Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2021 | |
Document and Entity Information [Abstract] | |
Document Type | S-1/A |
Entity Registrant Name | Roth CH Acquisition III Co |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Central Index Key | 0001839412 |
Amendment Flag | true |
Amendment Description | AMENDMENT NO. 2 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Feb. 12, 2019 | ||
ASSETS | |||||||||||
Cash | $ 93,594 | $ 195,758 | $ 25,000 | ||||||||
Other current asset | 1,500 | 0 | |||||||||
Total Current Assets | 380,540 | 197,258 | 25,000 | ||||||||
Deferred offering costs | 31,542 | 0 | |||||||||
TOTAL ASSETS | 115,387,992 | 228,800 | 25,000 | ||||||||
Current liabilities | |||||||||||
Accrued expenses | 1,000 | 1,225 | |||||||||
Accrued offering costs | 1,105 | 5,000 | 0 | ||||||||
Promissory note - related party | 200,000 | 0 | |||||||||
Total Current Liabilities | 394,392 | 206,000 | 1,225 | ||||||||
Commitments | |||||||||||
Stockholders' Equity | |||||||||||
Common stock, $0.0001 par value; 50,000,000 shares authorized; 3,283,000 and 2,875,000 shares issued and outstanding (excluding 11,500,000 and no shares subject to possible redemption) as of September 30, 2021 and December 31, 2020, respectively | 328 | 288 | [1] | 288 | [1] | ||||||
Additional paid-in capital | 1,200,660 | 24,712 | 24,712 | ||||||||
Accumulated deficit | (1,424,648) | (2,200) | (1,225) | ||||||||
Total Stockholders' (Deficit) Equity | (223,660) | $ 586,080 | $ 1,170,048 | 22,800 | $ 22,890 | $ 23,690 | $ 23,690 | 23,775 | $ 0 | ||
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY | $ 115,387,992 | $ 228,800 | $ 25,000 | ||||||||
[1] | Includes up to 375,000 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 shares of common stock outstanding (see Notes 5 and 8). |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Feb. 09, 2021 | Sep. 30, 2021 | Feb. 24, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Common shares, par value, (per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Common shares, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | ||
Common shares, shares issued | 3,283,000 | 2,875,000 | 2,875,000 | ||
Common shares, shares outstanding | 3,283,000 | 2,875,000 | 2,875,000 | ||
Subsequent Event | |||||
Common shares, shares outstanding | 4,312,500 | 2,875,000 | |||
Dividends Per Share | $ 0.50 | ||||
Over-allotment option | |||||
Shares subject to forfeiture | 375,000 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | 11 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | ||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
Formation and operating costs | $ 1,225 | $ 975 | |||||
Net loss | $ (809,740) | $ (800) | $ (1,422,448) | $ (885) | $ (1,225) | $ (975) | |
Weighted-average shares outstanding, basic | [1] | 2,500,000 | 2,500,000 | ||||
Weighted-average shares outstanding, diluted | [1] | 2,500,000 | 2,500,000 | ||||
Basic net income per share | $ 0 | $ 0 | |||||
Diluted net income per share | $ 0 | $ 0 | |||||
[1] | Includes up to 375,000 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 shares of common stock outstanding (see Notes 5 and 8). |
STATEMENTS OF OPERATIONS (Paren
STATEMENTS OF OPERATIONS (Parenthetical) - $ / shares | Feb. 09, 2021 | Sep. 30, 2021 | Feb. 24, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Common shares, shares outstanding | 3,283,000 | 2,875,000 | 2,875,000 | ||
Over-allotment option | |||||
Shares subject to forfeiture | 375,000 | ||||
Subsequent Event | |||||
Common shares, shares outstanding | 4,312,500 | 2,875,000 | |||
Dividends Per Share | $ 0.50 |
STATEMENTS OF CHANGES IN STOCKH
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Non-redeemable common stock | Additional Paid-in Capital | Accumulated Deficit | Total | |
Balance at the beginning at Feb. 12, 2019 | $ 0 | $ 0 | $ 0 | $ 0 | |
Balance at the beginning (in shares) at Feb. 12, 2019 | 0 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Sale of 11,500,000 Units, net of underwriting discount and offering expenses | [1] | $ 288 | 24,712 | 0 | 25,000 |
Sale of 11,500,000 Units, net of underwriting discount and offering expenses (in shares) | [1] | 2,875,000 | |||
Net loss | $ 0 | 0 | (1,225) | (1,225) | |
Balance at the end at Dec. 31, 2019 | $ 288 | 24,712 | (1,225) | 23,775 | |
Balance at the end (in shares) at Dec. 31, 2019 | 2,875,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (85) | (85) | |||
Balance at the end at Mar. 31, 2020 | $ 288 | 24,712 | (1,310) | 23,690 | |
Balance at the end (in shares) at Mar. 31, 2020 | 2,875,000 | ||||
Balance at the beginning at Dec. 31, 2019 | $ 288 | 24,712 | (1,225) | 23,775 | |
Balance at the beginning (in shares) at Dec. 31, 2019 | 2,875,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | $ 0 | 0 | (975) | (975) | |
Balance at the end at Dec. 31, 2020 | $ 288 | 24,712 | (2,200) | 22,800 | |
Balance at the end (in shares) at Dec. 31, 2020 | 2,875,000 | ||||
Balance at the beginning at Mar. 31, 2020 | $ 288 | 24,712 | (1,310) | 23,690 | |
Balance at the beginning (in shares) at Mar. 31, 2020 | 2,875,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | $ 0 | 0 | 0 | 0 | |
Balance at the end at Jun. 30, 2020 | $ 288 | 24,712 | (1,310) | 23,690 | |
Balance at the end (in shares) at Jun. 30, 2020 | 2,875,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (800) | (800) | |||
Balance at the end at Sep. 30, 2020 | $ 288 | 24,712 | (2,110) | 22,890 | |
Balance at the end (in shares) at Sep. 30, 2020 | 2,875,000 | ||||
Balance at the beginning at Dec. 31, 2020 | $ 288 | 24,712 | (2,200) | 22,800 | |
Balance at the beginning (in shares) at Dec. 31, 2020 | 2,875,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Sale of 11,500,000 Units, net of underwriting discount and offering expenses | 11,500,000 | ||||
Net loss | 0 | (28,740) | (28,740) | ||
Balance at the end at Mar. 31, 2021 | $ 328 | 1,200,660 | (30,940) | 1,170,048 | |
Balance at the end (in shares) at Mar. 31, 2021 | 3,283,000 | ||||
Balance at the beginning at Dec. 31, 2020 | $ 288 | 24,712 | (2,200) | 22,800 | |
Balance at the beginning (in shares) at Dec. 31, 2020 | 2,875,000 | ||||
Balance at the end at Sep. 30, 2021 | $ 328 | 1,200,660 | (1,424,648) | (223,660) | |
Balance at the end (in shares) at Sep. 30, 2021 | 3,283,000 | ||||
Balance at the beginning at Dec. 31, 2020 | $ 288 | 24,712 | (2,200) | 22,800 | |
Balance at the beginning (in shares) at Dec. 31, 2020 | 2,875,000 | ||||
Balance at the beginning at Mar. 31, 2021 | $ 328 | 1,200,660 | (30,940) | 1,170,048 | |
Balance at the beginning (in shares) at Mar. 31, 2021 | 3,283,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | 0 | (583,968) | (583,968) | ||
Balance at the end at Jun. 30, 2021 | $ 328 | 1,200,660 | (614,908) | 586,080 | |
Balance at the end (in shares) at Jun. 30, 2021 | 3,283,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | 0 | (809,740) | (809,740) | ||
Balance at the end at Sep. 30, 2021 | $ 328 | $ 1,200,660 | $ (1,424,648) | $ (223,660) | |
Balance at the end (in shares) at Sep. 30, 2021 | 3,283,000 | ||||
[1] | Includes 375,000 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 shares of common stock outstanding (see Notes 5 and 8). |
STATEMENTS OF CHANGES IN STOC_2
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | Feb. 09, 2021 | Sep. 30, 2021 | Feb. 24, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Common shares, shares outstanding | 3,283,000 | 2,875,000 | 2,875,000 | ||
Subsequent Event | |||||
Common shares, shares outstanding | 4,312,500 | 2,875,000 | |||
Dividends Per Share | $ 0.50 | ||||
Over-allotment option | |||||
Shares subject to forfeiture | 375,000 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 11 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Dec. 31, 2020 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (1,225) | $ (975) |
Changes in operating assets and liabilities: | ||
Other current asset | 0 | (1,500) |
Accrued expenses | 1,225 | (225) |
Net cash used in operating activities | 0 | (2,700) |
Cash Flows from Financing Activities: | ||
Proceeds from issuance of Class B common stock to Sponsor | 25,000 | 0 |
Proceeds from promissory note - related party | 0 | 200,000 |
Payment of offering costs | 0 | (26,542) |
Net cash provided by (used in) financing activities | 25,000 | 173,458 |
Net Change in Cash | 25,000 | 170,758 |
Cash - Beginning of period | 0 | 25,000 |
Cash - End of period | 25,000 | 195,758 |
Non-Cash investing and financing activities: | ||
Deferred offering costs included in accrued offering costs | $ 0 | $ 5,000 |
Description of Organization and
Description of Organization and Business Operations | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | ||
Description of Organization and Business Operations | NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Roth CH Acquisition III Co. (the “Company”) was incorporated in Delaware on February 13, 2019. The Company is a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities (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 September 30, 2021, the Company had not commenced any operations. All activity from February 13, 2019 (inception) through September 30, 2021 relates to the Company’s formation and the initial public offering (“Initial Public Offering”), which is described below, and subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company generates non-operating income in the form of interest income on marketable securities held in the Trust Account. The registration statement for the Company’s Initial Public Offering was declared effective on March 2, 2021. On March 5, 2021, the Company consummated the Initial Public Offering of 11,500,000 units (the “Units” and, with respect to the shares of common stock included in the Units sold, the “Public Shares”), which includes the full exercise by the underwriters of their over-allotment option in the amount of 1,500,000 Units, at $10.00 per Unit, generating gross proceeds of $115,000,000, which is described in Note 4. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 408,000 units (the "Private Units”) at a price of $10.00 per Private Unit in a private placement to certain of the Company’s stockholders, generating gross proceeds of $4,080,000, which is described in Note 5. Transaction costs amounted to $2,812,212 consisting of $2,300,000 of underwriting fees, and $512,212 of other offering costs. Following the closing of the Initial Public Offering on March 5, 2021, an amount of $115,000,000 ($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 Units was placed in a trust account (the “Trust Account”), located in the United States and will be held in cash items or 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 selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account, as described below. 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 Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete a Business Combination having an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding taxes payable on income earned on the Trust Account) at the time of the agreement to enter into an initial 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. 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 will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially $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 Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 either immediately 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 legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “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 containing substantially the same information as would be included in a proxy statement prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the holders of the Company’s shares prior to the Initial Public Offering (the “Initial Stockholders”) have agreed to vote their Founder Shares (as defined in Note 5), Private Shares (as defined in Note 4) and any Public Shares purchased during or after the Initial Public Offering (a) in favor of approving a Business Combination and (b) not to redeem any shares in connection with a stockholder vote to approve a Business Combination or sell any shares to the Company in a tender offer in connection with a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of how or whether they vote on the proposed transaction or do not vote at all. The Initial Stockholders have agreed (a) to waive their redemption rights with respect to their Founder Shares, Private Shares and Public Shares held by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Certificate of Incorporation that would affect a public stockholders’ ability to convert or sell their shares to the Company in connection with a Business Combination or affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, 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 March 5, 2023 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 The Initial Stockholders have agreed to waive their liquidation rights with respect to the Founder Shares and Private Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Initial Stockholders acquire Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00). In order to protect the amounts held in the Trust Account, the Initial Stockholders have agreed to be liable to the Company if and to the extent any claims by a vendor 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 $10.00 per Public Share, except as to any claims by a third party who executed a valid and enforceable agreement with the Company waiving any right, title, interest or claim of any kind they may have in or to any monies held in the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of 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 Initial Stockholders will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that Initial Stockholders 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. On June 16, 2021, (i) the Company, (ii) Roth CH III Blocker Merger Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (“Blocker Merger Sub”), (iii) BCP QualTek Investors, LLC, a Delaware limited liability company (the “Blocker”), (iv) Roth CH III Merger Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (“Company Merger Sub”, and together with the Company and the Blocker Merger Sub, the “Buyer Parties”), (v) BCP QualTek HoldCo, LLC, a Delaware limited liability company ( “QualTek”), and (vi) BCP QualTek, LLC, a Delaware limited liability company, solely in its capacity as representative of the Blocker’s equityholders and QualTek’s equityholders (the “Equityholder Representative”), entered into a Business Combination Agreement (the “Business Combination Agreement”). Pursuant to the terms of the Business Combination Agreement, (i) Blocker Merger Sub will be merged with and into the Blocker, with the Blocker surviving as a wholly owned subsidiary of the Company, (ii) immediately thereafter, the Blocker will be merged with and into the Company, with the Company as the surviving company, and (iii) immediately thereafter, Company Merger Sub will be merged with and into QualTek, with QualTek as the surviving company (such mergers and the other transactions contemplated by the Business Combination Agreement, the “Merger”). The Business Combination Agreement contains customary representations and warranties, covenants, and closing conditions. Liquidity and Going Concern As of September 30, 2021, the Company had $93,594 in its operating bank accounts and $115,007,452 in securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem its common stock in connection therewith. As of September 30, 2021, approximately $7,452 of the amount on deposit in the Trust Account represented interest income, which is available to pay the Company’s tax obligations. Until the consummation of a Business Combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating and consummating the Business Combination. The Company will need to raise additional capital through loans or additional investments from its Sponsor, stockholders, officers, directors, or third parties. The Company’s officers, directors and Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern. Risks and Uncertainties Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position and/or search for a target company, the specific impact is not readily determinable as of the date of the 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 Roth CH Acquisition III Co. (the “Company”) was incorporated in Delaware on February 13, 2019. The Company is a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities (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 February 13, 2019 (inception) through December 31, 2020 relates to the Company’s formation and the proposed initial public offering (“Proposed Public Offering”), which is described below. