Business Combination Marketing Agreement, for additional related party transactions. | NOTE 5. RELATED PARTY TRANSACTIONS Founder Shares On September 4, 2020, the Sponsor paid $25,000 in consideration for 14,375,000 shares of Class B common stock (the “Founder Shares”). The Founder Shares included an aggregate of up to 1,875,000 shares subject to forfeiture by the Sponsor to the extent that the underwriter’s over-allotment was not exercised in full or in part, so that the Sponsor would collectively own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Sponsor did not purchase any Public Shares in the Initial Public Offering). Upon the expiration of the over-allotment option in December 2020, 1,875,000 shares of Class B common stock were forfeited, resulting in an aggregate of 12,500,000 Founder Shares outstanding. The Sponsor has agreed not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination, or (B) the date on which the Company completes a liquidation, merger, capital stock exchange or similar transaction that results in the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 - trading day period commencing at least 150 days after the Business Combination, the Founder Shares will be released from the lock-up. Promissory Notes — Related Party On September 11, 2020, the Company issued an unsecured promissory note to the Sponsor, pursuant to which the Company received proceeds of $300,000 to cover expenses related to the Initial Public Offering. The promissory note was non-interest bearing and was payable on the earlier of March 31, 2021 or the completion of the Initial Public Offering. The outstanding balance under the promissory note of $300,000 was repaid at the closing of the Initial Public Offering on October 30, 2020. The Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”) effective June 25, 2021, pursuant to which the Company can borrow an aggregate of up to $300,000 to cover expenses related to an initial Business Combination and general working capital. The Promissory Note is non-interest bearing and payable upon the consumation of a Business Combination. As of June 30, 2021, there was $300,000 outstanding under the Promissory Note. Administrative Support Agreement The Company entered into an agreement, commencing on the effective date of the Initial Public Offering, to pay the Sponsor a total of $10,000 per month for office space, secretarial and administrative support. Upon completion of the Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. During the three and six months ended June 30, 2021, the Company incurred expenses of $30,000 and $60,000 , respectively, under the agreement. See Note 6, under Business Combination Marketing Agreement, for additional related party transactions. |
COMMITMENTS
COMMITMENTS | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
Commitments and Contingencies | ||
COMMITMENTS | NOTE 7. COMMITMENTS Registration Rights The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of the Working Capital Loans (as defined below) (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of the Initial Public Offering, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to Class A common stock). The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Business Combination Marketing Agreement The Company engaged the representative of the underwriters and Moelis & Company LLC, an affiliate of the Sponsor, in connection with a Business Combination to assist the Company in holding meetings with its stockholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with a Business Combination, assist the Company in obtaining stockholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination. The Company will pay the representative of the underwriters and Moelis & Company LLC a cash fee for such services upon the consummation of the Business Combination of 2.25% ($11,250,000) and 1.25% ($6,250,000), respectively, or 3.5% ($17,500,000), in the aggregate, of the gross proceeds of the offering including the gross proceeds from the full or partial exercise of the underwriters’ over-allotment option. A portion of such fee may be re-allocated or paid to members that assist the Company in consummating its Business Combination. Related Party Loans In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s directors and officers may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. 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, the Company 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. | NOTE 6. COMMITMENTS Registration Rights The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of the Working Capital Loans (as defined below) (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) are entitled to registration rights pursuant to a registration rights agreement signed on the effective date of the Initial Public Offering, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to Class A common stock). The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Business Combination Marketing Agreement The Company engaged the representative of the underwriters and Moelis & Company LLC, an affiliate of the Sponsor, in connection with a Business Combination to assist the Company in holding meetings with its stockholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with a Business Combination, assist the Company in obtaining stockholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination. The Company will pay the representative of the underwriters and Moelis & Company LLC a fee for such services upon the consummation of the Business Combination of 2.25% ( $11,250,000 ) and 1.25 % ( $6,250,000 ), respectively, or 3.5% ( $17,500,000 ), in the aggregate, of the gross proceeds of the Initial Public Offering including the gross proceeds from the full or partial exercise of the underwriters’ over-allotment option. A portion of such fee may be re-allocated or paid to members of FINRA that assist the Company in consummating its Business Combination. Related Party Loans In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s directors and officers may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. 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, the Company 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, without interest, 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. No Working Capital Loans were outstanding as of and during the three and six months ended June 30, 2021. |
WARRANTS
WARRANTS | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
WARRANTS | ||
WARRANTS | NOTE 8. WARRANTS Public Warrants may only be exercised for a whole number of shares. No fractional shares are issued upon exercise of the Public Warrants. The Public Warrants are exercisable on the later of (a) 30 days after the consummation of a Business Combination or (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years from the consummation of a Business Combination or earlier upon redemption or liquidation. The Company will not be obligated to deliver any Class A common stock pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A common stock issuable upon exercise of the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue shares of Class A common stock upon exercise of a warrant unless Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, it will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A common stock issuable upon exercise of the warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the sixtieth (60th) business day after the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elect, the Company will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, the Company will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. Once the Public Warrants become exercisable, the Company may call the Public Warrants for redemption: ● in whole and not in part; ● at a price of $0.01 per Public Warrant; ● upon not less than 30 days ’ prior written notice of redemption to each warrant holder; and ● if, and only if, the closing price of the common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 - trading day period commencing after the warrants become exercisable and ending three business days before the Company sends the notice of redemption to the warrant holders. If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws. The exercise price and number of Class A common stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless. In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination on the date of the consummation of such initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants will and the common shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and will be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. As of December 31, 2020, there were 16,666,667 Public Warrants and 8,000,000 Private Placement Warrants outstanding. The Company classifies the outstanding Public Warrants and Private Placement Warrants as warrant liabilities on the Balance Sheet in accordance with the guidance contained in ASC 815-40. The warrant liabilities are initially measured at fair value upon the closing of the Initial Public Offering and subsequently re-measured at each reporting period using a Monte-Carlo model. The Public Warrants were allocated a portion of the proceeds from the issuance of the Units equal to its fair value. The Company recognized gains in connection with changes in the fair value of warrant liabilities of $9,933,330 within change in fair value of warrant liabilities in the Statement of Operations during the year ended December 31, 2020. | NOTE 7. WARRANTS Public Warrants may only be exercised for a whole number of shares. No fractional shares are issued upon exercise of the Public Warrants. The Public Warrants are exercisable on the later of (a) 30 days after the consummation of a Business Combination or (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years from the consummation of a Business Combination or earlier upon redemption or liquidation. The Company will not be obligated to deliver any Class A common stock pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A common stock issuable upon exercise of the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue shares of Class A common stock upon exercise of a warrant unless Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, it will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A common stock issuable upon exercise of the warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the sixtieth ( 60 th ) business day after the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elect, the Company will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, the Company will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. Once the Public Warrants become exercisable, the Company may call the Public Warrants for redemption: ● in whole and not in part; ● at a price of $0.01 per Public Warrant; ● upon not less than 30 days ’ prior written notice of redemption to each warrant holder; and ● if, and only if, the closing price of the common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 - trading day period commencing after the warrants become exercisable and ending three business days before the Company sends the notice of redemption to the warrant holders. If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws. The exercise price and number of Class A common stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless. In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination on the date of the consummation of such initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants will and the common shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and will be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. At June 30, 2021 and December 31, 2020, there were 16,666,667 Public Warrants and 8,000,000 Private Placement Warrants outstanding. The Company accounts for the Public Warrants and Private Placement Warrants in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability (see Note 9). The accounting treatment of derivative financial instruments required that the Company record the warrants as derivative liabilities at fair value upon the closing of the Initial Public Offering. The Public Warrants were allocated a portion of the proceeds from the issuance of the Units equal to its fair value. The warrant liabilities are subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liabilities are adjusted to current fair value, with the change in fair value recognized in the Company’s statement of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
Preferred and Common Stock | ||
STOCKHOLDERS' EQUITY | NOTE 9. STOCKHOLDERS’ EQUITY Preferred stock outstanding Class A Common Stock issued Class B Common Stock outstanding Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of shareholders, except as required by law. The shares of Class B common stock will automatically convert into shares of Class A common stock upon the consummation of a Business Combination on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with a Business Combination, the number of shares of Class A common stock issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of shares of Class A common stock outstanding after such conversion, including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of a Business Combination, excluding any shares of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in a Business Combination and any Private Placement Warrants issued to the Sponsor, officers or directors upon conversion of Working Capital Loans, provided that such conversion of Founder Shares will never occur on a less than one-for-one basis. | NOTE 8. STOCKHOLDERS’ EQUITY Preferred stock — The Company is authorized to issue 1,000,000 shares of $0.0001 par value preferred stock. At June 30, 2021 and December 31, 2020, there were no shares of preferred stock issued or outstanding . Class A common stock — The Company is authorized to issue up to 200,000,000 shares of Class A, $0.0001 par value common stock. Holders of the Company's common stock are entitled to one vote for each share. At June 30, 2021 and December 31, 2020, there were 50,000,000 shares issued and no shares and 5,114,713 shares of Class A common stock outstanding, respectively, excluding 50,000,000 and 44,885,287 shares of Class A common stock subject to possible redemption at June 30, 2021 and December 31, 2020, respectively. The Company determined the Class A common stock subject to redemption to be equal to the redemption value of approximately $10 per share of Class A common stock while also taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001 . Upon considering the impact of the PIPE Financing and associated Subscription Agreements that will close substantially concurrent with an initial Business Combination (see Note 1), which would result in an additional $600,000,000 in net tangible assets, it was concluded during the quarter ended March 31, 2021, that the redemption value would include all shares of Class A common stock resulting in the common stock subject to possible redemption being equal to $500,143,016 . This resulted in a measurement adjustment to the initial carrying value of the Class A common stock subject to redemption with the offset recorded to additional paid-in capital and accumulated deficit. Class B common stock — The Company is authorized to issue up to 20,000,000 shares of Class B, $0.0001 par value common stock. Holders of the Company’s common stock are entitled to one vote for each share. At June 30, 2021 and December 31, 2020, there were 12,500,000 shares of Class B common stock issued and outstanding . Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of shareholders, except as required by law. The shares of Class B common stock will automatically convert into shares of Class A common stock upon the consummation of a Business Combination on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with a Business Combination, the number of shares of Class A common stock issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of shares of Class A common stock outstanding after such conversion, including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of a Business Combination, excluding any shares of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in a Business Combination and any Private Placement Warrants issued to the Sponsor, officers or directors upon conversion of Working Capital Loans, provided that such conversion of Founder Shares will never occur on a less than one-for-one basis. |
INCOME TAX
INCOME TAX | 4 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
INCOME TAX | NOTE 10. INCOME TAX The Company’s net deferred tax assets (liabilities) as of December 31, 2020 is as follows: Deferred tax assets: Start-up costs $ 33,188 Net operating loss carryforwards 14,688 Total deferred tax assets 47,876 Valuation allowance (27,174) Deferred tax liabilities: Unrealized gain on investments (20,702) Total deferred tax liabilities (20,702) Deferred tax assets, net of allowance $ — The income tax provision for the period from August 26 (inception) through December 31, 2020 consists of the following: Federal Current $ — Deferred (27,174) State Current — Deferred — Change in valuation allowance 27,174 Income tax provision $ — As of December 31, 2020, the Company has available U.S. federal operating loss carry forwards of approximately $70,000 that may be carried forward indefinitely. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax assets, projected future taxable income and tax planning strategies in making this assessment. After consideration of all the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the period ended December 31, 2020, the valuation allowance was $27,174. A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2020 is as follows: Statutory federal income tax rate 21.0 % State taxes, net of federal tax benefit 0.0 % Change in fair value of derivative warrant liabilities (19.2) % Non-deductible transaction costs (1.5) % Change in valuation allowance (0.3) % Income tax provision 0.0 % The Company files income tax returns in the U.S. federal jurisdiction, and New York which remain open and subject to examination. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
FAIR VALUE MEASUREMENTS | ||
FAIR VALUE MEASUREMENTS | NOTE 11. FAIR VALUE MEASUREMENTS The following table presents information about the Company’s financial assets that are measured at fair value on a recurring basis at December 31, 2020, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: Description Level 1 Level 2 Level 3 Assets Investments held in Trust Account: Money Market investments $ 500,098,582 $ — $ — Liabilities Warrant liability - Public Warrants $ 31,666,670 $ — $ — Warrant liability - Private Placement Warrants $ — $ — $ 15,840,000 The Company utilized a Monte Carlo simulation model for the initial valuation the Public Warrants. The subsequent measurement of the Public Warrants as of December 31, 2020 is classified as Level 1 due to the use of an observable market quote in an active market under the ticker ACIC WS. The quoted price of the Public Warrants was $1.90 per warrant as of December 31, 2020. The Company utilizes a Modified Black-Scholes model to value the Private Placement Warrants at each reporting period, with changes in fair value recognized in the statement of operations. The estimated fair value of the Private Placement warrant liability is determined using Level 3 inputs. Inherent in a binomial options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero. The aforementioned warrant liabilities are not subject to qualified hedge accounting. Transfers to/from Levels 1 2 3 The following table provides the significant inputs to the Monte Carlo Simulation for the initial measurement of the fair value of the Public Warrants: At October 30, 2020 (Initial Measurement) Stock price $ 9.93 Strike price $ 11.50 Probability of completing a Business Combination 86.0 % Term (in years) 6.1 Volatility 4.5% pre-merger / 26.0% post-merger Risk-free rate 0.5 % Fair value of warrants $ 1.52 The following table provides the significant inputs to the Modified Black-Scholes model for the fair value of the Private Placement Warrants: At October 30, 2020 (Initial As of December 31, Measurement) 2020 Stock price $ 9.93 $ 10.06 Strike price $ 11.50 $ 11.50 Probability of completing a Business Combination 86.0 % 86.0 % Dividend yield — % — % Term (in years) 6.1 5.9 Volatility 22.8 % 28.0 % Risk-free rate 0.5 % 0.5 % Fair value of warrants $ 1.53 $ 1.98 The following table presents the changes in the fair value of warrant liabilities: Private Warrant Placement Public Liabilities Fair value as of August 26, 2020 $ — — $ — Initial measurement at October 30, 2020 12,240,000 25,333,340 37,573,340 Change in valuation inputs or other assumptions 3,600,000 6,333,330 9,933,330 Fair value as of December 31, 2020 $ 15,840,000 31,666,670 $ 47,506,670 The Company recognized losses in connection with changes in the fair value of warrant liabilities of $9,933,330 within change in fair value of warrant liabilities in the Statement of Operations during the year ended December 31, 2020. | NOTE 9. FAIR VALUE MEASUREMENTS The following table presents information about the Company’s financial assets that are measured at fair value on a recurring basis at June 30, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: Amount at Fair Description Value Level 1 Level 2 Level 3 June 30, 2021 Assets Investments held in Trust Account: Money Market investments $ 500,143,016 $ 500,143,016 $ — $ — Liabilities Warrant liability – Public Warrants $ 25,666,667 $ 25,666,667 $ — $ — Warrant liability – Private Placement Warrants $ 12,560,000 $ — $ — $ 12,560,000 December 31, 2020 Assets Investments held in Trust Account: Money Market investments $ 500,098,582 $ 500,098,582 $ — $ — Liabilities Warrant liability – Public Warrants $ 31,666,670 $ 31,666,670 $ — $ — Warrant liability – Private Placement Warrants $ 15,840,000 $ — $ — $ 15,840,000 The Company utilized a Monte Carlo simulation model for the initial valuation of the Public Warrants. The subsequent measurement of the Public Warrants as of June 30, 2021 and December 31, 2020 is classified as Level 1 due to the use of an observable market quote in an active market under the ticker ACIC WS. The quoted prices of the Public Warrants were $1.54 and $1.90 per warrant as of June 30, 2021 and December 31, 2020, respectively. The Company utilizes a Modified Black-Scholes model to value the Private Placement Warrants at each reporting period, with changes in fair value recognized in the statement of operations. The estimated fair value of the Private Placement warrant liability is determined using Level 3 inputs. Inherent in a binomial options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero. The aforementioned warrant liabilities are not subject to qualified hedge accounting. Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period. The estimated fair value of the Public Warrants transferred from a Level 3 measurement to a Level 1 fair value measurement in December 2020 when the Public Warrants were separately listed and traded. There were no transfers between Levels 1, 2 or 3 during the three and six months ended June 30, 2021. The following table provides the significant inputs to the Modified Black-Scholes model for the fair value of the Private Placement Warrants: As of As of June 30, 2021 December 31, 2020 Stock price $ 9.96 $ 10.06 Strike price $ 11.50 $ 11.50 Probability of completing a Business Combination * 86.0 % Dividend yield — % — % Term (in years) 5.26 5.91 Volatility 21.5 % 28.0 % Risk-free rate 0.91 % 0.49 % Fair value of warrants $ 1.57 $ 1.98 *The probability of completing a Business Combination is considered within the volatility implied by the traded price of the Public Warrants which is used to value the Private Placement Warrants. The following table presents the changes in the fair value of warrant liabilities: Private Warrant Placement Public Liabilities Fair value as of December 31, 2020 $ 15,840,000 $ 31,666,670 $ 47,506,670 Change in valuation inputs or other assumptions (3,280,000) (6,000,003) (9,280,003) Fair value as of June 30, 2021 $ 12,560,000 $ 25,666,667 $ 38,226,667 The Company recognized income in connection with changes in the fair value of warrant liabilities of $7,053,334 and $9,280,003 within change in fair value of warrant liabilities in the Statement of Operations during the three and six months ended June 30, 2021, respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
Subsequent Events | ||
SUBSEQUENT EVENTS | NOTE 12. SUBSEQUENT EVENTS Business Combination Agreement On February 10, 2021, the Company entered into a Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among the Company, Artemis Acquisition Sub Inc., a Delaware corporation (“Artemis Merger Sub”), and Archer Aviation Inc., a Delaware corporation (“Archer”). The Business Combination Agreement and the transactions contemplated thereby were approved by the boards of directors of each of the Company and Archer. The Business Combination Agreement provides for, among other things, the following transactions on the date of closing of the Business Combination (the “Closing”): (i) Atlas will amend and restate its certificate of incorporation (the “Post-Closing Atlas Certificate of Incorporation”), pursuant to which, among other things, Atlas will have a dual-class share structure with (A) shares of Class A common stock that will carry voting rights in the form of one vote per share (the “New Class A Common Stock”), and (B) shares of Class B common stock that will carry voting rights in the form of ten votes per share (the “New Class B Common Stock” and, together with the New Class A Common Stock, the “New Atlas Common Stock”), and (ii) Artemis Merger Sub will merge with and into Archer, with Archer as the surviving company in the merger and, after giving effect to such merger, continuing as a wholly-owned subsidiary of Atlas (the “Merger”). The Merger and the other transactions contemplated by the Business Combination Agreement are hereinafter referred to as the “Business Combination”. The Business Combination is subject to customary closing conditions, including, without limitation, the receipt of the required approval by Atlas’ stockholders. In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the effective time of the Merger, (i) outstanding shares of common stock and preferred stock of Archer will be converted into a right to receive a number of shares of New Class B Common Stock determined on the basis of an implied Archer equity value of $2,525,000,000 (the “Implied Equity Value”), (ii) all stock awards (whether vested or unvested) to purchase Archer common stock will be converted into stock awards to purchase a number of shares of New Class B Common Stock based on an exchange ratio derived from the Implied Equity Value, and (iii) outstanding warrants (whether vested or unvested) to purchase Archer common stock will be converted into warrants to purchase a number of shares of New Class B Common Stock determined on the basis of the Implied Equity Value. The former Archer equity holders will have the right to convert their shares of New Class B Common Stock into shares of New Class A Common Stock pursuant to the Post-Closing Atlas Certificate of Incorporation. PIPE Financing (Private Placement) Concurrently with the execution of the Business Combination Agreement, the Company entered into subscription agreements (the “Subscription Agreements”) with certain investors. Pursuant to the Subscription Agreements, each investor agreed to subscribe for and purchase, and the Company agreed to issue and sell to such investors, on the Closing Date (as defined in the Business Combination Agreement) substantially concurrently with the Closing (as defined in the Business Combination Agreement), an aggregate of 60,000,000 shares of the Company’s Class A Common Stock for a purchase price of $10.00 per share, for aggregate gross proceeds of $600 million (the “PIPE Financing”). The closing of the PIPE Financing is contingent upon, among other things, the substantially concurrent consummation of the Business Combination. The Subscription Agreements provide that Atlas will grant the investors in the PIPE Financing certain customary registration rights. | NOTE 10. SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements except as disclosed in Note 1 under Business Combination Agreement. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
Summary of Significant Accounting Policies | ||
Basis of Presentation | Basis of Presentation The accompanying financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. | Basis of Presentation The accompanying financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K as filed with the SEC on March 8, 2021 and the Company’s Amended Annual Report on Form 10-K/A filed with the SEC on May 24, 2021. The interim results for the periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future interim periods. |
Emerging Growth Company | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it 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 independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, 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 stockholder approval of any golden parachute payments not previously approved. 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 a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it 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 independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, 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 stockholder approval of any golden parachute payments not previously approved. 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 a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2020. | Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did no t have any cash equivalents as of June 30, 2021 and December 31, 2020. |
Investments Held in Trust Account | Investments Held in Trust Account At December 31, 2020, the assets held in the Trust Account were held in U.S. Treasury securities and classified as trading. | |
Common Stock Subject to Possible Redemption | Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480, Distinguishing Liabilities from Equity | Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity . Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. As of June 30, 2021 and December 31, 2020, 50,000,000 and 44,885,287 shares of Class A common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s condensed balance sheet, respectively. |
Offering Costs associated with the Initial Public Offering | Offering Costs associated with the Initial Public Offering The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A - Expenses of Offering underwriting discount and $534,144 of other offering costs). The Company recorded $9,988,271 of offering costs as a reduction of equity in connection with the shares of Class A common Stock included in the Units. The Company immediately expensed $545,873 of | Offering Costs associated with the Initial Public Offering The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A - Expenses of Offering . Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the Initial Public Offering. Offering costs directly attributable to the issuance of an equity contract to be classified in equity are recorded as a reduction in equity. Offering costs for equity contracts that are classified as assets and liabilities are expensed immediately. The Company incurred offering costs amounting to $10,534,144 as a result of the Initial Public Offering (consisting of a $10,000,000 underwriting discount and $534,144 of other offering costs). The Company recorded $9,988,271 of offering costs as a reduction of equity in connection with the shares of Class A common Stock included in the Units. The Company immediately expensed $545,873 of offering costs in connection with the Public Warrants and Private Placement Warrants that were classified as liabilities. |
Warrant Liabilities | Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The initial fair value of the Public Warrants was estimated using a Monte Carlo simulation approach and the fair value of the Private Placement Warrants was estimated using a Modified Black-Scholes model (see Note 11). | |
Income Taxes | Income Taxes The Company complies with the accounting and reporting requirements of ASC Topic 740, Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. | Income Taxes The Company complies with the accounting and reporting requirements of ASC 740, Income Taxes , which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2021 and December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. |
Net Income Per Share of Common Stock | Net Earnings ( Loss) Per Share Net earnings (loss) per share is computed by dividing net earnings (loss) by the weighted-average number of shares of common stock outstanding during the period. The Company has not considered the effect of the warrants sold in the Public Offering and Private Placement to purchase an aggregate of 24,666,667 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 statement of operations includes a presentation of income per share for common shares subject to possible redemption and applies the two-class method in calculating income per share. Net earnings per common share, basic and diluted, for Class A redeemable common stock is calculated by dividing the allocable interest income earned on the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Class A redeemable common stock outstanding since original issuance. Net loss per share, basic and diluted, for Class A and Class B non-redeemable common stock is calculated by dividing the net loss, adjusted for income attributable to Class A redeemable common stock, by the weighted average number of Class B non-redeemable common stock outstanding for the period. Class B non-redeemable common stock 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. The following table reflects the calculation of basic and diluted net earnings (loss) per common share (in dollars, except per share amounts): For the Period from August 26,2020 (Inception) through December 31, 2020 Class A Common Stock subject to possible redemption Numerator: Earnings attributable to Class A Common Stock subject to possible redemption Unrealized gain on investments held in Trust Account $ 88,498 Less: Unrealized gain available to be withdrawn for payment of taxes (62,790) Net earnings attributable to Class A Common Stock subject to possible redemption $ 25,708 Denominator: Weighted average Class A Common Stock subject to possible redemption Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption 44,885,287 Basic and diluted net earnings per share, Class A Common Stock subject to possible redemption $ 0.00 Non-Redeemable Class A and Class B Common Stock Numerator: Net loss minus net earnings Net loss $ (10,850,513) Less: Net earnings attributable to Class A Common Stock subject to possible redemption (25,708) Non-redeemable net loss $ (10,876,221) Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock 17,614,713 Basic and diluted net loss per share, Non-Redeemable Class A and Class B Common Stock $ (0.62) | Net Income Per Share of Common Stock Net income per common share is computed by dividing net income by the weighted-average number of shares of common stock 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 24,666,667 shares in the calculation of diluted income per share, since the warrants are contingently exercisable, and the contingencies have not yet been met. The Company’s statement of operations includes a presentation of income per share for common shares subject to possible redemption and applies the two-class method in calculating income per share. Net earnings per common share, basic and diluted, for Class A redeemable common stock is calculated by dividing the allocable unrealized gain on investments held in the Trust Account and interest and dividend income on investments held in the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Class A common stock subject to possible redemption outstanding for the period. Net income per share, basic and diluted, for Class B non-redeemable common stock is calculated by dividing the net income, adjusted for income attributable to Class A redeemable common stock, by the weighted average number of Class B non-redeemable common stock outstanding for the period. Class B non-redeemable common stock includes the Founder Shares (as defined in Note 5) as these shares do not have any redemption features and do not participate in the income earned on the Trust Account. The following table reflects the calculation of basic and diluted net income per common share (in dollars, except share and per share amounts): Three Months Ended Six Months Ended June 30, June 30, 2021 2021 Class A Common Stock subject to possible redemption Numerator: Earnings attributable to Class A Common Stock subject to possible redemption Unrealized gain on investments held in Trust Account $ 5,002 $ 135,027 Interest and dividend income on investments held in Trust Account 8,633 8,633 Less: Income available to be withdrawn for payment of taxes (13,635) (100,209) Net earnings attributable to Class A Common Stock subject to possible redemption $ — $ 43,451 Denominator: Weighted average Class A Common Stock subject to possible redemption Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption 50,000,000 50,000,000 Basic and diluted net earnings per share, Class A Common Stock subject to possible redemption $ 0.00 $ 0.00 Non-Redeemable Class B Common Stock Numerator: Non-redeemable net income Net income $ 3,252,607 $ 833,801 Less: Net earnings attributable to Class A Common Stock subject to possible redemption — (43,451) Non-redeemable net income $ 3,252,607 $ 790,350 Denominator: Weighted average Non-Redeemable Class B Common Stock Basic and diluted weighted average shares outstanding, Non-Redeemable Class B Common Stock 12,500,000 12,500,000 Basic and diluted net income per share, Non-Redeemable Class B Common Stock $ 0.26 $ 0.06 |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000 . The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company applies ASC 820, which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances. The carrying amounts reflected in the balance sheet for cash, prepaid expenses and accrued offering costs approximate fair value due to their short-term nature. Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. See Note 11 for additional information on assets and liabilities measured at fair value. | Fair Value of Financial Instruments The Company applies ASC Topic 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances. The carrying amounts reflected in the balance sheet for cash, prepaid expenses and accrued offering costs approximate fair value due to their short-term nature. Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. See Note 9 for additional information on assets and liabilities measured at fair value. |
Recent Accounting Standards | 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 the Company’s financial statements. | Recent Accounting Standards In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows. Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. |
RESTATEMENT OF PREVIOUSLY ISS_2
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Tables) | 4 Months Ended |
Dec. 31, 2020 | |
RESTATEMENT OF PRESVIOUSLY ISSUED FINANCIAL STATEMENTS | |
Schedule of effect of the restatement on each financial statement line item | As Previously Reported Adjustment As Restated Balance Sheet as of October 30, 2020 (audited) Warrant liabilities $ — $ 37,573,340 $ 37,573,340 Total liabilities — 37,573,340 37,573,340 Class A common stock subject to possible redemption 496,488,280 (37,573,340) 458,914,940 Class A common stock 35 376 411 Additional paid-in capital 5,001,103 785,497 5,786,600 Accumulated deficit (2,568) (785,873) (788,441) Balance Sheet as of December 31, 2020 (audited) Warrant liabilities $ — $ 47,506,670 $ 47,506,670 Total liabilities 128,958 47,506,670 47,635,628 Class A common stock subject to possible redemption 496,359,540 (47,506,670) 448,852,870 Class A common stock 36 475 511 Additional paid-in capital 5,130,030 10,718,728 15,848,758 Accumulated deficit (131,310) (10,719,203) (10,850,513) Stockholders' equity 5,000,006 — 5,000,006 Statement of Operations for the period from August 26, 2020 (inception) to December 31, 2020 (audited) Expensed offering costs $ — $ 545,873 $ 545,873 Loss on sale of private placement warrants — (240,000) (240,000) Change in fair value of warrant liabilities — (9,933,330) (9,933,330) Net loss (131,310) (10,719,203) (10,850,513) Basic and diluted net loss per share, Non-redeemable Class A and Class B common stock (0.01) (0.61) (0.62) Statement of Cash Flows for the period from August 26, 2020 (inception) to December 31, 2020 (audited) Cash flow from operating activities: Net loss $ (131,310) $ (10,719,203) $ (10,850,513) Adjustments to reconcile net loss to net cash used in operating activities: Expensed offering costs in connection with the issuance of the Public Warrants included in the Units — 545,873 545,873 Loss on sale of private placement warrants — 240,000 240,000 Change in fair value of warrant liabilities — 9,933,330 9,933,330 Supplemental disclosure of non-cash investing and financing activities: Initial measurement of warrants issued in connection with the Initial Public Offering accounted for as liabilities — 37,573,340 37,573,340 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
Summary of Significant Accounting Policies | ||
Schedule of basic and diluted net earnings (loss) per common share | For the Period from August 26,2020 (Inception) through December 31, 2020 Class A Common Stock subject to possible redemption Numerator: Earnings attributable to Class A Common Stock subject to possible redemption Unrealized gain on investments held in Trust Account $ 88,498 Less: Unrealized gain available to be withdrawn for payment of taxes (62,790) Net earnings attributable to Class A Common Stock subject to possible redemption $ 25,708 Denominator: Weighted average Class A Common Stock subject to possible redemption Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption 44,885,287 Basic and diluted net earnings per share, Class A Common Stock subject to possible redemption $ 0.00 Non-Redeemable Class A and Class B Common Stock Numerator: Net loss minus net earnings Net loss $ (10,850,513) Less: Net earnings attributable to Class A Common Stock subject to possible redemption (25,708) Non-redeemable net loss $ (10,876,221) Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock 17,614,713 Basic and diluted net loss per share, Non-Redeemable Class A and Class B Common Stock $ (0.62) | The following table reflects the calculation of basic and diluted net income per common share (in dollars, except share and per share amounts): Three Months Ended Six Months Ended June 30, June 30, 2021 2021 Class A Common Stock subject to possible redemption Numerator: Earnings attributable to Class A Common Stock subject to possible redemption Unrealized gain on investments held in Trust Account $ 5,002 $ 135,027 Interest and dividend income on investments held in Trust Account 8,633 8,633 Less: Income available to be withdrawn for payment of taxes (13,635) (100,209) Net earnings attributable to Class A Common Stock subject to possible redemption $ — $ 43,451 Denominator: Weighted average Class A Common Stock subject to possible redemption Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption 50,000,000 50,000,000 Basic and diluted net earnings per share, Class A Common Stock subject to possible redemption $ 0.00 $ 0.00 Non-Redeemable Class B Common Stock Numerator: Non-redeemable net income Net income $ 3,252,607 $ 833,801 Less: Net earnings attributable to Class A Common Stock subject to possible redemption — (43,451) Non-redeemable net income $ 3,252,607 $ 790,350 Denominator: Weighted average Non-Redeemable Class B Common Stock Basic and diluted weighted average shares outstanding, Non-Redeemable Class B Common Stock 12,500,000 12,500,000 Basic and diluted net income per share, Non-Redeemable Class B Common Stock $ 0.26 $ 0.06 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 4 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Schedule of net deferred tax assets (liabilities) | The Company’s net deferred tax assets (liabilities) as of December 31, 2020 is as follows: Deferred tax assets: Start-up costs $ 33,188 Net operating loss carryforwards 14,688 Total deferred tax assets 47,876 Valuation allowance (27,174) Deferred tax liabilities: Unrealized gain on investments (20,702) Total deferred tax liabilities (20,702) Deferred tax assets, net of allowance $ — |
Schedule of components of income tax provision | The income tax provision for the period from August 26 (inception) through December 31, 2020 consists of the following: Federal Current $ — Deferred (27,174) State Current — Deferred — Change in valuation allowance 27,174 Income tax provision $ — |
Schedule of reconciliation of the federal income tax rate to the Company's effective tax rate | A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2020 is as follows: Statutory federal income tax rate 21.0 % State taxes, net of federal tax benefit 0.0 % Change in fair value of derivative warrant liabilities (19.2) % Non-deductible transaction costs (1.5) % Change in valuation allowance (0.3) % Income tax provision 0.0 % |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
FAIR VALUE MEASUREMENTS | ||
Schedule of Company's financial assets that are measured at fair value on a recurring basis | The following table presents information about the Company’s financial assets that are measured at fair value on a recurring basis at December 31, 2020, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: Description Level 1 Level 2 Level 3 Assets Investments held in Trust Account: Money Market investments $ 500,098,582 $ — $ — Liabilities Warrant liability - Public Warrants $ 31,666,670 $ — $ — Warrant liability - Private Placement Warrants $ — $ — $ 15,840,000 | |
Summary of the significant inputs for the fair value of the warrant | The following table provides the significant inputs to the Modified Black-Scholes model for the fair value of the Private Placement Warrants: As of As of June 30, 2021 December 31, 2020 Stock price $ 9.96 $ 10.06 Strike price $ 11.50 $ 11.50 Probability of completing a Business Combination * 86.0 % Dividend yield — % — % Term (in years) 5.26 5.91 Volatility 21.5 % 28.0 % Risk-free rate 0.91 % 0.49 % Fair value of warrants $ 1.57 $ 1.98 *The probability of completing a Business Combination is considered within the volatility implied by the traded price of the Public Warrants which is used to value the Private Placement Warrants. | |
Summary of changes in the fair value of warrant liabilities | Private Warrant Placement Public Liabilities Fair value as of August 26, 2020 $ — — $ — Initial measurement at October 30, 2020 12,240,000 25,333,340 37,573,340 Change in valuation inputs or other assumptions 3,600,000 6,333,330 9,933,330 Fair value as of December 31, 2020 $ 15,840,000 31,666,670 $ 47,506,670 | Private Warrant Placement Public Liabilities Fair value as of December 31, 2020 $ 15,840,000 $ 31,666,670 $ 47,506,670 Change in valuation inputs or other assumptions (3,280,000) (6,000,003) (9,280,003) Fair value as of June 30, 2021 $ 12,560,000 $ 25,666,667 $ 38,226,667 |
Public warrants | ||
FAIR VALUE MEASUREMENTS | ||
Summary of the significant inputs for the fair value of the warrant | At October 30, 2020 (Initial Measurement) Stock price $ 9.93 Strike price $ 11.50 Probability of completing a Business Combination 86.0 % Term (in years) 6.1 Volatility 4.5% pre-merger / 26.0% post-merger Risk-free rate 0.5 % Fair value of warrants $ 1.52 | |
Private Placement Warrants | ||
FAIR VALUE MEASUREMENTS | ||
Summary of the significant inputs for the fair value of the warrant | At October 30, 2020 (Initial As of December 31, Measurement) 2020 Stock price $ 9.93 $ 10.06 Strike price $ 11.50 $ 11.50 Probability of completing a Business Combination 86.0 % 86.0 % Dividend yield — % — % Term (in years) 6.1 5.9 Volatility 22.8 % 28.0 % Risk-free rate 0.5 % 0.5 % Fair value of warrants $ 1.53 $ 1.98 |
DESCRIPTION OF ORGANIZATION A_2
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details) | Oct. 30, 2020USD ($)$ / sharesshares | Sep. 11, 2020USD ($) | Dec. 31, 2020USD ($) | Jun. 30, 2021USD ($) |
Description of Organization and Business Operations (Details) [Line Items] | ||||
Cash | $ 925,923 | |||
Percentage of fair market value | 80.00% | |||
Condition for future business combination threshold Percentage Ownership | 50 | |||
Net tangible assets | $ 5,000,001 | |||
Maximum period to complete business combination from closing date of ipo | 24 months | |||
Redeem public shares, percentage | 100.00% | |||
Threshold business days for redemption of public shares | 10 days | |||
Interest to pay dissolution expenses | $ 100,000 | |||
Working capital | 1,260,964 | $ 7,308,241 | ||
Proceeds from issuance of Class B common stock to Sponsor | 25,000 | |||
Proceeds from issuance of promissory note - related party | 300,000 | |||
Initial Public Offering | ||||
Description of Organization and Business Operations (Details) [Line Items] | ||||
Sale of shares (in Shares) | shares | 50,000,000 | |||
Price per unit (in Dollars per share) | $ / shares | $ 10 | |||
Amount of Gross proceed from sale of units (in Dollars) | $ 500,000,000 | |||
Amount of net proceed from sale of units | 500,000,000 | |||
Offering costs as a reduction of equity | 10,534,144 | 10,534,144 | ||
Underwriting fees | 10,000,000 | 10,000,000 | 10,000,000 | |
Other offering costs | $ 534,144 | $ 534,144 | $ 534,144 | |
Proceeds from issuance of promissory note - related party | $ 300,000 |
RESTATEMENT OF PREVIOUSLY ISS_3
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Details) - USD ($) | 3 Months Ended | 4 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2021 | Oct. 30, 2020 | Aug. 25, 2020 | |
Balance Sheet | ||||||
Warrant liabilities | $ 47,506,670 | $ 37,573,340 | ||||
Total Liabilities | $ 46,083,912 | 47,635,628 | $ 46,083,912 | 37,573,340 | ||
Additional paid-in capital | 23,750 | 15,848,758 | 23,750 | 5,786,600 | ||
Accumulated deficit | (45,481,339) | (10,850,513) | (45,481,339) | (788,441) | ||
Stockholders' equity | (45,456,339) | $ (48,723,289) | 5,000,006 | (45,456,339) | $ 0 | |
Statement of Operations | ||||||
Expensed offering costs | 545,873 | |||||
Loss on sale of private placement warrants | (240,000) | |||||
Change in fair value of warrant liabilities | 7,053,334 | (9,933,330) | 9,280,003 | |||
Net loss | 3,252,607 | (2,418,806) | (10,850,513) | 833,801 | ||
Cash flows from operating activities | ||||||
Net loss | 3,252,607 | $ (2,418,806) | (10,850,513) | 833,801 | ||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||
Expensed offering costs on issuance of Public Warrants | 545,873 | |||||
Loss on sale of private placement warrants | 240,000 | |||||
Change in fair value of warrant liabilities | $ (7,053,334) | 9,933,330 | $ (9,280,003) | |||
Supplemental disclosures of non-cash investing and financing activities: | ||||||
Initial classification of warrant liabilities | $ 37,573,340 | |||||
Public warrants | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Warrants outstanding | 16,666,667 | 16,666,667 | 16,666,667 | |||
Private Placement Warrants | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Warrants outstanding | 8,000,000 | |||||
Restatement of warrants as derivative liabilities | Public warrants | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Warrants outstanding | 16,666,667 | |||||
Restatement of warrants as derivative liabilities | Private Placement Warrants | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Warrants outstanding | 8,000,000 | |||||
Restatement of warrants as derivative liabilities | As Previously Reported | ||||||
Balance Sheet | ||||||
Total Liabilities | $ 128,958 | |||||
Additional paid-in capital | 5,130,030 | 5,001,103 | ||||
Accumulated deficit | (131,310) | (2,568) | ||||
Stockholders' equity | 5,000,006 | |||||
Statement of Operations | ||||||
Net loss | (131,310) | |||||
Cash flows from operating activities | ||||||
Net loss | (131,310) | |||||
Restatement of warrants as derivative liabilities | Adjustment | ||||||
Balance Sheet | ||||||
Warrant liabilities | 47,506,670 | 37,573,340 | ||||
Total Liabilities | 47,506,670 | 37,573,340 | ||||
Additional paid-in capital | 10,718,728 | 785,497 | ||||
Accumulated deficit | (10,719,203) | (785,873) | ||||
Statement of Operations | ||||||
Expensed offering costs | 545,873 | |||||
Loss on sale of private placement warrants | (240,000) | |||||
Change in fair value of warrant liabilities | (9,933,330) | |||||
Net loss | (10,719,203) | |||||
Cash flows from operating activities | ||||||
Net loss | (10,719,203) | |||||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||
Expensed offering costs on issuance of Public Warrants | 545,873 | |||||
Loss on sale of private placement warrants | 240,000 | |||||
Change in fair value of warrant liabilities | 9,933,330 | |||||
Supplemental disclosures of non-cash investing and financing activities: | ||||||
Initial classification of warrant liabilities | 37,573,340 | |||||
Class A Common Stock | ||||||
Balance Sheet | ||||||
Common stock, $0.0001 par value; 155,000,000 shares authorized; 52,229,481 shares issued and outstanding as of June 30, 2021 and 143,677,090 shares authorized; 51,321,752 shares issued and outstanding as of December 31, 2020 | 511 | 411 | ||||
Class A Common Stock | Restatement of warrants as derivative liabilities | As Previously Reported | ||||||
Balance Sheet | ||||||
Common stock, $0.0001 par value; 155,000,000 shares authorized; 52,229,481 shares issued and outstanding as of June 30, 2021 and 143,677,090 shares authorized; 51,321,752 shares issued and outstanding as of December 31, 2020 | 36 | 35 | ||||
Class A Common Stock | Restatement of warrants as derivative liabilities | Adjustment | ||||||
Balance Sheet | ||||||
Common stock, $0.0001 par value; 155,000,000 shares authorized; 52,229,481 shares issued and outstanding as of June 30, 2021 and 143,677,090 shares authorized; 51,321,752 shares issued and outstanding as of December 31, 2020 | 475 | 376 | ||||
Common Class A subject to possible redemption | ||||||
Balance Sheet | ||||||
Class A common stock, $0.0001 par value, subject to possible redemption; 50,000,000 and 44,885,287 shares at redemption value at June 30, 2021 and December 31, 2020, respectively | $ 448,852,870 | 458,914,940 | ||||
Statement of Operations | ||||||
Net loss per share, basic and diluted | $ 0 | $ 0 | $ 0 | |||
Common Class A subject to possible redemption | Restatement of warrants as derivative liabilities | As Previously Reported | ||||||
Balance Sheet | ||||||
Class A common stock, $0.0001 par value, subject to possible redemption; 50,000,000 and 44,885,287 shares at redemption value at June 30, 2021 and December 31, 2020, respectively | $ 496,359,540 | 496,488,280 | ||||
Common Class A subject to possible redemption | Restatement of warrants as derivative liabilities | Adjustment | ||||||
Balance Sheet | ||||||
Class A common stock, $0.0001 par value, subject to possible redemption; 50,000,000 and 44,885,287 shares at redemption value at June 30, 2021 and December 31, 2020, respectively | (47,506,670) | $ (37,573,340) | ||||
Non-Redeemable Common Class A and B | ||||||
Statement of Operations | ||||||
Net loss | $ (10,850,513) | |||||
Net loss per share, basic and diluted | $ (0.62) | |||||
Cash flows from operating activities | ||||||
Net loss | $ (10,850,513) | |||||
Non-Redeemable Common Class A and B | Restatement of warrants as derivative liabilities | As Previously Reported | ||||||
Statement of Operations | ||||||
Net loss per share, basic and diluted | $ (0.01) | |||||
Non-Redeemable Common Class A and B | Restatement of warrants as derivative liabilities | Adjustment | ||||||
Statement of Operations | ||||||
Net loss per share, basic and diluted | $ (0.61) |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Oct. 30, 2020 | Dec. 31, 2020 | Jun. 30, 2021 |
Significant accounting policies | |||
Initial Public Offering cost | $ 10,534,144 | ||
Unrecognized tax benefits | $ 0 | $ 0 | |
Unrecognized tax benefits for accrued interest and penalties | 0 | 0 | |
Federal depository insurance coverage | $ 250,000 | $ 250,000 | |
Class A Common Stock | |||
Significant accounting policies | |||
Shares subject to possible redemption | 44,885,287 | 50,000,000 | |
Initial Public Offering | |||
Significant accounting policies | |||
Initial Public Offering cost | $ 10,534,144 | ||
Underwriting fees | 10,000,000 | 10,000,000 | $ 10,000,000 |
Other offering costs | $ 534,144 | 534,144 | $ 534,144 |
Offering costs | 9,988,271 | ||
Initial Public Offering | Public warrants | |||
Significant accounting policies | |||
Expensed offering costs on issuance of warrants | 545,873 | ||
Initial Public Offering | Private Placement Warrants | |||
Significant accounting policies | |||
Expensed offering costs on issuance of warrants | $ 545,873 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - calculation of basic and diluted net earnings (loss) per common share (Details) - USD ($) | 3 Months Ended | 4 Months Ended | 6 Months Ended | |
Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2021 | |
Basic and diluted net earnings (loss) per common share | ||||
Antidilutive securities excluded from the computation of diluted loss per share | 24,666,667 | |||
Unrealized gain on investments held in Trust Account | $ 5,002 | $ 98,582 | $ 135,027 | |
Net loss | 3,252,607 | $ (2,418,806) | $ (10,850,513) | 833,801 |
Class A Common Stock | ||||
Basic and diluted net earnings (loss) per common share | ||||
Antidilutive securities excluded from the computation of diluted loss per share | 24,666,667 | |||
Common Class A subject to possible redemption | ||||
Basic and diluted net earnings (loss) per common share | ||||
Unrealized gain on investments held in Trust Account | $ 5,002 | $ 88,498 | $ 135,027 | |
Less: Unrealized gain available to be withdrawn for payment of taxes | (62,790) | |||
Non-redeemable net loss | $ 25,708 | |||
Basic and diluted weighted average shares outstanding | 50,000,000 | 44,885,287 | 50,000,000 | |
Net loss per share, basic and diluted | $ 0 | $ 0 | $ 0 | |
Non-Redeemable Common Class A and B | ||||
Basic and diluted net earnings (loss) per common share | ||||
Net loss | $ (10,850,513) | |||
Non-redeemable net loss | 25,708 | |||
Non-redeemable net loss | $ (10,876,221) | |||
Basic and diluted weighted average shares outstanding | 17,614,713 | |||
Net loss per share, basic and diluted | $ (0.62) |
INITIAL PUBLIC OFFERING (Detail
INITIAL PUBLIC OFFERING (Details) - USD ($) | Oct. 30, 2020 | Dec. 31, 2020 | Jun. 30, 2021 |
Initial Public Offering | |||
INITIAL PUBLIC OFFERING | |||
Sale of Units, net of underwriting discounts (in shares) | 50,000,000 | ||
Price per unit | $ 10 | ||
Amount of Gross proceed from sale of units (in Dollars) | $ 500,000,000 | ||
Number of warrants in a unit | 0.33 | ||
Exercise price of warrant | $ 11.50 | ||
Cash underwriting discount per unit | $ 0.20 | ||
Underwriting fees | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 |
Over-allotment option | |||
INITIAL PUBLIC OFFERING | |||
Sale of Units, net of underwriting discounts (in shares) | 7,500,000 | ||
Class A Common Stock | |||
INITIAL PUBLIC OFFERING | |||
Common shares, par value, (per share) | $ 0.0001 | $ 0.0001 | |
Class A Common Stock | Initial Public Offering | |||
INITIAL PUBLIC OFFERING | |||
Number of shares in a unit | 1 | ||
Common shares, par value, (per share) | $ 0.0001 | ||
Number of shares purchased for one warrant | 1 |
PRIVATE PLACEMENT (Details)
PRIVATE PLACEMENT (Details) | 4 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
Private Placement | |
Share Price | $ 9.20 |
Private Placement | |
Private Placement | |
Number of warrants sold | shares | 8,000,000 |
Warrants per share price | $ 1.50 |
Amount of gross proceeds from sale of warrants | $ | $ 12,000,000 |
Class A Common Stock | Private Placement | |
Private Placement | |
Number of common stock purchased by exercisable of each warrants | shares | 1 |
Share Price | $ 11.50 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | Oct. 30, 2020 | Sep. 11, 2020 | Sep. 04, 2020 | Dec. 31, 2020 | Dec. 31, 2020 | Jun. 30, 2021 |
Related Party Transactions (Details) [Line Items] | ||||||
Share Price | $ 9.20 | $ 9.20 | ||||
Closing price of share for threshold trading days | 20 days | |||||
Closing price of share for threshold consecutive trading days | 30 days | |||||
Proceeds from issuance of promissory note - related party | $ 300,000 | |||||
Amount of repayment of outstanding promissory note | 300,000 | |||||
Office and administrative fess | $ 10,000 | |||||
Initial Public Offering | ||||||
Related Party Transactions (Details) [Line Items] | ||||||
Shares consideration (in Shares) | 50,000,000 | |||||
Share Price | $ 18 | $ 18 | ||||
Proceeds from issuance of promissory note - related party | $ 300,000 | |||||
Amount of repayment of outstanding promissory note | $ 300,000 | |||||
Founder Shares | ||||||
Related Party Transactions (Details) [Line Items] | ||||||
Amount of sponsor paid | $ 25,000 | |||||
Aggregate shares subject to forfeiture (in Shares) | 1,875,000 | 1,875,000 | ||||
Issued and outstanding shares percentage | 20.00% | |||||
Share Price | $ 12 | $ 12 | ||||
Closing price of share for threshold trading days | 20 days | |||||
Closing price of share for threshold consecutive trading days | 30 days | |||||
Class B Common Stock | ||||||
Related Party Transactions (Details) [Line Items] | ||||||
Shares consideration (in Shares) | 14,375,000 | |||||
Aggregate shares subject to forfeiture (in Shares) | 1,875,000 | 1,875,000 | ||||
Common shares, shares outstanding | 12,500,000 | 12,500,000 | 12,500,000 |
COMMITMENTS (Details)
COMMITMENTS (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021USD ($) | Dec. 31, 2020USD ($) | |
Other Commitments [Line Items] | ||
Cash Discount (in percent) | 3.5 | 3.5 |
Cash Discount | $ 17,500,000 | $ 17,500,000 |
Representative Of The Underwriters | ||
Other Commitments [Line Items] | ||
Cash Discount (in percent) | 2.25 | 2.25 |
Cash Discount | $ 11,250,000 | $ 11,250,000 |
Moelis & Company LLC | ||
Other Commitments [Line Items] | ||
Cash Discount (in percent) | 1.25 | 1.25 |
Cash Discount | $ 6,250,000 | $ 6,250,000 |
WARRANTS (Details)
WARRANTS (Details) - USD ($) | 3 Months Ended | 4 Months Ended | 6 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2021 | |
Class of Warrant or Right [Line Items] | |||
Class of warrant or right redemption price of warrants or rights | $ 0.01 | ||
Warrants exercisable term after the completion of a business combination | 30 days | ||
Public warrants expiration term | 5 years | ||
Threshold period for filling registration statement after business combination | 15 days | ||
Share Price | $ 9.20 | ||
Closing price of share for threshold trading days | 20 days | ||
Closing price of share for threshold consecutive trading days | 30 days | ||
Threshold business days before sending notice of redemption to warrant holders | 3 days | ||
Adjustment of exercise price of warrants based on market value (as a percent) | 115.00% | ||
Adjustment of redemption price of stock based on market value and newly issued price 2 (as a percent) | 180.00% | ||
Minimum threshold written notice period for redemption of public warrants | 30 days | ||
Threshold trading days determining volume weighted average price | 20 days | ||
Change in fair value of warrant liabilities | $ (7,053,334) | $ 9,933,330 | $ (9,280,003) |
Minimum | |||
Class of Warrant or Right [Line Items] | |||
Percentage of gross proceeds on total equity proceeds | 60.00% | ||
Maximum | |||
Class of Warrant or Right [Line Items] | |||
Minimum threshold written notice period for redemption of public warrants | 30 days | ||
Initial Public Offering | |||
Class of Warrant or Right [Line Items] | |||
Warrants and rights outstanding exercisable term from closing of public offering | 12 months | ||
Share Price | $ 18 | ||
Public warrants | |||
Class of Warrant or Right [Line Items] | |||
Public warrants expiration term | 5 years | 5 years | |
Warrants outstanding | 16,666,667 | 16,666,667 | 16,666,667 |
Private Placement Warrants | |||
Class of Warrant or Right [Line Items] | |||
Warrants outstanding | 8,000,000 |
STOCKHOLDER'S EQUITY (Details)
STOCKHOLDER'S EQUITY (Details) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020Vote$ / sharesshares | Jun. 30, 2021Vote$ / sharesshares | |
Stockholder's Equity (Details) [Line Items] | ||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Redeemable convertible preferred stock, par value | $ / shares | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Class A Common Stock | ||
Stockholder's Equity (Details) [Line Items] | ||
Common shares, shares authorized | 200,000,000 | 200,000,000 |
Common shares, par value, (per share) | $ / shares | $ 0.0001 | $ 0.0001 |
Common shares, shares outstanding | 5,114,713 | 0 |
Common shares, shares issued | 50,000,000 | 50,000,000 |
Common shares, votes per share | Vote | 1 | |
Issued and outstanding shares of public offering, percentage | 20.00% | |
Common Class A not subject to possible redemption | ||
Stockholder's Equity (Details) [Line Items] | ||
Common shares, shares outstanding | 5,114,713 | |
Common shares, shares issued | 5,114,713 | |
Class B Common Stock | ||
Stockholder's Equity (Details) [Line Items] | ||
Common shares, shares authorized | 20,000,000 | 20,000,000 |
Common shares, par value, (per share) | $ / shares | $ 0.0001 | $ 0.0001 |
Common shares, shares outstanding | 12,500,000 | 12,500,000 |
Common shares, shares issued | 12,500,000 | 12,500,000 |
Common shares, votes per share | Vote | 1 | 1 |
Aggregate shares subject to forfeiture | 1,875,000 | |
Conversion ratio | 1 | |
Issued and outstanding shares of public offering, percentage | 20.00% |
INCOME TAX - Company's net defe
INCOME TAX - Company's net deferred tax assets (liabilities) (Details) | Dec. 31, 2020USD ($) |
Deferred tax assets: | |
Start-up costs | $ 33,188 |
Net operating loss carryforwards | 14,688 |
Gross deferred tax assets | 47,876 |
Valuation allowance | (27,174) |
Deferred tax liabilities: | |
Unrealized gain on investments | (20,702) |
Total deferred tax liabilities | $ (20,702) |
INCOME TAX - Components of inco
INCOME TAX - Components of income tax provision (Details) | 4 Months Ended |
Dec. 31, 2020USD ($) | |
Federal | |
Deferred | $ (27,174) |
Change in valuation allowance | $ 27,174 |
INCOME TAX - Effective tax rate
INCOME TAX - Effective tax rate Reconciliation (Details) | 4 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Statutory tax rate (as a percent) | 21.00% |
State taxes, net of federal tax benefit (as a percent) | 0.00% |
Change in fair value of derivative warrant liabilities | (19.20%) |
Non-deductible transaction costs | (1.50%) |
Change in valuation allowance (as a percent) | (0.30%) |
Effective Tax Rate | 0.00% |
INCOME TAX - Carry forward (Det
INCOME TAX - Carry forward (Details) | Dec. 31, 2020USD ($) |
U.S. federal | |
Operating loss carryforward | |
Operating Loss carryforwards | $ 70,000 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) | 4 Months Ended | |
Dec. 31, 2020USD ($) | Oct. 30, 2020USD ($) | |
Liabilities | ||
Warrant liability | $ 47,506,670 | $ 37,573,340 |
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount | 0 | |
Fair value assets transfers in to level 3 | 0 | |
Fair value assets transfers out of level 3 | 0 | |
Level 1 | Recurring | Public warrants | ||
Liabilities | ||
Warrant liability | 31,666,670 | |
Level 1 | Recurring | Money market funds | ||
Assets | ||
Investments held in Trust Account | 500,098,582 | |
Level 3 | Recurring | Money market funds | Private Placement Warrants | ||
Liabilities | ||
Warrant liability | $ 15,840,000 | |
Dividend yield | ||
Liabilities | ||
Measurement input | 0 |
FAIR VALUE MEASUREMENTS - Signi
FAIR VALUE MEASUREMENTS - Significant inputs (Details) | Jun. 30, 2021 | Dec. 31, 2020$ / shares | Oct. 30, 2020$ / sharesY |
Monte Carlo Simulation Model | |||
FAIR VALUE MEASUREMENTS | |||
Measurement input | Y | 6.1 | ||
Stock price | |||
FAIR VALUE MEASUREMENTS | |||
Measurement input | 9.96 | 10.06 | |
Stock price | Monte Carlo Simulation Model | |||
FAIR VALUE MEASUREMENTS | |||
Measurement input | 9.93 | ||
Strike price | |||
FAIR VALUE MEASUREMENTS | |||
Measurement input | 11.50 | 11.50 | |
Strike price | Monte Carlo Simulation Model | |||
FAIR VALUE MEASUREMENTS | |||
Measurement input | 11.50 | ||
Probability of completing a Business Combination | |||
FAIR VALUE MEASUREMENTS | |||
Measurement input | 86 | ||
Probability of completing a Business Combination | Monte Carlo Simulation Model | |||
FAIR VALUE MEASUREMENTS | |||
Measurement input | 86 | ||
Dividend yield | |||
FAIR VALUE MEASUREMENTS | |||
Measurement input | 0 | ||
Term (in years) | |||
FAIR VALUE MEASUREMENTS | |||
Measurement input | 5.26 | 5.91 | |
Volatility | |||
FAIR VALUE MEASUREMENTS | |||
Measurement input | 21.5 | 28 | |
Risk-free rate | |||
FAIR VALUE MEASUREMENTS | |||
Measurement input | 0.91 | 0.49 | |
Risk-free rate | Monte Carlo Simulation Model | |||
FAIR VALUE MEASUREMENTS | |||
Measurement input | 0.5 | ||
Fair value of warrants | |||
FAIR VALUE MEASUREMENTS | |||
Measurement input | 1.57 | 1.98 | |
Fair value of warrants | Monte Carlo Simulation Model | |||
FAIR VALUE MEASUREMENTS | |||
Measurement input | 1.52 | ||
Public warrants | Monte Carlo Simulation Model | |||
FAIR VALUE MEASUREMENTS | |||
Measurement input | 1.90 | ||
Public warrants | Modified Black Scholes Model | |||
FAIR VALUE MEASUREMENTS | |||
Measurement input | Y | 6.1 | ||
Public warrants | Stock price | Modified Black Scholes Model | |||
FAIR VALUE MEASUREMENTS | |||
Measurement input | 10.06 | 9.93 | |
Public warrants | Strike price | Modified Black Scholes Model | |||
FAIR VALUE MEASUREMENTS | |||
Measurement input | 11.50 | 11.50 | |
Public warrants | Probability of completing a Business Combination | Modified Black Scholes Model | |||
FAIR VALUE MEASUREMENTS | |||
Measurement input | 86 | 86 | |
Public warrants | Volatility | Modified Black Scholes Model | |||
FAIR VALUE MEASUREMENTS | |||
Measurement input | 28 | 22.8 | |
Public warrants | Volatility pre-merger | Monte Carlo Simulation Model | |||
FAIR VALUE MEASUREMENTS | |||
Measurement input | 4.5 | ||
Public warrants | Volatility post-merger | Monte Carlo Simulation Model | |||
FAIR VALUE MEASUREMENTS | |||
Measurement input | 26 | ||
Public warrants | Risk-free rate | Modified Black Scholes Model | |||
FAIR VALUE MEASUREMENTS | |||
Measurement input | 0.5 | 0.5 | |
Public warrants | Fair value of warrants | Modified Black Scholes Model | |||
FAIR VALUE MEASUREMENTS | |||
Measurement input | 1.98 | 1.53 |
FAIR VALUE MEASUREMENTS - Chang
FAIR VALUE MEASUREMENTS - Changes in the fair value of warrant liabilities (Details) - USD ($) | 3 Months Ended | 4 Months Ended | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2021 | Oct. 30, 2020 | |
FAIR VALUE MEASUREMENTS | ||||
Fair value as of December 31, 2020 | $ 47,506,670 | |||
Initial measurement at October 30, 2020 | $ 38,226,667 | $ 47,506,670 | 38,226,667 | $ 37,573,340 |
Change in valuation inputs or other assumptions | 7,053,334 | 9,933,330 | 9,280,003 | |
Fair value as of March 31, 2021 | 38,226,667 | 47,506,670 | 38,226,667 | |
Private Placement Warrants | ||||
FAIR VALUE MEASUREMENTS | ||||
Fair value as of December 31, 2020 | 15,840,000 | |||
Initial measurement at October 30, 2020 | 12,560,000 | 15,840,000 | 12,560,000 | 12,240,000 |
Change in valuation inputs or other assumptions | 3,600,000 | 3,280,000 | ||
Fair value as of March 31, 2021 | 12,560,000 | 15,840,000 | 12,560,000 | |
Public warrants | ||||
FAIR VALUE MEASUREMENTS | ||||
Fair value as of December 31, 2020 | 31,666,670 | |||
Initial measurement at October 30, 2020 | 25,666,667 | 31,666,670 | 25,666,667 | $ 25,333,340 |
Change in valuation inputs or other assumptions | 6,333,330 | 6,000,003 | ||
Fair value as of March 31, 2021 | $ 25,666,667 | $ 31,666,670 | $ 25,666,667 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Jul. 01, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / shares | Jun. 30, 2021USD ($)Vote |
SUBSEQUENT EVENTS | |||
Share Price | $ / shares | $ 9.20 | ||
Proceeds from Issuance of Common Stock | $ | $ 25,000 | ||
Private Placement | Class A Common Stock | |||
SUBSEQUENT EVENTS | |||
Share Price | $ / shares | $ 11.50 | ||
Subsequent event | Class A Common Stock | |||
SUBSEQUENT EVENTS | |||
Number of votes per share | Vote | 1 | ||
Subsequent event | Class B Common Stock | |||
SUBSEQUENT EVENTS | |||
Number of votes per share | Vote | 10 | ||
Subsequent event | Private Placement | Class A Common Stock | |||
SUBSEQUENT EVENTS | |||
Issuance of preferred stock (in shares) | shares | 60,000,000 | ||
Share Price | $ / shares | $ 10 | ||
Proceeds from Issuance of Common Stock | $ | $ 600,000,000 | ||
Subsequent event | Archer | |||
SUBSEQUENT EVENTS | |||
Implied Equity Value | $ | $ 2,525,000,000 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | |
Current assets: | |||
Cash | $ 297,376 | $ 925,923 | |
Prepaid expenses | 251,628 | 463,999 | |
Total current assets | 549,004 | 1,389,922 | |
Investments held in Trust Account | 500,143,016 | 500,098,582 | |
Prepaid insurance - non-current | 78,569 | ||
Total assets | 500,770,589 | 501,488,504 | |
Current liabilities: | |||
Accounts payable | 77,617 | 10,991 | |
Accrued expenses | 7,376,317 | 48,022 | |
Franchise tax payable | 98,907 | 69,945 | |
Promissory note - related party | 300,000 | ||
Other current liabilities | 4,404 | ||
Total current liabilities | 7,857,245 | 128,958 | |
Warrant Liabilities | 38,226,667 | 47,506,670 | |
Total liabilities | 46,083,912 | 47,635,628 | |
Commitments and contingencies (Note 7) | |||
Stockholders' (Deficit) Equity: | |||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding at June 30,2021 and December 31,2020 | |||
Additional paid-in capital | 23,750 | 15,848,758 | |
Accumulated deficit | (45,481,339) | (10,850,513) | |
Total stockholders' deficit | (45,456,339) | 5,000,006 | |
Total liabilities, redeemable convertible preferred stock, and stockholders' deficit | 500,770,589 | 501,488,504 | |
Class A Common Stock | |||
Stockholders' (Deficit) Equity: | |||
Common stock, $0.0001 par value; 143,677,090 shares authorized; 51,321,752 shares issued and outstanding as of December 31, 2020 and 77,285,983 shares authorized; 50,000,000 shares issued and outstanding as of December 31, 2019 | 511 | ||
Class A Common Stock Subject to Redemption | |||
Current liabilities: | |||
Class A common stock, $0.0001 par value, subject to possible redemption; 50,000,000 and 44,885,287 shares at redemption value at June 30, 2021 and December 31, 2020, respectively | 500,143,016 | 448,852,870 | |
Class B Common Stock | |||
Stockholders' (Deficit) Equity: | |||
Common stock, $0.0001 par value; 143,677,090 shares authorized; 51,321,752 shares issued and outstanding as of December 31, 2020 and 77,285,983 shares authorized; 50,000,000 shares issued and outstanding as of December 31, 2019 | 1,250 | 1,250 | [1] |
Additional Paid-in Capital | |||
Stockholders' (Deficit) Equity: | |||
Total stockholders' deficit | 23,750 | 15,848,758 | |
Accumulated Deficit | |||
Stockholders' (Deficit) Equity: | |||
Total stockholders' deficit | (45,481,339) | (10,850,513) | |
Common Stock | Class A Common Stock | |||
Stockholders' (Deficit) Equity: | |||
Total stockholders' deficit | 511 | ||
Common Stock | Class B Common Stock | |||
Stockholders' (Deficit) Equity: | |||
Total stockholders' deficit | $ 1,250 | $ 1,250 | |
[1] | Excludes 1,875,000 shares of Class B common stock that were forfeited by the underwriter due to expiration of over-allotment option occurring in December 2020 (see Note 6). |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
Preferred stock, par value, (per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Class A Common Stock | ||
Common shares, par value, (per share) | $ 0.0001 | $ 0.0001 |
Common shares, shares authorized | 200,000,000 | 200,000,000 |
Common shares, shares issued | 50,000,000 | 50,000,000 |
Common shares, shares outstanding | 0 | 5,114,713 |
Shares subject to possible redemption | 50,000,000 | 44,885,287 |
Class A Common Stock Subject to Redemption | ||
Shares subject to possible redemption, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Shares subject to possible redemption | 50,000,000 | 44,885,287 |
Class B Common Stock | ||
Common shares, par value, (per share) | $ 0.0001 | $ 0.0001 |
Common shares, shares authorized | 20,000,000 | 20,000,000 |
Common shares, shares issued | 12,500,000 | 12,500,000 |
Common shares, shares outstanding | 12,500,000 | 12,500,000 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2021 | Jun. 30, 2021 | |
Operating costs | $ 3,764,636 | $ 8,489,653 |
Franchise tax expense | 49,726 | 100,209 |
Loss from operations | (3,814,362) | (8,589,862) |
Unrealized gain on investments held in Trust Account | 5,002 | 135,027 |
Interest and dividend income on investments held in Trust Account | 8,633 | 8,633 |
Change in fair value of warrant liabilities | 7,053,334 | 9,280,003 |
Net loss and comprehensive loss | 3,252,607 | 833,801 |
Non Redeemable Common Class B [Member] | ||
Net loss and comprehensive loss | $ 3,252,607 | $ 833,801 |
Basic and diluted weighted average shares outstanding | 12,500,000 | 12,500,000 |
Basic and diluted net loss per share | $ 0.26 | $ 0.06 |
Basic weighted average shares outstanding, Non-Redeemable Class B Common Stock | 12,500,000 | 12,500,000 |
Basic net income per share, Non-Redeemable Class B Common Stock | $ 0.26 | $ 0.06 |
Common Class A subject to possible redemption | ||
Unrealized gain on investments held in Trust Account | $ 5,002 | $ 135,027 |
Interest and dividend income on investments held in Trust Account | $ 8,633 | $ 8,633 |
Basic and diluted weighted average shares outstanding | 50,000,000 | 50,000,000 |
Basic and diluted net loss per share | $ 0 | $ 0 |
CONDENSED STATEMENT OF CHANGES
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Class A Common StockCommon Stock | Class B Common StockCommon Stock | Total |
Balance as of end of period at Dec. 31, 2020 | $ 511 | $ 1,250 | $ 5,000,006 |
Balance at the end (in shares) at Dec. 31, 2020 | 5,114,713 | 12,500,000 | |
Balance as of beginning of period at Aug. 25, 2020 | $ 0 | $ 0 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Measurement adjustment on redeemable common stock | $ 4,489 | 448,852,870 | |
Measurement adjustment on redeemable common stock (in shares) | (44,885,287) | ||
Net Income (losses) | (10,850,513) | ||
Balance as of end of period at Dec. 31, 2020 | $ 511 | $ 1,250 | 5,000,006 |
Balance at the end (in shares) at Dec. 31, 2020 | 5,114,713 | 12,500,000 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Measurement adjustment on redeemable common stock | $ 511 | 51,304,489 | |
Net Income (losses) | (2,418,806) | ||
Balance as of end of period at Mar. 31, 2021 | $ 1,250 | (48,723,289) | |
Balance at the end (in shares) at Mar. 31, 2021 | 0 | 12,500,000 | |
Balance as of beginning of period at Dec. 31, 2020 | $ 511 | $ 1,250 | 5,000,006 |
Balance at the beginning (in shares) at Dec. 31, 2020 | 5,114,713 | 12,500,000 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Net Income (losses) | 833,801 | ||
Balance as of end of period at Jun. 30, 2021 | $ 1,250 | (45,456,339) | |
Balance at the end (in shares) at Jun. 30, 2021 | 12,500,000 | ||
Balance as of beginning of period at Mar. 31, 2021 | $ 1,250 | (48,723,289) | |
Balance at the beginning (in shares) at Mar. 31, 2021 | 0 | 12,500,000 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Measurement adjustment on redeemable common stock | (14,343) | ||
Measurement adjustment on redeemable common stock (in shares) | (5,114,713) | ||
Net Income (losses) | 3,252,607 | ||
Balance as of end of period at Jun. 30, 2021 | $ 1,250 | $ (45,456,339) | |
Balance at the end (in shares) at Jun. 30, 2021 | 12,500,000 |
CONDENSED STATEMENT OF CASH FLO
CONDENSED STATEMENT OF CASH FLOWS | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Cash Flows from Operating Activities: | |
Net income | $ 833,801 |
Adjustments to reconcile net income to net cash used in operating activities: | |
Unrealized gain on investments held in Trust Account | (135,027) |
Interest and dividend income on investments held in Trust Account | (8,633) |
Change in fair value of warrant liabilities | (9,280,003) |
Increase (Decrease) in Operating Capital [Abstract] | |
Prepaid expenses | 133,802 |
Accounts payable | 66,626 |
Accrued expenses | 7,328,295 |
Franchise tax payable | 28,962 |
Other current liabilities | 4,404 |
Net cash used in operating activities | (1,027,773) |
Cash flows from investing activities | |
Cash withdrawn from Trust Account to pay taxes | 99,226 |
Net cash used in investing activities | 99,226 |
Cash flows from financing activities | |
Proceeds from issuance of promissory note | 300,000 |
Net cash provided by financing activities | 300,000 |
Net decrease in cash and cash equivalents | (628,547) |
Cash and cash equivalents, beginning of period | 925,923 |
Cash and cash equivalents, end of period | 297,376 |
Supplemental disclosure of noncash investing and financing activities: | |
Change in value of Class A common stock subject to possible redemption | $ 51,290,146 |
DESCRIPTION OF ORGANIZATION A_3
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
Formation and Nature of Business | ||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Atlas Crest Investment Corp. (the “Company” or “Atlas”) is a blank check company incorporated in Delaware on August 26, 2020. The Company was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses (the “Business Combination”). The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. As of December 31, 2020, the Company had not commenced any operations. All activity for the period from August 26, 2020 (inception) through December 31, 2020 relates to the Company’s formation, the initial public offering (“Initial Public Offering”) as described below, and since the closing of the Initial Public Offering, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income or gains on investments on the cash and investments held in a trust account from the proceeds derived from the Initial Public Offering. The registration statement for the Company’s Initial Public Offering was declared effective on October 27, 2020. On October 30, 2020, the Company consummated the Initial Public Offering of 50,000,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $500,000,000, which is discussed in Note 4. Following the closing of the Initial Public Offering on October 30, 2020, an amount of $500,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants (as defined in Note 5) was placed in a trust account (the “Trust Account”), invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the funds in the Trust Account to the Company’s stockholders, as described below. Transaction costs related to the issuances described above amounted to $10,534,144, consisting of $10,000,000 of underwriting fees and $534,144 of other costs. In addition, at December 31, 2020, $925,923 of cash was held outside of the Trust Account and is available for working capital purposes. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. New York Stock Exchange rules provide that the Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (excluding taxes payable on income earned on the Trust Account) at the time of the signing of a definitive agreement to enter a Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940. There is no assurance that the Company will be able to successfully effect a Business Combination. The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders are entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Public Shares subject to redemption are recorded at redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity The Company will proceed with the Business Combination only if the Company has net tangible assets of at least $5,000,001 either prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its amended and restated Certificate of Incorporation, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the Business Combination is required by law, or the Company decides to obtain stockholder approval for business or other 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. If the Company seeks stockholder approval in connection with a Business Combination, Atlas Crest Investment LLC (the "Sponsor") has agreed to vote its Founder Shares (as defined in Note 6) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed Business Combination or do not vote at all. Notwithstanding the above, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the amended and restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company. The Sponsor has agreed (a) to waive its redemption rights with respect to its Founder Shares and Public Shares held by it in connection with the completion of a Business Combination, (b) to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within 24 months from the closing of the Initial Public Offering and (c) not to propose an amendment to the amended and restated Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment. The Company will have until 24 months from the closing of the Initial Public Offering to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as 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”). Moreover, 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 all 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. Liquidity As of December 31, 2020, the Company had $925,923 in cash held outside of the Trust Account and working capital of $1,260,964. The Company’s liquidity needs prior to the consummation of the Initial Public Offering were satisfied through the proceeds of $25,000 from the sale of the Founder Shares, and a loan of $300,000 under an unsecured and non-interest bearing promissory note (see Note 6). Subsequent to the consummation of the Initial Public Offering, the Company’s liquidity will be satisfied through the net proceeds from the private placement held outside of the Trust Account. Based on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, the Company will be using the funds held outside of the Trust Account for paying existing accounts payable and accrued liabilities, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination. Risks and Uncertainties Management is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. | NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Atlas Crest Investment Corp. (the “Company” or “Atlas”) is a blank check company incorporated in Delaware on August 26, 2020. The Company was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses (the “Business Combination”). The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. As of June 30, 2021, the Company had not commenced any operations. All activity through June 30, 2021 relates to the Company's formation, the initial public offering (“Initial Public Offering”) as described below, and since the closing of the Initial Public Offering, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income or gains on investments on the cash and investments held in a trust account from the proceeds derived from the Initial Public Offering. The registration statement for the Company’s Initial Public Offering was declared effective on October 27, 2020. On October 30, 2020, the Company consummated the Initial Public Offering of 50,000,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $500,000,000 , which is discussed in Note 3. Following the closing of the Initial Public Offering on October 30, 2020, an amount of $500,000,000 ( $10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants (as defined in Note 4) was placed in a trust account (the “Trust Account”), invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with maturities of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the funds in the Trust Account to the Company’s stockholders, as described below. Transaction costs related to the issuances described above amounted to $10,534,144 , consisting of $10,000,000 of underwriting fees and $534,144 of other costs. In addition, at June 30, 2021, $297,376 of cash was held outside of the Trust Account and is available for working capital purposes. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. New York Stock Exchange rules provide that the Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (excluding taxes payable on income earned on the Trust Account) at the time of the signing of a definitive agreement to enter a Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940. There is no assurance that the Company will be able to successfully effect a Business Combination. The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders are entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Public Shares subject to redemption are recorded at redemption value and classified as temporary equity in accordance with the Financial Accounting Standards Board's Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity . The Company will proceed with the Business Combination only if the Company has net tangible assets of at least $5,000,001 either prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its amended and restated Certificate of Incorporation, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the Business Combination is required by law, or the Company decides to obtain stockholder approval for business or other 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. If the Company seeks stockholder approval in connection with a Business Combination, Atlas Crest Investment LLC (the “Sponsor”) has agreed to vote its Founder Shares (as defined in Note 6) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed Business Combination or do not vote at all. Notwithstanding the above, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the amended and restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company. The Sponsor has agreed (a) to waive its redemption rights with respect to its Founder Shares and Public Shares held by it in connection with the completion of a Business Combination, (b) to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within 24 months from the closing of the Initial Public Offering and (c) not to propose an amendment to the amended and restated Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment. The Company will have until 24 months from the closing of the Initial Public Offering to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period. In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as 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”). Moreover, 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 all 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. Business Combination Agreement On February 10, 2021, the Company entered into a Business Combination Agreement (as amended and restated on July 29, 2021 and as it may be further amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among the Company, Artemis Acquisition Sub Inc., a Delaware corporation (“Artemis Merger Sub”), and Archer Aviation Inc., a Delaware corporation (“Archer”). The Business Combination Agreement and the transactions contemplated thereby were approved by the boards of directors of each of the Company and Archer. The Business Combination Agreement provides for, among other things, the following transactions on the date of closing of the Business Combination (the “Closing”): (i) Atlas will amend and restate its certificate of incorporation (the “Post-Closing Atlas Certificate of Incorporation”), pursuant to which, among other things, Atlas will have a dual class share structure with (A) shares of Class A common stock that will carry voting rights in the form of one vote per share (the “New Class A Common Stock”), and (B) shares of Class B common stock that will carry voting rights in the form of ten votes per share (the “New Class B Common Stock” and, together with the New Class A Common Stock, the “New Atlas Common Stock”), and (ii) Artemis Merger Sub will merge with and into Archer, with Archer as the surviving company in the merger and, after giving effect to such merger, continuing as a wholly-owned subsidiary of Atlas (the “Merger”). The Merger and the other transactions contemplated by the Business Combination Agreement are hereinafter referred to as the “Business Combination”. The Business Combination is subject to customary closing conditions, including, without limitation, the required approval by Atlas’ stockholders. In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the effective time of the Merger, (i) outstanding shares of common stock and preferred stock of Archer will be converted into a right to receive a number of shares of New Class B Common Stock determined on the basis of an implied Archer equity value of $1,480,000,000 (the “Implied Equity Value”), (ii) all stock awards (whether vested or unvested) to purchase Archer common stock will be converted into stock awards to purchase a number of shares of New Class B Common Stock based on an exchange ratio derived from the Implied Equity Value, and (iii) outstanding warrants (whether vested or unvested) to purchase Archer common stock will be converted into warrants to purchase a number of shares of New Archer Class A Shares or New Class B Common Stock, as applicable, determined on the basis of the Implied Equity Value. The former Archer equity holders will have the right to convert their shares of New Class B Common Stock into shares of New Class A Common Stock pursuant to the Post-Closing Atlas Certificate of Incorporation. The Business Combination Agreement contains representations, warranties and covenants of each of the parties thereto that are customary for transactions of this type. Atlas has also agreed to take all action within its power as may be necessary or appropriate such that, effective immediately after the Closing, the Atlas board of directors will be divided into three classes and be composed of a total of seven directors, which directors shall include an individual designated by Atlas, three individuals designated by Archer and three individuals to be identified by Archer in consultation with Atlas who qualify as “independent directors” under the listing rules of the New York Stock Exchange. The obligations of Atlas and Archer to consummate the Business Combination are subject to certain closing conditions, including, but not limited to, (i) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) the absence of any law or governmental order or other legal restraint or prohibition preventing the consummation of the Business Combination, (iii) the Registration Statement (as defined below) being declared effective under the Securities Act of 1933, as amended (the “Securities Act”), (iv) the shares of New Class A Common Stock to be issued in connection with the Business Combination having been approved for listing on the New York Stock Exchange, (v) the approval of Atlas’ stockholders, (vi) the approval of Archer’s stockholders and (vii) Atlas having at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Securities Exchange Act of 1934, as amended) remaining after the Closing. In addition, the obligation of Archer to consummate the Business Combination is subject to, among other conditions, the aggregate cash proceeds from Atlas’ trust account, together with the proceeds from the PIPE Financing (as defined below), equaling no less than $600,000,000 (after deducting any amounts paid to Atlas shareholders that exercise their redemption rights in connection with the Business Combination). The Business Combination will be accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Under this method of accounting, Atlas will be treated as the “accounting acquiree” and Archer as the “accounting acquirer” for financial reporting purposes. PIPE Financing (Private Placement) Concurrently with the execution of the Business Combination Agreement, the Company entered into subscription agreements (the “Subscription Agreements”) with certain investors. Pursuant to the Subscription Agreements, each investor agreed to subscribe for and purchase, and the Company agreed to issue and sell to such investors, on the Closing Date (as defined in the Business Combination Agreement) substantially concurrently with the Closing (as defined in the Business Combination Agreement), an aggregate of 60,000,000 shares of the Company’s Class A Common Stock for a purchase price of $10.00 per share, for aggregate gross proceeds of $600 million (the “PIPE Financing”). The closing of the PIPE Financing is contingent upon, among other things, the substantially concurrent consummation of the Business Combination. The Subscription Agreements provide that Atlas will grant the investors in the PIPE Financing certain customary registration rights. Going Concern Consideration As of June 30, 2021, the Company had $297,376 in cash held outside of the Trust Account and a working capital deficit of $7,308,241 . The Company has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of time within one year after the date that the financial statements are issued. Management plans to address this uncertainty through the Business Combination as discussed above. There is no assurance that the Company’s plans to consummate the Business Combination will be successful or successful within the Combination Period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Risks and Uncertainties Management continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