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Proposed Public Offering. The Company has selected December 31 as its fiscal year end. The Company’s ability to commence operations is contingent upon obtaining adequate financial resources through a Proposed Public Offering of 10,000,000 units (the “Units” and, with respect to the shares of common stock included in the Units being offered, the “Public Shares”) at $10.00 per Unit (or 11,500,000 units if the underwriters’ over-allotment option is exercised in full), which is discussed in Note 3, and the sale of 378,000 units (or 408,000 units if the underwriters’ over-allotment option is exercised in full) (the “Private Units”) at a price of $10.00 per Private Unit in a private placement to certain of the Company’s stockholders prior to the offering that will close simultaneously with the Proposed Public Offering. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Proposed Public Offering and the sale of the Private Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete a Business Combination having an aggregate fair market value of at least 80% of the assets held in the Trust Account (as defined below) (excluding taxes payable on income earned on the Trust Account) at the time of the agreement to enter into an initial 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, as amended (the “Investment Company Act”). Upon the closing of the Proposed Public Offering, management has agreed that an amount equal to at least $10.00 per Unit sold in the Proposed Public Offering, including the proceeds from the sale of the Private Units, will be held in a trust account (“Trust Account”), located in the United States and will be held in cash items or invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account, as described below. 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 will be 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 will be recorded at redemption value and classified as temporary equity upon the completion of the Proposed Public Offering in accordance with the Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 either immediately 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 legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “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 containing substantially the same information as would be included in a proxy statement prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the holders of the Company’s shares prior to the Proposed Public Offering (the “Initial Stockholders”) have agreed to vote their Founder Shares (as defined in Note 5), Private Shares (as defined in Note 4) and any Public Shares purchased during or after the Proposed Public Offering (a) in favor of approving a Business Combination and (b) not to redeem any shares in connection with a stockholder vote to approve a Business Combination or sell any shares to the Company in a tender offer in connection with a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of how or whether they vote on the proposed transaction or don’t vote at all. The Initial Stockholders have agreed (a) to waive their redemption rights with respect to their Founder Shares, Private Shares and Public Shares held by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Certificate of Incorporation that would affect a public stockholders’ ability to convert or sell their shares to the Company in connection with a Business Combination or affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, 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 Proposed 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 five The Initial Stockholders have agreed to waive their liquidation rights with respect to the Founder Shares and Private Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Initial Stockholders acquire Public Shares in or after the Proposed Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Proposed Public Offering price per Unit ($10.00). In order to protect the amounts held in the Trust Account, the Initial Stockholders have agreed to be liable to the Company if and to the extent any claims by a vendor 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 $10.00 per Public Share, except as to any claims by a third party who executed a valid and enforceable agreement with the Company waiving any right, title, interest or claim of any kind they may have in or to any monies held in the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of Proposed 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 Initial Stockholders will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that Initial Stockholders 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. Going Concern Consideration At December 31, 2020, the Company had cash of $195,758 and working capital deficit of $8,742. The Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management plans to address this uncertainty through a Proposed Public Offering as discussed in Note 3. There is no assurance that the Company’s plans to raise capital or to consummate a Business Combination will be successful within the Combination Period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Summary of Significant Accounti
Summary of Significant Accounting Policies Basis of Presentation | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Summary of Significant Accounting Policies Basis of Presentation | NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X 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 complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated 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 consolidated financial statements should be read in conjunction with the Company’s prospectus for its Initial Public Offering as filed with the SEC on March 2, 2021. The interim results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future periods. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its majority owned subsidiary where the Company has the ability to exercise control. All significant intercompany balances and transactions have been eliminated in consolidation. 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 statement 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 the condensed consolidated financial statements in conformity with GAAP requires the Company’s 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. One of the more significant accounting estimates included in these condensed financial statements is the determination of the warrant liability. Such estimates may be subject to change as more current information becomes available and 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 September 30, 2021 and December 31, 2020. Marketable Securities Held in Trust Account At September 30, 2021, substantially all of the assets held in the Trust Account were held in money market funds which are invested primarily in U.S. Treasury securities. The Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these investments are included in interest earned on marketable securities held in Trust Account in the accompanying condensed consolidated statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information. Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the Company’s condensed consolidated balance sheets, primarily due to their short-term nature, with the exception of the warrant liabilities (see Note 9). 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 is 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. Accordingly, at September 30, 2021, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheets. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stocks to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable common stocks resulted in charges against additional paid-in capital. At September 30, 2021, common stock subject to possible redemption reflected in the condensed balance sheets are reconciled in the following table: Gross proceeds $ 115,000,000 Less: Common stock issuance costs (2,812,212) Plus: Accretion of carrying value to redemption value 2,812,212 Common stock subject to possible redemption $ 115,000,000 Warrant Liability 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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“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 ordinary shares, 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 fair value of the Private Placement Warrants (as defined in Note 5) was estimated using a binomial lattice simulation approach (see Note 9). Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. 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 as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 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. The effective tax rate differs from the statutory tax rate of 21% for the three months and nine months ended September 30, 2021 and 2020, respectively, primarily due to the valuation allowance recorded on the Company’s net operating losses. Net Income (Loss) per Common Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. Accretion associated with the redeemable shares of common stock is excluded from income (loss) per common share as the redemption value approximates fair value. The Company has not considered the effect of the warrants sold in the Initial Public Offering and private placement to purchase an aggregate of 2,977,000 shares in the calculation of diluted loss per share, since the inclusion of such warrants would be anti-dilutive. As of September 30, 2021 and 2020, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted net loss per common share is the same as basic net loss per common share for the periods presented. The following table reflects the calculation of basic and diluted net loss per common share (in dollars, except per share amounts): For the Period from 2/13/19 (Inception) Three Months Ended Nine Months Ended Through September 30, 2021 September 30, 2021 September 30, 2020 Redeemable Non-redeemable Redeemable Non-redeemable Non-redeemable common stock common stock common stock common stock common stock Basic and diluted net loss per common share Numerator: Allocation of net loss, as adjusted $ (629,913) $ (179,827) $ (1,052,069) $ (370,379) $ (800) Denominator: Basic and diluted weighted average shares outstanding 11,500,000 3,283,000 8,804,029 3,099,440 2,500,000 Basic and diluted net loss per common share $ (0.05) $ (0.05) $ (0.12) $ (0.12) $ (0.00) Three Months Ended Nine Months Ended September 30, 2020 September 30, 2020 Non-redeemable Non-redeemable common stock common stock Basic and diluted net loss per common share Numerator: Allocation of net loss, as adjusted $ (800) $ (885) Denominator: Basic and diluted weighted average shares outstanding 2,500,000 2,500,000 Basic and diluted net loss per common share $ (0.00) $ (0.00) Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts. Recent Accounting Standards In August 2020, the FASB issued ASU No. 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): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. 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 condensed consolidated financial statements. | Note 2 — Summary of Significant Accounting Policies Basis of Presentation The accompanying financial statements 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 the Company’s 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 expenses during the reporting periods. 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 and 2019. Deferred Offering Costs Deferred offering costs consist of legal, accounting and other costs incurred through the balance sheet date that are directly related to the Proposed Public Offering and that will be charged to stockholders’ equity upon the completion of the Proposed Public Offering. Should the Proposed Public Offering prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations. Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. 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 as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020 and 2019. 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. The provision for income taxes was deemed to be de minimis for the year ended December 31, 2020, and for the period from February 13, 2019 (inception) through December 31, 2019. Net Loss Per Common Share Net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period, excluding shares of common stock subject to forfeiture by the Initial Stockholders. Weighted average shares were reduced for the effect of an aggregate of 375,000 shares of common stock that are subject to forfeiture if the over-allotment option is not exercised by the underwriters (see Notes 5 and 8). At December 31, 2020 and 2019, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into shares of common stock and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the periods presented. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations 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. At December 31, 2020 and 2019, 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 fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature. 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. Risks and Uncertainties In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States and the World. As of the date the financial statements were issued, there was considerable uncertainty around the expected duration of this pandemic. The Company has concluded that while it is reasonably possible that COVID-19 could have a negative effect on identifying a target company for a Business Combination, 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. |
Public Offering
Public Offering | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
PUBLIC OFFERING | ||
Public Offering | NOTE 4. PUBLIC OFFERING Pursuant to the Initial Public Offering, the Company sold 11,500,000 Units, which includes a full exercise by the underwriters on March 5, 2021 of their over-allotment option in the amount of 1,500,000 Units, at a price of $10.00 per Unit. Each Unit consists of one share of common stock and one -quarter of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of common stock at an exercise price of $11.50 per share, subject to adjustment (see Note 9). | Note 3 — Public Offering Pursuant to the Proposed Public Offering, the Company intends to offer for sale 10,000,000 Units (or 11,500,000 Units if the over-allotment option is exercised in full) at a price of $10.00 per Unit. Each Unit will consist of one share of common stock and one |
Private Placement
Private Placement | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
PRIVATE PLACEMENT. | ||
Private Placement | NOTE 5. PRIVATE PLACEMENT Simultaneously with the closing of the Initial Public Offering, the Initial Stockholders purchased an aggregate of 408,000 Private Units at a price of $10.00 per Private Unit, for an aggregate purchase price of $4,080,000, in a private placement. Each Private Unit consists of one share of common stock (“Private Share”) and one-quarter | Note 4 — Private Placement The Initial Stockholders will enter into an agreement to purchase an aggregate of 378,000 Private Units (or 408,000 Private Units if the over-allotment option is exercised in full) at a price of $10.00 per Private Unit, for an aggregate purchase price of $3,780,000, or $4,080,000 if the over-allotment option is exercised in full, in a private placement that will occur simultaneously with the closing of the Proposed Public Offering. Each Private Unit will consist of one share of common stock (“Private Share”) and one Combination Period, the proceeds from the sale of the Private Units will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law). |
Related Party Transactions
Related Party Transactions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
RELATED PARTY TRANSACTIONS | ||
Related Party Transactions | NOTE 6. RELATED PARTY TRANSACTIONS Founder Shares In February 2019, the Initial Stockholders purchased an aggregate of 100 shares of the Company’s common stock for an aggregate price of $25,000. On May 26, 2020, the Company effected a stock dividend of 28,750 shares of common stock for each share of common stock outstanding, resulting in an aggregate of 2,875,000 shares of common stock being held by the Initial Stockholders (the “Founder Shares”). In February 2021, the Company sold 35,233 Founder Shares to three of the Company’s director nominees (for a total of 105,699 Founder Shares) and 89,093 Founder Shares to affiliates of its sponsor group as part of a larger purchase and resale of securities. The total consideration paid for these shares was $1,247. On February 9, 2021, the Company effected a dividend of 0.50 share for each share outstanding resulting in there being an aggregate of 4,312,500 shares outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 Founder Shares outstanding. All share and per-share amounts have been retroactively restated to reflect the stock dividend. The Founder Shares included an aggregate of up to 375,000 shares subject to forfeiture by the Initial Stockholders to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the Initial Stockholders would collectively own 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Initial Stockholders did not purchase any Public Shares in the Initial Public Offering and excluding the Private Shares). As a result of the underwriters’ election to fully exercise their over-allotment option, no Founder Shares are subject to forfeiture. The sale of the Founders Shares to the Company's director nominees and affiliates of its sponsor group, as described above, is within the scope of FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The fair value of the 194,792 shares sold to the Company’s director nominees and affiliates of its sponsor group was $1,229,138, or $6.31 per share. The Founders Shares were effectively sold subject to a performance condition (i.e., the occurrence of a Business Combination). Compensation expense related to the Founders Shares is recognized only when the performance condition is probable of occurrence. Stock-based compensation will be recognized at the date a Business Combination is considered probable in an amount equal to the number of Founders Shares times the grant date fair value per share (unless subsequently modified) less the amount initially received for the purchase of the Founders Shares. As of September 30, 2021, the Company determined that a Business Combination is not considered probable, and, therefore, no stock-based compensation expense has been recognized. The Initial Stockholders have agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until (1) with respect to 50% of the Founder Shares, the earlier of six months after the completion of a Business Combination and the date on which the closing price of the common stock equals or exceeds $12.50 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 after a Business Combination and (2) with respect to the remaining 50% of the Founder Shares, six months after the completion of a Business Combination, or earlier, in either case, if, subsequent to a Business Combination, the Company completes a liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Promissory Note — Related Party On December 15, 2020, the Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company could borrow up to an aggregate principal amount of $200,000. The Promissory Note was non-interest bearing and payable on the earlier of (i) the consummation of the Initial Public Offering or (ii) the date on which the Company determined not to proceed with the Initial Public Offering. The outstanding balance under the Promissory Note of $200,000 was repaid on March 9, 2021. Borrowings under the Promissory Note are no longer available. Related Party Loans In order to finance transaction costs in connection with a Business Combination, the Initial Stockholders, or certain of the Company’s officers and directors or their affiliates 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 be repaid upon consummation of a Business Combination, without interest. Up to $1,500,000 of such loans may be convertible into units at a price of $10.00 per unit, at the option of the lender. The units would be identical to the Private Units. As of September 30, 2021 and December 31, 2020, there were no amounts outstanding under the Working Capital Loans. On November 3, 2021 the Company entered into a new promissory note with related parties of the Company in the aggregate principal amount of $500,000 in order to finance the Company’s working capital needs (see Note 11). | Note 5 — Related Party Transactions Founder Shares In February 2019, the Initial Stockholders purchased an aggregate of 100 shares of the Company’s common stock for an aggregate price of $25,000. On May 26, 2020, the Company effected a stock dividend of 28,750 shares of common stock for each share of common stock outstanding, resulting in an aggregate of 2,875,000 shares of common stock being held by the Initial Stockholders (the “Founder Shares”). On February 9, 2021, the Company effected a dividend of 0.50 share for each share outstanding resulting in there being an aggregate of 4,312,500 shares outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 Founder Shares outstanding (see Note 8). All share and per-share amounts have been retroactively restated to reflect the stock transactions. The Founder Shares include an aggregate of up to 375,000 shares subject to forfeiture by the Initial Stockholders to the extent that the underwriters’ over-allotment is not exercised in full or in part, so that the Initial Stockholders will collectively own 20% of the Company’s issued and outstanding shares after the Proposed Public Offering (assuming the Initial Stockholders do not purchase any Public Shares in the Proposed Public Offering and excluding the Private Shares). The Initial Stockholders have agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until (1) with respect to 50% of the Founder Shares, the earlier of six months after the completion of a Business Combination and the date on which the closing price of the common stock equals or exceeds $12.50 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 after a Business Combination and (2) with respect to the remaining 50% of the Founder Shares, six months after the completion of a Business Combination, or earlier, in either case, if, subsequent to a Business Combination, the Company completes a liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Promissory Note — Related Party On December 15, 2020, the Company issued an unsecured promissory note to the sponsor (the Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal amount of $200,000. The Promissory Note is non-interest bearing and payable on the earlier of (i) the consummation of the Proposed Public Offering or (ii) the date on which the Company determines not to proceed with the Proposed Public Offering. As of December 31, 2020, there was $200,000 outstanding under the Promissory Note. Related Party Loans In addition, in order to finance transaction costs in connection with a Business Combination, the Initial Stockholders, or certain of the Company’s officers and directors or their affiliates 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 be repaid upon consummation of a Business Combination, without interest. |
Commitments
Commitments | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
COMMITMENTS | ||
Commitments | NOTE 7. COMMITMENTS Registration Rights Pursuant to a registration rights agreement entered into on March 2, 2021, the holders of the Founder Shares and the holders of the Private Units (and underlying securities) are entitled to registration rights. The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of the majority of the Founder Shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Private Units (and underlying securities) can elect to exercise these registration rights at any time after the Company consummates a Business Combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation 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. Notwithstanding the foregoing, the holders of the Founder Shares and the holders of the Private Units may not exercise demand or piggyback rights after seven (7) years from the effective date of the Initial Public Offering and may not exercise demand rights on more than one occasion in respect of all registrable securities. Business Combination Marketing Agreement The Company entered into a business combination marketing agreement with Roth Capital Partners, LLC (“Roth”) and Craig-Hallum Capital Group LLC (“Craig-Hallum”), the underwriters in the Initial Public Offering, to act as advisors in connection with a Business Combination, including assisting in the transaction structuring and negotiation of a definitive purchase agreement with respect to the Business Combination, holding meetings with the stockholders to discuss the Business Combination and the target’s attributes, introducing the Company to potential investors to purchase its securities in connection with the Business Combination, assisting in obtaining stockholder approval for the Business Combination, and assisting with relevant financial analysis, presentations, press releases and filings related to the Business Combination. The Company will pay Roth and Craig-Hallum a marketing fee for such services upon the consummation of a Business Combination in an amount equal to, in the aggregate, 3.5% of the gross proceeds of the Initial Public Offering, or $4,025,000. Roth and Craig-Hallum will not be entitled to such fee unless the Company consummates a Business Combination. Business Combination Agreement On June 16, 2021, (i) the Company, (ii) Blocker Merger Sub, (iii) the Blocker, (iv) Company Merger Sub, (v) QualTek, and (vi) the Equityholder Representative, entered into the Business Combination Agreement. Pursuant to the terms of the Business Combination Agreement, (i) Blocker Merger Sub will be merged with and into the Blocker, with the Blocker surviving as a wholly owned subsidiary of the Company, (ii) immediately thereafter, the Blocker will be merged with and into the Company, with the Company as the surviving company, and (iii) immediately thereafter, Company Merger Sub will be merged with and into QualTek, with QualTek as the surviving company. The Business Combination Agreement contains customary representations and warranties, covenants, and closing conditions. Consideration Subject to the terms and conditions of the Business Combination Agreement, as a result of the Business Combination, the consideration payable or issuable to the owners of such equity interests in the Blocker (“Blocker Owners”) and the equityholders of QualTek other than the Blocker (the “Flow-Through Sellers”) is set forth below. Blocker Owner Consideration The consideration to be received by the Blocker Owners at the Closing will consist of (i) 11,923,940 shares of Class A Common Stock with 3,642,750 shares of Class A Common Stock to be received by BCP AIV Investor Holdings-3, L.P., 4,184,290 shares of Class A Common Stock to be received by BCP Strategic AIV Investor Holdings-2, L.P., and 4,096,901 shares of Class A Common Stock to be received by BCP QualTek Investor Holdings L.P. and (ii) 2,274,934 Blocker Owner Earnout Shares (as defined herein) with 626,123 Blocker Owner Earnout Shares to be received by BCP AIV Investor Holdings-3, L.P., 719,230 Blocker Owner Earnout Shares to be received by BCP Strategic AIV Investor Holdings-2, L.P., and 929,582 Blocker Owner Earnout Shares to be received by BCP QualTek Investor Holdings L.P. Flow-Through Seller Consideration The consideration to be received by each Flow-Through Seller at the Closing will consist of: ● 18,764,898 Common Units, with 4,825,893 Common Units to be received by BCP QualTek Management LLC, 11,780,782 Common Units to be received by BCP QualTek, LLC and 2,158,223 Common Units to be received by BCP QualTek II, LLC; ● 18,764,898 shares of Class B Common Stock, with 4,825,893 shares of Class B Common Stock to be received by BCP QualTek Management LLC, 11,780,782 shares of Class B Common Stock to be received by BCP QualTek, LLC and 2,158,223 shares of Class B Common Stock to be received by BCP QualTek II, LLC; ● 3,836,177 Earnout Common Units, with 1,157,803 Earnout Common Units to be received by BCP QualTek Management LLC, 2,678,374 Earnout Common Units to be received by BCP QualTek, LLC and 0 Earnout Common Units to be received by BCP QualTek II, LLC; and ● 3,836,177 Earnout Voting Shares, with 1,157,803 Earnout Voting Shares to be received by BCP QualTek Management LLC, 2,678,374 Earnout Voting Shares to be received by BCP QualTek, LLC and 0 Earnout Common Units to be received by BCP QualTek II, LLC. No fractional shares will be issued pursuant to the Business Combination Agreement. In lieu of any fractional shares that would otherwise be issuable to any Blocker Owner or Flow-Through Seller, the Company will pay to such Blocker Owner or Flow-Through Seller, as applicable, cash (rounded up to the nearest cent) in an amount equal to such fraction multiplied by $10.00. The Earnout Shares and Earnout Common Units In connection with the Closing, (i) 2,274,934 shares of Class A Common Stock issued to the Blocker Owners (the “Blocker Owner Earnout Shares”), (ii) 3,836,177 Common Units issued to the Flow-Through Sellers (the “Earnout Common Units”) and (iii) an equal number of shares of Class B Common Stock issued to the Flow-Through Sellers by the Company in connection with the Business Combination (the “Earnout Voting Shares,” and together with the Blocker Owner Earnout Shares, the “Earnout Shares”), will be subject to certain restriction on transfer and voting and potential forfeiture pending the achievement (if any) of the following earnout targets pursuant to the terms of the Business Combination Agreement: ● if, on or any time prior to the fifth anniversary of the date of the Closing, the closing sale price per share of Class A Common Stock equals or exceeds $15.00 per share for 20 trading days of any 30 consecutive trading day period following the Closing, 50% of the Earnout Shares and Earnout Common Units will be earned and no longer subject to the applicable restrictions on transfer and voting; and ● if, on or any time prior to the fifth anniversary of the date of the Closing, the closing sale price per share of Class A Common Stock equals or exceeds $18.00 per share for 20 trading days of any 30 consecutive trading day period following the Closing, 50% of the Earnout Shares and Earnout Common Units will be earned and no longer subject to the applicable restrictions on transfer and voting. Pre-PIPE Convertible Notes Offering In connection with the Business Combination, accredited investors (each a “Pre-PIPE Investor”) have purchased convertible notes of QualTek, as issuer (the “Notes Issuer”), in an aggregate principal amount of $44.4 million (the “Pre-PIPE Notes”) in a private placement, issuable pursuant to Note Purchase Agreements (the “Note Purchase Agreements”), among the Notes Issuer, ROCR Unless earlier converted or redeemed in accordance with the terms of the Pre-PIPE Notes, the Pre-PIPE Notes have a perpetual maturity. The Pre-PIPE Notes will not bear interest and are subject to certain customary information rights. Pursuant to the current terms of the Pre-PIPE Notes, upon consummation of the Merger, the Pre-PIPE Notes will automatically convert into Class A Common Stock of the Company at $8.00 per share, subject to certain adjustments. However, the Note Purchase Agreements provide that the parties will use commercially reasonable efforts to amend the Pre-PIPE Notes and any other agreements deemed necessary such that upon the consummation of the Business Combination, the Pre-PIPE Notes automatically convert into Common Units of the Company (along with a corresponding number of shares of Class B Common Stock of the Company) in lieu of converting into Class A Common Stock. The number of Common Units and Class B Common Stock will be equal to the quotient that results from dividing the aggregate principal amount of the Note by $8.00, subject to certain adjustments. PIPE Subscription Agreements In connection with the Merger, the Company has obtained commitments from certain accredited investors (each a “Subscriber”) to purchase shares of Class A Common Stock which will be issued in connection with the closing of the Merger (the “PIPE Shares”), for an aggregate cash amount of $66.1 million at a purchase price of $10.00 per share, in a private placement (the “PIPE Investment”). Certain offering-related expenses are payable by the Company, including customary fees payable to the placement agents, Roth Capital Partners, LLC and Craig-Hallum, aggregating $5,150,000. Such commitments are being made by way of the subscription agreements, by and between each Subscriber and the Company (collectively, the “Subscription Agreements”). The purpose of the sale of the PIPE Shares is to raise additional capital for use in connection with the Business Combination and to meet the minimum cash requirements provided in the Business Combination Agreement. The PIPE Shares are identical to the shares of Class A Common Stock that will be held by the Company’s public stockholders at the time of the closing of the Business Combination, except that the PIPE Shares will not be entitled to any redemption rights and will not be registered with the SEC at closing of the Business Combination. | Note 6 — Commitments Registration Rights The holders of the Founder Shares, as well as the holders of the Private Units (and underlying securities), will be entitled to registration rights pursuant to an agreement to be signed prior to or on the effective date of the Proposed Public Offering. The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of the majority of the insider shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Private Units (and underlying securities) can elect to exercise these registration rights at any time after the Company consummates a Business Combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation 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. Notwithstanding the foregoing, they may not exercise demand or piggyback rights after five (5) and seven (7) years, respectively, from the effective date of the Proposed Public Offering and may not exercise demand rights on more than one occasion in respect of all registrable securities. Underwriting Agreement The Company will grant the underwriters a 45-day option from the date of Proposed Public Offering to purchase up to 1,500,000 additional Units to cover over-allotments, if any, at the Proposed Public Offering price less the underwriting discounts and commissions. The underwriters will be entitled to a cash underwriting discount of 2.0% of the gross proceeds of the Proposed Public Offering, or $2,000,000 (or up to $2,300,000 if the underwriters’ over-allotment is exercised in full). Business Combination Marketing Agreement The Company will engage Roth Capital Partners, LLC (“Roth”) and Craig-Hallum Capital Group LLC (“Craig-Hallum”), the underwriters in the Proposed Public Offering, as advisors in connection with its Business Combination Business combination to assist in the transaction structuring and negotiation of a definitive purchase agreement with respect to the Business Combination, holding meetings with the stockholders to discuss the Business Combination and the target’s attributes, introducing the Company to potential investors to purchase its securities in connection with the Business Combination, assisting in obtaining stockholder approval for the Business Combination, and assisting with financial analysis, presentations, press releases and filings related to the Business Combination. The Company will pay Roth and Craig-Hallum a marketing fee for such services upon the consummation of a Business Combination in an amount equal to, in the aggregate, 3.5% of the gross proceeds of the Proposed Public Offering, including any proceeds from the full or partial exercise of the underwriters’ over-allotment option. As a result, Roth and Craig-Hallum will not be entitled to such fee unless the Company consummates a Business Combination. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