Summary of Significant Accounting Policies | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it 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 independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, 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 stockholder approval of any golden parachute payments not previously approved. 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 a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2020. Investments Held in Trust Account At December 31, 2020, the assets held in the Trust Account were held in U.S. Treasury securities and classified as trading. Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480, Distinguishing Liabilities from Equity Offering Costs associated with the Initial Public Offering The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A - Expenses of Offering underwriting discount and $534,144 of other offering costs). The Company recorded $9,988,271 of offering costs as a reduction of equity in connection with the shares of Class A common Stock included in the Units. The Company immediately expensed $545,873 of Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The initial fair value of the Public Warrants was estimated using a Monte Carlo simulation approach and the fair value of the Private Placement Warrants was estimated using a Modified Black-Scholes model (see Note 11). Income Taxes The Company complies with the accounting and reporting requirements of ASC Topic 740, Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. Net Earnings ( Loss) Per Share Net earnings (loss) per share is computed by dividing net earnings (loss) by the weighted-average number of shares of common stock outstanding during the period. The Company has not considered the effect of the warrants sold in the Public Offering and Private Placement to purchase an aggregate of 24,666,667 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 statement of operations includes a presentation of income per share for common shares subject to possible redemption and applies the two-class method in calculating income per share. Net earnings per common share, basic and diluted, for Class A redeemable common stock is calculated by dividing the allocable interest income earned on the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Class A redeemable common stock outstanding since original issuance. Net loss per share, basic and diluted, for Class A and Class B non-redeemable common stock is calculated by dividing the net loss, adjusted for income attributable to Class A redeemable common stock, by the weighted average number of Class B non-redeemable common stock outstanding for the period. Class B non-redeemable common stock 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. The following table reflects the calculation of basic and diluted net earnings (loss) per common share (in dollars, except per share amounts): For the Period from August 26,2020 (Inception) through December 31, 2020 Class A Common Stock subject to possible redemption Numerator: Earnings attributable to Class A Common Stock subject to possible redemption Unrealized gain on investments held in Trust Account $ 88,498 Less: Unrealized gain available to be withdrawn for payment of taxes (62,790) Net earnings attributable to Class A Common Stock subject to possible redemption $ 25,708 Denominator: Weighted average Class A Common Stock subject to possible redemption Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption 44,885,287 Basic and diluted net earnings per share, Class A Common Stock subject to possible redemption $ 0.00 Non-Redeemable Class A and Class B Common Stock Numerator: Net loss minus net earnings Net loss $ (10,850,513) Less: Net earnings attributable to Class A Common Stock subject to possible redemption (25,708) Non-redeemable net loss $ (10,876,221) Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock 17,614,713 Basic and diluted net loss per share, Non-Redeemable Class A and Class B Common Stock $ (0.62) Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. Fair Value of Financial Instruments The Company applies ASC 820, which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances. The carrying amounts reflected in the balance sheet for cash, prepaid expenses and accrued offering costs approximate fair value due to their short-term nature. Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. See Note 11 for additional information on assets and liabilities measured at fair value. 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 the Company’s financial statements. | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K as filed with the SEC on March 8, 2021 and the Company’s Amended Annual Report on Form 10-K/A filed with the SEC on May 24, 2021. The interim results for the periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future interim periods. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it 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 independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, 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 stockholder approval of any golden parachute payments not previously approved. 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 a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did no t have any cash equivalents as of June 30, 2021 and December 31, 2020. Investments Held in Trust Account At June 30, 2021 and December 31, 2020, substantially all of the assets held in the Trust Account were held in money market funds, which are invested in U.S. Treasury securities. Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity . Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. As of June 30, 2021 and December 31, 2020, 50,000,000 and 44,885,287 shares of Class A common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s condensed balance sheet, respectively. Offering Costs associated with the Initial Public Offering The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A - Expenses of Offering . Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the Initial Public Offering. Offering costs directly attributable to the issuance of an equity contract to be classified in equity are recorded as a reduction in equity. Offering costs for equity contracts that are classified as assets and liabilities are expensed immediately. The Company incurred offering costs amounting to $10,534,144 as a result of the Initial Public Offering (consisting of a $10,000,000 underwriting discount and $534,144 of other offering costs). The Company recorded $9,988,271 of offering costs as a reduction of equity in connection with the shares of Class A common Stock included in the Units. The Company immediately expensed $545,873 of offering costs in connection with the Public Warrants and Private Placement Warrants that were classified as liabilities. Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The initial fair value of the Public Warrants was estimated using a Monte Carlo simulation approach and the fair value of the Private Placement Warrants was estimated using a Modified Black-Scholes model (see Note 9). Income Taxes The Company complies with the accounting and reporting requirements of ASC 740, Income Taxes , which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2021 and December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. Net Income Per Share of Common Stock Net income per common share is computed by dividing net income by the weighted-average number of shares of common stock 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 24,666,667 shares in the calculation of diluted income per share, since the warrants are contingently exercisable, and the contingencies have not yet been met. The Company’s statement of operations includes a presentation of income per share for common shares subject to possible redemption and applies the two-class method in calculating income per share. Net earnings per common share, basic and diluted, for Class A redeemable common stock is calculated by dividing the allocable unrealized gain on investments held in the Trust Account and interest and dividend income on investments held in the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Class A common stock subject to possible redemption outstanding for the period. Net income per share, basic and diluted, for Class B non-redeemable common stock is calculated by dividing the net income, adjusted for income attributable to Class A redeemable common stock, by the weighted average number of Class B non-redeemable common stock outstanding for the period. Class B non-redeemable common stock includes the Founder Shares (as defined in Note 5) as these shares do not have any redemption features and do not participate in the income earned on the Trust Account. The following table reflects the calculation of basic and diluted net income per common share (in dollars, except share and per share amounts): Three Months Ended Six Months Ended June 30, June 30, 2021 2021 Class A Common Stock subject to possible redemption Numerator: Earnings attributable to Class A Common Stock subject to possible redemption Unrealized gain on investments held in Trust Account $ 5,002 $ 135,027 Interest and dividend income on investments held in Trust Account 8,633 8,633 Less: Income available to be withdrawn for payment of taxes (13,635) (100,209) Net earnings attributable to Class A Common Stock subject to possible redemption $ — $ 43,451 Denominator: Weighted average Class A Common Stock subject to possible redemption Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption 50,000,000 50,000,000 Basic and diluted net earnings per share, Class A Common Stock subject to possible redemption $ 0.00 $ 0.00 Non-Redeemable Class B Common Stock Numerator: Non-redeemable net income Net income $ 3,252,607 $ 833,801 Less: Net earnings attributable to Class A Common Stock subject to possible redemption — (43,451) Non-redeemable net income $ 3,252,607 $ 790,350 Denominator: Weighted average Non-Redeemable Class B Common Stock Basic and diluted weighted average shares outstanding, Non-Redeemable Class B Common Stock 12,500,000 12,500,000 Basic and diluted net income per share, Non-Redeemable Class B Common Stock $ 0.26 $ 0.06 Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000 . The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. Fair Value of Financial Instruments The Company applies ASC Topic 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances. The carrying amounts reflected in the balance sheet for cash, prepaid expenses and accrued offering costs approximate fair value due to their short-term nature. Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. See Note 9 for additional information on assets and liabilities measured at fair value. Recent Accounting Standards In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows. Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. |
INITIAL PUBLIC OFFERING_2
INITIAL PUBLIC OFFERING | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
INITIAL PUBLIC OFFERING | ||
INITIAL PUBLIC OFFERING | NOTE 4. INITIAL PUBLIC OFFERING The registration statement for the Company’s Initial Public Offering was declared effective on October 27, 2020. On October 30, 2020, the Company completed its Initial Public Offering of 50,000,000 Units, at $10.00 per Unit, generating gross proceeds of $500,000,000. Each Unit consisted of one share of Class A common stock, $0.0001 par value, and one-third of one The Company granted the underwriter a 45-day option to purchase up to 7,500,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions. The over-allotment option expired without being exercised in any part. The underwriter was paid a cash underwriting discount of $0.20 per Unit, or $10,000,000 in the aggregate upon the closing of the Initial Public Offering. | NOTE 3. INITIAL PUBLIC OFFERING The registration statement for the Company’s Initial Public Offering was declared effective on October 27, 2020. On October 30, 2020, the Company completed its Initial Public Offering of 50,000,000 Units, at $10.00 per Unit, generating gross proceeds of $500,000,000 . Each Unit consisted of one share of Class A common stock, $0.0001 par value, and one -third of one redeemable warrant (“Public Warrant”). Each Public Warrant entitles the holder to purchase one share of Class A common stock at an exercise price of $11.50 per whole share (see Note 7). |
PRIVATE PLACEMENT_2
PRIVATE PLACEMENT | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
PRIVATE PLACEMENT | ||
PRIVATE PLACEMENT | NOTE 5. PRIVATE PLACEMENT Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 8,000,000 warrants at a price of $1.50 per warrant in a private placement (the “Private Placement Warrants”) to the Sponsor, generating gross proceeds of $12,000,000. Each Private Placement Warrant is exercisable to purchase one share of Class A common stock at a price of $11.50 per share. The proceeds from the sale of the Private Placement Warrants were added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless. | NOTE 4. PRIVATE PLACEMENT Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 8,000,000 warrants at a price of $1.50 per warrant in a private placement (the “Private Placement Warrants”) to the Sponsor, generating gross proceeds of $12,000,000 . Each Private Placement Warrant is exercisable to purchase one share of Class A common stock at a price of $11.50 per share. The proceeds from the sale of the Private Placement Warrants were added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless. |
RELATED PARTY TRANSACTIONS_2
RELATED PARTY TRANSACTIONS | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
Related Party Transactions | ||
RELATED PARTY TRANSACTIONS | NOTE 6. RELATED PARTY TRANSACTIONS Founder Shares On September 4, 2020, the Sponsor paid $25,000 in consideration for 14,375,000 shares of Class B common stock (the “Founder Shares”). The Founder Shares included an aggregate of up to 1,875,000 shares subject to forfeiture by the Sponsor to the extent that the underwriter’s over-allotment was not exercised in full or in part, so that the Sponsor would collectively own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Sponsor did not purchase any Public Shares in the Initial Public Offering). Upon the expiration of the over-allotment option in December 2020, 1,875,000 shares of Class B common stock were forfeited, resulting in an aggregate of 12,500,000 Founder Shares outstanding. The Sponsor has agreed not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination, or (B) the date on which the Company completes a liquidation, merger, capital stock exchange or similar transaction that results in the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Business Combination, the Founder Shares will be released from the lock-up. Promissory Note - Related Party On September 11, 2020, the Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company received proceeds of $300,000 to cover expenses related to the Initial Public Offering. The Promissory Note was non-interest bearing and was payable on the earlier of March 31, 2021 or the completion of the Initial Public Offering. The outstanding balance under the Promissory Note of $300,000 was repaid at the closing of the Initial Public Offering on October 30, 2020. Administrative Support Agreement The Company entered into an agreement, commencing on the effective date of the Initial Public Offering, to pay the Sponsor a total of $10,000 per month for office space, secretarial and administrative support. Upon completion of the Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. See Note 7, under Business Combination Marketing Agreement, for additional related party transactions. | NOTE 5. RELATED PARTY TRANSACTIONS Founder Shares On September 4, 2020, the Sponsor paid $25,000 in consideration for 14,375,000 shares of Class B common stock (the “Founder Shares”). The Founder Shares included an aggregate of up to 1,875,000 shares subject to forfeiture by the Sponsor to the extent that the underwriter’s over-allotment was not exercised in full or in part, so that the Sponsor would collectively own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Sponsor did not purchase any Public Shares in the Initial Public Offering). Upon the expiration of the over-allotment option in December 2020, 1,875,000 shares of Class B common stock were forfeited, resulting in an aggregate of 12,500,000 Founder Shares outstanding. The Sponsor has agreed not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination, or (B) the date on which the Company completes a liquidation, merger, capital stock exchange or similar transaction that results in the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 - trading day period commencing at least 150 days after the Business Combination, the Founder Shares will be released from the lock-up. Promissory Notes — Related Party On September 11, 2020, the Company issued an unsecured promissory note to the Sponsor, pursuant to which the Company received proceeds of $300,000 to cover expenses related to the Initial Public Offering. The promissory note was non-interest bearing and was payable on the earlier of March 31, 2021 or the completion of the Initial Public Offering. The outstanding balance under the promissory note of $300,000 was repaid at the closing of the Initial Public Offering on October 30, 2020. The Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”) effective June 25, 2021, pursuant to which the Company can borrow an aggregate of up to $300,000 to cover expenses related to an initial Business Combination and general working capital. The Promissory Note is non-interest bearing and payable upon the consumation of a Business Combination. As of June 30, 2021, there was $300,000 outstanding under the Promissory Note. Administrative Support Agreement The Company entered into an agreement, commencing on the effective date of the Initial Public Offering, to pay the Sponsor a total of $10,000 per month for office space, secretarial and administrative support. Upon completion of the Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. During the three and six months ended June 30, 2021, the Company incurred expenses of $30,000 and $60,000 , respectively, under the agreement. See Note 6, under Business Combination Marketing Agreement, for additional related party transactions. |
COMMITMENTS_2
COMMITMENTS | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
Commitments and Contingencies | ||
COMMITMENTS | NOTE 7. COMMITMENTS Registration Rights The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of the Working Capital Loans (as defined below) (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of the Initial Public Offering, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to Class A common stock). The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Business Combination Marketing Agreement The Company engaged the representative of the underwriters and Moelis & Company LLC, an affiliate of the Sponsor, in connection with a Business Combination to assist the Company in holding meetings with its stockholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with a Business Combination, assist the Company in obtaining stockholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination. The Company will pay the representative of the underwriters and Moelis & Company LLC a cash fee for such services upon the consummation of the Business Combination of 2.25% ($11,250,000) and 1.25% ($6,250,000), respectively, or 3.5% ($17,500,000), in the aggregate, of the gross proceeds of the offering including the gross proceeds from the full or partial exercise of the underwriters’ over-allotment option. A portion of such fee may be re-allocated or paid to members that assist the Company in consummating its Business Combination. Related Party Loans In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s directors and officers may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. 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, the Company 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. | NOTE 6. COMMITMENTS Registration Rights The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of the Working Capital Loans (as defined below) (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) are entitled to registration rights pursuant to a registration rights agreement signed on the effective date of the Initial Public Offering, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to Class A common stock). The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Business Combination Marketing Agreement The Company engaged the representative of the underwriters and Moelis & Company LLC, an affiliate of the Sponsor, in connection with a Business Combination to assist the Company in holding meetings with its stockholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with a Business Combination, assist the Company in obtaining stockholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination. The Company will pay the representative of the underwriters and Moelis & Company LLC a fee for such services upon the consummation of the Business Combination of 2.25% ( $11,250,000 ) and 1.25 % ( $6,250,000 ), respectively, or 3.5% ( $17,500,000 ), in the aggregate, of the gross proceeds of the Initial Public Offering including the gross proceeds from the full or partial exercise of the underwriters’ over-allotment option. A portion of such fee may be re-allocated or paid to members of FINRA that assist the Company in consummating its Business Combination. Related Party Loans In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s directors and officers may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. 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, the Company 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, without interest, 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. No Working Capital Loans were outstanding as of and during the three and six months ended June 30, 2021. |
WARRANTS_2
WARRANTS | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
WARRANTS | ||
WARRANTS | NOTE 8. WARRANTS Public Warrants may only be exercised for a whole number of shares. No fractional shares are issued upon exercise of the Public Warrants. The Public Warrants are exercisable on the later of (a) 30 days after the consummation of a Business Combination or (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years from the consummation of a Business Combination or earlier upon redemption or liquidation. The Company will not be obligated to deliver any Class A common stock pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A common stock issuable upon exercise of the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue shares of Class A common stock upon exercise of a warrant unless Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, it will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A common stock issuable upon exercise of the warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the sixtieth (60th) business day after the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elect, the Company will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, the Company will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. Once the Public Warrants become exercisable, the Company may call the Public Warrants for redemption: ● in whole and not in part; ● at a price of $0.01 per Public Warrant; ● upon not less than 30 days ’ prior written notice of redemption to each warrant holder; and ● if, and only if, the closing price of the common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 - trading day period commencing after the warrants become exercisable and ending three business days before the Company sends the notice of redemption to the warrant holders. If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws. The exercise price and number of Class A common stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless. In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination on the date of the consummation of such initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants will and the common shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and will be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. As of December 31, 2020, there were 16,666,667 Public Warrants and 8,000,000 Private Placement Warrants outstanding. The Company classifies the outstanding Public Warrants and Private Placement Warrants as warrant liabilities on the Balance Sheet in accordance with the guidance contained in ASC 815-40. The warrant liabilities are initially measured at fair value upon the closing of the Initial Public Offering and subsequently re-measured at each reporting period using a Monte-Carlo model. The Public Warrants were allocated a portion of the proceeds from the issuance of the Units equal to its fair value. The Company recognized gains in connection with changes in the fair value of warrant liabilities of $9,933,330 within change in fair value of warrant liabilities in the Statement of Operations during the year ended December 31, 2020. | NOTE 7. WARRANTS Public Warrants may only be exercised for a whole number of shares. No fractional shares are issued upon exercise of the Public Warrants. The Public Warrants are exercisable on the later of (a) 30 days after the consummation of a Business Combination or (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years from the consummation of a Business Combination or earlier upon redemption or liquidation. The Company will not be obligated to deliver any Class A common stock pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A common stock issuable upon exercise of the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue shares of Class A common stock upon exercise of a warrant unless Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, it will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A common stock issuable upon exercise of the warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the sixtieth ( 60 th ) business day after the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elect, the Company will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, the Company will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. Once the Public Warrants become exercisable, the Company may call the Public Warrants for redemption: ● in whole and not in part; ● at a price of $0.01 per Public Warrant; ● upon not less than 30 days ’ prior written notice of redemption to each warrant holder; and ● if, and only if, the closing price of the common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 - trading day period commencing after the warrants become exercisable and ending three business days before the Company sends the notice of redemption to the warrant holders. If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws. The exercise price and number of Class A common stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless. In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination on the date of the consummation of such initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants will and the common shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and will be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. At June 30, 2021 and December 31, 2020, there were 16,666,667 Public Warrants and 8,000,000 Private Placement Warrants outstanding. The Company accounts for the Public Warrants and Private Placement Warrants in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability (see Note 9). The accounting treatment of derivative financial instruments required that the Company record the warrants as derivative liabilities at fair value upon the closing of the Initial Public Offering. The Public Warrants were allocated a portion of the proceeds from the issuance of the Units equal to its fair value. The warrant liabilities are subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liabilities are adjusted to current fair value, with the change in fair value recognized in the Company’s statement of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification. |
STOCKHOLDERS' EQUITY_2
STOCKHOLDERS' EQUITY | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
Preferred and Common Stock | ||
STOCKHOLDERS' EQUITY | NOTE 9. STOCKHOLDERS’ EQUITY Preferred stock outstanding Class A Common Stock issued Class B Common Stock outstanding Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of shareholders, except as required by law. The shares of Class B common stock will automatically convert into shares of Class A common stock upon the consummation of a Business Combination on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with a Business Combination, the number of shares of Class A common stock issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of shares of Class A common stock outstanding after such conversion, including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of a Business Combination, excluding any shares of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in a Business Combination and any Private Placement Warrants issued to the Sponsor, officers or directors upon conversion of Working Capital Loans, provided that such conversion of Founder Shares will never occur on a less than one-for-one basis. | NOTE 8. STOCKHOLDERS’ EQUITY Preferred stock — The Company is authorized to issue 1,000,000 shares of $0.0001 par value preferred stock. At June 30, 2021 and December 31, 2020, there were no shares of preferred stock issued or outstanding . Class A common stock — The Company is authorized to issue up to 200,000,000 shares of Class A, $0.0001 par value common stock. Holders of the Company's common stock are entitled to one vote for each share. At June 30, 2021 and December 31, 2020, there were 50,000,000 shares issued and no shares and 5,114,713 shares of Class A common stock outstanding, respectively, excluding 50,000,000 and 44,885,287 shares of Class A common stock subject to possible redemption at June 30, 2021 and December 31, 2020, respectively. The Company determined the Class A common stock subject to redemption to be equal to the redemption value of approximately $10 per share of Class A common stock while also taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001 . Upon considering the impact of the PIPE Financing and associated Subscription Agreements that will close substantially concurrent with an initial Business Combination (see Note 1), which would result in an additional $600,000,000 in net tangible assets, it was concluded during the quarter ended March 31, 2021, that the redemption value would include all shares of Class A common stock resulting in the common stock subject to possible redemption being equal to $500,143,016 . This resulted in a measurement adjustment to the initial carrying value of the Class A common stock subject to redemption with the offset recorded to additional paid-in capital and accumulated deficit. Class B common stock — The Company is authorized to issue up to 20,000,000 shares of Class B, $0.0001 par value common stock. Holders of the Company’s common stock are entitled to one vote for each share. At June 30, 2021 and December 31, 2020, there were 12,500,000 shares of Class B common stock issued and outstanding . Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of shareholders, except as required by law. The shares of Class B common stock will automatically convert into shares of Class A common stock upon the consummation of a Business Combination on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with a Business Combination, the number of shares of Class A common stock issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of shares of Class A common stock outstanding after such conversion, including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of a Business Combination, excluding any shares of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in a Business Combination and any Private Placement Warrants issued to the Sponsor, officers or directors upon conversion of Working Capital Loans, provided that such conversion of Founder Shares will never occur on a less than one-for-one basis. |
FAIR VALUE MEASUREMENTS_2
FAIR VALUE MEASUREMENTS | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
FAIR VALUE MEASUREMENTS | ||
FAIR VALUE MEASUREMENTS | NOTE 11. FAIR VALUE MEASUREMENTS The following table presents information about the Company’s financial assets that are measured at fair value on a recurring basis at December 31, 2020, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: Description Level 1 Level 2 Level 3 Assets Investments held in Trust Account: Money Market investments $ 500,098,582 $ — $ — Liabilities Warrant liability - Public Warrants $ 31,666,670 $ — $ — Warrant liability - Private Placement Warrants $ — $ — $ 15,840,000 The Company utilized a Monte Carlo simulation model for the initial valuation the Public Warrants. The subsequent measurement of the Public Warrants as of December 31, 2020 is classified as Level 1 due to the use of an observable market quote in an active market under the ticker ACIC WS. The quoted price of the Public Warrants was $1.90 per warrant as of December 31, 2020. The Company utilizes a Modified Black-Scholes model to value the Private Placement Warrants at each reporting period, with changes in fair value recognized in the statement of operations. The estimated fair value of the Private Placement warrant liability is determined using Level 3 inputs. Inherent in a binomial options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero. The aforementioned warrant liabilities are not subject to qualified hedge accounting. Transfers to/from Levels 1 2 3 The following table provides the significant inputs to the Monte Carlo Simulation for the initial measurement of the fair value of the Public Warrants: At October 30, 2020 (Initial Measurement) Stock price $ 9.93 Strike price $ 11.50 Probability of completing a Business Combination 86.0 % Term (in years) 6.1 Volatility 4.5% pre-merger / 26.0% post-merger Risk-free rate 0.5 % Fair value of warrants $ 1.52 The following table provides the significant inputs to the Modified Black-Scholes model for the fair value of the Private Placement Warrants: At October 30, 2020 (Initial As of December 31, Measurement) 2020 Stock price $ 9.93 $ 10.06 Strike price $ 11.50 $ 11.50 Probability of completing a Business Combination 86.0 % 86.0 % Dividend yield — % — % Term (in years) 6.1 5.9 Volatility 22.8 % 28.0 % Risk-free rate 0.5 % 0.5 % Fair value of warrants $ 1.53 $ 1.98 The following table presents the changes in the fair value of warrant liabilities: Private Warrant Placement Public Liabilities Fair value as of August 26, 2020 $ — — $ — Initial measurement at October 30, 2020 12,240,000 25,333,340 37,573,340 Change in valuation inputs or other assumptions 3,600,000 6,333,330 9,933,330 Fair value as of December 31, 2020 $ 15,840,000 31,666,670 $ 47,506,670 The Company recognized losses in connection with changes in the fair value of warrant liabilities of $9,933,330 within change in fair value of warrant liabilities in the Statement of Operations during the year ended December 31, 2020. | NOTE 9. FAIR VALUE MEASUREMENTS The following table presents information about the Company’s financial assets that are measured at fair value on a recurring basis at June 30, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: Amount at Fair Description Value Level 1 Level 2 Level 3 June 30, 2021 Assets Investments held in Trust Account: Money Market investments $ 500,143,016 $ 500,143,016 $ — $ — Liabilities Warrant liability – Public Warrants $ 25,666,667 $ 25,666,667 $ — $ — Warrant liability – Private Placement Warrants $ 12,560,000 $ — $ — $ 12,560,000 December 31, 2020 Assets Investments held in Trust Account: Money Market investments $ 500,098,582 $ 500,098,582 $ — $ — Liabilities Warrant liability – Public Warrants $ 31,666,670 $ 31,666,670 $ — $ — Warrant liability – Private Placement Warrants $ 15,840,000 $ — $ — $ 15,840,000 The Company utilized a Monte Carlo simulation model for the initial valuation of the Public Warrants. The subsequent measurement of the Public Warrants as of June 30, 2021 and December 31, 2020 is classified as Level 1 due to the use of an observable market quote in an active market under the ticker ACIC WS. The quoted prices of the Public Warrants were $1.54 and $1.90 per warrant as of June 30, 2021 and December 31, 2020, respectively. The Company utilizes a Modified Black-Scholes model to value the Private Placement Warrants at each reporting period, with changes in fair value recognized in the statement of operations. The estimated fair value of the Private Placement warrant liability is determined using Level 3 inputs. Inherent in a binomial options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero. The aforementioned warrant liabilities are not subject to qualified hedge accounting. Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period. The estimated fair value of the Public Warrants transferred from a Level 3 measurement to a Level 1 fair value measurement in December 2020 when the Public Warrants were separately listed and traded. There were no transfers between Levels 1, 2 or 3 during the three and six months ended June 30, 2021. The following table provides the significant inputs to the Modified Black-Scholes model for the fair value of the Private Placement Warrants: As of As of June 30, 2021 December 31, 2020 Stock price $ 9.96 $ 10.06 Strike price $ 11.50 $ 11.50 Probability of completing a Business Combination * 86.0 % Dividend yield — % — % Term (in years) 5.26 5.91 Volatility 21.5 % 28.0 % Risk-free rate 0.91 % 0.49 % Fair value of warrants $ 1.57 $ 1.98 *The probability of completing a Business Combination is considered within the volatility implied by the traded price of the Public Warrants which is used to value the Private Placement Warrants. The following table presents the changes in the fair value of warrant liabilities: Private Warrant Placement Public Liabilities Fair value as of December 31, 2020 $ 15,840,000 $ 31,666,670 $ 47,506,670 Change in valuation inputs or other assumptions (3,280,000) (6,000,003) (9,280,003) Fair value as of June 30, 2021 $ 12,560,000 $ 25,666,667 $ 38,226,667 The Company recognized income in connection with changes in the fair value of warrant liabilities of $7,053,334 and $9,280,003 within change in fair value of warrant liabilities in the Statement of Operations during the three and six months ended June 30, 2021, respectively. |
SUBSEQUENT EVENTS_2
SUBSEQUENT EVENTS | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
Subsequent Events | ||
SUBSEQUENT EVENTS | NOTE 12. SUBSEQUENT EVENTS Business Combination Agreement On February 10, 2021, the Company entered into a Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among the Company, Artemis Acquisition Sub Inc., a Delaware corporation (“Artemis Merger Sub”), and Archer Aviation Inc., a Delaware corporation (“Archer”). The Business Combination Agreement and the transactions contemplated thereby were approved by the boards of directors of each of the Company and Archer. The Business Combination Agreement provides for, among other things, the following transactions on the date of closing of the Business Combination (the “Closing”): (i) Atlas will amend and restate its certificate of incorporation (the “Post-Closing Atlas Certificate of Incorporation”), pursuant to which, among other things, Atlas will have a dual-class share structure with (A) shares of Class A common stock that will carry voting rights in the form of one vote per share (the “New Class A Common Stock”), and (B) shares of Class B common stock that will carry voting rights in the form of ten votes per share (the “New Class B Common Stock” and, together with the New Class A Common Stock, the “New Atlas Common Stock”), and (ii) Artemis Merger Sub will merge with and into Archer, with Archer as the surviving company in the merger and, after giving effect to such merger, continuing as a wholly-owned subsidiary of Atlas (the “Merger”). The Merger and the other transactions contemplated by the Business Combination Agreement are hereinafter referred to as the “Business Combination”. The Business Combination is subject to customary closing conditions, including, without limitation, the receipt of the required approval by Atlas’ stockholders. In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the effective time of the Merger, (i) outstanding shares of common stock and preferred stock of Archer will be converted into a right to receive a number of shares of New Class B Common Stock determined on the basis of an implied Archer equity value of $2,525,000,000 (the “Implied Equity Value”), (ii) all stock awards (whether vested or unvested) to purchase Archer common stock will be converted into stock awards to purchase a number of shares of New Class B Common Stock based on an exchange ratio derived from the Implied Equity Value, and (iii) outstanding warrants (whether vested or unvested) to purchase Archer common stock will be converted into warrants to purchase a number of shares of New Class B Common Stock determined on the basis of the Implied Equity Value. The former Archer equity holders will have the right to convert their shares of New Class B Common Stock into shares of New Class A Common Stock pursuant to the Post-Closing Atlas Certificate of Incorporation. PIPE Financing (Private Placement) Concurrently with the execution of the Business Combination Agreement, the Company entered into subscription agreements (the “Subscription Agreements”) with certain investors. Pursuant to the Subscription Agreements, each investor agreed to subscribe for and purchase, and the Company agreed to issue and sell to such investors, on the Closing Date (as defined in the Business Combination Agreement) substantially concurrently with the Closing (as defined in the Business Combination Agreement), an aggregate of 60,000,000 shares of the Company’s Class A Common Stock for a purchase price of $10.00 per share, for aggregate gross proceeds of $600 million (the “PIPE Financing”). The closing of the PIPE Financing is contingent upon, among other things, the substantially concurrent consummation of the Business Combination. The Subscription Agreements provide that Atlas will grant the investors in the PIPE Financing certain customary registration rights. | NOTE 10. SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements except as disclosed in Note 1 under Business Combination Agreement. |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
Summary of Significant Accounting Policies | ||
Basis of Presentation | Basis of Presentation The accompanying financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. | Basis of Presentation The accompanying financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K as filed with the SEC on March 8, 2021 and the Company’s Amended Annual Report on Form 10-K/A filed with the SEC on May 24, 2021. The interim results for the periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future interim periods. |
Emerging Growth Company | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it 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 independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, 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 stockholder approval of any golden parachute payments not previously approved. 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 a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it 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 independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, 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 stockholder approval of any golden parachute payments not previously approved. 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 a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2020. | Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did no t have any cash equivalents as of June 30, 2021 and December 31, 2020. |
Investments Held in Trust Account | Investments Held in Trust Account At June 30, 2021 and December 31, 2020, substantially all of the assets held in the Trust Account were held in money market funds, which are invested in U.S. Treasury securities. | |
Common Stock Subject to Possible Redemption | Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480, Distinguishing Liabilities from Equity | Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity . Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. As of June 30, 2021 and December 31, 2020, 50,000,000 and 44,885,287 shares of Class A common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s condensed balance sheet, respectively. |
Offering Costs associated with the Initial Public Offering | Offering Costs associated with the Initial Public Offering The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A - Expenses of Offering underwriting discount and $534,144 of other offering costs). The Company recorded $9,988,271 of offering costs as a reduction of equity in connection with the shares of Class A common Stock included in the Units. The Company immediately expensed $545,873 of | Offering Costs associated with the Initial Public Offering The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A - Expenses of Offering . Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the Initial Public Offering. Offering costs directly attributable to the issuance of an equity contract to be classified in equity are recorded as a reduction in equity. Offering costs for equity contracts that are classified as assets and liabilities are expensed immediately. The Company incurred offering costs amounting to $10,534,144 as a result of the Initial Public Offering (consisting of a $10,000,000 underwriting discount and $534,144 of other offering costs). The Company recorded $9,988,271 of offering costs as a reduction of equity in connection with the shares of Class A common Stock included in the Units. The Company immediately expensed $545,873 of offering costs in connection with the Public Warrants and Private Placement Warrants that were classified as liabilities. |
Warrant Liabilities | Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The initial fair value of the Public Warrants was estimated using a Monte Carlo simulation approach and the fair value of the Private Placement Warrants was estimated using a Modified Black-Scholes model (see Note 9). | |
Income Taxes | Income Taxes The Company complies with the accounting and reporting requirements of ASC Topic 740, Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. | Income Taxes The Company complies with the accounting and reporting requirements of ASC 740, Income Taxes , which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2021 and December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. |
Net Income Per Share of Common Stock | Net Earnings ( Loss) Per Share Net earnings (loss) per share is computed by dividing net earnings (loss) by the weighted-average number of shares of common stock outstanding during the period. The Company has not considered the effect of the warrants sold in the Public Offering and Private Placement to purchase an aggregate of 24,666,667 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 statement of operations includes a presentation of income per share for common shares subject to possible redemption and applies the two-class method in calculating income per share. Net earnings per common share, basic and diluted, for Class A redeemable common stock is calculated by dividing the allocable interest income earned on the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Class A redeemable common stock outstanding since original issuance. Net loss per share, basic and diluted, for Class A and Class B non-redeemable common stock is calculated by dividing the net loss, adjusted for income attributable to Class A redeemable common stock, by the weighted average number of Class B non-redeemable common stock outstanding for the period. Class B non-redeemable common stock 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. The following table reflects the calculation of basic and diluted net earnings (loss) per common share (in dollars, except per share amounts): For the Period from August 26,2020 (Inception) through December 31, 2020 Class A Common Stock subject to possible redemption Numerator: Earnings attributable to Class A Common Stock subject to possible redemption Unrealized gain on investments held in Trust Account $ 88,498 Less: Unrealized gain available to be withdrawn for payment of taxes (62,790) Net earnings attributable to Class A Common Stock subject to possible redemption $ 25,708 Denominator: Weighted average Class A Common Stock subject to possible redemption Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption 44,885,287 Basic and diluted net earnings per share, Class A Common Stock subject to possible redemption $ 0.00 Non-Redeemable Class A and Class B Common Stock Numerator: Net loss minus net earnings Net loss $ (10,850,513) Less: Net earnings attributable to Class A Common Stock subject to possible redemption (25,708) Non-redeemable net loss $ (10,876,221) Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock 17,614,713 Basic and diluted net loss per share, Non-Redeemable Class A and Class B Common Stock $ (0.62) | Net Income Per Share of Common Stock Net income per common share is computed by dividing net income by the weighted-average number of shares of common stock 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 24,666,667 shares in the calculation of diluted income per share, since the warrants are contingently exercisable, and the contingencies have not yet been met. The Company’s statement of operations includes a presentation of income per share for common shares subject to possible redemption and applies the two-class method in calculating income per share. Net earnings per common share, basic and diluted, for Class A redeemable common stock is calculated by dividing the allocable unrealized gain on investments held in the Trust Account and interest and dividend income on investments held in the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Class A common stock subject to possible redemption outstanding for the period. Net income per share, basic and diluted, for Class B non-redeemable common stock is calculated by dividing the net income, adjusted for income attributable to Class A redeemable common stock, by the weighted average number of Class B non-redeemable common stock outstanding for the period. Class B non-redeemable common stock includes the Founder Shares (as defined in Note 5) as these shares do not have any redemption features and do not participate in the income earned on the Trust Account. The following table reflects the calculation of basic and diluted net income per common share (in dollars, except share and per share amounts): Three Months Ended Six Months Ended June 30, June 30, 2021 2021 Class A Common Stock subject to possible redemption Numerator: Earnings attributable to Class A Common Stock subject to possible redemption Unrealized gain on investments held in Trust Account $ 5,002 $ 135,027 Interest and dividend income on investments held in Trust Account 8,633 8,633 Less: Income available to be withdrawn for payment of taxes (13,635) (100,209) Net earnings attributable to Class A Common Stock subject to possible redemption $ — $ 43,451 Denominator: Weighted average Class A Common Stock subject to possible redemption Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption 50,000,000 50,000,000 Basic and diluted net earnings per share, Class A Common Stock subject to possible redemption $ 0.00 $ 0.00 Non-Redeemable Class B Common Stock Numerator: Non-redeemable net income Net income $ 3,252,607 $ 833,801 Less: Net earnings attributable to Class A Common Stock subject to possible redemption — (43,451) Non-redeemable net income $ 3,252,607 $ 790,350 Denominator: Weighted average Non-Redeemable Class B Common Stock Basic and diluted weighted average shares outstanding, Non-Redeemable Class B Common Stock 12,500,000 12,500,000 Basic and diluted net income per share, Non-Redeemable Class B Common Stock $ 0.26 $ 0.06 |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000 . The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company applies ASC 820, which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances. The carrying amounts reflected in the balance sheet for cash, prepaid expenses and accrued offering costs approximate fair value due to their short-term nature. Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. See Note 11 for additional information on assets and liabilities measured at fair value. | Fair Value of Financial Instruments The Company applies ASC Topic 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances. The carrying amounts reflected in the balance sheet for cash, prepaid expenses and accrued offering costs approximate fair value due to their short-term nature. Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. See Note 9 for additional information on assets and liabilities measured at fair value. |
Recent Accounting Standards | 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 the Company’s financial statements. | Recent Accounting Standards In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows. Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
Summary of Significant Accounting Policies | ||
Reconciliation of Net Loss per Common Share | For the Period from August 26,2020 (Inception) through December 31, 2020 Class A Common Stock subject to possible redemption Numerator: Earnings attributable to Class A Common Stock subject to possible redemption Unrealized gain on investments held in Trust Account $ 88,498 Less: Unrealized gain available to be withdrawn for payment of taxes (62,790) Net earnings attributable to Class A Common Stock subject to possible redemption $ 25,708 Denominator: Weighted average Class A Common Stock subject to possible redemption Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption 44,885,287 Basic and diluted net earnings per share, Class A Common Stock subject to possible redemption $ 0.00 Non-Redeemable Class A and Class B Common Stock Numerator: Net loss minus net earnings Net loss $ (10,850,513) Less: Net earnings attributable to Class A Common Stock subject to possible redemption (25,708) Non-redeemable net loss $ (10,876,221) Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock 17,614,713 Basic and diluted net loss per share, Non-Redeemable Class A and Class B Common Stock $ (0.62) | The following table reflects the calculation of basic and diluted net income per common share (in dollars, except share and per share amounts): Three Months Ended Six Months Ended June 30, June 30, 2021 2021 Class A Common Stock subject to possible redemption Numerator: Earnings attributable to Class A Common Stock subject to possible redemption Unrealized gain on investments held in Trust Account $ 5,002 $ 135,027 Interest and dividend income on investments held in Trust Account 8,633 8,633 Less: Income available to be withdrawn for payment of taxes (13,635) (100,209) Net earnings attributable to Class A Common Stock subject to possible redemption $ — $ 43,451 Denominator: Weighted average Class A Common Stock subject to possible redemption Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption 50,000,000 50,000,000 Basic and diluted net earnings per share, Class A Common Stock subject to possible redemption $ 0.00 $ 0.00 Non-Redeemable Class B Common Stock Numerator: Non-redeemable net income Net income $ 3,252,607 $ 833,801 Less: Net earnings attributable to Class A Common Stock subject to possible redemption — (43,451) Non-redeemable net income $ 3,252,607 $ 790,350 Denominator: Weighted average Non-Redeemable Class B Common Stock Basic and diluted weighted average shares outstanding, Non-Redeemable Class B Common Stock 12,500,000 12,500,000 Basic and diluted net income per share, Non-Redeemable Class B Common Stock $ 0.26 $ 0.06 |
FAIR VALUE MEASUREMENTS (Tabl_2
FAIR VALUE MEASUREMENTS (Tables) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
FAIR VALUE MEASUREMENTS | ||
Schedule of financial assets that are measured at fair value on a recurring basis | Amount at Fair Description Value Level 1 Level 2 Level 3 June 30, 2021 Assets Investments held in Trust Account: Money Market investments $ 500,143,016 $ 500,143,016 $ — $ — Liabilities Warrant liability – Public Warrants $ 25,666,667 $ 25,666,667 $ — $ — Warrant liability – Private Placement Warrants $ 12,560,000 $ — $ — $ 12,560,000 December 31, 2020 Assets Investments held in Trust Account: Money Market investments $ 500,098,582 $ 500,098,582 $ — $ — Liabilities Warrant liability – Public Warrants $ 31,666,670 $ 31,666,670 $ — $ — Warrant liability – Private Placement Warrants $ 15,840,000 $ — $ — $ 15,840,000 | |
Schedule of significant inputs to the Monte Carlo Simulation for the fair value | The following table provides the significant inputs to the Modified Black-Scholes model for the fair value of the Private Placement Warrants: As of As of June 30, 2021 December 31, 2020 Stock price $ 9.96 $ 10.06 Strike price $ 11.50 $ 11.50 Probability of completing a Business Combination * 86.0 % Dividend yield — % — % Term (in years) 5.26 5.91 Volatility 21.5 % 28.0 % Risk-free rate 0.91 % 0.49 % Fair value of warrants $ 1.57 $ 1.98 *The probability of completing a Business Combination is considered within the volatility implied by the traded price of the Public Warrants which is used to value the Private Placement Warrants. | |
Schedule of changes in the fair value of warrant liabilities | Private Warrant Placement Public Liabilities Fair value as of August 26, 2020 $ — — $ — Initial measurement at October 30, 2020 12,240,000 25,333,340 37,573,340 Change in valuation inputs or other assumptions 3,600,000 6,333,330 9,933,330 Fair value as of December 31, 2020 $ 15,840,000 31,666,670 $ 47,506,670 | Private Warrant Placement Public Liabilities Fair value as of December 31, 2020 $ 15,840,000 $ 31,666,670 $ 47,506,670 Change in valuation inputs or other assumptions (3,280,000) (6,000,003) (9,280,003) Fair value as of June 30, 2021 $ 12,560,000 $ 25,666,667 $ 38,226,667 |
DESCRIPTION OF ORGANIZATION A_4
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details) | Oct. 30, 2020USD ($)$ / sharesshares | Aug. 26, 2020 | Dec. 31, 2020USD ($)shares | Jun. 30, 2021USD ($)$ / sharesitemshares | Oct. 31, 2020USD ($) |
Subsidiary, Sale of Stock [Line Items] | |||||
Proceeds from issuance initial public offering | $ 490,000,000 | ||||
Transaction Costs | $ 10,534,144 | ||||
Underwriting fees | 10,000,000 | ||||
Other offering costs | $ 534,144 | ||||
Condition for future business combination number of businesses minimum | 1 | ||||
Condition for future business combination use of proceeds percentage | 80 | ||||
Condition for future business combination threshold Percentage Ownership Source2 | 50 | ||||
Condition for future business combination threshold Net Tangible Assets | $ 5,000,001 | ||||
Redemption limit percentage without prior consent | 15 | ||||
Obligation to redeem Public Shares if entity does not complete a Business Combination (as a percent) | 100.00% | ||||
Months to complete acquisition | item | 24 | ||||
Redemption period upon closure | 10 days | ||||
Maximum Allowed Dissolution Expenses | $ 100,000 | ||||
Cash and Cash Equivalents, at Carrying Value | 925,923 | 297,376 | |||
Working Capital | 1,260,964 | $ 7,308,241 | |||
Private Placement Warrants | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Price of warrant | $ / shares | $ 1.50 | ||||
Aggregate gross proceeds | $ 12,000,000 | ||||
Initial Public Offering | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Sale of Units, net of underwriting discounts (in shares) | shares | 50,000,000 | ||||
Purchase price, per unit | $ / shares | $ 10 | ||||
Implied Equity Value | $ 1,480,000,000 | ||||
Proceeds from issuance initial public offering | $ 500,000,000 | ||||
Transaction Costs | $ 10,534,144 | ||||
Payments for investment of cash in Trust Account | $ 500,000,000 | ||||
Private Placement | Private Placement Warrants | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Aggregate gross proceeds | $ 600,000,000 | ||||
Private Placement | Class A Common Stock | Private Placement Warrants | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Maximum number of shares to be purchased for warrants | shares | 60,000,000 | ||||
Over-allotment option | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Sale of Units, net of underwriting discounts (in shares) | shares | 7,500,000 | ||||
Purchase price, per unit | $ / shares | $ 10 | ||||
Over-allotment option | Private Placement Warrants | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Price of warrant | $ / shares | $ 10 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Oct. 30, 2020 | Dec. 31, 2020 | Jun. 30, 2021 |
Cash equivalents | $ 0 | $ 0 | |
Unrecognized tax benefits | 0 | 0 | |
Unrecognized tax benefits accrued for interest and penalties | $ 0 | $ 0 | |
Statutory tax rate (as a percent) | 21.00% | ||
Antidilutive securities excluded from the computation of diluted loss per share | 24,666,667 | ||
FDIC insurance coverage limit | $ 250,000 | $ 250,000 | |
Public warrants | |||
Offering costs | 545,873 | ||
Initial Public Offering | |||
Offering costs | $ 10,534,144 | 10,534,144 | |
Underwriting discounts | 10,000,000 | 10,000,000 | 10,000,000 |
Other offering costs | $ 534,144 | $ 534,144 | $ 534,144 |
Class A Common Stock | |||
Shares subject to possible redemption | 44,885,287 | 50,000,000 | |
Offering costs | $ 9,988,271 | ||
Antidilutive securities excluded from the computation of diluted loss per share | 24,666,667 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Calculation of basic and diluted net income (loss) per common share (Details) - USD ($) | 3 Months Ended | 4 Months Ended | 6 Months Ended | |
Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2021 | |
Unrealized gain on investments held in Trust Account | $ 5,002 | $ 98,582 | $ 135,027 | |
Interest and dividend income on investments held in Trust Account | 8,633 | 8,633 | ||
Net Income (losses) | 3,252,607 | $ (2,418,806) | (10,850,513) | 833,801 |
Less: Change in fair value of warrant liabilities | (7,053,334) | 9,933,330 | (9,280,003) | |
Common Class A subject to possible redemption | ||||
Unrealized gain on investments held in Trust Account | 5,002 | 88,498 | 135,027 | |
Interest and dividend income on investments held in Trust Account | 8,633 | 8,633 | ||
Less: Income available to be withdrawn for payment of taxes | $ (13,635) | (100,209) | ||
Net earnings attributable to Class A Common Stock subject to possible redemption | $ 43,451 | |||
Non-redeemable net loss | $ 25,708 | |||
Basic and diluted weighted average shares outstanding | 50,000,000 | 44,885,287 | 50,000,000 | |
Basic and diluted net loss per share | $ 0 | $ 0 | $ 0 | |
Non Redeemable Common Class B [Member] | ||||
Net Income (losses) | $ 3,252,607 | $ 833,801 | ||
Less: Net earnings attributable to Class A Common Stock subject to possible redemption | (43,451) | |||
Non-redeemable net income | $ 3,252,607 | $ 790,350 | ||
Basic and diluted weighted average shares outstanding | 12,500,000 | 12,500,000 | ||
Basic and diluted net loss per share | $ 0.26 | $ 0.06 |
INITIAL PUBLIC OFFERING (Deta_2
INITIAL PUBLIC OFFERING (Details) - USD ($) | Oct. 30, 2020 | Dec. 31, 2020 | Jun. 30, 2021 |
Class A Common Stock | |||
Subsidiary, Sale of Stock [Line Items] | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | |
Initial Public Offering | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of units sold | 50,000,000 | ||
Purchase price, per unit | $ 10 | ||
Amount of Gross proceed from sale of units (in Dollars) | $ 500,000,000 | ||
Number of warrants in a unit | 0.33 | ||
Exercise price of warrants | $ 11.50 | ||
Initial Public Offering | Class A Common Stock | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of shares in a unit | 1 | ||
Common stock, par value | $ 0.0001 | ||
Number of shares for each warrant | 1 | ||
Initial Public Offering | Public warrants | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of warrants in a unit | 0.33 | ||
Initial Public Offering | Public warrants | Class A Common Stock | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of shares for each warrant | 1 | ||
Exercise price of warrants | $ 11.50 | ||
Over-allotment option | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of units sold | 7,500,000 | ||
Purchase price, per unit | $ 10 |
PRIVATE PLACEMENT (Details)_2
PRIVATE PLACEMENT (Details) - USD ($) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | |
Private Placement Warrants | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of warrants sold | 8,000,000 | |
Price of warrants | $ 1.50 | |
Aggregate gross proceeds | $ 12,000,000 | |
Over-allotment option | Private Placement Warrants | ||
Subsidiary, Sale of Stock [Line Items] | ||
Price of warrants | $ 10 | |
Private Placement | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of warrants sold | 8,000,000 | |
Private Placement | Private Placement Warrants | ||
Subsidiary, Sale of Stock [Line Items] | ||
Aggregate gross proceeds | $ 600,000,000 | |
Private Placement | Class A Common Stock | Private Placement Warrants | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of shares purchased for one warrant | 1 | |
Exercise price of warrant | $ 11.50 |
RELATED PARTY TRANSACTIONS - Fo
RELATED PARTY TRANSACTIONS - Founder Shares (Details) | Sep. 04, 2020USD ($)shares | Jun. 30, 2021shares | Dec. 31, 2020USD ($)shares | Jun. 30, 2021D$ / sharesshares | |
Related Party Transaction | |||||
Issuance of preferred stock | $ | [1] | $ 25,000 | |||
Class B Common Stock | |||||
Related Party Transaction | |||||
Common stock, shares outstanding | 12,500,000 | 12,500,000 | 12,500,000 | ||
Founder Shares | Sponsor | Class B Common Stock | |||||
Related Party Transaction | |||||
Issuance of preferred stock (in shares) | 14,375,000 | ||||
Issuance of preferred stock | $ | $ 25,000 | ||||
Issued and outstanding shares percentage | 20.00% | ||||
Number of shares subject to forfeiture | 1,875,000 | 1,875,000 | |||
Common stock, shares outstanding | 12,500,000 | ||||
Restrictions on transfer period of time after business combination completion | 1 year | ||||
Stock price trigger to transfer, assign or sell any shares or warrants of the company, after the completion of the initial business combination (in dollars per share) | $ / shares | $ 12 | ||||
Threshold trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | D | 20 | ||||
Threshold consecutive trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | D | 30 | ||||
Threshold period after the business combination in which the 20 trading days within any 30 trading day period commences | 150 days | ||||
[1] | Includes up to 1,875,000 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriter.Upon the expiration of the over-allotment option in December 2020, 1,875,000 shares of Class B common stock were forfeited (see Note 6). |
RELATED PARTY TRANSACTIONS - Ad
RELATED PARTY TRANSACTIONS - Additional Information (Details) - USD ($) | Oct. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2021 | Jun. 25, 2021 | Sep. 11, 2020 |
Related Party Transaction | |||||
Promissory note outstanding - Related party | $ 300,000 | $ 300,000 | |||
Promissory Note with Related Party | |||||
Related Party Transaction | |||||
Maximum borrowing capacity of related party promissory note | $ 300,000 | ||||
Repayment of promissory note - related party | $ 300,000 | ||||
Promissory note outstanding - Related party | 300,000 | 300,000 | $ 300,000 | ||
Administrative Support Agreement | |||||
Related Party Transaction | |||||
Expenses per month | 10,000 | ||||
Expenses incurred and paid | $ 30,000 | $ 60,000 |
COMMITMENTS (Details)_2
COMMITMENTS (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021USD ($)$ / shares | Jun. 30, 2021USD ($)$ / shares | Dec. 31, 2020USD ($) | Oct. 31, 2020item | |
Other Commitments [Line Items] | ||||
Maximum number of demands for registration of securities | item | 3 | |||
Cash Discount (in percent) | 3.5 | 3.5 | ||
Cash discount | $ 17,500,000 | $ 17,500,000 | ||
Working capital loans | $ 1,500,000 | |||
Business Acquisition Share Price per warrant | $ / shares | $ 1.50 | $ 1.50 | ||
Outstanding working capital Loan | $ 0 | $ 0 | ||
Representative Of The Underwriters | ||||
Other Commitments [Line Items] | ||||
Cash Discount (in percent) | 2.25 | 2.25 | ||
Cash discount | $ 11,250,000 | $ 11,250,000 | ||
Moelis & Company LLC | ||||
Other Commitments [Line Items] | ||||
Cash Discount (in percent) | 1.25 | 1.25 | ||
Cash discount | $ 6,250,000 | $ 6,250,000 |
WARRANTS (Details)_2
WARRANTS (Details) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020$ / sharesshares | Jun. 30, 2021itemD$ / sharesshares | |
Class of Warrant or Right [Line Items] | ||
Public Warrants expiration term | 5 years | |
Redemption price per public warrant (in dollars per share) | $ 0.01 | |
Warrants | ||
Class of Warrant or Right [Line Items] | ||
Maximum period after business combination in which to file registration statement | 15 days | |
Period of time within which registration statement is expected to become effective | 60 days | |
Private Placement Warrants | ||
Class of Warrant or Right [Line Items] | ||
Warrants outstanding | shares | 8,000,000 | |
Public warrants | ||
Class of Warrant or Right [Line Items] | ||
Warrant exercise period condition one | 30 days | |
Warrant exercise period condition two | 12 months | |
Public Warrants expiration term | 5 years | |
Share price trigger used to measure dilution of warrant | $ 9.20 | |
Percentage of gross new proceeds to total equity proceeds used to measure dilution of warrant | 60 | |
Trading period after business combination used to measure dilution of warrant | item | 20 | |
Warrant exercise price adjustment multiple | 115 | |
Warrant redemption price adjustment multiple | 180 | |
Restrictions on transfer period of time after business combination completion | 30 days | |
Warrants outstanding | shares | 16,666,667 | 16,666,667 |
Public warrants | Redemption of Warrants When the Price per Class A Ordinary Share Equals or Exceeds $18.00 | ||
Class of Warrant or Right [Line Items] | ||
Redemption price per public warrant (in dollars per share) | $ 0.01 | |
Redemption period | 30 days | |
Warrant redemption condition minimum share price | $ 18 | |
Threshold trading days for redemption of public warrants | D | 20 | |
Threshold consecutive trading days for redemption of public warrants | D | 30 | |
Threshold number of business days before sending notice of redemption to warrant holders | item | 3 |
STOCKHOLDERS' EQUITY - Preferre
STOCKHOLDERS' EQUITY - Preferred Stock Shares (Details) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
Preferred and Common Stock | ||
Redeemable convertible preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, par value, (per share) | $ 0.0001 | $ 0.0001 |
Redeemable convertible preferred stock, shares issued | 0 | 0 |
Redeemable convertible preferred stock, shares outstanding | 0 | 0 |
STOCKHOLDERS' EQUITY - Common S
STOCKHOLDERS' EQUITY - Common Stock Shares (Details) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2020Vote$ / sharesshares | Jun. 30, 2021USD ($)Vote$ / sharesshares | |
ClassOfStockLineItems | ||
Share Price | $ / shares | $ 9.20 | |
Net tangible assets | $ | $ 600,000,000 | |
Class A Common Stock | ||
ClassOfStockLineItems | ||
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 |
Common shares, votes per share | Vote | 1 | |
Common stock, shares issued | 50,000,000 | 50,000,000 |
Common stock, shares outstanding | 5,114,713 | 0 |
Shares subject to possible redemption | 44,885,287 | 50,000,000 |
Issued and outstanding shares of public offering before transaction, percentage | 20.00% | |
Class A Common Stock Subject to Redemption | ||
ClassOfStockLineItems | ||
Class A common stock subject to possible redemption, issued (in shares) | 44,885,287 | 50,000,000 |
Shares subject to possible redemption | 44,885,287 | 50,000,000 |
Share Price | $ / shares | $ 10 | |
Class B Common Stock | ||
ClassOfStockLineItems | ||
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 |
Common shares, votes per share | Vote | 1 | 1 |
Common stock, shares issued | 12,500,000 | 12,500,000 |
Common stock, shares outstanding | 12,500,000 | 12,500,000 |
Issued and outstanding shares of public offering before transaction, percentage | 20.00% | |
Series A Common Stock [Member] | ||
ClassOfStockLineItems | ||
Net tangible assets | $ | $ 5,000,001 | |
Series A common stock subject to possible redemption | $ | $ 500,143,016 |
FAIR VALUE MEASUREMENTS (Deta_2
FAIR VALUE MEASUREMENTS (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Assets: | ||
Cash held in the Trust Account | $ 925,923 | |
Marketable securities held in Trust Account | $ 500,143,016 | 500,098,582 |
Public warrants | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Warrant Liabilities | 25,666,667 | 31,666,670 |
Private Placement Warrants | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Warrant Liabilities | 12,560,000 | 15,840,000 |
Level 1 | ||
Assets: | ||
Marketable securities held in Trust Account | 500,143,016 | 500,098,582 |
Level 1 | Public warrants | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Warrant Liabilities | $ 25,666,667 | $ 31,666,670 |
Exercise price of warrants | $ 1.54 | $ 1.90 |
Level 3 | Private Placement Warrants | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Warrant Liabilities | $ 12,560,000 | $ 15,840,000 |
FAIR VALUE MEASUREMENTS - Monte
FAIR VALUE MEASUREMENTS - Monte Carlo Simulation for the fair value (Details) | Jun. 30, 2021 | Dec. 31, 2020 |
Stock price | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 9.96 | 10.06 |
Strike price | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 11.50 | 11.50 |
Probability of completing a Business Combination | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 86 | |
Dividend yield | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0 | |
Term (in years) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 5.26 | 5.91 |
Volatility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 21.5 | 28 |
Risk-free rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.91 | 0.49 |
Fair value of warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 1.57 | 1.98 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair value of warrant liabilities (Details) - USD ($) | 3 Months Ended | 4 Months Ended | 6 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value as of December 31, 2020 | $ 47,506,670 | ||
Change in valuation inputs or other assumptions | $ (7,053,334) | $ (9,933,330) | (9,280,003) |
Fair value as of March 31, 2021 | 38,226,667 | 47,506,670 | 38,226,667 |
Public warrants | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value as of December 31, 2020 | 31,666,670 | ||
Change in valuation inputs or other assumptions | (6,333,330) | (6,000,003) | |
Fair value as of March 31, 2021 | 25,666,667 | 31,666,670 | 25,666,667 |
Private Placement Warrants | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value as of December 31, 2020 | 15,840,000 | ||
Change in valuation inputs or other assumptions | (3,600,000) | (3,280,000) | |
Fair value as of March 31, 2021 | $ 12,560,000 | $ 15,840,000 | $ 12,560,000 |
Balance Sheets
Balance Sheets - USD ($) | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Oct. 30, 2020 | Aug. 25, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets | |||||||||
Cash and cash equivalents | $ 297,376 | $ 925,923 | |||||||
Prepaid expenses | 251,628 | 463,999 | |||||||
Total current assets | 549,004 | 1,389,922 | |||||||
Total assets | 500,770,589 | 501,488,504 | |||||||
Current liabilities | |||||||||
Accounts payable | 77,617 | 10,991 | |||||||
Other current liabilities | 4,404 | ||||||||
Total current liabilities | 7,857,245 | 128,958 | |||||||
Total liabilities | 46,083,912 | 47,635,628 | $ 37,573,340 | ||||||
Commitments and contingencies (Note 8) | |||||||||
Redeemable convertible preferred stock | |||||||||
Stockholders' deficit | |||||||||
Additional paid-in capital | 23,750 | 15,848,758 | 5,786,600 | ||||||
Accumulated deficit | (45,481,339) | (10,850,513) | $ (788,441) | ||||||
Total stockholders' deficit | (45,456,339) | $ (48,723,289) | 5,000,006 | $ 0 | |||||
Total liabilities, redeemable convertible preferred stock, and stockholders' deficit | 500,770,589 | 501,488,504 | |||||||
Archer Aviation Inc | |||||||||
Current assets | |||||||||
Cash and cash equivalents | 5,937,000 | 36,564,000 | $ 10,149,000 | ||||||
Prepaid expenses | 542,000 | 762,000 | 6,000 | ||||||
Other current assets | 199,000 | 43,000 | 7,000 | ||||||
Total current assets | 6,678,000 | 37,369,000 | 10,162,000 | ||||||
Property and equipment, net | 3,572,000 | 1,613,000 | 4,000 | ||||||
Intangible assets, net | 481,000 | 497,000 | 0 | ||||||
Right-of-use asset | 2,687,000 | 2,300,000 | 0 | ||||||
Total assets | 13,653,000 | 41,779,000 | 10,166,000 | ||||||
Current liabilities | |||||||||
Accounts payable | 21,710,000 | 2,103,000 | 110,000 | ||||||
Lease liability | 1,329,000 | 816,000 | 0 | ||||||
Notes payable | 645,000 | 0 | |||||||
Other current liabilities | 667,000 | 279,000 | 43,000 | ||||||
Total current liabilities | 23,706,000 | 3,843,000 | 153,000 | ||||||
Notes payable, net of current portion | 260,000 | 0 | |||||||
Lease liability, net of current portion | 1,385,000 | 1,485,000 | 0 | ||||||
Convertible promissory notes due to related parties | 0 | 4,995,000 | |||||||
Other long-term liabilities | 215,000 | 268,000 | 47,000 | ||||||
Total liabilities | 25,306,000 | 5,856,000 | 5,195,000 | ||||||
Commitments and contingencies (Note 8) | |||||||||
Stockholders' deficit | |||||||||
Common stock, $0.0001 par value; 143,677,090 shares authorized; 51,321,752 shares issued and outstanding as of December 31, 2020 and 77,285,983 shares authorized; 50,000,000 shares issued and outstanding as of December 31, 2019 | 5,000 | 5,000 | 5,000 | ||||||
Additional paid-in capital | 80,408,000 | 186,000 | 0 | ||||||
Accumulated deficit | (153,598,000) | (25,800,000) | (977,000) | ||||||
Total stockholders' deficit | (73,185,000) | (41,255,000) | (25,609,000) | $ (9,850,000) | $ (4,956,000) | (972,000) | $ (28,000) | ||
Total liabilities, redeemable convertible preferred stock, and stockholders' deficit | 13,653,000 | 41,779,000 | 10,166,000 | ||||||
Archer Aviation Inc | Series Seed redeemable convertible preferred stock | |||||||||
Current liabilities | |||||||||
Redeemable convertible preferred stock | 5,943,000 | 5,943,000 | 5,943,000 | ||||||
Stockholders' deficit | |||||||||
Total stockholders' deficit | 5,943,000 | 5,943,000 | 5,943,000 | 5,943,000 | 5,943,000 | 5,943,000 | 0 | ||
Archer Aviation Inc | Series A redeemable convertible preferred stock | |||||||||
Current liabilities | |||||||||
Redeemable convertible preferred stock | 55,589,000 | 55,589,000 | 0 | ||||||
Stockholders' deficit | |||||||||
Total stockholders' deficit | $ 55,589,000 | $ 55,589,000 | $ 55,589,000 | $ 0 | $ 0 | $ 0 | $ 0 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Redeemable convertible preferred stock, par value | $ 0.0001 | $ 0.0001 | |||||
Redeemable convertible preferred stock, shares authorized | 1,000,000 | 1,000,000 | |||||
Redeemable convertible preferred stock, shares issued | 0 | 0 | |||||
Redeemable convertible preferred stock, shares outstanding | 0 | 0 | |||||
Archer Aviation Inc | |||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Common stock, shares authorized | 155,000,000 | 143,677,090 | 77,285,983 | ||||
Common stock, shares issued | 52,229,481 | 51,321,752 | 50,000,000 | ||||
Common stock, shares outstanding | 52,229,481 | 51,321,752 | 50,000,000 | ||||
Archer Aviation Inc | Series Seed redeemable convertible preferred stock | |||||||
Redeemable convertible preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Redeemable convertible preferred stock, liquidation value | $ 6,004 | $ 6,004 | $ 6,004 | ||||
Redeemable convertible preferred stock, shares authorized | 18,193,515 | 18,193,515 | 18,193,515 | ||||
Redeemable convertible preferred stock, shares issued | 18,193,515 | 18,193,515 | 18,193,515 | ||||
Redeemable convertible preferred stock, shares outstanding | 18,193,515 | 18,193,515 | 18,193,515 | 18,193,515 | 18,193,515 | 18,193,515 | 0 |
Archer Aviation Inc | Series A redeemable convertible preferred stock | |||||||
Redeemable convertible preferred stock, par value | $ 0.0001 | $ 0.0001 | |||||
Redeemable convertible preferred stock, liquidation value | $ 55,734 | $ 55,734 | |||||
Redeemable convertible preferred stock, shares authorized | 46,732,728 | 46,732,728 | 0 | ||||
Redeemable convertible preferred stock, shares issued | 46,267,422 | 46,267,422 | 0 | ||||
Redeemable convertible preferred stock, shares outstanding | 46,267,422 | 46,267,422 | 46,267,422 | 0 | 0 | 0 | 0 |
Statements of Operations and Co
Statements of Operations and Comprehensive Loss - USD ($) | 3 Months Ended | 4 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating expenses | |||||||||
Loss from operations | $ (3,814,362) | $ (229,892) | $ (8,589,862) | ||||||
Net loss and comprehensive loss | 3,252,607 | $ (2,418,806) | $ (10,850,513) | 833,801 | |||||
Archer Aviation Inc | |||||||||
Operating expenses | |||||||||
Research and development | 11,448,000 | $ 4,105,000 | 21,514,000 | $ 6,974,000 | $ 21,097,000 | $ 769,000 | |||
General and administrative | 22,409,000 | 669,000 | 28,987,000 | 1,686,000 | 3,491,000 | 122,000 | |||
Total operating expenses | 33,857,000 | 4,774,000 | 128,709,000 | 8,660,000 | 24,588,000 | 891,000 | |||
Loss from operations | (33,857,000) | (4,774,000) | (128,709,000) | (8,660,000) | (24,588,000) | (891,000) | |||
Other expense, net | (3,000) | 0 | 0 | 0 | (2,000) | 0 | |||
Interest expense, net | 3,000 | (128,000) | 1,000 | (229,000) | (232,000) | (53,000) | |||
Loss before income taxes | (32,945,000) | (4,902,000) | (127,796,000) | (8,889,000) | (24,822,000) | (944,000) | |||
Income tax expense | 0 | 0 | (2,000) | 0 | (1,000) | 0 | |||
Net loss and comprehensive loss | $ (32,945,000) | $ (94,853,000) | $ (4,902,000) | $ (3,987,000) | $ (127,798,000) | $ (8,889,000) | $ (24,823,000) | $ (944,000) | |
Net loss per share, basic and diluted | $ (0.57) | $ (0.10) | $ (2.25) | $ (0.18) | $ (0.49) | $ (0.02) | |||
Weighted-average common shares, basic and diluted | 58,100,977 | 50,000,000 | 56,774,344 | 50,000,000 | 50,164,360 | 50,000,000 |
Statements of Redeemable Conver
Statements of Redeemable Convertible Preferred Stock and Stockholders' Deficit - USD ($) | Archer Aviation IncSeries Seed redeemable convertible preferred stock | Archer Aviation IncSeries A redeemable convertible preferred stock | Archer Aviation IncCommon Stock | Archer Aviation IncAdditional Paid-in Capital | Archer Aviation IncAccumulated Deficit | Archer Aviation Inc | Additional Paid-in Capital | Accumulated Deficit | Total | |
Balance as of beginning of period at Dec. 31, 2018 | $ 0 | $ 0 | $ 5,000 | $ 0 | $ (33,000) | $ (28,000) | ||||
Balance as of beginning of period, preferred stock (in shares) at Dec. 31, 2018 | 0 | 0 | ||||||||
Balance as of beginning of period, common stock (in shares) at Dec. 31, 2018 | 50,000,000 | |||||||||
Issuance of preferred stock | $ 5,339,000 | $ 0 | $ 0 | 0 | 0 | 0 | ||||
Issuance of preferred stock (in shares) | 16,363,635 | 0 | ||||||||
Conversion of notes and accrued interest to preferred stock | $ 604,000 | $ 0 | 0 | 0 | 0 | 0 | ||||
Conversion of notes and accrued interest to preferred stock (in shares) | 1,829,880 | 0 | ||||||||
Net loss | $ 0 | $ 0 | 0 | 0 | (944,000) | (944,000) | ||||
Balance as of end of period at Dec. 31, 2019 | $ 5,943,000 | $ 0 | $ 5,000 | 0 | (977,000) | $ (972,000) | ||||
Balance as of end of period, preferred stock (in shares) at Dec. 31, 2019 | 18,193,515 | 0 | ||||||||
Balance as of end of period, common stock (in shares) at Dec. 31, 2019 | 50,000,000 | 50,000,000 | ||||||||
Stock-based compensation | $ 0 | $ 0 | $ 0 | 3,000 | 0 | $ 3,000 | ||||
Net loss | 0 | 0 | 0 | 0 | (3,987,000) | (3,987,000) | ||||
Balance as of end of period at Mar. 31, 2020 | $ 5,943,000 | $ 0 | $ 5,000 | 3,000 | (4,964,000) | (4,956,000) | ||||
Balance as of end of period, preferred stock (in shares) at Mar. 31, 2020 | 18,193,515 | 0 | ||||||||
Balance as of end of period, common stock (in shares) at Mar. 31, 2020 | 50,000,000 | |||||||||
Balance as of beginning of period at Dec. 31, 2019 | $ 5,943,000 | $ 0 | $ 5,000 | 0 | (977,000) | $ (972,000) | ||||
Balance as of beginning of period, preferred stock (in shares) at Dec. 31, 2019 | 18,193,515 | 0 | ||||||||
Balance as of beginning of period, common stock (in shares) at Dec. 31, 2019 | 50,000,000 | 50,000,000 | ||||||||
Net loss | $ (8,889,000) | |||||||||
Balance as of end of period at Jun. 30, 2020 | $ 5,943,000 | $ 0 | $ 5,000 | 11,000 | (9,866,000) | (9,850,000) | ||||
Balance as of end of period, preferred stock (in shares) at Jun. 30, 2020 | 18,193,515 | 0 | ||||||||