STOCKHOLDERS' EQUITY | ||
Stockholders' Equity | NOTE 8. STOCKHOLDERS’ EQUITY Common Stock issued outstanding | Note 7 — Stockholders’ Equity Common Stock Warrants Once the warrants become exercisable, the Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $0.01 per warrant; ● at any time after the warrants become exercisable; ● upon not less than 30 days ’ prior written notice of redemption to each warrant holder; ● if, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.00 per share, for any 20 trading days within a 30- day trading period commencing after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and ● if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants at the time of redemption and for the entire 30- day trading period referred to above and continuing each day thereafter until the date of redemption. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuances of shares of common stock at a price below their respective exercise prices. Additionally, in no event will the Company be required to net cash settle the 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 warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless. In addition, if (x) the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per share of 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 Initial Stockholders or their affiliates, without taking into account any Founder Shares held by them prior to such issuance), (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 a Business Combination on the date of the consummation of a 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 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 Market Value 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 Market Price. The Private Warrants will be identical to the Public Warrants underlying the Units being sold in the Proposed Public Offering, except that the Private Warrants and the shares of common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or saleable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. |
Subsequent Events
Subsequent Events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
SUBSEQUENT EVENTS | ||
Subsequent Events | NOTE 11. SUBSEQUENT EVENTS On November 3, 2021 the Company entered into a new promissory note with related parties of the Company in the aggregate principal amount of $500,000 in order to finance the Company’s working capital needs. The promissory note is non-interest bearing and is not convertible into any securities of the Company and shall be payable upon the consummation of a Business Combination. | Note 8 — Subsequent Events The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to January 8, 2021, the date that the financial statements were available to be issued. Based upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements. On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 Founder Shares outstanding. All share and per-share amounts have been retroactively restated to reflect the stock transactions. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies Basis of Presentation (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X 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 complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated 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 consolidated financial statements should be read in conjunction with the Company’s prospectus for its Initial Public Offering as filed with the SEC on March 2, 2021. The interim results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future periods. | |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its majority owned subsidiary where the Company has the ability to exercise control. All significant intercompany balances and transactions have been eliminated in consolidation. | |
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 statement 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 the condensed consolidated financial statements in conformity with GAAP requires the Company’s 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. One of the more significant accounting estimates included in these condensed financial statements is the determination of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly, the actual results could differ significantly from those estimates. | Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company’s 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 expenses during the reporting periods. 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 September 30, 2021 and 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 not have any cash equivalents as of December 31, 2020 and 2019. |
Marketable Securities Held in Trust Account | Marketable Securities Held in Trust Account At September 30, 2021, substantially all of the assets held in the Trust Account were held in money market funds which are invested primarily in U.S. Treasury securities. The Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these investments are included in interest earned on marketable securities held in Trust Account in the accompanying condensed consolidated statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information. | |
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 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 is 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. Accordingly, at September 30, 2021, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheets. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stocks to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable common stocks resulted in charges against additional paid-in capital. At September 30, 2021, common stock subject to possible redemption reflected in the condensed balance sheets are reconciled in the following table: Gross proceeds $ 115,000,000 Less: Common stock issuance costs (2,812,212) Plus: Accretion of carrying value to redemption value 2,812,212 Common stock subject to possible redemption $ 115,000,000 | |
Warrant Liabilities | Warrant Liability 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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“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 ordinary shares, 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 fair value of the Private Placement Warrants (as defined in Note 5) was estimated using a binomial lattice simulation approach (see Note 9). | |
Deferred Offering Costs | Deferred Offering Costs Deferred offering costs consist of legal, accounting and other costs incurred through the balance sheet date that are directly related to the Proposed Public Offering and that will be charged to stockholders’ equity upon the completion of the Proposed Public Offering. Should the Proposed Public Offering prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations. | |
Income Taxes | Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. 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 as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 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. The effective tax rate differs from the statutory tax rate of 21% for the three months and nine months ended September 30, 2021 and 2020, respectively, primarily due to the valuation allowance recorded on the Company’s net operating losses. | Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. 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 as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020 and 2019. 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. The provision for income taxes was deemed to be de minimis for the year ended December 31, 2020, and for the period from February 13, 2019 (inception) through December 31, 2019. |
Net Loss per Common Share | Net Income (Loss) per Common Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. Accretion associated with the redeemable shares of common stock is excluded from income (loss) per common share as the redemption value approximates fair value. The Company has not considered the effect of the warrants sold in the Initial Public Offering and private placement to purchase an aggregate of 2,977,000 shares in the calculation of diluted loss per share, since the inclusion of such warrants would be anti-dilutive. As of September 30, 2021 and 2020, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted net loss per common share is the same as basic net loss per common share for the periods presented. The following table reflects the calculation of basic and diluted net loss per common share (in dollars, except per share amounts): For the Period from 2/13/19 (Inception) Three Months Ended Nine Months Ended Through September 30, 2021 September 30, 2021 September 30, 2020 Redeemable Non-redeemable Redeemable Non-redeemable Non-redeemable common stock common stock common stock common stock common stock Basic and diluted net loss per common share Numerator: Allocation of net loss, as adjusted $ (629,913) $ (179,827) $ (1,052,069) $ (370,379) $ (800) Denominator: Basic and diluted weighted average shares outstanding 11,500,000 3,283,000 8,804,029 3,099,440 2,500,000 Basic and diluted net loss per common share $ (0.05) $ (0.05) $ (0.12) $ (0.12) $ (0.00) Three Months Ended Nine Months Ended September 30, 2020 September 30, 2020 Non-redeemable Non-redeemable common stock common stock Basic and diluted net loss per common share Numerator: Allocation of net loss, as adjusted $ (800) $ (885) Denominator: Basic and diluted weighted average shares outstanding 2,500,000 2,500,000 Basic and diluted net loss per common share $ (0.00) $ (0.00) | Net Loss Per Common Share Net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period, excluding shares of common stock subject to forfeiture by the Initial Stockholders. Weighted average shares were reduced for the effect of an aggregate of 375,000 shares of common stock that are subject to forfeiture if the over-allotment option is not exercised by the underwriters (see Notes 5 and 8). At December 31, 2020 and 2019, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into shares of common stock and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the periods presented. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts. | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations 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. At December 31, 2020 and 2019, 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 fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the Company’s condensed consolidated balance sheets, primarily due to their short-term nature, with the exception of the warrant liabilities (see Note 9). | Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature. |
Recent Accounting Standards | Recent Accounting Standards In August 2020, the FASB issued ASU No. 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): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. 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 condensed consolidated financial statements. | 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. |
Risks and Uncertainties | Risks and Uncertainties In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States and the World. As of the date the financial statements were issued, there was considerable uncertainty around the expected duration of this pandemic. The Company has concluded that while it is reasonably possible that COVID-19 could have a negative effect on identifying a target company for a Business Combination, 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. |
Description of Organization a_2
Description of Organization and Business Operations (Details) | Mar. 05, 2021USD ($)$ / sharesshares | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)$ / sharesshares | Mar. 31, 2021shares | Dec. 31, 2019USD ($) |
Subsidiary, Sale of Stock [Line Items] | ||||||
Purchase price, per unit | $ / shares | $ 10 | |||||
Sale of Private Placement Warrants (in shares) | shares | 378,000 | |||||
Cash | $ 93,594 | $ 195,758 | $ 25,000 | |||
Working capital deficit | $ 8,742 | |||||
Condition for future business combination number of businesses minimum | 1 | 1 | ||||
Payments for investment of cash in Trust Account | $ 115,000,000 | $ 0 | ||||
Condition for future business combination use of proceeds percentage | 80 | 80 | ||||
Business combination period | 24 months | |||||
Maximum net interest to pay dissolution expenses | $ 50,000 | |||||
Threshold business days for redemption of public shares | 5 days | |||||
Condition for future business combination threshold Percentage Ownership | 50 | 50 | ||||
Condition for future business combination threshold Net Tangible Assets | $ 5,000,001 | $ 5,000,001 | ||||
Obligation to redeem Public Shares if entity does not complete a Business Combination (as a percent) | 100.00% | 100.00% | ||||
Redemption period upon closure | 10 days | |||||
Initial Public Offering | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of units sold | shares | 11,500,000 | 10,000,000 | ||||
Purchase price, per unit | $ / shares | $ 10 | $ 10 | ||||
Proceeds from issuance initial public offering | $ 115,000,000 | |||||
Payments for investment of cash in Trust Account | $ 115,000,000 | |||||
Private Placement | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Sale of Private Placement Warrants (in shares) | shares | 378,000 | |||||
Price of warrant | $ / shares | $ 10 | |||||
Private Placement | Private Placement Warrants | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Sale of Private Placement Warrants (in shares) | shares | 408,000 | 408,000 | 408,000 | |||
Price of warrant | $ / shares | $ 10 | $ 10 | ||||
Over-allotment option | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of units sold | shares | 1,500,000 | 11,500,000 | ||||
Purchase price, per unit | $ / shares | $ 10 | $ 10 | ||||
Sale of Private Placement Warrants (in shares) | shares | 408,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies Basis of Presentation (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash equivalents | $ 0 | $ 0 | |
Unrecognized tax benefits | $ 0 | 0 | 0 |
Unrecognized tax benefits accrued for interest and penalties | 0 | 0 | $ 0 |
Federal depository insurance coverage | $ 250,000 | $ 250,000 | |
Over-allotment option | |||
Shares subject to forfeiture | 375,000 |
Public Offering (Details)
Public Offering (Details) - $ / shares | Mar. 05, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Subsidiary, Sale of Stock [Line Items] | |||
Purchase price, per unit | $ 10 | ||
Initial Public Offering | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of units sold | 11,500,000 | 10,000,000 | |
Purchase price, per unit | $ 10 | $ 10 | |
Number of shares in a unit | 1 | ||
Number of shares issuable per warrant | 1 | ||
Exercise price of warrants | $ 11.50 | ||
Initial Public Offering | Public Warrants | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of shares in a unit | 1 | ||
Number of warrants in a unit | 0.25 | 0.25 | |
Number of shares issuable per warrant | 1 | ||
Exercise price of warrants | $ 11.50 | ||
Over-allotment option | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of units sold | 1,500,000 | 11,500,000 | |
Purchase price, per unit | $ 10 | $ 10 |
Private Placement (Details)
Private Placement (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Mar. 31, 2021 | |
Subsidiary, Sale of Stock [Line Items] | ||||
Number of warrants to purchase shares issued | 378,000 | |||
Aggregate purchase price | $ 4,080,000 | $ 0 | ||