Balance as of end of period, common stock (in shares) at Jun. 30, 2020 | 51,134,000 | |||||||||
Balance as of beginning of period at Dec. 31, 2019 | $ 5,943,000 | $ 0 | $ 5,000 | 0 | (977,000) | $ (972,000) | ||||
Balance as of beginning of period, preferred stock (in shares) at Dec. 31, 2019 | 18,193,515 | 0 | ||||||||
Balance as of beginning of period, common stock (in shares) at Dec. 31, 2019 | 50,000,000 | 50,000,000 | ||||||||
Issuance of preferred stock | $ 0 | $ 50,295,000 | $ 0 | 0 | 0 | $ 0 | ||||
Issuance of preferred stock (in shares) | 0 | 41,872,399 | 0 | |||||||
Conversion of notes and accrued interest to preferred stock | $ 0 | $ 5,294,000 | $ 0 | 0 | 0 | 0 | ||||
Conversion of notes and accrued interest to preferred stock (in shares) | 0 | 4,395,023 | 0 | |||||||
Issuance of restricted stock | $ 0 | $ 0 | $ 0 | 0 | 0 | 0 | ||||
Issuance of restricted stock (in shares) | 0 | 0 | 1,134,000 | |||||||
Exercise of stock options | $ 0 | $ 0 | $ 0 | 11,000 | 0 | 11,000 | ||||
Exercise of stock options (in shares) | 0 | 0 | 187,752 | |||||||
Stock-based compensation | $ 0 | $ 0 | $ 0 | 175,000 | 0 | 175,000 | ||||
Net loss | 0 | 0 | 0 | 0 | (24,823,000) | (24,823,000) | ||||
Balance as of end of period at Dec. 31, 2020 | $ 5,943,000 | $ 55,589,000 | $ 5,000 | 186,000 | (25,800,000) | $ (25,609,000) | $ 15,848,758 | $ (10,850,513) | $ 5,000,006 | |
Balance as of end of period, preferred stock (in shares) at Dec. 31, 2020 | 18,193,515 | 46,267,422 | 0 | |||||||
Balance as of end of period, common stock (in shares) at Dec. 31, 2020 | 51,321,752 | 51,321,752 | ||||||||
Balance as of beginning of period at Mar. 31, 2020 | $ 5,943,000 | $ 0 | $ 5,000 | 3,000 | (4,964,000) | $ (4,956,000) | ||||
Balance as of beginning of period, preferred stock (in shares) at Mar. 31, 2020 | 18,193,515 | 0 | ||||||||
Balance as of beginning of period, common stock (in shares) at Mar. 31, 2020 | 50,000,000 | |||||||||
Issuance of restricted stock | $ 0 | $ 0 | $ 0 | 0 | 0 | 0 | ||||
Issuance of restricted stock (in shares) | 0 | 0 | 1,134,000 | |||||||
Stock-based compensation | $ 0 | $ 0 | $ 0 | 8,000 | 0 | 8,000 | ||||
Net loss | 0 | 0 | 0 | 0 | (4,902,000) | (4,902,000) | ||||
Balance as of end of period at Jun. 30, 2020 | $ 5,943,000 | $ 0 | $ 5,000 | 11,000 | (9,866,000) | (9,850,000) | ||||
Balance as of end of period, preferred stock (in shares) at Jun. 30, 2020 | 18,193,515 | 0 | ||||||||
Balance as of end of period, common stock (in shares) at Jun. 30, 2020 | 51,134,000 | |||||||||
Balance as of beginning of period at Aug. 25, 2020 | 0 | 0 | $ 0 | |||||||
Issuance of preferred stock | [1] | 23,562 | 25,000 | |||||||
Net loss | (10,850,513) | (10,850,513) | ||||||||
Balance as of end of period at Dec. 31, 2020 | $ 5,943,000 | $ 55,589,000 | $ 5,000 | 186,000 | (25,800,000) | $ (25,609,000) | 15,848,758 | (10,850,513) | $ 5,000,006 | |
Balance as of end of period, preferred stock (in shares) at Dec. 31, 2020 | 18,193,515 | 46,267,422 | 0 | |||||||
Balance as of end of period, common stock (in shares) at Dec. 31, 2020 | 51,321,752 | 51,321,752 | ||||||||
Exercise of stock options | $ 0 | $ 0 | $ 0 | 40,000 | 0 | $ 40,000 | ||||
Exercise of stock options (in shares) | 667,979,000 | |||||||||
Stock-based compensation | 0 | 0 | $ 0 | 925,000 | 0 | 925,000 | ||||
Net loss | 0 | 0 | 0 | 0 | (94,853,000) | (94,853,000) | (2,418,806) | $ (2,418,806) | ||
Balance as of end of period at Mar. 31, 2021 | $ 5,943,000 | $ 55,589,000 | $ 5,000 | 79,393,000 | (120,653,000) | (41,255,000) | 23,750 | (48,748,289) | (48,723,289) | |
Balance as of end of period, preferred stock (in shares) at Mar. 31, 2021 | 18,193,515 | 46,267,422 | ||||||||
Balance as of end of period, common stock (in shares) at Mar. 31, 2021 | 51,989,731 | |||||||||
Balance as of beginning of period at Dec. 31, 2020 | $ 5,943,000 | $ 55,589,000 | $ 5,000 | 186,000 | (25,800,000) | $ (25,609,000) | 15,848,758 | (10,850,513) | $ 5,000,006 | |
Balance as of beginning of period, preferred stock (in shares) at Dec. 31, 2020 | 18,193,515 | 46,267,422 | 0 | |||||||
Balance as of beginning of period, common stock (in shares) at Dec. 31, 2020 | 51,321,752 | 51,321,752 | ||||||||
Net loss | $ (127,798,000) | $ 833,801 | ||||||||
Balance as of end of period at Jun. 30, 2021 | $ 5,943,000 | $ 55,589,000 | $ 5,000 | 80,408,000 | (153,598,000) | $ (73,185,000) | 23,750 | (45,481,339) | $ (45,456,339) | |
Balance as of end of period, preferred stock (in shares) at Jun. 30, 2021 | 18,193,515 | 46,267,422 | 0 | |||||||
Balance as of end of period, common stock (in shares) at Jun. 30, 2021 | 52,229,481 | 52,229,481 | ||||||||
Balance as of beginning of period at Mar. 31, 2021 | $ 5,943,000 | $ 55,589,000 | $ 5,000 | 79,393,000 | (120,653,000) | $ (41,255,000) | 23,750 | (48,748,289) | $ (48,723,289) | |
Balance as of beginning of period, preferred stock (in shares) at Mar. 31, 2021 | 18,193,515 | 46,267,422 | ||||||||
Balance as of beginning of period, common stock (in shares) at Mar. 31, 2021 | 51,989,731 | |||||||||
Exercise of stock options | $ 0 | $ 0 | $ 0 | 22,000 | 0 | 22,000 | ||||
Exercise of stock options (in shares) | 239,750,000 | |||||||||
Stock-based compensation | 0 | 0 | $ 0 | 993,000 | 0 | 993,000 | ||||
Net loss | 0 | 0 | 0 | 0 | (32,945,000) | (32,945,000) | 3,252,607 | 3,252,607 | ||
Balance as of end of period at Jun. 30, 2021 | $ 5,943,000 | $ 55,589,000 | $ 5,000 | $ 80,408,000 | $ (153,598,000) | $ (73,185,000) | $ 23,750 | $ (45,481,339) | $ (45,456,339) | |
Balance as of end of period, preferred stock (in shares) at Jun. 30, 2021 | 18,193,515 | 46,267,422 | 0 | |||||||
Balance as of end of period, common stock (in shares) at Jun. 30, 2021 | 52,229,481 | 52,229,481 | ||||||||
[1] | Includes up to 1,875,000 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriter.Upon the expiration of the over-allotment option in December 2020, 1,875,000 shares of Class B common stock were forfeited (see Note 6). |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 4 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities | |||||
Net loss | $ (10,850,513) | $ 833,801 | |||
Changes in operating assets and liabilities: | |||||
Prepaid expenses | (463,999) | 133,802 | |||
Other current liabilities | 4,404 | ||||
Net cash used in operating activities | (564,933) | (1,027,773) | |||
Cash flows from investing activities | |||||
Net cash used in investing activities | (500,000,000) | 99,226 | |||
Cash flows from financing activities | |||||
Net cash provided by financing activities | 501,490,856 | 300,000 | |||
Net decrease in cash and cash equivalents | 925,923 | (628,547) | |||
Cash and cash equivalents, beginning of period | 925,923 | 925,923 | |||
Cash and cash equivalents, end of period | 925,923 | 297,376 | $ 925,923 | ||
Archer Aviation Inc | |||||
Cash flows from operating activities | |||||
Net loss | (127,798,000) | $ (8,889,000) | (24,823,000) | $ (944,000) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||
Depreciation and amortization expense | 422,000 | 39,000 | 142,000 | ||
Stock-based compensation | 1,918,000 | 11,000 | 175,000 | ||
Non-cash interest | 0 | 248,000 | 253,000 | 53,000 | |
Non-cash lease expense | 597,000 | 0 | 39,000 | ||
Changes in operating assets and liabilities: | |||||
Prepaid expenses | 220,000 | (315,000) | (755,000) | (6,000) | |
Other current assets | (156,000) | (6,000) | (36,000) | (7,000) | |
Accounts payable | 19,161,000 | 790,000 | 1,644,000 | 109,000 | |
Accounts payable to related parties | (57,000) | ||||
Other current liabilities | 343,000 | 642,000 | 235,000 | 43,000 | |
Operating lease liability | (572,000) | 0 | (38,000) | ||
Other long-term liabilities | 268,000 | ||||
Net cash used in operating activities | (28,770,000) | (7,480,000) | (22,896,000) | (809,000) | |
Cash flows from investing activities | |||||
Purchase of property and equipment | (1,919,000) | (315,000) | (1,400,000) | (4,000) | |
Purchase of domain names | (500,000) | ||||
Net cash used in investing activities | (1,919,000) | (315,000) | (1,900,000) | (4,000) | |
Cash flows from financing activities | |||||
Proceeds from issuance of convertible debt | 5,600,000 | ||||
Payments of debt issuance costs | (8,000) | ||||
Proceeds from issuance of preferred stock, net | 50,295,000 | 5,339,000 | |||
Proceeds from exercise of stock options | 62,000 | 0 | 11,000 | ||
Proceeds from issuance of debt | 0 | 905,000 | 905,000 | ||
Net cash provided by financing activities | 62,000 | 825,000 | 51,211,000 | 10,931,000 | |
Net decrease in cash and cash equivalents | (30,627,000) | (6,970,000) | 26,415,000 | 10,118,000 | |
Cash and cash equivalents, beginning of period | 36,564,000 | 10,149,000 | 10,149,000 | 31,000 | |
Cash and cash equivalents, end of period | $ 36,564,000 | 5,937,000 | 3,179,000 | 36,564,000 | 10,149,000 |
Supplemental disclosure of other noncash investing and financing activities | |||||
Promissory notes and interest settled with preferred shares | 5,294,000 | $ 604,000 | |||
Property and equipment recorded in accounts payable | $ 446,000 | $ 0 | $ 349,000 |
Formation and Nature of Busines
Formation and Nature of Business | 4 Months Ended | 6 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | |
Formation and Nature of Business | NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Atlas Crest Investment Corp. (the “Company” or “Atlas”) is a blank check company incorporated in Delaware on August 26, 2020. The Company was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses (the “Business Combination”). The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. As of December 31, 2020, the Company had not commenced any operations. All activity for the period from August 26, 2020 (inception) through December 31, 2020 relates to the Company’s formation, the initial public offering (“Initial Public Offering”) as described below, and since the closing of the Initial Public Offering, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income or gains on investments on the cash and investments held in a trust account from the proceeds derived from the Initial Public Offering. The registration statement for the Company’s Initial Public Offering was declared effective on October 27, 2020. On October 30, 2020, the Company consummated the Initial Public Offering of 50,000,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $500,000,000, which is discussed in Note 4. Following the closing of the Initial Public Offering on October 30, 2020, an amount of $500,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants (as defined in Note 5) was placed in a trust account (the “Trust Account”), invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the funds in the Trust Account to the Company’s stockholders, as described below. Transaction costs related to the issuances described above amounted to $10,534,144, consisting of $10,000,000 of underwriting fees and $534,144 of other costs. In addition, at December 31, 2020, $925,923 of cash was held outside of the Trust Account and is available for working capital purposes. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. New York Stock Exchange rules provide that the Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (excluding taxes payable on income earned on the Trust Account) at the time of the signing of a definitive agreement to enter a Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940. There is no assurance that the Company will be able to successfully effect a Business Combination. The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders are entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Public Shares subject to redemption are recorded at redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity The Company will proceed with the Business Combination only if the Company has net tangible assets of at least $5,000,001 either prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its amended and restated Certificate of Incorporation, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the Business Combination is required by law, or the Company decides to obtain stockholder approval for business or other 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. If the Company seeks stockholder approval in connection with a Business Combination, Atlas Crest Investment LLC (the "Sponsor") has agreed to vote its Founder Shares (as defined in Note 6) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed Business Combination or do not vote at all. Notwithstanding the above, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the amended and restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company. The Sponsor has agreed (a) to waive its redemption rights with respect to its Founder Shares and Public Shares held by it in connection with the completion of a Business Combination, (b) to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within 24 months from the closing of the Initial Public Offering and (c) not to propose an amendment to the amended and restated Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment. The Company will have until 24 months from the closing of the Initial Public Offering to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as 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”). Moreover, 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 all 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. Liquidity As of December 31, 2020, the Company had $925,923 in cash held outside of the Trust Account and working capital of $1,260,964. The Company’s liquidity needs prior to the consummation of the Initial Public Offering were satisfied through the proceeds of $25,000 from the sale of the Founder Shares, and a loan of $300,000 under an unsecured and non-interest bearing promissory note (see Note 6). Subsequent to the consummation of the Initial Public Offering, the Company’s liquidity will be satisfied through the net proceeds from the private placement held outside of the Trust Account. Based on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, the Company will be using the funds held outside of the Trust Account for paying existing accounts payable and accrued liabilities, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination. Risks and Uncertainties Management is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. | NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Atlas Crest Investment Corp. (the “Company” or “Atlas”) is a blank check company incorporated in Delaware on August 26, 2020. The Company was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses (the “Business Combination”). The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. As of June 30, 2021, the Company had not commenced any operations. All activity through June 30, 2021 relates to the Company's formation, the initial public offering (“Initial Public Offering”) as described below, and since the closing of the Initial Public Offering, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income or gains on investments on the cash and investments held in a trust account from the proceeds derived from the Initial Public Offering. The registration statement for the Company’s Initial Public Offering was declared effective on October 27, 2020. On October 30, 2020, the Company consummated the Initial Public Offering of 50,000,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $500,000,000 , which is discussed in Note 3. Following the closing of the Initial Public Offering on October 30, 2020, an amount of $500,000,000 ( $10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants (as defined in Note 4) was placed in a trust account (the “Trust Account”), invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with maturities of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the funds in the Trust Account to the Company’s stockholders, as described below. Transaction costs related to the issuances described above amounted to $10,534,144 , consisting of $10,000,000 of underwriting fees and $534,144 of other costs. In addition, at June 30, 2021, $297,376 of cash was held outside of the Trust Account and is available for working capital purposes. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. New York Stock Exchange rules provide that the Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (excluding taxes payable on income earned on the Trust Account) at the time of the signing of a definitive agreement to enter a Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940. There is no assurance that the Company will be able to successfully effect a Business Combination. The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders are entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Public Shares subject to redemption are recorded at redemption value and classified as temporary equity in accordance with the Financial Accounting Standards Board's Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity . The Company will proceed with the Business Combination only if the Company has net tangible assets of at least $5,000,001 either prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its amended and restated Certificate of Incorporation, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the Business Combination is required by law, or the Company decides to obtain stockholder approval for business or other 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. If the Company seeks stockholder approval in connection with a Business Combination, Atlas Crest Investment LLC (the “Sponsor”) has agreed to vote its Founder Shares (as defined in Note 6) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed Business Combination or do not vote at all. Notwithstanding the above, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the amended and restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company. The Sponsor has agreed (a) to waive its redemption rights with respect to its Founder Shares and Public Shares held by it in connection with the completion of a Business Combination, (b) to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within 24 months from the closing of the Initial Public Offering and (c) not to propose an amendment to the amended and restated Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment. The Company will have until 24 months from the closing of the Initial Public Offering to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period. In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as 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”). Moreover, 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 all 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. Business Combination Agreement On February 10, 2021, the Company entered into a Business Combination Agreement (as amended and restated on July 29, 2021 and as it may be further amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among the Company, Artemis Acquisition Sub Inc., a Delaware corporation (“Artemis Merger Sub”), and Archer Aviation Inc., a Delaware corporation (“Archer”). The Business Combination Agreement and the transactions contemplated thereby were approved by the boards of directors of each of the Company and Archer. The Business Combination Agreement provides for, among other things, the following transactions on the date of closing of the Business Combination (the “Closing”): (i) Atlas will amend and restate its certificate of incorporation (the “Post-Closing Atlas Certificate of Incorporation”), pursuant to which, among other things, Atlas will have a dual class share structure with (A) shares of Class A common stock that will carry voting rights in the form of one vote per share (the “New Class A Common Stock”), and (B) shares of Class B common stock that will carry voting rights in the form of ten votes per share (the “New Class B Common Stock” and, together with the New Class A Common Stock, the “New Atlas Common Stock”), and (ii) Artemis Merger Sub will merge with and into Archer, with Archer as the surviving company in the merger and, after giving effect to such merger, continuing as a wholly-owned subsidiary of Atlas (the “Merger”). The Merger and the other transactions contemplated by the Business Combination Agreement are hereinafter referred to as the “Business Combination”. The Business Combination is subject to customary closing conditions, including, without limitation, the required approval by Atlas’ stockholders. In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the effective time of the Merger, (i) outstanding shares of common stock and preferred stock of Archer will be converted into a right to receive a number of shares of New Class B Common Stock determined on the basis of an implied Archer equity value of $1,480,000,000 (the “Implied Equity Value”), (ii) all stock awards (whether vested or unvested) to purchase Archer common stock will be converted into stock awards to purchase a number of shares of New Class B Common Stock based on an exchange ratio derived from the Implied Equity Value, and (iii) outstanding warrants (whether vested or unvested) to purchase Archer common stock will be converted into warrants to purchase a number of shares of New Archer Class A Shares or New Class B Common Stock, as applicable, determined on the basis of the Implied Equity Value. The former Archer equity holders will have the right to convert their shares of New Class B Common Stock into shares of New Class A Common Stock pursuant to the Post-Closing Atlas Certificate of Incorporation. The Business Combination Agreement contains representations, warranties and covenants of each of the parties thereto that are customary for transactions of this type. Atlas has also agreed to take all action within its power as may be necessary or appropriate such that, effective immediately after the Closing, the Atlas board of directors will be divided into three classes and be composed of a total of seven directors, which directors shall include an individual designated by Atlas, three individuals designated by Archer and three individuals to be identified by Archer in consultation with Atlas who qualify as “independent directors” under the listing rules of the New York Stock Exchange. The obligations of Atlas and Archer to consummate the Business Combination are subject to certain closing conditions, including, but not limited to, (i) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) the absence of any law or governmental order or other legal restraint or prohibition preventing the consummation of the Business Combination, (iii) the Registration Statement (as defined below) being declared effective under the Securities Act of 1933, as amended (the “Securities Act”), (iv) the shares of New Class A Common Stock to be issued in connection with the Business Combination having been approved for listing on the New York Stock Exchange, (v) the approval of Atlas’ stockholders, (vi) the approval of Archer’s stockholders and (vii) Atlas having at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Securities Exchange Act of 1934, as amended) remaining after the Closing. In addition, the obligation of Archer to consummate the Business Combination is subject to, among other conditions, the aggregate cash proceeds from Atlas’ trust account, together with the proceeds from the PIPE Financing (as defined below), equaling no less than $600,000,000 (after deducting any amounts paid to Atlas shareholders that exercise their redemption rights in connection with the Business Combination). The Business Combination will be accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Under this method of accounting, Atlas will be treated as the “accounting acquiree” and Archer as the “accounting acquirer” for financial reporting purposes. PIPE Financing (Private Placement) Concurrently with the execution of the Business Combination Agreement, the Company entered into subscription agreements (the “Subscription Agreements”) with certain investors. Pursuant to the Subscription Agreements, each investor agreed to subscribe for and purchase, and the Company agreed to issue and sell to such investors, on the Closing Date (as defined in the Business Combination Agreement) substantially concurrently with the Closing (as defined in the Business Combination Agreement), an aggregate of 60,000,000 shares of the Company’s Class A Common Stock for a purchase price of $10.00 per share, for aggregate gross proceeds of $600 million (the “PIPE Financing”). The closing of the PIPE Financing is contingent upon, among other things, the substantially concurrent consummation of the Business Combination. The Subscription Agreements provide that Atlas will grant the investors in the PIPE Financing certain customary registration rights. Going Concern Consideration As of June 30, 2021, the Company had $297,376 in cash held outside of the Trust Account and a working capital deficit of $7,308,241 . The Company has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of time within one year after the date that the financial statements are issued. Management plans to address this uncertainty through the Business Combination as discussed above. There is no assurance that the Company’s plans to consummate the Business Combination will be successful or successful within the Combination Period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Risks and Uncertainties Management continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. | |
Archer Aviation Inc | |||
Formation and Nature of Business | 1. Formation and Nature of Business Formation and Nature of Business Archer Aviation Inc. (the “Company” or “Archer”), headquartered in Palo Alto, California, is an aerospace company focused on the engineering, design, and development of all-electric vertical takeoff and landing (“eVTOL”) aircraft with the objective of improving mobility in cities. The Company’s mission is to advance the benefits of sustainable air mobility that saves people significant time compared to ground transportation. Archer’s vehicle performance is enabled by bringing together advances in key technologies such as high specific energy batteries, high performance electric motors, an advanced fly-by-wire flight control system, and a lightweight and efficient structure. In connection with the initial formation of the Company, Archer Aviation Inc. was incorporated in the State of Delaware and commenced operations on October 16, 2018. Merger with Atlas Crest On September 16, 2021, Archer consummated the previously announced business combination pursuant to the Business Combination Agreement dated February 10, 2021 (as amended and restated on July 29, 2021) between Atlas Crest Investment Corp. (“Atlas”), Artemis Acquisition Sub Inc., a wholly-owned subsidiary of Atlas (“Merger Sub”), and Archer, under the terms of which Merger Sub merged with and into Archer, with Archer surviving the merger as a wholly-owned subsidiary of Atlas. After giving effect to the business combination, the combined company directly owns all of the issued and outstanding equity interests of Archer. As a result of the Business Combination Agreement, Archer’s stockholders received an aggregate number of shares of New Archer common stock equal to $2,465,779 divided by $10.00 . Additionally, certain investors had agreed to subscribe for and purchase an aggregate of up to $600 million of common stock of the combined company (“PIPE Financing”). The PIPE Investment was consummated immediately prior to the closing of the merger. COVID-19 Pandemic In March 2020, the World Health Organization declared the outbreak of a novel coronavirus ("COVID-19") as a pandemic, which continues to spread. COVID-19 has spread rapidly throughout the world, causing volatility and disruption in financial markets, curtailing global economic activity, raising the prospect of an extended global recession, and prompting governments and businesses to take unprecedented measures such as travel restrictions, quarantines, shelter-in-place orders, and business shutdowns. The COVID-19 pandemic may slow down the Company’s ability to ramp up its production and delay the Company’s ability to launch products on anticipated timelines and begin generating revenue. The COVID-19 pandemic could limit the ability of suppliers and business partners to perform, including third party suppliers’ ability to provide components and materials. The Company may also experience an increase in the cost of raw materials. The full impact of the COVID-19 pandemic continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the situation on its financial condition, liquidity, operations, suppliers, industry, and workforce. | 1. Formation and Nature of Business Formation and Nature of Business Archer Aviation Inc. (the “Company” or “Archer”), headquartered in Palo Alto, California, is an aerospace company focused on the engineering, design, and development of all-electric vertical takeoff and landing (“eVTOL”) aircraft with the objective of improving mobility in cities. The Company’s mission is to advance the benefits of sustainable air mobility that saves people significant time compared to ground transportation. Archer’s vehicle performance is enabled by bringing together advances in key technologies such as high specific energy batteries, high performance electric motors, an advanced fly-by-wire flight control system, and a lightweight and efficient structure. In connection with the initial formation of the Company, Archer Aviation Inc. was incorporated in the State of Delaware and commenced operations on October 16, 2018. COVID-19 Pandemic The World Health Organization declared a global emergency on January 30, 2020 with respect to the outbreak of a novel strain of coronavirus, or COVID-19 pandemic. There are many uncertainties regarding the current global COVID-19 pandemic, and the Company is closely monitoring the impact of the pandemic on all aspects of its business, including how it will impact its employees, suppliers, vendors, and business partners. The pandemic has resulted in government authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, stay-at-home or shelter-in-place orders, and business shutdowns. For example, the Company’s employees based in California have been subject to periodic stay-at-home orders from state and local governments. These measures may adversely impact the Company’s employees and operations and the operations of suppliers and business partners and could negatively impact the construction schedule of the Company’s manufacturing facility and production schedule. In addition, various aspects of the Company’s business and manufacturing facility cannot be conducted remotely. These measures by government authorities may continue to remain in place for a significant period of time and could adversely affect the Company’s construction and manufacturing plans, sales and marketing activities, and business operations. The evolution of the virus is unpredictable at this point and any resurgence may slow down the Company’s ability to ramp-up its production program on time to satisfy investors and potential customers. Any delay to production will delay the Company’s ability to launch and begin generating revenue. The COVID-19 pandemic could limit the ability of suppliers and business partners to perform, including third party suppliers’ ability to provide components and materials. The Company may also experience an increase in the cost of raw materials. At the time of this report, the Company has not recorded any impairments as a result of COVID-19. The full impact of the COVID-19 pandemic continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the situation on its financial condition, liquidity, operations, suppliers, industry, and workforce. |
Liquidity and Going Concern
Liquidity and Going Concern | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Archer Aviation Inc | ||
Liquidity and Going Concern | 2. Liquidity and Going Concern Since its formation, the Company has devoted substantial effort and capital resources to the design and development of its planned eVTOL aircraft and Urban Air Mobility network. Funding of these activities has primarily been through the net proceeds received from the issuance of related and third-party debt (Notes 5 and 6), and the sale of preferred and common stock to related and third parties (Note 8). Since inception of the Company through June 30, 2021, the Company has incurred cumulative losses from operations, negative cash flows from operating activities, and has an accumulated deficit of $153,598 . Additionally, Archer had cash and cash equivalents of $5,937 at June 30, 2021. The Company’s audit report for the year ended December 31, 2020 from the Company’s independent registered public accounting firm includes an explanatory paragraph stating that the Company’s recurring losses from operations and cash outflows from operating activities raise substantial doubt about Archer’s ability to continue as a going concern. However, after the closing of the business combination on September 16, 2021, the Company received net cash proceeds of $801,826 . Management expects that the net cash proceeds from the business combination along with cash balances held by the Company prior to the closing date will be sufficient for its working capital and capital requirements for at least the next 12 months from the date these condensed financial statements were available to be issued. There can be no assurance that the Company will be successful in achieving its strategic plans, that the Company’s future capital raises will be sufficient to support its ongoing operations, or that any additional financing will be available in a timely manner or on acceptable terms, if at all. If events or circumstances occur such that the Company does not meet its strategic plans, the Company will be required to reduce discretionary spending, alter or scale back aircraft development programs, be unable to develop new or enhanced production methods, or be unable to fund capital expenditures. Any such events would have a material adverse effect on the Company’s financial position, results of operations, cash flows, and ability to achieve its intended business objectives. | 2. Liquidity and Going Concern Since its formation, the Company has devoted substantial effort and capital resources to strategic planning, engineering, design, and development of its planned electric aircraft platform, development of specific initial electric aircraft models, and capital raising. Funding of these activities has primarily been through the net proceeds received from the issuance of related and third-party debt (Notes 6 and 7), and the sale of preferred and common stock to related and third parties (Note 9). For 2020 and 2019, Archer incurred net losses of $24,823 and $944 , respectively, and has recognized cash outflows from operating activities in each year of $22,896 and $809 , respectively. As of December 31, 2020, Archer had cash and cash equivalents of $36,564 . Based on its recurring losses from operations, expectation of continuing operating losses for the foreseeable future, and need to raise additional capital to finance future operations, management has concluded there is substantial doubt about the Company’s ability to continue as a going concern. Management’s plans include the continued development of its electric aircraft platform and bringing initial aircraft models to market which will require the Company to continue to raise significant amounts of capital through new financing arrangements or merging with a public entity. There can be no assurance that the Company will be successful in achieving its strategic plans, that any additional financing will be available in a timely manner or on acceptable terms, if at all, or that the Company’s planned merger (discussed further in Note 13) will be completed or will provide sufficient capital to support its ongoing operations. If the Company is unable to raise sufficient capital when needed or events or circumstances occur such that the Company does not meet its strategic plans, the Company will be required to reduce certain discretionary spending, alter or scale back aircraft development programs, be unable to develop new or enhanced production methods, or be unable to fund capital expenditures, which would have a material adverse effect on the Company’s financial position, results of operations, cash flows, and ability to achieve its intended business objectives. The financial statements have been prepared on a going concern basis and do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary in the event the Company can no longer continue as a going concern. |
Summary of Significant Accou_11
Summary of Significant Accounting Policies | 4 Months Ended | 6 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies | NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it 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 independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, 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 stockholder approval of any golden parachute payments not previously approved. 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 a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2020. Investments Held in Trust Account At December 31, 2020, the assets held in the Trust Account were held in U.S. Treasury securities and classified as trading. Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480, Distinguishing Liabilities from Equity Offering Costs associated with the Initial Public Offering The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A - Expenses of Offering underwriting discount and $534,144 of other offering costs). The Company recorded $9,988,271 of offering costs as a reduction of equity in connection with the shares of Class A common Stock included in the Units. The Company immediately expensed $545,873 of Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The initial fair value of the Public Warrants was estimated using a Monte Carlo simulation approach and the fair value of the Private Placement Warrants was estimated using a Modified Black-Scholes model (see Note 11). Income Taxes The Company complies with the accounting and reporting requirements of ASC Topic 740, Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. Net Earnings ( Loss) Per Share Net earnings (loss) per share is computed by dividing net earnings (loss) by the weighted-average number of shares of common stock outstanding during the period. The Company has not considered the effect of the warrants sold in the Public Offering and Private Placement to purchase an aggregate of 24,666,667 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 statement of operations includes a presentation of income per share for common shares subject to possible redemption and applies the two-class method in calculating income per share. Net earnings per common share, basic and diluted, for Class A redeemable common stock is calculated by dividing the allocable interest income earned on the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Class A redeemable common stock outstanding since original issuance. Net loss per share, basic and diluted, for Class A and Class B non-redeemable common stock is calculated by dividing the net loss, adjusted for income attributable to Class A redeemable common stock, by the weighted average number of Class B non-redeemable common stock outstanding for the period. Class B non-redeemable common stock 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. The following table reflects the calculation of basic and diluted net earnings (loss) per common share (in dollars, except per share amounts): For the Period from August 26,2020 (Inception) through December 31, 2020 Class A Common Stock subject to possible redemption Numerator: Earnings attributable to Class A Common Stock subject to possible redemption Unrealized gain on investments held in Trust Account $ 88,498 Less: Unrealized gain available to be withdrawn for payment of taxes (62,790) Net earnings attributable to Class A Common Stock subject to possible redemption $ 25,708 Denominator: Weighted average Class A Common Stock subject to possible redemption Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption 44,885,287 Basic and diluted net earnings per share, Class A Common Stock subject to possible redemption $ 0.00 Non-Redeemable Class A and Class B Common Stock Numerator: Net loss minus net earnings Net loss $ (10,850,513) Less: Net earnings attributable to Class A Common Stock subject to possible redemption (25,708) Non-redeemable net loss $ (10,876,221) Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock 17,614,713 Basic and diluted net loss per share, Non-Redeemable Class A and Class B Common Stock $ (0.62) Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. Fair Value of Financial Instruments The Company applies ASC 820, which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances. The carrying amounts reflected in the balance sheet for cash, prepaid expenses and accrued offering costs approximate fair value due to their short-term nature. Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. See Note 11 for additional information on assets and liabilities measured at fair value. 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 the Company’s financial statements. | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K as filed with the SEC on March 8, 2021 and the Company’s Amended Annual Report on Form 10-K/A filed with the SEC on May 24, 2021. The interim results for the periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future interim periods. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it 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 independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, 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 stockholder approval of any golden parachute payments not previously approved. 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 a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did no t have any cash equivalents as of June 30, 2021 and December 31, 2020. Investments Held in Trust Account At June 30, 2021 and December 31, 2020, substantially all of the assets held in the Trust Account were held in money market funds, which are invested in U.S. Treasury securities. Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity . Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. As of June 30, 2021 and December 31, 2020, 50,000,000 and 44,885,287 shares of Class A common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s condensed balance sheet, respectively. Offering Costs associated with the Initial Public Offering The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A - Expenses of Offering . Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the Initial Public Offering. Offering costs directly attributable to the issuance of an equity contract to be classified in equity are recorded as a reduction in equity. Offering costs for equity contracts that are classified as assets and liabilities are expensed immediately. The Company incurred offering costs amounting to $10,534,144 as a result of the Initial Public Offering (consisting of a $10,000,000 underwriting discount and $534,144 of other offering costs). The Company recorded $9,988,271 of offering costs as a reduction of equity in connection with the shares of Class A common Stock included in the Units. The Company immediately expensed $545,873 of offering costs in connection with the Public Warrants and Private Placement Warrants that were classified as liabilities. Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The initial fair value of the Public Warrants was estimated using a Monte Carlo simulation approach and the fair value of the Private Placement Warrants was estimated using a Modified Black-Scholes model (see Note 9). Income Taxes The Company complies with the accounting and reporting requirements of ASC 740, Income Taxes , which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2021 and December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. Net Income Per Share of Common Stock Net income per common share is computed by dividing net income by the weighted-average number of shares of common stock 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 24,666,667 shares in the calculation of diluted income per share, since the warrants are contingently exercisable, and the contingencies have not yet been met. The Company’s statement of operations includes a presentation of income per share for common shares subject to possible redemption and applies the two-class method in calculating income per share. Net earnings per common share, basic and diluted, for Class A redeemable common stock is calculated by dividing the allocable unrealized gain on investments held in the Trust Account and interest and dividend income on investments held in the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Class A common stock subject to possible redemption outstanding for the period. Net income per share, basic and diluted, for Class B non-redeemable common stock is calculated by dividing the net income, adjusted for income attributable to Class A redeemable common stock, by the weighted average number of Class B non-redeemable common stock outstanding for the period. Class B non-redeemable common stock includes the Founder Shares (as defined in Note 5) as these shares do not have any redemption features and do not participate in the income earned on the Trust Account. The following table reflects the calculation of basic and diluted net income per common share (in dollars, except share and per share amounts): Three Months Ended Six Months Ended June 30, June 30, 2021 2021 Class A Common Stock subject to possible redemption Numerator: Earnings attributable to Class A Common Stock subject to possible redemption Unrealized gain on investments held in Trust Account $ 5,002 $ 135,027 Interest and dividend income on investments held in Trust Account 8,633 8,633 Less: Income available to be withdrawn for payment of taxes (13,635) (100,209) Net earnings attributable to Class A Common Stock subject to possible redemption $ — $ 43,451 Denominator: Weighted average Class A Common Stock subject to possible redemption Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption 50,000,000 50,000,000 Basic and diluted net earnings per share, Class A Common Stock subject to possible redemption $ 0.00 $ 0.00 Non-Redeemable Class B Common Stock Numerator: Non-redeemable net income Net income $ 3,252,607 $ 833,801 Less: Net earnings attributable to Class A Common Stock subject to possible redemption — (43,451) Non-redeemable net income $ 3,252,607 $ 790,350 Denominator: Weighted average Non-Redeemable Class B Common Stock Basic and diluted weighted average shares outstanding, Non-Redeemable Class B Common Stock 12,500,000 12,500,000 Basic and diluted net income per share, Non-Redeemable Class B Common Stock $ 0.26 $ 0.06 Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000 . The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. Fair Value of Financial Instruments The Company applies ASC Topic 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances. The carrying amounts reflected in the balance sheet for cash, prepaid expenses and accrued offering costs approximate fair value due to their short-term nature. Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. See Note 9 for additional information on assets and liabilities measured at fair value. Recent Accounting Standards In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows. Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. | |
Archer Aviation Inc | |||
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission for interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position, results of operations, and cash flows for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. The unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements as of and for the year ended December 31, 2020 set forth elsewhere in this proxy statement/prospectus. The Company has provided a discussion of significant accounting policies, estimates, and judgments in its audited financial statements. There have been no changes to the Company’s significant accounting policies since December 31, 2020 which are expected to have a material impact on the Company’s financial position, results of operations, or cash flows. Cash and Cash Equivalents Cash consists of cash on deposit with financial institutions. Cash equivalents consist of short-term, highly liquid financial instruments that are readily convertible to cash and have maturities of three months or less from the date of purchase. Cash and cash equivalent balances were $5,937 and $36,564 as of June 30, 2021 and December 31, 2020, respectively, of which, money market funds were $344 and $34,377 as of June 30, 2021 and December 31, 2020, respectively. Money market funds, which are considered as cash equivalents, are recorded at fair value and classified as Level 1 within the fair value hierarchy. Fair Value Measurements The Company applies the provisions of Accounting Standards Codification (“ASC”) 820, Fair Value Measurement , which defines a single authoritative definition of fair value, sets out a framework for measuring fair value and expands on required disclosures about fair value measurements. The provisions of ASC 820 relate to financial assets and liabilities as well as other assets and liabilities carried at fair value on a recurring and nonrecurring basis. The standard clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the standard establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2 Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The carrying amounts of the Company’s cash, accounts payable, accrued compensation and accrued liabilities approximate fair value due to the short-term nature of these instruments. Level 1 instruments include investments in money market funds, which are valued based on inputs such as actual trade data, quoted market prices from brokers or other similar sources. Financial Instruments Not Recorded at Fair Value on a Recurring Basis Certain financial instruments, including debt, are not measured at fair value on a recurring basis in the balance sheets. The fair value of debt as of December 31, 2020 approximates its carrying value. There was no outstanding debt as of June 30, 2021. Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis Certain assets and liabilities are subject to measurement at fair value on a nonrecurring basis if there are indicators of impairment or if they are deemed to be impaired as a result of an impairment review. There were no assets or liabilities measured at fair value using Level 3 inputs for the periods presented. Intangible Assets, Net Intangible assets consist solely of domain names and are recorded at cost, net of accumulated amortization, and if applicable, impairment charges. Amortization of domain names is provided over a 15-year estimated useful life on a straight-line basis or based on the pattern in which economic benefits are consumed, if reliably determinable. The Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company has analyzed a variety of factors in light of the known impact to date of the COVID-19 pandemic on its business to determine if a circumstance could trigger an impairment loss, and, at this time and based on the information presently known, does not believe that it is more likely than not that an impairment loss has been incurred. As of June 30, 2021 and December 31, 2020, the gross carrying amount for domain names was $500 with $19 and $3 recorded in accumulated amortization, respectively. During the three and six months ended June 30, 2021, the Company recognized amortization expense of $9 and $17 , respectively, included within general and administrative expenses on the statements of operations and comprehensive loss. The Company did not recognize any amortization expense during the three and six months ended June 30, 2020. Property and Equipment, Net Property and equipment are stated at historical cost less accumulated depreciation. Expenditures for major renewals and betterments are capitalized, while minor replacements, maintenance, and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation is removed from the accounts, and any difference between the selling price and net carrying amount is recorded as a gain or loss in the statements of operations and comprehensive loss. Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets as follows: Useful Life (in years) Furniture, fixtures, and equipment 5 Computer hardware 3 Computer software 3 Website design 2 Leasehold improvements Shorter of lease term or the asset standard life Impairment of Long-Lived Assets The Company reviews its long-lived assets, consisting primarily of property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Such triggering events or changes in circumstances may include: a significant decrease in the market price of a long-lived asset, a significant adverse change in the extent or manner in which a long-lived asset is being or intended to be used, a significant adverse change in legal factors or in the business climate, the impact of competition or other factors that could affect the value of a long-lived asset, a significant adverse deterioration in the amount of revenue or cash flows expected to be generated from an asset group, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of a long-lived asset, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset, or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is determined by comparing the forecasted undiscounted cash flows attributable to such assets including any cash flows upon their eventual disposition to their carrying value. If the carrying value of the assets exceeds the forecasted undiscounted cash flows, then the assets are written down to their fair value. The Company determined there was no impairment of long-lived assets during all periods presented. Operating Expenses Research and Development Research and development (“R&D”) costs are expensed as incurred and are primarily comprised of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) for employees focused on R&D activities, other related costs, and an allocation of general overhead. In addition, R&D expense includes professional fees paid to outside contractors and depreciation expense. R&D efforts are focused on design and development of our electric aircraft and continuing to prepare our prototype electric aircraft to achieve industry standards. General and Administrative General and administrative expenses are primarily comprised of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) and overhead related costs for employees in our executive, finance, information technology, or human resources departments. In addition, general and administrative expense includes fees for third-party professional services (including consulting, legal, and audit services), other corporate expenses, allocated shared costs, and depreciation expense. Other Warrant Expense Other warrant expense of $78,208 is related to the vesting of warrants issued in conjunction with the execution of purchase, collaboration, and warrant arrangements with United Airlines. Refer to Note 9 for additional information. Stock-Based Compensation The Company’s stock-based compensation awards consist of options granted to employees, directors, and non-employees for the purchase of ordinary shares and restricted shares. The Company recognizes stock-based compensation expense in accordance with the provisions of ASC 718, Compensation - Stock Compensation. ASC 718 requires the measurement and recognition of compensation expense for all stock-based compensation awards made to employees, directors, and non-employees to be based on the grant date fair values of the awards. The Company estimates the fair value of share options using the Black-Scholes option-pricing model. The value of the award is recognized as expense over the requisite service period on a straight-line basis. Determining the grant date fair value of the awards using the Black-Scholes option-pricing model requires management to make assumptions and judgments, including but not limited to the following: Expected term - The estimate of the expected term of employee awards is determined in accordance with the simplified method, which estimates the term based on an averaging of the vesting period and contractual term of the option grant. The Company uses the contractual term for non-employee awards. Expected volatility - Since the Company is a private entity without sufficient historical data on the volatility of its common stock, the expected volatility used is based on the volatility of similar entities (referred to as “guideline companies”) for a period consistent with the expected term of the award. Risk-free interest rate - The risk-free interest rate used to value awards is based on the United States Treasury yield in effect at the time of grant for a period consistent with the expected term of the award. Dividend yield - The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future. Forfeiture rate – The Company has elected to account for forfeitures as they occur and will record stock-based compensation expense assuming all option holders will complete the requisite service period. If an employee forfeits an award because they fail to complete the requisite service period, the Company will reverse stock-based compensation expense previously recognized in the period the award is forfeited. Fair value of common stock The Company’s Board of Directors grants stock options with exercise prices equal to the fair value of the Company’s common stock on the date of grant. Because there is no public market for the Company’s common stock, the Company has determined the fair value of its common stock at the time of the grant of stock options in accordance with the American Institute of Certified Public Accountants (“AICPA”) Accounting and Valuation Guide: Valuation of Privately-Held-Company Equity Securities Issued as Compensation (the “AICPA Practice Aid”). The Company determined the fair value of its common stock based on a variety of factors including, but not limited to (i) the results of contemporaneous independent third-party valuations of the Company’s common stock and the prices, rights, preferences and privileges of the Company’s redeemable convertible preferred stock relative to those of its common stock; (ii) the lack of marketability of the Company’s common stock; (iii) actual operating and financial results; (iv) current business conditions and projections; (v) the likelihood of achieving a liquidity event, such as an IPO or sale of the Company, given prevailing market conditions, and (vi) precedent transactions involving the Company’s shares. As provided in the AICPA Practice Aid, there are several approaches for setting the value of an enterprise and various methodologies for allocating the value of an enterprise to its outstanding equity. The Company determined the fair value of equity awards using a combination of the market and income approach. Within the market approach, the guideline public company method was used, which employs the use of ratios developed from the market price of traded shares from publicly traded companies considered reasonably similar to the Company. Under the income approach, the enterprise value was estimated using the discounted cash flow method, which involves estimating the future cash flows of a business for a discrete period and discounting them to their present value. In allocating enterprise value to its outstanding equity, the Company applied a hybrid approach, which consisted of the option pricing method (“OPM”) and probability-weighted expected return method (“PWERM”). The OPM treats securities, including debt, common and preferred stock, as call options on the enterprise’s value, with exercise prices based on the securities’ respective liquidation preferences and conversion values. The PWERM estimates the fair market value of the common stock based on an analysis of future values for the enterprise assuming various exit scenarios, such as IPO, merger or sale, staying private, and liquidation. In conducting the valuations, the Company considered all objective and subjective factors that it believed to be relevant in the valuation conducted, including management’s best estimate of the Company’s business condition, and prospects and operating performance at the valuation dates. There are significant judgments and estimates inherent in these valuations. Net Loss Per Share Attributable to Ordinary Stockholders The Company has one class of participating security (preferred shares) issued and outstanding as of June 30, 2021. Losses are not attributed to the participating security as the preferred stockholders are not contractually obligated to share in the Company’s losses. For all periods presented, the calculation of basic net loss per share excludes shares issued upon the early exercise of stock options where the vesting conditions have not been satisfied. Basic net loss attributable to common stockholders per share is calculated by dividing net loss attributable to ordinary stockholders by the weighted-average number of common shares outstanding. Diluted net loss per share attributable to ordinary stockholders reflects adjustments to the basic net loss per share attributable to ordinary stockholders and the weighted-average number of shares of ordinary shares outstanding for the potentially dilutive impact of outstanding securities or other contracts to issue common stock if they were to be exercised or converted into common shares, using the treasury stock method. Contingently issuable shares, including equity awards with performance conditions, are considered outstanding common shares and included in basic net loss per share as of the date that all necessary conditions to earn the awards have been satisfied. Prior to the end of the contingency period, the number of contingently issuable shares included in diluted net loss per share is based on the number of shares, if any, that would be issuable under the terms of the arrangement at the end of the reporting period. Because the Company reported net losses for all periods presented, all potentially dilutive common stock equivalents are antidilutive and have been excluded from the calculation of net loss per share. The following table presents the number of antidilutive shares excluded from the calculation of diluted net loss per share: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Stock-based compensation awards - employees 11,690,674 3,714,205 11,690,674 3,714,205 Stock-based compensation awards - non-employees 11,440,789 1,134,000 11,440,789 1,134,000 Series Seed redeemable convertible preferred stock 18,193,515 18,193,515 18,193,515 18,193,515 Series A redeemable convertible preferred stock 46,267,422 — 46,267,422 — Total 87,592,400 23,041,720 87,592,400 23,041,720 Comprehensive Loss There were no differences between net loss and comprehensive loss presented in the statements of operations and comprehensive loss for the three and six months ended June 30, 2021 and 2020. Recently adopted accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which outlines a comprehensive lease accounting model that supersedes the current lease guidance. The new guidance requires lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms greater than 12 months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. In July 2018, the FASB issued ASU 2018-11, which provides the option of an additional transition method that allows entities to initially apply the new lease guidance at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company entered into its first lease in July of 2020 and applied ASU 2016-02 to this lease and subsequent leases. In June 2018, the FASB issued ASU 2018-07 , Compensation - Stock Compensation (Topic 718) : Improvements to Nonemployee Share-Based Payment Accounting ("ASU 2018-07"). This amendment expands the scope of Topic 718, Compensation—Stock Compensation (which only included share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees is substantially aligned. ASU 2018-07 supersedes Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees . Early adoption of ASU 2018-07 is permitted and should be applied on a prospective basis. The Company began applying ASU 2018-07 during 2020 upon the Company’s first grant of share-based payment awards. No share-based payments were granted prior to 2020. In August 2018, the FASB issued ASU 2018-13 , Fair Value Measurement (Topic 820) (“ASU 2018-13”), which modifies, removes, and adds certain disclosure requirements on fair value measurements based on the FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements. The ASU is effective for all entities for fiscal years beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively for only the most recent annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company has applied ASU 2018-13 to all periods presented. In November 2019, the FASB issued ASU 2019-08, Compensation — Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606) (“ASU 2019-08”), which requires entities to measure and classify share-based payments to a customer in accordance with the guidance in ASC 718, Compensation — Stock Compensation . ASU 2019-08 expanded the scope of Topic 718 to include awards issued to customers for purposes of measurement and classification and amended portions of ASC 606, Revenue from Contracts with Customers , to refer to this guidance. The amount that would be recorded as a reduction in revenue would be measured based on the grant date fair value of the share-based payment in accordance with Topic 718. The Company adopted ASU 2019-08 on January 1, 2021 and has applied its provisions to the measurement of the warrants issued to United Airlines. Refer to Note 9 for details. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12") . This amendment was issued to simplify the accounting for income taxes by removing certain exceptions for recognizing deferred taxes, performing intraperiod allocation, and calculating income taxes in interim periods. Further, ASU 2019-12 adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax basis goodwill and allocating taxes to members of a consolidated group. The Company has applied ASU 2019-12 to all periods presented, and there was no adoption date impact to its financial statements. Recently issued accounting pronouncements not yet adopted In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies the accounting for convertible instruments by removing certain separation models in ASC 470- 20, Debt — Debt with Conversion and Other Options , for convertible instruments. The ASU updates the guidance on certain embedded conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, such that those features are no longer required to be separated from the host contract. The convertible debt instruments will be accounted for as a single liability measured at amortized cost. Further, the ASU made amendments to the EPS guidance in Topic 260 for convertible instruments, the most significant impact of which is requiring the use of the if-converted method for diluted EPS calculation, and no longer allowing the net share settlement method. The ASU also made revisions to Topic 815-40, which provides guidance on how an entity must determine whether a contract qualifies for a scope exception from derivative accounting. The amendments to Topic 815-40 change the scope of contracts that are recognized as assets or liabilities. The ASU is effective for public business entities for interim and annual periods beginning after December 15, 2021, with early adoption permitted. Adoption of the ASU can either be on a modified retrospective or full retrospective basis. The Company is currently evaluating the impact the adoption of this standard will have on its financial statements and related disclosures . | 3. Summary of Significant Accounting Policies Basis of Presentation The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company. Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent liabilities, and the reported amounts of expenses during the reporting period. The Company bases these estimates on historical results and various other assumptions believed to be reasonable, all of which form the basis for making estimates concerning the carrying values of assets and liabilities that are not readily available from other sources. On an ongoing basis, management evaluates its estimates, including those related to the: (i) realization of tax assets and estimates of tax liabilities, (ii) valuation of common stock, (iii) fair value of debt, (iv) fair value of share-based payments, (v) valuation of leased assets and liabilities, and (vi) estimated useful lives of long-lived assets. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Such estimates often require the selection of appropriate valuation methodologies and models and may involve significant judgment in evaluating ranges of assumptions and financial inputs. Actual results may differ from those estimates under different assumptions, financial inputs, or circumstances. Given the global economic climate and unpredictable nature and unknown duration of the COVID-19 pandemic, estimates are subject to additional volatility. Cash and Cash Equivalents Cash consists of cash on deposit with financial institutions. Cash equivalents consist of short-term, highly liquid financial instruments that are readily convertible to cash and have maturities of three months or less from the date of purchase. Cash equivalents are recorded at fair value. As of December 31, 2020 and 2019, the Company held $34,377 and $0 , respectively, of cash equivalents consisting of Level 1 money market funds. Fair Value Measurements The Company applies the provisions of Accounting Standards Codification (“ASC”) 820, Fair Value Measurement , which defines a single authoritative definition of fair value, sets out a framework for measuring fair value and expands on required disclosures about fair value measurements. The provisions of ASC 820 relate to financial assets and liabilities as well as other assets and liabilities carried at fair value on a recurring and nonrecurring basis. The standard clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the standard establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2 Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The carrying amounts of the Company’s cash, accounts payable, accrued compensation and accrued liabilities approximate fair value due to the short-term nature of these instruments. Level 1 instruments include investments in money market funds, which are valued based on inputs such as actual trade data, quoted market prices from brokers or other similar sources. Financial Instruments Not Recorded at Fair Value on a Recurring Basis Certain financial instruments, including debt, are not measured at fair value on a recurring basis in the balance sheets. The fair value of debt as of December 31, 2020 approximates its carrying value. Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis Certain assets and liabilities are subject to measurement at fair value on a non-recurring basis if there are indicators of impairment or if they are deemed to be impaired as a result of an impairment review. There were no assets or liabilities measured at fair value using Level 3 inputs for the periods presented. Concentration of Credit Risk Financial instruments, which subject the Company to concentrations of credit risk, consist primarily of cash, cash equivalents, and deposits. The Company’s cash and cash equivalents are held at major financial institutions located in the United States of America. At times, cash account balances with any one financial institution may exceed Federal Deposit Insurance Corporation (“FDIC”) insurance limits ($250 per depositor per institution). Management believes the financial institutions that hold the Company’s cash and cash equivalents are financially sound and, accordingly, minimal credit risk exists with respect to cash and cash equivalents. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist primarily of prepaid payroll costs, rent, consulting, and subscriptions for brand development and research and development (“R&D”). Intangible Assets, Net Intangible assets consist solely of domain names and are recorded at cost, net of accumulated amortization, and if applicable, impairment charges. Amortization of domain names is provided over a 15 - year estimated useful life on a straight-line basis or based on the pattern in which economic benefits are consumed, if reliably determinable. The Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company has analyzed a variety of factors in light of the known impact to date of the COVID-19 pandemic on its business to determine if a circumstance could trigger an impairment loss, and, at this time and based on the information presently known, does not believe that it is more likely than not that an impairment loss has been incurred. The Company capitalized domain names in 2020, and as of December 31, 2020, the gross carrying amount for domain names was $ 500 with $ 3 recorded in accumulated amortization. During the year ended December 31, 2020, the Company recognized amortization expense of $ 3 , classified within general and administrative on the statements of operations and comprehensive loss. Property and Equipment, Net Property and equipment are stated at historical cost less accumulated depreciation. Expenditures for major renewals and betterments are capitalized, while minor replacements, maintenance, and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation is removed from the accounts, and any difference between the selling price and net carrying amount is recorded as a gain or loss in the statements of operations and comprehensive loss. Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets as follows: Useful Life Furniture, fixtures, and equipment 5 Computer hardware 3 Computer software 3 Website design 2 Leasehold improvements Shorter of lease term or the asset standard life Impairment of Long-Lived Assets The Company reviews its long-lived assets, consisting primarily of property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Such triggering events or changes in circumstances may include: a significant decrease in the market price of a long-lived asset, a significant adverse change in the extent or manner in which a long- lived asset is being or intended to be used, a significant adverse change in legal factors or in the business climate, the impact of competition or other factors that could affect the value of a long-lived asset, a significant adverse deterioration in the amount of revenue or cash flows expected to be generated from an asset group, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of a long-lived asset, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset, or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is determined by comparing the forecasted undiscounted cash flows attributable to such assets including any cash flows upon their eventual disposition to their carrying value. If the carrying value of the assets exceeds the forecasted undiscounted cash flows, then the assets are written down to their fair value. The Company determined there was no impairment of long-lived assets during either period presented. Other Current Liabilities For the year ended December 31, 2020, other current liabilities primarily consist of accrued payroll costs, liabilities related to cash received for the early exercise of stock options which may require repayment if the options do not vest, and accrued interest on the Company’s Paycheck Protection Program Loan. For the year ended December 31, 2019, other current liabilities consist of accrued payroll costs. Paycheck Protection Program Loan On April 9, 2020, the Company received the proceeds from a loan in the amount of approximately $ 905 (the “PPP Loan”) from JPMorgan Chase Bank, N.A., as lender, pursuant to the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The Company accounted for the PPP Loan as a financial liability in accordance with ASC Topic 470, Debt . Accordingly, the PPP Loan was recognized within notes payable and notes payable, net of current portion, in the Company’s balance sheet. In addition, related accrued interest is included within other current liabilities in the Company’s balance sheet. Refer to Note 7 for additional information. Research and Development R&D costs are expensed as incurred and are primarily comprised of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) for employees focused on R&D activities, other related costs, and an allocation of general overhead. In addition, R&D expense includes professional fees paid to outside contractors and depreciation expense. R&D efforts are focused on design and development of our electric aircraft and continuing to prepare our prototype electric aircraft to achieve industry standards. General and Administrative General and administrative expenses are primarily comprised of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) and overhead related costs for employees in our executive, finance, information technology, or human resources departments. In addition, general and administrative expense includes fees for third-party professional services (including consulting, legal, and audit services), other corporate expenses, allocated shared costs, and depreciation expense. Stock-Based Compensation The Company’s stock-based compensation awards consist of options granted to employees, directors, and non-employees for the purchase of ordinary shares and restricted shares. The Company recognizes stock- based compensation expense in accordance with the provisions of ASC 718, Compensation — Stock Compensation. ASC 718 requires the measurement and recognition of compensation expense for all stock- based compensation awards made to employees, directors, and non-employees to be based on the grant date fair values of the awards. The Company estimates the fair value of share options using the Black-Scholes option-pricing model. The value of the award is recognized as expense over the requisite service period on a straight-line basis. Determining the grant date fair value of the awards using the Black-Scholes option-pricing model requires management to make assumptions and judgments, including but not limited to the following: Expected term — The estimate of the expected term of employee awards is determined in accordance with the simplified method, which estimates the term based on an averaging of the vesting period and contractual term of the option grant. The Company uses the contractual term for non-employee awards. Expected volatility — Since the Company is a private entity without sufficient historical data on the volatility of its common stock, the expected volatility used is based on the volatility of similar entities (referred to as “guideline companies”) for a period consistent with the expected term of the award. Risk-free interest rate — The risk-free interest rate used to value awards is based on the United States Treasury yield in effect at the time of grant for a period consistent with the expected term of the award. Dividend yield — The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future. Forfeiture rate — The Company has elected to account for forfeitures as they occur and will record stock- based compensation expense assuming all option holders will complete the requisite service period. If an employee forfeits an award because they fail to complete the requisite service period, the Company will reverse stock-based compensation expense previously recognized in the period the award is forfeited. Fair value of common stock The Company’s Board of Directors grants stock options with exercise prices equal to the fair value of the Company’s common stock on the date of grant. Because there is no public market for the Company’s common stock, the Company has determined the fair value of its common stock at the time of the grant of stock options in accordance with the American Institute of Certified Public Accountants Accounting and Valuation Guide (“AICPA”): Valuation of Privately- Held-Company Equity Securities Issued as Compensation. The Company determined the fair value of its common stock based on a variety of factors including, but not limited to (i) the results of contemporaneous independent third-party valuations of the Company’s common stock and the prices, rights, preferences and privileges of the Company’s redeemable convertible preferred stock relative to those of its common stock; (ii) the lack of marketability of the Company’s common stock; (iii) actual operating and financial results; (iv) current business conditions and projections; (v) the likelihood of achieving a liquidity event, such as an IPO or sale of the Company, given prevailing market conditions, and (vi) precedent transactions involving the Company’s shares. In valuing the fair value of the Company’s common shares, the Company used the market approach, which uses prices and other relevant information generated by market transactions involving identical or comparable assets, liabilities, or a group of assets and liabilities. Within the market approach, given that the Company had recent security transactions, the subject company transaction method was used, which consists of examining prior transactions of the Company. According to the AICPA guidelines, under this method, recent securities transactions in the Company’s stock should be considered as a relevant input for computing the enterprise valuation. Additionally, the Hybrid Backsolve methodology specifically was selected to reflect the high risks in the eVTOL space, namely regulatory risk, the fact that there is currently no market for the product, and technology risk in this new sector. In conducting the valuations, the Company considered all objective and subjective factors that it believed to be relevant in the valuation conducted, including management’s best estimate of the Company’s business condition, and prospects and operating performance at the valuation dates. There are significant judgments and estimates inherent in these valuations. Leases The Company accounts for leases in accordance with ASC 842, Leases and determines if an arrangement is a lease at its inception. Right-of-use (“ROU”) assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate in determining the present value of lease payments considering the term of the lease, which is derived from information available at the lease commencement date. The incremental borrowing rate is the rate of interest the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments for a term similar to the lease term in a similar economic environment as the lease. The lease term includes renewal options when it is reasonably certain that the option will be exercised and excludes termination options. To the extent that the Company’s agreements have variable lease payments, the Company includes variable lease payments that depend on an index or a rate and excludes those that depend on facts or circumstances occurring after the commencement date, other than the passage of time. Lease expense for these leases is recognized on a straight-line basis over the lease term. The Company has elected not to recognize ROU assets and lease liabilities that arise from short-term (12 months or less) leases for any class of underlying asset. Operating leases are included in right-of-use asset, lease liability, and lease liability, net of current portion in the Company’s balance sheet. In addition, the Company has elected as an accounting policy, the practical expedient to not separate lease and non-lease components within a contract and instead treat it as a single-lease component. Income Taxes The Company accounts for its income taxes using the asset and liability method whereby deferred tax assets and liabilities are determined based on temporary differences between the basis used for financial reporting and income tax reporting purposes. Deferred income taxes are provided based on the enacted tax rates in effect at the time such temporary differences are expected to reverse. A valuation allowance is provided for deferred tax assets if it is more-likely-than-not that the Company will not realize those tax assets through future operations. The carrying value of deferred tax assets reflects an amount that is more likely than not to be realized. The Company utilizes the guidance in ASC 740-10, Income Taxes , to account for uncertain tax positions. ASC 740-10 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the positions will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more-likely-than-not of being realized and effectively settled. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately forecast actual outcomes. The Company’s policy is to recognize interest and penalties related to uncertain tax positions, if any, in the income tax provision. Net Loss Per Share Attributable to Ordinary Stockholders The Company has one class of participating security (preferred shares) issued and outstanding as of December 31, 2020 and 2019. Losses are not attributed to the participating security as the preferred stockholders are not contractually obligated to share in the Company’s losses. For all periods presented, the calculation of basic net loss per share excludes shares issued upon the early exercise of stock options where the vesting conditions have not been satisfied. Basic net loss attributable to common stockholders per share is calculated by dividing net loss attributable to ordinary stockholders by the weighted-average number of shares of common shares outstanding. Diluted net loss per share attributable to ordinary stockholders adjusts the basic net loss per share attributable to ordinary stockholders and the weighted-average number of shares of ordinary shares outstanding for the potentially dilutive impact of stock options, using the treasury stock method. Because the Company reported net losses for all periods presented, all potentially dilutive common stock equivalents are antidilutive and have been excluded from the calculation of net loss per share. The following table presents the number of antidilutive shares excluded from the calculation of diluted net loss per share: As of December 31, 2020 2019 Stock-based compensation awards — employees 11,167,089 — Stock-based compensation awards — non-employees 3,614,888 — Series Seed redeemable convertible preferred stock 18,193,515 18,193,515 Series A redeemable convertible preferred stock 46,267,422 — Total 79,242,914 18,193,515 Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM consists of its two founders. The Company has determined that it operates as a single operating segment and one reportable segment, as the CODM reviews financial information presented on a combined basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. Given the Company’s pre-revenue operating stage, it currently has no concentration exposure to products, services or customers. Comprehensive Loss There were no differences between net loss and comprehensive loss presented in the statements of operations and comprehensive loss for the years ended December 31, 2020 and 2019. Recently adopted accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which outlines a comprehensive lease accounting model that supersedes the current lease guidance. The new guidance requires lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms greater than 12 months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. In July 2018, the FASB issued ASU 2018-11, which provides the option of an additional transition method that allows entities to initially apply the new lease guidance at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company entered into its first lease in July of 2020 and applied ASU 2016-02 to this lease and subsequent leases. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (Topic 230) (“ASU 2016-15”). The standard provides guidance on eight specific cash flow issues, including debt prepayment or debt extinguishment costs. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and the amendments should be applied using the retrospective transition method to each period presented. The Company has applied ASU 2016-15 to all periods presented. In July 2017, the FASB issued ASU 2017-11, Earnings per share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), and Derivatives and Hedging (Topic 815) : Accounting for Certain Financial Instruments with Down Round Features (“ASU 2017-11”). The update addresses the complexity of accounting for certain financial instruments with “down round” features and the liability or equity classification of financial instruments with warrants or convertible features. The guidance eliminates the requirement to consider “down round” features when determining whether certain equity-linked financial instruments or embedded features are indexed to an entity’s own stock. ASU 2017-11 is effective for public business entities for annual periods beginning after December 15, 2018, and for interim periods within those years, with early adoption permitted. The Company has applied ASU 2017-11 to all periods presented, and there was no adoption date impact to its financial statements. In June 2018, the FASB issued ASU 2018-07 , Compensation — Stock Compensation (Topic 718) : Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). This amendment expands the scope of Topic 718, Compensation — Stock Compensation (which only included share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees is substantially aligned. ASU 2018-07 supersedes Subtopic 505-50, Equity — Equity-Based Payments to Non-Employees and is effective for public business entities for fiscal years beginning after December 15, 2018. Early adoption of ASU 2018-07 is permitted and should be applied on a prospective basis. The Company began applying ASU 2018-07 during 2020 upon the Company’s first grant of share-based payment awards. No share-based payments were granted prior to 2020. In August 2018, the FASB issued ASU 2018-13 , Fair Value Measurement (Topic 820) (“ASU 2018-13”), which modifies, removes, and adds certain disclosure requirements on fair value measurements based on the FASB Concepts Statement, Conceptual Framework for Financial Reporting — Chapter 8: Notes to Financial Statements. The ASU is effective for all entities for fiscal years beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted-average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively for only the most recent annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted. The Company has applied ASU 2018-13 to all periods presented. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”) . This amendment was issued to simplify the accounting for income taxes by removing certain exceptions for recognizing deferred taxes, performing intraperiod allocation, and calculating income taxes in interim periods. Further, ASU 2019-12 adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax basis goodwill and allocating taxes to members of a consolidated group. ASU 2019-12 is effective for public business entities for fiscal periods beginning after December 15, 2020. The Company has applied ASU 2019-12 to all periods presented, and there was no adoption date impact to its financial statements. Recently issued accounting pronouncements not yet adopted In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies the accounting for convertible instruments by removing certain separation models in ASC 470- 20, Debt — Debt with Conversion and Other Options , for convertible instruments. The ASU updates the guidance on certain embedded conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, such that those features are no longer required to be separated from the host contract. The convertible debt instruments will be accounted for as a single liability measured at amortized cost. Further, the ASU made amendments to the EPS guidance in Topic 260 for convertible instruments, the most significant impact of which is requiring the use of the if-converted method for diluted EPS calculation, and no longer allowing the net share settlement method. The ASU also made revisions to Topic 815-40, which provides guidance on how an entity must determine whether a contract qualifies for a scope exception from derivative accounting. The amendments to Topic 815-40 change the scope of contracts that are recognized as assets or liabilities. The ASU is effective for public business entities for interim and annual periods beginning after December 15, 2021, with early adoption permitted. Adoption of the ASU can either be on a modified retrospective or full retrospective basis. The Company is currently evaluating the impact the adoption of this standard will have on its financial statements and related disclosures. |