Over-allotment option | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of warrants to purchase shares issued | 408,000 | |||
Aggregate purchase price | $ 4,080,000 | |||
Private Placement | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of warrants to purchase shares issued | 378,000 | |||
Price of warrants | $ 10 | |||
Aggregate purchase price | $ 3,780,000 | |||
Number of shares per unit | 1 | 1 | ||
Number of warrants per unit | 0.25 | |||
Number of shares per warrant | 1 | |||
Exercise price of warrants | $ 11.50 | |||
Private Placement | Private Placement Warrants | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of warrants to purchase shares issued | 408,000 | 408,000 | 408,000 | |
Price of warrants | $ 10 | $ 10 | ||
Aggregate purchase price | $ 4,080,000 | |||
Number of warrants per unit | 0.25 | |||
Number of shares per warrant | 1 | |||
Exercise price of warrants | $ 11.50 |
Related Party Transactions - Fo
Related Party Transactions - Founder Shares (Details) | Feb. 24, 2021shares | Feb. 09, 2021$ / sharesshares | May 26, 2020shares | Feb. 28, 2021USD ($)shares | Feb. 28, 2019USD ($)shares | Mar. 31, 2021USD ($) | Sep. 30, 2021$ / shares | Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($)$ / sharesshares | |
Related Party Transaction [Line Items] | ||||||||||
Proceeds from issuance of common stock to initial stockholders | $ | $ 25,000 | $ 0 | ||||||||
Aggregate cash amount for new issuances | $ | $ 11,500,000 | $ 25,000 | [1] | |||||||
Dividend shares Exchange Ratio | 0.50 | |||||||||
Share dividend | 28,750 | |||||||||
Percentage of issued and outstanding shares after the Initial Public Offering collectively held by initial stockholders | 20.00% | |||||||||
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 | $ 12.50 | |||||||||
Threshold trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | 20 days | |||||||||
Threshold consecutive trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | 30 days | |||||||||
Threshold period after the business combination in which the 20 trading days within any 30 trading day period commences | 6 months | |||||||||
Class B Common Stock | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Number of shares issued | 100 | |||||||||
Proceeds from issuance of common stock to initial stockholders | $ | $ 25,000 | |||||||||
Founder Shares | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Number of shares issued | 35,233 | 100 | ||||||||
Proceeds from issuance of common stock to initial stockholders | $ | $ 25,000 | |||||||||
Share Price | $ / shares | $ 0.50 | |||||||||
Share dividend | 4,312,500 | 28,750 | ||||||||
Consideration paid | $ | $ 1,247 | |||||||||
Number of shares held by the initial stockholders | 2,875,000 | 2,875,000 | 89,093 | 2,875,000 | ||||||
Aggregate number of shares owned | 4,312,500 | 105,699 | ||||||||
Shares subject to forfeiture | 375,000 | 375,000 | ||||||||
Percentage of issued and outstanding shares after the Initial Public Offering collectively held by initial stockholders | 20.00% | 20.00% | ||||||||
Percentage of transfer of founder shares with certain exceptions | 50.00% | 50.00% | ||||||||
Percentage of transfer of remaining founder shares with certain exceptions | 50.00% | 50.00% | ||||||||
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 | $ 12.50 | |||||||||
[1] | Includes 375,000 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 shares of common stock outstanding (see Notes 5 and 8). |
Related Party Transactions - Pr
Related Party Transactions - Promissory Note and Related Party Loans (Details) - USD ($) | Mar. 09, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Nov. 03, 2021 | Dec. 15, 2020 |
Related Party Transaction [Line Items] | ||||||
Repayment of promissory note - related party | $ 200,000 | $ 0 | ||||
Promissory Note with Related Party | ||||||
Related Party Transaction [Line Items] | ||||||
Maximum borrowing capacity of related party promissory note | $ 200,000 | |||||
Repayment of promissory note - related party | $ 200,000 | |||||
Promissory Note with Related Party | Subsequent Event | ||||||
Related Party Transaction [Line Items] | ||||||
Maximum borrowing capacity of related party promissory note | $ 500,000 | |||||
Related Party Loans | ||||||
Related Party Transaction [Line Items] | ||||||
Repayment of promissory note - related party | $ 200,000 | |||||
Loan conversion agreement warrant | $ 1,500,000 | |||||
Price of warrants ( in dollars per share) | $ 10 |
Commitments (Details)
Commitments (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021USD ($)D$ / sharesshares | Dec. 31, 2020USD ($)itemshares | |
Business Acquisition [Line Items] | ||
Maximum number of demands for registration of securities | item | 2 | |
Marketing fee (as a percent) | 3.50% | 3.50% |
Marketing fee | $ | $ 4,025,000 | |
gross proceeds | $ | $ 2,000,000 | |
cash underwriting discount | 2 | |
Blocker Owner Consideration | ||
Business Acquisition [Line Items] | ||
Shares issued | 2,274,934 | |
Earnout Common Units | ||
Business Acquisition [Line Items] | ||
Shares issued | 3,836,177 | |
Over-allotment option | ||
Business Acquisition [Line Items] | ||
Granted Term | 45 days | |
Number of units issued | 1,500,000 | |
gross proceeds | $ | $ 2,300,000 | |
Common Stock A | Blocker Owner Consideration | ||
Business Acquisition [Line Items] | ||
Shares issued | 11,923,940 | |
Common Stock A | Blocker Owner Earnout Shares | ||
Business Acquisition [Line Items] | ||
Shares issued | 2,274,934 | |
Business Combination Agreement | Flow Through Seller Consideration | ||
Business Acquisition [Line Items] | ||
Shares price | $ / shares | $ 10 | |
Business Combination Agreement | Earnout Shares and Earnout Common Units | Fifth Anniversary | ||
Business Acquisition [Line Items] | ||
Shares price | $ / shares | $ 15 | |
Trading days | D | 20 | |
Consecutive trading day | D | 30 | |
Earnout shares, percentage | 50.00% | |
Business Combination Agreement | Earnout Shares and Earnout Common Units | Fifth Anniversary One | ||
Business Acquisition [Line Items] | ||
Shares price | $ / shares | $ 18 | |
Trading days | D | 20 | |
Consecutive trading day | D | 30 | |
Earnout shares, percentage | 50.00% |
Commitments - Pre-PIPE Converti
Commitments - Pre-PIPE Convertible Notes Offering (Details) - Pre-PIPE Convertible Notes Offering - Merger Agreement with Merger Sub and Qualtek [Member] $ / shares in Units, $ in Millions | Sep. 30, 2021USD ($)$ / shares |
Business Acquisition [Line Items] | |
Aggregate principal amount issuable | $ | $ 44.4 |
Share price for conversion of notes to common stock | $ / shares | $ 8 |
Commitments - PIPE Subscription
Commitments - PIPE Subscription Agreements (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 11 Months Ended | ||
Mar. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2019 | [1] | Dec. 31, 2020 | |
Business Acquisition [Line Items] | |||||
Aggregate cash amount for new issuances | $ 11,500,000 | $ 25,000 | |||
Purchase price | $ 10 | ||||
PIPE Subscription Agreements | Merger Agreement with Merger Sub and Qualtek [Member] | |||||
Business Acquisition [Line Items] | |||||
Aggregate cash amount for new issuances | $ 66,100,000 | ||||
Purchase price | $ 10 | ||||
Offering related expenses | $ 5,150,000 | ||||
[1] | Includes 375,000 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 shares of common stock outstanding (see Notes 5 and 8). |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2019 | |
Class of Stock [Line Items] | |||
Common shares, shares authorized (in shares) | 50,000,000 | 50,000,000 | 50,000,000 |
Common shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common shares, shares issued (in shares) | 2,875,000 | 3,283,000 | 2,875,000 |
Common shares, shares outstanding (in shares) | 2,875,000 | 3,283,000 | 2,875,000 |
Common stock subject to possible redemption (in shares) | 0 | 11,500,000 | |
Percentage Of Issued And Outstanding Shares After The Initial Public Offering Collectively Held By Initial Stockholders | 20.00% | ||
Over-allotment option | |||
Class of Stock [Line Items] | |||
Maximum Common Stock Shares Subject To Forfeiture | 375,000 |
Stockholders' Equity - Warrants
Stockholders' Equity - Warrants (Details) - Public Warrants | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021D$ / shares | Dec. 31, 2020D$ / shares | |
Class of Warrant or Right [Line Items] | ||
Public Warrants exercisable term after the completion of a business combination | 30 days | 30 days |
Number of days of which warrants will not be effective from the date of business combination | 120 days | 120 days |
Public Warrants expiration term | 5 years | 5 years |
Issue price per share | $ / shares | $ 9.20 | $ 9.20 |
Percentage of gross new proceeds to total equity proceeds used to measure dilution of warrant | 60 | 60 |
Trading period after business combination used to measure dilution of warrant | D | 20 | 20 |
Warrant exercise price adjustment multiple | 115 | 115 |
Warrant redemption price adjustment multiple | 180 | 180 |
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) | $ / shares | $ 0.01 | $ 0.01 |
Warrant redemption condition minimum share price | $ / shares | $ 18 | $ 18 |
Threshold trading days for redemption of public warrants | D | 20 | 20 |
Threshold consecutive trading days for redemption of public warrants | D | 30 | 30 |
Redemption period | 30 days | 30 days |
Subsequent Events (Details)
Subsequent Events (Details) | Feb. 24, 2021shares | Feb. 09, 2021shares | May 26, 2020shares | Feb. 28, 2021shares | Dec. 31, 2020shares |
Subsequent Event [Line Items] | |||||
Dividend shares Exchange Ratio | 0.50 | ||||
Founder Shares | |||||
Subsequent Event [Line Items] | |||||
Aggregate number of shares owned | 4,312,500 | 105,699 | |||
Number of shares held by the initial stockholders | 2,875,000 | 2,875,000 | 89,093 | 2,875,000 | |
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Dividend shares Exchange Ratio | 0.50 | ||||
Subsequent Event | Founder Shares | |||||
Subsequent Event [Line Items] | |||||
Aggregate number of shares owned | 4,312,500 | ||||
Number of shares held by the initial stockholders | 2,875,000 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 | |
Current assets | |||
Cash | $ 93,594 | $ 195,758 | |
Prepaid expenses | 286,946 | 1,500 | |
Total Current Assets | 380,540 | 197,258 | |
Deferred offering costs | 31,542 | ||
Marketable securities held in Trust Account | 115,007,452 | ||
TOTAL ASSETS | 115,387,992 | 228,800 | |
Current liabilities | |||
Accounts payable and accrued expenses | 393,287 | 1,000 | |
Accrued offering costs | 1,105 | 5,000 | |
Promissory note - related party | 200,000 | ||
Total Current Liabilities | 394,392 | 206,000 | |
Accrued liabilities - current | 1,000 | ||
Warrant liability | 217,260 | ||
Total Liabilities | 611,652 | 206,000 | |
Commitments | |||
Common stock subject to possible redemption 11,500,000 and no shares at redemption value at September 30, 2021 and December 31, 2020, respectively | 115,000,000 | ||
Stockholders' (Deficit) Equity | |||
Common stock, $0.0001 par value; 50,000,000 shares authorized; 3,283,000 and 2,875,000 shares issued and outstanding (excluding 11,500,000 and no shares subject to possible redemption) as of September 30, 2021 and December 31, 2020, respectively | 328 | 288 | [1] |
Additional paid-in capital | 1,200,660 | 24,712 | |
Accumulated deficit | (1,424,648) | (2,200) | |
Total Stockholders' (Deficit) Equity | (223,660) | 22,800 | |
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY | $ 115,387,992 | $ 228,800 | |
[1] | Includes up to 375,000 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 shares of common stock outstanding (see Notes 5 and 8). |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Common shares, par value, (per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common shares, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 |
Common shares, shares issued | 3,283,000 | 2,875,000 | 2,875,000 |
Common shares, shares outstanding | 3,283,000 | 2,875,000 | 2,875,000 |
Common stock subject to possible redemption (in shares) | 11,500,000 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
General and administrative expenses | $ 909,139 | $ 800 | $ 1,304,440 | $ 885 |
Loss from operations | (909,139) | (800) | (1,304,440) | (885) |
Other income (expense): | ||||
Change in fair value of warrant liability | 97,920 | 0 | (125,460) | 0 |
Interest earned on marketable securities held in Trust Account | 1,479 | 0 | 7,452 | 0 |
Other income (expense), net | 99,399 | 0 | (118,008) | 0 |
Net loss | $ (809,740) | $ (800) | $ (1,422,448) | $ (885) |
Class A Common Stock Subject to Redemption | ||||
Other income (expense): | ||||
Basic weighted average shares outstanding | 11,500,000 | 0 | 8,804,029 | 0 |
Diluted weighted average shares outstanding | 11,500,000 | 0 | 8,804,029 | 0 |
Basic income (loss) per share | $ (0.05) | $ 0 | $ (0.12) | $ 0 |
Diluted net income (loss) per share | $ (0.05) | $ 0 | $ (0.12) | $ 0 |
Class A Common Stock Not Subject to Redemption | ||||
Other income (expense): | ||||
Basic weighted average shares outstanding | 3,283,000 | 2,500,000 | 3,099,440 | 2,500,000 |
Diluted weighted average shares outstanding | 3,283,000 | 2,500,000 | 3,099,440 | 2,500,000 |
Basic income (loss) per share | $ (0.05) | $ 0 | $ (0.12) | $ 0 |
Diluted net income (loss) per share | $ (0.05) | $ 0 | $ (0.12) | $ 0 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | Non-redeemable common stock | Additional Paid-in Capital | Accumulated Deficit | Total | |
Balance at the beginning at Feb. 12, 2019 | $ 0 | $ 0 | $ 0 | $ 0 | |
Balance at the beginning (in shares) at Feb. 12, 2019 | 0 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Sale of 11,500,000 Units, net of underwriting discount and offering expenses | [1] | $ 288 | 24,712 | 0 | 25,000 |
Sale of 11,500,000 Units, net of underwriting discount and offering expenses (in shares) | [1] | 2,875,000 | |||
Net loss | $ 0 | 0 | (1,225) | (1,225) | |
Balance at the end at Dec. 31, 2019 | $ 288 | 24,712 | (1,225) | 23,775 | |
Balance at the end (in shares) at Dec. 31, 2019 | 2,875,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (85) | (85) | |||
Balance at the end at Mar. 31, 2020 | $ 288 | 24,712 | (1,310) | 23,690 | |
Balance at the end (in shares) at Mar. 31, 2020 | 2,875,000 | ||||
Balance at the beginning at Dec. 31, 2019 | $ 288 | 24,712 | (1,225) | 23,775 | |
Balance at the beginning (in shares) at Dec. 31, 2019 | 2,875,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | $ 0 | 0 | (975) | (975) | |
Balance at the end at Dec. 31, 2020 | $ 288 | 24,712 | (2,200) | 22,800 | |
Balance at the end (in shares) at Dec. 31, 2020 | 2,875,000 | ||||
Balance at the beginning at Mar. 31, 2020 | $ 288 | 24,712 | (1,310) | 23,690 | |
Balance at the beginning (in shares) at Mar. 31, 2020 | 2,875,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | $ 0 | 0 | 0 | 0 | |
Balance at the end at Jun. 30, 2020 | $ 288 | 24,712 | (1,310) | 23,690 | |
Balance at the end (in shares) at Jun. 30, 2020 | 2,875,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (800) | (800) | |||
Balance at the end at Sep. 30, 2020 | $ 288 | 24,712 | (2,110) | 22,890 | |
Balance at the end (in shares) at Sep. 30, 2020 | 2,875,000 | ||||
Balance at the beginning at Dec. 31, 2020 | $ 288 | 24,712 | (2,200) | 22,800 | |
Balance at the beginning (in shares) at Dec. 31, 2020 | 2,875,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Accretion for common stock to redemption amount | (2,812,212) | 0 | (2,812,212) | ||
Sale of 11,500,000 Units, net of underwriting discount and offering expenses | 11,500,000 | ||||
Sale of 408,000 Private Units | $ 40 | 3,988,160 | 0 | 3,988,200 | |
Sale of 408,000 Private Units (in shares) | 408,000 | ||||
Net loss | 0 | (28,740) | (28,740) | ||
Balance at the end at Mar. 31, 2021 | $ 328 | 1,200,660 | (30,940) | 1,170,048 | |
Balance at the end (in shares) at Mar. 31, 2021 | 3,283,000 | ||||
Balance at the beginning at Dec. 31, 2020 | $ 288 | 24,712 | (2,200) | 22,800 | |
Balance at the beginning (in shares) at Dec. 31, 2020 | 2,875,000 | ||||
Balance at the end at Sep. 30, 2021 | $ 328 | 1,200,660 | (1,424,648) | (223,660) | |
Balance at the end (in shares) at Sep. 30, 2021 | 3,283,000 | ||||
Balance at the beginning at Dec. 31, 2020 | $ 288 | 24,712 | (2,200) | 22,800 | |
Balance at the beginning (in shares) at Dec. 31, 2020 | 2,875,000 | ||||
Balance at the beginning at Mar. 31, 2021 | $ 328 | 1,200,660 | (30,940) | 1,170,048 | |
Balance at the beginning (in shares) at Mar. 31, 2021 | 3,283,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | 0 | (583,968) | (583,968) | ||
Balance at the end at Jun. 30, 2021 | $ 328 | 1,200,660 | (614,908) | 586,080 | |
Balance at the end (in shares) at Jun. 30, 2021 | 3,283,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | 0 | (809,740) | (809,740) | ||
Balance at the end at Sep. 30, 2021 | $ 328 | $ 1,200,660 | $ (1,424,648) | $ (223,660) | |
Balance at the end (in shares) at Sep. 30, 2021 | 3,283,000 | ||||