Property and Equipment, Net
Property and Equipment, Net | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Archer Aviation Inc | ||
Property and Equipment, Net | 4. Property and Equipment, Net Property and equipment, net, consists of the following: June 30, 2021 December 31, 2020 Furniture, fixtures, and equipment $ 1,379 $ 1,046 Computer hardware 1,281 524 Website design 504 128 Leasehold improvements 764 54 Construction in progress 189 — Property and equipment, gross 4,117 1,752 Less: Accumulated depreciation (545) (139) Property and equipment, net $ 3,572 $ 1,613 The following table presents depreciation expense included in each respective expense category in the statements of operations and comprehensive loss: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Research and development $ 91 $ 10 $ 166 $ 16 General and administrative 167 19 239 19 Total depreciation expense $ 258 $ 29 $ 405 $ 35 | 4. Property and Equipment, Net Property and equipment, net, consists of the following: As of December 31, 2020 2019 Furniture, fixtures, and equipment $ 1,046 $ — Computer hardware 524 4 Website design 128 — Leasehold improvements 54 — Total property and equipment 1,752 4 Less: Accumulated depreciation (139) — Total property and equipment, net $ 1,613 $ 4 Depreciation expense totaled $139 and $0 for the years ended December 31, 2020 and 2019, respectively. Depreciation expense was classified as $72 and $67 within R&D and general and administrative, respectively, for the year ended December 31, 2020 on the statements of operations and comprehensive loss. |
Other Current Liabilities
Other Current Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Archer Aviation Inc | |
Other Current Liabilities | 5. Other Current Liabilities Other current liabilities consist of the following: As of December 31, 2020 2019 Accrued interest $ 6 $ — Accrued bonus 155 43 Deposit liability related to cash received from the early exercise of stock options 117 — Income tax payable 1 — $ 279 $ 43 |
Related Party Transactions_2_3
Related Party Transactions | 4 Months Ended | 6 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | |
Related Party Transactions | NOTE 6. RELATED PARTY TRANSACTIONS Founder Shares On September 4, 2020, the Sponsor paid $25,000 in consideration for 14,375,000 shares of Class B common stock (the “Founder Shares”). The Founder Shares included an aggregate of up to 1,875,000 shares subject to forfeiture by the Sponsor to the extent that the underwriter’s over-allotment was not exercised in full or in part, so that the Sponsor would collectively own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Sponsor did not purchase any Public Shares in the Initial Public Offering). Upon the expiration of the over-allotment option in December 2020, 1,875,000 shares of Class B common stock were forfeited, resulting in an aggregate of 12,500,000 Founder Shares outstanding. The Sponsor has agreed not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination, or (B) the date on which the Company completes a liquidation, merger, capital stock exchange or similar transaction that results in the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Business Combination, the Founder Shares will be released from the lock-up. Promissory Note - Related Party On September 11, 2020, the Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company received proceeds of $300,000 to cover expenses related to the Initial Public Offering. The Promissory Note was non-interest bearing and was payable on the earlier of March 31, 2021 or the completion of the Initial Public Offering. The outstanding balance under the Promissory Note of $300,000 was repaid at the closing of the Initial Public Offering on October 30, 2020. Administrative Support Agreement The Company entered into an agreement, commencing on the effective date of the Initial Public Offering, to pay the Sponsor a total of $10,000 per month for office space, secretarial and administrative support. Upon completion of the Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. See Note 7, under Business Combination Marketing Agreement, for additional related party transactions. | NOTE 5. RELATED PARTY TRANSACTIONS Founder Shares On September 4, 2020, the Sponsor paid $25,000 in consideration for 14,375,000 shares of Class B common stock (the “Founder Shares”). The Founder Shares included an aggregate of up to 1,875,000 shares subject to forfeiture by the Sponsor to the extent that the underwriter’s over-allotment was not exercised in full or in part, so that the Sponsor would collectively own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Sponsor did not purchase any Public Shares in the Initial Public Offering). Upon the expiration of the over-allotment option in December 2020, 1,875,000 shares of Class B common stock were forfeited, resulting in an aggregate of 12,500,000 Founder Shares outstanding. The Sponsor has agreed not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination, or (B) the date on which the Company completes a liquidation, merger, capital stock exchange or similar transaction that results in the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 - trading day period commencing at least 150 days after the Business Combination, the Founder Shares will be released from the lock-up. Promissory Notes — Related Party On September 11, 2020, the Company issued an unsecured promissory note to the Sponsor, pursuant to which the Company received proceeds of $300,000 to cover expenses related to the Initial Public Offering. The promissory note was non-interest bearing and was payable on the earlier of March 31, 2021 or the completion of the Initial Public Offering. The outstanding balance under the promissory note of $300,000 was repaid at the closing of the Initial Public Offering on October 30, 2020. The Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”) effective June 25, 2021, pursuant to which the Company can borrow an aggregate of up to $300,000 to cover expenses related to an initial Business Combination and general working capital. The Promissory Note is non-interest bearing and payable upon the consumation of a Business Combination. As of June 30, 2021, there was $300,000 outstanding under the Promissory Note. Administrative Support Agreement The Company entered into an agreement, commencing on the effective date of the Initial Public Offering, to pay the Sponsor a total of $10,000 per month for office space, secretarial and administrative support. Upon completion of the Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. During the three and six months ended June 30, 2021, the Company incurred expenses of $30,000 and $60,000 , respectively, under the agreement. See Note 6, under Business Combination Marketing Agreement, for additional related party transactions. | |
Archer Aviation Inc | |||
Related Party Transactions | 5. Related Party Transactions The Company has been primarily funded by notes payable and the sale of preferred and common stock to third parties and the Company’s co-founders. Convertible Promissory Notes Due to Related Parties On October 11, 2019, the Company entered into a Convertible Note Purchase Agreement which permitted the Company to issue and sell two convertible promissory notes to the founders’ Trusts, Capri Growth LLC (“Capri”) and Hight Drive Growth LLC (“Hight”), in the total amount of $601 (the “October Notes”). Interest accrues from the date of the notes on the unpaid principal amount at a rate of 5% per annum. Capri and Hight will have the ability to convert the outstanding principal and (at the Company’s option) any accrued but unpaid interest under the note (the “Conversion Amount”) into shares of the Company’s preferred stock issued and sold at the close of the Company’s next preferred equity financing that yields gross proceeds of at least $1,000 in aggregate. If such financing occurs before maturity of the notes on October 11, 2021, the Company will issue a number of shares equal to the Conversion Amount divided by (i) the capped price (price per share equal to $4,000 divided by the Company Capitalization) or (ii) the discount price (price per share multiplied by the discount rate of 80% ). On November 21, 2019, the Company entered into a Convertible Note Purchase Agreement which permitted the Company to issue and sell an additional three convertible promissory notes in the total amount of $5,000 to three related party investors (the “November Notes”), two of which are the Company’s founders and one of which is a third-party investor. Interest accrues from the date of the notes on the unpaid principal amount at a rate of 10% per annum. The investors will have the ability to either (i) convert the outstanding principal and any accrued but unpaid interest under the note into shares of the Company’s preferred stock at the price per share issued and sold at the close of the Company’s next preferred equity financing that yields gross proceeds of least $25,000 in the aggregate if such financing occurs before maturity of the notes on December 31, 2022 or (ii) be repaid in cash at the initial closing of such $25,000 equity financing event. The Company has not elected the fair value option for either the October or November Notes and does not otherwise account for any convertible promissory notes at fair value under GAAP. On November 21, 2019, the Company closed its Series Seed Preferred Stock round in which the October Notes were cancelled and converted into such shares. On July 22, 2020, the Company issued its Series A Preferred Stock in which the holders of the November Notes elected to cancel their notes and convert into such shares as opposed to being repaid in cash. As the October and November Notes were cancelled and converted into preferred stock in the respective preferred equity financing rounds, there was no outstanding balance on the convertible promissory notes as of June 30, 2021. Partial Recourse Promissory Notes On November 21, 2020, the Company entered into partial recourse promissory note arrangements with each of the Company’s founders which provided each of them with a partial recourse loan as consideration for the issuance of stock, which proceeds were used for the exercise of 2,645,517 shares, per founder, of the Company’s common stock pursuant to the outstanding option agreements issued by the Company to the founders on November 3, 2020. Due to the partial recourse nature of the notes, the promissory note arrangements are considered nonrecourse loans in their entirety for accounting purposes and thus are accounted for as in-substance share options. The purchase price for the shares was $0.15 per share for a total amount of $397 paid by each founder. The notes bear interest at a rate of 0.38% per annum, compounded annually. The promissory notes may be repaid at any time and from time to time and are due upon the earlier of five years from issuance or upon a deemed liquidation event, initial draft registration statement filing, or within 90 days of the respective founder’s termination. Concurrent with the execution of the notes, the founders early exercised their common stock options at the exercise price of $0.15 per share in accordance with the terms of the early exercise agreements. These options are subject to vesting conditions and are subject to forfeiture in the form of a Company repurchase option at the original $0.15 per share price if the founders terminate employment prior to the vesting dates of the original option agreements. The Company determined that the stock options exercised by a nonrecourse note are considered unexercised until the nonrecourse note is repaid. Because the loan is deemed nonrecourse for accounting purposes, the principal and interest represent the strike price of the in-substance awards for the purposes of fair valuing the in-substance awards, and the principal and interest on the note and shares underlying the in-substance share options will not be recorded on the Company’s balance sheets or statements of operations and comprehensive loss. The Company estimated the fair value of the in-substance share options using the Black-Scholes option-pricing model and compared this fair value to the value of the original awards immediately prior to the issuance of the promissory note. The Company determined that the promissory note terms did not result in incremental fair value of these awards and no incremental compensation cost would be recognized under the promissory note arrangement. The grant date fair value of the original award is recognized as expense over the requisite service period on a straight-line basis. | 6. Related Party Transactions The Company has been primarily funded by notes payable and the sale of preferred and common stock to third parties and the Company’s Co-founders. Convertible Promissory Notes Due to Related Parties On October 11, 2019, the Company entered into a Convertible Note Purchase Agreement which permitted the Company to issue and sell two convertible promissory notes to the founders’ Trusts, Capri Growth LLC (“Capri”) and Hight Drive Growth LLC (“Hight”), in the total amount of $601 (the “October Notes”). Interest accrues from the date of the notes on the unpaid principal amount at a rate of 5% per annum. Capri and Hight will have the ability to convert the outstanding principal and (at the Company’s option) any accrued but unpaid interest under the note (the “Conversion Amount”) into shares of the Company’s preferred stock issued and sold at the close of the Company’s next preferred equity financing that yields gross proceeds of at least $1,000 in aggregate. If such financing occurs before maturity of the notes on October 11, 2021, the Company will issue a number of shares equal to the Conversion Amount divided by (i) the capped price (price per share equal to $4,000 divided by the Company Capitalization) or (ii) the discount price (price per share multiplied by the discount rate of 80% ). On November 21, 2019, the Company entered into a Convertible Note Purchase Agreement which permitted the Company to issue and sell an additional three convertible promissory notes in the total amount of $5,000 to three related party investors (the “November Notes”), two of which are the Company’s founders and one of which is a third-party investor. Interest accrues from the date of the notes on the unpaid principal amount at a rate of 10% per annum. The investors will have the ability to either (i) convert the outstanding principal and any accrued but unpaid interest under the note into shares of the Company’s preferred stock at the price per share issued and sold at the close of the Company’s next preferred equity financing that yields gross proceeds of least $25,000 in the aggregate if such financing occurs before maturity of the notes on December 31, 2022 or (ii) be repaid in cash at the initial closing of such $25,000 equity financing event. The Company has not elected the fair value option for either the October or November Notes and does not otherwise account for any convertible promissory notes at fair value under GAAP. On November 21, 2019, the Company closed their Series Seed Preferred Stock round in which the October Notes were cancelled and converted into such shares. On July 22, 2020, the Company issued their Series A Preferred Stock in which the holders of the November Notes elected to cancel their notes and convert into such shares as opposed to being repaid in cash. The outstanding principal balance on the convertible promissory notes was $0 and $4,995 as of December 31, 2020 and 2019, respectively, recorded in convertible promissory notes due to related parties on the accompanying balance sheets. Accrued interest was $0 and $47 as of December 31, 2020 and 2019, respectively, recorded in other long-term liabilities on the accompanying balance sheets. Partial Recourse Promissory Notes On November 21, 2020, the Company entered into partial recourse promissory note arrangements with each of the Company’s founders which provided each of them with a partial recourse loan as consideration for the issuance of stock, which proceeds were used for the exercise of 2,645,517 shares, per founder, of the Company’s common stock pursuant to the outstanding option agreements issued by the Company to the founders on November 3, 2020. Due to the partial recourse nature of the notes, the promissory note arrangements are considered nonrecourse loans in their entirety for accounting purposes and thus are accounted for as in-substance share options. The purchase price for the shares was $0.15 per share for a total amount of $397 paid by each founder. The notes bear interest at a fixed rate of 0.38% per annum, compounded annually. The promissory notes may be repaid at any time and from time to time and are due upon the earlier of five years from issuance or upon a deemed liquidation event, initial draft registration statement filing, or within ninety days of the respective founder’s termination. Concurrent with the execution of the notes, the founders early exercised their common stock options at the exercise price of $0.15 per share in accordance with the terms of the early exercise agreements. These options are subject to vesting conditions and are subject to forfeiture in the form of a Company repurchase option at the original $0.15 per share price if the founders terminate employment prior to the vesting dates of the original option agreements. The Company determined that the stock options exercised by a nonrecourse note are considered unexercised until the nonrecourse note is repaid. Because the loan is deemed nonrecourse, for accounting purposes the principal and interest represent the strike price of the in-substance awards for the purposes of fair valuing the in-substance awards, and the principal and interest on the note and shares underlying the in- substance share options will not be recorded on the Company’s balance sheets or statements of operations and comprehensive loss. The Company estimated the fair value of the in-substance share options using the Black-Scholes option- pricing model and compared this fair value to the value of the original awards immediately prior to the issuance of the promissory note. The Company determined that the promissory note terms did not result in incremental fair value of these awards and no incremental compensation cost would be recognized under the promissory note arrangement. The grant date fair value of the original award is recognized as expense over the requisite service period on a straight-line basis. |
Paycheck Protection Program Loa
Paycheck Protection Program Loan | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Archer Aviation Inc | ||
Paycheck Protection Program Loan | 6. Paycheck Protection Program Loan On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act also appropriated funds for the U.S. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans that are forgivable in certain situations to promote continued employment, as well as Economic Injury Disaster Loans to provide liquidity to small businesses harmed by COVID-19. On April 9, 2020, the Company entered into a PPP Loan with JPMorgan Chase Bank, N.A. under the Paycheck Protection Program of the CARES Act and received total proceeds of $905 , with interest accruing at a rate of 0.98% per annum. The application for these funds required the Company to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company and that the Company will use the loan funds to retain workers, maintain payroll, or make mortgage, lease, and utility payments. In accordance with the requirements of the CARES Act, the Company used the proceeds for payroll costs. In June 2021, the Company received notification from the SBA that the loan and accrued interest, totaling $912 , was forgiven in full. Accordingly, the Company recorded a gain on forgiveness of PPP loan and interest in the condensed statement of operations and comprehensive loss. | 7. Paycheck Protection Program Loan On March 27, 2020, President Trump signed into law the CARES Act (defined above). The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act also appropriated funds for the U.S. Small Business Administration (“SBA”) Paycheck Protection Program loans that are forgivable in certain situations to promote continued employment, as well as Economic Injury Disaster Loans to provide liquidity to small businesses harmed by COVID-19. On April 9, 2020, the Company entered into a PPP Loan with JPMorgan Chase Bank, N.A., under the Paycheck Protection Program of the CARES Act. The application for these funds required the Company to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company and that the Company will use the loan funds to retain workers, maintain payroll, or make mortgage, lease, and utility payments. Based in part on the Company’s assessment of the uncertainty associated with its future operating performance created by the COVID-19 pandemic and related governmental responses, and the going concern uncertainty reflected in the Company’s financial statements, the Company believed in good faith that it met the eligibility requirements for the PPP Loan. If, despite the good-faith belief that given the Company’s circumstances all eligibility requirements for the PPP Loan were satisfied, it is later determined that the Company had violated any applicable laws or regulations or it is otherwise determined the Company was ineligible to receive the PPP Loan, it may be required to repay the PPP Loan in its entirety and/or be subject to additional penalties and potential liabilities. The Company received total proceeds of $905 from the PPP Loan, which is due on April 9, 2022. In accordance with the requirements of the CARES Act, the Company will use the proceeds for payroll costs. Interest accrues on the PPP Loan at the rate of 0.98% per annum. Neither principal nor interest shall be due or payable during the six-month deferral period beginning on April 9, 2020. On June 11, 2020, the SBA extended the deferral period to ten months . Commencing one month after the expiration of the deferral period and continuing on the same day of each month thereafter until the maturity date, the Company will pay to JPMorgan Chase Bank, N.A. monthly payments of principal and interest, each in such equal amount required to fully amortize the principal amount outstanding on the loan. The Company accounts for the PPP Loan as debt and will accrue interest over the term of the loan. As of December 31, 2020, the PPP Loan had an outstanding balance of $645 and $260 in notes payable and notes payable, net of current portion, respectively, in the accompanying balance sheets. The future principal payments under the PPP loan agreement as of December 31, 2020 were as follows: Years ending December 31, 2021 $ 645 2022 260 $ 905 The Company may apply to JPMorgan Chase Bank, N.A., for loan forgiveness in an amount equal to the sum of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities during the eight weeks following disbursement on the PPP Loan. Not more than 25% of the forgiven amount may be for non-payroll costs. Forgiveness of the loan is only available for principal. Interest payable under the loan will not be forgiven but the SBA may pay the loan interest on forgiven amounts. On June 5, 2020, the Paycheck Protection Program Flexibility Act (the “PPP Flexibility Act”) was signed into law, extending the PPP Note forgiveness period from 8 weeks to 24 weeks after loan origination, reducing the required amount of payroll expenditures from 75% to 60 %, removing the prior ban on borrowers taking advantage of payroll tax deferral after loan forgiveness and allowing for the amendment of the maturity date on existing loans from two years to five years . The Company did not amend the maturity date but intends to apply for loan forgiveness under the terms of the PPP Loan and expects the loan to be recorded as income when legal forgiveness is obtained. While the Company believes that its use of the loan proceeds satisfied the conditions for forgiveness of the loan, the Company cannot guarantee that it has not or will not take actions that could cause the Company to be ineligible for forgiveness of the loan, in whole or in part. |
Commitments and Contingencies
Commitments and Contingencies | 4 Months Ended | 6 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies | NOTE 7. COMMITMENTS Registration Rights The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of the Working Capital Loans (as defined below) (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of the Initial Public Offering, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to Class A common stock). The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Business Combination Marketing Agreement The Company engaged the representative of the underwriters and Moelis & Company LLC, an affiliate of the Sponsor, in connection with a Business Combination to assist the Company in holding meetings with its stockholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with a Business Combination, assist the Company in obtaining stockholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination. The Company will pay the representative of the underwriters and Moelis & Company LLC a cash fee for such services upon the consummation of the Business Combination of 2.25% ($11,250,000) and 1.25% ($6,250,000), respectively, or 3.5% ($17,500,000), in the aggregate, of the gross proceeds of the offering including the gross proceeds from the full or partial exercise of the underwriters’ over-allotment option. A portion of such fee may be re-allocated or paid to members that assist the Company in consummating its Business Combination. Related Party Loans In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s directors and officers may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. 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, the Company 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. | NOTE 6. COMMITMENTS Registration Rights The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of the Working Capital Loans (as defined below) (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) are entitled to registration rights pursuant to a registration rights agreement signed on the effective date of the Initial Public Offering, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to Class A common stock). The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Business Combination Marketing Agreement The Company engaged the representative of the underwriters and Moelis & Company LLC, an affiliate of the Sponsor, in connection with a Business Combination to assist the Company in holding meetings with its stockholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with a Business Combination, assist the Company in obtaining stockholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination. The Company will pay the representative of the underwriters and Moelis & Company LLC a fee for such services upon the consummation of the Business Combination of 2.25% ( $11,250,000 ) and 1.25 % ( $6,250,000 ), respectively, or 3.5% ( $17,500,000 ), in the aggregate, of the gross proceeds of the Initial Public Offering including the gross proceeds from the full or partial exercise of the underwriters’ over-allotment option. A portion of such fee may be re-allocated or paid to members of FINRA that assist the Company in consummating its Business Combination. Related Party Loans In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s directors and officers may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. 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, the Company 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, without interest, 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. No Working Capital Loans were outstanding as of and during the three and six months ended June 30, 2021. | |
Archer Aviation Inc | |||
Commitments and Contingencies | 7. Commitments and Contingencies Operating Leases The Company leases office and storage facilities under various operating lease agreements with lease periods expiring between 2022 and 2023 and generally contain periodic rent increases and various renewal and termination options. The Company’s lease costs were as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Operating lease cost $ 388 $ — $ 731 $ — Short-term lease cost — — 25 — Total lease cost $ 388 $ — $ 756 $ — The Company’s weighted-average remaining lease term and discount rate were as follows: Six Months Ended June 30, 2021 2020 Weighted-average remaining lease term (in months) 23.42 — Weighted-average discount rate 11.29 % — The minimum aggregate future obligations under noncancelable operating leases as of June 30, 2021 were as follows: Remaining 2021 $ 774 2022 1,546 2023 688 Total future lease payments 3,008 Less: imputed interest (294) Present value of future lease payments $ 2,714 Supplemental cash information and non-cash activities related to right-of-use assets and lease liabilities were as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Operating cash outflows from operating leases $ 379 $ — $ 706 $ — Operating lease assets obtained in exchange for new lease liabilities 165 — 984 — Letter of Credit In conjunction with the Company’s operating lease for its headquarters, the Company entered into a standby letter of credit in favor of the Company’s lessor, in lieu of paying cash to the lessor to satisfy the security deposit requirements of the leased property. The standby letter of credit was issued on September 15, 2020 for an amount of $257 and expires on September 30, 2021. The letter of credit automatically renews for additional 12 - month periods at each forfeiture date until September 1, 2023, unless cancelled by the Company. Legal Proceedings During the ordinary course of the Company’s business, it may be subject to legal proceedings, various claims, and litigation. Such proceedings can be costly, time consuming, and unpredictable, and therefore, no assurance can be given that the final outcome of such proceedings will not materially impact the Company’s financial condition or results of operations. On April 6, 2021, Wisk Aero LLC (“Wisk”) brought a lawsuit against Archer in the United States District Court in the Northern District of California alleging misappropriation of trade secrets and patent infringement. Archer has placed an employee on paid administrative leave in connection with a government investigation and a search warrant issued to the employee, which Archer believes are focused on conduct prior to the employee joining Archer. Archer and three other Archer employees with whom the individual worked have received subpoenas relating to this investigation. Archer is cooperating with the investigation of the employee. On May 19, 2021, Wisk filed a motion for preliminary injunction and expedited discovery. On June 1, 2021, Archer filed a motion to dismiss the trade secret claims and filed counterclaims. On June 15, 2021, Wisk amended its complaint, and the following day Archer filed a motion to dismiss the amended complaint. On June 23, 2021, Archer filed an opposition to the motion for preliminary injunction. On July 13, 2021, Archer filed amended counterclaims. On July 22, 2021, the Court denied Wisk’s motion for preliminary injunction. On July 27, 2021, Wisk filed a motion to strike and dismiss certain of Archer’s amended counterclaims. On August 10, 2021, Archer filed a motion to dismiss the motion to strike and dismiss and issued a press release. On August 20, 2021, Wisk filed a notice of appeal of the Court’s denial of the motion for preliminary injunction. On August 24, 2021, the Court denied Archer’s motion to dismiss the trade secret claims. On September 14, 2021, the Court denied Wisk’s motion to strike and dismiss certain of Archer’s amended counterclaims. Archer cannot predict the timing or outcome of the litigation or federal government investigation. On September 30, 2021, Wisk dismissed its appeal of the District Court’s denial of the motion for preliminary injunction. As of October 6, 2021, the investigation is ongoing. Archer cannot predict the timing or probability of the outcome or range of reasonably possible loss, if any, but a negative result could have a material adverse effect on Archer’s financial position, liquidity, operations, and cash flows. | 8. Commitments and Contingencies Operating Leases The Company’s lease arrangements consist of one corporate facility lease and one short-term storage facility lease. The corporate facility lease expires in 2023 and does not contain an option to extend the lease. The Company’s short-term storage facility lease has a term of six months and expires in January of 2021. As the Company does not intend to extend its short-term lease over one year from the commencement date, the Company has elected the Short-Term Lease exemption and therefore, will not recognize right-of-use assets and lease liabilities that arise from short-term leases for any class of underlying asset. The Company’s lease costs, weighted-average remaining lease term and weighted-average discount rate for each period ended December 31, 2020 and 2019, is as follows: Year Ended December 31, 2020 2019 Operating lease cost $ 52 $ — Short-term lease cost 44 — Total lease cost $ 96 $ — Weighted-average remaining lease term (in months) 30 — Weighted-average discount rate 12.17 % — The minimum aggregate future obligations under noncancelable operating leases as of December 31, 2020 were as follows: Years ending December 31, 2021 $ 1,043 2022 1,074 2023 507 Future minimum lease payments 2,624 Less: Amount representing interest (323) Present value of future lease payments $ 2,301 Supplemental cash information and non-cash activities related to right-of-use assets and lease liabilities are as follows: 2020 2019 Operating cash outflows from operating leases $ 86 $ — Operating lease assets obtained in exchange for new lease liabilities 2,300 — Letter of Credit In conjunction with the Company’s operating lease, the Company entered into a standby letter of credit in favor of the Company’s lessor, in lieu of paying cash to the lessor to satisfy the security deposit requirements of the leased property. The standby letter of credit was issued on September 15, 2020 for an amount of $257 and expires on September 30, 2021. The letter of credit automatically renews for additional 12 - month periods at each forfeiture date until September 1, 2023 unless cancelled by the Company. Litigation During the ordinary course of the Company’s business, it may be subject to legal proceedings, various claims, and litigation in the ordinary course of business. As of December 31, 2020 and 2019, the Company did not have any matters which would require it to accrue any liability regarding ongoing legal proceedings. |
Preferred and Common Stock
Preferred and Common Stock | 4 Months Ended | 6 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | |
Preferred and Common Stock | NOTE 9. STOCKHOLDERS’ EQUITY Preferred stock outstanding Class A Common Stock issued Class B Common Stock outstanding Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of shareholders, except as required by law. The shares of Class B common stock will automatically convert into shares of Class A common stock upon the consummation of a Business Combination on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with a Business Combination, the number of shares of Class A common stock issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of shares of Class A common stock outstanding after such conversion, including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of a Business Combination, excluding any shares of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in a Business Combination and any Private Placement Warrants issued to the Sponsor, officers or directors upon conversion of Working Capital Loans, provided that such conversion of Founder Shares will never occur on a less than one-for-one basis. | NOTE 8. STOCKHOLDERS’ EQUITY Preferred stock — The Company is authorized to issue 1,000,000 shares of $0.0001 par value preferred stock. At June 30, 2021 and December 31, 2020, there were no shares of preferred stock issued or outstanding . Class A common stock — The Company is authorized to issue up to 200,000,000 shares of Class A, $0.0001 par value common stock. Holders of the Company's common stock are entitled to one vote for each share. At June 30, 2021 and December 31, 2020, there were 50,000,000 shares issued and no shares and 5,114,713 shares of Class A common stock outstanding, respectively, excluding 50,000,000 and 44,885,287 shares of Class A common stock subject to possible redemption at June 30, 2021 and December 31, 2020, respectively. The Company determined the Class A common stock subject to redemption to be equal to the redemption value of approximately $10 per share of Class A common stock while also taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001 . Upon considering the impact of the PIPE Financing and associated Subscription Agreements that will close substantially concurrent with an initial Business Combination (see Note 1), which would result in an additional $600,000,000 in net tangible assets, it was concluded during the quarter ended March 31, 2021, that the redemption value would include all shares of Class A common stock resulting in the common stock subject to possible redemption being equal to $500,143,016 . This resulted in a measurement adjustment to the initial carrying value of the Class A common stock subject to redemption with the offset recorded to additional paid-in capital and accumulated deficit. Class B common stock — The Company is authorized to issue up to 20,000,000 shares of Class B, $0.0001 par value common stock. Holders of the Company’s common stock are entitled to one vote for each share. At June 30, 2021 and December 31, 2020, there were 12,500,000 shares of Class B common stock issued and outstanding . Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of shareholders, except as required by law. The shares of Class B common stock will automatically convert into shares of Class A common stock upon the consummation of a Business Combination on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with a Business Combination, the number of shares of Class A common stock issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of shares of Class A common stock outstanding after such conversion, including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of a Business Combination, excluding any shares of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in a Business Combination and any Private Placement Warrants issued to the Sponsor, officers or directors upon conversion of Working Capital Loans, provided that such conversion of Founder Shares will never occur on a less than one-for-one basis. | |
Archer Aviation Inc | |||
Preferred and Common Stock | 8. Preferred and Common Stock Preferred Stock There were 18,193,515 shares of Series Seed redeemable convertible preferred stock (“Series Seed Preferred Stock”) authorized, issued and outstanding as of June 30, 2021 and December 31, 2020. There were 46,732,728 shares of Series A redeemable convertible preferred stock (“Series A Preferred Stock”) authorized and 46,267,422 shares issued and outstanding as of June 30, 2021 and December 31, 2020. Common Stock There were 155,000,000 shares of common stock authorized and 52,229,481 shares issued and outstanding as of June 30, 2021 and 143,677,090 shares of common stock authorized and 51,321,752 shares issued and outstanding as of December 31, 2020. Preferred and Common Stock Rights The rights, privileges, and preferences of the Company’s preferred and common stock as set forth in the Company’s Amended and Restated Certificate of Incorporation, dated July 16, 2020, are as follows: Voting The holders of preferred and common stock vote together and not as separate classes. Each holder of common stock is entitled to one vote for each share held by such holder. Each holder of preferred stock is entitled to the number of votes equal to the number of shares of common stock into which the shares of preferred stock are convertible. Except as otherwise required by law, holders of common stock are not entitled to vote on any amendment to the Amended and Restated Certificate of Incorporation that relates solely to the terms of one or more outstanding series of preferred stock. Holders of common stock, exclusively and as a separate class, are entitled to elect three directors of the Company. Holders of Series A Preferred Stock, exclusively and as a separate class, are entitled to elect one director of the Company. Holders of Series Seed Preferred Stock are not entitled to vote for a director. There is no cumulative voting. Dividends The Company may not declare, pay, or set aside any dividends unless the holders of preferred stock have first or simultaneously received a dividend. If declared, the dividend rate for the convertible preferred stock is defined as equal amount per share on an as-converted basis. Any dividends declared are noncumulative, and no dividends on preferred or common stock have been declared by the Board of Directors through June 30, 2021. Preemptive Rights If the Company proposes to offer any equity securities, securities convertible to equity securities, or options or warrants, subject to customary exceptions, any investor who holds at least 4,150,755 shares of registrable securities has the right to purchase their pro rata portion of such securities. Redemption The preferred stock is not redeemable at the option of the holder except in certain circumstances. Mandatory redemption occurs upon a redemption event, which is upon wind-up, dissolution, liquidation, insolvency, declaration of bankruptcy, or change in control. The contingent redemption upon a deemed liquidation event results in mezzanine equity classification (outside of permanent equity) on the Company’s balance sheets. In the event of a deemed liquidation event, if available proceeds are not sufficient to redeem all outstanding shares of preferred stock, the Company may redeem a pro rata portion of each holder’s shares of preferred stock to the extent of such available proceeds. Conversion Each share of Series Seed Preferred Stock and Series A Preferred Stock is convertible into one share of common stock as determined by dividing the applicable original issue price by the applicable conversion price in effect at the time of conversion (subject to appropriate adjustment in the event of a stock dividend, stock split, combination, or other similar recapitalization). The applicable original issue price and the applicable conversion price of each share of Series Seed Preferred Stock is $0.3300 . The applicable original issue price and the applicable conversion price of each share of Series A Preferred Stock is $1.2046 . The Company will reserve the number of authorized shares of common stock sufficient to effect the conversion of all outstanding preferred stock, and if necessary, will increase its authorized but unissued shares of common stock to such number of shares sufficient to effect the conversion. All outstanding shares of preferred stock will be automatically converted into shares of common stock upon either a qualified initial public offering or in event of a mandatory conversion. The Series Seed Preferred Stock and Series A Preferred Stock will convert into common stock upon consummation of the Business Combination Agreement with Atlas and Merger Sub. Refer to Note 1 for more detail. Liquidation In the event of any voluntary or involuntary liquidation or deemed liquidation event such as dissolution or winding up, the holders of shares of preferred stock are entitled to receive distribution in an amount per share equal to the greater of (i) the applicable original issue price, plus any declared but unpaid dividend, or (ii) the amount per share had all shares of preferred stock been converted prior to such liquidation event, on a pari passu basis prior and in preference to any distribution to the holders of common stock. If upon any such liquidation event, the assets of the Company available for distribution is insufficient to pay the holders of shares of preferred stock, the amounts will be distributed among the holders of preferred stock pro rata, in proportion to the full amounts they would otherwise be entitled to receive. If the holders of preferred stock are paid in full, the remaining assets of the Company will be distributed pro rata to the holders of common stock based on the number of shares held by each holder. | 9. Preferred and Common Stock Stock Split On October 11, 2019, the Board of Directors effected a five -for-one stock split of the Company’s common stock. Accordingly, all share and share amounts for the periods presented in the accompanying financial statements and the notes thereto have been adjusted retroactively, where applicable, to reflect this stock split. Preferred Stock There were 18,193,515 shares of Series Seed redeemable convertible preferred stock (“Series Seed Preferred Stock”) authorized, issued and outstanding as of December 31, 2020 and 2019. There were 46,732,728 shares of Series A redeemable convertible preferred stock (“Series A Preferred Stock”) authorized and 46,267,422 shares issued and outstanding as of December 31, 2020. There were no shares of Series A Preferred Stock authorized, issued and outstanding as of December 31, 2019. Common Stock There were 143,677,090 shares of common stock authorized and 51,321,752 shares issued and outstanding as of December 31, 2020. There were 77,285,983 shares of common stock authorized and 50,000,000 shares issued and outstanding as of December 31, 2019. Preferred and Common Stock Rights The rights, privileges, and preferences of the Company’s preferred and common stock as set forth in the Company’s Amended and Restated Certificate of Incorporation, dated July 16, 2020, are as follows: Voting The holders of preferred and common stock vote together and not as separate classes. Each holder of common stock is entitled to one vote for each share held by such holder. Each holder of preferred stock is entitled to the number of votes equal to the number of shares of common stock into which the shares of preferred stock are convertible. Except as otherwise required by law, holders of common stock are not entitled to vote on any amendment to the Amended and Restated Certificate of Incorporation that relates solely to the terms of one or more outstanding series of preferred stock. Holders of common stock, exclusively and as a separate class, are entitled to elect three directors of the Company. Holders of Series A Preferred Stock, exclusively and as a separate class, are entitled to elect one director of the Company. Holders of Series Seed Preferred Stock are not entitled to vote for a director. There is no cumulative voting. Dividends The Company may not declare, pay or set aside any dividends unless the holders of preferred stock have first or simultaneously received a dividend. If declared, the dividend rate for the convertible preferred stock is defined as equal amount per share on an as-converted basis. Any dividends declared are noncumulative, and no dividends on preferred or common stock have been declared by the Board of Directors through December 31, 2020. Preemptive Rights If the Company proposes to offer any equity securities, securities convertible to equity securities, or options or warrants, subject to customary exceptions, any investor who holds at least 4,150,755 shares of registrable securities has the right to purchase their pro rata portion of such securities. Redemption The preferred stock is not redeemable at the option of the holder except in certain circumstances. Mandatory redemption occurs upon a redemption event, which is upon wind-up, dissolution, liquidation, insolvency, declaration of bankruptcy, or change in control. The contingent redemption upon a deemed liquidation event results in mezzanine equity classification (outside of permanent equity) on the Company’s balance sheets. In the event of a deemed liquidation event, if available proceeds are not sufficient to redeem all outstanding shares of preferred stock, the Company may redeem a pro rata portion of each holder’s shares of preferred stock to the extent of such available proceeds. Conversion Each share of Series Seed Preferred Stock and Series A Preferred Stock is convertible into one share of common stock as determined by dividing the applicable original issue price by the applicable conversion price in effect at the time of conversion (subject to appropriate adjustment in the event of a stock dividend, stock split, combination, or other similar recapitalization). The applicable original issue price and the applicable conversion price of each share of Series Seed Preferred Stock is $0.3300 . The applicable original issue price and the applicable conversion price of each share of Series A Preferred Stock is $1.2046 . The Company will reserve the number of authorized shares of common stock sufficient to effect the conversion of all outstanding preferred stock, and if necessary, will increase its authorized but unissued shares of common stock to such number of shares sufficient to effect the conversion. All outstanding shares of preferred stock will be automatically converted into shares of common stock upon either a qualified initial public offering or in event of a mandatory conversion. The Series Seed Preferred Stock and Series A Preferred Stock will convert into common stock upon consummation of the Merger Agreement with Atlas and Merger Sub. Refer to Note 13 for more detail. Liquidation In the event of any voluntary or involuntary liquidation or deemed liquidation event such as dissolution or winding up, the holders of shares of preferred stock are entitled to receive distribution in an amount per share equal to the greater of (i) the applicable original issue price, plus any declared but unpaid dividend, or (ii) the amount per share had all shares of preferred stock been converted prior to such liquidation event, on a pari passu basis prior and in preference to any distribution to the holders of common stock. If upon any such liquidation event, the assets of the Company available for distribution is insufficient to pay the holders of shares of preferred stock, the amounts will be distributed among the holders of preferred stock pro rata, in proportion to the full amounts they would otherwise be entitled to receive. If the holders of preferred stock are paid in full, the remaining assets of the Company will be distributed pro rata to the holders of common stock based on the number of shares held by each holder. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Archer Aviation Inc | ||
Stock-Based Compensation | 9. Stock-Based Compensation 2019 Stock Plan In January 2021, the Company granted 1,269,289 incentive and nonstatutory stock options. As of June 30, 2021, the Company had 543,578 shares of common stock available for issuance under the 2019 Stock Plan. A summary of our employee stock option activity is as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Life (Years) Value Outstanding as of January 1, 2021 11,167,089 $ 0.11 9.61 $ 136,988 Granted 1,203,981 $ 0.15 Exercised (680,396) $ 0.04 $ 9,339 Outstanding as of June 30, 2021 11,690,674 $ 0.12 9.18 $ 177,315 Exercisable as of June 30, 2021 2,335,560 $ 0.14 9.28 $ 35,385 Vested and expected to vest as of June 30, 2021 11,690,674 $ 0.12 9.18 $ 177,315 A summary of our non-employee stock option activity is as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Life (Years) Value Outstanding as of January 1, 2021 1,387,586 $ 0.15 9.84 $ 16,973 Granted 65,308 $ 0.15 Exercised (227,333) $ 0.15 $ 3,129 Outstanding as of June 30, 2021 1,225,561 $ 0.15 9.35 $ 18,885 Exercisable as of June 30, 2021 33,900 $ 0.15 9.41 $ 513 Vested and expected to vest as of June 30, 2021 1,225,561 $ 0.15 9.35 $ 18,885 A summary of our restricted stock activity is as follows: Weighted Average Number of Grant Shares Price Outstanding as of January 1, 2021 567,000 $ 0.04 Vested (567,000) $ 0.04 Outstanding as of June 30, 2021 — $ — Determination of Fair Value The assumptions used in the Black-Scholes option pricing model are provided in the following table. June 30, 2021 December 31, 2020 Risk-free interest rate: Employee stock options 0.62 % 0.52 – 1.52 % Non-employee stock options 1.08 % 0.79 % Expected term (in years): Employee stock options 6.32 6.02 – 6.32 Non-employee stock options 10.00 10.00 Expected volatility: Employee stock options 87.94 % 60.00 – 70.00 % Non-employee stock options 88.03 % 60.00 % Dividend yield: Employee stock options 0.00 % 0.00 % Non-employee stock options 0.00 % 0.00 % Grant date fair value per share: Employee stock options $ 13.65 $ 0.02 - $0.08 Non-employee stock options $ 13.68 $ 0.10 The Company records stock-based compensation expense for stock-based compensation awards based on the fair value on the date of grant. The stock-based compensation expense is recognized ratably over the course of the requisite service period. The Company recognized stock-based compensation expense of $861 and $123 for employee and non-employees, respectively, for stock options and $9 for non-employees for restricted stock awards for the three months ended June 30, 2021. The Company recognized stock-based compensation expense of $1,658 and $240 for employees and non-employees, respectively, for stock options and $20 for non-employees for restricted stock awards for the six months ended June 30, 2021. For the three and six months ended June 30, 2020, the Company recognized stock-based compensation expense of $5 and $8 , respectively, related to stock options for employees. For the three months ended June 30, 2020, the Company recognized stock-based compensation expense of $3 related to restricted stock awards for non-employees. As of June 30, 2021, the total remaining stock-based compensation expense for unvested stock options was $15,342 and $788 for employees and non-employees, respectively, which are expected to be recognized over a weighted-average period of 1.7 and 1.1 years, for employee and non-employees, respectively. The Company has elected to account for forfeitures as they occur and will record stock-based compensation expense assuming all stockholders will complete the requisite service period. If an employee forfeits an award because they fail to complete the requisite service period, the Company will reverse stock-based compensation expense previously recognized in the period the award is forfeited. The following table presents stock-based compensation expense included in each respective expense category in the statements of operations and comprehensive loss: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Research and development $ 735 $ 5 $ 1,416 $ 8 General and administrative 258 3 502 3 Total stock-based compensation expense $ 993 $ 8 $ 1,918 $ 11 Collaboration and Warrant Agreements United Airlines On January 29, 2021, the Company entered into a purchase agreement and warrant agreement with United Airlines (“United”). Under the terms of the purchase agreement, United has a conditional purchase order for up to 200 Archer aircraft, with an option to purchase an additional 100 aircraft. The purchase agreement between Archer and United is subject to conditions that include, but are not limited to, the certification of Archer’s aircraft by the Federal Aviation Administration (“FAA”) and further negotiation and reaching mutual agreement on certain material terms. Archer issued 14,645,614 warrants to United to purchase shares of the Company’s common stock. Each warrant provides United with the right to purchase one share of Archer common stock at an exercise price of $0.01 per share. The warrants will vest in accordance with four milestones including the issuance of the warrant in conjunction with the execution of the purchase and collaboration arrangements, completion of a SPAC transaction by Archer, the certification of the aircraft by the FAA, and the sale of aircraft to United. On January 29, 2021, a valuation of the Company’s common stock was performed, valuing the Company’s common stock at $13.35 per share. The value of the common stock was determined using a hybrid approach of the OPM and PWERM, with the PWERM weighted at 80% primarily based on management’s expectation of the planned merger as described in Note 1 and the OPM weighted at 20% due to uncertainties in the timing of other possible scenarios. The Company used the OPM to allocate value in a stay private scenario. Given the $0.01 exercise price, each warrant also had a fair value of $13.35 at the grant date. The Company determined that as a result of signing the purchase agreement, United is a customer with the intention of obtaining the output of the Company’s ordinary activities (design and production of aircraft). United has not contracted to share in the risks and benefits of development of the aircraft, and United is not involved in the development of the aircraft. As a result, the Company accounts for the collaboration and purchase agreement under ASC 606, Revenue from Contracts with Customers . The Company identified the sale of each aircraft ordered by United as a separate performance obligation in the contract. As the performance obligations have not been satisfied, the Company has not recognized any revenue as of June 30, 2021. With respect to the four milestones outlined above, the Company accounts for them as consideration payable to a customer under ASC 606 related to the future purchase of aircraft by United. Pursuant to ASC 718, the Company measured the grant date fair value of the warrants to be recognized upon the achievement of each of the four milestones and the vesting of the related warrants. The Company determined that the warrants will be classified as equity awards based on the criteria of ASC 480 and ASC 718. Pursuant to ASC 606, consideration payable to the customer is generally accounted for as a reduction to revenue and recorded at the later of when (i) the entity recognizes revenue for the transfer of related goods, or (ii) the entity pays the consideration. Due to the nature of the four milestones, and the Company’s unique circumstances upon the actual or anticipated vesting dates as described below, the recognition pattern and cost presentation of each will differ. For the first milestone, issuance of the warrant in conjunction with the execution of the purchase and collaboration arrangements, the Company has recorded the grant date fair value of the respective warrant tranche at the vesting date upon satisfaction of the milestone. The Company does not believe that the consideration payable for the first milestone was provided in exchange for a distinct good or service. Rather, the consideration was to induce United to commit to a contingent purchase agreement for an aircraft from the Company. The related costs for this milestone were recorded in other warrant expense in the statements of operations and comprehensive loss due to the absence of historical or probable future revenue. For the second milestone, the completion of the SPAC transaction by Archer, as it is not considered probable that certain events will occur, the Company will record the grant date fair value of the respective warrant tranche at the vesting date upon satisfaction of the milestone. The related costs for this milestone will be recorded in other warrant expense in the statements of operations and comprehensive loss due to the absence of historical or probable future revenue. For the third milestone, the certification of the aircraft by the FAA, the Company will assess whether it is probable that the award will vest at the end of every reporting period. If and when the award is deemed probable of vesting, the Company will begin capitalizing the grant date fair value of the associated warrant as an asset through the vesting date and subsequently amortize the asset as a reduction to revenue as it sells the new aircraft to United. For the fourth milestone, the sale of aircraft to United, the Company will record the cost associated with the vesting of each portion of warrants within this milestone as a reduction of the transaction price as revenue is recognized for each sale of the aircraft. As of June 30, 2021, the first milestone of execution of the collaboration agreement had been achieved, and the Company recorded the associated expense of $78,208 related to 5,858,246 warrants that vested. FCA US LLC On November 6, 2020, the Company entered into a collaboration agreement with FCA US LLC (“FCA”), in which both parties agreed to work together to complete a series of fixed duration collaboration projects to develop a prototype aircraft for Archer. In exchange for services to be provided by FCA under the collaboration agreement, the Company issued a warrant to FCA on November 6, 2020, in which FCA will have the right to purchase up to 1,660,302 shares of Archer’s common stock at an exercise price of $0.01 per share (subject to appropriate adjustment in the event of a stock dividend, stock split, combination, or other similar recapitalization). In September 2020, a valuation of the Company’s common and preferred stock was performed, valuing the Company’s common stock and Series A Preferred Stock at $0.15 and $1.20 per share, respectively. The warrant expires on November 6, 2025. Shares under the warrant are vested and earned based on the completion of specific aircraft development milestones identified under the collaboration agreement which are expected to be achieved through December 2022. As the Company is currently in pre-revenue stage and is not generating any revenue from the collaboration agreement, all costs incurred with third parties are recorded based on the nature of the cost incurred. The Company accounts for the warrant in accordance with the provisions of ASC 718. The Company will assess whether it is probable that the award will vest for each of the seven milestones at the end of every reporting period. If and when the award is deemed probable of vesting, the Company will recognize compensation expense for the portion of the grant determined probable of vesting on a straight-line basis over the duration of each milestone. If services had been provided by FCA prior to management determining the milestone is probable of being achieved, a cumulative catch-up adjustment will be recorded for services performed in prior periods. Costs incurred under the collaboration agreement and warrant are associated with the research, design, and production and testing for the aircraft prototype and are recorded in R&D expense in the statements of operations and comprehensive loss. As services began in January 2021, no expense was recognized during the year ended December 31, 2020. During the six months ended June 30, 2021, the Company recorded $34 of expense related to the completion of two milestones, amounting to 232,442 shares that have vested. | 10. Stock-Based Compensation 2019 Stock Plan On October 11, 2019, the Company adopted the 2019 Stock Plan (the “Plan”) under which the Board of Directors may grant up to 5,555,555 incentive and nonstatutory stock options and restricted stock to employees, directors, and non-employees. On November 20, 2019, the Board of Directors amended the Plan to increase the number of shares to 7,577,057 shares. On October 4, 2020, the Board of Directors further amended the Plan to increase the number of shares to 15,689,294 shares. As of December 31, 2020 and 2019, the Company had 1,812,867 and 7,577,057 shares, respectively, of common stock available for future issuance under the Plan. The Company did not grant any awards under the Plan during the year ended December 31, 2019. A summary of our employee stock option activity is as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Life (Years) Value Outstanding as of December 31, 2019 — $ — — $ — Granted 11,318,689 $ 0.11 Exercised (151,600) $ 0.04 $ 1,324 Outstanding as of December 31, 2020 11,167,089 $ 0.11 9.61 $ 136,988 Exercisable as of December 31, 2020 1,432,988 $ 0.15 9.84 $ 17,528 Vested and expected to vest as of December 31, 2020 11,167,089 $ 0.11 9.61 $ 136,988 A summary of our non-employee stock option activity is as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Life (Years) Value Outstanding as of December 31, 2019 — $ — — $ — Granted 1,423,738 $ 0.15 Exercised (36,152) $ 0.15 $ 282 Outstanding as of December 31, 2020 1,387,586 $ 0.15 9.84 $ 16,973 Exercisable as of December 31, 2020 6,172 $ 0.15 9.84 $ 75 Vested and expected to vest as of December 31, 2020 1,387,586 $ 0.15 9.84 $ 16,973 A summary of our restricted stock activity is as follows: Weighted Average Number of Grant Shares Price Outstanding as of December 31, 2019 — $ — Granted 1,134,000 $ 0.04 Vested (567,000) $ 0.04 Outstanding as of December 31, 2020 567,000 $ 0.04 Determination of Fair Value The assumptions used in the Black-Scholes option pricing model for the year ended December 31, 2020 are provided in the following table. 2020 Risk-free interest rate: Employee stock options 0.52 – 1.52 % Non-employee stock options 0.79% Expected term (in years): Employee stock options 6.02 – 6.32 Non-employee stock options 10.00 Expected volatility: Employee stock options 60.00 – 70.00 % Non-employee stock options 60.00% Dividend yield: Employee stock options 0.00% Non-employee stock options 0.00% Grant date fair value per share: Employee stock options $ 0.02 – $0.08 Non-employee stock options $0.10 The Company records stock-based compensation expense for stock-based compensation awards based on the fair value on the date of grant. The stock-based compensation expense is recognized ratably over the course of the requisite service period. The Company recognized stock-based compensation expense of $142 and $8 for employee and non-employees, respectively, for stock options and $25 for non-employees for restricted stock awards for the year ended December 31, 2020. The Company did not recognize any stock- based compensation expense for the year ended December 31, 2019. As of December 31, 2020, the total remaining stock-based compensation expense for unvested stock options was $565 and $135 for employees and non-employees, respectively, which are expected to be recognized over a weighted-average period of 1.8 and 1.4 years, for employee and non-employees, respectively. As of December 31, 2020, the total remaining stock-based compensation expense for restricted stock awards was $20 for non-employees, which is expected to be recognized over a weighted-average period of 0.2 years. The Company has elected to account for forfeitures as they occur and will record stock-based compensation expense assuming all stockholders will complete the requisite service period. If an employee forfeits an award because they fail to complete the requisite service period, the Company will reverse stock- based compensation expense previously recognized in the period the award is forfeited. The following table presents stock-based compensation expense included in each respective expense category in the statements of operations and other comprehensive loss: Years Ended December 31, 2020 2019 Research and development $ 25 $ — General and administrative 150 — Total $ 175 $ — Collaboration Agreement and Warrant On November 6, 2020, the Company entered into a collaboration agreement with FCA US LLC (“FCA”), in which both parties agreed to work together to complete a series of fixed duration collaboration projects to develop a prototype aircraft for Archer (the “Collaboration Agreement”). In exchange for services to be provided by FCA under the Collaboration Agreement, the Company issued a warrant to FCA on November 6, 2020 (the “Warrant”), in which FCA will have the right to purchase up to 1,660,302 shares of Archer’s common stock at an exercise price of $0.01 per share (subject to appropriate adjustment in the event of a stock dividend, stock split, combination, or other similar recapitalization). As of September 2020, the Company’s most recent valuation date, a valuation of the Company’s common and preferred stock was performed. The Company’s common stock and Series A Preferred Stock was valued at $0.15 per share and $1.20 per share, respectively. The warrant expires on November 6, 2025. Shares under the Warrant are vested and earned based on the completion of specific aircraft development milestones identified under the Collaboration Agreement which are expected to be achieved through December 2022. As the Company is currently in pre-revenue stage and is not generating any revenue from the Collaboration Agreement, all costs incurred with third parties are recorded based on the nature of the cost incurred. The Company accounts for the Warrant in accordance with the provisions of ASC 718, Compensation — Stock Compensation . The Company will assess whether it is probable that the award will vest for each of the seven milestones at the end of every reporting period. If and when the award is deemed probable of vesting, the Company will recognize compensation expense for the portion of the grant determined probable of vesting on a straight-line basis over the duration of each milestone. If services had been provided by FCA prior to management determining the milestone is probable of being achieved, a cumulative catch-up adjustment will be recorded for services performed in prior periods. Costs incurred under the Collaboration Agreement and Warrant are associated with the research, design, and production and testing for the aircraft prototype and are recorded in R&D expense in the statements of operations and comprehensive loss. As services are planned to begin in January 2021, none of the projects identified in the Collaboration Agreement have commenced as of December 31, 2020. Therefore, no expense was recognized during the years ended December 31, 2020 and 2019. |
Income Taxes
Income Taxes | 4 Months Ended | 6 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | |
Income Taxes | NOTE 10. INCOME TAX The Company’s net deferred tax assets (liabilities) as of December 31, 2020 is as follows: Deferred tax assets: Start-up costs $ 33,188 Net operating loss carryforwards 14,688 Total deferred tax assets 47,876 Valuation allowance (27,174) Deferred tax liabilities: Unrealized gain on investments (20,702) Total deferred tax liabilities (20,702) Deferred tax assets, net of allowance $ — The income tax provision for the period from August 26 (inception) through December 31, 2020 consists of the following: Federal Current $ — Deferred (27,174) State Current — Deferred — Change in valuation allowance 27,174 Income tax provision $ — As of December 31, 2020, the Company has available U.S. federal operating loss carry forwards of approximately $70,000 that may be carried forward indefinitely. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax assets, projected future taxable income and tax planning strategies in making this assessment. After consideration of all the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the period ended December 31, 2020, the valuation allowance was $27,174. A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2020 is as follows: Statutory federal income tax rate 21.0 % State taxes, net of federal tax benefit 0.0 % Change in fair value of derivative warrant liabilities (19.2) % Non-deductible transaction costs (1.5) % Change in valuation allowance (0.3) % Income tax provision 0.0 % The Company files income tax returns in the U.S. federal jurisdiction, and New York which remain open and subject to examination. | ||
Archer Aviation Inc | |||
Income Taxes | 10. Income Taxes The Company recognized zero and an immaterial amount of income tax expense for the three and six months ended June 30, 2021, respectively, resulting in an effective tax rate of 0% . The Company did not recognize an income tax benefit/(expense) during the three and six months ended June 30, 2020. The effective tax rate is different from the federal statutory tax rate primarily due to a full valuation allowance against deferred tax assets. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Based upon the analysis of federal and state deferred tax balances, future tax projections, and the Company’s lack of taxable income in the carryback period, the Company recorded a valuation allowance against the federal and state deferred tax assets as of June 30, 2021 and 2020. | 11. Income Taxes The Company did not record any deferred income tax provision for the years ended December 31, 2020 and 2019. The components of the provision for incomes taxes are as follows: Years ended December 31, 2020 2019 Current: Federal $ — $ — State 1 — Total current 1 — Total income tax provision $ 1 $ — The following table presents the principal reasons for the difference between the effective tax rate and the federal statutory income tax rate of 21 %: Years Ended December 31, 2020 2019 Federal income tax (benefit) 21.0 % 21.0 % State and local income taxes (net of federal benefit) 8.8 % 15.2 % Nondeductible expenses (0.1) % (0.2) % Valuation allowance (29.7) % (36.0) % Effective Tax Rate 0.0 % 0.0 % The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are provided below: Years ended December 31, 2020 2019 Deferred Tax Assets: Net operating loss carryforwards $ 7,500 $ 299 Accrued expenses 43 14 Operating lease liability 645 — Other 34 — Gross deferred tax assets 8,222 313 Less: Valuation allowance (7,216) (312) Deferred tax assets, net of valuation allowance 1,006 1 Deferred Tax Liabilities: Stock-based compensation (5) — Depreciation and amortization (356) (1) Right-of-use asset (645) — Total deferred tax liabilities (1,006) (1) Total net deferred tax assets $ — $ — In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Based upon the analysis of federal and state deferred tax balances and future tax projections and the Company’s lack of taxable income in the carryback period, the Company recorded a valuation allowance against the federal and state deferred tax assets of $ 7,216 . As of December 31, 2020 and 2019, the Company has U.S. federal net operating loss carryforwards of $26,959 and $905 , respectively, which will both begin to expire in 2038. As of December 31, 2020 and 2019, the Company has state net operating loss carryforwards of $26,692 and $1,796 , respectively, which will both begin to expire in 2038. The following table summarizes the activity related to the Company’s unrecognized tax benefits during the years ended December 31, 2020 and 2019: Balance as of December 31, 2019 $ 31 Increases related to current year tax positions 2,018 Balance as of December 31, 2020 $ 2,049 The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate as of December 31, 2019 and December 31, 2020 is zero due to the valuation allowance that would otherwise be recorded on the deferred tax asset associated with the recognized position. During the years ended December 31, 2020 and 2019, the Company recognized no interest and penalties related to uncertain tax positions. In accordance with Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended (the “Code”), a corporation that undergoes an “ownership change” (generally defined as a cumulative change [by value] of more than 50% in the equity ownership of certain stockholders over a rolling three- year period) is subject to limitations on its ability to utilize its pre-change NOLs and R&D tax credits to offset post-change taxable income and post-change tax liabilities, respectively. The Company’s existing NOLs and R&D credits may be subject to limitations arising from previous ownership changes, and the ability to utilize NOLs could be further limited by Section 382 and Section 383 of the Code. In addition, future changes in the Company’s stock ownership, some of which may be outside of the Company’s control, could result in an ownership change under Section 382 and Section 383 of the Code. The amount of such limitations, if any, has not been determined. The Company is subject to taxation and files income tax returns with the U.S. federal government and the state of California. The tax years ended December 31, 2018 through December 31, 2020 remain open to examination by the Internal Revenue Service and New York State Department of Revenue, and from December 31, 2020, by the California Franchise Tax Board. In addition, the utilization of net loss carryforwards is subject to federal and state review for the periods in which those net losses were incurred. The Company is not under audit by any taxing jurisdictions at this time. |
401 (K) Savings Plan
401 (K) Savings Plan | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Archer Aviation Inc | ||
401(k) Savings Plan | 11. 401(k) Savings Plan The Company maintains a 401(k) savings plan for the benefit of its employees. The Company makes matching contributions equal to 50% of each employee contribution, subject to the maximum amount established by the Internal Revenue Service. All current employees are eligible to participate in the 401(k) savings plan. The Company’s matching contributions were approximately $123 and $252 for the three and six months ended June 30, 2021, respectively, and $67 and $126 for the three and six months ended June 30, 2020, respectively. | 12. 401(k) Savings Plan The Company maintains a 401(k) savings plan for the benefit of its employees. The Company makes matching contributions equal to 50% of each employee contribution, not to exceed $9 a year. All current employees are eligible to participate in the 401(k) savings plan. The Company’s matching contributions were approximately $276 for the year ended December 31, 2020. As the 401(k) savings plan became effective in February 2020, the Company did not match any employee contributions for the year ended December 31, 2019. |
Subsequent Events_2_3
Subsequent Events | 4 Months Ended | 6 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | |
Subsequent Events | NOTE 12. SUBSEQUENT EVENTS Business Combination Agreement On February 10, 2021, the Company entered into a Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among the Company, Artemis Acquisition Sub Inc., a Delaware corporation (“Artemis Merger Sub”), and Archer Aviation Inc., a Delaware corporation (“Archer”). The Business Combination Agreement and the transactions contemplated thereby were approved by the boards of directors of each of the Company and Archer. The Business Combination Agreement provides for, among other things, the following transactions on the date of closing of the Business Combination (the “Closing”): (i) Atlas will amend and restate its certificate of incorporation (the “Post-Closing Atlas Certificate of Incorporation”), pursuant to which, among other things, Atlas will have a dual-class share structure with (A) shares of Class A common stock that will carry voting rights in the form of one vote per share (the “New Class A Common Stock”), and (B) shares of Class B common stock that will carry voting rights in the form of ten votes per share (the “New Class B Common Stock” and, together with the New Class A Common Stock, the “New Atlas Common Stock”), and (ii) Artemis Merger Sub will merge with and into Archer, with Archer as the surviving company in the merger and, after giving effect to such merger, continuing as a wholly-owned subsidiary of Atlas (the “Merger”). The Merger and the other transactions contemplated by the Business Combination Agreement are hereinafter referred to as the “Business Combination”. The Business Combination is subject to customary closing conditions, including, without limitation, the receipt of the required approval by Atlas’ stockholders. In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the effective time of the Merger, (i) outstanding shares of common stock and preferred stock of Archer will be converted into a right to receive a number of shares of New Class B Common Stock determined on the basis of an implied Archer equity value of $2,525,000,000 (the “Implied Equity Value”), (ii) all stock awards (whether vested or unvested) to purchase Archer common stock will be converted into stock awards to purchase a number of shares of New Class B Common Stock based on an exchange ratio derived from the Implied Equity Value, and (iii) outstanding warrants (whether vested or unvested) to purchase Archer common stock will be converted into warrants to purchase a number of shares of New Class B Common Stock determined on the basis of the Implied Equity Value. The former Archer equity holders will have the right to convert their shares of New Class B Common Stock into shares of New Class A Common Stock pursuant to the Post-Closing Atlas Certificate of Incorporation. PIPE Financing (Private Placement) Concurrently with the execution of the Business Combination Agreement, the Company entered into subscription agreements (the “Subscription Agreements”) with certain investors. Pursuant to the Subscription Agreements, each investor agreed to subscribe for and purchase, and the Company agreed to issue and sell to such investors, on the Closing Date (as defined in the Business Combination Agreement) substantially concurrently with the Closing (as defined in the Business Combination Agreement), an aggregate of 60,000,000 shares of the Company’s Class A Common Stock for a purchase price of $10.00 per share, for aggregate gross proceeds of $600 million (the “PIPE Financing”). The closing of the PIPE Financing is contingent upon, among other things, the substantially concurrent consummation of the Business Combination. The Subscription Agreements provide that Atlas will grant the investors in the PIPE Financing certain customary registration rights. | NOTE 10. SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements except as disclosed in Note 1 under Business Combination Agreement. | |
Archer Aviation Inc | |||
Subsequent Events | 12. Subsequent Events The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date of the issuance of these financial statements. Other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements. Silicon Valley Bank Loan and Security Agreement On July 9, 2021, Archer, as the borrower, entered into a Loan and Security Agreement with Silicon Valley Bank (“SVB”) and SVB Innovation Credit Fund VIII, L.P. (“SVB Innovation”) as the lenders, and SVB as the collateral agent. The total principal amount of the loans is $20,000 (the “Term Loans”), and all obligations due under the Term Loans are collateralized by all of Archer’s right, title, and interest in and to its specified personal property in favor of the collateral agent. The interest rate on the loans is a floating rate per annum equal to the greater of (1) 8.5% and (2) the Prime Rate plus the Prime Rate Margin, which increases by 2% per annum upon the occurrence of an event of default. The Term Loans are subject to a final payment fee ranging between zero and 5.5% of the original aggregate principal amount depending on the timing of repayment and whether the SPAC transaction occurs. Additionally, in conjunction with the issuance of the Term Loans, the Company agreed to issue 211,641 warrants to SVB and 211,641 warrants to SVB Innovation, totaling 423,282 warrants. Each warrant provides SVB and SVB Innovation with the right to purchase one share of Archer common stock. The warrants have an exercise price of $17.30 per share and expire on the 10th anniversary of the issuance date. The number and exercise price of the warrants are subject to adjustment if the Atlas merger closing occurs on or before October 10, 2021. As of the date of the merger with Atlas, the warrants were exchanged into public warrants and became 732,280 shares at the exercise price of $11.50 . The Company accounts for the warrants in accordance with the guidance contained in ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity, under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the warrants as liabilities at their fair value and adjusts the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized as a gain or loss in the Company’s statement of operations. FCA Italy S.p.A. Manufacturing Consulting and Warrant Agreements On July 19, 2021, Archer entered into a manufacturing consulting agreement with an affiliate of FCA, FCA Italy S.p.A. (“FCA Italy”), in which both parties agreed to work together to complete a series of fixed duration projects to develop manufacturing and production processes for the sale of the Company’s aircraft. In conjunction with the manufacturing consulting agreement, the Company issued a warrant to FCA Italy, in which FCA Italy will have the right to purchase up to 1,070,000 shares of Archer’s common stock at an exercise price of $0.01 per share. Shares under the warrant will vest in accordance with two events, including the execution of the manufacturing consulting agreement and 12 months from the effective date of the agreement. | 13. Subsequent Events The Company evaluated subsequent events and transactions that occurred after the balance sheet date through March 8, 2021, which is the date the financial statements were available to be issued. Other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements. Whisman Lease Agreement On December 11, 2020, the Company entered into an agreement to lease approximately 14,660 square feet of R&D space for 30 months with an option to extend for one subsequent 12 - month period. The Company obtained control of the leased property on January 11, 2021 and recognized the right-of-use asset and lease liability in January 2021. Merger Agreement with Atlas Crest On February 10, 2021, Archer entered into a Business Combination Agreement (the “Merger Agreement”) with Atlas Crest Investment Corp. (“Atlas”) and Artemis Acquisition Sub Inc., a wholly- owned subsidiary of Atlas (“Merger Sub”), with an equity value of the Company of $2,525 million (the “Equity Value”). Pursuant to the Merger Agreement, Archer shall cause Merger Sub to be merged with and into Archer with Archer continuing as the surviving company under the Companies Act following the merger, being a wholly-owned subsidiary of Atlas, and the separate corporate existence of Merger Sub shall cease. Immediately after the completion of the merger, the shareholders of Archer will exchange their interests in Archer for shares of common stock of the combined entity. Additionally, certain investors have agreed to subscribe for and purchase an aggregate of up to $600 million of common stock of the combined company (“PIPE Financing”). United Collaboration and Warrant Agreement On January 29, 2021, the Company entered into a purchase agreement and warrant agreement with United Airlines (“United”). Under the terms of the agreements, Archer expects United to provide design and development support and United agreed to a conditional order for $1 billion worth of Archer aircraft, with an option to order an additional quantity of Archer aircraft at the same unit price for an additional aggregate base purchase price of up to $500 million, upon commencement of commercial production of the aircraft. Archer issued up to 14,645,614 warrants (subject to adjustment based on the Exchange Ratio) to United to purchase shares of the Company’s common stock, twenty percent of which have been conditionally assigned to Mesa Airlines pursuant to the terms of the agreements. Each warrant provides United with the right to purchase one share of Archer common stock at an exercise price of $0.01 per share. The warrants will vest in accordance with certain milestones, including among others the agreement of all material terms pursuant to the collaboration agreement, completion of a SPAC transaction by Archer, the certification of the aircraft by the FAA, and the sale of aircraft. |
Summary of Significant Accou_12
Summary of Significant Accounting Policies (Policies) | 4 Months Ended | 6 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | |
Basis of Presentation | Basis of Presentation The accompanying financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. | Basis of Presentation The accompanying financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K as filed with the SEC on March 8, 2021 and the Company’s Amended Annual Report on Form 10-K/A filed with the SEC on May 24, 2021. The interim results for the periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future interim periods. | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. | |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2020. | Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did no t have any cash equivalents as of June 30, 2021 and December 31, 2020. | |
Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis | Fair Value of Financial Instruments The Company applies ASC 820, which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances. The carrying amounts reflected in the balance sheet for cash, prepaid expenses and accrued offering costs approximate fair value due to their short-term nature. Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. See Note 11 for additional information on assets and liabilities measured at fair value. | Fair Value of Financial Instruments The Company applies ASC Topic 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances. The carrying amounts reflected in the balance sheet for cash, prepaid expenses and accrued offering costs approximate fair value due to their short-term nature. Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. See Note 9 for additional information on assets and liabilities measured at fair value. | |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000 . The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. | |
Income Taxes | Income Taxes The Company complies with the accounting and reporting requirements of ASC Topic 740, Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. | Income Taxes The Company complies with the accounting and reporting requirements of ASC 740, Income Taxes , which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2021 and December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. | |
Net Loss Per Share Attributable to Ordinary Stockholders | Net Earnings ( Loss) Per Share Net earnings (loss) per share is computed by dividing net earnings (loss) by the weighted-average number of shares of common stock outstanding during the period. The Company has not considered the effect of the warrants sold in the Public Offering and Private Placement to purchase an aggregate of 24,666,667 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 statement of operations includes a presentation of income per share for common shares subject to possible redemption and applies the two-class method in calculating income per share. Net earnings per common share, basic and diluted, for Class A redeemable common stock is calculated by dividing the allocable interest income earned on the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Class A redeemable common stock outstanding since original issuance. Net loss per share, basic and diluted, for Class A and Class B non-redeemable common stock is calculated by dividing the net loss, adjusted for income attributable to Class A redeemable common stock, by the weighted average number of Class B non-redeemable common stock outstanding for the period. Class B non-redeemable common stock 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. The following table reflects the calculation of basic and diluted net earnings (loss) per common share (in dollars, except per share amounts): For the Period from August 26,2020 (Inception) through December 31, 2020 Class A Common Stock subject to possible redemption Numerator: Earnings attributable to Class A Common Stock subject to possible redemption Unrealized gain on investments held in Trust Account $ 88,498 Less: Unrealized gain available to be withdrawn for payment of taxes (62,790) Net earnings attributable to Class A Common Stock subject to possible redemption $ 25,708 Denominator: Weighted average Class A Common Stock subject to possible redemption Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption 44,885,287 Basic and diluted net earnings per share, Class A Common Stock subject to possible redemption $ 0.00 Non-Redeemable Class A and Class B Common Stock Numerator: Net loss minus net earnings Net loss $ (10,850,513) Less: Net earnings attributable to Class A Common Stock subject to possible redemption (25,708) Non-redeemable net loss $ (10,876,221) Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock 17,614,713 Basic and diluted net loss per share, Non-Redeemable Class A and Class B Common Stock $ (0.62) | Net Income Per Share of Common Stock Net income per common share is computed by dividing net income by the weighted-average number of shares of common stock 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 24,666,667 shares in the calculation of diluted income per share, since the warrants are contingently exercisable, and the contingencies have not yet been met. The Company’s statement of operations includes a presentation of income per share for common shares subject to possible redemption and applies the two-class method in calculating income per share. Net earnings per common share, basic and diluted, for Class A redeemable common stock is calculated by dividing the allocable unrealized gain on investments held in the Trust Account and interest and dividend income on investments held in the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Class A common stock subject to possible redemption outstanding for the period. Net income per share, basic and diluted, for Class B non-redeemable common stock is calculated by dividing the net income, adjusted for income attributable to Class A redeemable common stock, by the weighted average number of Class B non-redeemable common stock outstanding for the period. Class B non-redeemable common stock includes the Founder Shares (as defined in Note 5) as these shares do not have any redemption features and do not participate in the income earned on the Trust Account. The following table reflects the calculation of basic and diluted net income per common share (in dollars, except share and per share amounts): Three Months Ended Six Months Ended June 30, June 30, 2021 2021 Class A Common Stock subject to possible redemption Numerator: Earnings attributable to Class A Common Stock subject to possible redemption Unrealized gain on investments held in Trust Account $ 5,002 $ 135,027 Interest and dividend income on investments held in Trust Account 8,633 8,633 Less: Income available to be withdrawn for payment of taxes (13,635) (100,209) Net earnings attributable to Class A Common Stock subject to possible redemption $ — $ 43,451 Denominator: Weighted average Class A Common Stock subject to possible redemption Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption 50,000,000 50,000,000 Basic and diluted net earnings per share, Class A Common Stock subject to possible redemption $ 0.00 $ 0.00 Non-Redeemable Class B Common Stock Numerator: Non-redeemable net income Net income $ 3,252,607 $ 833,801 Less: Net earnings attributable to Class A Common Stock subject to possible redemption — (43,451) Non-redeemable net income $ 3,252,607 $ 790,350 Denominator: Weighted average Non-Redeemable Class B Common Stock Basic and diluted weighted average shares outstanding, Non-Redeemable Class B Common Stock 12,500,000 12,500,000 Basic and diluted net income per share, Non-Redeemable Class B Common Stock $ 0.26 $ 0.06 | |
Recently adopted accounting pronouncements | 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 the Company’s financial statements. | Recent Accounting Standards In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows. Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. | |
Archer Aviation Inc | |||
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission for interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position, results of operations, and cash flows for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. The unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements as of and for the year ended December 31, 2020 set forth elsewhere in this proxy statement/prospectus. The Company has provided a discussion of significant accounting policies, estimates, and judgments in its audited financial statements. There have been no changes to the Company’s significant accounting policies since December 31, 2020 which are expected to have a material impact on the Company’s financial position, results of operations, or cash flows. | Basis of Presentation The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company. | |
Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent liabilities, and the reported amounts of expenses during the reporting period. The Company bases these estimates on historical results and various other assumptions believed to be reasonable, all of which form the basis for making estimates concerning the carrying values of assets and liabilities that are not readily available from other sources. On an ongoing basis, management evaluates its estimates, including those related to the: (i) realization of tax assets and estimates of tax liabilities, (ii) valuation of common stock, (iii) fair value of debt, (iv) fair value of share-based payments, (v) valuation of leased assets and liabilities, and (vi) estimated useful lives of long-lived assets. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Such estimates often require the selection of appropriate valuation methodologies and models and may involve significant judgment in evaluating ranges of assumptions and financial inputs. Actual results may differ from those estimates under different assumptions, financial inputs, or circumstances. Given the global economic climate and unpredictable nature and unknown duration of the COVID-19 pandemic, estimates are subject to additional volatility. | ||
Cash and Cash Equivalents | Cash and Cash Equivalents Cash consists of cash on deposit with financial institutions. Cash equivalents consist of short-term, highly liquid financial instruments that are readily convertible to cash and have maturities of three months or less from the date of purchase. Cash and cash equivalent balances were $5,937 and $36,564 as of June 30, 2021 and December 31, 2020, respectively, of which, money market funds were $344 and $34,377 as of June 30, 2021 and December 31, 2020, respectively. Money market funds, which are considered as cash equivalents, are recorded at fair value and classified as Level 1 within the fair value hierarchy. | Cash and Cash Equivalents Cash consists of cash on deposit with financial institutions. Cash equivalents consist of short-term, highly liquid financial instruments that are readily convertible to cash and have maturities of three months or less from the date of purchase. Cash equivalents are recorded at fair value. As of December 31, 2020 and 2019, the Company held $34,377 and $0 , respectively, of cash equivalents consisting of Level 1 money market funds. | |
Fair Value Measurements | Fair Value Measurements The Company applies the provisions of Accounting Standards Codification (“ASC”) 820, Fair Value Measurement , which defines a single authoritative definition of fair value, sets out a framework for measuring fair value and expands on required disclosures about fair value measurements. The provisions of ASC 820 relate to financial assets and liabilities as well as other assets and liabilities carried at fair value on a recurring and nonrecurring basis. The standard clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the standard establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2 Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The carrying amounts of the Company’s cash, accounts payable, accrued compensation and accrued liabilities approximate fair value due to the short-term nature of these instruments. Level 1 instruments include investments in money market funds, which are valued based on inputs such as actual trade data, quoted market prices from brokers or other similar sources. Financial Instruments Not Recorded at Fair Value on a Recurring Basis Certain financial instruments, including debt, are not measured at fair value on a recurring basis in the balance sheets. The fair value of debt as of December 31, 2020 approximates its carrying value. There was no outstanding debt as of June 30, 2021. Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis Certain assets and liabilities are subject to measurement at fair value on a nonrecurring basis if there are indicators of impairment or if they are deemed to be impaired as a result of an impairment review. There were no assets or liabilities measured at fair value using Level 3 inputs for the periods presented. | Fair Value Measurements The Company applies the provisions of Accounting Standards Codification (“ASC”) 820, Fair Value Measurement , which defines a single authoritative definition of fair value, sets out a framework for measuring fair value and expands on required disclosures about fair value measurements. The provisions of ASC 820 relate to financial assets and liabilities as well as other assets and liabilities carried at fair value on a recurring and nonrecurring basis. The standard clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the standard establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2 Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The carrying amounts of the Company’s cash, accounts payable, accrued compensation and accrued liabilities approximate fair value due to the short-term nature of these instruments. Level 1 instruments include investments in money market funds, which are valued based on inputs such as actual trade data, quoted market prices from brokers or other similar sources. | |
Financial Instruments Not Recorded at Fair Value on a Recurring Basis | Financial Instruments Not Recorded at Fair Value on a Recurring Basis Certain financial instruments, including debt, are not measured at fair value on a recurring basis in the balance sheets. The fair value of debt as of December 31, 2020 approximates its carrying value. | ||
Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis | Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis Certain assets and liabilities are subject to measurement at fair value on a non-recurring basis if there are indicators of impairment or if they are deemed to be impaired as a result of an impairment review. There were no assets or liabilities measured at fair value using Level 3 inputs for the periods presented. | ||
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments, which subject the Company to concentrations of credit risk, consist primarily of cash, cash equivalents, and deposits. The Company’s cash and cash equivalents are held at major financial institutions located in the United States of America. At times, cash account balances with any one financial institution may exceed Federal Deposit Insurance Corporation (“FDIC”) insurance limits ($250 per depositor per institution). Management believes the financial institutions that hold the Company’s cash and cash equivalents are financially sound and, accordingly, minimal credit risk exists with respect to cash and cash equivalents. | ||
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist primarily of prepaid payroll costs, rent, consulting, and subscriptions for brand development and research and development (“R&D”). | ||
Intangible Assets, Net | Intangible Assets, Net Intangible assets consist solely of domain names and are recorded at cost, net of accumulated amortization, and if applicable, impairment charges. Amortization of domain names is provided over a 15-year estimated useful life on a straight-line basis or based on the pattern in which economic benefits are consumed, if reliably determinable. The Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company has analyzed a variety of factors in light of the known impact to date of the COVID-19 pandemic on its business to determine if a circumstance could trigger an impairment loss, and, at this time and based on the information presently known, does not believe that it is more likely than not that an impairment loss has been incurred. As of June 30, 2021 and December 31, 2020, the gross carrying amount for domain names was $500 with $19 and $3 recorded in accumulated amortization, respectively. During the three and six months ended June 30, 2021, the Company recognized amortization expense of $9 and $17 , respectively, included within general and administrative expenses on the statements of operations and comprehensive loss. The Company did not recognize any amortization expense during the three and six months ended June 30, 2020. | Intangible Assets, Net Intangible assets consist solely of domain names and are recorded at cost, net of accumulated amortization, and if applicable, impairment charges. Amortization of domain names is provided over a 15 - year estimated useful life on a straight-line basis or based on the pattern in which economic benefits are consumed, if reliably determinable. The Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company has analyzed a variety of factors in light of the known impact to date of the COVID-19 pandemic on its business to determine if a circumstance could trigger an impairment loss, and, at this time and based on the information presently known, does not believe that it is more likely than not that an impairment loss has been incurred. The Company capitalized domain names in 2020, and as of December 31, 2020, the gross carrying amount for domain names was $ 500 with $ 3 recorded in accumulated amortization. During the year ended December 31, 2020, the Company recognized amortization expense of $ 3 , classified within general and administrative on the statements of operations and comprehensive loss. | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at historical cost less accumulated depreciation. Expenditures for major renewals and betterments are capitalized, while minor replacements, maintenance, and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation is removed from the accounts, and any difference between the selling price and net carrying amount is recorded as a gain or loss in the statements of operations and comprehensive loss. Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets as follows: Useful Life (in years) Furniture, fixtures, and equipment 5 Computer hardware 3 Computer software 3 Website design 2 Leasehold improvements Shorter of lease term or the asset standard life | Property and Equipment, Net Property and equipment are stated at historical cost less accumulated depreciation. Expenditures for major renewals and betterments are capitalized, while minor replacements, maintenance, and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation is removed from the accounts, and any difference between the selling price and net carrying amount is recorded as a gain or loss in the statements of operations and comprehensive loss. Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets as follows: Useful Life Furniture, fixtures, and equipment 5 Computer hardware 3 Computer software 3 Website design 2 Leasehold improvements Shorter of lease term or the asset standard life | |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews its long-lived assets, consisting primarily of property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Such triggering events or changes in circumstances may include: a significant decrease in the market price of a long-lived asset, a significant adverse change in the extent or manner in which a long-lived asset is being or intended to be used, a significant adverse change in legal factors or in the business climate, the impact of competition or other factors that could affect the value of a long-lived asset, a significant adverse deterioration in the amount of revenue or cash flows expected to be generated from an asset group, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of a long-lived asset, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset, or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is determined by comparing the forecasted undiscounted cash flows attributable to such assets including any cash flows upon their eventual disposition to their carrying value. If the carrying value of the assets exceeds the forecasted undiscounted cash flows, then the assets are written down to their fair value. The Company determined there was no impairment of long-lived assets during all periods presented. | Impairment of Long-Lived Assets The Company reviews its long-lived assets, consisting primarily of property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Such triggering events or changes in circumstances may include: a significant decrease in the market price of a long-lived asset, a significant adverse change in the extent or manner in which a long- lived asset is being or intended to be used, a significant adverse change in legal factors or in the business climate, the impact of competition or other factors that could affect the value of a long-lived asset, a significant adverse deterioration in the amount of revenue or cash flows expected to be generated from an asset group, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of a long-lived asset, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset, or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is determined by comparing the forecasted undiscounted cash flows attributable to such assets including any cash flows upon their eventual disposition to their carrying value. If the carrying value of the assets exceeds the forecasted undiscounted cash flows, then the assets are written down to their fair value. The Company determined there was no impairment of long-lived assets during either period presented. | |
Other Current Liabilities | Other Current Liabilities For the year ended December 31, 2020, other current liabilities primarily consist of accrued payroll costs, liabilities related to cash received for the early exercise of stock options which may require repayment if the options do not vest, and accrued interest on the Company’s Paycheck Protection Program Loan. For the year ended December 31, 2019, other current liabilities consist of accrued payroll costs. | ||
Paycheck Protection Program Loan | Paycheck Protection Program Loan On April 9, 2020, the Company received the proceeds from a loan in the amount of approximately $ 905 (the “PPP Loan”) from JPMorgan Chase Bank, N.A., as lender, pursuant to the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The Company accounted for the PPP Loan as a financial liability in accordance with ASC Topic 470, Debt . Accordingly, the PPP Loan was recognized within notes payable and notes payable, net of current portion, in the Company’s balance sheet. In addition, related accrued interest is included within other current liabilities in the Company’s balance sheet. Refer to Note 7 for additional information. | ||
Research and Development | Research and Development R&D costs are expensed as incurred and are primarily comprised of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) for employees focused on R&D activities, other related costs, and an allocation of general overhead. In addition, R&D expense includes professional fees paid to outside contractors and depreciation expense. R&D efforts are focused on design and development of our electric aircraft and continuing to prepare our prototype electric aircraft to achieve industry standards. | ||
General and Administrative | General and Administrative General and administrative expenses are primarily comprised of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) and overhead related costs for employees in our executive, finance, information technology, or human resources departments. In addition, general and administrative expense includes fees for third-party professional services (including consulting, legal, and audit services), other corporate expenses, allocated shared costs, and depreciation expense. | ||
Stock-Based Compensation | Stock-Based Compensation The Company’s stock-based compensation awards consist of options granted to employees, directors, and non-employees for the purchase of ordinary shares and restricted shares. The Company recognizes stock- based compensation expense in accordance with the provisions of ASC 718, Compensation — Stock Compensation. ASC 718 requires the measurement and recognition of compensation expense for all stock- based compensation awards made to employees, directors, and non-employees to be based on the grant date fair values of the awards. The Company estimates the fair value of share options using the Black-Scholes option-pricing model. The value of the award is recognized as expense over the requisite service period on a straight-line basis. Determining the grant date fair value of the awards using the Black-Scholes option-pricing model requires management to make assumptions and judgments, including but not limited to the following: Expected term — The estimate of the expected term of employee awards is determined in accordance with the simplified method, which estimates the term based on an averaging of the vesting period and contractual term of the option grant. The Company uses the contractual term for non-employee awards. Expected volatility — Since the Company is a private entity without sufficient historical data on the volatility of its common stock, the expected volatility used is based on the volatility of similar entities (referred to as “guideline companies”) for a period consistent with the expected term of the award. Risk-free interest rate — The risk-free interest rate used to value awards is based on the United States Treasury yield in effect at the time of grant for a period consistent with the expected term of the award. Dividend yield — The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future. Forfeiture rate — The Company has elected to account for forfeitures as they occur and will record stock- based compensation expense assuming all option holders will complete the requisite service period. If an employee forfeits an award because they fail to complete the requisite service period, the Company will reverse stock-based compensation expense previously recognized in the period the award is forfeited. | ||
Fair value of common stock | Fair value of common stock The Company’s Board of Directors grants stock options with exercise prices equal to the fair value of the Company’s common stock on the date of grant. Because there is no public market for the Company’s common stock, the Company has determined the fair value of its common stock at the time of the grant of stock options in accordance with the American Institute of Certified Public Accountants Accounting and Valuation Guide (“AICPA”): Valuation of Privately- Held-Company Equity Securities Issued as Compensation. The Company determined the fair value of its common stock based on a variety of factors including, but not limited to (i) the results of contemporaneous independent third-party valuations of the Company’s common stock and the prices, rights, preferences and privileges of the Company’s redeemable convertible preferred stock relative to those of its common stock; (ii) the lack of marketability of the Company’s common stock; (iii) actual operating and financial results; (iv) current business conditions and projections; (v) the likelihood of achieving a liquidity event, such as an IPO or sale of the Company, given prevailing market conditions, and (vi) precedent transactions involving the Company’s shares. In valuing the fair value of the Company’s common shares, the Company used the market approach, which uses prices and other relevant information generated by market transactions involving identical or comparable assets, liabilities, or a group of assets and liabilities. Within the market approach, given that the Company had recent security transactions, the subject company transaction method was used, which consists of examining prior transactions of the Company. According to the AICPA guidelines, under this method, recent securities transactions in the Company’s stock should be considered as a relevant input for computing the enterprise valuation. Additionally, the Hybrid Backsolve methodology specifically was selected to reflect the high risks in the eVTOL space, namely regulatory risk, the fact that there is currently no market for the product, and technology risk in this new sector. In conducting the valuations, the Company considered all objective and subjective factors that it believed to be relevant in the valuation conducted, including management’s best estimate of the Company’s business condition, and prospects and operating performance at the valuation dates. There are significant judgments and estimates inherent in these valuations. | ||
Leases | Leases The Company accounts for leases in accordance with ASC 842, Leases and determines if an arrangement is a lease at its inception. Right-of-use (“ROU”) assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate in determining the present value of lease payments considering the term of the lease, which is derived from information available at the lease commencement date. The incremental borrowing rate is the rate of interest the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments for a term similar to the lease term in a similar economic environment as the lease. The lease term includes renewal options when it is reasonably certain that the option will be exercised and excludes termination options. To the extent that the Company’s agreements have variable lease payments, the Company includes variable lease payments that depend on an index or a rate and excludes those that depend on facts or circumstances occurring after the commencement date, other than the passage of time. Lease expense for these leases is recognized on a straight-line basis over the lease term. The Company has elected not to recognize ROU assets and lease liabilities that arise from short-term (12 months or less) leases for any class of underlying asset. Operating leases are included in right-of-use asset, lease liability, and lease liability, net of current portion in the Company’s balance sheet. In addition, the Company has elected as an accounting policy, the practical expedient to not separate lease and non-lease components within a contract and instead treat it as a single-lease component. | ||
Income Taxes | Income Taxes The Company accounts for its income taxes using the asset and liability method whereby deferred tax assets and liabilities are determined based on temporary differences between the basis used for financial reporting and income tax reporting purposes. Deferred income taxes are provided based on the enacted tax rates in effect at the time such temporary differences are expected to reverse. A valuation allowance is provided for deferred tax assets if it is more-likely-than-not that the Company will not realize those tax assets through future operations. The carrying value of deferred tax assets reflects an amount that is more likely than not to be realized. The Company utilizes the guidance in ASC 740-10, Income Taxes , to account for uncertain tax positions. ASC 740-10 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the positions will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more-likely-than-not of being realized and effectively settled. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately forecast actual outcomes. The Company’s policy is to recognize interest and penalties related to uncertain tax positions, if any, in the income tax provision. | ||
Net Loss Per Share Attributable to Ordinary Stockholders | Net Loss Per Share Attributable to Ordinary Stockholders The Company has one class of participating security (preferred shares) issued and outstanding as of June 30, 2021. Losses are not attributed to the participating security as the preferred stockholders are not contractually obligated to share in the Company’s losses. For all periods presented, the calculation of basic net loss per share excludes shares issued upon the early exercise of stock options where the vesting conditions have not been satisfied. Basic net loss attributable to common stockholders per share is calculated by dividing net loss attributable to ordinary stockholders by the weighted-average number of common shares outstanding. Diluted net loss per share attributable to ordinary stockholders reflects adjustments to the basic net loss per share attributable to ordinary stockholders and the weighted-average number of shares of ordinary shares outstanding for the potentially dilutive impact of outstanding securities or other contracts to issue common stock if they were to be exercised or converted into common shares, using the treasury stock method. Contingently issuable shares, including equity awards with performance conditions, are considered outstanding common shares and included in basic net loss per share as of the date that all necessary conditions to earn the awards have been satisfied. Prior to the end of the contingency period, the number of contingently issuable shares included in diluted net loss per share is based on the number of shares, if any, that would be issuable under the terms of the arrangement at the end of the reporting period. Because the Company reported net losses for all periods presented, all potentially dilutive common stock equivalents are antidilutive and have been excluded from the calculation of net loss per share. The following table presents the number of antidilutive shares excluded from the calculation of diluted net loss per share: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Stock-based compensation awards - employees 11,690,674 3,714,205 11,690,674 3,714,205 Stock-based compensation awards - non-employees 11,440,789 1,134,000 11,440,789 1,134,000 Series Seed redeemable convertible preferred stock 18,193,515 18,193,515 18,193,515 18,193,515 Series A redeemable convertible preferred stock 46,267,422 — 46,267,422 — Total 87,592,400 23,041,720 87,592,400 23,041,720 | Net Loss Per Share Attributable to Ordinary Stockholders The Company has one class of participating security (preferred shares) issued and outstanding as of December 31, 2020 and 2019. Losses are not attributed to the participating security as the preferred stockholders are not contractually obligated to share in the Company’s losses. For all periods presented, the calculation of basic net loss per share excludes shares issued upon the early exercise of stock options where the vesting conditions have not been satisfied. Basic net loss attributable to common stockholders per share is calculated by dividing net loss attributable to ordinary stockholders by the weighted-average number of shares of common shares outstanding. Diluted net loss per share attributable to ordinary stockholders adjusts the basic net loss per share attributable to ordinary stockholders and the weighted-average number of shares of ordinary shares outstanding for the potentially dilutive impact of stock options, using the treasury stock method. Because the Company reported net losses for all periods presented, all potentially dilutive common stock equivalents are antidilutive and have been excluded from the calculation of net loss per share. The following table presents the number of antidilutive shares excluded from the calculation of diluted net loss per share: As of December 31, 2020 2019 Stock-based compensation awards — employees 11,167,089 — Stock-based compensation awards — non-employees 3,614,888 — Series Seed redeemable convertible preferred stock 18,193,515 18,193,515 Series A redeemable convertible preferred stock 46,267,422 — Total 79,242,914 18,193,515 | |
Segments | Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM consists of its two founders. The Company has determined that it operates as a single operating segment and one reportable segment, as the CODM reviews financial information presented on a combined basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. Given the Company’s pre-revenue operating stage, it currently has no concentration exposure to products, services or customers. | ||
Comprehensive Loss | Comprehensive Loss There were no differences between net loss and comprehensive loss presented in the statements of operations and comprehensive loss for the three and six months ended June 30, 2021 and 2020. | Comprehensive Loss There were no differences between net loss and comprehensive loss presented in the statements of operations and comprehensive loss for the years ended December 31, 2020 and 2019. | |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which outlines a comprehensive lease accounting model that supersedes the current lease guidance. The new guidance requires lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms greater than 12 months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. In July 2018, the FASB issued ASU 2018-11, which provides the option of an additional transition method that allows entities to initially apply the new lease guidance at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company entered into its first lease in July of 2020 and applied ASU 2016-02 to this lease and subsequent leases. In June 2018, the FASB issued ASU 2018-07 , Compensation - Stock Compensation (Topic 718) : Improvements to Nonemployee Share-Based Payment Accounting ("ASU 2018-07"). This amendment expands the scope of Topic 718, Compensation—Stock Compensation (which only included share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees is substantially aligned. ASU 2018-07 supersedes Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees . Early adoption of ASU 2018-07 is permitted and should be applied on a prospective basis. The Company began applying ASU 2018-07 during 2020 upon the Company’s first grant of share-based payment awards. No share-based payments were granted prior to 2020. In August 2018, the FASB issued ASU 2018-13 , Fair Value Measurement (Topic 820) (“ASU 2018-13”), which modifies, removes, and adds certain disclosure requirements on fair value measurements based on the FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements. The ASU is effective for all entities for fiscal years beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively for only the most recent annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company has applied ASU 2018-13 to all periods presented. In November 2019, the FASB issued ASU 2019-08, Compensation — Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606) (“ASU 2019-08”), which requires entities to measure and classify share-based payments to a customer in accordance with the guidance in ASC 718, Compensation — Stock Compensation . ASU 2019-08 expanded the scope of Topic 718 to include awards issued to customers for purposes of measurement and classification and amended portions of ASC 606, Revenue from Contracts with Customers , to refer to this guidance. The amount that would be recorded as a reduction in revenue would be measured based on the grant date fair value of the share-based payment in accordance with Topic 718. The Company adopted ASU 2019-08 on January 1, 2021 and has applied its provisions to the measurement of the warrants issued to United Airlines. Refer to Note 9 for details. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12") . This amendment was issued to simplify the accounting for income taxes by removing certain exceptions for recognizing deferred taxes, performing intraperiod allocation, and calculating income taxes in interim periods. Further, ASU 2019-12 adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax basis goodwill and allocating taxes to members of a consolidated group. The Company has applied ASU 2019-12 to all periods presented, and there was no adoption date impact to its financial statements. | Recently adopted accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which outlines a comprehensive lease accounting model that supersedes the current lease guidance. The new guidance requires lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms greater than 12 months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. In July 2018, the FASB issued ASU 2018-11, which provides the option of an additional transition method that allows entities to initially apply the new lease guidance at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company entered into its first lease in July of 2020 and applied ASU 2016-02 to this lease and subsequent leases. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (Topic 230) (“ASU 2016-15”). The standard provides guidance on eight specific cash flow issues, including debt prepayment or debt extinguishment costs. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and the amendments should be applied using the retrospective transition method to each period presented. The Company has applied ASU 2016-15 to all periods presented. In July 2017, the FASB issued ASU 2017-11, Earnings per share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), and Derivatives and Hedging (Topic 815) : Accounting for Certain Financial Instruments with Down Round Features (“ASU 2017-11”). The update addresses the complexity of accounting for certain financial instruments with “down round” features and the liability or equity classification of financial instruments with warrants or convertible features. The guidance eliminates the requirement to consider “down round” features when determining whether certain equity-linked financial instruments or embedded features are indexed to an entity’s own stock. ASU 2017-11 is effective for public business entities for annual periods beginning after December 15, 2018, and for interim periods within those years, with early adoption permitted. The Company has applied ASU 2017-11 to all periods presented, and there was no adoption date impact to its financial statements. In June 2018, the FASB issued ASU 2018-07 , Compensation — Stock Compensation (Topic 718) : Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). This amendment expands the scope of Topic 718, Compensation — Stock Compensation (which only included share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees is substantially aligned. ASU 2018-07 supersedes Subtopic 505-50, Equity — Equity-Based Payments to Non-Employees and is effective for public business entities for fiscal years beginning after December 15, 2018. Early adoption of ASU 2018-07 is permitted and should be applied on a prospective basis. The Company began applying ASU 2018-07 during 2020 upon the Company’s first grant of share-based payment awards. No share-based payments were granted prior to 2020. In August 2018, the FASB issued ASU 2018-13 , Fair Value Measurement (Topic 820) (“ASU 2018-13”), which modifies, removes, and adds certain disclosure requirements on fair value measurements based on the FASB Concepts Statement, Conceptual Framework for Financial Reporting — Chapter 8: Notes to Financial Statements. The ASU is effective for all entities for fiscal years beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted-average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively for only the most recent annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted. The Company has applied ASU 2018-13 to all periods presented. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”) . This amendment was issued to simplify the accounting for income taxes by removing certain exceptions for recognizing deferred taxes, performing intraperiod allocation, and calculating income taxes in interim periods. Further, ASU 2019-12 adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax basis goodwill and allocating taxes to members of a consolidated group. ASU 2019-12 is effective for public business entities for fiscal periods beginning after December 15, 2020. The Company has applied ASU 2019-12 to all periods presented, and there was no adoption date impact to its financial statements. | |
Recently issued accounting pronouncements not yet adopted | Recently issued accounting pronouncements not yet adopted In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies the accounting for convertible instruments by removing certain separation models in ASC 470- 20, Debt — Debt with Conversion and Other Options , for convertible instruments. The ASU updates the guidance on certain embedded conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, such that those features are no longer required to be separated from the host contract. The convertible debt instruments will be accounted for as a single liability measured at amortized cost. Further, the ASU made amendments to the EPS guidance in Topic 260 for convertible instruments, the most significant impact of which is requiring the use of the if-converted method for diluted EPS calculation, and no longer allowing the net share settlement method. The ASU also made revisions to Topic 815-40, which provides guidance on how an entity must determine whether a contract qualifies for a scope exception from derivative accounting. The amendments to Topic 815-40 change the scope of contracts that are recognized as assets or liabilities. The ASU is effective for public business entities for interim and annual periods beginning after December 15, 2021, with early adoption permitted. Adoption of the ASU can either be on a modified retrospective or full retrospective basis. The Company is currently evaluating the impact the adoption of this standard will have on its financial statements and related disclosures . | Recently issued accounting pronouncements not yet adopted In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies the accounting for convertible instruments by removing certain separation models in ASC 470- 20, Debt — Debt with Conversion and Other Options , for convertible instruments. The ASU updates the guidance on certain embedded conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, such that those features are no longer required to be separated from the host contract. The convertible debt instruments will be accounted for as a single liability measured at amortized cost. Further, the ASU made amendments to the EPS guidance in Topic 260 for convertible instruments, the most significant impact of which is requiring the use of the if-converted method for diluted EPS calculation, and no longer allowing the net share settlement method. The ASU also made revisions to Topic 815-40, which provides guidance on how an entity must determine whether a contract qualifies for a scope exception from derivative accounting. The amendments to Topic 815-40 change the scope of contracts that are recognized as assets or liabilities. The ASU is effective for public business entities for interim and annual periods beginning after December 15, 2021, with early adoption permitted. Adoption of the ASU can either be on a modified retrospective or full retrospective basis. The Company is currently evaluating the impact the adoption of this standard will have on its financial statements and related disclosures. |
Summary of Significant Accou_13
Summary of Significant Accounting Policies (Tables) - Archer Aviation Inc | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Schedule of estimated useful lives of depreciable property and equipment assets | Useful Life (in years) Furniture, fixtures, and equipment 5 Computer hardware 3 Computer software 3 Website design 2 Leasehold improvements Shorter of lease term or the asset standard life | Useful Life Furniture, fixtures, and equipment 5 Computer hardware 3 Computer software 3 Website design 2 Leasehold improvements Shorter of lease term or the asset standard life |
Schedule of number of antidilutive shares excluded from the calculation of diluted net loss per share | Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Stock-based compensation awards - employees 11,690,674 3,714,205 11,690,674 3,714,205 Stock-based compensation awards - non-employees 11,440,789 1,134,000 11,440,789 1,134,000 Series Seed redeemable convertible preferred stock 18,193,515 18,193,515 18,193,515 18,193,515 Series A redeemable convertible preferred stock 46,267,422 — 46,267,422 — Total 87,592,400 23,041,720 87,592,400 23,041,720 | As of December 31, 2020 2019 Stock-based compensation awards — employees 11,167,089 — Stock-based compensation awards — non-employees 3,614,888 — Series Seed redeemable convertible preferred stock 18,193,515 18,193,515 Series A redeemable convertible preferred stock 46,267,422 — Total 79,242,914 18,193,515 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Archer Aviation Inc | ||
Schedule of property and equipment, net | June 30, 2021 December 31, 2020 Furniture, fixtures, and equipment $ 1,379 $ 1,046 Computer hardware 1,281 524 Website design 504 128 Leasehold improvements 764 54 Construction in progress 189 — Property and equipment, gross 4,117 1,752 Less: Accumulated depreciation (545) (139) Property and equipment, net $ 3,572 $ 1,613 | As of December 31, 2020 2019 Furniture, fixtures, and equipment $ 1,046 $ — Computer hardware 524 4 Website design 128 — Leasehold improvements 54 — Total property and equipment 1,752 4 Less: Accumulated depreciation (139) — Total property and equipment, net $ 1,613 $ 4 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Archer Aviation Inc | |
Schedule of other current liabilities | As of December 31, 2020 2019 Accrued interest $ 6 $ — Accrued bonus 155 43 Deposit liability related to cash received from the early exercise of stock options 117 — Income tax payable 1 — $ 279 $ 43 |
Paycheck Protection Program L_2
Paycheck Protection Program Loan (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Archer Aviation Inc | PPP Loan | |
Paycheck Protection Program Loan [Line ltems] | |
Schedule of future principal payments under the PPP loan agreement | Years ending December 31, 2021 $ 645 2022 260 $ 905 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) - Archer Aviation Inc | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Schedule of lease costs, weighted-average remaining lease term and weighted-average discount rate | Year Ended December 31, 2020 2019 Operating lease cost $ 52 $ — Short-term lease cost 44 — Total lease cost $ 96 $ — Weighted-average remaining lease term (in months) 30 — Weighted-average discount rate 12.17 % — | |
Schedule of minimum aggregate future obligations under noncancelable operating leases | The minimum aggregate future obligations under noncancelable operating leases as of June 30, 2021 were as follows: Remaining 2021 $ 774 2022 1,546 2023 688 Total future lease payments 3,008 Less: imputed interest (294) Present value of future lease payments $ 2,714 | Years ending December 31, 2021 $ 1,043 2022 1,074 2023 507 Future minimum lease payments 2,624 Less: Amount representing interest (323) Present value of future lease payments $ 2,301 |
Supplemental cash information and non-cash activities related to right-of-use assets and lease liabilities | Supplemental cash information and non-cash activities related to right-of-use assets and lease liabilities were as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Operating cash outflows from operating leases $ 379 $ — $ 706 $ — Operating lease assets obtained in exchange for new lease liabilities 165 — 984 — | 2020 2019 Operating cash outflows from operating leases $ 86 $ — Operating lease assets obtained in exchange for new lease liabilities 2,300 — |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) - Archer Aviation Inc | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Summary of stock option activity | A summary of our employee stock option activity is as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Life (Years) Value Outstanding as of January 1, 2021 11,167,089 $ 0.11 9.61 $ 136,988 Granted 1,203,981 $ 0.15 Exercised (680,396) $ 0.04 $ 9,339 Outstanding as of June 30, 2021 11,690,674 $ 0.12 9.18 $ 177,315 Exercisable as of June 30, 2021 2,335,560 $ 0.14 9.28 $ 35,385 Vested and expected to vest as of June 30, 2021 11,690,674 $ 0.12 9.18 $ 177,315 A summary of our non-employee stock option activity is as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Life (Years) Value Outstanding as of January 1, 2021 1,387,586 $ 0.15 9.84 $ 16,973 Granted 65,308 $ 0.15 Exercised (227,333) $ 0.15 $ 3,129 Outstanding as of June 30, 2021 1,225,561 $ 0.15 9.35 $ 18,885 Exercisable as of June 30, 2021 33,900 $ 0.15 9.41 $ 513 Vested and expected to vest as of June 30, 2021 1,225,561 $ 0.15 9.35 $ 18,885 | A summary of our employee stock option activity is as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Life (Years) Value Outstanding as of December 31, 2019 — $ — — $ — Granted 11,318,689 $ 0.11 Exercised (151,600) $ 0.04 $ 1,324 Outstanding as of December 31, 2020 11,167,089 $ 0.11 9.61 $ 136,988 Exercisable as of December 31, 2020 1,432,988 $ 0.15 9.84 $ 17,528 Vested and expected to vest as of December 31, 2020 11,167,089 $ 0.11 9.61 $ 136,988 A summary of our non-employee stock option activity is as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Life (Years) Value Outstanding as of December 31, 2019 — $ — — $ — Granted 1,423,738 $ 0.15 Exercised (36,152) $ 0.15 $ 282 Outstanding as of December 31, 2020 1,387,586 $ 0.15 9.84 $ 16,973 Exercisable as of December 31, 2020 6,172 $ 0.15 9.84 $ 75 Vested and expected to vest as of December 31, 2020 1,387,586 $ 0.15 9.84 $ 16,973 |
Summary of restricted stock activity | Weighted Average Number of Grant Shares Price Outstanding as of January 1, 2021 567,000 $ 0.04 Vested (567,000) $ 0.04 Outstanding as of June 30, 2021 — $ — | Weighted Average Number of Grant Shares Price Outstanding as of December 31, 2019 — $ — Granted 1,134,000 $ 0.04 Vested (567,000) $ 0.04 Outstanding as of December 31, 2020 567,000 $ 0.04 |
Schedule of assumptions used in the Black-Scholes option pricing model | June 30, 2021 December 31, 2020 Risk-free interest rate: Employee stock options 0.62 % 0.52 – 1.52 % Non-employee stock options 1.08 % 0.79 % Expected term (in years): Employee stock options 6.32 6.02 – 6.32 Non-employee stock options 10.00 10.00 Expected volatility: Employee stock options 87.94 % 60.00 – 70.00 % Non-employee stock options 88.03 % 60.00 % Dividend yield: Employee stock options 0.00 % 0.00 % Non-employee stock options 0.00 % 0.00 % Grant date fair value per share: Employee stock options $ 13.65 $ 0.02 - $0.08 Non-employee stock options $ 13.68 $ 0.10 | 2020 Risk-free interest rate: Employee stock options 0.52 – 1.52 % Non-employee stock options 0.79% Expected term (in years): Employee stock options 6.02 – 6.32 Non-employee stock options 10.00 Expected volatility: Employee stock options 60.00 – 70.00 % Non-employee stock options 60.00% Dividend yield: Employee stock options 0.00% Non-employee stock options 0.00% Grant date fair value per share: Employee stock options $ 0.02 – $0.08 Non-employee stock options $0.10 |
Schedule of stock-based compensation expense | Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Research and development $ 735 $ 5 $ 1,416 $ 8 General and administrative 258 3 502 3 Total stock-based compensation expense $ 993 $ 8 $ 1,918 $ 11 | Years Ended December 31, 2020 2019 Research and development $ 25 $ — General and administrative 150 — Total $ 175 $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 4 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Dec. 31, 2020 | |
Schedule of components of the provision for incomes taxes | The income tax provision for the period from August 26 (inception) through December 31, 2020 consists of the following: Federal Current $ — Deferred (27,174) State Current — Deferred — Change in valuation allowance 27,174 Income tax provision $ — | |
Schedule of principal reasons for the difference between the effective tax rate and the federal statutory income tax rate | A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2020 is as follows: Statutory federal income tax rate 21.0 % State taxes, net of federal tax benefit 0.0 % Change in fair value of derivative warrant liabilities (19.2) % Non-deductible transaction costs (1.5) % Change in valuation allowance (0.3) % Income tax provision 0.0 % | |
Schedule of tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities | The Company’s net deferred tax assets (liabilities) as of December 31, 2020 is as follows: Deferred tax assets: Start-up costs $ 33,188 Net operating loss carryforwards 14,688 Total deferred tax assets 47,876 Valuation allowance (27,174) Deferred tax liabilities: Unrealized gain on investments (20,702) Total deferred tax liabilities (20,702) Deferred tax assets, net of allowance $ — | |
Archer Aviation Inc | ||
Schedule of components of the provision for incomes taxes | Years ended December 31, 2020 2019 Current: Federal $ — $ — State 1 — Total current 1 — Total income tax provision $ 1 $ — | |
Schedule of principal reasons for the difference between the effective tax rate and the federal statutory income tax rate | Years Ended December 31, 2020 2019 Federal income tax (benefit) 21.0 % 21.0 % State and local income taxes (net of federal benefit) 8.8 % 15.2 % Nondeductible expenses (0.1) % (0.2) % Valuation allowance (29.7) % (36.0) % Effective Tax Rate 0.0 % 0.0 % | |
Schedule of tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities | Years ended December 31, 2020 2019 Deferred Tax Assets: Net operating loss carryforwards $ 7,500 $ 299 Accrued expenses 43 14 Operating lease liability 645 — Other 34 — Gross deferred tax assets 8,222 313 Less: Valuation allowance (7,216) (312) Deferred tax assets, net of valuation allowance 1,006 1 Deferred Tax Liabilities: Stock-based compensation (5) — Depreciation and amortization (356) (1) Right-of-use asset (645) — Total deferred tax liabilities (1,006) (1) Total net deferred tax assets $ — $ — | |
Schedule of activity related to unrecognized tax benefits | Balance as of December 31, 2019 $ 31 Increases related to current year tax positions 2,018 Balance as of December 31, 2020 $ 2,049 |
Liquidity and Going Concern (De
Liquidity and Going Concern (Details) - USD ($) | 3 Months Ended | 4 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net Income (losses) | $ 3,252,607 | $ (2,418,806) | $ (10,850,513) | $ 833,801 | |||||
Cash outflows from operating activities | (564,933) | (1,027,773) | |||||||
Cash and cash equivalents | 297,376 | 925,923 | 297,376 | $ 925,923 | |||||
Archer Aviation Inc | |||||||||
Net Income (losses) | (32,945,000) | $ (94,853,000) | $ (4,902,000) | $ (3,987,000) | (127,798,000) | $ (8,889,000) | (24,823,000) | $ (944,000) | |
Cash outflows from operating activities | (28,770,000) | $ (7,480,000) | (22,896,000) | (809,000) | |||||
Cash and cash equivalents | $ 5,937,000 | $ 36,564,000 | $ 5,937,000 | $ 36,564,000 | $ 10,149,000 |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Cash and Cash Equivalents (Details) - Archer Aviation Inc - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Cash and Cash Equivalents [Line Items] | |||
Fair value of cash equivalents | $ 5,937 | $ 36,564 | |
Level 1 | Money market funds | |||
Cash and Cash Equivalents [Line Items] | |||
Fair value of cash equivalents | $ 344 | $ 34,377 | $ 0 |
Summary of Significant Accou_15
Summary of Significant Accounting Policies - Intangible Assets, Net (Details) - Archer Aviation Inc - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 15 years | |
Gross carrying amount | $ 500 | $ 19 |
Accumulated amortization | 3 | 3 |
Amortization expense | $ 9 | $ 17 |
Domain names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 15 years | |
Gross carrying amount | $ 500 | |
Accumulated amortization | 3 | |
Amortization expense | $ 3 |
Summary of Significant Accou_16
Summary of Significant Accounting Policies - Property and Equipment, Net and Impariment of Long-Lived Assets (Details) - Archer Aviation Inc - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Impairment of Long-Lived Assets | |||
Impairment of long-lived assets | $ 0 | $ 0 | $ 0 |
Furniture, fixtures, and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (in years) | 5 years | 5 years | |
Computer hardware | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (in years) | 3 years | 3 years | |
Computer software | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (in years) | 3 years | 3 years | |
Website design | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (in years) | 2 years | 2 years |
Summary of Significant Accou_17
Summary of Significant Accounting Policies - Paycheck Protection Program Loan (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Apr. 09, 2020 |
Archer Aviation Inc | PPP Loan | ||
Debt Instrument [Line Items] | ||
Proceeds from loan | $ 905 | $ 905 |
Summary of Significant Accou_18
Summary of Significant Accounting Policies - Net Loss Per Share Attributable to Ordinary Stockholders (Details) - shares | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Total | 24,666,667 | |||||
Archer Aviation Inc | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Total | 87,592,400 | 23,041,720 | 87,592,400 | 23,041,720 | 79,242,914 | 18,193,515 |
Archer Aviation Inc | Stock-based compensation awards - employees | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Total | 11,690,674 | 3,714,205 | 11,690,674 | 3,714,205 | 11,167,089 | |
Archer Aviation Inc | Stock-based compensation awards - non-employees | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Total | 11,440,789 | 1,134,000 | 11,440,789 | 1,134,000 | 3,614,888 | |
Archer Aviation Inc | Series Seed redeemable convertible preferred stock | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Total | 18,193,515 | 18,193,515 | 18,193,515 | 18,193,515 | 18,193,515 | 18,193,515 |
Archer Aviation Inc | Series A redeemable convertible preferred stock | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Total | 46,267,422 | 46,267,422 | 46,267,422 |
Summary of Significant Accou_19
Summary of Significant Accounting Policies - Segments (Details) | 12 Months Ended |
Dec. 31, 2020segment | |
Archer Aviation Inc | |
Number of reportable segments | 1 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of property and equipment, net (Details) - Archer Aviation Inc - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property and Equipment, Net [Line Items] | ||||||
Total property and equipment | $ 4,117 | $ 4,117 | $ 1,752 | $ 4 | ||
Less: Accumulated depreciation | (545) | (545) | (139) | |||
Total property and equipment, net | 3,572 | 3,572 | 1,613 | 4 | ||
Depreciation expense | 258 | $ 29 | 405 | $ 35 | 139 | 0 |
Research and development | ||||||
Property and Equipment, Net [Line Items] | ||||||
Depreciation expense | 91 | 10 | 166 | 16 | 72 | |
General and administrative | ||||||
Property and Equipment, Net [Line Items] | ||||||
Depreciation expense | 167 | $ 19 | 239 | $ 19 | 67 | |
Furniture, fixtures, and equipment | ||||||
Property and Equipment, Net [Line Items] | ||||||
Total property and equipment | 1,379 | 1,379 | 1,046 | |||
Computer hardware | ||||||
Property and Equipment, Net [Line Items] | ||||||
Total property and equipment | 1,281 | 1,281 | 524 | $ 4 | ||
Website design | ||||||
Property and Equipment, Net [Line Items] | ||||||
Total property and equipment | 504 | 504 | 128 | |||
Leasehold Improvements [Member] | ||||||
Property and Equipment, Net [Line Items] | ||||||
Total property and equipment | $ 764 | $ 764 | $ 54 |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Other current liabilities | $ 4,404 | ||
Archer Aviation Inc | |||
Accrued interest | $ 6,000 | ||
Accrued bonus | 155,000 | $ 43,000 | |
Deposit liability related to cash received from the early exercise of stock options | 117,000 | ||
Income tax payable | 1,000 | ||
Other current liabilities | $ 667,000 | $ 279,000 | $ 43,000 |
Related Party Transactions - Co
Related Party Transactions - Convertible Promissory Notes (Detail) - Archer Aviation Inc $ in Thousands | Nov. 21, 2019USD ($) | Nov. 21, 2019USD ($) | Nov. 21, 2019USD ($)item | Oct. 11, 2019USD ($) | Oct. 11, 2019USD ($) | Oct. 11, 2019USD ($)item | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2021USD ($) |
Related Party Transaction | |||||||||
Conversion Amount | $ 5,294 | $ 604 | |||||||
Outstanding principal balance on the convertible promissory notes | 0 | 4,995 | |||||||
Convertible Note Purchase Agreement | |||||||||
Related Party Transaction | |||||||||
Outstanding principal balance on the convertible promissory notes | 0 | 4,995 | $ 0 | ||||||
Accrued interest | $ 0 | $ 47 | |||||||
October Notes | Convertible Note Purchase Agreement | |||||||||
Related Party Transaction | |||||||||
Number of convertible promissory notes issued to founders | 2 | 2 | |||||||
Amount of debt issued | $ 601 | $ 601 | $ 601 | ||||||
Interest rate | 5.00% | 5.00% | 5.00% | ||||||
Numerator used to calculate capped price in the debt conversion | $ 4,000 | ||||||||
Discount rate | 80.00% | ||||||||
October Notes | Convertible Note Purchase Agreement | Minimum | |||||||||
Related Party Transaction | |||||||||
Conversion Amount | $ 1,000 | ||||||||
November Notes | Convertible Note Purchase Agreement | |||||||||
Related Party Transaction | |||||||||
Number of convertible promissory notes issued | 3 | 3 | |||||||
Number of convertible promissory notes issued to founders | 2 | 2 | |||||||
Number of convertible promissory notes issued to third-party investor | 1 | 1 | |||||||
Amount of debt issued | $ 5,000 | $ 5,000 | $ 5,000 | ||||||
Interest rate | 10.00% | 10.00% | 10.00% | ||||||
Repayment of debt | $ 25,000 | ||||||||
November Notes | Convertible Note Purchase Agreement | Minimum | |||||||||
Related Party Transaction | |||||||||
Conversion Amount | $ 25,000 |
Related Party Transactions - Pa
Related Party Transactions - Partial Recourse Promissory Notes (Detail) - USD ($) | Nov. 21, 2021 | Nov. 21, 2020 | Dec. 31, 2020 |
Related Party Transaction | |||
Purchase price per share | $ 9.20 | ||
Total amount paid by founders | $ 25,000 | ||
Archer Aviation Inc | Partial recourse promissory note arrangements | |||
Related Party Transaction | |||
Number of shares exercised | 2,645,517 | ||
Purchase price per share | $ 0.15 | ||
Total amount paid by founders | $ 397,000 | ||
Fixed interest rate of Notes | 0.38% | ||
Maturity period | 5 years | ||
Repayment term with in founders termination | 90 days | ||
Exercise price of early exercise of options | $ 0.15 | $ 0.15 |
Paycheck Protection Program L_3
Paycheck Protection Program Loan (Details) - Archer Aviation Inc - USD ($) $ in Thousands | Sep. 06, 2020 | Jun. 11, 2020 | Dec. 31, 2020 | Apr. 09, 2020 | Dec. 31, 2019 |
Paycheck Protection Program Loan [Line ltems] | |||||
Notes payable | $ 260 | $ 0 | |||
Outstanding balance | 645 | $ 0 | |||
PPP Loan | |||||
Paycheck Protection Program Loan [Line ltems] | |||||
Proceeds from loan | $ 905 | $ 905 | |||
Interest rate | 0.98% | 0.98% | |||
Deferral period | 6 months | ||||
Notes payable | $ 260 | ||||
Outstanding balance | $ 645 | ||||
SBA | |||||
Paycheck Protection Program Loan [Line ltems] | |||||
Deferral period | 10 months |
Paycheck Protection Program L_4
Paycheck Protection Program Loan - Future principal payments under the PPP loan agreement (Details) - Archer Aviation Inc - PPP Loan - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Apr. 09, 2020 | |
Future principal payments under the PPP loan agreement [Line ltems] | ||
2021 | $ 645 | |
2022 | 260 | |
Total | $ 905 | |
Interest rate | 0.98% | 0.98% |
Maximum | ||
Future principal payments under the PPP loan agreement [Line ltems] | ||
Interest rate | 75.00% | |
Maturity period | 5 years | |
Minimum | ||
Future principal payments under the PPP loan agreement [Line ltems] | ||
Interest rate | 60.00% | |
Maturity period | 2 years |
Commitments and Contingencies -
Commitments and Contingencies - Weighted-average remaining lease term and weighted-average discount rate (Details) - Archer Aviation Inc $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021USD ($) | Jun. 30, 2021USD ($) | Dec. 31, 2020USD ($)facility | Dec. 31, 2019 | |
Weighted-average remaining lease term and weighted-average discount rate [Line ltems] | ||||
Number of corporate facility lease arrangements | facility | 1 | |||
Number of short-term storage facility lease arrangements | facility | 1 | |||
Lease term | 6 months | |||
Operating lease cost | $ 388 | $ 731 | $ 52 | |
Short-term lease cost | 25 | 44 | ||
Total lease cost | $ 388 | $ 756 | $ 96 | |
Weighted-average remaining lease term (in months) | 23 months 12 days | 23 months 12 days | 30 months | 0 months |
Weighted-average discount rate | 11.29% | 11.29% | 12.17% |
Commitments and Contingencies_2
Commitments and Contingencies - Future obligations under noncancelable operating leases (Details) - Archer Aviation Inc - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | |
Years ending December 31, | |||
2021 | $ 1,546 | $ 1,546 | $ 1,043 |
2022 | 688 | 688 | 1,074 |
2023 | 507 | ||
Future minimum lease payments | 3,008 | 3,008 | 2,624 |
Less: Amount representing interest | (294) | (294) | (323) |
Present value of future lease payments | 2,714 | 2,714 | 2,301 |
Supplemental cash information and non-cash activities related to right-of-use assets and lease liabilities | |||
Operating cash outflows from operating leases | 379 | 706 | 86 |
Operating lease assets obtained in exchange for new lease liabilities | $ 165 | $ 984 | $ 2,300 |
Commitments and Contingencies_3
Commitments and Contingencies - Letter of Credit (Details) - Archer Aviation Inc - Standby letter of credit - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | Sep. 15, 2020 | |
Letter of Credit | |||
Proceeds from loan | $ 257 | ||
Maturity period | 12 months | 12 months |
Preferred and Common Stock (Det
Preferred and Common Stock (Details) $ / shares in Units, $ in Thousands | Oct. 11, 2019 | Jun. 30, 2021USD ($)Votedirector$ / sharesshares | Dec. 31, 2020USD ($)directorVote$ / sharesshares | Mar. 31, 2021shares | Jun. 30, 2020shares | Mar. 31, 2020shares | Dec. 31, 2019shares | Dec. 31, 2018shares |
Preferred and Common Stock | ||||||||
Redeemable convertible preferred stock, shares authorized | 1,000,000 | 1,000,000 | ||||||
Redeemable convertible preferred stock, shares issued | 0 | 0 | ||||||
Redeemable convertible preferred stock, shares outstanding | 0 | 0 | ||||||
Archer Aviation Inc | ||||||||
Preferred and Common Stock | ||||||||
Stock split ratio | 1 | |||||||
Common stock, shares authorized | 155,000,000 | 143,677,090 | 77,285,983 | |||||
Common stock, shares issued | 52,229,481 | 51,321,752 | 50,000,000 | |||||
Common Stock, Shares, Outstanding | 52,229,481 | 51,321,752 | 50,000,000 | |||||
Common stock, votes per share | Vote | 1 | 1 | ||||||
Number of directors the common stock holders are entitled to elect | director | 3 | 3 | ||||||
Common stock dividends declared | $ | $ 0 | $ 0 | ||||||
Preferred stock dividends declared | $ | $ 0 | $ 0 | ||||||
Minimum number of shares held for preemptive rights | 4,150,755 | 4,150,755 | ||||||
Archer Aviation Inc | Common Stock | ||||||||
Preferred and Common Stock | ||||||||
Stock split ratio | 5 | |||||||
Archer Aviation Inc | Redeemable convertible preferred stock | ||||||||
Preferred and Common Stock | ||||||||
Stock split ratio | 1 | |||||||
Archer Aviation Inc | Series Seed redeemable convertible preferred stock | ||||||||
Preferred and Common Stock | ||||||||
Redeemable convertible preferred stock, shares authorized | 18,193,515 | 18,193,515 | 18,193,515 | |||||
Redeemable convertible preferred stock, shares issued | 18,193,515 | 18,193,515 | 18,193,515 | |||||
Redeemable convertible preferred stock, shares outstanding | 18,193,515 | 18,193,515 | 18,193,515 | 18,193,515 | 18,193,515 | 18,193,515 | 0 | |
Original issue price | $ / shares | $ 0.3300 | $ 0.3300 | ||||||
Conversion price | $ / shares | $ 0.3300 | $ 0.3300 | ||||||
Archer Aviation Inc | Series A redeemable convertible preferred stock | ||||||||
Preferred and Common Stock | ||||||||
Redeemable convertible preferred stock, shares authorized | 46,732,728 | 46,732,728 | 0 | |||||
Redeemable convertible preferred stock, shares issued | 46,267,422 | 46,267,422 | 0 | |||||
Redeemable convertible preferred stock, shares outstanding | 46,267,422 | 46,267,422 | 46,267,422 | 0 | 0 | 0 | 0 | |
Number of directors the common stock holders are entitled to elect | director | 1 | |||||||
Number of directors the Series A Preferred Stock holders are entitled to elect | director | 1 | |||||||
Original issue price | $ / shares | $ 1.2046 | $ 1.2046 | ||||||
Conversion price | $ / shares | $ 1.2046 | $ 1.2046 |
Stock-Based Compensation - 2019
Stock-Based Compensation - 2019 stock plan (Details) - Archer Aviation Inc - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2021 | Dec. 31, 2020 | Jan. 31, 2021 | Oct. 11, 2020 | Oct. 04, 2020 | Dec. 31, 2019 | Nov. 20, 2019 | |
Employee | |||||||
Number of Shares | |||||||
Outstanding as of January 1, 2021 | 11,167,089 | ||||||
Granted | 11,318,689 | ||||||
Exercised | (151,600) | ||||||
Outstanding as of June 30, 2021 | 11,167,089 | ||||||
Exercisable as of December 31, 2020 | 1,432,988 | ||||||
Vested and expected to vest as of December 31, 2020 | 11,167,089 | ||||||
Weighted Average Exercise Price | |||||||
Outstanding as of January 1, 2021 | $ 0.11 | ||||||
Granted | $ 0.11 | ||||||
Exercised | 0.04 | ||||||
Outstanding as of June 30, 2021 | 0.11 | ||||||
Exercisable as of December 31, 2020 | 0.15 | ||||||
Vested and expected to vest as of December 31, 2020 | $ 0.11 | ||||||
Weighted Average Remaining Contractual Life (Years) | |||||||
Outstanding as of December 31, 2020 | 9 years 7 months 9 days | ||||||
Exercisable as of December 31, 2020 | 9 years 10 months 2 days | ||||||
Vested and expected to vest as of December 31, 2020 | 9 years 7 months 9 days | ||||||
Aggregate Intrinsic Value | |||||||
Outstanding as of January 1, 2021 | $ 136,988 | ||||||
Exercised | $ 1,324 | ||||||
Outstanding as of June 30, 2021 | 136,988 | ||||||
Exercisable as of December 31, 2020 | 17,528 | ||||||
Vested and expected to vest as of December 31, 2020 | $ 136,988 | ||||||
Non-employee | |||||||
Number of Shares | |||||||
Outstanding as of January 1, 2021 | 1,387,586 | ||||||
Granted | 1,423,738 | ||||||
Exercised | (36,152) | ||||||
Outstanding as of June 30, 2021 | 1,387,586 | ||||||
Exercisable as of December 31, 2020 | 6,172 | ||||||
Vested and expected to vest as of December 31, 2020 | 1,387,586 | ||||||
Weighted Average Exercise Price | |||||||
Outstanding as of January 1, 2021 | $ 0.15 | ||||||
Granted | $ 0.15 | ||||||
Exercised | 0.15 | ||||||
Outstanding as of June 30, 2021 | 0.15 | ||||||
Exercisable as of December 31, 2020 | 0.15 | ||||||
Vested and expected to vest as of December 31, 2020 | $ 0.15 | ||||||
Weighted Average Remaining Contractual Life (Years) | |||||||
Outstanding as of December 31, 2020 | 9 years 10 months 2 days | ||||||
Exercisable as of December 31, 2020 | 9 years 10 months 2 days | ||||||
Vested and expected to vest as of December 31, 2020 | 9 years 10 months 2 days | ||||||
Aggregate Intrinsic Value | |||||||
Outstanding as of January 1, 2021 | $ 16,973 | ||||||
Exercised | $ 282 | ||||||
Outstanding as of June 30, 2021 | 16,973 | ||||||
Exercisable as of December 31, 2020 | 75 | ||||||
Vested and expected to vest as of December 31, 2020 | $ 16,973 | ||||||
2019 Stock Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized for grant | 5,555,555 | 15,689,294 | 7,577,057 | ||||
Common stock available for future issuance | 543,578 | 1,812,867 | 7,577,057 | ||||
2019 Stock Plan | Stock options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized for grant | 1,269,289 | ||||||
2019 Stock Plan | Stock options | Employee | |||||||
Number of Shares | |||||||
Outstanding as of January 1, 2021 | 11,167,089 | ||||||
Granted | 1,203,981 | ||||||
Exercised | (680,396) | ||||||
Outstanding as of June 30, 2021 | 11,690,674 | 11,167,089 | |||||
Exercisable as of December 31, 2020 | 2,335,560 | ||||||
Vested and expected to vest as of December 31, 2020 | 11,690,674 | ||||||
Weighted Average Exercise Price | |||||||
Outstanding as of January 1, 2021 | $ 0.11 | ||||||
Granted | 0.15 | ||||||
Exercised | 0.04 | ||||||
Outstanding as of June 30, 2021 | 0.12 | $ 0.11 | |||||
Exercisable as of December 31, 2020 | 0.14 | ||||||
Vested and expected to vest as of December 31, 2020 | $ 0.12 | ||||||
Weighted Average Remaining Contractual Life (Years) | |||||||
Outstanding as of December 31, 2020 | 9 years 2 months 4 days | 9 years 7 months 9 days | |||||
Exercisable as of December 31, 2020 | 9 years 3 months 10 days | ||||||
Vested and expected to vest as of December 31, 2020 | 9 years 2 months 4 days | ||||||
Aggregate Intrinsic Value | |||||||
Outstanding as of January 1, 2021 | $ 136,988 | ||||||
Exercised | 9,339 | ||||||
Outstanding as of June 30, 2021 | 177,315 | $ 136,988 | |||||
Exercisable as of December 31, 2020 | 35,385 | ||||||
Vested and expected to vest as of December 31, 2020 | $ 177,315 | ||||||
2019 Stock Plan | Stock options | Non-employee | |||||||
Number of Shares | |||||||
Outstanding as of January 1, 2021 | 1,387,586 | ||||||
Granted | 65,308 | ||||||
Exercised | (227,333) | ||||||
Outstanding as of June 30, 2021 | 1,225,561 | 1,387,586 | |||||
Exercisable as of December 31, 2020 | 33,900 | ||||||
Vested and expected to vest as of December 31, 2020 | 1,225,561 | ||||||
Weighted Average Exercise Price | |||||||
Outstanding as of January 1, 2021 | $ 0.15 | ||||||
Granted | 0.15 | ||||||
Exercised | 0.15 | ||||||
Outstanding as of June 30, 2021 | 0.15 | $ 0.15 | |||||
Exercisable as of December 31, 2020 | 0.15 | ||||||
Vested and expected to vest as of December 31, 2020 | $ 0.15 | ||||||
Weighted Average Remaining Contractual Life (Years) | |||||||
Outstanding as of December 31, 2020 | 9 years 4 months 6 days | 9 years 10 months 2 days | |||||
Exercisable as of December 31, 2020 | 9 years 4 months 28 days | ||||||
Vested and expected to vest as of December 31, 2020 | 9 years 4 months 6 days | ||||||
Aggregate Intrinsic Value | |||||||
Outstanding as of January 1, 2021 | $ 16,973 | ||||||
Exercised | 3,129 | ||||||
Outstanding as of June 30, 2021 | 18,885 | $ 16,973 | |||||
Exercisable as of December 31, 2020 | 513 | ||||||
Vested and expected to vest as of December 31, 2020 | $ 18,885 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted stock activity (Details) - Archer Aviation Inc - 2019 Stock Plan - Restricted stock - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Number of Shares | ||
Outstanding as of January 1, 2021 | 567,000 | |
Granted | 1,134,000 | |
Vested | (567,000) | (567,000) |
Outstanding as of June 30, 2021 | 567,000 | |
Weighted Average Grant Price | ||
Outstanding as of January 1, 2021 | $ 0.04 | |
Granted | $ 0.04 | |
Vested | $ 0.04 | 0.04 |
Outstanding as of June 30, 2021 | $ 0.04 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions used in Black-Scholes (Details) - Archer Aviation Inc - Stock options - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Employee | ||
Assumptions used in the Black-Scholes option pricing model | ||
Risk-free interest rate, minimum | 0.52% | |
Risk-free interest rate, maximum | 1.52% | |
Risk-free interest rate | 0.62% | |
Expected term (in years) | 6 years 3 months 25 days | |
Expected volatility, minimum | 60.00% | |
Expected volatility, maximum | 70.00% | |
Expected volatility | 87.94% | |
Dividend yield | 0.00% | 0.00% |
Grant date fair value per share | $ 13.65 | |
Employee | Maximum | ||
Assumptions used in the Black-Scholes option pricing model | ||
Expected term (in years) | 6 years 3 months 25 days | |
Grant date fair value per share | $ 0.08 | |
Employee | Minimum | ||
Assumptions used in the Black-Scholes option pricing model | ||
Expected term (in years) | 6 years 7 days | |
Grant date fair value per share | $ 0.02 | |
Non-employee | ||
Assumptions used in the Black-Scholes option pricing model | ||
Risk-free interest rate | 1.08% | 0.79% |
Expected term (in years) | 10 years | 10 years |
Expected volatility | 88.03% | 60.00% |
Dividend yield | 0.00% | 0.00% |
Grant date fair value per share | $ 13.68 | $ 0.10 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-based compensation expense (Details) - Archer Aviation Inc - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 993 | $ 8 | $ 1,918 | $ 11 | $ 175 |
Research and development | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | 735 | 5 | 1,416 | 8 | 25 |
General and administrative | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | 258 | 3 | $ 502 | 3 | 150 |
Employee | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total remaining stock-based compensation expense for unvested stock options | 142 | ||||
Cost expected to be recognized over a weighted-average period | 1 year 8 months 12 days | ||||
Non-employee | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total remaining stock-based compensation expense for unvested stock options | 8 | ||||
Cost expected to be recognized over a weighted-average period | 1 year 1 month 6 days | ||||
Stock options | Employee | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | 861 | 5 | $ 1,658 | $ 8 | |
Stock options | Non-employee | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | 123 | 240 | |||
Total remaining stock-based compensation expense for restricted stock awards | 25 | ||||
Restricted stock | Non-employee | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | 9 | $ 3 | 20 | ||
Total remaining stock-based compensation expense for restricted stock awards | $ 20 | ||||
Cost expected to be recognized over a weighted-average period | 2 months 12 days | ||||
Unvested stock options | Employee | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total remaining stock-based compensation expense for unvested stock options | 15,342 | 15,342 | |||
Total remaining stock-based compensation expense for restricted stock awards | $ 565 | ||||
Cost expected to be recognized over a weighted-average period | 1 year 9 months 18 days | ||||
Unvested stock options | Non-employee | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total remaining stock-based compensation expense for unvested stock options | $ 788 | $ 788 | |||
Total remaining stock-based compensation expense for restricted stock awards | $ 135 | ||||
Cost expected to be recognized over a weighted-average period | 1 year 4 months 24 days |
Stock-Based Compensation - Coll
Stock-Based Compensation - Collaboration agreement and warrant (Details) - Archer Aviation Inc - Collaboration Agreement - $ / shares | Sep. 30, 2020 | Nov. 06, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares to be purchased | 1,660,302 | |
Exercise price of warrants | $ 0.01 | |
Common stock, value per share | $ 0.15 | |
Preferred stock, value per share | $ 1.20 |
Income Taxes - Components of th
Income Taxes - Components of the provison for income taxes (Details) - Archer Aviation Inc - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current: | ||||||
State | $ 1 | |||||
Total current | 1 | |||||
Total income tax provision | $ 0 | $ 0 | $ 2 | $ 0 | $ 1 | $ 0 |
Income Taxes - Difference betwe
Income Taxes - Difference between the effective tax rate and the federal statutory income tax rate (Details) | 3 Months Ended | 4 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Federal income tax (benefit) | 21.00% | ||||
State and local income taxes (net of federal benefit) | 0.00% | ||||
Nondeductible expenses | (1.50%) | ||||
Valuation allowance | (0.30%) | ||||
Effective Tax Rate | 0.00% | ||||
Archer Aviation Inc | |||||
Federal income tax (benefit) | 21.00% | 21.00% | |||
State and local income taxes (net of federal benefit) | 8.80% | 15.20% | |||
Nondeductible expenses | (0.10%) | (0.20%) | |||
Valuation allowance | (29.70%) | (36.00%) | |||
Effective Tax Rate | 0.00% | 0.00% | 0.00% | 0.00% |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets and deferred tax liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Tax Assets: | ||
Net operating loss carryforwards | $ 14,688 | |
Gross deferred tax assets | 47,876 | |
Less: Valuation allowance | (27,174) | |
Deferred Tax Liabilities: | ||
Total deferred tax liabilities | (20,702) | |
Archer Aviation Inc | ||
Deferred Tax Assets: | ||
Net operating loss carryforwards | 7,500,000 | $ 299,000 |
Accrued expenses | 43,000 | 14,000 |
Operating lease liability | 645,000 | |
Other | 34,000 | |
Gross deferred tax assets | 8,222,000 | 313,000 |
Less: Valuation allowance | (7,216,000) | (312,000) |
Deferred tax assets, net of valuation allowance | 1,006,000 | 1,000 |
Deferred Tax Liabilities: | ||
Stock-based compensation | (5,000) | |
Depreciation and amortization | (356,000) | (1,000) |
Right-of-use asset | (645,000) | |
Total deferred tax liabilities | $ (1,006,000) | $ (1,000) |
Income Taxes - Net operating lo
Income Taxes - Net operating loss carryforwards (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Operating Loss Carryforwards [Line Items] | ||
Deferred tax valuation allowances | $ 27,174 | |
U.S. federal | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carry forwards | 70,000 | |
Archer Aviation Inc | ||
Operating Loss Carryforwards [Line Items] | ||
Deferred tax valuation allowances | 7,216,000 | $ 312,000 |
Archer Aviation Inc | U.S. federal | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carry forwards | 26,959,000 | 905,000 |
Archer Aviation Inc | State | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carry forwards | $ 26,692,000 | $ 1,796,000 |
Income Taxes - Unrecognized tax
Income Taxes - Unrecognized tax benefits (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Balance as of December 31, 2020 | $ 0 | |
Archer Aviation Inc | ||
Balance as of December 31, 2019 | 31,000 | |
Increases related to current year tax positions | 2,018,000 | |
Balance as of December 31, 2020 | 2,049,000 | $ 31,000 |
Interest and penalties related to uncertain tax positions | $ 0 | $ 0 |
401(k) Savings Plan (Details)
401(k) Savings Plan (Details) - Archer Aviation Inc - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Matching contribution (in percent) | 50.00% | 50.00% | |||
Maximum annual employer contribution per employee | $ 9,000 | ||||
Matching contributions | $ 123 | $ 67 | $ 252 | $ 126 | $ 276,000 |
Subsequent Events (Details)_2
Subsequent Events (Details) - Archer Aviation Inc $ / shares in Units, $ in Millions | Feb. 10, 2021USD ($) | Jan. 29, 2021USD ($)$ / sharesshares | Jul. 09, 2021$ / sharesshares | Dec. 31, 2020 | Dec. 11, 2020ft² |
Subsequent Event | |||||
Lease term | 6 months | ||||
Whisman Lease Agreement | |||||
Subsequent Event | |||||
Lease space (in sqft) | ft² | 14,660 | ||||
Lease term | 30 months | ||||
Lease renewal term | 12 months | ||||
Subsequent event | |||||
Subsequent Event | |||||
Number of shares for each warrant | shares | 1 | ||||
Exercise price of warrants | $ / shares | $ 17.30 | ||||
Subsequent event | Business Combination Agreement | |||||
Subsequent Event | |||||
Equity value | $ 2,525 | ||||
Subsequent event | Business Combination Agreement | Maximum | |||||
Subsequent Event | |||||
Amount of common stock subscription | $ 600 | ||||
Subsequent event | United Collaboration | |||||
Subsequent Event | |||||
Conditional order to purchase aircraft, Amount | $ 1,000 | ||||
Subsequent event | United Collaboration | Maximum | |||||
Subsequent Event | |||||
Amount of option to purchase additional quantity of aircraft | $ 500 | ||||
Subsequent event | Warrant Agreement | |||||
Subsequent Event | |||||
Maximum number of warrants issued | shares | 14,645,614 | ||||
Percentage of warrants assigned | 20.00% | ||||
Number of shares for each warrant | shares | 1 | ||||
Exercise price of warrants | $ / shares | $ 0.01 |
Condensed Balance Sheets_2
Condensed Balance Sheets | Jun. 30, 2021USD ($) |
Current assets | |
Cash and cash equivalents | $ 297,376 |
Prepaid expenses | 251,628 |
Total current assets | 549,004 |
Total assets | 500,770,589 |
Current liabilities | |
Accounts payable | 77,617 |
Other current liabilities | 4,404 |
Total current liabilities | 7,857,245 |
Total liabilities | 46,083,912 |
Commitments and contingencies (Note 7) | |
Redeemable convertible preferred stock | |
Stockholders' deficit | |
Additional paid-in capital | 23,750 |
Accumulated deficit | (45,481,339) |
Total stockholders' deficit | (45,456,339) |
Total liabilities, redeemable convertible preferred stock, and stockholders' deficit | 500,770,589 |
Archer Aviation Inc | |
Current assets | |
Cash and cash equivalents | 5,937,000 |
Prepaid expenses | 542,000 |
Other current assets | 199,000 |
Total current assets | 6,678,000 |
Property and equipment, net | 3,572,000 |
Intangible assets, net | 481,000 |
Right-of-use asset | 2,687,000 |
Other long-term assets | 235,000 |
Total assets | 13,653,000 |
Current liabilities | |
Accounts payable | 21,710,000 |
Lease liability | 1,329,000 |
Other current liabilities | 667,000 |
Total current liabilities | 23,706,000 |
Lease liability, net of current portion | 1,385,000 |
Other long-term liabilities | 215,000 |
Total liabilities | 25,306,000 |
Commitments and contingencies (Note 7) | |
Stockholders' deficit | |
Common stock, $0.0001 par value; 155,000,000 shares authorized; 52,229,481 shares issued and outstanding as of June 30, 2021 and 143,677,090 shares authorized; 51,321,752 shares issued and outstanding as of December 31, 2020 | 5,000 |
Additional paid-in capital | 80,408,000 |
Accumulated deficit | (153,598,000) |
Total stockholders' deficit | (73,185,000) |
Total liabilities, redeemable convertible preferred stock, and stockholders' deficit | 13,653,000 |
Archer Aviation Inc | Series Seed redeemable convertible preferred stock | |
Current liabilities | |
Redeemable convertible preferred stock | 5,943,000 |
Stockholders' deficit | |
Total stockholders' deficit | 5,943,000 |
Archer Aviation Inc | Series A redeemable convertible preferred stock | |
Current liabilities | |
Redeemable convertible preferred stock | 55,589,000 |
Stockholders' deficit | |
Total stockholders' deficit | $ 55,589,000 |
Condensed Balance Sheets (Par_2
Condensed Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Redeemable convertible preferred stock, par value | $ 0.0001 | $ 0.0001 | |||||
Redeemable convertible preferred stock, shares authorized | 1,000,000 | 1,000,000 | |||||
Redeemable convertible preferred stock, shares issued | 0 | 0 | |||||
Redeemable convertible preferred stock, shares outstanding | 0 | 0 | |||||
Archer Aviation Inc | |||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Common stock, shares authorized | 155,000,000 | 143,677,090 | 77,285,983 | ||||
Common stock, shares issued | 52,229,481 | 51,321,752 | 50,000,000 | ||||
Common stock, shares outstanding | 52,229,481 | 51,321,752 | 50,000,000 | ||||
Archer Aviation Inc | Series Seed redeemable convertible preferred stock | |||||||
Redeemable convertible preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Redeemable convertible preferred stock, liquidation value | $ 6,004 | $ 6,004 | $ 6,004 | ||||
Redeemable convertible preferred stock, shares authorized | 18,193,515 | 18,193,515 | 18,193,515 | ||||
Redeemable convertible preferred stock, shares issued | 18,193,515 | 18,193,515 | 18,193,515 | ||||
Redeemable convertible preferred stock, shares outstanding | 18,193,515 | 18,193,515 | 18,193,515 | 18,193,515 | 18,193,515 | 18,193,515 | 0 |
Archer Aviation Inc | Series A redeemable convertible preferred stock | |||||||
Redeemable convertible preferred stock, par value | $ 0.0001 | $ 0.0001 | |||||
Redeemable convertible preferred stock, liquidation value | $ 55,734 | $ 55,734 | |||||
Redeemable convertible preferred stock, shares authorized | 46,732,728 | 46,732,728 | 0 | ||||
Redeemable convertible preferred stock, shares issued | 46,267,422 | 46,267,422 | 0 | ||||
Redeemable convertible preferred stock, shares outstanding | 46,267,422 | 46,267,422 | 46,267,422 | 0 | 0 | 0 | 0 |
Condensed Statements of Opera_2
Condensed Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 4 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating expenses | |||||||||
Loss from operations | $ (3,814,362) | $ (229,892) | $ (8,589,862) | ||||||
Net loss and comprehensive loss | 3,252,607 | $ (2,418,806) | $ (10,850,513) | 833,801 | |||||
Archer Aviation Inc | |||||||||
Operating expenses | |||||||||
Research and development | 11,448,000 | $ 4,105,000 | 21,514,000 | $ 6,974,000 | $ 21,097,000 | $ 769,000 | |||
General and administrative | 22,409,000 | 669,000 | 28,987,000 | 1,686,000 | 3,491,000 | 122,000 | |||
Other warrant expense | 0 | 0 | 78,208,000 | 0 | |||||
Total operating expenses | 33,857,000 | 4,774,000 | 128,709,000 | 8,660,000 | 24,588,000 | 891,000 | |||
Loss from operations | (33,857,000) | (4,774,000) | (128,709,000) | (8,660,000) | (24,588,000) | (891,000) | |||
Gain on forgiveness of PPP loan | 912,000 | 0 | 912,000 | 0 | |||||
Other expense, net | (3,000) | 0 | 0 | 0 | (2,000) | 0 | |||
Interest income (expense) | 3,000 | (128,000) | 1,000 | (229,000) | (232,000) | (53,000) | |||
Loss before income taxes | (32,945,000) | (4,902,000) | (127,796,000) | (8,889,000) | (24,822,000) | (944,000) | |||
Income tax expense | 0 | 0 | (2,000) | 0 | (1,000) | 0 | |||
Net loss and comprehensive loss | $ (32,945,000) | $ (94,853,000) | $ (4,902,000) | $ (3,987,000) | $ (127,798,000) | $ (8,889,000) | $ (24,823,000) | $ (944,000) | |
Net loss per share, basic and diluted | $ (0.57) | $ (0.10) | $ (2.25) | $ (0.18) | $ (0.49) | $ (0.02) | |||
Weighted-average common shares, basic and diluted | 58,100,977 | 50,000,000 | 56,774,344 | 50,000,000 | 50,164,360 | 50,000,000 |
Condensed Statements of Redeema
Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders' Deficit (Unaudited) - USD ($) | Archer Aviation IncSeries Seed redeemable convertible preferred stock | Archer Aviation IncSeries A redeemable convertible preferred stock | Archer Aviation IncCommon Stock | Archer Aviation IncAdditional Paid-in Capital | Archer Aviation IncAccumulated Deficit | Archer Aviation Inc | Additional Paid-in Capital | Accumulated Deficit | Total | |
Balance as of beginning of period at Dec. 31, 2018 | $ 0 | $ 0 | $ 5,000 | $ 0 | $ (33,000) | $ (28,000) | ||||
Balance as of beginning of period, preferred stock (in shares) at Dec. 31, 2018 | 0 | 0 | ||||||||
Balance as of beginning of period, common stock (in shares) at Dec. 31, 2018 | 50,000,000 | |||||||||
Issuance of preferred stock | $ 5,339,000 | $ 0 | $ 0 | 0 | 0 | 0 | ||||
Issuance of preferred stock (in shares) | 16,363,635 | 0 | ||||||||
Conversion of notes and accrued interest to preferred stock | $ 604,000 | $ 0 | 0 | 0 | 0 | 0 | ||||
Conversion of notes and accrued interest to preferred stock (in shares) | 1,829,880 | 0 | ||||||||
Net loss | $ 0 | $ 0 | 0 | 0 | (944,000) | (944,000) | ||||
Balance as of end of period at Dec. 31, 2019 | $ 5,943,000 | $ 0 | $ 5,000 | 0 | (977,000) | $ (972,000) | ||||
Balance as of end of period, preferred stock (in shares) at Dec. 31, 2019 | 18,193,515 | 0 | ||||||||
Balance as of end of period, common stock (in shares) at Dec. 31, 2019 | 50,000,000 | 50,000,000 | ||||||||
Stock-based compensation expense | $ 0 | $ 0 | $ 0 | 3,000 | 0 | $ 3,000 | ||||
Net loss | 0 | 0 | 0 | 0 | (3,987,000) | (3,987,000) | ||||
Balance as of end of period at Mar. 31, 2020 | $ 5,943,000 | $ 0 | $ 5,000 | 3,000 | (4,964,000) | (4,956,000) | ||||
Balance as of end of period, preferred stock (in shares) at Mar. 31, 2020 | 18,193,515 | 0 | ||||||||
Balance as of end of period, common stock (in shares) at Mar. 31, 2020 | 50,000,000 | |||||||||
Balance as of beginning of period at Dec. 31, 2019 | $ 5,943,000 | $ 0 | $ 5,000 | 0 | (977,000) | $ (972,000) | ||||
Balance as of beginning of period, preferred stock (in shares) at Dec. 31, 2019 | 18,193,515 | 0 | ||||||||
Balance as of beginning of period, common stock (in shares) at Dec. 31, 2019 | 50,000,000 | 50,000,000 | ||||||||
Net loss | $ (8,889,000) | |||||||||
Balance as of end of period at Jun. 30, 2020 | $ 5,943,000 | $ 0 | $ 5,000 | 11,000 | (9,866,000) | (9,850,000) | ||||
Balance as of end of period, preferred stock (in shares) at Jun. 30, 2020 | 18,193,515 | 0 | ||||||||
Balance as of end of period, common stock (in shares) at Jun. 30, 2020 | 51,134,000 | |||||||||
Balance as of beginning of period at Dec. 31, 2019 | $ 5,943,000 | $ 0 | $ 5,000 | 0 | (977,000) | $ (972,000) | ||||
Balance as of beginning of period, preferred stock (in shares) at Dec. 31, 2019 | 18,193,515 | 0 | ||||||||
Balance as of beginning of period, common stock (in shares) at Dec. 31, 2019 | 50,000,000 | 50,000,000 | ||||||||
Issuance of preferred stock | $ 0 | $ 50,295,000 | $ 0 | 0 | 0 | $ 0 | ||||
Issuance of preferred stock (in shares) | 0 | 41,872,399 | 0 | |||||||
Conversion of notes and accrued interest to preferred stock | $ 0 | $ 5,294,000 | $ 0 | 0 | 0 | 0 | ||||
Conversion of notes and accrued interest to preferred stock (in shares) | 0 | 4,395,023 | 0 | |||||||
Issuance of restricted stock | $ 0 | $ 0 | $ 0 | 0 | 0 | 0 | ||||
Issuance of restricted stock (in shares) | 0 | 0 | 1,134,000 | |||||||
Exercise of stock options | $ 0 | $ 0 | $ 0 | 11,000 | 0 | 11,000 | ||||
Exercise of stock options (in shares) | 0 | 0 | 187,752 | |||||||
Stock-based compensation expense | $ 0 | $ 0 | $ 0 | 175,000 | 0 | 175,000 | ||||
Net loss | 0 | 0 | 0 | 0 | (24,823,000) | (24,823,000) | ||||
Balance as of end of period at Dec. 31, 2020 | $ 5,943,000 | $ 55,589,000 | $ 5,000 | 186,000 | (25,800,000) | $ (25,609,000) | $ 15,848,758 | $ (10,850,513) | $ 5,000,006 | |
Balance as of end of period, preferred stock (in shares) at Dec. 31, 2020 | 18,193,515 | 46,267,422 | 0 | |||||||
Balance as of end of period, common stock (in shares) at Dec. 31, 2020 | 51,321,752 | 51,321,752 | ||||||||
Balance as of beginning of period at Mar. 31, 2020 | $ 5,943,000 | $ 0 | $ 5,000 | 3,000 | (4,964,000) | $ (4,956,000) | ||||
Balance as of beginning of period, preferred stock (in shares) at Mar. 31, 2020 | 18,193,515 | 0 | ||||||||
Balance as of beginning of period, common stock (in shares) at Mar. 31, 2020 | 50,000,000 | |||||||||
Issuance of restricted stock | $ 0 | $ 0 | $ 0 | 0 | 0 | 0 | ||||
Issuance of restricted stock (in shares) | 0 | 0 | 1,134,000 | |||||||
Stock-based compensation expense | $ 0 | $ 0 | $ 0 | 8,000 | 0 | 8,000 | ||||
Net loss | 0 | 0 | 0 | 0 | (4,902,000) | (4,902,000) | ||||
Balance as of end of period at Jun. 30, 2020 | $ 5,943,000 | $ 0 | $ 5,000 | 11,000 | (9,866,000) | (9,850,000) | ||||
Balance as of end of period, preferred stock (in shares) at Jun. 30, 2020 | 18,193,515 | 0 | ||||||||
Balance as of end of period, common stock (in shares) at Jun. 30, 2020 | 51,134,000 | |||||||||
Balance as of beginning of period at Aug. 25, 2020 | 0 | 0 | $ 0 | |||||||
Issuance of preferred stock | [1] | 23,562 | 25,000 | |||||||
Net loss | (10,850,513) | (10,850,513) | ||||||||
Balance as of end of period at Dec. 31, 2020 | $ 5,943,000 | $ 55,589,000 | $ 5,000 | 186,000 | (25,800,000) | $ (25,609,000) | 15,848,758 | (10,850,513) | $ 5,000,006 | |
Balance as of end of period, preferred stock (in shares) at Dec. 31, 2020 | 18,193,515 | 46,267,422 | 0 | |||||||
Balance as of end of period, common stock (in shares) at Dec. 31, 2020 | 51,321,752 | 51,321,752 | ||||||||
Exercise of stock options | $ 0 | $ 0 | $ 0 | 40,000 | 0 | $ 40,000 | ||||
Exercise of stock options (in shares) | 667,979,000 | |||||||||
Issuance of warrants | 0 | 0 | $ 0 | 78,242,000 | 0 | 78,242,000 | ||||
Stock-based compensation expense | 0 | 0 | 0 | 925,000 | 0 | 925,000 | ||||
Net loss | 0 | 0 | 0 | 0 | (94,853,000) | (94,853,000) | (2,418,806) | $ (2,418,806) | ||
Balance as of end of period at Mar. 31, 2021 | $ 5,943,000 | $ 55,589,000 | $ 5,000 | 79,393,000 | (120,653,000) | (41,255,000) | 23,750 | (48,748,289) | (48,723,289) | |
Balance as of end of period, preferred stock (in shares) at Mar. 31, 2021 | 18,193,515 | 46,267,422 | ||||||||
Balance as of end of period, common stock (in shares) at Mar. 31, 2021 | 51,989,731 | |||||||||
Balance as of beginning of period at Dec. 31, 2020 | $ 5,943,000 | $ 55,589,000 | $ 5,000 | 186,000 | (25,800,000) | $ (25,609,000) | 15,848,758 | (10,850,513) | $ 5,000,006 | |
Balance as of beginning of period, preferred stock (in shares) at Dec. 31, 2020 | 18,193,515 | 46,267,422 | 0 | |||||||
Balance as of beginning of period, common stock (in shares) at Dec. 31, 2020 | 51,321,752 | 51,321,752 | ||||||||
Net loss | $ (127,798,000) | $ 833,801 | ||||||||
Balance as of end of period at Jun. 30, 2021 | $ 5,943,000 | $ 55,589,000 | $ 5,000 | 80,408,000 | (153,598,000) | $ (73,185,000) | 23,750 | (45,481,339) | $ (45,456,339) | |
Balance as of end of period, preferred stock (in shares) at Jun. 30, 2021 | 18,193,515 | 46,267,422 | 0 | |||||||
Balance as of end of period, common stock (in shares) at Jun. 30, 2021 | 52,229,481 | 52,229,481 | ||||||||
Balance as of beginning of period at Mar. 31, 2021 | $ 5,943,000 | $ 55,589,000 | $ 5,000 | 79,393,000 | (120,653,000) | $ (41,255,000) | 23,750 | (48,748,289) | $ (48,723,289) | |
Balance as of beginning of period, preferred stock (in shares) at Mar. 31, 2021 | 18,193,515 | 46,267,422 | ||||||||
Balance as of beginning of period, common stock (in shares) at Mar. 31, 2021 | 51,989,731 | |||||||||
Exercise of stock options | $ 0 | $ 0 | $ 0 | 22,000 | 0 | 22,000 | ||||
Exercise of stock options (in shares) | 239,750,000 | |||||||||
Stock-based compensation expense | 0 | 0 | $ 0 | 993,000 | 0 | 993,000 | ||||
Net loss | 0 | 0 | 0 | 0 | (32,945,000) | (32,945,000) | 3,252,607 | 3,252,607 | ||
Balance as of end of period at Jun. 30, 2021 | $ 5,943,000 | $ 55,589,000 | $ 5,000 | $ 80,408,000 | $ (153,598,000) | $ (73,185,000) | $ 23,750 | $ (45,481,339) | $ (45,456,339) | |
Balance as of end of period, preferred stock (in shares) at Jun. 30, 2021 | 18,193,515 | 46,267,422 | 0 | |||||||
Balance as of end of period, common stock (in shares) at Jun. 30, 2021 | 52,229,481 | 52,229,481 | ||||||||
[1] | Includes up to 1,875,000 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriter.Upon the expiration of the over-allotment option in December 2020, 1,875,000 shares of Class B common stock were forfeited (see Note 6). |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows from operating activities | ||
Net loss | $ 833,801 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses | 133,802 | |
Other current liabilities | 4,404 | |
Net cash used in operating activities | (1,027,773) | |
Cash flows from investing activities | ||
Net cash used in investing activities | 99,226 | |
Cash flows from financing activities | ||
Net cash provided by financing activities | 300,000 | |
Net decrease in cash and cash equivalents | (628,547) | |
Cash and cash equivalents, beginning of period | 925,923 | |
Cash and cash equivalents, end of period | 297,376 | |
Archer Aviation Inc | ||
Cash flows from operating activities | ||
Net loss | (127,798,000) | $ (8,889,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 422,000 | 39,000 |
Stock-based compensation expense | 1,918,000 | 11,000 |
Noncash interest | 0 | 248,000 |
Noncash lease expense | 597,000 | 0 |
Research and development warrant expense | 34,000 | 0 |
Other warrant expense | 78,208,000 | 0 |
Gain on forgiveness of PPP loan | (912,000) | 0 |
Changes in operating assets and liabilities: | ||
Prepaid expenses | 220,000 | (315,000) |
Other current assets | (156,000) | (6,000) |
Other long-term assets | (235,000) | 0 |
Accounts payable | 19,161,000 | 790,000 |
Other current liabilities | 343,000 | 642,000 |
Operating lease liability | (572,000) | 0 |
Net cash used in operating activities | (28,770,000) | (7,480,000) |
Cash flows from investing activities | ||
Purchases of property and equipment | (1,919,000) | (315,000) |
Net cash used in investing activities | (1,919,000) | (315,000) |
Cash flows from financing activities | ||
Payments of offering costs | 0 | (80,000) |
Proceeds from exercise of stock options | 62,000 | 0 |
Proceeds from issuance of debt | 0 | 905,000 |
Net cash provided by financing activities | 62,000 | 825,000 |
Net decrease in cash and cash equivalents | (30,627,000) | (6,970,000) |
Cash and cash equivalents, beginning of period | 36,564,000 | 10,149,000 |
Cash and cash equivalents, end of period | 5,937,000 | 3,179,000 |
Noncash investing activities | ||
Purchases of property and equipment included in accounts payable | $ 446,000 | $ 0 |
Formation and Nature of Busin_2
Formation and Nature of Business | 4 Months Ended | 6 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | |
Formation and Nature of Business | NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Atlas Crest Investment Corp. (the “Company” or “Atlas”) is a blank check company incorporated in Delaware on August 26, 2020. The Company was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses (the “Business Combination”). The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. As of December 31, 2020, the Company had not commenced any operations. All activity for the period from August 26, 2020 (inception) through December 31, 2020 relates to the Company’s formation, the initial public offering (“Initial Public Offering”) as described below, and since the closing of the Initial Public Offering, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income or gains on investments on the cash and investments held in a trust account from the proceeds derived from the Initial Public Offering. The registration statement for the Company’s Initial Public Offering was declared effective on October 27, 2020. On October 30, 2020, the Company consummated the Initial Public Offering of 50,000,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $500,000,000, which is discussed in Note 4. Following the closing of the Initial Public Offering on October 30, 2020, an amount of $500,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants (as defined in Note 5) was placed in a trust account (the “Trust Account”), invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the funds in the Trust Account to the Company’s stockholders, as described below. Transaction costs related to the issuances described above amounted to $10,534,144, consisting of $10,000,000 of underwriting fees and $534,144 of other costs. In addition, at December 31, 2020, $925,923 of cash was held outside of the Trust Account and is available for working capital purposes. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. New York Stock Exchange rules provide that the Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (excluding taxes payable on income earned on the Trust Account) at the time of the signing of a definitive agreement to enter a Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940. There is no assurance that the Company will be able to successfully effect a Business Combination. The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders are entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Public Shares subject to redemption are recorded at redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity The Company will proceed with the Business Combination only if the Company has net tangible assets of at least $5,000,001 either prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its amended and restated Certificate of Incorporation, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the Business Combination is required by law, or the Company decides to obtain stockholder approval for business or other 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. If the Company seeks stockholder approval in connection with a Business Combination, Atlas Crest Investment LLC (the "Sponsor") has agreed to vote its Founder Shares (as defined in Note 6) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed Business Combination or do not vote at all. Notwithstanding the above, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the amended and restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company. The Sponsor has agreed (a) to waive its redemption rights with respect to its Founder Shares and Public Shares held by it in connection with the completion of a Business Combination, (b) to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within 24 months from the closing of the Initial Public Offering and (c) not to propose an amendment to the amended and restated Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment. The Company will have until 24 months from the closing of the Initial Public Offering to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as 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”). Moreover, 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 all 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. Liquidity As of December 31, 2020, the Company had $925,923 in cash held outside of the Trust Account and working capital of $1,260,964. The Company’s liquidity needs prior to the consummation of the Initial Public Offering were satisfied through the proceeds of $25,000 from the sale of the Founder Shares, and a loan of $300,000 under an unsecured and non-interest bearing promissory note (see Note 6). Subsequent to the consummation of the Initial Public Offering, the Company’s liquidity will be satisfied through the net proceeds from the private placement held outside of the Trust Account. Based on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, the Company will be using the funds held outside of the Trust Account for paying existing accounts payable and accrued liabilities, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination. Risks and Uncertainties Management is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. | NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Atlas Crest Investment Corp. (the “Company” or “Atlas”) is a blank check company incorporated in Delaware on August 26, 2020. The Company was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses (the “Business Combination”). The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. As of June 30, 2021, the Company had not commenced any operations. All activity through June 30, 2021 relates to the Company's formation, the initial public offering (“Initial Public Offering”) as described below, and since the closing of the Initial Public Offering, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income or gains on investments on the cash and investments held in a trust account from the proceeds derived from the Initial Public Offering. The registration statement for the Company’s Initial Public Offering was declared effective on October 27, 2020. On October 30, 2020, the Company consummated the Initial Public Offering of 50,000,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $500,000,000 , which is discussed in Note 3. Following the closing of the Initial Public Offering on October 30, 2020, an amount of $500,000,000 ( $10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants (as defined in Note 4) was placed in a trust account (the “Trust Account”), invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with maturities of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the funds in the Trust Account to the Company’s stockholders, as described below. Transaction costs related to the issuances described above amounted to $10,534,144 , consisting of $10,000,000 of underwriting fees and $534,144 of other costs. In addition, at June 30, 2021, $297,376 of cash was held outside of the Trust Account and is available for working capital purposes. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. New York Stock Exchange rules provide that the Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (excluding taxes payable on income earned on the Trust Account) at the time of the signing of a definitive agreement to enter a Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940. There is no assurance that the Company will be able to successfully effect a Business Combination. The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders are entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Public Shares subject to redemption are recorded at redemption value and classified as temporary equity in accordance with the Financial Accounting Standards Board's Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity . The Company will proceed with the Business Combination only if the Company has net tangible assets of at least $5,000,001 either prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its amended and restated Certificate of Incorporation, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the Business Combination is required by law, or the Company decides to obtain stockholder approval for business or other 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. If the Company seeks stockholder approval in connection with a Business Combination, Atlas Crest Investment LLC (the “Sponsor”) has agreed to vote its Founder Shares (as defined in Note 6) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed Business Combination or do not vote at all. Notwithstanding the above, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the amended and restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company. The Sponsor has agreed (a) to waive its redemption rights with respect to its Founder Shares and Public Shares held by it in connection with the completion of a Business Combination, (b) to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within 24 months from the closing of the Initial Public Offering and (c) not to propose an amendment to the amended and restated Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment. The Company will have until 24 months from the closing of the Initial Public Offering to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period. In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as 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”). Moreover, 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 all 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. Business Combination Agreement On February 10, 2021, the Company entered into a Business Combination Agreement (as amended and restated on July 29, 2021 and as it may be further amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among the Company, Artemis Acquisition Sub Inc., a Delaware corporation (“Artemis Merger Sub”), and Archer Aviation Inc., a Delaware corporation (“Archer”). The Business Combination Agreement and the transactions contemplated thereby were approved by the boards of directors of each of the Company and Archer. The Business Combination Agreement provides for, among other things, the following transactions on the date of closing of the Business Combination (the “Closing”): (i) Atlas will amend and restate its certificate of incorporation (the “Post-Closing Atlas Certificate of Incorporation”), pursuant to which, among other things, Atlas will have a dual class share structure with (A) shares of Class A common stock that will carry voting rights in the form of one vote per share (the “New Class A Common Stock”), and (B) shares of Class B common stock that will carry voting rights in the form of ten votes per share (the “New Class B Common Stock” and, together with the New Class A Common Stock, the “New Atlas Common Stock”), and (ii) Artemis Merger Sub will merge with and into Archer, with Archer as the surviving company in the merger and, after giving effect to such merger, continuing as a wholly-owned subsidiary of Atlas (the “Merger”). The Merger and the other transactions contemplated by the Business Combination Agreement are hereinafter referred to as the “Business Combination”. The Business Combination is subject to customary closing conditions, including, without limitation, the required approval by Atlas’ stockholders. In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the effective time of the Merger, (i) outstanding shares of common stock and preferred stock of Archer will be converted into a right to receive a number of shares of New Class B Common Stock determined on the basis of an implied Archer equity value of $1,480,000,000 (the “Implied Equity Value”), (ii) all stock awards (whether vested or unvested) to purchase Archer common stock will be converted into stock awards to purchase a number of shares of New Class B Common Stock based on an exchange ratio derived from the Implied Equity Value, and (iii) outstanding warrants (whether vested or unvested) to purchase Archer common stock will be converted into warrants to purchase a number of shares of New Archer Class A Shares or New Class B Common Stock, as applicable, determined on the basis of the Implied Equity Value. The former Archer equity holders will have the right to convert their shares of New Class B Common Stock into shares of New Class A Common Stock pursuant to the Post-Closing Atlas Certificate of Incorporation. The Business Combination Agreement contains representations, warranties and covenants of each of the parties thereto that are customary for transactions of this type. Atlas has also agreed to take all action within its power as may be necessary or appropriate such that, effective immediately after the Closing, the Atlas board of directors will be divided into three classes and be composed of a total of seven directors, which directors shall include an individual designated by Atlas, three individuals designated by Archer and three individuals to be identified by Archer in consultation with Atlas who qualify as “independent directors” under the listing rules of the New York Stock Exchange. The obligations of Atlas and Archer to consummate the Business Combination are subject to certain closing conditions, including, but not limited to, (i) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) the absence of any law or governmental order or other legal restraint or prohibition preventing the consummation of the Business Combination, (iii) the Registration Statement (as defined below) being declared effective under the Securities Act of 1933, as amended (the “Securities Act”), (iv) the shares of New Class A Common Stock to be issued in connection with the Business Combination having been approved for listing on the New York Stock Exchange, (v) the approval of Atlas’ stockholders, (vi) the approval of Archer’s stockholders and (vii) Atlas having at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Securities Exchange Act of 1934, as amended) remaining after the Closing. In addition, the obligation of Archer to consummate the Business Combination is subject to, among other conditions, the aggregate cash proceeds from Atlas’ trust account, together with the proceeds from the PIPE Financing (as defined below), equaling no less than $600,000,000 (after deducting any amounts paid to Atlas shareholders that exercise their redemption rights in connection with the Business Combination). The Business Combination will be accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Under this method of accounting, Atlas will be treated as the “accounting acquiree” and Archer as the “accounting acquirer” for financial reporting purposes. PIPE Financing (Private Placement) Concurrently with the execution of the Business Combination Agreement, the Company entered into subscription agreements (the “Subscription Agreements”) with certain investors. Pursuant to the Subscription Agreements, each investor agreed to subscribe for and purchase, and the Company agreed to issue and sell to such investors, on the Closing Date (as defined in the Business Combination Agreement) substantially concurrently with the Closing (as defined in the Business Combination Agreement), an aggregate of 60,000,000 shares of the Company’s Class A Common Stock for a purchase price of $10.00 per share, for aggregate gross proceeds of $600 million (the “PIPE Financing”). The closing of the PIPE Financing is contingent upon, among other things, the substantially concurrent consummation of the Business Combination. The Subscription Agreements provide that Atlas will grant the investors in the PIPE Financing certain customary registration rights. Going Concern Consideration As of June 30, 2021, the Company had $297,376 in cash held outside of the Trust Account and a working capital deficit of $7,308,241 . The Company has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of time within one year after the date that the financial statements are issued. Management plans to address this uncertainty through the Business Combination as discussed above. There is no assurance that the Company’s plans to consummate the Business Combination will be successful or successful within the Combination Period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Risks and Uncertainties Management continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. | |
Archer Aviation Inc | |||
Formation and Nature of Business | 1. Formation and Nature of Business Formation and Nature of Business Archer Aviation Inc. (the “Company” or “Archer”), headquartered in Palo Alto, California, is an aerospace company focused on the engineering, design, and development of all-electric vertical takeoff and landing (“eVTOL”) aircraft with the objective of improving mobility in cities. The Company’s mission is to advance the benefits of sustainable air mobility that saves people significant time compared to ground transportation. Archer’s vehicle performance is enabled by bringing together advances in key technologies such as high specific energy batteries, high performance electric motors, an advanced fly-by-wire flight control system, and a lightweight and efficient structure. In connection with the initial formation of the Company, Archer Aviation Inc. was incorporated in the State of Delaware and commenced operations on October 16, 2018. Merger with Atlas Crest On September 16, 2021, Archer consummated the previously announced business combination pursuant to the Business Combination Agreement dated February 10, 2021 (as amended and restated on July 29, 2021) between Atlas Crest Investment Corp. (“Atlas”), Artemis Acquisition Sub Inc., a wholly-owned subsidiary of Atlas (“Merger Sub”), and Archer, under the terms of which Merger Sub merged with and into Archer, with Archer surviving the merger as a wholly-owned subsidiary of Atlas. After giving effect to the business combination, the combined company directly owns all of the issued and outstanding equity interests of Archer. As a result of the Business Combination Agreement, Archer’s stockholders received an aggregate number of shares of New Archer common stock equal to $2,465,779 divided by $10.00 . Additionally, certain investors had agreed to subscribe for and purchase an aggregate of up to $600 million of common stock of the combined company (“PIPE Financing”). The PIPE Investment was consummated immediately prior to the closing of the merger. COVID-19 Pandemic In March 2020, the World Health Organization declared the outbreak of a novel coronavirus ("COVID-19") as a pandemic, which continues to spread. COVID-19 has spread rapidly throughout the world, causing volatility and disruption in financial markets, curtailing global economic activity, raising the prospect of an extended global recession, and prompting governments and businesses to take unprecedented measures such as travel restrictions, quarantines, shelter-in-place orders, and business shutdowns. The COVID-19 pandemic may slow down the Company’s ability to ramp up its production and delay the Company’s ability to launch products on anticipated timelines and begin generating revenue. The COVID-19 pandemic could limit the ability of suppliers and business partners to perform, including third party suppliers’ ability to provide components and materials. The Company may also experience an increase in the cost of raw materials. The full impact of the COVID-19 pandemic continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the situation on its financial condition, liquidity, operations, suppliers, industry, and workforce. | 1. Formation and Nature of Business Formation and Nature of Business Archer Aviation Inc. (the “Company” or “Archer”), headquartered in Palo Alto, California, is an aerospace company focused on the engineering, design, and development of all-electric vertical takeoff and landing (“eVTOL”) aircraft with the objective of improving mobility in cities. The Company’s mission is to advance the benefits of sustainable air mobility that saves people significant time compared to ground transportation. Archer’s vehicle performance is enabled by bringing together advances in key technologies such as high specific energy batteries, high performance electric motors, an advanced fly-by-wire flight control system, and a lightweight and efficient structure. In connection with the initial formation of the Company, Archer Aviation Inc. was incorporated in the State of Delaware and commenced operations on October 16, 2018. COVID-19 Pandemic The World Health Organization declared a global emergency on January 30, 2020 with respect to the outbreak of a novel strain of coronavirus, or COVID-19 pandemic. There are many uncertainties regarding the current global COVID-19 pandemic, and the Company is closely monitoring the impact of the pandemic on all aspects of its business, including how it will impact its employees, suppliers, vendors, and business partners. The pandemic has resulted in government authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, stay-at-home or shelter-in-place orders, and business shutdowns. For example, the Company’s employees based in California have been subject to periodic stay-at-home orders from state and local governments. These measures may adversely impact the Company’s employees and operations and the operations of suppliers and business partners and could negatively impact the construction schedule of the Company’s manufacturing facility and production schedule. In addition, various aspects of the Company’s business and manufacturing facility cannot be conducted remotely. These measures by government authorities may continue to remain in place for a significant period of time and could adversely affect the Company’s construction and manufacturing plans, sales and marketing activities, and business operations. The evolution of the virus is unpredictable at this point and any resurgence may slow down the Company’s ability to ramp-up its production program on time to satisfy investors and potential customers. Any delay to production will delay the Company’s ability to launch and begin generating revenue. The COVID-19 pandemic could limit the ability of suppliers and business partners to perform, including third party suppliers’ ability to provide components and materials. The Company may also experience an increase in the cost of raw materials. At the time of this report, the Company has not recorded any impairments as a result of COVID-19. The full impact of the COVID-19 pandemic continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the situation on its financial condition, liquidity, operations, suppliers, industry, and workforce. |
Liquidity and Going Concern_2
Liquidity and Going Concern | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Archer Aviation Inc | ||
Liquidity and Going Concern | 2. Liquidity and Going Concern Since its formation, the Company has devoted substantial effort and capital resources to the design and development of its planned eVTOL aircraft and Urban Air Mobility network. Funding of these activities has primarily been through the net proceeds received from the issuance of related and third-party debt (Notes 5 and 6), and the sale of preferred and common stock to related and third parties (Note 8). Since inception of the Company through June 30, 2021, the Company has incurred cumulative losses from operations, negative cash flows from operating activities, and has an accumulated deficit of $153,598 . Additionally, Archer had cash and cash equivalents of $5,937 at June 30, 2021. The Company’s audit report for the year ended December 31, 2020 from the Company’s independent registered public accounting firm includes an explanatory paragraph stating that the Company’s recurring losses from operations and cash outflows from operating activities raise substantial doubt about Archer’s ability to continue as a going concern. However, after the closing of the business combination on September 16, 2021, the Company received net cash proceeds of $801,826 . Management expects that the net cash proceeds from the business combination along with cash balances held by the Company prior to the closing date will be sufficient for its working capital and capital requirements for at least the next 12 months from the date these condensed financial statements were available to be issued. There can be no assurance that the Company will be successful in achieving its strategic plans, that the Company’s future capital raises will be sufficient to support its ongoing operations, or that any additional financing will be available in a timely manner or on acceptable terms, if at all. If events or circumstances occur such that the Company does not meet its strategic plans, the Company will be required to reduce discretionary spending, alter or scale back aircraft development programs, be unable to develop new or enhanced production methods, or be unable to fund capital expenditures. Any such events would have a material adverse effect on the Company’s financial position, results of operations, cash flows, and ability to achieve its intended business objectives. | 2. Liquidity and Going Concern Since its formation, the Company has devoted substantial effort and capital resources to strategic planning, engineering, design, and development of its planned electric aircraft platform, development of specific initial electric aircraft models, and capital raising. Funding of these activities has primarily been through the net proceeds received from the issuance of related and third-party debt (Notes 6 and 7), and the sale of preferred and common stock to related and third parties (Note 9). For 2020 and 2019, Archer incurred net losses of $24,823 and $944 , respectively, and has recognized cash outflows from operating activities in each year of $22,896 and $809 , respectively. As of December 31, 2020, Archer had cash and cash equivalents of $36,564 . Based on its recurring losses from operations, expectation of continuing operating losses for the foreseeable future, and need to raise additional capital to finance future operations, management has concluded there is substantial doubt about the Company’s ability to continue as a going concern. Management’s plans include the continued development of its electric aircraft platform and bringing initial aircraft models to market which will require the Company to continue to raise significant amounts of capital through new financing arrangements or merging with a public entity. There can be no assurance that the Company will be successful in achieving its strategic plans, that any additional financing will be available in a timely manner or on acceptable terms, if at all, or that the Company’s planned merger (discussed further in Note 13) will be completed or will provide sufficient capital to support its ongoing operations. If the Company is unable to raise sufficient capital when needed or events or circumstances occur such that the Company does not meet its strategic plans, the Company will be required to reduce certain discretionary spending, alter or scale back aircraft development programs, be unable to develop new or enhanced production methods, or be unable to fund capital expenditures, which would have a material adverse effect on the Company’s financial position, results of operations, cash flows, and ability to achieve its intended business objectives. The financial statements have been prepared on a going concern basis and do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary in the event the Company can no longer continue as a going concern. |
Summary of Significant Accou_20
Summary of Significant Accounting Policies | 4 Months Ended | 6 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies | NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it 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 independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, 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 stockholder approval of any golden parachute payments not previously approved. 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 a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2020. Investments Held in Trust Account At December 31, 2020, the assets held in the Trust Account were held in U.S. Treasury securities and classified as trading. Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480, Distinguishing Liabilities from Equity Offering Costs associated with the Initial Public Offering The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A - Expenses of Offering underwriting discount and $534,144 of other offering costs). The Company recorded $9,988,271 of offering costs as a reduction of equity in connection with the shares of Class A common Stock included in the Units. The Company immediately expensed $545,873 of Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The initial fair value of the Public Warrants was estimated using a Monte Carlo simulation approach and the fair value of the Private Placement Warrants was estimated using a Modified Black-Scholes model (see Note 11). Income Taxes The Company complies with the accounting and reporting requirements of ASC Topic 740, Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. Net Earnings ( Loss) Per Share Net earnings (loss) per share is computed by dividing net earnings (loss) by the weighted-average number of shares of common stock outstanding during the period. The Company has not considered the effect of the warrants sold in the Public Offering and Private Placement to purchase an aggregate of 24,666,667 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 statement of operations includes a presentation of income per share for common shares subject to possible redemption and applies the two-class method in calculating income per share. Net earnings per common share, basic and diluted, for Class A redeemable common stock is calculated by dividing the allocable interest income earned on the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Class A redeemable common stock outstanding since original issuance. Net loss per share, basic and diluted, for Class A and Class B non-redeemable common stock is calculated by dividing the net loss, adjusted for income attributable to Class A redeemable common stock, by the weighted average number of Class B non-redeemable common stock outstanding for the period. Class B non-redeemable common stock 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. The following table reflects the calculation of basic and diluted net earnings (loss) per common share (in dollars, except per share amounts): For the Period from August 26,2020 (Inception) through December 31, 2020 Class A Common Stock subject to possible redemption Numerator: Earnings attributable to Class A Common Stock subject to possible redemption Unrealized gain on investments held in Trust Account $ 88,498 Less: Unrealized gain available to be withdrawn for payment of taxes (62,790) Net earnings attributable to Class A Common Stock subject to possible redemption $ 25,708 Denominator: Weighted average Class A Common Stock subject to possible redemption Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption 44,885,287 Basic and diluted net earnings per share, Class A Common Stock subject to possible redemption $ 0.00 Non-Redeemable Class A and Class B Common Stock Numerator: Net loss minus net earnings Net loss $ (10,850,513) Less: Net earnings attributable to Class A Common Stock subject to possible redemption (25,708) Non-redeemable net loss $ (10,876,221) Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock 17,614,713 Basic and diluted net loss per share, Non-Redeemable Class A and Class B Common Stock $ (0.62) Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. Fair Value of Financial Instruments The Company applies ASC 820, which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances. The carrying amounts reflected in the balance sheet for cash, prepaid expenses and accrued offering costs approximate fair value due to their short-term nature. Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. See Note 11 for additional information on assets and liabilities measured at fair value. 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 the Company’s financial statements. | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K as filed with the SEC on March 8, 2021 and the Company’s Amended Annual Report on Form 10-K/A filed with the SEC on May 24, 2021. The interim results for the periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future interim periods. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it 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 independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, 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 stockholder approval of any golden parachute payments not previously approved. 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 a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did no t have any cash equivalents as of June 30, 2021 and December 31, 2020. Investments Held in Trust Account At June 30, 2021 and December 31, 2020, substantially all of the assets held in the Trust Account were held in money market funds, which are invested in U.S. Treasury securities. Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity . Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. As of June 30, 2021 and December 31, 2020, 50,000,000 and 44,885,287 shares of Class A common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s condensed balance sheet, respectively. Offering Costs associated with the Initial Public Offering The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A - Expenses of Offering . Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the Initial Public Offering. Offering costs directly attributable to the issuance of an equity contract to be classified in equity are recorded as a reduction in equity. Offering costs for equity contracts that are classified as assets and liabilities are expensed immediately. The Company incurred offering costs amounting to $10,534,144 as a result of the Initial Public Offering (consisting of a $10,000,000 underwriting discount and $534,144 of other offering costs). The Company recorded $9,988,271 of offering costs as a reduction of equity in connection with the shares of Class A common Stock included in the Units. The Company immediately expensed $545,873 of offering costs in connection with the Public Warrants and Private Placement Warrants that were classified as liabilities. Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The initial fair value of the Public Warrants was estimated using a Monte Carlo simulation approach and the fair value of the Private Placement Warrants was estimated using a Modified Black-Scholes model (see Note 9). Income Taxes The Company complies with the accounting and reporting requirements of ASC 740, Income Taxes , which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2021 and December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. Net Income Per Share of Common Stock Net income per common share is computed by dividing net income by the weighted-average number of shares of common stock 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 24,666,667 shares in the calculation of diluted income per share, since the warrants are contingently exercisable, and the contingencies have not yet been met. The Company’s statement of operations includes a presentation of income per share for common shares subject to possible redemption and applies the two-class method in calculating income per share. Net earnings per common share, basic and diluted, for Class A redeemable common stock is calculated by dividing the allocable unrealized gain on investments held in the Trust Account and interest and dividend income on investments held in the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Class A common stock subject to possible redemption outstanding for the period. Net income per share, basic and diluted, for Class B non-redeemable common stock is calculated by dividing the net income, adjusted for income attributable to Class A redeemable common stock, by the weighted average number of Class B non-redeemable common stock outstanding for the period. Class B non-redeemable common stock includes the Founder Shares (as defined in Note 5) as these shares do not have any redemption features and do not participate in the income earned on the Trust Account. The following table reflects the calculation of basic and diluted net income per common share (in dollars, except share and per share amounts): Three Months Ended Six Months Ended June 30, June 30, 2021 2021 Class A Common Stock subject to possible redemption Numerator: Earnings attributable to Class A Common Stock subject to possible redemption Unrealized gain on investments held in Trust Account $ 5,002 $ 135,027 Interest and dividend income on investments held in Trust Account 8,633 8,633 Less: Income available to be withdrawn for payment of taxes (13,635) (100,209) Net earnings attributable to Class A Common Stock subject to possible redemption $ — $ 43,451 Denominator: Weighted average Class A Common Stock subject to possible redemption Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption 50,000,000 50,000,000 Basic and diluted net earnings per share, Class A Common Stock subject to possible redemption $ 0.00 $ 0.00 Non-Redeemable Class B Common Stock Numerator: Non-redeemable net income Net income $ 3,252,607 $ 833,801 Less: Net earnings attributable to Class A Common Stock subject to possible redemption — (43,451) Non-redeemable net income $ 3,252,607 $ 790,350 Denominator: Weighted average Non-Redeemable Class B Common Stock Basic and diluted weighted average shares outstanding, Non-Redeemable Class B Common Stock 12,500,000 12,500,000 Basic and diluted net income per share, Non-Redeemable Class B Common Stock $ 0.26 $ 0.06 Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000 . The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. Fair Value of Financial Instruments The Company applies ASC Topic 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances. The carrying amounts reflected in the balance sheet for cash, prepaid expenses and accrued offering costs approximate fair value due to their short-term nature. Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. See Note 9 for additional information on assets and liabilities measured at fair value. Recent Accounting Standards In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows. Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. | |
Archer Aviation Inc | |||
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission for interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position, results of operations, and cash flows for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. The unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements as of and for the year ended December 31, 2020 set forth elsewhere in this proxy statement/prospectus. The Company has provided a discussion of significant accounting policies, estimates, and judgments in its audited financial statements. There have been no changes to the Company’s significant accounting policies since December 31, 2020 which are expected to have a material impact on the Company’s financial position, results of operations, or cash flows. Cash and Cash Equivalents Cash consists of cash on deposit with financial institutions. Cash equivalents consist of short-term, highly liquid financial instruments that are readily convertible to cash and have maturities of three months or less from the date of purchase. Cash and cash equivalent balances were $5,937 and $36,564 as of June 30, 2021 and December 31, 2020, respectively, of which, money market funds were $344 and $34,377 as of June 30, 2021 and December 31, 2020, respectively. Money market funds, which are considered as cash equivalents, are recorded at fair value and classified as Level 1 within the fair value hierarchy. Fair Value Measurements The Company applies the provisions of Accounting Standards Codification (“ASC”) 820, Fair Value Measurement , which defines a single authoritative definition of fair value, sets out a framework for measuring fair value and expands on required disclosures about fair value measurements. The provisions of ASC 820 relate to financial assets and liabilities as well as other assets and liabilities carried at fair value on a recurring and nonrecurring basis. The standard clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the standard establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2 Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The carrying amounts of the Company’s cash, accounts payable, accrued compensation and accrued liabilities approximate fair value due to the short-term nature of these instruments. Level 1 instruments include investments in money market funds, which are valued based on inputs such as actual trade data, quoted market prices from brokers or other similar sources. Financial Instruments Not Recorded at Fair Value on a Recurring Basis Certain financial instruments, including debt, are not measured at fair value on a recurring basis in the balance sheets. The fair value of debt as of December 31, 2020 approximates its carrying value. There was no outstanding debt as of June 30, 2021. Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis Certain assets and liabilities are subject to measurement at fair value on a nonrecurring basis if there are indicators of impairment or if they are deemed to be impaired as a result of an impairment review. There were no assets or liabilities measured at fair value using Level 3 inputs for the periods presented. Intangible Assets, Net Intangible assets consist solely of domain names and are recorded at cost, net of accumulated amortization, and if applicable, impairment charges. Amortization of domain names is provided over a 15-year estimated useful life on a straight-line basis or based on the pattern in which economic benefits are consumed, if reliably determinable. The Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company has analyzed a variety of factors in light of the known impact to date of the COVID-19 pandemic on its business to determine if a circumstance could trigger an impairment loss, and, at this time and based on the information presently known, does not believe that it is more likely than not that an impairment loss has been incurred. As of June 30, 2021 and December 31, 2020, the gross carrying amount for domain names was $500 with $19 and $3 recorded in accumulated amortization, respectively. During the three and six months ended June 30, 2021, the Company recognized amortization expense of $9 and $17 , respectively, included within general and administrative expenses on the statements of operations and comprehensive loss. The Company did not recognize any amortization expense during the three and six months ended June 30, 2020. Property and Equipment, Net Property and equipment are stated at historical cost less accumulated depreciation. Expenditures for major renewals and betterments are capitalized, while minor replacements, maintenance, and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation is removed from the accounts, and any difference between the selling price and net carrying amount is recorded as a gain or loss in the statements of operations and comprehensive loss. Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets as follows: Useful Life (in years) Furniture, fixtures, and equipment 5 Computer hardware 3 Computer software 3 Website design 2 Leasehold improvements Shorter of lease term or the asset standard life Impairment of Long-Lived Assets The Company reviews its long-lived assets, consisting primarily of property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Such triggering events or changes in circumstances may include: a significant decrease in the market price of a long-lived asset, a significant adverse change in the extent or manner in which a long-lived asset is being or intended to be used, a significant adverse change in legal factors or in the business climate, the impact of competition or other factors that could affect the value of a long-lived asset, a significant adverse deterioration in the amount of revenue or cash flows expected to be generated from an asset group, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of a long-lived asset, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset, or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is determined by comparing the forecasted undiscounted cash flows attributable to such assets including any cash flows upon their eventual disposition to their carrying value. If the carrying value of the assets exceeds the forecasted undiscounted cash flows, then the assets are written down to their fair value. The Company determined there was no impairment of long-lived assets during all periods presented. Operating Expenses Research and Development Research and development (“R&D”) costs are expensed as incurred and are primarily comprised of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) for employees focused on R&D activities, other related costs, and an allocation of general overhead. In addition, R&D expense includes professional fees paid to outside contractors and depreciation expense. R&D efforts are focused on design and development of our electric aircraft and continuing to prepare our prototype electric aircraft to achieve industry standards. General and Administrative General and administrative expenses are primarily comprised of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) and overhead related costs for employees in our executive, finance, information technology, or human resources departments. In addition, general and administrative expense includes fees for third-party professional services (including consulting, legal, and audit services), other corporate expenses, allocated shared costs, and depreciation expense. Other Warrant Expense Other warrant expense of $78,208 is related to the vesting of warrants issued in conjunction with the execution of purchase, collaboration, and warrant arrangements with United Airlines. Refer to Note 9 for additional information. Stock-Based Compensation The Company’s stock-based compensation awards consist of options granted to employees, directors, and non-employees for the purchase of ordinary shares and restricted shares. The Company recognizes stock-based compensation expense in accordance with the provisions of ASC 718, Compensation - Stock Compensation. ASC 718 requires the measurement and recognition of compensation expense for all stock-based compensation awards made to employees, directors, and non-employees to be based on the grant date fair values of the awards. The Company estimates the fair value of share options using the Black-Scholes option-pricing model. The value of the award is recognized as expense over the requisite service period on a straight-line basis. Determining the grant date fair value of the awards using the Black-Scholes option-pricing model requires management to make assumptions and judgments, including but not limited to the following: Expected term - The estimate of the expected term of employee awards is determined in accordance with the simplified method, which estimates the term based on an averaging of the vesting period and contractual term of the option grant. The Company uses the contractual term for non-employee awards. Expected volatility - Since the Company is a private entity without sufficient historical data on the volatility of its common stock, the expected volatility used is based on the volatility of similar entities (referred to as “guideline companies”) for a period consistent with the expected term of the award. Risk-free interest rate - The risk-free interest rate used to value awards is based on the United States Treasury yield in effect at the time of grant for a period consistent with the expected term of the award. Dividend yield - The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future. Forfeiture rate – The Company has elected to account for forfeitures as they occur and will record stock-based compensation expense assuming all option holders will complete the requisite service period. If an employee forfeits an award because they fail to complete the requisite service period, the Company will reverse stock-based compensation expense previously recognized in the period the award is forfeited. Fair value of common stock The Company’s Board of Directors grants stock options with exercise prices equal to the fair value of the Company’s common stock on the date of grant. Because there is no public market for the Company’s common stock, the Company has determined the fair value of its common stock at the time of the grant of stock options in accordance with the American Institute of Certified Public Accountants (“AICPA”) Accounting and Valuation Guide: Valuation of Privately-Held-Company Equity Securities Issued as Compensation (the “AICPA Practice Aid”). The Company determined the fair value of its common stock based on a variety of factors including, but not limited to (i) the results of contemporaneous independent third-party valuations of the Company’s common stock and the prices, rights, preferences and privileges of the Company’s redeemable convertible preferred stock relative to those of its common stock; (ii) the lack of marketability of the Company’s common stock; (iii) actual operating and financial results; (iv) current business conditions and projections; (v) the likelihood of achieving a liquidity event, such as an IPO or sale of the Company, given prevailing market conditions, and (vi) precedent transactions involving the Company’s shares. As provided in the AICPA Practice Aid, there are several approaches for setting the value of an enterprise and various methodologies for allocating the value of an enterprise to its outstanding equity. The Company determined the fair value of equity awards using a combination of the market and income approach. Within the market approach, the guideline public company method was used, which employs the use of ratios developed from the market price of traded shares from publicly traded companies considered reasonably similar to the Company. Under the income approach, the enterprise value was estimated using the discounted cash flow method, which involves estimating the future cash flows of a business for a discrete period and discounting them to their present value. In allocating enterprise value to its outstanding equity, the Company applied a hybrid approach, which consisted of the option pricing method (“OPM”) and probability-weighted expected return method (“PWERM”). The OPM treats securities, including debt, common and preferred stock, as call options on the enterprise’s value, with exercise prices based on the securities’ respective liquidation preferences and conversion values. The PWERM estimates the fair market value of the common stock based on an analysis of future values for the enterprise assuming various exit scenarios, such as IPO, merger or sale, staying private, and liquidation. In conducting the valuations, the Company considered all objective and subjective factors that it believed to be relevant in the valuation conducted, including management’s best estimate of the Company’s business condition, and prospects and operating performance at the valuation dates. There are significant judgments and estimates inherent in these valuations. Net Loss Per Share Attributable to Ordinary Stockholders The Company has one class of participating security (preferred shares) issued and outstanding as of June 30, 2021. Losses are not attributed to the participating security as the preferred stockholders are not contractually obligated to share in the Company’s losses. For all periods presented, the calculation of basic net loss per share excludes shares issued upon the early exercise of stock options where the vesting conditions have not been satisfied. Basic net loss attributable to common stockholders per share is calculated by dividing net loss attributable to ordinary stockholders by the weighted-average number of common shares outstanding. Diluted net loss per share attributable to ordinary stockholders reflects adjustments to the basic net loss per share attributable to ordinary stockholders and the weighted-average number of shares of ordinary shares outstanding for the potentially dilutive impact of outstanding securities or other contracts to issue common stock if they were to be exercised or converted into common shares, using the treasury stock method. Contingently issuable shares, including equity awards with performance conditions, are considered outstanding common shares and included in basic net loss per share as of the date that all necessary conditions to earn the awards have been satisfied. Prior to the end of the contingency period, the number of contingently issuable shares included in diluted net loss per share is based on the number of shares, if any, that would be issuable under the terms of the arrangement at the end of the reporting period. Because the Company reported net losses for all periods presented, all potentially dilutive common stock equivalents are antidilutive and have been excluded from the calculation of net loss per share. The following table presents the number of antidilutive shares excluded from the calculation of diluted net loss per share: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Stock-based compensation awards - employees 11,690,674 3,714,205 11,690,674 3,714,205 Stock-based compensation awards - non-employees 11,440,789 1,134,000 11,440,789 1,134,000 Series Seed redeemable convertible preferred stock 18,193,515 18,193,515 18,193,515 18,193,515 Series A redeemable convertible preferred stock 46,267,422 — 46,267,422 — Total 87,592,400 23,041,720 87,592,400 23,041,720 Comprehensive Loss There were no differences between net loss and comprehensive loss presented in the statements of operations and comprehensive loss for the three and six months ended June 30, 2021 and 2020. Recently adopted accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which outlines a comprehensive lease accounting model that supersedes the current lease guidance. The new guidance requires lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms greater than 12 months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. In July 2018, the FASB issued ASU 2018-11, which provides the option of an additional transition method that allows entities to initially apply the new lease guidance at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company entered into its first lease in July of 2020 and applied ASU 2016-02 to this lease and subsequent leases. In June 2018, the FASB issued ASU 2018-07 , Compensation - Stock Compensation (Topic 718) : Improvements to Nonemployee Share-Based Payment Accounting ("ASU 2018-07"). This amendment expands the scope of Topic 718, Compensation—Stock Compensation (which only included share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees is substantially aligned. ASU 2018-07 supersedes Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees . Early adoption of ASU 2018-07 is permitted and should be applied on a prospective basis. The Company began applying ASU 2018-07 during 2020 upon the Company’s first grant of share-based payment awards. No share-based payments were granted prior to 2020. In August 2018, the FASB issued ASU 2018-13 , Fair Value Measurement (Topic 820) (“ASU 2018-13”), which modifies, removes, and adds certain disclosure requirements on fair value measurements based on the FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements. The ASU is effective for all entities for fiscal years beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively for only the most recent annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company has applied ASU 2018-13 to all periods presented. In November 2019, the FASB issued ASU 2019-08, Compensation — Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606) (“ASU 2019-08”), which requires entities to measure and classify share-based payments to a customer in accordance with the guidance in ASC 718, Compensation — Stock Compensation . ASU 2019-08 expanded the scope of Topic 718 to include awards issued to customers for purposes of measurement and classification and amended portions of ASC 606, Revenue from Contracts with Customers , to refer to this guidance. The amount that would be recorded as a reduction in revenue would be measured based on the grant date fair value of the share-based payment in accordance with Topic 718. The Company adopted ASU 2019-08 on January 1, 2021 and has applied its provisions to the measurement of the warrants issued to United Airlines. Refer to Note 9 for details. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12") . This amendment was issued to simplify the accounting for income taxes by removing certain exceptions for recognizing deferred taxes, performing intraperiod allocation, and calculating income taxes in interim periods. Further, ASU 2019-12 adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax basis goodwill and allocating taxes to members of a consolidated group. The Company has applied ASU 2019-12 to all periods presented, and there was no adoption date impact to its financial statements. Recently issued accounting pronouncements not yet adopted In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies the accounting for convertible instruments by removing certain separation models in ASC 470- 20, Debt — Debt with Conversion and Other Options , for convertible instruments. The ASU updates the guidance on certain embedded conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, such that those features are no longer required to be separated from the host contract. The convertible debt instruments will be accounted for as a single liability measured at amortized cost. Further, the ASU made amendments to the EPS guidance in Topic 260 for convertible instruments, the most significant impact of which is requiring the use of the if-converted method for diluted EPS calculation, and no longer allowing the net share settlement method. The ASU also made revisions to Topic 815-40, which provides guidance on how an entity must determine whether a contract qualifies for a scope exception from derivative accounting. The amendments to Topic 815-40 change the scope of contracts that are recognized as assets or liabilities. The ASU is effective for public business entities for interim and annual periods beginning after December 15, 2021, with early adoption permitted. Adoption of the ASU can either be on a modified retrospective or full retrospective basis. The Company is currently evaluating the impact the adoption of this standard will have on its financial statements and related disclosures . | 3. Summary of Significant Accounting Policies Basis of Presentation The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company. Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent liabilities, and the reported amounts of expenses during the reporting period. The Company bases these estimates on historical results and various other assumptions believed to be reasonable, all of which form the basis for making estimates concerning the carrying values of assets and liabilities that are not readily available from other sources. On an ongoing basis, management evaluates its estimates, including those related to the: (i) realization of tax assets and estimates of tax liabilities, (ii) valuation of common stock, (iii) fair value of debt, (iv) fair value of share-based payments, (v) valuation of leased assets and liabilities, and (vi) estimated useful lives of long-lived assets. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Such estimates often require the selection of appropriate valuation methodologies and models and may involve significant judgment in evaluating ranges of assumptions and financial inputs. Actual results may differ from those estimates under different assumptions, financial inputs, or circumstances. Given the global economic climate and unpredictable nature and unknown duration of the COVID-19 pandemic, estimates are subject to additional volatility. Cash and Cash Equivalents Cash consists of cash on deposit with financial institutions. Cash equivalents consist of short-term, highly liquid financial instruments that are readily convertible to cash and have maturities of three months or less from the date of purchase. Cash equivalents are recorded at fair value. As of December 31, 2020 and 2019, the Company held $34,377 and $0 , respectively, of cash equivalents consisting of Level 1 money market funds. Fair Value Measurements The Company applies the provisions of Accounting Standards Codification (“ASC”) 820, Fair Value Measurement , which defines a single authoritative definition of fair value, sets out a framework for measuring fair value and expands on required disclosures about fair value measurements. The provisions of ASC 820 relate to financial assets and liabilities as well as other assets and liabilities carried at fair value on a recurring and nonrecurring basis. The standard clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the standard establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2 Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The carrying amounts of the Company’s cash, accounts payable, accrued compensation and accrued liabilities approximate fair value due to the short-term nature of these instruments. Level 1 instruments include investments in money market funds, which are valued based on inputs such as actual trade data, quoted market prices from brokers or other similar sources. Financial Instruments Not Recorded at Fair Value on a Recurring Basis Certain financial instruments, including debt, are not measured at fair value on a recurring basis in the balance sheets. The fair value of debt as of December 31, 2020 approximates its carrying value. Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis Certain assets and liabilities are subject to measurement at fair value on a non-recurring basis if there are indicators of impairment or if they are deemed to be impaired as a result of an impairment review. There were no assets or liabilities measured at fair value using Level 3 inputs for the periods presented. Concentration of Credit Risk Financial instruments, which subject the Company to concentrations of credit risk, consist primarily of cash, cash equivalents, and deposits. The Company’s cash and cash equivalents are held at major financial institutions located in the United States of America. At times, cash account balances with any one financial institution may exceed Federal Deposit Insurance Corporation (“FDIC”) insurance limits ($250 per depositor per institution). Management believes the financial institutions that hold the Company’s cash and cash equivalents are financially sound and, accordingly, minimal credit risk exists with respect to cash and cash equivalents. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist primarily of prepaid payroll costs, rent, consulting, and subscriptions for brand development and research and development (“R&D”). Intangible Assets, Net Intangible assets consist solely of domain names and are recorded at cost, net of accumulated amortization, and if applicable, impairment charges. Amortization of domain names is provided over a 15 - year estimated useful life on a straight-line basis or based on the pattern in which economic benefits are consumed, if reliably determinable. The Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company has analyzed a variety of factors in light of the known impact to date of the COVID-19 pandemic on its business to determine if a circumstance could trigger an impairment loss, and, at this time and based on the information presently known, does not believe that it is more likely than not that an impairment loss has been incurred. The Company capitalized domain names in 2020, and as of December 31, 2020, the gross carrying amount for domain names was $ 500 with $ 3 recorded in accumulated amortization. During the year ended December 31, 2020, the Company recognized amortization expense of $ 3 , classified within general and administrative on the statements of operations and comprehensive loss. Property and Equipment, Net Property and equipment are stated at historical cost less accumulated depreciation. Expenditures for major renewals and betterments are capitalized, while minor replacements, maintenance, and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation is removed from the accounts, and any difference between the selling price and net carrying amount is recorded as a gain or loss in the statements of operations and comprehensive loss. Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets as follows: Useful Life Furniture, fixtures, and equipment 5 Computer hardware 3 Computer software 3 Website design 2 Leasehold improvements Shorter of lease term or the asset standard life Impairment of Long-Lived Assets The Company reviews its long-lived assets, consisting primarily of property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Such triggering events or changes in circumstances may include: a significant decrease in the market price of a long-lived asset, a significant adverse change in the extent or manner in which a long- lived asset is being or intended to be used, a significant adverse change in legal factors or in the business climate, the impact of competition or other factors that could affect the value of a long-lived asset, a significant adverse deterioration in the amount of revenue or cash flows expected to be generated from an asset group, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of a long-lived asset, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset, or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is determined by comparing the forecasted undiscounted cash flows attributable to such assets including any cash flows upon their eventual disposition to their carrying value. If the carrying value of the assets exceeds the forecasted undiscounted cash flows, then the assets are written down to their fair value. The Company determined there was no impairment of long-lived assets during either period presented. Other Current Liabilities For the year ended December 31, 2020, other current liabilities primarily consist of accrued payroll costs, liabilities related to cash received for the early exercise of stock options which may require repayment if the options do not vest, and accrued interest on the Company’s Paycheck Protection Program Loan. For the year ended December 31, 2019, other current liabilities consist of accrued payroll costs. Paycheck Protection Program Loan On April 9, 2020, the Company received the proceeds from a loan in the amount of approximately $ 905 (the “PPP Loan”) from JPMorgan Chase Bank, N.A., as lender, pursuant to the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The Company accounted for the PPP Loan as a financial liability in accordance with ASC Topic 470, Debt . Accordingly, the PPP Loan was recognized within notes payable and notes payable, net of current portion, in the Company’s balance sheet. In addition, related accrued interest is included within other current liabilities in the Company’s balance sheet. Refer to Note 7 for additional information. Research and Development R&D costs are expensed as incurred and are primarily comprised of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) for employees focused on R&D activities, other related costs, and an allocation of general overhead. In addition, R&D expense includes professional fees paid to outside contractors and depreciation expense. R&D efforts are focused on design and development of our electric aircraft and continuing to prepare our prototype electric aircraft to achieve industry standards. General and Administrative General and administrative expenses are primarily comprised of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) and overhead related costs for employees in our executive, finance, information technology, or human resources departments. In addition, general and administrative expense includes fees for third-party professional services (including consulting, legal, and audit services), other corporate expenses, allocated shared costs, and depreciation expense. Stock-Based Compensation The Company’s stock-based compensation awards consist of options granted to employees, directors, and non-employees for the purchase of ordinary shares and restricted shares. The Company recognizes stock- based compensation expense in accordance with the provisions of ASC 718, Compensation — Stock Compensation. ASC 718 requires the measurement and recognition of compensation expense for all stock- based compensation awards made to employees, directors, and non-employees to be based on the grant date fair values of the awards. The Company estimates the fair value of share options using the Black-Scholes option-pricing model. The value of the award is recognized as expense over the requisite service period on a straight-line basis. Determining the grant date fair value of the awards using the Black-Scholes option-pricing model requires management to make assumptions and judgments, including but not limited to the following: Expected term — The estimate of the expected term of employee awards is determined in accordance with the simplified method, which estimates the term based on an averaging of the vesting period and contractual term of the option grant. The Company uses the contractual term for non-employee awards. Expected volatility — Since the Company is a private entity without sufficient historical data on the volatility of its common stock, the expected volatility used is based on the volatility of similar entities (referred to as “guideline companies”) for a period consistent with the expected term of the award. Risk-free interest rate — The risk-free interest rate used to value awards is based on the United States Treasury yield in effect at the time of grant for a period consistent with the expected term of the award. Dividend yield — The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future. Forfeiture rate — The Company has elected to account for forfeitures as they occur and will record stock- based compensation expense assuming all option holders will complete the requisite service period. If an employee forfeits an award because they fail to complete the requisite service period, the Company will reverse stock-based compensation expense previously recognized in the period the award is forfeited. Fair value of common stock The Company’s Board of Directors grants stock options with exercise prices equal to the fair value of the Company’s common stock on the date of grant. Because there is no public market for the Company’s common stock, the Company has determined the fair value of its common stock at the time of the grant of stock options in accordance with the American Institute of Certified Public Accountants Accounting and Valuation Guide (“AICPA”): Valuation of Privately- Held-Company Equity Securities Issued as Compensation. The Company determined the fair value of its common stock based on a variety of factors including, but not limited to (i) the results of contemporaneous independent third-party valuations of the Company’s common stock and the prices, rights, preferences and privileges of the Company’s redeemable convertible preferred stock relative to those of its common stock; (ii) the lack of marketability of the Company’s common stock; (iii) actual operating and financial results; (iv) current business conditions and projections; (v) the likelihood of achieving a liquidity event, such as an IPO or sale of the Company, given prevailing market conditions, and (vi) precedent transactions involving the Company’s shares. In valuing the fair value of the Company’s common shares, the Company used the market approach, which uses prices and other relevant information generated by market transactions involving identical or comparable assets, liabilities, or a group of assets and liabilities. Within the market approach, given that the Company had recent security transactions, the subject company transaction method was used, which consists of examining prior transactions of the Company. According to the AICPA guidelines, under this method, recent securities transactions in the Company’s stock should be considered as a relevant input for computing the enterprise valuation. Additionally, the Hybrid Backsolve methodology specifically was selected to reflect the high risks in the eVTOL space, namely regulatory risk, the fact that there is currently no market for the product, and technology risk in this new sector. In conducting the valuations, the Company considered all objective and subjective factors that it believed to be relevant in the valuation conducted, including management’s best estimate of the Company’s business condition, and prospects and operating performance at the valuation dates. There are significant judgments and estimates inherent in these valuations. Leases The Company accounts for leases in accordance with ASC 842, Leases and determines if an arrangement is a lease at its inception. Right-of-use (“ROU”) assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate in determining the present value of lease payments considering the term of the lease, which is derived from information available at the lease commencement date. The incremental borrowing rate is the rate of interest the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments for a term similar to the lease term in a similar economic environment as the lease. The lease term includes renewal options when it is reasonably certain that the option will be exercised and excludes termination options. To the extent that the Company’s agreements have variable lease payments, the Company includes variable lease payments that depend on an index or a rate and excludes those that depend on facts or circumstances occurring after the commencement date, other than the passage of time. Lease expense for these leases is recognized on a straight-line basis over the lease term. The Company has elected not to recognize ROU assets and lease liabilities that arise from short-term (12 months or less) leases for any class of underlying asset. Operating leases are included in right-of-use asset, lease liability, and lease liability, net of current portion in the Company’s balance sheet. In addition, the Company has elected as an accounting policy, the practical expedient to not separate lease and non-lease components within a contract and instead treat it as a single-lease component. Income Taxes The Company accounts for its income taxes using the asset and liability method whereby deferred tax assets and liabilities are determined based on temporary differences between the basis used for financial reporting and income tax reporting purposes. Deferred income taxes are provided based on the enacted tax rates in effect at the time such temporary differences are expected to reverse. A valuation allowance is provided for deferred tax assets if it is more-likely-than-not that the Company will not realize those tax assets through future operations. The carrying value of deferred tax assets reflects an amount that is more likely than not to be realized. The Company utilizes the guidance in ASC 740-10, Income Taxes , to account for uncertain tax positions. ASC 740-10 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the positions will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more-likely-than-not of being realized and effectively settled. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately forecast actual outcomes. The Company’s policy is to recognize interest and penalties related to uncertain tax positions, if any, in the income tax provision. Net Loss Per Share Attributable to Ordinary Stockholders The Company has one class of participating security (preferred shares) issued and outstanding as of December 31, 2020 and 2019. Losses are not attributed to the participating security as the preferred stockholders are not contractually obligated to share in the Company’s losses. For all periods presented, the calculation of basic net loss per share excludes shares issued upon the early exercise of stock options where the vesting conditions have not been satisfied. Basic net loss attributable to common stockholders per share is calculated by dividing net loss attributable to ordinary stockholders by the weighted-average number of shares of common shares outstanding. Diluted net loss per share attributable to ordinary stockholders adjusts the basic net loss per share attributable to ordinary stockholders and the weighted-average number of shares of ordinary shares outstanding for the potentially dilutive impact of stock options, using the treasury stock method. Because the Company reported net losses for all periods presented, all potentially dilutive common stock equivalents are antidilutive and have been excluded from the calculation of net loss per share. The following table presents the number of antidilutive shares excluded from the calculation of diluted net loss per share: As of December 31, 2020 2019 Stock-based compensation awards — employees 11,167,089 — Stock-based compensation awards — non-employees 3,614,888 — Series Seed redeemable convertible preferred stock 18,193,515 18,193,515 Series A redeemable convertible preferred stock 46,267,422 — Total 79,242,914 18,193,515 Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM consists of its two founders. The Company has determined that it operates as a single operating segment and one reportable segment, as the CODM reviews financial information presented on a combined basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. Given the Company’s pre-revenue operating stage, it currently has no concentration exposure to products, services or customers. Comprehensive Loss There were no differences between net loss and comprehensive loss presented in the statements of operations and comprehensive loss for the years ended December 31, 2020 and 2019. Recently adopted accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which outlines a comprehensive lease accounting model that supersedes the current lease guidance. The new guidance requires lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms greater than 12 months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. In July 2018, the FASB issued ASU 2018-11, which provides the option of an additional transition method that allows entities to initially apply the new lease guidance at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company entered into its first lease in July of 2020 and applied ASU 2016-02 to this lease and subsequent leases. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (Topic 230) (“ASU 2016-15”). The standard provides guidance on eight specific cash flow issues, including debt prepayment or debt extinguishment costs. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and the amendments should be applied using the retrospective transition method to each period presented. The Company has applied ASU 2016-15 to all periods presented. In July 2017, the FASB issued ASU 2017-11, Earnings per share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), and Derivatives and Hedging (Topic 815) : Accounting for Certain Financial Instruments with Down Round Features (“ASU 2017-11”). The update addresses the complexity of accounting for certain financial instruments with “down round” features and the liability or equity classification of financial instruments with warrants or convertible features. The guidance eliminates the requirement to consider “down round” features when determining whether certain equity-linked financial instruments or embedded features are indexed to an entity’s own stock. ASU 2017-11 is effective for public business entities for annual periods beginning after December 15, 2018, and for interim periods within those years, with early adoption permitted. The Company has applied ASU 2017-11 to all periods presented, and there was no adoption date impact to its financial statements. In June 2018, the FASB issued ASU 2018-07 , Compensation — Stock Compensation (Topic 718) : Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). This amendment expands the scope of Topic 718, Compensation — Stock Compensation (which only included share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees is substantially aligned. ASU 2018-07 supersedes Subtopic 505-50, Equity — Equity-Based Payments to Non-Employees and is effective for public business entities for fiscal years beginning after December 15, 2018. Early adoption of ASU 2018-07 is permitted and should be applied on a prospective basis. The Company began applying ASU 2018-07 during 2020 upon the Company’s first grant of share-based payment awards. No share-based payments were granted prior to 2020. In August 2018, the FASB issued ASU 2018-13 , Fair Value Measurement (Topic 820) (“ASU 2018-13”), which modifies, removes, and adds certain disclosure requirements on fair value measurements based on the FASB Concepts Statement, Conceptual Framework for Financial Reporting — Chapter 8: Notes to Financial Statements. The ASU is effective for all entities for fiscal years beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted-average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively for only the most recent annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted. The Company has applied ASU 2018-13 to all periods presented. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”) . This amendment was issued to simplify the accounting for income taxes by removing certain exceptions for recognizing deferred taxes, performing intraperiod allocation, and calculating income taxes in interim periods. Further, ASU 2019-12 adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax basis goodwill and allocating taxes to members of a consolidated group. ASU 2019-12 is effective for public business entities for fiscal periods beginning after December 15, 2020. The Company has applied ASU 2019-12 to all periods presented, and there was no adoption date impact to its financial statements. Recently issued accounting pronouncements not yet adopted In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies the accounting for convertible instruments by removing certain separation models in ASC 470- 20, Debt — Debt with Conversion and Other Options , for convertible instruments. The ASU updates the guidance on certain embedded conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, such that those features are no longer required to be separated from the host contract. The convertible debt instruments will be accounted for as a single liability measured at amortized cost. Further, the ASU made amendments to the EPS guidance in Topic 260 for convertible instruments, the most significant impact of which is requiring the use of the if-converted method for diluted EPS calculation, and no longer allowing the net share settlement method. The ASU also made revisions to Topic 815-40, which provides guidance on how an entity must determine whether a contract qualifies for a scope exception from derivative accounting. The amendments to Topic 815-40 change the scope of contracts that are recognized as assets or liabilities. The ASU is effective for public business entities for interim and annual periods beginning after December 15, 2021, with early adoption permitted. Adoption of the ASU can either be on a modified retrospective or full retrospective basis. The Company is currently evaluating the impact the adoption of this standard will have on its financial statements and related disclosures. |
Property and Equipment, Net_2
Property and Equipment, Net | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Archer Aviation Inc | ||
Property and Equipment, Net | 4. Property and Equipment, Net Property and equipment, net, consists of the following: June 30, 2021 December 31, 2020 Furniture, fixtures, and equipment $ 1,379 $ 1,046 Computer hardware 1,281 524 Website design 504 128 Leasehold improvements 764 54 Construction in progress 189 — Property and equipment, gross 4,117 1,752 Less: Accumulated depreciation (545) (139) Property and equipment, net $ 3,572 $ 1,613 The following table presents depreciation expense included in each respective expense category in the statements of operations and comprehensive loss: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Research and development $ 91 $ 10 $ 166 $ 16 General and administrative 167 19 239 19 Total depreciation expense $ 258 $ 29 $ 405 $ 35 | 4. Property and Equipment, Net Property and equipment, net, consists of the following: As of December 31, 2020 2019 Furniture, fixtures, and equipment $ 1,046 $ — Computer hardware 524 4 Website design 128 — Leasehold improvements 54 — Total property and equipment 1,752 4 Less: Accumulated depreciation (139) — Total property and equipment, net $ 1,613 $ 4 Depreciation expense totaled $139 and $0 for the years ended December 31, 2020 and 2019, respectively. Depreciation expense was classified as $72 and $67 within R&D and general and administrative, respectively, for the year ended December 31, 2020 on the statements of operations and comprehensive loss. |
Related Party Transactions_2__4
Related Party Transactions | 4 Months Ended | 6 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | |
Related Party Transactions | NOTE 6. RELATED PARTY TRANSACTIONS Founder Shares On September 4, 2020, the Sponsor paid $25,000 in consideration for 14,375,000 shares of Class B common stock (the “Founder Shares”). The Founder Shares included an aggregate of up to 1,875,000 shares subject to forfeiture by the Sponsor to the extent that the underwriter’s over-allotment was not exercised in full or in part, so that the Sponsor would collectively own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Sponsor did not purchase any Public Shares in the Initial Public Offering). Upon the expiration of the over-allotment option in December 2020, 1,875,000 shares of Class B common stock were forfeited, resulting in an aggregate of 12,500,000 Founder Shares outstanding. The Sponsor has agreed not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination, or (B) the date on which the Company completes a liquidation, merger, capital stock exchange or similar transaction that results in the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Business Combination, the Founder Shares will be released from the lock-up. Promissory Note - Related Party On September 11, 2020, the Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company received proceeds of $300,000 to cover expenses related to the Initial Public Offering. The Promissory Note was non-interest bearing and was payable on the earlier of March 31, 2021 or the completion of the Initial Public Offering. The outstanding balance under the Promissory Note of $300,000 was repaid at the closing of the Initial Public Offering on October 30, 2020. Administrative Support Agreement The Company entered into an agreement, commencing on the effective date of the Initial Public Offering, to pay the Sponsor a total of $10,000 per month for office space, secretarial and administrative support. Upon completion of the Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. See Note 7, under Business Combination Marketing Agreement, for additional related party transactions. | NOTE 5. RELATED PARTY TRANSACTIONS Founder Shares On September 4, 2020, the Sponsor paid $25,000 in consideration for 14,375,000 shares of Class B common stock (the “Founder Shares”). The Founder Shares included an aggregate of up to 1,875,000 shares subject to forfeiture by the Sponsor to the extent that the underwriter’s over-allotment was not exercised in full or in part, so that the Sponsor would collectively own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Sponsor did not purchase any Public Shares in the Initial Public Offering). Upon the expiration of the over-allotment option in December 2020, 1,875,000 shares of Class B common stock were forfeited, resulting in an aggregate of 12,500,000 Founder Shares outstanding. The Sponsor has agreed not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination, or (B) the date on which the Company completes a liquidation, merger, capital stock exchange or similar transaction that results in the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 - trading day period commencing at least 150 days after the Business Combination, the Founder Shares will be released from the lock-up. Promissory Notes — Related Party On September 11, 2020, the Company issued an unsecured promissory note to the Sponsor, pursuant to which the Company received proceeds of $300,000 to cover expenses related to the Initial Public Offering. The promissory note was non-interest bearing and was payable on the earlier of March 31, 2021 or the completion of the Initial Public Offering. The outstanding balance under the promissory note of $300,000 was repaid at the closing of the Initial Public Offering on October 30, 2020. The Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”) effective June 25, 2021, pursuant to which the Company can borrow an aggregate of up to $300,000 to cover expenses related to an initial Business Combination and general working capital. The Promissory Note is non-interest bearing and payable upon the consumation of a Business Combination. As of June 30, 2021, there was $300,000 outstanding under the Promissory Note. Administrative Support Agreement The Company entered into an agreement, commencing on the effective date of the Initial Public Offering, to pay the Sponsor a total of $10,000 per month for office space, secretarial and administrative support. Upon completion of the Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. During the three and six months ended June 30, 2021, the Company incurred expenses of $30,000 and $60,000 , respectively, under the agreement. See Note 6, under Business Combination Marketing Agreement, for additional related party transactions. | |
Archer Aviation Inc | |||
Related Party Transactions | 5. Related Party Transactions The Company has been primarily funded by notes payable and the sale of preferred and common stock to third parties and the Company’s co-founders. Convertible Promissory Notes Due to Related Parties On October 11, 2019, the Company entered into a Convertible Note Purchase Agreement which permitted the Company to issue and sell two convertible promissory notes to the founders’ Trusts, Capri Growth LLC (“Capri”) and Hight Drive Growth LLC (“Hight”), in the total amount of $601 (the “October Notes”). Interest accrues from the date of the notes on the unpaid principal amount at a rate of 5% per annum. Capri and Hight will have the ability to convert the outstanding principal and (at the Company’s option) any accrued but unpaid interest under the note (the “Conversion Amount”) into shares of the Company’s preferred stock issued and sold at the close of the Company’s next preferred equity financing that yields gross proceeds of at least $1,000 in aggregate. If such financing occurs before maturity of the notes on October 11, 2021, the Company will issue a number of shares equal to the Conversion Amount divided by (i) the capped price (price per share equal to $4,000 divided by the Company Capitalization) or (ii) the discount price (price per share multiplied by the discount rate of 80% ). On November 21, 2019, the Company entered into a Convertible Note Purchase Agreement which permitted the Company to issue and sell an additional three convertible promissory notes in the total amount of $5,000 to three related party investors (the “November Notes”), two of which are the Company’s founders and one of which is a third-party investor. Interest accrues from the date of the notes on the unpaid principal amount at a rate of 10% per annum. The investors will have the ability to either (i) convert the outstanding principal and any accrued but unpaid interest under the note into shares of the Company’s preferred stock at the price per share issued and sold at the close of the Company’s next preferred equity financing that yields gross proceeds of least $25,000 in the aggregate if such financing occurs before maturity of the notes on December 31, 2022 or (ii) be repaid in cash at the initial closing of such $25,000 equity financing event. The Company has not elected the fair value option for either the October or November Notes and does not otherwise account for any convertible promissory notes at fair value under GAAP. On November 21, 2019, the Company closed its Series Seed Preferred Stock round in which the October Notes were cancelled and converted into such shares. On July 22, 2020, the Company issued its Series A Preferred Stock in which the holders of the November Notes elected to cancel their notes and convert into such shares as opposed to being repaid in cash. As the October and November Notes were cancelled and converted into preferred stock in the respective preferred equity financing rounds, there was no outstanding balance on the convertible promissory notes as of June 30, 2021. Partial Recourse Promissory Notes On November 21, 2020, the Company entered into partial recourse promissory note arrangements with each of the Company’s founders which provided each of them with a partial recourse loan as consideration for the issuance of stock, which proceeds were used for the exercise of 2,645,517 shares, per founder, of the Company’s common stock pursuant to the outstanding option agreements issued by the Company to the founders on November 3, 2020. Due to the partial recourse nature of the notes, the promissory note arrangements are considered nonrecourse loans in their entirety for accounting purposes and thus are accounted for as in-substance share options. The purchase price for the shares was $0.15 per share for a total amount of $397 paid by each founder. The notes bear interest at a rate of 0.38% per annum, compounded annually. The promissory notes may be repaid at any time and from time to time and are due upon the earlier of five years from issuance or upon a deemed liquidation event, initial draft registration statement filing, or within 90 days of the respective founder’s termination. Concurrent with the execution of the notes, the founders early exercised their common stock options at the exercise price of $0.15 per share in accordance with the terms of the early exercise agreements. These options are subject to vesting conditions and are subject to forfeiture in the form of a Company repurchase option at the original $0.15 per share price if the founders terminate employment prior to the vesting dates of the original option agreements. The Company determined that the stock options exercised by a nonrecourse note are considered unexercised until the nonrecourse note is repaid. Because the loan is deemed nonrecourse for accounting purposes, the principal and interest represent the strike price of the in-substance awards for the purposes of fair valuing the in-substance awards, and the principal and interest on the note and shares underlying the in-substance share options will not be recorded on the Company’s balance sheets or statements of operations and comprehensive loss. The Company estimated the fair value of the in-substance share options using the Black-Scholes option-pricing model and compared this fair value to the value of the original awards immediately prior to the issuance of the promissory note. The Company determined that the promissory note terms did not result in incremental fair value of these awards and no incremental compensation cost would be recognized under the promissory note arrangement. The grant date fair value of the original award is recognized as expense over the requisite service period on a straight-line basis. | 6. Related Party Transactions The Company has been primarily funded by notes payable and the sale of preferred and common stock to third parties and the Company’s Co-founders. Convertible Promissory Notes Due to Related Parties On October 11, 2019, the Company entered into a Convertible Note Purchase Agreement which permitted the Company to issue and sell two convertible promissory notes to the founders’ Trusts, Capri Growth LLC (“Capri”) and Hight Drive Growth LLC (“Hight”), in the total amount of $601 (the “October Notes”). Interest accrues from the date of the notes on the unpaid principal amount at a rate of 5% per annum. Capri and Hight will have the ability to convert the outstanding principal and (at the Company’s option) any accrued but unpaid interest under the note (the “Conversion Amount”) into shares of the Company’s preferred stock issued and sold at the close of the Company’s next preferred equity financing that yields gross proceeds of at least $1,000 in aggregate. If such financing occurs before maturity of the notes on October 11, 2021, the Company will issue a number of shares equal to the Conversion Amount divided by (i) the capped price (price per share equal to $4,000 divided by the Company Capitalization) or (ii) the discount price (price per share multiplied by the discount rate of 80% ). On November 21, 2019, the Company entered into a Convertible Note Purchase Agreement which permitted the Company to issue and sell an additional three convertible promissory notes in the total amount of $5,000 to three related party investors (the “November Notes”), two of which are the Company’s founders and one of which is a third-party investor. Interest accrues from the date of the notes on the unpaid principal amount at a rate of 10% per annum. The investors will have the ability to either (i) convert the outstanding principal and any accrued but unpaid interest under the note into shares of the Company’s preferred stock at the price per share issued and sold at the close of the Company’s next preferred equity financing that yields gross proceeds of least $25,000 in the aggregate if such financing occurs before maturity of the notes on December 31, 2022 or (ii) be repaid in cash at the initial closing of such $25,000 equity financing event. The Company has not elected the fair value option for either the October or November Notes and does not otherwise account for any convertible promissory notes at fair value under GAAP. On November 21, 2019, the Company closed their Series Seed Preferred Stock round in which the October Notes were cancelled and converted into such shares. On July 22, 2020, the Company issued their Series A Preferred Stock in which the holders of the November Notes elected to cancel their notes and convert into such shares as opposed to being repaid in cash. The outstanding principal balance on the convertible promissory notes was $0 and $4,995 as of December 31, 2020 and 2019, respectively, recorded in convertible promissory notes due to related parties on the accompanying balance sheets. Accrued interest was $0 and $47 as of December 31, 2020 and 2019, respectively, recorded in other long-term liabilities on the accompanying balance sheets. Partial Recourse Promissory Notes On November 21, 2020, the Company entered into partial recourse promissory note arrangements with each of the Company’s founders which provided each of them with a partial recourse loan as consideration for the issuance of stock, which proceeds were used for the exercise of 2,645,517 shares, per founder, of the Company’s common stock pursuant to the outstanding option agreements issued by the Company to the founders on November 3, 2020. Due to the partial recourse nature of the notes, the promissory note arrangements are considered nonrecourse loans in their entirety for accounting purposes and thus are accounted for as in-substance share options. The purchase price for the shares was $0.15 per share for a total amount of $397 paid by each founder. The notes bear interest at a fixed rate of 0.38% per annum, compounded annually. The promissory notes may be repaid at any time and from time to time and are due upon the earlier of five years from issuance or upon a deemed liquidation event, initial draft registration statement filing, or within ninety days of the respective founder’s termination. Concurrent with the execution of the notes, the founders early exercised their common stock options at the exercise price of $0.15 per share in accordance with the terms of the early exercise agreements. These options are subject to vesting conditions and are subject to forfeiture in the form of a Company repurchase option at the original $0.15 per share price if the founders terminate employment prior to the vesting dates of the original option agreements. The Company determined that the stock options exercised by a nonrecourse note are considered unexercised until the nonrecourse note is repaid. Because the loan is deemed nonrecourse, for accounting purposes the principal and interest represent the strike price of the in-substance awards for the purposes of fair valuing the in-substance awards, and the principal and interest on the note and shares underlying the in- substance share options will not be recorded on the Company’s balance sheets or statements of operations and comprehensive loss. The Company estimated the fair value of the in-substance share options using the Black-Scholes option- pricing model and compared this fair value to the value of the original awards immediately prior to the issuance of the promissory note. The Company determined that the promissory note terms did not result in incremental fair value of these awards and no incremental compensation cost would be recognized under the promissory note arrangement. The grant date fair value of the original award is recognized as expense over the requisite service period on a straight-line basis. |
Paycheck Protection Program L_5
Paycheck Protection Program Loan | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Archer Aviation Inc | ||
Paycheck Protection Program Loan | 6. Paycheck Protection Program Loan On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act also appropriated funds for the U.S. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans that are forgivable in certain situations to promote continued employment, as well as Economic Injury Disaster Loans to provide liquidity to small businesses harmed by COVID-19. On April 9, 2020, the Company entered into a PPP Loan with JPMorgan Chase Bank, N.A. under the Paycheck Protection Program of the CARES Act and received total proceeds of $905 , with interest accruing at a rate of 0.98% per annum. The application for these funds required the Company to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company and that the Company will use the loan funds to retain workers, maintain payroll, or make mortgage, lease, and utility payments. In accordance with the requirements of the CARES Act, the Company used the proceeds for payroll costs. In June 2021, the Company received notification from the SBA that the loan and accrued interest, totaling $912 , was forgiven in full. Accordingly, the Company recorded a gain on forgiveness of PPP loan and interest in the condensed statement of operations and comprehensive loss. | 7. Paycheck Protection Program Loan On March 27, 2020, President Trump signed into law the CARES Act (defined above). The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act also appropriated funds for the U.S. Small Business Administration (“SBA”) Paycheck Protection Program loans that are forgivable in certain situations to promote continued employment, as well as Economic Injury Disaster Loans to provide liquidity to small businesses harmed by COVID-19. On April 9, 2020, the Company entered into a PPP Loan with JPMorgan Chase Bank, N.A., under the Paycheck Protection Program of the CARES Act. The application for these funds required the Company to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company and that the Company will use the loan funds to retain workers, maintain payroll, or make mortgage, lease, and utility payments. Based in part on the Company’s assessment of the uncertainty associated with its future operating performance created by the COVID-19 pandemic and related governmental responses, and the going concern uncertainty reflected in the Company’s financial statements, the Company believed in good faith that it met the eligibility requirements for the PPP Loan. If, despite the good-faith belief that given the Company’s circumstances all eligibility requirements for the PPP Loan were satisfied, it is later determined that the Company had violated any applicable laws or regulations or it is otherwise determined the Company was ineligible to receive the PPP Loan, it may be required to repay the PPP Loan in its entirety and/or be subject to additional penalties and potential liabilities. The Company received total proceeds of $905 from the PPP Loan, which is due on April 9, 2022. In accordance with the requirements of the CARES Act, the Company will use the proceeds for payroll costs. Interest accrues on the PPP Loan at the rate of 0.98% per annum. Neither principal nor interest shall be due or payable during the six-month deferral period beginning on April 9, 2020. On June 11, 2020, the SBA extended the deferral period to ten months . Commencing one month after the expiration of the deferral period and continuing on the same day of each month thereafter until the maturity date, the Company will pay to JPMorgan Chase Bank, N.A. monthly payments of principal and interest, each in such equal amount required to fully amortize the principal amount outstanding on the loan. The Company accounts for the PPP Loan as debt and will accrue interest over the term of the loan. As of December 31, 2020, the PPP Loan had an outstanding balance of $645 and $260 in notes payable and notes payable, net of current portion, respectively, in the accompanying balance sheets. The future principal payments under the PPP loan agreement as of December 31, 2020 were as follows: Years ending December 31, 2021 $ 645 2022 260 $ 905 The Company may apply to JPMorgan Chase Bank, N.A., for loan forgiveness in an amount equal to the sum of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities during the eight weeks following disbursement on the PPP Loan. Not more than 25% of the forgiven amount may be for non-payroll costs. Forgiveness of the loan is only available for principal. Interest payable under the loan will not be forgiven but the SBA may pay the loan interest on forgiven amounts. On June 5, 2020, the Paycheck Protection Program Flexibility Act (the “PPP Flexibility Act”) was signed into law, extending the PPP Note forgiveness period from 8 weeks to 24 weeks after loan origination, reducing the required amount of payroll expenditures from 75% to 60 %, removing the prior ban on borrowers taking advantage of payroll tax deferral after loan forgiveness and allowing for the amendment of the maturity date on existing loans from two years to five years . The Company did not amend the maturity date but intends to apply for loan forgiveness under the terms of the PPP Loan and expects the loan to be recorded as income when legal forgiveness is obtained. While the Company believes that its use of the loan proceeds satisfied the conditions for forgiveness of the loan, the Company cannot guarantee that it has not or will not take actions that could cause the Company to be ineligible for forgiveness of the loan, in whole or in part. |
Commitments and Contingencies_4
Commitments and Contingencies | 4 Months Ended | 6 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies | NOTE 7. COMMITMENTS Registration Rights The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of the Working Capital Loans (as defined below) (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of the Initial Public Offering, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to Class A common stock). The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Business Combination Marketing Agreement The Company engaged the representative of the underwriters and Moelis & Company LLC, an affiliate of the Sponsor, in connection with a Business Combination to assist the Company in holding meetings with its stockholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with a Business Combination, assist the Company in obtaining stockholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination. The Company will pay the representative of the underwriters and Moelis & Company LLC a cash fee for such services upon the consummation of the Business Combination of 2.25% ($11,250,000) and 1.25% ($6,250,000), respectively, or 3.5% ($17,500,000), in the aggregate, of the gross proceeds of the offering including the gross proceeds from the full or partial exercise of the underwriters’ over-allotment option. A portion of such fee may be re-allocated or paid to members that assist the Company in consummating its Business Combination. Related Party Loans In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s directors and officers may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. 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, the Company 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. | NOTE 6. COMMITMENTS Registration Rights The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of the Working Capital Loans (as defined below) (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) are entitled to registration rights pursuant to a registration rights agreement signed on the effective date of the Initial Public Offering, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to Class A common stock). The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Business Combination Marketing Agreement The Company engaged the representative of the underwriters and Moelis & Company LLC, an affiliate of the Sponsor, in connection with a Business Combination to assist the Company in holding meetings with its stockholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with a Business Combination, assist the Company in obtaining stockholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination. The Company will pay the representative of the underwriters and Moelis & Company LLC a fee for such services upon the consummation of the Business Combination of 2.25% ( $11,250,000 ) and 1.25 % ( $6,250,000 ), respectively, or 3.5% ( $17,500,000 ), in the aggregate, of the gross proceeds of the Initial Public Offering including the gross proceeds from the full or partial exercise of the underwriters’ over-allotment option. A portion of such fee may be re-allocated or paid to members of FINRA that assist the Company in consummating its Business Combination. Related Party Loans In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s directors and officers may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. 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, the Company 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, without interest, 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. No Working Capital Loans were outstanding as of and during the three and six months ended June 30, 2021. | |
Archer Aviation Inc | |||
Commitments and Contingencies | 7. Commitments and Contingencies Operating Leases The Company leases office and storage facilities under various operating lease agreements with lease periods expiring between 2022 and 2023 and generally contain periodic rent increases and various renewal and termination options. The Company’s lease costs were as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Operating lease cost $ 388 $ — $ 731 $ — Short-term lease cost — — 25 — Total lease cost $ 388 $ — $ 756 $ — The Company’s weighted-average remaining lease term and discount rate were as follows: Six Months Ended June 30, 2021 2020 Weighted-average remaining lease term (in months) 23.42 — Weighted-average discount rate 11.29 % — The minimum aggregate future obligations under noncancelable operating leases as of June 30, 2021 were as follows: Remaining 2021 $ 774 2022 1,546 2023 688 Total future lease payments 3,008 Less: imputed interest (294) Present value of future lease payments $ 2,714 Supplemental cash information and non-cash activities related to right-of-use assets and lease liabilities were as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Operating cash outflows from operating leases $ 379 $ — $ 706 $ — Operating lease assets obtained in exchange for new lease liabilities 165 — 984 — Letter of Credit In conjunction with the Company’s operating lease for its headquarters, the Company entered into a standby letter of credit in favor of the Company’s lessor, in lieu of paying cash to the lessor to satisfy the security deposit requirements of the leased property. The standby letter of credit was issued on September 15, 2020 for an amount of $257 and expires on September 30, 2021. The letter of credit automatically renews for additional 12 - month periods at each forfeiture date until September 1, 2023, unless cancelled by the Company. Legal Proceedings During the ordinary course of the Company’s business, it may be subject to legal proceedings, various claims, and litigation. Such proceedings can be costly, time consuming, and unpredictable, and therefore, no assurance can be given that the final outcome of such proceedings will not materially impact the Company’s financial condition or results of operations. On April 6, 2021, Wisk Aero LLC (“Wisk”) brought a lawsuit against Archer in the United States District Court in the Northern District of California alleging misappropriation of trade secrets and patent infringement. Archer has placed an employee on paid administrative leave in connection with a government investigation and a search warrant issued to the employee, which Archer believes are focused on conduct prior to the employee joining Archer. Archer and three other Archer employees with whom the individual worked have received subpoenas relating to this investigation. Archer is cooperating with the investigation of the employee. On May 19, 2021, Wisk filed a motion for preliminary injunction and expedited discovery. On June 1, 2021, Archer filed a motion to dismiss the trade secret claims and filed counterclaims. On June 15, 2021, Wisk amended its complaint, and the following day Archer filed a motion to dismiss the amended complaint. On June 23, 2021, Archer filed an opposition to the motion for preliminary injunction. On July 13, 2021, Archer filed amended counterclaims. On July 22, 2021, the Court denied Wisk’s motion for preliminary injunction. On July 27, 2021, Wisk filed a motion to strike and dismiss certain of Archer’s amended counterclaims. On August 10, 2021, Archer filed a motion to dismiss the motion to strike and dismiss and issued a press release. On August 20, 2021, Wisk filed a notice of appeal of the Court’s denial of the motion for preliminary injunction. On August 24, 2021, the Court denied Archer’s motion to dismiss the trade secret claims. On September 14, 2021, the Court denied Wisk’s motion to strike and dismiss certain of Archer’s amended counterclaims. Archer cannot predict the timing or outcome of the litigation or federal government investigation. On September 30, 2021, Wisk dismissed its appeal of the District Court’s denial of the motion for preliminary injunction. As of October 6, 2021, the investigation is ongoing. Archer cannot predict the timing or probability of the outcome or range of reasonably possible loss, if any, but a negative result could have a material adverse effect on Archer’s financial position, liquidity, operations, and cash flows. | 8. Commitments and Contingencies Operating Leases The Company’s lease arrangements consist of one corporate facility lease and one short-term storage facility lease. The corporate facility lease expires in 2023 and does not contain an option to extend the lease. The Company’s short-term storage facility lease has a term of six months and expires in January of 2021. As the Company does not intend to extend its short-term lease over one year from the commencement date, the Company has elected the Short-Term Lease exemption and therefore, will not recognize right-of-use assets and lease liabilities that arise from short-term leases for any class of underlying asset. The Company’s lease costs, weighted-average remaining lease term and weighted-average discount rate for each period ended December 31, 2020 and 2019, is as follows: Year Ended December 31, 2020 2019 Operating lease cost $ 52 $ — Short-term lease cost 44 — Total lease cost $ 96 $ — Weighted-average remaining lease term (in months) 30 — Weighted-average discount rate 12.17 % — The minimum aggregate future obligations under noncancelable operating leases as of December 31, 2020 were as follows: Years ending December 31, 2021 $ 1,043 2022 1,074 2023 507 Future minimum lease payments 2,624 Less: Amount representing interest (323) Present value of future lease payments $ 2,301 Supplemental cash information and non-cash activities related to right-of-use assets and lease liabilities are as follows: 2020 2019 Operating cash outflows from operating leases $ 86 $ — Operating lease assets obtained in exchange for new lease liabilities 2,300 — Letter of Credit In conjunction with the Company’s operating lease, the Company entered into a standby letter of credit in favor of the Company’s lessor, in lieu of paying cash to the lessor to satisfy the security deposit requirements of the leased property. The standby letter of credit was issued on September 15, 2020 for an amount of $257 and expires on September 30, 2021. The letter of credit automatically renews for additional 12 - month periods at each forfeiture date until September 1, 2023 unless cancelled by the Company. Litigation During the ordinary course of the Company’s business, it may be subject to legal proceedings, various claims, and litigation in the ordinary course of business. As of December 31, 2020 and 2019, the Company did not have any matters which would require it to accrue any liability regarding ongoing legal proceedings. |
Preferred and Common Stock_2
Preferred and Common Stock | 4 Months Ended | 6 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | |
Preferred and Common Stock | NOTE 9. STOCKHOLDERS’ EQUITY Preferred stock outstanding Class A Common Stock issued Class B Common Stock outstanding Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of shareholders, except as required by law. The shares of Class B common stock will automatically convert into shares of Class A common stock upon the consummation of a Business Combination on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with a Business Combination, the number of shares of Class A common stock issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of shares of Class A common stock outstanding after such conversion, including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of a Business Combination, excluding any shares of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in a Business Combination and any Private Placement Warrants issued to the Sponsor, officers or directors upon conversion of Working Capital Loans, provided that such conversion of Founder Shares will never occur on a less than one-for-one basis. | NOTE 8. STOCKHOLDERS’ EQUITY Preferred stock — The Company is authorized to issue 1,000,000 shares of $0.0001 par value preferred stock. At June 30, 2021 and December 31, 2020, there were no shares of preferred stock issued or outstanding . Class A common stock — The Company is authorized to issue up to 200,000,000 shares of Class A, $0.0001 par value common stock. Holders of the Company's common stock are entitled to one vote for each share. At June 30, 2021 and December 31, 2020, there were 50,000,000 shares issued and no shares and 5,114,713 shares of Class A common stock outstanding, respectively, excluding 50,000,000 and 44,885,287 shares of Class A common stock subject to possible redemption at June 30, 2021 and December 31, 2020, respectively. The Company determined the Class A common stock subject to redemption to be equal to the redemption value of approximately $10 per share of Class A common stock while also taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001 . Upon considering the impact of the PIPE Financing and associated Subscription Agreements that will close substantially concurrent with an initial Business Combination (see Note 1), which would result in an additional $600,000,000 in net tangible assets, it was concluded during the quarter ended March 31, 2021, that the redemption value would include all shares of Class A common stock resulting in the common stock subject to possible redemption being equal to $500,143,016 . This resulted in a measurement adjustment to the initial carrying value of the Class A common stock subject to redemption with the offset recorded to additional paid-in capital and accumulated deficit. Class B common stock — The Company is authorized to issue up to 20,000,000 shares of Class B, $0.0001 par value common stock. Holders of the Company’s common stock are entitled to one vote for each share. At June 30, 2021 and December 31, 2020, there were 12,500,000 shares of Class B common stock issued and outstanding . Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of shareholders, except as required by law. The shares of Class B common stock will automatically convert into shares of Class A common stock upon the consummation of a Business Combination on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with a Business Combination, the number of shares of Class A common stock issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of shares of Class A common stock outstanding after such conversion, including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of a Business Combination, excluding any shares of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in a Business Combination and any Private Placement Warrants issued to the Sponsor, officers or directors upon conversion of Working Capital Loans, provided that such conversion of Founder Shares will never occur on a less than one-for-one basis. | |
Archer Aviation Inc | |||
Preferred and Common Stock | 8. Preferred and Common Stock Preferred Stock There were 18,193,515 shares of Series Seed redeemable convertible preferred stock (“Series Seed Preferred Stock”) authorized, issued and outstanding as of June 30, 2021 and December 31, 2020. There were 46,732,728 shares of Series A redeemable convertible preferred stock (“Series A Preferred Stock”) authorized and 46,267,422 shares issued and outstanding as of June 30, 2021 and December 31, 2020. Common Stock There were 155,000,000 shares of common stock authorized and 52,229,481 shares issued and outstanding as of June 30, 2021 and 143,677,090 shares of common stock authorized and 51,321,752 shares issued and outstanding as of December 31, 2020. Preferred and Common Stock Rights The rights, privileges, and preferences of the Company’s preferred and common stock as set forth in the Company’s Amended and Restated Certificate of Incorporation, dated July 16, 2020, are as follows: Voting The holders of preferred and common stock vote together and not as separate classes. Each holder of common stock is entitled to one vote for each share held by such holder. Each holder of preferred stock is entitled to the number of votes equal to the number of shares of common stock into which the shares of preferred stock are convertible. Except as otherwise required by law, holders of common stock are not entitled to vote on any amendment to the Amended and Restated Certificate of Incorporation that relates solely to the terms of one or more outstanding series of preferred stock. Holders of common stock, exclusively and as a separate class, are entitled to elect three directors of the Company. Holders of Series A Preferred Stock, exclusively and as a separate class, are entitled to elect one director of the Company. Holders of Series Seed Preferred Stock are not entitled to vote for a director. There is no cumulative voting. Dividends The Company may not declare, pay, or set aside any dividends unless the holders of preferred stock have first or simultaneously received a dividend. If declared, the dividend rate for the convertible preferred stock is defined as equal amount per share on an as-converted basis. Any dividends declared are noncumulative, and no dividends on preferred or common stock have been declared by the Board of Directors through June 30, 2021. Preemptive Rights If the Company proposes to offer any equity securities, securities convertible to equity securities, or options or warrants, subject to customary exceptions, any investor who holds at least 4,150,755 shares of registrable securities has the right to purchase their pro rata portion of such securities. Redemption The preferred stock is not redeemable at the option of the holder except in certain circumstances. Mandatory redemption occurs upon a redemption event, which is upon wind-up, dissolution, liquidation, insolvency, declaration of bankruptcy, or change in control. The contingent redemption upon a deemed liquidation event results in mezzanine equity classification (outside of permanent equity) on the Company’s balance sheets. In the event of a deemed liquidation event, if available proceeds are not sufficient to redeem all outstanding shares of preferred stock, the Company may redeem a pro rata portion of each holder’s shares of preferred stock to the extent of such available proceeds. Conversion Each share of Series Seed Preferred Stock and Series A Preferred Stock is convertible into one share of common stock as determined by dividing the applicable original issue price by the applicable conversion price in effect at the time of conversion (subject to appropriate adjustment in the event of a stock dividend, stock split, combination, or other similar recapitalization). The applicable original issue price and the applicable conversion price of each share of Series Seed Preferred Stock is $0.3300 . The applicable original issue price and the applicable conversion price of each share of Series A Preferred Stock is $1.2046 . The Company will reserve the number of authorized shares of common stock sufficient to effect the conversion of all outstanding preferred stock, and if necessary, will increase its authorized but unissued shares of common stock to such number of shares sufficient to effect the conversion. All outstanding shares of preferred stock will be automatically converted into shares of common stock upon either a qualified initial public offering or in event of a mandatory conversion. The Series Seed Preferred Stock and Series A Preferred Stock will convert into common stock upon consummation of the Business Combination Agreement with Atlas and Merger Sub. Refer to Note 1 for more detail. Liquidation In the event of any voluntary or involuntary liquidation or deemed liquidation event such as dissolution or winding up, the holders of shares of preferred stock are entitled to receive distribution in an amount per share equal to the greater of (i) the applicable original issue price, plus any declared but unpaid dividend, or (ii) the amount per share had all shares of preferred stock been converted prior to such liquidation event, on a pari passu basis prior and in preference to any distribution to the holders of common stock. If upon any such liquidation event, the assets of the Company available for distribution is insufficient to pay the holders of shares of preferred stock, the amounts will be distributed among the holders of preferred stock pro rata, in proportion to the full amounts they would otherwise be entitled to receive. If the holders of preferred stock are paid in full, the remaining assets of the Company will be distributed pro rata to the holders of common stock based on the number of shares held by each holder. | 9. Preferred and Common Stock Stock Split On October 11, 2019, the Board of Directors effected a five -for-one stock split of the Company’s common stock. Accordingly, all share and share amounts for the periods presented in the accompanying financial statements and the notes thereto have been adjusted retroactively, where applicable, to reflect this stock split. Preferred Stock There were 18,193,515 shares of Series Seed redeemable convertible preferred stock (“Series Seed Preferred Stock”) authorized, issued and outstanding as of December 31, 2020 and 2019. There were 46,732,728 shares of Series A redeemable convertible preferred stock (“Series A Preferred Stock”) authorized and 46,267,422 shares issued and outstanding as of December 31, 2020. There were no shares of Series A Preferred Stock authorized, issued and outstanding as of December 31, 2019. Common Stock There were 143,677,090 shares of common stock authorized and 51,321,752 shares issued and outstanding as of December 31, 2020. There were 77,285,983 shares of common stock authorized and 50,000,000 shares issued and outstanding as of December 31, 2019. Preferred and Common Stock Rights The rights, privileges, and preferences of the Company’s preferred and common stock as set forth in the Company’s Amended and Restated Certificate of Incorporation, dated July 16, 2020, are as follows: Voting The holders of preferred and common stock vote together and not as separate classes. Each holder of common stock is entitled to one vote for each share held by such holder. Each holder of preferred stock is entitled to the number of votes equal to the number of shares of common stock into which the shares of preferred stock are convertible. Except as otherwise required by law, holders of common stock are not entitled to vote on any amendment to the Amended and Restated Certificate of Incorporation that relates solely to the terms of one or more outstanding series of preferred stock. Holders of common stock, exclusively and as a separate class, are entitled to elect three directors of the Company. Holders of Series A Preferred Stock, exclusively and as a separate class, are entitled to elect one director of the Company. Holders of Series Seed Preferred Stock are not entitled to vote for a director. There is no cumulative voting. Dividends The Company may not declare, pay or set aside any dividends unless the holders of preferred stock have first or simultaneously received a dividend. If declared, the dividend rate for the convertible preferred stock is defined as equal amount per share on an as-converted basis. Any dividends declared are noncumulative, and no dividends on preferred or common stock have been declared by the Board of Directors through December 31, 2020. Preemptive Rights If the Company proposes to offer any equity securities, securities convertible to equity securities, or options or warrants, subject to customary exceptions, any investor who holds at least 4,150,755 shares of registrable securities has the right to purchase their pro rata portion of such securities. Redemption The preferred stock is not redeemable at the option of the holder except in certain circumstances. Mandatory redemption occurs upon a redemption event, which is upon wind-up, dissolution, liquidation, insolvency, declaration of bankruptcy, or change in control. The contingent redemption upon a deemed liquidation event results in mezzanine equity classification (outside of permanent equity) on the Company’s balance sheets. In the event of a deemed liquidation event, if available proceeds are not sufficient to redeem all outstanding shares of preferred stock, the Company may redeem a pro rata portion of each holder’s shares of preferred stock to the extent of such available proceeds. Conversion Each share of Series Seed Preferred Stock and Series A Preferred Stock is convertible into one share of common stock as determined by dividing the applicable original issue price by the applicable conversion price in effect at the time of conversion (subject to appropriate adjustment in the event of a stock dividend, stock split, combination, or other similar recapitalization). The applicable original issue price and the applicable conversion price of each share of Series Seed Preferred Stock is $0.3300 . The applicable original issue price and the applicable conversion price of each share of Series A Preferred Stock is $1.2046 . The Company will reserve the number of authorized shares of common stock sufficient to effect the conversion of all outstanding preferred stock, and if necessary, will increase its authorized but unissued shares of common stock to such number of shares sufficient to effect the conversion. All outstanding shares of preferred stock will be automatically converted into shares of common stock upon either a qualified initial public offering or in event of a mandatory conversion. The Series Seed Preferred Stock and Series A Preferred Stock will convert into common stock upon consummation of the Merger Agreement with Atlas and Merger Sub. Refer to Note 13 for more detail. Liquidation In the event of any voluntary or involuntary liquidation or deemed liquidation event such as dissolution or winding up, the holders of shares of preferred stock are entitled to receive distribution in an amount per share equal to the greater of (i) the applicable original issue price, plus any declared but unpaid dividend, or (ii) the amount per share had all shares of preferred stock been converted prior to such liquidation event, on a pari passu basis prior and in preference to any distribution to the holders of common stock. If upon any such liquidation event, the assets of the Company available for distribution is insufficient to pay the holders of shares of preferred stock, the amounts will be distributed among the holders of preferred stock pro rata, in proportion to the full amounts they would otherwise be entitled to receive. If the holders of preferred stock are paid in full, the remaining assets of the Company will be distributed pro rata to the holders of common stock based on the number of shares held by each holder. |
Stock-Based Compensation_2
Stock-Based Compensation | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Archer Aviation Inc | ||
Stock-Based Compensation | 9. Stock-Based Compensation 2019 Stock Plan In January 2021, the Company granted 1,269,289 incentive and nonstatutory stock options. As of June 30, 2021, the Company had 543,578 shares of common stock available for issuance under the 2019 Stock Plan. A summary of our employee stock option activity is as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Life (Years) Value Outstanding as of January 1, 2021 11,167,089 $ 0.11 9.61 $ 136,988 Granted 1,203,981 $ 0.15 Exercised (680,396) $ 0.04 $ 9,339 Outstanding as of June 30, 2021 11,690,674 $ 0.12 9.18 $ 177,315 Exercisable as of June 30, 2021 2,335,560 $ 0.14 9.28 $ 35,385 Vested and expected to vest as of June 30, 2021 11,690,674 $ 0.12 9.18 $ 177,315 A summary of our non-employee stock option activity is as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Life (Years) Value Outstanding as of January 1, 2021 1,387,586 $ 0.15 9.84 $ 16,973 Granted 65,308 $ 0.15 Exercised (227,333) $ 0.15 $ 3,129 Outstanding as of June 30, 2021 1,225,561 $ 0.15 9.35 $ 18,885 Exercisable as of June 30, 2021 33,900 $ 0.15 9.41 $ 513 Vested and expected to vest as of June 30, 2021 1,225,561 $ 0.15 9.35 $ 18,885 A summary of our restricted stock activity is as follows: Weighted Average Number of Grant Shares Price Outstanding as of January 1, 2021 567,000 $ 0.04 Vested (567,000) $ 0.04 Outstanding as of June 30, 2021 — $ — Determination of Fair Value The assumptions used in the Black-Scholes option pricing model are provided in the following table. June 30, 2021 December 31, 2020 Risk-free interest rate: Employee stock options 0.62 % 0.52 – 1.52 % Non-employee stock options 1.08 % 0.79 % Expected term (in years): Employee stock options 6.32 6.02 – 6.32 Non-employee stock options 10.00 10.00 Expected volatility: Employee stock options 87.94 % 60.00 – 70.00 % Non-employee stock options 88.03 % 60.00 % Dividend yield: Employee stock options 0.00 % 0.00 % Non-employee stock options 0.00 % 0.00 % Grant date fair value per share: Employee stock options $ 13.65 $ 0.02 - $0.08 Non-employee stock options $ 13.68 $ 0.10 The Company records stock-based compensation expense for stock-based compensation awards based on the fair value on the date of grant. The stock-based compensation expense is recognized ratably over the course of the requisite service period. The Company recognized stock-based compensation expense of $861 and $123 for employee and non-employees, respectively, for stock options and $9 for non-employees for restricted stock awards for the three months ended June 30, 2021. The Company recognized stock-based compensation expense of $1,658 and $240 for employees and non-employees, respectively, for stock options and $20 for non-employees for restricted stock awards for the six months ended June 30, 2021. For the three and six months ended June 30, 2020, the Company recognized stock-based compensation expense of $5 and $8 , respectively, related to stock options for employees. For the three months ended June 30, 2020, the Company recognized stock-based compensation expense of $3 related to restricted stock awards for non-employees. As of June 30, 2021, the total remaining stock-based compensation expense for unvested stock options was $15,342 and $788 for employees and non-employees, respectively, which are expected to be recognized over a weighted-average period of 1.7 and 1.1 years, for employee and non-employees, respectively. The Company has elected to account for forfeitures as they occur and will record stock-based compensation expense assuming all stockholders will complete the requisite service period. If an employee forfeits an award because they fail to complete the requisite service period, the Company will reverse stock-based compensation expense previously recognized in the period the award is forfeited. The following table presents stock-based compensation expense included in each respective expense category in the statements of operations and comprehensive loss: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Research and development $ 735 $ 5 $ 1,416 $ 8 General and administrative 258 3 502 3 Total stock-based compensation expense $ 993 $ 8 $ 1,918 $ 11 Collaboration and Warrant Agreements United Airlines On January 29, 2021, the Company entered into a purchase agreement and warrant agreement with United Airlines (“United”). Under the terms of the purchase agreement, United has a conditional purchase order for up to 200 Archer aircraft, with an option to purchase an additional 100 aircraft. The purchase agreement between Archer and United is subject to conditions that include, but are not limited to, the certification of Archer’s aircraft by the Federal Aviation Administration (“FAA”) and further negotiation and reaching mutual agreement on certain material terms. Archer issued 14,645,614 warrants to United to purchase shares of the Company’s common stock. Each warrant provides United with the right to purchase one share of Archer common stock at an exercise price of $0.01 per share. The warrants will vest in accordance with four milestones including the issuance of the warrant in conjunction with the execution of the purchase and collaboration arrangements, completion of a SPAC transaction by Archer, the certification of the aircraft by the FAA, and the sale of aircraft to United. On January 29, 2021, a valuation of the Company’s common stock was performed, valuing the Company’s common stock at $13.35 per share. The value of the common stock was determined using a hybrid approach of the OPM and PWERM, with the PWERM weighted at 80% primarily based on management’s expectation of the planned merger as described in Note 1 and the OPM weighted at 20% due to uncertainties in the timing of other possible scenarios. The Company used the OPM to allocate value in a stay private scenario. Given the $0.01 exercise price, each warrant also had a fair value of $13.35 at the grant date. The Company determined that as a result of signing the purchase agreement, United is a customer with the intention of obtaining the output of the Company’s ordinary activities (design and production of aircraft). United has not contracted to share in the risks and benefits of development of the aircraft, and United is not involved in the development of the aircraft. As a result, the Company accounts for the collaboration and purchase agreement under ASC 606, Revenue from Contracts with Customers . The Company identified the sale of each aircraft ordered by United as a separate performance obligation in the contract. As the performance obligations have not been satisfied, the Company has not recognized any revenue as of June 30, 2021. With respect to the four milestones outlined above, the Company accounts for them as consideration payable to a customer under ASC 606 related to the future purchase of aircraft by United. Pursuant to ASC 718, the Company measured the grant date fair value of the warrants to be recognized upon the achievement of each of the four milestones and the vesting of the related warrants. The Company determined that the warrants will be classified as equity awards based on the criteria of ASC 480 and ASC 718. Pursuant to ASC 606, consideration payable to the customer is generally accounted for as a reduction to revenue and recorded at the later of when (i) the entity recognizes revenue for the transfer of related goods, or (ii) the entity pays the consideration. Due to the nature of the four milestones, and the Company’s unique circumstances upon the actual or anticipated vesting dates as described below, the recognition pattern and cost presentation of each will differ. For the first milestone, issuance of the warrant in conjunction with the execution of the purchase and collaboration arrangements, the Company has recorded the grant date fair value of the respective warrant tranche at the vesting date upon satisfaction of the milestone. The Company does not believe that the consideration payable for the first milestone was provided in exchange for a distinct good or service. Rather, the consideration was to induce United to commit to a contingent purchase agreement for an aircraft from the Company. The related costs for this milestone were recorded in other warrant expense in the statements of operations and comprehensive loss due to the absence of historical or probable future revenue. For the second milestone, the completion of the SPAC transaction by Archer, as it is not considered probable that certain events will occur, the Company will record the grant date fair value of the respective warrant tranche at the vesting date upon satisfaction of the milestone. The related costs for this milestone will be recorded in other warrant expense in the statements of operations and comprehensive loss due to the absence of historical or probable future revenue. For the third milestone, the certification of the aircraft by the FAA, the Company will assess whether it is probable that the award will vest at the end of every reporting period. If and when the award is deemed probable of vesting, the Company will begin capitalizing the grant date fair value of the associated warrant as an asset through the vesting date and subsequently amortize the asset as a reduction to revenue as it sells the new aircraft to United. For the fourth milestone, the sale of aircraft to United, the Company will record the cost associated with the vesting of each portion of warrants within this milestone as a reduction of the transaction price as revenue is recognized for each sale of the aircraft. As of June 30, 2021, the first milestone of execution of the collaboration agreement had been achieved, and the Company recorded the associated expense of $78,208 related to 5,858,246 warrants that vested. FCA US LLC On November 6, 2020, the Company entered into a collaboration agreement with FCA US LLC (“FCA”), in which both parties agreed to work together to complete a series of fixed duration collaboration projects to develop a prototype aircraft for Archer. In exchange for services to be provided by FCA under the collaboration agreement, the Company issued a warrant to FCA on November 6, 2020, in which FCA will have the right to purchase up to 1,660,302 shares of Archer’s common stock at an exercise price of $0.01 per share (subject to appropriate adjustment in the event of a stock dividend, stock split, combination, or other similar recapitalization). In September 2020, a valuation of the Company’s common and preferred stock was performed, valuing the Company’s common stock and Series A Preferred Stock at $0.15 and $1.20 per share, respectively. The warrant expires on November 6, 2025. Shares under the warrant are vested and earned based on the completion of specific aircraft development milestones identified under the collaboration agreement which are expected to be achieved through December 2022. As the Company is currently in pre-revenue stage and is not generating any revenue from the collaboration agreement, all costs incurred with third parties are recorded based on the nature of the cost incurred. The Company accounts for the warrant in accordance with the provisions of ASC 718. The Company will assess whether it is probable that the award will vest for each of the seven milestones at the end of every reporting period. If and when the award is deemed probable of vesting, the Company will recognize compensation expense for the portion of the grant determined probable of vesting on a straight-line basis over the duration of each milestone. If services had been provided by FCA prior to management determining the milestone is probable of being achieved, a cumulative catch-up adjustment will be recorded for services performed in prior periods. Costs incurred under the collaboration agreement and warrant are associated with the research, design, and production and testing for the aircraft prototype and are recorded in R&D expense in the statements of operations and comprehensive loss. As services began in January 2021, no expense was recognized during the year ended December 31, 2020. During the six months ended June 30, 2021, the Company recorded $34 of expense related to the completion of two milestones, amounting to 232,442 shares that have vested. | 10. Stock-Based Compensation 2019 Stock Plan On October 11, 2019, the Company adopted the 2019 Stock Plan (the “Plan”) under which the Board of Directors may grant up to 5,555,555 incentive and nonstatutory stock options and restricted stock to employees, directors, and non-employees. On November 20, 2019, the Board of Directors amended the Plan to increase the number of shares to 7,577,057 shares. On October 4, 2020, the Board of Directors further amended the Plan to increase the number of shares to 15,689,294 shares. As of December 31, 2020 and 2019, the Company had 1,812,867 and 7,577,057 shares, respectively, of common stock available for future issuance under the Plan. The Company did not grant any awards under the Plan during the year ended December 31, 2019. A summary of our employee stock option activity is as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Life (Years) Value Outstanding as of December 31, 2019 — $ — — $ — Granted 11,318,689 $ 0.11 Exercised (151,600) $ 0.04 $ 1,324 Outstanding as of December 31, 2020 11,167,089 $ 0.11 9.61 $ 136,988 Exercisable as of December 31, 2020 1,432,988 $ 0.15 9.84 $ 17,528 Vested and expected to vest as of December 31, 2020 11,167,089 $ 0.11 9.61 $ 136,988 A summary of our non-employee stock option activity is as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Life (Years) Value Outstanding as of December 31, 2019 — $ — — $ — Granted 1,423,738 $ 0.15 Exercised (36,152) $ 0.15 $ 282 Outstanding as of December 31, 2020 1,387,586 $ 0.15 9.84 $ 16,973 Exercisable as of December 31, 2020 6,172 $ 0.15 9.84 $ 75 Vested and expected to vest as of December 31, 2020 1,387,586 $ 0.15 9.84 $ 16,973 A summary of our restricted stock activity is as follows: Weighted Average Number of Grant Shares Price Outstanding as of December 31, 2019 — $ — Granted 1,134,000 $ 0.04 Vested (567,000) $ 0.04 Outstanding as of December 31, 2020 567,000 $ 0.04 Determination of Fair Value The assumptions used in the Black-Scholes option pricing model for the year ended December 31, 2020 are provided in the following table. 2020 Risk-free interest rate: Employee stock options 0.52 – 1.52 % Non-employee stock options 0.79% Expected term (in years): Employee stock options 6.02 – 6.32 Non-employee stock options 10.00 Expected volatility: Employee stock options 60.00 – 70.00 % Non-employee stock options 60.00% Dividend yield: Employee stock options 0.00% Non-employee stock options 0.00% Grant date fair value per share: Employee stock options $ 0.02 – $0.08 Non-employee stock options $0.10 The Company records stock-based compensation expense for stock-based compensation awards based on the fair value on the date of grant. The stock-based compensation expense is recognized ratably over the course of the requisite service period. The Company recognized stock-based compensation expense of $142 and $8 for employee and non-employees, respectively, for stock options and $25 for non-employees for restricted stock awards for the year ended December 31, 2020. The Company did not recognize any stock- based compensation expense for the year ended December 31, 2019. As of December 31, 2020, the total remaining stock-based compensation expense for unvested stock options was $565 and $135 for employees and non-employees, respectively, which are expected to be recognized over a weighted-average period of 1.8 and 1.4 years, for employee and non-employees, respectively. As of December 31, 2020, the total remaining stock-based compensation expense for restricted stock awards was $20 for non-employees, which is expected to be recognized over a weighted-average period of 0.2 years. The Company has elected to account for forfeitures as they occur and will record stock-based compensation expense assuming all stockholders will complete the requisite service period. If an employee forfeits an award because they fail to complete the requisite service period, the Company will reverse stock- based compensation expense previously recognized in the period the award is forfeited. The following table presents stock-based compensation expense included in each respective expense category in the statements of operations and other comprehensive loss: Years Ended December 31, 2020 2019 Research and development $ 25 $ — General and administrative 150 — Total $ 175 $ — Collaboration Agreement and Warrant On November 6, 2020, the Company entered into a collaboration agreement with FCA US LLC (“FCA”), in which both parties agreed to work together to complete a series of fixed duration collaboration projects to develop a prototype aircraft for Archer (the “Collaboration Agreement”). In exchange for services to be provided by FCA under the Collaboration Agreement, the Company issued a warrant to FCA on November 6, 2020 (the “Warrant”), in which FCA will have the right to purchase up to 1,660,302 shares of Archer’s common stock at an exercise price of $0.01 per share (subject to appropriate adjustment in the event of a stock dividend, stock split, combination, or other similar recapitalization). As of September 2020, the Company’s most recent valuation date, a valuation of the Company’s common and preferred stock was performed. The Company’s common stock and Series A Preferred Stock was valued at $0.15 per share and $1.20 per share, respectively. The warrant expires on November 6, 2025. Shares under the Warrant are vested and earned based on the completion of specific aircraft development milestones identified under the Collaboration Agreement which are expected to be achieved through December 2022. As the Company is currently in pre-revenue stage and is not generating any revenue from the Collaboration Agreement, all costs incurred with third parties are recorded based on the nature of the cost incurred. The Company accounts for the Warrant in accordance with the provisions of ASC 718, Compensation — Stock Compensation . The Company will assess whether it is probable that the award will vest for each of the seven milestones at the end of every reporting period. If and when the award is deemed probable of vesting, the Company will recognize compensation expense for the portion of the grant determined probable of vesting on a straight-line basis over the duration of each milestone. If services had been provided by FCA prior to management determining the milestone is probable of being achieved, a cumulative catch-up adjustment will be recorded for services performed in prior periods. Costs incurred under the Collaboration Agreement and Warrant are associated with the research, design, and production and testing for the aircraft prototype and are recorded in R&D expense in the statements of operations and comprehensive loss. As services are planned to begin in January 2021, none of the projects identified in the Collaboration Agreement have commenced as of December 31, 2020. Therefore, no expense was recognized during the years ended December 31, 2020 and 2019. |
Income Taxes_2
Income Taxes | 4 Months Ended | 6 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | |
Income Taxes | NOTE 10. INCOME TAX The Company’s net deferred tax assets (liabilities) as of December 31, 2020 is as follows: Deferred tax assets: Start-up costs $ 33,188 Net operating loss carryforwards 14,688 Total deferred tax assets 47,876 Valuation allowance (27,174) Deferred tax liabilities: Unrealized gain on investments (20,702) Total deferred tax liabilities (20,702) Deferred tax assets, net of allowance $ — The income tax provision for the period from August 26 (inception) through December 31, 2020 consists of the following: Federal Current $ — Deferred (27,174) State Current — Deferred — Change in valuation allowance 27,174 Income tax provision $ — As of December 31, 2020, the Company has available U.S. federal operating loss carry forwards of approximately $70,000 that may be carried forward indefinitely. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax assets, projected future taxable income and tax planning strategies in making this assessment. After consideration of all the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the period ended December 31, 2020, the valuation allowance was $27,174. A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2020 is as follows: Statutory federal income tax rate 21.0 % State taxes, net of federal tax benefit 0.0 % Change in fair value of derivative warrant liabilities (19.2) % Non-deductible transaction costs (1.5) % Change in valuation allowance (0.3) % Income tax provision 0.0 % The Company files income tax returns in the U.S. federal jurisdiction, and New York which remain open and subject to examination. | ||
Archer Aviation Inc | |||
Income Taxes | 10. Income Taxes The Company recognized zero and an immaterial amount of income tax expense for the three and six months ended June 30, 2021, respectively, resulting in an effective tax rate of 0% . The Company did not recognize an income tax benefit/(expense) during the three and six months ended June 30, 2020. The effective tax rate is different from the federal statutory tax rate primarily due to a full valuation allowance against deferred tax assets. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Based upon the analysis of federal and state deferred tax balances, future tax projections, and the Company’s lack of taxable income in the carryback period, the Company recorded a valuation allowance against the federal and state deferred tax assets as of June 30, 2021 and 2020. | 11. Income Taxes The Company did not record any deferred income tax provision for the years ended December 31, 2020 and 2019. The components of the provision for incomes taxes are as follows: Years ended December 31, 2020 2019 Current: Federal $ — $ — State 1 — Total current 1 — Total income tax provision $ 1 $ — The following table presents the principal reasons for the difference between the effective tax rate and the federal statutory income tax rate of 21 %: Years Ended December 31, 2020 2019 Federal income tax (benefit) 21.0 % 21.0 % State and local income taxes (net of federal benefit) 8.8 % 15.2 % Nondeductible expenses (0.1) % (0.2) % Valuation allowance (29.7) % (36.0) % Effective Tax Rate 0.0 % 0.0 % The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are provided below: Years ended December 31, 2020 2019 Deferred Tax Assets: Net operating loss carryforwards $ 7,500 $ 299 Accrued expenses 43 14 Operating lease liability 645 — Other 34 — Gross deferred tax assets 8,222 313 Less: Valuation allowance (7,216) (312) Deferred tax assets, net of valuation allowance 1,006 1 Deferred Tax Liabilities: Stock-based compensation (5) — Depreciation and amortization (356) (1) Right-of-use asset (645) — Total deferred tax liabilities (1,006) (1) Total net deferred tax assets $ — $ — In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Based upon the analysis of federal and state deferred tax balances and future tax projections and the Company’s lack of taxable income in the carryback period, the Company recorded a valuation allowance against the federal and state deferred tax assets of $ 7,216 . As of December 31, 2020 and 2019, the Company has U.S. federal net operating loss carryforwards of $26,959 and $905 , respectively, which will both begin to expire in 2038. As of December 31, 2020 and 2019, the Company has state net operating loss carryforwards of $26,692 and $1,796 , respectively, which will both begin to expire in 2038. The following table summarizes the activity related to the Company’s unrecognized tax benefits during the years ended December 31, 2020 and 2019: Balance as of December 31, 2019 $ 31 Increases related to current year tax positions 2,018 Balance as of December 31, 2020 $ 2,049 The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate as of December 31, 2019 and December 31, 2020 is zero due to the valuation allowance that would otherwise be recorded on the deferred tax asset associated with the recognized position. During the years ended December 31, 2020 and 2019, the Company recognized no interest and penalties related to uncertain tax positions. In accordance with Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended (the “Code”), a corporation that undergoes an “ownership change” (generally defined as a cumulative change [by value] of more than 50% in the equity ownership of certain stockholders over a rolling three- year period) is subject to limitations on its ability to utilize its pre-change NOLs and R&D tax credits to offset post-change taxable income and post-change tax liabilities, respectively. The Company’s existing NOLs and R&D credits may be subject to limitations arising from previous ownership changes, and the ability to utilize NOLs could be further limited by Section 382 and Section 383 of the Code. In addition, future changes in the Company’s stock ownership, some of which may be outside of the Company’s control, could result in an ownership change under Section 382 and Section 383 of the Code. The amount of such limitations, if any, has not been determined. The Company is subject to taxation and files income tax returns with the U.S. federal government and the state of California. The tax years ended December 31, 2018 through December 31, 2020 remain open to examination by the Internal Revenue Service and New York State Department of Revenue, and from December 31, 2020, by the California Franchise Tax Board. In addition, the utilization of net loss carryforwards is subject to federal and state review for the periods in which those net losses were incurred. The Company is not under audit by any taxing jurisdictions at this time. |
401 (K) Savings Plan_2
401 (K) Savings Plan | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Archer Aviation Inc | ||
401(k) Savings Plan | 11. 401(k) Savings Plan The Company maintains a 401(k) savings plan for the benefit of its employees. The Company makes matching contributions equal to 50% of each employee contribution, subject to the maximum amount established by the Internal Revenue Service. All current employees are eligible to participate in the 401(k) savings plan. The Company’s matching contributions were approximately $123 and $252 for the three and six months ended June 30, 2021, respectively, and $67 and $126 for the three and six months ended June 30, 2020, respectively. | 12. 401(k) Savings Plan The Company maintains a 401(k) savings plan for the benefit of its employees. The Company makes matching contributions equal to 50% of each employee contribution, not to exceed $9 a year. All current employees are eligible to participate in the 401(k) savings plan. The Company’s matching contributions were approximately $276 for the year ended December 31, 2020. As the 401(k) savings plan became effective in February 2020, the Company did not match any employee contributions for the year ended December 31, 2019. |
Subsequent Events_2_3_4
Subsequent Events | 4 Months Ended | 6 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | |
Subsequent Events | NOTE 12. SUBSEQUENT EVENTS Business Combination Agreement On February 10, 2021, the Company entered into a Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among the Company, Artemis Acquisition Sub Inc., a Delaware corporation (“Artemis Merger Sub”), and Archer Aviation Inc., a Delaware corporation (“Archer”). The Business Combination Agreement and the transactions contemplated thereby were approved by the boards of directors of each of the Company and Archer. The Business Combination Agreement provides for, among other things, the following transactions on the date of closing of the Business Combination (the “Closing”): (i) Atlas will amend and restate its certificate of incorporation (the “Post-Closing Atlas Certificate of Incorporation”), pursuant to which, among other things, Atlas will have a dual-class share structure with (A) shares of Class A common stock that will carry voting rights in the form of one vote per share (the “New Class A Common Stock”), and (B) shares of Class B common stock that will carry voting rights in the form of ten votes per share (the “New Class B Common Stock” and, together with the New Class A Common Stock, the “New Atlas Common Stock”), and (ii) Artemis Merger Sub will merge with and into Archer, with Archer as the surviving company in the merger and, after giving effect to such merger, continuing as a wholly-owned subsidiary of Atlas (the “Merger”). The Merger and the other transactions contemplated by the Business Combination Agreement are hereinafter referred to as the “Business Combination”. The Business Combination is subject to customary closing conditions, including, without limitation, the receipt of the required approval by Atlas’ stockholders. In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the effective time of the Merger, (i) outstanding shares of common stock and preferred stock of Archer will be converted into a right to receive a number of shares of New Class B Common Stock determined on the basis of an implied Archer equity value of $2,525,000,000 (the “Implied Equity Value”), (ii) all stock awards (whether vested or unvested) to purchase Archer common stock will be converted into stock awards to purchase a number of shares of New Class B Common Stock based on an exchange ratio derived from the Implied Equity Value, and (iii) outstanding warrants (whether vested or unvested) to purchase Archer common stock will be converted into warrants to purchase a number of shares of New Class B Common Stock determined on the basis of the Implied Equity Value. The former Archer equity holders will have the right to convert their shares of New Class B Common Stock into shares of New Class A Common Stock pursuant to the Post-Closing Atlas Certificate of Incorporation. PIPE Financing (Private Placement) Concurrently with the execution of the Business Combination Agreement, the Company entered into subscription agreements (the “Subscription Agreements”) with certain investors. Pursuant to the Subscription Agreements, each investor agreed to subscribe for and purchase, and the Company agreed to issue and sell to such investors, on the Closing Date (as defined in the Business Combination Agreement) substantially concurrently with the Closing (as defined in the Business Combination Agreement), an aggregate of 60,000,000 shares of the Company’s Class A Common Stock for a purchase price of $10.00 per share, for aggregate gross proceeds of $600 million (the “PIPE Financing”). The closing of the PIPE Financing is contingent upon, among other things, the substantially concurrent consummation of the Business Combination. The Subscription Agreements provide that Atlas will grant the investors in the PIPE Financing certain customary registration rights. | NOTE 10. SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements except as disclosed in Note 1 under Business Combination Agreement. | |
Archer Aviation Inc | |||
Subsequent Events | 12. Subsequent Events The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date of the issuance of these financial statements. Other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements. Silicon Valley Bank Loan and Security Agreement On July 9, 2021, Archer, as the borrower, entered into a Loan and Security Agreement with Silicon Valley Bank (“SVB”) and SVB Innovation Credit Fund VIII, L.P. (“SVB Innovation”) as the lenders, and SVB as the collateral agent. The total principal amount of the loans is $20,000 (the “Term Loans”), and all obligations due under the Term Loans are collateralized by all of Archer’s right, title, and interest in and to its specified personal property in favor of the collateral agent. The interest rate on the loans is a floating rate per annum equal to the greater of (1) 8.5% and (2) the Prime Rate plus the Prime Rate Margin, which increases by 2% per annum upon the occurrence of an event of default. The Term Loans are subject to a final payment fee ranging between zero and 5.5% of the original aggregate principal amount depending on the timing of repayment and whether the SPAC transaction occurs. Additionally, in conjunction with the issuance of the Term Loans, the Company agreed to issue 211,641 warrants to SVB and 211,641 warrants to SVB Innovation, totaling 423,282 warrants. Each warrant provides SVB and SVB Innovation with the right to purchase one share of Archer common stock. The warrants have an exercise price of $17.30 per share and expire on the 10th anniversary of the issuance date. The number and exercise price of the warrants are subject to adjustment if the Atlas merger closing occurs on or before October 10, 2021. As of the date of the merger with Atlas, the warrants were exchanged into public warrants and became 732,280 shares at the exercise price of $11.50 . The Company accounts for the warrants in accordance with the guidance contained in ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity, under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the warrants as liabilities at their fair value and adjusts the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized as a gain or loss in the Company’s statement of operations. FCA Italy S.p.A. Manufacturing Consulting and Warrant Agreements On July 19, 2021, Archer entered into a manufacturing consulting agreement with an affiliate of FCA, FCA Italy S.p.A. (“FCA Italy”), in which both parties agreed to work together to complete a series of fixed duration projects to develop manufacturing and production processes for the sale of the Company’s aircraft. In conjunction with the manufacturing consulting agreement, the Company issued a warrant to FCA Italy, in which FCA Italy will have the right to purchase up to 1,070,000 shares of Archer’s common stock at an exercise price of $0.01 per share. Shares under the warrant will vest in accordance with two events, including the execution of the manufacturing consulting agreement and 12 months from the effective date of the agreement. | 13. Subsequent Events The Company evaluated subsequent events and transactions that occurred after the balance sheet date through March 8, 2021, which is the date the financial statements were available to be issued. Other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements. Whisman Lease Agreement On December 11, 2020, the Company entered into an agreement to lease approximately 14,660 square feet of R&D space for 30 months with an option to extend for one subsequent 12 - month period. The Company obtained control of the leased property on January 11, 2021 and recognized the right-of-use asset and lease liability in January 2021. Merger Agreement with Atlas Crest On February 10, 2021, Archer entered into a Business Combination Agreement (the “Merger Agreement”) with Atlas Crest Investment Corp. (“Atlas”) and Artemis Acquisition Sub Inc., a wholly- owned subsidiary of Atlas (“Merger Sub”), with an equity value of the Company of $2,525 million (the “Equity Value”). Pursuant to the Merger Agreement, Archer shall cause Merger Sub to be merged with and into Archer with Archer continuing as the surviving company under the Companies Act following the merger, being a wholly-owned subsidiary of Atlas, and the separate corporate existence of Merger Sub shall cease. Immediately after the completion of the merger, the shareholders of Archer will exchange their interests in Archer for shares of common stock of the combined entity. Additionally, certain investors have agreed to subscribe for and purchase an aggregate of up to $600 million of common stock of the combined company (“PIPE Financing”). United Collaboration and Warrant Agreement On January 29, 2021, the Company entered into a purchase agreement and warrant agreement with United Airlines (“United”). Under the terms of the agreements, Archer expects United to provide design and development support and United agreed to a conditional order for $1 billion worth of Archer aircraft, with an option to order an additional quantity of Archer aircraft at the same unit price for an additional aggregate base purchase price of up to $500 million, upon commencement of commercial production of the aircraft. Archer issued up to 14,645,614 warrants (subject to adjustment based on the Exchange Ratio) to United to purchase shares of the Company’s common stock, twenty percent of which have been conditionally assigned to Mesa Airlines pursuant to the terms of the agreements. Each warrant provides United with the right to purchase one share of Archer common stock at an exercise price of $0.01 per share. The warrants will vest in accordance with certain milestones, including among others the agreement of all material terms pursuant to the collaboration agreement, completion of a SPAC transaction by Archer, the certification of the aircraft by the FAA, and the sale of aircraft. |
Summary of Significant Accou_21
Summary of Significant Accounting Policies (Policies) | 4 Months Ended | 6 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | |
Basis of Presentation | Basis of Presentation The accompanying financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. | Basis of Presentation The accompanying financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K as filed with the SEC on March 8, 2021 and the Company’s Amended Annual Report on Form 10-K/A filed with the SEC on May 24, 2021. The interim results for the periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future interim periods. | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. | |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2020. | Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did no t have any cash equivalents as of June 30, 2021 and December 31, 2020. | |
Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis | Fair Value of Financial Instruments The Company applies ASC 820, which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances. The carrying amounts reflected in the balance sheet for cash, prepaid expenses and accrued offering costs approximate fair value due to their short-term nature. Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. See Note 11 for additional information on assets and liabilities measured at fair value. | Fair Value of Financial Instruments The Company applies ASC Topic 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances. The carrying amounts reflected in the balance sheet for cash, prepaid expenses and accrued offering costs approximate fair value due to their short-term nature. Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. See Note 9 for additional information on assets and liabilities measured at fair value. | |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000 . The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. | |
Income Taxes | Income Taxes The Company complies with the accounting and reporting requirements of ASC Topic 740, Income Taxes ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. | Income Taxes The Company complies with the accounting and reporting requirements of ASC 740, Income Taxes , which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2021 and December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. | |
Net Loss Per Share Attributable to Ordinary Stockholders | Net Earnings ( Loss) Per Share Net earnings (loss) per share is computed by dividing net earnings (loss) by the weighted-average number of shares of common stock outstanding during the period. The Company has not considered the effect of the warrants sold in the Public Offering and Private Placement to purchase an aggregate of 24,666,667 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 statement of operations includes a presentation of income per share for common shares subject to possible redemption and applies the two-class method in calculating income per share. Net earnings per common share, basic and diluted, for Class A redeemable common stock is calculated by dividing the allocable interest income earned on the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Class A redeemable common stock outstanding since original issuance. Net loss per share, basic and diluted, for Class A and Class B non-redeemable common stock is calculated by dividing the net loss, adjusted for income attributable to Class A redeemable common stock, by the weighted average number of Class B non-redeemable common stock outstanding for the period. Class B non-redeemable common stock 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. The following table reflects the calculation of basic and diluted net earnings (loss) per common share (in dollars, except per share amounts): For the Period from August 26,2020 (Inception) through December 31, 2020 Class A Common Stock subject to possible redemption Numerator: Earnings attributable to Class A Common Stock subject to possible redemption Unrealized gain on investments held in Trust Account $ 88,498 Less: Unrealized gain available to be withdrawn for payment of taxes (62,790) Net earnings attributable to Class A Common Stock subject to possible redemption $ 25,708 Denominator: Weighted average Class A Common Stock subject to possible redemption Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption 44,885,287 Basic and diluted net earnings per share, Class A Common Stock subject to possible redemption $ 0.00 Non-Redeemable Class A and Class B Common Stock Numerator: Net loss minus net earnings Net loss $ (10,850,513) Less: Net earnings attributable to Class A Common Stock subject to possible redemption (25,708) Non-redeemable net loss $ (10,876,221) Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock 17,614,713 Basic and diluted net loss per share, Non-Redeemable Class A and Class B Common Stock $ (0.62) | Net Income Per Share of Common Stock Net income per common share is computed by dividing net income by the weighted-average number of shares of common stock 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 24,666,667 shares in the calculation of diluted income per share, since the warrants are contingently exercisable, and the contingencies have not yet been met. The Company’s statement of operations includes a presentation of income per share for common shares subject to possible redemption and applies the two-class method in calculating income per share. Net earnings per common share, basic and diluted, for Class A redeemable common stock is calculated by dividing the allocable unrealized gain on investments held in the Trust Account and interest and dividend income on investments held in the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Class A common stock subject to possible redemption outstanding for the period. Net income per share, basic and diluted, for Class B non-redeemable common stock is calculated by dividing the net income, adjusted for income attributable to Class A redeemable common stock, by the weighted average number of Class B non-redeemable common stock outstanding for the period. Class B non-redeemable common stock includes the Founder Shares (as defined in Note 5) as these shares do not have any redemption features and do not participate in the income earned on the Trust Account. The following table reflects the calculation of basic and diluted net income per common share (in dollars, except share and per share amounts): Three Months Ended Six Months Ended June 30, June 30, 2021 2021 Class A Common Stock subject to possible redemption Numerator: Earnings attributable to Class A Common Stock subject to possible redemption Unrealized gain on investments held in Trust Account $ 5,002 $ 135,027 Interest and dividend income on investments held in Trust Account 8,633 8,633 Less: Income available to be withdrawn for payment of taxes (13,635) (100,209) Net earnings attributable to Class A Common Stock subject to possible redemption $ — $ 43,451 Denominator: Weighted average Class A Common Stock subject to possible redemption Basic and diluted weighted average shares outstanding, Class A Common Stock subject to possible redemption 50,000,000 50,000,000 Basic and diluted net earnings per share, Class A Common Stock subject to possible redemption $ 0.00 $ 0.00 Non-Redeemable Class B Common Stock Numerator: Non-redeemable net income Net income $ 3,252,607 $ 833,801 Less: Net earnings attributable to Class A Common Stock subject to possible redemption — (43,451) Non-redeemable net income $ 3,252,607 $ 790,350 Denominator: Weighted average Non-Redeemable Class B Common Stock Basic and diluted weighted average shares outstanding, Non-Redeemable Class B Common Stock 12,500,000 12,500,000 Basic and diluted net income per share, Non-Redeemable Class B Common Stock $ 0.26 $ 0.06 | |
Recently adopted accounting pronouncements | 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 the Company’s financial statements. | Recent Accounting Standards In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows. Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. | |
Archer Aviation Inc | |||
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission for interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position, results of operations, and cash flows for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. The unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements as of and for the year ended December 31, 2020 set forth elsewhere in this proxy statement/prospectus. The Company has provided a discussion of significant accounting policies, estimates, and judgments in its audited financial statements. There have been no changes to the Company’s significant accounting policies since December 31, 2020 which are expected to have a material impact on the Company’s financial position, results of operations, or cash flows. | Basis of Presentation The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company. | |
Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent liabilities, and the reported amounts of expenses during the reporting period. The Company bases these estimates on historical results and various other assumptions believed to be reasonable, all of which form the basis for making estimates concerning the carrying values of assets and liabilities that are not readily available from other sources. On an ongoing basis, management evaluates its estimates, including those related to the: (i) realization of tax assets and estimates of tax liabilities, (ii) valuation of common stock, (iii) fair value of debt, (iv) fair value of share-based payments, (v) valuation of leased assets and liabilities, and (vi) estimated useful lives of long-lived assets. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Such estimates often require the selection of appropriate valuation methodologies and models and may involve significant judgment in evaluating ranges of assumptions and financial inputs. Actual results may differ from those estimates under different assumptions, financial inputs, or circumstances. Given the global economic climate and unpredictable nature and unknown duration of the COVID-19 pandemic, estimates are subject to additional volatility. | ||
Cash and Cash Equivalents | Cash and Cash Equivalents Cash consists of cash on deposit with financial institutions. Cash equivalents consist of short-term, highly liquid financial instruments that are readily convertible to cash and have maturities of three months or less from the date of purchase. Cash and cash equivalent balances were $5,937 and $36,564 as of June 30, 2021 and December 31, 2020, respectively, of which, money market funds were $344 and $34,377 as of June 30, 2021 and December 31, 2020, respectively. Money market funds, which are considered as cash equivalents, are recorded at fair value and classified as Level 1 within the fair value hierarchy. | Cash and Cash Equivalents Cash consists of cash on deposit with financial institutions. Cash equivalents consist of short-term, highly liquid financial instruments that are readily convertible to cash and have maturities of three months or less from the date of purchase. Cash equivalents are recorded at fair value. As of December 31, 2020 and 2019, the Company held $34,377 and $0 , respectively, of cash equivalents consisting of Level 1 money market funds. | |
Fair Value Measurements | Fair Value Measurements The Company applies the provisions of Accounting Standards Codification (“ASC”) 820, Fair Value Measurement , which defines a single authoritative definition of fair value, sets out a framework for measuring fair value and expands on required disclosures about fair value measurements. The provisions of ASC 820 relate to financial assets and liabilities as well as other assets and liabilities carried at fair value on a recurring and nonrecurring basis. The standard clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the standard establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2 Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The carrying amounts of the Company’s cash, accounts payable, accrued compensation and accrued liabilities approximate fair value due to the short-term nature of these instruments. Level 1 instruments include investments in money market funds, which are valued based on inputs such as actual trade data, quoted market prices from brokers or other similar sources. Financial Instruments Not Recorded at Fair Value on a Recurring Basis Certain financial instruments, including debt, are not measured at fair value on a recurring basis in the balance sheets. The fair value of debt as of December 31, 2020 approximates its carrying value. There was no outstanding debt as of June 30, 2021. Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis Certain assets and liabilities are subject to measurement at fair value on a nonrecurring basis if there are indicators of impairment or if they are deemed to be impaired as a result of an impairment review. There were no assets or liabilities measured at fair value using Level 3 inputs for the periods presented. | Fair Value Measurements The Company applies the provisions of Accounting Standards Codification (“ASC”) 820, Fair Value Measurement , which defines a single authoritative definition of fair value, sets out a framework for measuring fair value and expands on required disclosures about fair value measurements. The provisions of ASC 820 relate to financial assets and liabilities as well as other assets and liabilities carried at fair value on a recurring and nonrecurring basis. The standard clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the standard establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2 Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The carrying amounts of the Company’s cash, accounts payable, accrued compensation and accrued liabilities approximate fair value due to the short-term nature of these instruments. Level 1 instruments include investments in money market funds, which are valued based on inputs such as actual trade data, quoted market prices from brokers or other similar sources. | |
Financial Instruments Not Recorded at Fair Value on a Recurring Basis | Financial Instruments Not Recorded at Fair Value on a Recurring Basis Certain financial instruments, including debt, are not measured at fair value on a recurring basis in the balance sheets. The fair value of debt as of December 31, 2020 approximates its carrying value. | ||
Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis | Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis Certain assets and liabilities are subject to measurement at fair value on a non-recurring basis if there are indicators of impairment or if they are deemed to be impaired as a result of an impairment review. There were no assets or liabilities measured at fair value using Level 3 inputs for the periods presented. | ||
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments, which subject the Company to concentrations of credit risk, consist primarily of cash, cash equivalents, and deposits. The Company’s cash and cash equivalents are held at major financial institutions located in the United States of America. At times, cash account balances with any one financial institution may exceed Federal Deposit Insurance Corporation (“FDIC”) insurance limits ($250 per depositor per institution). Management believes the financial institutions that hold the Company’s cash and cash equivalents are financially sound and, accordingly, minimal credit risk exists with respect to cash and cash equivalents. | ||
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist primarily of prepaid payroll costs, rent, consulting, and subscriptions for brand development and research and development (“R&D”). | ||
Intangible Assets, Net | Intangible Assets, Net Intangible assets consist solely of domain names and are recorded at cost, net of accumulated amortization, and if applicable, impairment charges. Amortization of domain names is provided over a 15-year estimated useful life on a straight-line basis or based on the pattern in which economic benefits are consumed, if reliably determinable. The Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company has analyzed a variety of factors in light of the known impact to date of the COVID-19 pandemic on its business to determine if a circumstance could trigger an impairment loss, and, at this time and based on the information presently known, does not believe that it is more likely than not that an impairment loss has been incurred. As of June 30, 2021 and December 31, 2020, the gross carrying amount for domain names was $500 with $19 and $3 recorded in accumulated amortization, respectively. During the three and six months ended June 30, 2021, the Company recognized amortization expense of $9 and $17 , respectively, included within general and administrative expenses on the statements of operations and comprehensive loss. The Company did not recognize any amortization expense during the three and six months ended June 30, 2020. | Intangible Assets, Net Intangible assets consist solely of domain names and are recorded at cost, net of accumulated amortization, and if applicable, impairment charges. Amortization of domain names is provided over a 15 - year estimated useful life on a straight-line basis or based on the pattern in which economic benefits are consumed, if reliably determinable. The Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company has analyzed a variety of factors in light of the known impact to date of the COVID-19 pandemic on its business to determine if a circumstance could trigger an impairment loss, and, at this time and based on the information presently known, does not believe that it is more likely than not that an impairment loss has been incurred. The Company capitalized domain names in 2020, and as of December 31, 2020, the gross carrying amount for domain names was $ 500 with $ 3 recorded in accumulated amortization. During the year ended December 31, 2020, the Company recognized amortization expense of $ 3 , classified within general and administrative on the statements of operations and comprehensive loss. | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at historical cost less accumulated depreciation. Expenditures for major renewals and betterments are capitalized, while minor replacements, maintenance, and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation is removed from the accounts, and any difference between the selling price and net carrying amount is recorded as a gain or loss in the statements of operations and comprehensive loss. Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets as follows: Useful Life (in years) Furniture, fixtures, and equipment 5 Computer hardware 3 Computer software 3 Website design 2 Leasehold improvements Shorter of lease term or the asset standard life | Property and Equipment, Net Property and equipment are stated at historical cost less accumulated depreciation. Expenditures for major renewals and betterments are capitalized, while minor replacements, maintenance, and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation is removed from the accounts, and any difference between the selling price and net carrying amount is recorded as a gain or loss in the statements of operations and comprehensive loss. Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets as follows: Useful Life Furniture, fixtures, and equipment 5 Computer hardware 3 Computer software 3 Website design 2 Leasehold improvements Shorter of lease term or the asset standard life | |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews its long-lived assets, consisting primarily of property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Such triggering events or changes in circumstances may include: a significant decrease in the market price of a long-lived asset, a significant adverse change in the extent or manner in which a long-lived asset is being or intended to be used, a significant adverse change in legal factors or in the business climate, the impact of competition or other factors that could affect the value of a long-lived asset, a significant adverse deterioration in the amount of revenue or cash flows expected to be generated from an asset group, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of a long-lived asset, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset, or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is determined by comparing the forecasted undiscounted cash flows attributable to such assets including any cash flows upon their eventual disposition to their carrying value. If the carrying value of the assets exceeds the forecasted undiscounted cash flows, then the assets are written down to their fair value. The Company determined there was no impairment of long-lived assets during all periods presented. | Impairment of Long-Lived Assets The Company reviews its long-lived assets, consisting primarily of property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Such triggering events or changes in circumstances may include: a significant decrease in the market price of a long-lived asset, a significant adverse change in the extent or manner in which a long- lived asset is being or intended to be used, a significant adverse change in legal factors or in the business climate, the impact of competition or other factors that could affect the value of a long-lived asset, a significant adverse deterioration in the amount of revenue or cash flows expected to be generated from an asset group, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of a long-lived asset, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset, or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is determined by comparing the forecasted undiscounted cash flows attributable to such assets including any cash flows upon their eventual disposition to their carrying value. If the carrying value of the assets exceeds the forecasted undiscounted cash flows, then the assets are written down to their fair value. The Company determined there was no impairment of long-lived assets during either period presented. | |
Other Current Liabilities | Other Current Liabilities For the year ended December 31, 2020, other current liabilities primarily consist of accrued payroll costs, liabilities related to cash received for the early exercise of stock options which may require repayment if the options do not vest, and accrued interest on the Company’s Paycheck Protection Program Loan. For the year ended December 31, 2019, other current liabilities consist of accrued payroll costs. | ||
Paycheck Protection Program Loan | Paycheck Protection Program Loan On April 9, 2020, the Company received the proceeds from a loan in the amount of approximately $ 905 (the “PPP Loan”) from JPMorgan Chase Bank, N.A., as lender, pursuant to the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The Company accounted for the PPP Loan as a financial liability in accordance with ASC Topic 470, Debt . Accordingly, the PPP Loan was recognized within notes payable and notes payable, net of current portion, in the Company’s balance sheet. In addition, related accrued interest is included within other current liabilities in the Company’s balance sheet. Refer to Note 7 for additional information. | ||
Operating expenses | Operating Expenses Research and Development Research and development (“R&D”) costs are expensed as incurred and are primarily comprised of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) for employees focused on R&D activities, other related costs, and an allocation of general overhead. In addition, R&D expense includes professional fees paid to outside contractors and depreciation expense. R&D efforts are focused on design and development of our electric aircraft and continuing to prepare our prototype electric aircraft to achieve industry standards. General and Administrative General and administrative expenses are primarily comprised of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) and overhead related costs for employees in our executive, finance, information technology, or human resources departments. In addition, general and administrative expense includes fees for third-party professional services (including consulting, legal, and audit services), other corporate expenses, allocated shared costs, and depreciation expense. Other Warrant Expense Other warrant expense of $78,208 is related to the vesting of warrants issued in conjunction with the execution of purchase, collaboration, and warrant arrangements with United Airlines. Refer to Note 9 for additional information. Stock-Based Compensation The Company’s stock-based compensation awards consist of options granted to employees, directors, and non-employees for the purchase of ordinary shares and restricted shares. The Company recognizes stock-based compensation expense in accordance with the provisions of ASC 718, Compensation - Stock Compensation. ASC 718 requires the measurement and recognition of compensation expense for all stock-based compensation awards made to employees, directors, and non-employees to be based on the grant date fair values of the awards. The Company estimates the fair value of share options using the Black-Scholes option-pricing model. The value of the award is recognized as expense over the requisite service period on a straight-line basis. Determining the grant date fair value of the awards using the Black-Scholes option-pricing model requires management to make assumptions and judgments, including but not limited to the following: Expected term - The estimate of the expected term of employee awards is determined in accordance with the simplified method, which estimates the term based on an averaging of the vesting period and contractual term of the option grant. The Company uses the contractual term for non-employee awards. Expected volatility - Since the Company is a private entity without sufficient historical data on the volatility of its common stock, the expected volatility used is based on the volatility of similar entities (referred to as “guideline companies”) for a period consistent with the expected term of the award. Risk-free interest rate - The risk-free interest rate used to value awards is based on the United States Treasury yield in effect at the time of grant for a period consistent with the expected term of the award. Dividend yield - The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future. Forfeiture rate – The Company has elected to account for forfeitures as they occur and will record stock-based compensation expense assuming all option holders will complete the requisite service period. If an employee forfeits an award because they fail to complete the requisite service period, the Company will reverse stock-based compensation expense previously recognized in the period the award is forfeited. Fair value of common stock The Company’s Board of Directors grants stock options with exercise prices equal to the fair value of the Company’s common stock on the date of grant. Because there is no public market for the Company’s common stock, the Company has determined the fair value of its common stock at the time of the grant of stock options in accordance with the American Institute of Certified Public Accountants (“AICPA”) Accounting and Valuation Guide: Valuation of Privately-Held-Company Equity Securities Issued as Compensation (the “AICPA Practice Aid”). The Company determined the fair value of its common stock based on a variety of factors including, but not limited to (i) the results of contemporaneous independent third-party valuations of the Company’s common stock and the prices, rights, preferences and privileges of the Company’s redeemable convertible preferred stock relative to those of its common stock; (ii) the lack of marketability of the Company’s common stock; (iii) actual operating and financial results; (iv) current business conditions and projections; (v) the likelihood of achieving a liquidity event, such as an IPO or sale of the Company, given prevailing market conditions, and (vi) precedent transactions involving the Company’s shares. As provided in the AICPA Practice Aid, there are several approaches for setting the value of an enterprise and various methodologies for allocating the value of an enterprise to its outstanding equity. The Company determined the fair value of equity awards using a combination of the market and income approach. Within the market approach, the guideline public company method was used, which employs the use of ratios developed from the market price of traded shares from publicly traded companies considered reasonably similar to the Company. Under the income approach, the enterprise value was estimated using the discounted cash flow method, which involves estimating the future cash flows of a business for a discrete period and discounting them to their present value. In allocating enterprise value to its outstanding equity, the Company applied a hybrid approach, which consisted of the option pricing method (“OPM”) and probability-weighted expected return method (“PWERM”). The OPM treats securities, including debt, common and preferred stock, as call options on the enterprise’s value, with exercise prices based on the securities’ respective liquidation preferences and conversion values. The PWERM estimates the fair market value of the common stock based on an analysis of future values for the enterprise assuming various exit scenarios, such as IPO, merger or sale, staying private, and liquidation. In conducting the valuations, the Company considered all objective and subjective factors that it believed to be relevant in the valuation conducted, including management’s best estimate of the Company’s business condition, and prospects and operating performance at the valuation dates. There are significant judgments and estimates inherent in these valuations. | ||
Research and Development | Research and Development R&D costs are expensed as incurred and are primarily comprised of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) for employees focused on R&D activities, other related costs, and an allocation of general overhead. In addition, R&D expense includes professional fees paid to outside contractors and depreciation expense. R&D efforts are focused on design and development of our electric aircraft and continuing to prepare our prototype electric aircraft to achieve industry standards. | ||
General and Administrative | General and Administrative General and administrative expenses are primarily comprised of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) and overhead related costs for employees in our executive, finance, information technology, or human resources departments. In addition, general and administrative expense includes fees for third-party professional services (including consulting, legal, and audit services), other corporate expenses, allocated shared costs, and depreciation expense. | ||
Stock-Based Compensation | Stock-Based Compensation The Company’s stock-based compensation awards consist of options granted to employees, directors, and non-employees for the purchase of ordinary shares and restricted shares. The Company recognizes stock- based compensation expense in accordance with the provisions of ASC 718, Compensation — Stock Compensation. ASC 718 requires the measurement and recognition of compensation expense for all stock- based compensation awards made to employees, directors, and non-employees to be based on the grant date fair values of the awards. The Company estimates the fair value of share options using the Black-Scholes option-pricing model. The value of the award is recognized as expense over the requisite service period on a straight-line basis. Determining the grant date fair value of the awards using the Black-Scholes option-pricing model requires management to make assumptions and judgments, including but not limited to the following: Expected term — The estimate of the expected term of employee awards is determined in accordance with the simplified method, which estimates the term based on an averaging of the vesting period and contractual term of the option grant. The Company uses the contractual term for non-employee awards. Expected volatility — Since the Company is a private entity without sufficient historical data on the volatility of its common stock, the expected volatility used is based on the volatility of similar entities (referred to as “guideline companies”) for a period consistent with the expected term of the award. Risk-free interest rate — The risk-free interest rate used to value awards is based on the United States Treasury yield in effect at the time of grant for a period consistent with the expected term of the award. Dividend yield — The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future. Forfeiture rate — The Company has elected to account for forfeitures as they occur and will record stock- based compensation expense assuming all option holders will complete the requisite service period. If an employee forfeits an award because they fail to complete the requisite service period, the Company will reverse stock-based compensation expense previously recognized in the period the award is forfeited. | ||
Fair value of common stock | Fair value of common stock The Company’s Board of Directors grants stock options with exercise prices equal to the fair value of the Company’s common stock on the date of grant. Because there is no public market for the Company’s common stock, the Company has determined the fair value of its common stock at the time of the grant of stock options in accordance with the American Institute of Certified Public Accountants Accounting and Valuation Guide (“AICPA”): Valuation of Privately- Held-Company Equity Securities Issued as Compensation. The Company determined the fair value of its common stock based on a variety of factors including, but not limited to (i) the results of contemporaneous independent third-party valuations of the Company’s common stock and the prices, rights, preferences and privileges of the Company’s redeemable convertible preferred stock relative to those of its common stock; (ii) the lack of marketability of the Company’s common stock; (iii) actual operating and financial results; (iv) current business conditions and projections; (v) the likelihood of achieving a liquidity event, such as an IPO or sale of the Company, given prevailing market conditions, and (vi) precedent transactions involving the Company’s shares. In valuing the fair value of the Company’s common shares, the Company used the market approach, which uses prices and other relevant information generated by market transactions involving identical or comparable assets, liabilities, or a group of assets and liabilities. Within the market approach, given that the Company had recent security transactions, the subject company transaction method was used, which consists of examining prior transactions of the Company. According to the AICPA guidelines, under this method, recent securities transactions in the Company’s stock should be considered as a relevant input for computing the enterprise valuation. Additionally, the Hybrid Backsolve methodology specifically was selected to reflect the high risks in the eVTOL space, namely regulatory risk, the fact that there is currently no market for the product, and technology risk in this new sector. In conducting the valuations, the Company considered all objective and subjective factors that it believed to be relevant in the valuation conducted, including management’s best estimate of the Company’s business condition, and prospects and operating performance at the valuation dates. There are significant judgments and estimates inherent in these valuations. | ||
Leases | Leases The Company accounts for leases in accordance with ASC 842, Leases and determines if an arrangement is a lease at its inception. Right-of-use (“ROU”) assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate in determining the present value of lease payments considering the term of the lease, which is derived from information available at the lease commencement date. The incremental borrowing rate is the rate of interest the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments for a term similar to the lease term in a similar economic environment as the lease. The lease term includes renewal options when it is reasonably certain that the option will be exercised and excludes termination options. To the extent that the Company’s agreements have variable lease payments, the Company includes variable lease payments that depend on an index or a rate and excludes those that depend on facts or circumstances occurring after the commencement date, other than the passage of time. Lease expense for these leases is recognized on a straight-line basis over the lease term. The Company has elected not to recognize ROU assets and lease liabilities that arise from short-term (12 months or less) leases for any class of underlying asset. Operating leases are included in right-of-use asset, lease liability, and lease liability, net of current portion in the Company’s balance sheet. In addition, the Company has elected as an accounting policy, the practical expedient to not separate lease and non-lease components within a contract and instead treat it as a single-lease component. | ||
Income Taxes | Income Taxes The Company accounts for its income taxes using the asset and liability method whereby deferred tax assets and liabilities are determined based on temporary differences between the basis used for financial reporting and income tax reporting purposes. Deferred income taxes are provided based on the enacted tax rates in effect at the time such temporary differences are expected to reverse. A valuation allowance is provided for deferred tax assets if it is more-likely-than-not that the Company will not realize those tax assets through future operations. The carrying value of deferred tax assets reflects an amount that is more likely than not to be realized. The Company utilizes the guidance in ASC 740-10, Income Taxes , to account for uncertain tax positions. ASC 740-10 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the positions will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more-likely-than-not of being realized and effectively settled. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately forecast actual outcomes. The Company’s policy is to recognize interest and penalties related to uncertain tax positions, if any, in the income tax provision. | ||
Net Loss Per Share Attributable to Ordinary Stockholders | Net Loss Per Share Attributable to Ordinary Stockholders The Company has one class of participating security (preferred shares) issued and outstanding as of June 30, 2021. Losses are not attributed to the participating security as the preferred stockholders are not contractually obligated to share in the Company’s losses. For all periods presented, the calculation of basic net loss per share excludes shares issued upon the early exercise of stock options where the vesting conditions have not been satisfied. Basic net loss attributable to common stockholders per share is calculated by dividing net loss attributable to ordinary stockholders by the weighted-average number of common shares outstanding. Diluted net loss per share attributable to ordinary stockholders reflects adjustments to the basic net loss per share attributable to ordinary stockholders and the weighted-average number of shares of ordinary shares outstanding for the potentially dilutive impact of outstanding securities or other contracts to issue common stock if they were to be exercised or converted into common shares, using the treasury stock method. Contingently issuable shares, including equity awards with performance conditions, are considered outstanding common shares and included in basic net loss per share as of the date that all necessary conditions to earn the awards have been satisfied. Prior to the end of the contingency period, the number of contingently issuable shares included in diluted net loss per share is based on the number of shares, if any, that would be issuable under the terms of the arrangement at the end of the reporting period. Because the Company reported net losses for all periods presented, all potentially dilutive common stock equivalents are antidilutive and have been excluded from the calculation of net loss per share. The following table presents the number of antidilutive shares excluded from the calculation of diluted net loss per share: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Stock-based compensation awards - employees 11,690,674 3,714,205 11,690,674 3,714,205 Stock-based compensation awards - non-employees 11,440,789 1,134,000 11,440,789 1,134,000 Series Seed redeemable convertible preferred stock 18,193,515 18,193,515 18,193,515 18,193,515 Series A redeemable convertible preferred stock 46,267,422 — 46,267,422 — Total 87,592,400 23,041,720 87,592,400 23,041,720 | Net Loss Per Share Attributable to Ordinary Stockholders The Company has one class of participating security (preferred shares) issued and outstanding as of December 31, 2020 and 2019. Losses are not attributed to the participating security as the preferred stockholders are not contractually obligated to share in the Company’s losses. For all periods presented, the calculation of basic net loss per share excludes shares issued upon the early exercise of stock options where the vesting conditions have not been satisfied. Basic net loss attributable to common stockholders per share is calculated by dividing net loss attributable to ordinary stockholders by the weighted-average number of shares of common shares outstanding. Diluted net loss per share attributable to ordinary stockholders adjusts the basic net loss per share attributable to ordinary stockholders and the weighted-average number of shares of ordinary shares outstanding for the potentially dilutive impact of stock options, using the treasury stock method. Because the Company reported net losses for all periods presented, all potentially dilutive common stock equivalents are antidilutive and have been excluded from the calculation of net loss per share. The following table presents the number of antidilutive shares excluded from the calculation of diluted net loss per share: As of December 31, 2020 2019 Stock-based compensation awards — employees 11,167,089 — Stock-based compensation awards — non-employees 3,614,888 — Series Seed redeemable convertible preferred stock 18,193,515 18,193,515 Series A redeemable convertible preferred stock 46,267,422 — Total 79,242,914 18,193,515 | |
Segments | Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM consists of its two founders. The Company has determined that it operates as a single operating segment and one reportable segment, as the CODM reviews financial information presented on a combined basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. Given the Company’s pre-revenue operating stage, it currently has no concentration exposure to products, services or customers. | ||
Comprehensive Loss | Comprehensive Loss There were no differences between net loss and comprehensive loss presented in the statements of operations and comprehensive loss for the three and six months ended June 30, 2021 and 2020. | Comprehensive Loss There were no differences between net loss and comprehensive loss presented in the statements of operations and comprehensive loss for the years ended December 31, 2020 and 2019. | |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which outlines a comprehensive lease accounting model that supersedes the current lease guidance. The new guidance requires lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms greater than 12 months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. In July 2018, the FASB issued ASU 2018-11, which provides the option of an additional transition method that allows entities to initially apply the new lease guidance at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company entered into its first lease in July of 2020 and applied ASU 2016-02 to this lease and subsequent leases. In June 2018, the FASB issued ASU 2018-07 , Compensation - Stock Compensation (Topic 718) : Improvements to Nonemployee Share-Based Payment Accounting ("ASU 2018-07"). This amendment expands the scope of Topic 718, Compensation—Stock Compensation (which only included share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees is substantially aligned. ASU 2018-07 supersedes Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees . Early adoption of ASU 2018-07 is permitted and should be applied on a prospective basis. The Company began applying ASU 2018-07 during 2020 upon the Company’s first grant of share-based payment awards. No share-based payments were granted prior to 2020. In August 2018, the FASB issued ASU 2018-13 , Fair Value Measurement (Topic 820) (“ASU 2018-13”), which modifies, removes, and adds certain disclosure requirements on fair value measurements based on the FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements. The ASU is effective for all entities for fiscal years beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively for only the most recent annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company has applied ASU 2018-13 to all periods presented. In November 2019, the FASB issued ASU 2019-08, Compensation — Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606) (“ASU 2019-08”), which requires entities to measure and classify share-based payments to a customer in accordance with the guidance in ASC 718, Compensation — Stock Compensation . ASU 2019-08 expanded the scope of Topic 718 to include awards issued to customers for purposes of measurement and classification and amended portions of ASC 606, Revenue from Contracts with Customers , to refer to this guidance. The amount that would be recorded as a reduction in revenue would be measured based on the grant date fair value of the share-based payment in accordance with Topic 718. The Company adopted ASU 2019-08 on January 1, 2021 and has applied its provisions to the measurement of the warrants issued to United Airlines. Refer to Note 9 for details. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12") . This amendment was issued to simplify the accounting for income taxes by removing certain exceptions for recognizing deferred taxes, performing intraperiod allocation, and calculating income taxes in interim periods. Further, ASU 2019-12 adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax basis goodwill and allocating taxes to members of a consolidated group. The Company has applied ASU 2019-12 to all periods presented, and there was no adoption date impact to its financial statements. | Recently adopted accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which outlines a comprehensive lease accounting model that supersedes the current lease guidance. The new guidance requires lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms greater than 12 months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. In July 2018, the FASB issued ASU 2018-11, which provides the option of an additional transition method that allows entities to initially apply the new lease guidance at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company entered into its first lease in July of 2020 and applied ASU 2016-02 to this lease and subsequent leases. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (Topic 230) (“ASU 2016-15”). The standard provides guidance on eight specific cash flow issues, including debt prepayment or debt extinguishment costs. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and the amendments should be applied using the retrospective transition method to each period presented. The Company has applied ASU 2016-15 to all periods presented. In July 2017, the FASB issued ASU 2017-11, Earnings per share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), and Derivatives and Hedging (Topic 815) : Accounting for Certain Financial Instruments with Down Round Features (“ASU 2017-11”). The update addresses the complexity of accounting for certain financial instruments with “down round” features and the liability or equity classification of financial instruments with warrants or convertible features. The guidance eliminates the requirement to consider “down round” features when determining whether certain equity-linked financial instruments or embedded features are indexed to an entity’s own stock. ASU 2017-11 is effective for public business entities for annual periods beginning after December 15, 2018, and for interim periods within those years, with early adoption permitted. The Company has applied ASU 2017-11 to all periods presented, and there was no adoption date impact to its financial statements. In June 2018, the FASB issued ASU 2018-07 , Compensation — Stock Compensation (Topic 718) : Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). This amendment expands the scope of Topic 718, Compensation — Stock Compensation (which only included share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees is substantially aligned. ASU 2018-07 supersedes Subtopic 505-50, Equity — Equity-Based Payments to Non-Employees and is effective for public business entities for fiscal years beginning after December 15, 2018. Early adoption of ASU 2018-07 is permitted and should be applied on a prospective basis. The Company began applying ASU 2018-07 during 2020 upon the Company’s first grant of share-based payment awards. No share-based payments were granted prior to 2020. In August 2018, the FASB issued ASU 2018-13 , Fair Value Measurement (Topic 820) (“ASU 2018-13”), which modifies, removes, and adds certain disclosure requirements on fair value measurements based on the FASB Concepts Statement, Conceptual Framework for Financial Reporting — Chapter 8: Notes to Financial Statements. The ASU is effective for all entities for fiscal years beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted-average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively for only the most recent annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted. The Company has applied ASU 2018-13 to all periods presented. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”) . This amendment was issued to simplify the accounting for income taxes by removing certain exceptions for recognizing deferred taxes, performing intraperiod allocation, and calculating income taxes in interim periods. Further, ASU 2019-12 adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax basis goodwill and allocating taxes to members of a consolidated group. ASU 2019-12 is effective for public business entities for fiscal periods beginning after December 15, 2020. The Company has applied ASU 2019-12 to all periods presented, and there was no adoption date impact to its financial statements. | |
Recently issued accounting pronouncements not yet adopted | Recently issued accounting pronouncements not yet adopted In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies the accounting for convertible instruments by removing certain separation models in ASC 470- 20, Debt — Debt with Conversion and Other Options , for convertible instruments. The ASU updates the guidance on certain embedded conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, such that those features are no longer required to be separated from the host contract. The convertible debt instruments will be accounted for as a single liability measured at amortized cost. Further, the ASU made amendments to the EPS guidance in Topic 260 for convertible instruments, the most significant impact of which is requiring the use of the if-converted method for diluted EPS calculation, and no longer allowing the net share settlement method. The ASU also made revisions to Topic 815-40, which provides guidance on how an entity must determine whether a contract qualifies for a scope exception from derivative accounting. The amendments to Topic 815-40 change the scope of contracts that are recognized as assets or liabilities. The ASU is effective for public business entities for interim and annual periods beginning after December 15, 2021, with early adoption permitted. Adoption of the ASU can either be on a modified retrospective or full retrospective basis. The Company is currently evaluating the impact the adoption of this standard will have on its financial statements and related disclosures . | Recently issued accounting pronouncements not yet adopted In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies the accounting for convertible instruments by removing certain separation models in ASC 470- 20, Debt — Debt with Conversion and Other Options , for convertible instruments. The ASU updates the guidance on certain embedded conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, such that those features are no longer required to be separated from the host contract. The convertible debt instruments will be accounted for as a single liability measured at amortized cost. Further, the ASU made amendments to the EPS guidance in Topic 260 for convertible instruments, the most significant impact of which is requiring the use of the if-converted method for diluted EPS calculation, and no longer allowing the net share settlement method. The ASU also made revisions to Topic 815-40, which provides guidance on how an entity must determine whether a contract qualifies for a scope exception from derivative accounting. The amendments to Topic 815-40 change the scope of contracts that are recognized as assets or liabilities. The ASU is effective for public business entities for interim and annual periods beginning after December 15, 2021, with early adoption permitted. Adoption of the ASU can either be on a modified retrospective or full retrospective basis. The Company is currently evaluating the impact the adoption of this standard will have on its financial statements and related disclosures. |
Summary of Significant Accou_22
Summary of Significant Accounting Policies (Tables) - Archer Aviation Inc | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Schedule of estimated useful lives of depreciable property and equipment assets | Useful Life (in years) Furniture, fixtures, and equipment 5 Computer hardware 3 Computer software 3 Website design 2 Leasehold improvements Shorter of lease term or the asset standard life | Useful Life Furniture, fixtures, and equipment 5 Computer hardware 3 Computer software 3 Website design 2 Leasehold improvements Shorter of lease term or the asset standard life |
Schedule of number of antidilutive shares excluded from the calculation of diluted net loss per share | Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Stock-based compensation awards - employees 11,690,674 3,714,205 11,690,674 3,714,205 Stock-based compensation awards - non-employees 11,440,789 1,134,000 11,440,789 1,134,000 Series Seed redeemable convertible preferred stock 18,193,515 18,193,515 18,193,515 18,193,515 Series A redeemable convertible preferred stock 46,267,422 — 46,267,422 — Total 87,592,400 23,041,720 87,592,400 23,041,720 | As of December 31, 2020 2019 Stock-based compensation awards — employees 11,167,089 — Stock-based compensation awards — non-employees 3,614,888 — Series Seed redeemable convertible preferred stock 18,193,515 18,193,515 Series A redeemable convertible preferred stock 46,267,422 — Total 79,242,914 18,193,515 |
Property and Equipment, Net (_2
Property and Equipment, Net (Tables) - Archer Aviation Inc | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Schedule of property and equipment, net | June 30, 2021 December 31, 2020 Furniture, fixtures, and equipment $ 1,379 $ 1,046 Computer hardware 1,281 524 Website design 504 128 Leasehold improvements 764 54 Construction in progress 189 — Property and equipment, gross 4,117 1,752 Less: Accumulated depreciation (545) (139) Property and equipment, net $ 3,572 $ 1,613 | As of December 31, 2020 2019 Furniture, fixtures, and equipment $ 1,046 $ — Computer hardware 524 4 Website design 128 — Leasehold improvements 54 — Total property and equipment 1,752 4 Less: Accumulated depreciation (139) — Total property and equipment, net $ 1,613 $ 4 |
Schedule of depreciation expense included in each respective expense category in the statements of operations and comprehensive loss | Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Research and development $ 91 $ 10 $ 166 $ 16 General and administrative 167 19 239 19 Total depreciation expense $ 258 $ 29 $ 405 $ 35 |
Other Current Liabilities (Ta_2
Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Archer Aviation Inc | |
Schedule of other current liabilities | As of December 31, 2020 2019 Accrued interest $ 6 $ — Accrued bonus 155 43 Deposit liability related to cash received from the early exercise of stock options 117 — Income tax payable 1 — $ 279 $ 43 |
Paycheck Protection Program L_6
Paycheck Protection Program Loan (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Archer Aviation Inc | PPP Loan | |
Paycheck Protection Program Loan [Line ltems] | |
Schedule of future principal payments under the PPP loan agreement | Years ending December 31, 2021 $ 645 2022 260 $ 905 |
Commitments and Contingencies_5
Commitments and Contingencies (Tables) - Archer Aviation Inc | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Schedule of lease costs, weighted-average remaining lease term and weighted-average discount rate | Year Ended December 31, 2020 2019 Operating lease cost $ 52 $ — Short-term lease cost 44 — Total lease cost $ 96 $ — Weighted-average remaining lease term (in months) 30 — Weighted-average discount rate 12.17 % — | |
Schedule of lease costs | The Company’s lease costs were as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Operating lease cost $ 388 $ — $ 731 $ — Short-term lease cost — — 25 — Total lease cost $ 388 $ — $ 756 $ — | |
Schedule of weighted-average remaining lease term and discount rate | The Company’s weighted-average remaining lease term and discount rate were as follows: Six Months Ended June 30, 2021 2020 Weighted-average remaining lease term (in months) 23.42 — Weighted-average discount rate 11.29 % — | |
Schedule of minimum aggregate future obligations under noncancelable operating leases | The minimum aggregate future obligations under noncancelable operating leases as of June 30, 2021 were as follows: Remaining 2021 $ 774 2022 1,546 2023 688 Total future lease payments 3,008 Less: imputed interest (294) Present value of future lease payments $ 2,714 | Years ending December 31, 2021 $ 1,043 2022 1,074 2023 507 Future minimum lease payments 2,624 Less: Amount representing interest (323) Present value of future lease payments $ 2,301 |
Supplemental cash information and non-cash activities related to right-of-use assets and lease liabilities | Supplemental cash information and non-cash activities related to right-of-use assets and lease liabilities were as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Operating cash outflows from operating leases $ 379 $ — $ 706 $ — Operating lease assets obtained in exchange for new lease liabilities 165 — 984 — | 2020 2019 Operating cash outflows from operating leases $ 86 $ — Operating lease assets obtained in exchange for new lease liabilities 2,300 — |
Stock-Based Compensation (Tab_2
Stock-Based Compensation (Tables) - Archer Aviation Inc | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Summary of stock option activity | A summary of our employee stock option activity is as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Life (Years) Value Outstanding as of January 1, 2021 11,167,089 $ 0.11 9.61 $ 136,988 Granted 1,203,981 $ 0.15 Exercised (680,396) $ 0.04 $ 9,339 Outstanding as of June 30, 2021 11,690,674 $ 0.12 9.18 $ 177,315 Exercisable as of June 30, 2021 2,335,560 $ 0.14 9.28 $ 35,385 Vested and expected to vest as of June 30, 2021 11,690,674 $ 0.12 9.18 $ 177,315 A summary of our non-employee stock option activity is as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Life (Years) Value Outstanding as of January 1, 2021 1,387,586 $ 0.15 9.84 $ 16,973 Granted 65,308 $ 0.15 Exercised (227,333) $ 0.15 $ 3,129 Outstanding as of June 30, 2021 1,225,561 $ 0.15 9.35 $ 18,885 Exercisable as of June 30, 2021 33,900 $ 0.15 9.41 $ 513 Vested and expected to vest as of June 30, 2021 1,225,561 $ 0.15 9.35 $ 18,885 | A summary of our employee stock option activity is as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Life (Years) Value Outstanding as of December 31, 2019 — $ — — $ — Granted 11,318,689 $ 0.11 Exercised (151,600) $ 0.04 $ 1,324 Outstanding as of December 31, 2020 11,167,089 $ 0.11 9.61 $ 136,988 Exercisable as of December 31, 2020 1,432,988 $ 0.15 9.84 $ 17,528 Vested and expected to vest as of December 31, 2020 11,167,089 $ 0.11 9.61 $ 136,988 A summary of our non-employee stock option activity is as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Life (Years) Value Outstanding as of December 31, 2019 — $ — — $ — Granted 1,423,738 $ 0.15 Exercised (36,152) $ 0.15 $ 282 Outstanding as of December 31, 2020 1,387,586 $ 0.15 9.84 $ 16,973 Exercisable as of December 31, 2020 6,172 $ 0.15 9.84 $ 75 Vested and expected to vest as of December 31, 2020 1,387,586 $ 0.15 9.84 $ 16,973 |
Summary of restricted stock activity | Weighted Average Number of Grant Shares Price Outstanding as of January 1, 2021 567,000 $ 0.04 Vested (567,000) $ 0.04 Outstanding as of June 30, 2021 — $ — | Weighted Average Number of Grant Shares Price Outstanding as of December 31, 2019 — $ — Granted 1,134,000 $ 0.04 Vested (567,000) $ 0.04 Outstanding as of December 31, 2020 567,000 $ 0.04 |
Schedule of assumptions used in the Black-Scholes option pricing model | June 30, 2021 December 31, 2020 Risk-free interest rate: Employee stock options 0.62 % 0.52 – 1.52 % Non-employee stock options 1.08 % 0.79 % Expected term (in years): Employee stock options 6.32 6.02 – 6.32 Non-employee stock options 10.00 10.00 Expected volatility: Employee stock options 87.94 % 60.00 – 70.00 % Non-employee stock options 88.03 % 60.00 % Dividend yield: Employee stock options 0.00 % 0.00 % Non-employee stock options 0.00 % 0.00 % Grant date fair value per share: Employee stock options $ 13.65 $ 0.02 - $0.08 Non-employee stock options $ 13.68 $ 0.10 | 2020 Risk-free interest rate: Employee stock options 0.52 – 1.52 % Non-employee stock options 0.79% Expected term (in years): Employee stock options 6.02 – 6.32 Non-employee stock options 10.00 Expected volatility: Employee stock options 60.00 – 70.00 % Non-employee stock options 60.00% Dividend yield: Employee stock options 0.00% Non-employee stock options 0.00% Grant date fair value per share: Employee stock options $ 0.02 – $0.08 Non-employee stock options $0.10 |
Schedule of stock-based compensation expense | Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Research and development $ 735 $ 5 $ 1,416 $ 8 General and administrative 258 3 502 3 Total stock-based compensation expense $ 993 $ 8 $ 1,918 $ 11 | Years Ended December 31, 2020 2019 Research and development $ 25 $ — General and administrative 150 — Total $ 175 $ — |
Formation and Nature of Busin_3
Formation and Nature of Business (Details) - Archer Aviation Inc - Business Combination Agreement $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($)$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Amount of common stock received | $ 2,465,779 |
Common stock per share | $ / shares | $ 10 |
Maximum amount of common stock agreed to be subscribe and to be purchased | $ 600,000 |
Liquidity and Going Concern (_2
Liquidity and Going Concern (Details) - USD ($) | Sep. 16, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Oct. 30, 2020 | Dec. 31, 2019 |
Accumulated deficit | $ (45,481,339) | $ (10,850,513) | $ (788,441) | ||
Cash and cash equivalents | 297,376 | 925,923 | |||
Archer Aviation Inc | |||||
Accumulated deficit | (153,598,000) | (25,800,000) | $ (977,000) | ||
Cash and cash equivalents | $ 5,937,000 | $ 36,564,000 | $ 10,149,000 | ||
Net cash proceeds from business combination | $ 801,826,000 |
Summary of Significant Accou_23
Summary of Significant Accounting Policies - Cash and Cash Equivalents (Details) - Archer Aviation Inc - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Cash and Cash Equivalents [Line Items] | |||
Fair value of cash equivalents | $ 5,937 | $ 36,564 | |
Level 1 | Money market funds | |||
Cash and Cash Equivalents [Line Items] | |||
Fair value of cash equivalents | $ 344 | $ 34,377 | $ 0 |
Summary of Significant Accou_24
Summary of Significant Accounting Policies - Intangible Assets, Net (Details) - Archer Aviation Inc - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 15 years | |
Gross carrying amount | $ 500 | $ 19 |
Accumulated amortization | 3 | 3 |
Amortization expense | $ 9 | $ 17 |
Domain names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 15 years | |
Gross carrying amount | $ 500 | |
Accumulated amortization | 3 | |
Amortization expense | $ 3 |
Summary of Significant Accou_25
Summary of Significant Accounting Policies - Property and Equipment, Net and Impariment of Long-Lived Assets (Details) - Archer Aviation Inc - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Impairment of Long-Lived Assets | |||
Impairment of long-lived assets | $ 0 | $ 0 | $ 0 |
Furniture, fixtures, and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (in years) | 5 years | 5 years | |
Computer hardware | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (in years) | 3 years | 3 years | |
Computer software | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (in years) | 3 years | 3 years | |
Website design | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (in years) | 2 years | 2 years |
Summary of Significant Accou_26
Summary of Significant Accounting Policies - Other Warrant Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Archer Aviation Inc | ||||
Debt Instrument [Line Items] | ||||
Other warrant expense | $ 0 | $ 0 | $ 78,208 | $ 0 |
Summary of Significant Accou_27
Summary of Significant Accounting Policies - Net Loss Per Share Attributable to Ordinary Stockholders (Details) - shares | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Total | 24,666,667 | |||||
Archer Aviation Inc | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Total | 87,592,400 | 23,041,720 | 87,592,400 | 23,041,720 | 79,242,914 | 18,193,515 |
Archer Aviation Inc | Stock-based compensation awards - employees | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Total | 11,690,674 | 3,714,205 | 11,690,674 | 3,714,205 | 11,167,089 | |
Archer Aviation Inc | Stock-based compensation awards - non-employees | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Total | 11,440,789 | 1,134,000 | 11,440,789 | 1,134,000 | 3,614,888 | |
Archer Aviation Inc | Series Seed redeemable convertible preferred stock | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Total | 18,193,515 | 18,193,515 | 18,193,515 | 18,193,515 | 18,193,515 | 18,193,515 |
Archer Aviation Inc | Series A redeemable convertible preferred stock | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Total | 46,267,422 | 46,267,422 | 46,267,422 |
Property and Equipment, Net -_2
Property and Equipment, Net - Schedule of property and equipment, net (Details) - Archer Aviation Inc - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Property and Equipment, Net [Line Items] | |||
Total property and equipment | $ 4,117 | $ 1,752 | $ 4 |
Less: Accumulated depreciation | (545) | (139) | |
Total property and equipment, net | 3,572 | 1,613 | 4 |
Furniture, fixtures, and equipment | |||
Property and Equipment, Net [Line Items] | |||
Total property and equipment | 1,379 | 1,046 | |
Computer hardware | |||
Property and Equipment, Net [Line Items] | |||
Total property and equipment | 1,281 | 524 | $ 4 |
Website design | |||
Property and Equipment, Net [Line Items] | |||
Total property and equipment | 504 | 128 | |
Leasehold Improvements [Member] | |||
Property and Equipment, Net [Line Items] | |||
Total property and equipment | 764 | $ 54 | |
Construction in progress | |||
Property and Equipment, Net [Line Items] | |||
Total property and equipment | $ 189 |
Property and Equipment, Net -_3
Property and Equipment, Net - Schedule of Depreciation Expense (Details) - Archer Aviation Inc - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property and Equipment, Net [Line Items] | ||||||
Depreciation expense | $ 258 | $ 29 | $ 405 | $ 35 | $ 139 | $ 0 |
Research and development | ||||||
Property and Equipment, Net [Line Items] | ||||||
Depreciation expense | 91 | 10 | 166 | 16 | 72 | |
General and administrative | ||||||
Property and Equipment, Net [Line Items] | ||||||
Depreciation expense | $ 167 | $ 19 | $ 239 | $ 19 | $ 67 |
Related Party Transactions - _2
Related Party Transactions - Convertible Promissory Notes (Detail) - Archer Aviation Inc $ in Thousands | Nov. 21, 2019USD ($) | Nov. 21, 2019USD ($) | Nov. 21, 2019USD ($)item | Oct. 11, 2019USD ($) | Oct. 11, 2019USD ($) | Oct. 11, 2019USD ($)item | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2021USD ($) |
Related Party Transaction | |||||||||
Conversion Amount | $ 5,294 | $ 604 | |||||||
Outstanding principal balance on the convertible promissory notes | 0 | 4,995 | |||||||
Convertible Note Purchase Agreement | |||||||||
Related Party Transaction | |||||||||
Outstanding principal balance on the convertible promissory notes | 0 | 4,995 | $ 0 | ||||||
Accrued interest | $ 0 | $ 47 | |||||||
October Notes | Convertible Note Purchase Agreement | |||||||||
Related Party Transaction | |||||||||
Number of convertible promissory notes issued to founders | 2 | 2 | |||||||
Amount of debt issued | $ 601 | $ 601 | $ 601 | ||||||
Interest rate | 5.00% | 5.00% | 5.00% | ||||||
Numerator used to calculate capped price in the debt conversion | $ 4,000 | ||||||||
Discount rate | 80.00% | ||||||||
October Notes | Convertible Note Purchase Agreement | Minimum | |||||||||
Related Party Transaction | |||||||||
Conversion Amount | $ 1,000 | ||||||||
November Notes | Convertible Note Purchase Agreement | |||||||||
Related Party Transaction | |||||||||
Number of convertible promissory notes issued | 3 | 3 | |||||||
Number of convertible promissory notes issued to founders | 2 | 2 | |||||||
Number of convertible promissory notes issued to third-party investor | 1 | 1 | |||||||
Amount of debt issued | $ 5,000 | $ 5,000 | $ 5,000 | ||||||
Interest rate | 10.00% | 10.00% | 10.00% | ||||||
Repayment of debt | $ 25,000 | ||||||||
November Notes | Convertible Note Purchase Agreement | Minimum | |||||||||
Related Party Transaction | |||||||||
Conversion Amount | $ 25,000 |
Related Party Transactions - _3
Related Party Transactions - Partial Recourse Promissory Notes (Detail) | 4 Months Ended |
Dec. 31, 2020USD ($)$ / shares | |
Related Party Transaction | |
Purchase price per share | $ / shares | $ 9.20 |
Total amount paid by founders | $ | $ 25,000 |
Paycheck Protection Program L_7
Paycheck Protection Program Loan (Details) - Archer Aviation Inc - USD ($) $ in Thousands | Sep. 06, 2020 | Jun. 11, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Apr. 09, 2020 | Dec. 31, 2019 |
Paycheck Protection Program Loan [Line ltems] | |||||||||
Notes payable | $ 260 | $ 0 | |||||||
Outstanding balance | 645 | $ 0 | |||||||
Gain on forgiveness of PPP loan | $ 912 | $ 0 | $ 912 | $ 0 | |||||
PPP Loan | |||||||||
Paycheck Protection Program Loan [Line ltems] | |||||||||
Proceeds from loan | $ 905 | $ 905 | |||||||
Interest rate | 0.98% | 0.98% | |||||||
Deferral period | 6 months | ||||||||
Notes payable | $ 260 | ||||||||
Outstanding balance | $ 645 | ||||||||
SBA | |||||||||
Paycheck Protection Program Loan [Line ltems] | |||||||||
Deferral period | 10 months | ||||||||
SBA | PPP Loan | |||||||||
Paycheck Protection Program Loan [Line ltems] | |||||||||
Gain on forgiveness of PPP loan | $ 912 |
Commitments and Contingencies_6
Commitments and Contingencies - Weighted-average remaining lease term and weighted-average discount rate (Details) - Archer Aviation Inc $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021USD ($) | Jun. 30, 2021USD ($) | Dec. 31, 2020USD ($)facility | Dec. 31, 2019 | |
Weighted-average remaining lease term and weighted-average discount rate [Line ltems] | ||||
Number of corporate facility lease arrangements | facility | 1 | |||
Number of short-term storage facility lease arrangements | facility | 1 | |||
Lease term | 6 months | |||
Operating lease cost | $ 388 | $ 731 | $ 52 | |
Short-term lease cost | 25 | 44 | ||
Total lease cost | $ 388 | $ 756 | $ 96 | |
Weighted-average remaining lease term (in months) | 23 months 12 days | 23 months 12 days | 30 months | 0 months |
Weighted-average discount rate | 11.29% | 11.29% | 12.17% |
Commitments and Contingencies_7
Commitments and Contingencies - Future obligations under noncancelable operating leases (Details) - Archer Aviation Inc - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | |
Years ending December 31, | |||
Remaining 2021 | $ 774 | $ 774 | |
2022 | 1,546 | 1,546 | $ 1,043 |
2023 | 688 | 688 | 1,074 |
2023 | 507 | ||
Total future lease payments | 3,008 | 3,008 | 2,624 |
Less: imputed interest | (294) | (294) | (323) |
Present value of future lease payments | 2,714 | 2,714 | 2,301 |
Supplemental cash information and non-cash activities related to right-of-use assets and lease liabilities | |||
Operating cash outflows from operating leases | 379 | 706 | 86 |
Operating lease assets obtained in exchange for new lease liabilities | $ 165 | $ 984 | $ 2,300 |
Commitments and Contingencies_8
Commitments and Contingencies - Letter of Credit (Details) - Archer Aviation Inc - Standby letter of credit - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | Sep. 15, 2020 | |
Letter of Credit | |||
Proceeds from loan | $ 257 | ||
Maturity period | 12 months | 12 months |
Preferred and Common Stock (D_2
Preferred and Common Stock (Details) $ / shares in Units, $ in Thousands | Oct. 11, 2019 | Jun. 30, 2021USD ($)Votedirector$ / sharesshares | Dec. 31, 2020USD ($)directorVote$ / sharesshares | Mar. 31, 2021shares | Jun. 30, 2020shares | Mar. 31, 2020shares | Dec. 31, 2019shares | Dec. 31, 2018shares |
Preferred and Common Stock | ||||||||
Redeemable convertible preferred stock, shares authorized | 1,000,000 | 1,000,000 | ||||||
Redeemable convertible preferred stock, shares issued | 0 | 0 | ||||||
Redeemable convertible preferred stock, shares outstanding | 0 | 0 | ||||||
Archer Aviation Inc | ||||||||
Preferred and Common Stock | ||||||||
Common stock, shares authorized | 155,000,000 | 143,677,090 | 77,285,983 | |||||
Common stock, shares issued | 52,229,481 | 51,321,752 | 50,000,000 | |||||
Common Stock, Shares, Outstanding | 52,229,481 | 51,321,752 | 50,000,000 | |||||
Common stock, votes per share | Vote | 1 | 1 | ||||||
Number of directors the common stock holders are entitled to elect | director | 3 | 3 | ||||||
Common stock dividends declared | $ | $ 0 | $ 0 | ||||||
Preferred stock dividends declared | $ | $ 0 | $ 0 | ||||||
Minimum number of shares held for preemptive rights | 4,150,755 | 4,150,755 | ||||||
Stock split ratio | 1 | |||||||
Archer Aviation Inc | Common Stock | ||||||||
Preferred and Common Stock | ||||||||
Stock split ratio | 5 | |||||||
Archer Aviation Inc | Redeemable convertible preferred stock | ||||||||
Preferred and Common Stock | ||||||||
Stock split ratio | 1 | |||||||
Archer Aviation Inc | Series Seed redeemable convertible preferred stock | ||||||||
Preferred and Common Stock | ||||||||
Redeemable convertible preferred stock, shares authorized | 18,193,515 | 18,193,515 | 18,193,515 | |||||
Redeemable convertible preferred stock, shares issued | 18,193,515 | 18,193,515 | 18,193,515 | |||||
Redeemable convertible preferred stock, shares outstanding | 18,193,515 | 18,193,515 | 18,193,515 | 18,193,515 | 18,193,515 | 18,193,515 | 0 | |
Original issue price | $ / shares | $ 0.3300 | $ 0.3300 | ||||||
Conversion price | $ / shares | $ 0.3300 | $ 0.3300 | ||||||
Archer Aviation Inc | Series A redeemable convertible preferred stock | ||||||||
Preferred and Common Stock | ||||||||
Redeemable convertible preferred stock, shares authorized | 46,732,728 | 46,732,728 | 0 | |||||
Redeemable convertible preferred stock, shares issued | 46,267,422 | 46,267,422 | 0 | |||||
Redeemable convertible preferred stock, shares outstanding | 46,267,422 | 46,267,422 | 46,267,422 | 0 | 0 | 0 | 0 | |
Number of directors the common stock holders are entitled to elect | director | 1 | |||||||
Number of directors the Series A Preferred Stock holders are entitled to elect | director | 1 | |||||||
Original issue price | $ / shares | $ 1.2046 | $ 1.2046 | ||||||
Conversion price | $ / shares | $ 1.2046 | $ 1.2046 |
Stock-Based Compensation - 20_2
Stock-Based Compensation - 2019 stock plan (Details) - Archer Aviation Inc - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2021 | Dec. 31, 2020 | Jan. 31, 2021 | Oct. 11, 2020 | Oct. 04, 2020 | Dec. 31, 2019 | Nov. 20, 2019 | |
Employee | |||||||
Number of Shares | |||||||
Outstanding as of January 1, 2021 | 11,167,089 | ||||||
Granted | 11,318,689 | ||||||
Exercised | (151,600) | ||||||
Outstanding as of June 30, 2021 | 11,167,089 | ||||||
Exercisable as of June 30, 2021 | 1,432,988 | ||||||
Vested and expected to vest as of June 30, 2021 | 11,167,089 | ||||||
Weighted Average Exercise Price | |||||||
Outstanding as of January 1, 2021 | $ 0.11 | ||||||
Granted | $ 0.11 | ||||||
Exercised | 0.04 | ||||||
Outstanding as of June 30, 2021 | 0.11 | ||||||
Exercisable as of June 30, 2021 | 0.15 | ||||||
Vested and expected to vest as of June 30, 2021 | $ 0.11 | ||||||
Weighted Average Remaining Contractual Life (Years) | |||||||
Outstanding of the period | 9 years 7 months 9 days | ||||||
Exercisable as of June 30, 2021 | 9 years 10 months 2 days | ||||||
Vested and expected to vest as of June 30, 2021 | 9 years 7 months 9 days | ||||||
Aggregate Intrinsic Value | |||||||
Outstanding as of January 1, 2021 | $ 136,988 | ||||||
Exercised | $ 1,324 | ||||||
Outstanding as of June 30, 2021 | 136,988 | ||||||
Exercisable as of June 30, 2021 | 17,528 | ||||||
Vested and expected to vest as of June 30, 2021 | $ 136,988 | ||||||
Non-employee | |||||||
Number of Shares | |||||||
Outstanding as of January 1, 2021 | 1,387,586 | ||||||
Granted | 1,423,738 | ||||||
Exercised | (36,152) | ||||||
Outstanding as of June 30, 2021 | 1,387,586 | ||||||
Exercisable as of June 30, 2021 | 6,172 | ||||||
Vested and expected to vest as of June 30, 2021 | 1,387,586 | ||||||
Weighted Average Exercise Price | |||||||
Outstanding as of January 1, 2021 | $ 0.15 | ||||||
Granted | $ 0.15 | ||||||
Exercised | 0.15 | ||||||
Outstanding as of June 30, 2021 | 0.15 | ||||||
Exercisable as of June 30, 2021 | 0.15 | ||||||
Vested and expected to vest as of June 30, 2021 | $ 0.15 | ||||||
Weighted Average Remaining Contractual Life (Years) | |||||||
Outstanding of the period | 9 years 10 months 2 days | ||||||
Exercisable as of June 30, 2021 | 9 years 10 months 2 days | ||||||
Vested and expected to vest as of June 30, 2021 | 9 years 10 months 2 days | ||||||
Aggregate Intrinsic Value | |||||||
Outstanding as of January 1, 2021 | $ 16,973 | ||||||
Exercised | $ 282 | ||||||
Outstanding as of June 30, 2021 | 16,973 | ||||||
Exercisable as of June 30, 2021 | 75 | ||||||
Vested and expected to vest as of June 30, 2021 | $ 16,973 | ||||||
2019 Stock Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized for grant | 5,555,555 | 15,689,294 | 7,577,057 | ||||
Common stock available for future issuance | 543,578 | 1,812,867 | 7,577,057 | ||||
2019 Stock Plan | Stock options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized for grant | 1,269,289 | ||||||
2019 Stock Plan | Stock options | Employee | |||||||
Number of Shares | |||||||
Outstanding as of January 1, 2021 | 11,167,089 | ||||||
Granted | 1,203,981 | ||||||
Exercised | (680,396) | ||||||
Outstanding as of June 30, 2021 | 11,690,674 | 11,167,089 | |||||
Exercisable as of June 30, 2021 | 2,335,560 | ||||||
Vested and expected to vest as of June 30, 2021 | 11,690,674 | ||||||
Weighted Average Exercise Price | |||||||
Outstanding as of January 1, 2021 | $ 0.11 | ||||||
Granted | 0.15 | ||||||
Exercised | 0.04 | ||||||
Outstanding as of June 30, 2021 | 0.12 | $ 0.11 | |||||
Exercisable as of June 30, 2021 | 0.14 | ||||||
Vested and expected to vest as of June 30, 2021 | $ 0.12 | ||||||
Weighted Average Remaining Contractual Life (Years) | |||||||
Outstanding of the period | 9 years 2 months 4 days | 9 years 7 months 9 days | |||||
Exercisable as of June 30, 2021 | 9 years 3 months 10 days | ||||||
Vested and expected to vest as of June 30, 2021 | 9 years 2 months 4 days | ||||||
Aggregate Intrinsic Value | |||||||
Outstanding as of January 1, 2021 | $ 136,988 | ||||||
Exercised | 9,339 | ||||||
Outstanding as of June 30, 2021 | 177,315 | $ 136,988 | |||||
Exercisable as of June 30, 2021 | 35,385 | ||||||
Vested and expected to vest as of June 30, 2021 | $ 177,315 | ||||||
2019 Stock Plan | Stock options | Non-employee | |||||||
Number of Shares | |||||||
Outstanding as of January 1, 2021 | 1,387,586 | ||||||
Granted | 65,308 | ||||||
Exercised | (227,333) | ||||||
Outstanding as of June 30, 2021 | 1,225,561 | 1,387,586 | |||||
Exercisable as of June 30, 2021 | 33,900 | ||||||
Vested and expected to vest as of June 30, 2021 | 1,225,561 | ||||||
Weighted Average Exercise Price | |||||||
Outstanding as of January 1, 2021 | $ 0.15 | ||||||
Granted | 0.15 | ||||||
Exercised | 0.15 | ||||||
Outstanding as of June 30, 2021 | 0.15 | $ 0.15 | |||||
Exercisable as of June 30, 2021 | 0.15 | ||||||
Vested and expected to vest as of June 30, 2021 | $ 0.15 | ||||||
Weighted Average Remaining Contractual Life (Years) | |||||||
Outstanding of the period | 9 years 4 months 6 days | 9 years 10 months 2 days | |||||
Exercisable as of June 30, 2021 | 9 years 4 months 28 days | ||||||
Vested and expected to vest as of June 30, 2021 | 9 years 4 months 6 days | ||||||
Aggregate Intrinsic Value | |||||||
Outstanding as of January 1, 2021 | $ 16,973 | ||||||
Exercised | 3,129 | ||||||
Outstanding as of June 30, 2021 | 18,885 | $ 16,973 | |||||
Exercisable as of June 30, 2021 | 513 | ||||||
Vested and expected to vest as of June 30, 2021 | $ 18,885 |
Stock-Based Compensation - Re_2
Stock-Based Compensation - Restricted stock activity (Details) - Archer Aviation Inc - 2019 Stock Plan - Restricted stock - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Number of Shares | ||
Outstanding as of January 1, 2021 | 567,000 | |
Granted | 1,134,000 | |
Vested | (567,000) | (567,000) |
Outstanding as of June 30, 2021 | 567,000 | |
Weighted Average Grant Price | ||
Outstanding as of January 1, 2021 | $ 0.04 | |
Granted | $ 0.04 | |
Vested | $ 0.04 | 0.04 |
Outstanding as of June 30, 2021 | $ 0.04 |
Stock-Based Compensation - As_2
Stock-Based Compensation - Assumptions used in Black-Scholes (Details) - Archer Aviation Inc - Stock options - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Employee | ||
Assumptions used in the Black-Scholes option pricing model | ||
Risk-free interest rate, minimum | 0.52% | |
Risk-free interest rate, maximum | 1.52% | |
Risk-free interest rate | 0.62% | |
Expected term (in years) | 6 years 3 months 25 days | |
Expected volatility, minimum | 60.00% | |
Expected volatility, maximum | 70.00% | |
Expected volatility | 87.94% | |
Dividend yield | 0.00% | 0.00% |
Grant date fair value per share | $ 13.65 | |
Employee | Minimum | ||
Assumptions used in the Black-Scholes option pricing model | ||
Expected term (in years) | 6 years 7 days | |
Grant date fair value per share | $ 0.02 | |
Employee | Maximum | ||
Assumptions used in the Black-Scholes option pricing model | ||
Expected term (in years) | 6 years 3 months 25 days | |
Grant date fair value per share | $ 0.08 | |
Non-employee | ||
Assumptions used in the Black-Scholes option pricing model | ||
Risk-free interest rate | 1.08% | 0.79% |
Expected term (in years) | 10 years | 10 years |
Expected volatility | 88.03% | 60.00% |
Dividend yield | 0.00% | 0.00% |
Grant date fair value per share | $ 13.68 | $ 0.10 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock-based compensation expense (Details) - Archer Aviation Inc - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 993 | $ 8 | $ 1,918 | $ 11 | $ 175 |
Research and development | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | 735 | 5 | 1,416 | 8 | 25 |
General and administrative | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | 258 | 3 | $ 502 | 3 | 150 |
Employee | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total remaining stock-based compensation expense for unvested stock options | 142 | ||||
Cost expected to be recognized over a weighted-average period | 1 year 8 months 12 days | ||||
Non-employee | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total remaining stock-based compensation expense for unvested stock options | 8 | ||||
Cost expected to be recognized over a weighted-average period | 1 year 1 month 6 days | ||||
Stock options | Employee | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | 861 | 5 | $ 1,658 | $ 8 | |
Stock options | Non-employee | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | 123 | 240 | |||
Total remaining stock-based compensation expense for restricted stock awards | 25 | ||||
Restricted stock | Non-employee | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | 9 | $ 3 | 20 | ||
Total remaining stock-based compensation expense for restricted stock awards | $ 20 | ||||
Cost expected to be recognized over a weighted-average period | 2 months 12 days | ||||
Unvested stock options | Employee | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total remaining stock-based compensation expense for unvested stock options | 15,342 | 15,342 | |||
Total remaining stock-based compensation expense for restricted stock awards | $ 565 | ||||
Cost expected to be recognized over a weighted-average period | 1 year 9 months 18 days | ||||
Unvested stock options | Non-employee | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total remaining stock-based compensation expense for unvested stock options | $ 788 | $ 788 | |||
Total remaining stock-based compensation expense for restricted stock awards | $ 135 | ||||
Cost expected to be recognized over a weighted-average period | 1 year 4 months 24 days |
Stock-Based Compensation - Co_2
Stock-Based Compensation - Collaboration agreement and warrant (Details) - Archer Aviation Inc $ / shares in Units, $ in Thousands | Jan. 29, 2021aircraftMilestone$ / sharesshares | Sep. 30, 2020$ / shares | Sep. 30, 2020$ / shares | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)shares | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Nov. 06, 2020Milestone$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Associated expense related to vested warrants | $ | $ 0 | $ 0 | $ 78,208 | $ 0 | |||||
Research and development warrant expense | $ | 34 | $ 0 | |||||||
Collaboration Agreement | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Maximum number of shares to be purchased for warrants | shares | 1,660,302 | ||||||||
Exercise price of warrants | $ 0.01 | ||||||||
Common stock, value per share | $ 0.15 | ||||||||
Preferred stock, value per share | $ 1.20 | ||||||||
Purchase agreement and warrant agreement with United Airlines | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of maximum conditional sale order of aircraft | aircraft | 200 | ||||||||
Number of additional sale order of aircraft | aircraft | 100 | ||||||||
Number of warrants issued | shares | 14,645,614 | ||||||||
Number of shares purchased for one warrant | shares | 1 | ||||||||
Exercise price of warrants | $ 0.01 | ||||||||
Number of milestones | Milestone | 4 | ||||||||
Common stock, value per share | $ 13.35 | ||||||||
Valuation of common stock, PWERM (in percent) | 80.00% | ||||||||
Valuation of common stock, OPM (in percent) | 20.00% | ||||||||
Fair value of per share of warrants | $ 13.35 | ||||||||
Associated expense related to vested warrants | $ | $ 78,208 | ||||||||
Number of warrants vested | shares | 5,858,246 | ||||||||
Collaboration agreement with FCA US LLC | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Maximum number of shares to be purchased for warrants | shares | 1,660,302 | ||||||||
Exercise price of warrants | $ 0.01 | ||||||||
Number of milestones | Milestone | 7 | ||||||||
Common stock, value per share | $ 0.15 | ||||||||
Preferred stock, value per share | $ 1.20 | ||||||||
Research and development warrant expense | $ | $ 34 | $ 0 | |||||||
Number of warrants vested | shares | 232,442 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 4 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Federal income tax (benefit) | 21.00% | ||||
State and local income taxes (net of federal benefit) | 0.00% | ||||
Nondeductible expenses | (1.50%) | ||||
Valuation allowance | (0.30%) | ||||
Effective tax rate | 0.00% | ||||
Archer Aviation Inc | |||||
Federal income tax (benefit) | 21.00% | 21.00% | |||
State and local income taxes (net of federal benefit) | 8.80% | 15.20% | |||
Nondeductible expenses | (0.10%) | (0.20%) | |||
Valuation allowance | (29.70%) | (36.00%) | |||
Effective tax rate | 0.00% | 0.00% | 0.00% | 0.00% |
401(k) Savings Plan (Details)_2
401(k) Savings Plan (Details) - Archer Aviation Inc - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Matching contribution (in percent) | 50.00% | 50.00% | |||
Maximum annual employer contribution per employee | $ 9,000 | ||||
Matching contributions | $ 123 | $ 67 | $ 252 | $ 126 | $ 276,000 |
Subsequent Events (Details)_2_3
Subsequent Events (Details) - Archer Aviation Inc $ / shares in Units, $ in Thousands | Jul. 09, 2021USD ($)$ / sharesshares | Feb. 10, 2021USD ($) | Jan. 29, 2021USD ($)$ / sharesshares | Jul. 19, 2021$ / sharesshares | Dec. 31, 2020 | Dec. 11, 2020ft² |
Subsequent Event | ||||||
Lease term | 6 months | |||||
Whisman Lease Agreement | ||||||
Subsequent Event | ||||||
Lease space (in sqft) | ft² | 14,660 | |||||
Lease term | 30 months | |||||
Lease renewal term | 12 months | |||||
Subsequent event | ||||||
Subsequent Event | ||||||
Number of warrants agreed to be issued | 423,282 | |||||
Number of shares purchased for one warrant | 1 | |||||
Exercise price of warrants | $ / shares | $ 17.30 | |||||
Subsequent event | Public warrants | ||||||
Subsequent Event | ||||||
Number of warrants exchanged | 732,280 | |||||
Exercise price of warrants | $ / shares | $ 11.50 | |||||
Subsequent event | SVB | ||||||
Subsequent Event | ||||||
Number of warrants agreed to be issued | 211,641 | |||||
Subsequent event | SVB Innovation | ||||||
Subsequent Event | ||||||
Number of warrants agreed to be issued | 211,641 | |||||
Subsequent event | Business Combination Agreement | ||||||
Subsequent Event | ||||||
Equity value | $ | $ 2,525,000 | |||||
Subsequent event | Business Combination Agreement | Maximum | ||||||
Subsequent Event | ||||||
Amount of common stock subscription | $ | $ 600,000 | |||||
Subsequent event | United Collaboration | ||||||
Subsequent Event | ||||||
Conditional order to purchase aircraft, Amount | $ | $ 1,000,000 | |||||
Subsequent event | United Collaboration | Maximum | ||||||
Subsequent Event | ||||||
Amount of option to purchase additional quantity of aircraft | $ | $ 500,000 | |||||
Subsequent event | Warrant Agreement | ||||||
Subsequent Event | ||||||
Number of shares purchased for one warrant | 1 | |||||
Exercise price of warrants | $ / shares | $ 0.01 | |||||
Maximum number of warrants issued | 14,645,614 | |||||
Percentage of warrants assigned | 20.00% | |||||
Subsequent event | Loan and Security Agreement | Term Loans | ||||||
Subsequent Event | ||||||
Proceeds from loan | $ | $ 20,000 | |||||
Floating rate per annum (in percent) | 8.50% | |||||
Adjustment to floating rate (in percent) | 2.00% | |||||
Subsequent event | Loan and Security Agreement | Minimum | Term Loans | ||||||
Subsequent Event | ||||||
Final payment fee (in percent) | 0.00% | |||||
Subsequent event | Loan and Security Agreement | Maximum | Term Loans | ||||||
Subsequent Event | ||||||
Final payment fee (in percent) | 5.50% | |||||
Subsequent event | FCA Italy S.p.A. . Manufacturing Consulting and Warrant Agreements | ||||||
Subsequent Event | ||||||
Number of shares to be purchased | 1,070,000 | |||||
Exercise price of warrants | $ / shares | $ 0.01 |