[1] | Includes 375,000 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 shares of common stock outstanding (see Notes 5 and 8). |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) - shares | Mar. 05, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Mar. 31, 2021 |
Sale of Private Placement Warrants (in shares) | 378,000 | |||
Over-allotment option | ||||
Number of units sold | 1,500,000 | 11,500,000 | ||
Sale of Private Placement Warrants (in shares) | 408,000 | |||
Private Placement | ||||
Sale of Private Placement Warrants (in shares) | 378,000 | |||
Private Placement | Private Placement Warrants | ||||
Sale of Private Placement Warrants (in shares) | 408,000 | 408,000 | 408,000 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (1,422,448) | $ (885) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Change in fair value of warrants | 125,460 | 0 |
Interest earned on marketable securities held in Trust Account | (7,452) | 0 |
Changes in operating assets and liabilities: | ||
Prepaid expenses | (285,446) | 0 |
Accounts payable and accrued expenses | 392,287 | (225) |
Net cash used in operating activities | (1,197,599) | (1,110) |
Cash Flows from Investing Activities: | ||
Investment of cash in Trust Account | (115,000,000) | 0 |
Net cash used in investing activities | (115,000,000) | 0 |
Cash Flows from Financing Activities: | ||
Proceeds from sale of Units, net of underwriting discounts paid | 112,700,000 | 0 |
Proceeds from sale of Private Placement Units | 4,080,000 | 0 |
Repayment of promissory note - related party | (200,000) | 0 |
Payment of offering costs | (484,565) | (723) |
Net cash provided by (used in) financing activities | 116,095,435 | (723) |
Net Change in Cash | (102,164) | (1,833) |
Cash - Beginning of period | 195,758 | 25,000 |
Cash - End of period | 93,594 | 23,167 |
Non-Cash investing and financing activities: | ||
Offering costs included in accrued offering costs | 1,105 | 0 |
Initial classification of common stock subject to possible redemption | $ 115,000,000 | $ 0 |
DESCRIPTION OF ORGANIZATION A_3
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | ||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Roth CH Acquisition III Co. (the “Company”) was incorporated in Delaware on February 13, 2019. The Company is a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities (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 September 30, 2021, the Company had not commenced any operations. All activity from February 13, 2019 (inception) through September 30, 2021 relates to the Company’s formation and the initial public offering (“Initial Public Offering”), which is described below, and subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company generates non-operating income in the form of interest income on marketable securities held in the Trust Account. The registration statement for the Company’s Initial Public Offering was declared effective on March 2, 2021. On March 5, 2021, the Company consummated the Initial Public Offering of 11,500,000 units (the “Units” and, with respect to the shares of common stock included in the Units sold, the “Public Shares”), which includes the full exercise by the underwriters of their over-allotment option in the amount of 1,500,000 Units, at $10.00 per Unit, generating gross proceeds of $115,000,000, which is described in Note 4. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 408,000 units (the "Private Units”) at a price of $10.00 per Private Unit in a private placement to certain of the Company’s stockholders, generating gross proceeds of $4,080,000, which is described in Note 5. Transaction costs amounted to $2,812,212 consisting of $2,300,000 of underwriting fees, and $512,212 of other offering costs. Following the closing of the Initial Public Offering on March 5, 2021, an amount of $115,000,000 ($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 Units was placed in a trust account (the “Trust Account”), located in the United States and will be held in cash items or 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 selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account, as described below. 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 Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete a Business Combination having an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding taxes payable on income earned on the Trust Account) at the time of the agreement to enter into an initial 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. 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 will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially $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 Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 either immediately 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 legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “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 containing substantially the same information as would be included in a proxy statement prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the holders of the Company’s shares prior to the Initial Public Offering (the “Initial Stockholders”) have agreed to vote their Founder Shares (as defined in Note 5), Private Shares (as defined in Note 4) and any Public Shares purchased during or after the Initial Public Offering (a) in favor of approving a Business Combination and (b) not to redeem any shares in connection with a stockholder vote to approve a Business Combination or sell any shares to the Company in a tender offer in connection with a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of how or whether they vote on the proposed transaction or do not vote at all. The Initial Stockholders have agreed (a) to waive their redemption rights with respect to their Founder Shares, Private Shares and Public Shares held by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Certificate of Incorporation that would affect a public stockholders’ ability to convert or sell their shares to the Company in connection with a Business Combination or affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, 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 March 5, 2023 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 The Initial Stockholders have agreed to waive their liquidation rights with respect to the Founder Shares and Private Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Initial Stockholders acquire Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00). In order to protect the amounts held in the Trust Account, the Initial Stockholders have agreed to be liable to the Company if and to the extent any claims by a vendor 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 $10.00 per Public Share, except as to any claims by a third party who executed a valid and enforceable agreement with the Company waiving any right, title, interest or claim of any kind they may have in or to any monies held in the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of 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 Initial Stockholders will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that Initial Stockholders 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. On June 16, 2021, (i) the Company, (ii) Roth CH III Blocker Merger Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (“Blocker Merger Sub”), (iii) BCP QualTek Investors, LLC, a Delaware limited liability company (the “Blocker”), (iv) Roth CH III Merger Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (“Company Merger Sub”, and together with the Company and the Blocker Merger Sub, the “Buyer Parties”), (v) BCP QualTek HoldCo, LLC, a Delaware limited liability company ( “QualTek”), and (vi) BCP QualTek, LLC, a Delaware limited liability company, solely in its capacity as representative of the Blocker’s equityholders and QualTek’s equityholders (the “Equityholder Representative”), entered into a Business Combination Agreement (the “Business Combination Agreement”). Pursuant to the terms of the Business Combination Agreement, (i) Blocker Merger Sub will be merged with and into the Blocker, with the Blocker surviving as a wholly owned subsidiary of the Company, (ii) immediately thereafter, the Blocker will be merged with and into the Company, with the Company as the surviving company, and (iii) immediately thereafter, Company Merger Sub will be merged with and into QualTek, with QualTek as the surviving company (such mergers and the other transactions contemplated by the Business Combination Agreement, the “Merger”). The Business Combination Agreement contains customary representations and warranties, covenants, and closing conditions. Liquidity and Going Concern As of September 30, 2021, the Company had $93,594 in its operating bank accounts and $115,007,452 in securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem its common stock in connection therewith. As of September 30, 2021, approximately $7,452 of the amount on deposit in the Trust Account represented interest income, which is available to pay the Company’s tax obligations. Until the consummation of a Business Combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating and consummating the Business Combination. The Company will need to raise additional capital through loans or additional investments from its Sponsor, stockholders, officers, directors, or third parties. The Company’s officers, directors and Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern. Risks and Uncertainties Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position and/or search for a target company, the specific impact is not readily determinable as of the date of the 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 Roth CH Acquisition III Co. (the “Company”) was incorporated in Delaware on February 13, 2019. The Company is a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities (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 February 13, 2019 (inception) through December 31, 2020 relates to the Company’s formation and the proposed initial public offering (“Proposed Public Offering”), which is described below. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Proposed Public Offering. The Company has selected December 31 as its fiscal year end. The Company’s ability to commence operations is contingent upon obtaining adequate financial resources through a Proposed Public Offering of 10,000,000 units (the “Units” and, with respect to the shares of common stock included in the Units being offered, the “Public Shares”) at $10.00 per Unit (or 11,500,000 units if the underwriters’ over-allotment option is exercised in full), which is discussed in Note 3, and the sale of 378,000 units (or 408,000 units if the underwriters’ over-allotment option is exercised in full) (the “Private Units”) at a price of $10.00 per Private Unit in a private placement to certain of the Company’s stockholders prior to the offering that will close simultaneously with the Proposed Public Offering. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Proposed Public Offering and the sale of the Private Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete a Business Combination having an aggregate fair market value of at least 80% of the assets held in the Trust Account (as defined below) (excluding taxes payable on income earned on the Trust Account) at the time of the agreement to enter into an initial 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, as amended (the “Investment Company Act”). Upon the closing of the Proposed Public Offering, management has agreed that an amount equal to at least $10.00 per Unit sold in the Proposed Public Offering, including the proceeds from the sale of the Private Units, will be held in a trust account (“Trust Account”), located in the United States and will be held in cash items or invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account, as described below. 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 will be 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 will be recorded at redemption value and classified as temporary equity upon the completion of the Proposed Public Offering in accordance with the Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 either immediately 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 legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “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 containing substantially the same information as would be included in a proxy statement prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the holders of the Company’s shares prior to the Proposed Public Offering (the “Initial Stockholders”) have agreed to vote their Founder Shares (as defined in Note 5), Private Shares (as defined in Note 4) and any Public Shares purchased during or after the Proposed Public Offering (a) in favor of approving a Business Combination and (b) not to redeem any shares in connection with a stockholder vote to approve a Business Combination or sell any shares to the Company in a tender offer in connection with a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of how or whether they vote on the proposed transaction or don’t vote at all. The Initial Stockholders have agreed (a) to waive their redemption rights with respect to their Founder Shares, Private Shares and Public Shares held by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Certificate of Incorporation that would affect a public stockholders’ ability to convert or sell their shares to the Company in connection with a Business Combination or affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, 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 Proposed 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 five The Initial Stockholders have agreed to waive their liquidation rights with respect to the Founder Shares and Private Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Initial Stockholders acquire Public Shares in or after the Proposed Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Proposed Public Offering price per Unit ($10.00). In order to protect the amounts held in the Trust Account, the Initial Stockholders have agreed to be liable to the Company if and to the extent any claims by a vendor 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 $10.00 per Public Share, except as to any claims by a third party who executed a valid and enforceable agreement with the Company waiving any right, title, interest or claim of any kind they may have in or to any monies held in the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of Proposed 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 Initial Stockholders will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that Initial Stockholders 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. Going Concern Consideration At December 31, 2020, the Company had cash of $195,758 and working capital deficit of $8,742. The Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management plans to address this uncertainty through a Proposed Public Offering as discussed in Note 3. There is no assurance that the Company’s plans to raise capital or to consummate a Business Combination will be successful within the Combination Period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
REVISION OF PREVIOUSLY ISSUED F
REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS | 9 Months Ended |
Sep. 30, 2021 | |
REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS | |
REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS | NOTE 2. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS In connection with the preparation of the Company’s financial statements as of September 30, 2021, management identified errors made in its historical financial statements where, at the closing of the Company’s Initial Public Offering, the Company improperly valued its common stock subject to possible redemption. The Company previously determined the common stock subject to possible redemption to be equal to the redemption value of $10.00 per share of common stock, while also taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001. Management determined that the common stock issued during the Initial Public Offering can be redeemed or become redeemable subject to the occurrence of future events considered outside the Company’s control. Therefore, management concluded that the redemption value should include all shares of common stock subject to possible redemption, resulting in the common stock subject to possible redemption being equal to their redemption value. As a result, management has noted a classification error related to temporary equity and permanent equity. This resulted in a restatement of the initial carrying value of the common stock subject to possible redemption with the offset recorded to additional paid-in capital and common stock. The impact of the restatement on the Company’s financial statements is reflected in the following tables. As Previously Balance Sheet as of March 05, 2021 (unaudited) Reported Adjustment As Restated Common stock subject to possible redemption $ 111,197,990 $ 3,802,010 $ 115,000,000 Common stock $ 366 $ (38) $ 328 Additional paid-in capital $ 5,002,631 $ (3,801,972) $ 1,200,659 Total Stockholders’ Equity $ 5,000,008 $ (3,802,010) $ 1,197,998 Number of shares subject to redemption 11,119,799 380,201 11,500,000 Number of shares, non-redeemable common stock 3,663,201 (380,201) 3,283,000 Balance Sheet as of March 31, 2021 (unaudited) Common stock subject to possible redemption $ 111,170,039 $ 3,829,961 $ 115,000,000 Common stock $ 366 $ (38) $ 328 Additional paid-in capital $ 5,030,583 $ (3,829,923) $ 1,200,660 Total Stockholders’ Equity $ 5,000,009 $ (3,829,961) $ 1,170,048 Number of shares subject to redemption 11,117,004 382,996 11,500,000 Number of shares, non-redeemable common stock 3,665,996 (382,996) 3,283,000 Balance Sheet as of June 30, 2021 (unaudited) Common stock subject to possible redemption $ 110,586,069 $ 4,413,931 $ 115,000,000 Common stock $ 372 $ (44) $ 328 Additional paid-in capital $ 5,614,547 $ (4,413,887) $ 1,200,660 Total Stockholders’ Equity $ 5,000,011 $ (4,413,931) $ 586,080 Number of shares subject to redemption 11,058,607 441,393 11,500,000 Number of shares, non-redeemable common stock 3,724,393 (441,393) 3,283,000 Statement of Operations for the Three Months Ended March 31, 2021 (unaudited) Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption 3,212,386 109,836 3,322,222 Basic and diluted net loss per share, Common stock subject to possible redemption $ (0.00) $ — $ (0.00) Basic and diluted weighted average shares outstanding, Non-redeemable common stock 2,836,036 (109,836) $ 2,726,200 Basic and diluted net loss per share, Non-redeemable common stock $ (0.01) $ 0.01 $ (0.00) Statement of Operations for the Three Months Ended June 30, 2021 (unaudited) Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption 11,117,004 382,996 11,500,000 Basic and diluted net loss per share, Common stock subject to possible redemption $ 0.00 $ (0.04) $ (0.04) Basic and diluted weighted average shares outstanding, Non-redeemable common stock 3,665,996 (382,996) 3,283,000 Basic and diluted net loss per share, Non-redeemable common stock $ (0.16) $ 0.12 $ (0.04) Statement of Operations for the Six Months Ended June 30, 2021 (unaudited) Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption 11,117,625 (3,683,923) 7,433,702 Basic and diluted net loss per share, Common stock subject to possible redemption $ 0.00 $ (0.06) $ (0.06) Basic and diluted weighted average shares outstanding, Non-redeemable common stock 3,253,309 (247,171) 3,006,138 Basic and diluted net loss per share, Non-redeemable common stock $ (0.19) $ 0.13 $ (0.06) Statement of Cash Flows for the Three Months Ended March 31, 2021 (unaudited) Initial classification of common stock subject to possible redemption $ 111,197,990 $ 3,802,010 $ 115,000,000 Change in value of common stock subject to possible redemption $ (27,591) $ 27,591 $ — Statement of Cash Flows for the Six Months Ended June 30, 2021 (unaudited) Initial classification of common stock subject to possible redemption $ 111,197,990 $ 3,802,010 $ 115,000,000 Change in value of common stock subject to possible redemption $ (611,921) $ 611,921 $ — Statement of Changes in Stockholders’ (Deficit) Equity for the Three Months Ended March 31, 2021 (unaudited) Sale of 11,500,000 Units, net of underwriting discounts and offering expenses $ 112,187,788 $ (112,187,788) $ — Common stock subject to redemption $ (111,170,139) $ 111,170,039 $ — Accretion for common stock subject to redemption $ — $ (2,812,212) $ (2,812,212) Total shareholders’ equity $ 5,000,009 $ (3,829,961) $ 1,170,048 Shares of common stock 3,665,996 382,996 3,283,000 Common stock $ 366 $ (38) $ 328 Statement of Changes in Stockholders’ (Deficit) Equity for the Three Months Ended June 30, 2021 (unaudited) Change in value of common stock subject to redemption $ 583,970 $ (583,970) $ — Total shareholders’ equity $ 5,000,011 $ (4,413,931) $ 586,080 Shares of common stock 3,724,393 441,393 3,283,000 Common stock $ 372 $ (44) $ 328 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X 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 complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated 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 consolidated financial statements should be read in conjunction with the Company’s prospectus for its Initial Public Offering as filed with the SEC on March 2, 2021. The interim results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future periods. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its majority owned subsidiary where the Company has the ability to exercise control. All significant intercompany balances and transactions have been eliminated in consolidation. 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 statement 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 the condensed consolidated financial statements in conformity with GAAP requires the Company’s 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. One of the more significant accounting estimates included in these condensed financial statements is the determination of the warrant liability. Such estimates may be subject to change as more current information becomes available and 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 September 30, 2021 and December 31, 2020. Marketable Securities Held in Trust Account At September 30, 2021, substantially all of the assets held in the Trust Account were held in money market funds which are invested primarily in U.S. Treasury securities. The Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these investments are included in interest earned on marketable securities held in Trust Account in the accompanying condensed consolidated statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information. Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the Company’s condensed consolidated balance sheets, primarily due to their short-term nature, with the exception of the warrant liabilities (see Note 9). 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 is 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. Accordingly, at September 30, 2021, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheets. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stocks to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable common stocks resulted in charges against additional paid-in capital. At September 30, 2021, common stock subject to possible redemption reflected in the condensed balance sheets are reconciled in the following table: Gross proceeds $ 115,000,000 Less: Common stock issuance costs (2,812,212) Plus: Accretion of carrying value to redemption value 2,812,212 Common stock subject to possible redemption $ 115,000,000 Warrant Liability 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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“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 ordinary shares, 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 fair value of the Private Placement Warrants (as defined in Note 5) was estimated using a binomial lattice simulation approach (see Note 9). Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. 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 as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 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. The effective tax rate differs from the statutory tax rate of 21% for the three months and nine months ended September 30, 2021 and 2020, respectively, primarily due to the valuation allowance recorded on the Company’s net operating losses. Net Income (Loss) per Common Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. Accretion associated with the redeemable shares of common stock is excluded from income (loss) per common share as the redemption value approximates fair value. The Company has not considered the effect of the warrants sold in the Initial Public Offering and private placement to purchase an aggregate of 2,977,000 shares in the calculation of diluted loss per share, since the inclusion of such warrants would be anti-dilutive. As of September 30, 2021 and 2020, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted net loss per common share is the same as basic net loss per common share for the periods presented. The following table reflects the calculation of basic and diluted net loss per common share (in dollars, except per share amounts): For the Period from 2/13/19 (Inception) Three Months Ended Nine Months Ended Through September 30, 2021 September 30, 2021 September 30, 2020 Redeemable Non-redeemable Redeemable Non-redeemable Non-redeemable common stock common stock common stock common stock common stock Basic and diluted net loss per common share Numerator: Allocation of net loss, as adjusted $ (629,913) $ (179,827) $ (1,052,069) $ (370,379) $ (800) Denominator: Basic and diluted weighted average shares outstanding 11,500,000 3,283,000 8,804,029 3,099,440 2,500,000 Basic and diluted net loss per common share $ (0.05) $ (0.05) $ (0.12) $ (0.12) $ (0.00) Three Months Ended Nine Months Ended September 30, 2020 September 30, 2020 Non-redeemable Non-redeemable common stock common stock Basic and diluted net loss per common share Numerator: Allocation of net loss, as adjusted $ (800) $ (885) Denominator: Basic and diluted weighted average shares outstanding 2,500,000 2,500,000 Basic and diluted net loss per common share $ (0.00) $ (0.00) Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts. Recent Accounting Standards In August 2020, the FASB issued ASU No. 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): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. 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 condensed consolidated financial statements. | Note 2 — Summary of Significant Accounting Policies Basis of Presentation The accompanying financial statements 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 the Company’s 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 expenses during the reporting periods. 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 and 2019. Deferred Offering Costs Deferred offering costs consist of legal, accounting and other costs incurred through the balance sheet date that are directly related to the Proposed Public Offering and that will be charged to stockholders’ equity upon the completion of the Proposed Public Offering. Should the Proposed Public Offering prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations. Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. 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 as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020 and 2019. 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. The provision for income taxes was deemed to be de minimis for the year ended December 31, 2020, and for the period from February 13, 2019 (inception) through December 31, 2019. Net Loss Per Common Share Net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period, excluding shares of common stock subject to forfeiture by the Initial Stockholders. Weighted average shares were reduced for the effect of an aggregate of 375,000 shares of common stock that are subject to forfeiture if the over-allotment option is not exercised by the underwriters (see Notes 5 and 8). At December 31, 2020 and 2019, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into shares of common stock and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the periods presented. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations 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. At December 31, 2020 and 2019, 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 fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature. 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. Risks and Uncertainties In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States and the World. As of the date the financial statements were issued, there was considerable uncertainty around the expected duration of this pandemic. The Company has concluded that while it is reasonably possible that COVID-19 could have a negative effect on identifying a target company for a Business Combination, 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. |
PUBLIC OFFERING_2
PUBLIC OFFERING | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
PUBLIC OFFERING | ||
PUBLIC OFFERING | NOTE 4. PUBLIC OFFERING Pursuant to the Initial Public Offering, the Company sold 11,500,000 Units, which includes a full exercise by the underwriters on March 5, 2021 of their over-allotment option in the amount of 1,500,000 Units, at a price of $10.00 per Unit. Each Unit consists of one share of common stock and one -quarter of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of common stock at an exercise price of $11.50 per share, subject to adjustment (see Note 9). | Note 3 — Public Offering Pursuant to the Proposed Public Offering, the Company intends to offer for sale 10,000,000 Units (or 11,500,000 Units if the over-allotment option is exercised in full) at a price of $10.00 per Unit. Each Unit will consist of one share of common stock and one |
PRIVATE PLACEMENT_2
PRIVATE PLACEMENT | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
PRIVATE PLACEMENT. | ||
PRIVATE PLACEMENT | NOTE 5. PRIVATE PLACEMENT Simultaneously with the closing of the Initial Public Offering, the Initial Stockholders purchased an aggregate of 408,000 Private Units at a price of $10.00 per Private Unit, for an aggregate purchase price of $4,080,000, in a private placement. Each Private Unit consists of one share of common stock (“Private Share”) and one-quarter | Note 4 — Private Placement The Initial Stockholders will enter into an agreement to purchase an aggregate of 378,000 Private Units (or 408,000 Private Units if the over-allotment option is exercised in full) at a price of $10.00 per Private Unit, for an aggregate purchase price of $3,780,000, or $4,080,000 if the over-allotment option is exercised in full, in a private placement that will occur simultaneously with the closing of the Proposed Public Offering. Each Private Unit will consist of one share of common stock (“Private Share”) and one Combination Period, the proceeds from the sale of the Private Units will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law). |
RELATED PARTY TRANSACTIONS_2
RELATED PARTY TRANSACTIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
RELATED PARTY TRANSACTIONS | ||
RELATED PARTY TRANSACTIONS | NOTE 6. RELATED PARTY TRANSACTIONS Founder Shares In February 2019, the Initial Stockholders purchased an aggregate of 100 shares of the Company’s common stock for an aggregate price of $25,000. On May 26, 2020, the Company effected a stock dividend of 28,750 shares of common stock for each share of common stock outstanding, resulting in an aggregate of 2,875,000 shares of common stock being held by the Initial Stockholders (the “Founder Shares”). In February 2021, the Company sold 35,233 Founder Shares to three of the Company’s director nominees (for a total of 105,699 Founder Shares) and 89,093 Founder Shares to affiliates of its sponsor group as part of a larger purchase and resale of securities. The total consideration paid for these shares was $1,247. On February 9, 2021, the Company effected a dividend of 0.50 share for each share outstanding resulting in there being an aggregate of 4,312,500 shares outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 Founder Shares outstanding. All share and per-share amounts have been retroactively restated to reflect the stock dividend. The Founder Shares included an aggregate of up to 375,000 shares subject to forfeiture by the Initial Stockholders to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the Initial Stockholders would collectively own 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Initial Stockholders did not purchase any Public Shares in the Initial Public Offering and excluding the Private Shares). As a result of the underwriters’ election to fully exercise their over-allotment option, no Founder Shares are subject to forfeiture. The sale of the Founders Shares to the Company's director nominees and affiliates of its sponsor group, as described above, is within the scope of FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The fair value of the 194,792 shares sold to the Company’s director nominees and affiliates of its sponsor group was $1,229,138, or $6.31 per share. The Founders Shares were effectively sold subject to a performance condition (i.e., the occurrence of a Business Combination). Compensation expense related to the Founders Shares is recognized only when the performance condition is probable of occurrence. Stock-based compensation will be recognized at the date a Business Combination is considered probable in an amount equal to the number of Founders Shares times the grant date fair value per share (unless subsequently modified) less the amount initially received for the purchase of the Founders Shares. As of September 30, 2021, the Company determined that a Business Combination is not considered probable, and, therefore, no stock-based compensation expense has been recognized. The Initial Stockholders have agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until (1) with respect to 50% of the Founder Shares, the earlier of six months after the completion of a Business Combination and the date on which the closing price of the common stock equals or exceeds $12.50 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 after a Business Combination and (2) with respect to the remaining 50% of the Founder Shares, six months after the completion of a Business Combination, or earlier, in either case, if, subsequent to a Business Combination, the Company completes a liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Promissory Note — Related Party On December 15, 2020, the Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company could borrow up to an aggregate principal amount of $200,000. The Promissory Note was non-interest bearing and payable on the earlier of (i) the consummation of the Initial Public Offering or (ii) the date on which the Company determined not to proceed with the Initial Public Offering. The outstanding balance under the Promissory Note of $200,000 was repaid on March 9, 2021. Borrowings under the Promissory Note are no longer available. Related Party Loans In order to finance transaction costs in connection with a Business Combination, the Initial Stockholders, or certain of the Company’s officers and directors or their affiliates 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 be repaid upon consummation of a Business Combination, without interest. Up to $1,500,000 of such loans may be convertible into units at a price of $10.00 per unit, at the option of the lender. The units would be identical to the Private Units. As of September 30, 2021 and December 31, 2020, there were no amounts outstanding under the Working Capital Loans. On November 3, 2021 the Company entered into a new promissory note with related parties of the Company in the aggregate principal amount of $500,000 in order to finance the Company’s working capital needs (see Note 11). | Note 5 — Related Party Transactions Founder Shares In February 2019, the Initial Stockholders purchased an aggregate of 100 shares of the Company’s common stock for an aggregate price of $25,000. On May 26, 2020, the Company effected a stock dividend of 28,750 shares of common stock for each share of common stock outstanding, resulting in an aggregate of 2,875,000 shares of common stock being held by the Initial Stockholders (the “Founder Shares”). On February 9, 2021, the Company effected a dividend of 0.50 share for each share outstanding resulting in there being an aggregate of 4,312,500 shares outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 Founder Shares outstanding (see Note 8). All share and per-share amounts have been retroactively restated to reflect the stock transactions. The Founder Shares include an aggregate of up to 375,000 shares subject to forfeiture by the Initial Stockholders to the extent that the underwriters’ over-allotment is not exercised in full or in part, so that the Initial Stockholders will collectively own 20% of the Company’s issued and outstanding shares after the Proposed Public Offering (assuming the Initial Stockholders do not purchase any Public Shares in the Proposed Public Offering and excluding the Private Shares). The Initial Stockholders have agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until (1) with respect to 50% of the Founder Shares, the earlier of six months after the completion of a Business Combination and the date on which the closing price of the common stock equals or exceeds $12.50 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 after a Business Combination and (2) with respect to the remaining 50% of the Founder Shares, six months after the completion of a Business Combination, or earlier, in either case, if, subsequent to a Business Combination, the Company completes a liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Promissory Note — Related Party On December 15, 2020, the Company issued an unsecured promissory note to the sponsor (the Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal amount of $200,000. The Promissory Note is non-interest bearing and payable on the earlier of (i) the consummation of the Proposed Public Offering or (ii) the date on which the Company determines not to proceed with the Proposed Public Offering. As of December 31, 2020, there was $200,000 outstanding under the Promissory Note. Related Party Loans In addition, in order to finance transaction costs in connection with a Business Combination, the Initial Stockholders, or certain of the Company’s officers and directors or their affiliates 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 be repaid upon consummation of a Business Combination, without interest. |
COMMITMENTS_2
COMMITMENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
COMMITMENTS | ||
COMMITMENTS | NOTE 7. COMMITMENTS Registration Rights Pursuant to a registration rights agreement entered into on March 2, 2021, the holders of the Founder Shares and the holders of the Private Units (and underlying securities) are entitled to registration rights. The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of the majority of the Founder Shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Private Units (and underlying securities) can elect to exercise these registration rights at any time after the Company consummates a Business Combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation 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. Notwithstanding the foregoing, the holders of the Founder Shares and the holders of the Private Units may not exercise demand or piggyback rights after seven (7) years from the effective date of the Initial Public Offering and may not exercise demand rights on more than one occasion in respect of all registrable securities. Business Combination Marketing Agreement The Company entered into a business combination marketing agreement with Roth Capital Partners, LLC (“Roth”) and Craig-Hallum Capital Group LLC (“Craig-Hallum”), the underwriters in the Initial Public Offering, to act as advisors in connection with a Business Combination, including assisting in the transaction structuring and negotiation of a definitive purchase agreement with respect to the Business Combination, holding meetings with the stockholders to discuss the Business Combination and the target’s attributes, introducing the Company to potential investors to purchase its securities in connection with the Business Combination, assisting in obtaining stockholder approval for the Business Combination, and assisting with relevant financial analysis, presentations, press releases and filings related to the Business Combination. The Company will pay Roth and Craig-Hallum a marketing fee for such services upon the consummation of a Business Combination in an amount equal to, in the aggregate, 3.5% of the gross proceeds of the Initial Public Offering, or $4,025,000. Roth and Craig-Hallum will not be entitled to such fee unless the Company consummates a Business Combination. Business Combination Agreement On June 16, 2021, (i) the Company, (ii) Blocker Merger Sub, (iii) the Blocker, (iv) Company Merger Sub, (v) QualTek, and (vi) the Equityholder Representative, entered into the Business Combination Agreement. Pursuant to the terms of the Business Combination Agreement, (i) Blocker Merger Sub will be merged with and into the Blocker, with the Blocker surviving as a wholly owned subsidiary of the Company, (ii) immediately thereafter, the Blocker will be merged with and into the Company, with the Company as the surviving company, and (iii) immediately thereafter, Company Merger Sub will be merged with and into QualTek, with QualTek as the surviving company. The Business Combination Agreement contains customary representations and warranties, covenants, and closing conditions. Consideration Subject to the terms and conditions of the Business Combination Agreement, as a result of the Business Combination, the consideration payable or issuable to the owners of such equity interests in the Blocker (“Blocker Owners”) and the equityholders of QualTek other than the Blocker (the “Flow-Through Sellers”) is set forth below. Blocker Owner Consideration The consideration to be received by the Blocker Owners at the Closing will consist of (i) 11,923,940 shares of Class A Common Stock with 3,642,750 shares of Class A Common Stock to be received by BCP AIV Investor Holdings-3, L.P., 4,184,290 shares of Class A Common Stock to be received by BCP Strategic AIV Investor Holdings-2, L.P., and 4,096,901 shares of Class A Common Stock to be received by BCP QualTek Investor Holdings L.P. and (ii) 2,274,934 Blocker Owner Earnout Shares (as defined herein) with 626,123 Blocker Owner Earnout Shares to be received by BCP AIV Investor Holdings-3, L.P., 719,230 Blocker Owner Earnout Shares to be received by BCP Strategic AIV Investor Holdings-2, L.P., and 929,582 Blocker Owner Earnout Shares to be received by BCP QualTek Investor Holdings L.P. Flow-Through Seller Consideration The consideration to be received by each Flow-Through Seller at the Closing will consist of: ● 18,764,898 Common Units, with 4,825,893 Common Units to be received by BCP QualTek Management LLC, 11,780,782 Common Units to be received by BCP QualTek, LLC and 2,158,223 Common Units to be received by BCP QualTek II, LLC; ● 18,764,898 shares of Class B Common Stock, with 4,825,893 shares of Class B Common Stock to be received by BCP QualTek Management LLC, 11,780,782 shares of Class B Common Stock to be received by BCP QualTek, LLC and 2,158,223 shares of Class B Common Stock to be received by BCP QualTek II, LLC; ● 3,836,177 Earnout Common Units, with 1,157,803 Earnout Common Units to be received by BCP QualTek Management LLC, 2,678,374 Earnout Common Units to be received by BCP QualTek, LLC and 0 Earnout Common Units to be received by BCP QualTek II, LLC; and ● 3,836,177 Earnout Voting Shares, with 1,157,803 Earnout Voting Shares to be received by BCP QualTek Management LLC, 2,678,374 Earnout Voting Shares to be received by BCP QualTek, LLC and 0 Earnout Common Units to be received by BCP QualTek II, LLC. No fractional shares will be issued pursuant to the Business Combination Agreement. In lieu of any fractional shares that would otherwise be issuable to any Blocker Owner or Flow-Through Seller, the Company will pay to such Blocker Owner or Flow-Through Seller, as applicable, cash (rounded up to the nearest cent) in an amount equal to such fraction multiplied by $10.00. The Earnout Shares and Earnout Common Units In connection with the Closing, (i) 2,274,934 shares of Class A Common Stock issued to the Blocker Owners (the “Blocker Owner Earnout Shares”), (ii) 3,836,177 Common Units issued to the Flow-Through Sellers (the “Earnout Common Units”) and (iii) an equal number of shares of Class B Common Stock issued to the Flow-Through Sellers by the Company in connection with the Business Combination (the “Earnout Voting Shares,” and together with the Blocker Owner Earnout Shares, the “Earnout Shares”), will be subject to certain restriction on transfer and voting and potential forfeiture pending the achievement (if any) of the following earnout targets pursuant to the terms of the Business Combination Agreement: ● if, on or any time prior to the fifth anniversary of the date of the Closing, the closing sale price per share of Class A Common Stock equals or exceeds $15.00 per share for 20 trading days of any 30 consecutive trading day period following the Closing, 50% of the Earnout Shares and Earnout Common Units will be earned and no longer subject to the applicable restrictions on transfer and voting; and ● if, on or any time prior to the fifth anniversary of the date of the Closing, the closing sale price per share of Class A Common Stock equals or exceeds $18.00 per share for 20 trading days of any 30 consecutive trading day period following the Closing, 50% of the Earnout Shares and Earnout Common Units will be earned and no longer subject to the applicable restrictions on transfer and voting. Pre-PIPE Convertible Notes Offering In connection with the Business Combination, accredited investors (each a “Pre-PIPE Investor”) have purchased convertible notes of QualTek, as issuer (the “Notes Issuer”), in an aggregate principal amount of $44.4 million (the “Pre-PIPE Notes”) in a private placement, issuable pursuant to Note Purchase Agreements (the “Note Purchase Agreements”), among the Notes Issuer, ROCR Unless earlier converted or redeemed in accordance with the terms of the Pre-PIPE Notes, the Pre-PIPE Notes have a perpetual maturity. The Pre-PIPE Notes will not bear interest and are subject to certain customary information rights. Pursuant to the current terms of the Pre-PIPE Notes, upon consummation of the Merger, the Pre-PIPE Notes will automatically convert into Class A Common Stock of the Company at $8.00 per share, subject to certain adjustments. However, the Note Purchase Agreements provide that the parties will use commercially reasonable efforts to amend the Pre-PIPE Notes and any other agreements deemed necessary such that upon the consummation of the Business Combination, the Pre-PIPE Notes automatically convert into Common Units of the Company (along with a corresponding number of shares of Class B Common Stock of the Company) in lieu of converting into Class A Common Stock. The number of Common Units and Class B Common Stock will be equal to the quotient that results from dividing the aggregate principal amount of the Note by $8.00, subject to certain adjustments. PIPE Subscription Agreements In connection with the Merger, the Company has obtained commitments from certain accredited investors (each a “Subscriber”) to purchase shares of Class A Common Stock which will be issued in connection with the closing of the Merger (the “PIPE Shares”), for an aggregate cash amount of $66.1 million at a purchase price of $10.00 per share, in a private placement (the “PIPE Investment”). Certain offering-related expenses are payable by the Company, including customary fees payable to the placement agents, Roth Capital Partners, LLC and Craig-Hallum, aggregating $5,150,000. Such commitments are being made by way of the subscription agreements, by and between each Subscriber and the Company (collectively, the “Subscription Agreements”). The purpose of the sale of the PIPE Shares is to raise additional capital for use in connection with the Business Combination and to meet the minimum cash requirements provided in the Business Combination Agreement. The PIPE Shares are identical to the shares of Class A Common Stock that will be held by the Company’s public stockholders at the time of the closing of the Business Combination, except that the PIPE Shares will not be entitled to any redemption rights and will not be registered with the SEC at closing of the Business Combination. | Note 6 — Commitments Registration Rights The holders of the Founder Shares, as well as the holders of the Private Units (and underlying securities), will be entitled to registration rights pursuant to an agreement to be signed prior to or on the effective date of the Proposed Public Offering. The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of the majority of the insider shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Private Units (and underlying securities) can elect to exercise these registration rights at any time after the Company consummates a Business Combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation 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. Notwithstanding the foregoing, they may not exercise demand or piggyback rights after five (5) and seven (7) years, respectively, from the effective date of the Proposed Public Offering and may not exercise demand rights on more than one occasion in respect of all registrable securities. Underwriting Agreement The Company will grant the underwriters a 45-day option from the date of Proposed Public Offering to purchase up to 1,500,000 additional Units to cover over-allotments, if any, at the Proposed Public Offering price less the underwriting discounts and commissions. The underwriters will be entitled to a cash underwriting discount of 2.0% of the gross proceeds of the Proposed Public Offering, or $2,000,000 (or up to $2,300,000 if the underwriters’ over-allotment is exercised in full). Business Combination Marketing Agreement The Company will engage Roth Capital Partners, LLC (“Roth”) and Craig-Hallum Capital Group LLC (“Craig-Hallum”), the underwriters in the Proposed Public Offering, as advisors in connection with its Business Combination Business combination to assist in the transaction structuring and negotiation of a definitive purchase agreement with respect to the Business Combination, holding meetings with the stockholders to discuss the Business Combination and the target’s attributes, introducing the Company to potential investors to purchase its securities in connection with the Business Combination, assisting in obtaining stockholder approval for the Business Combination, and assisting with financial analysis, presentations, press releases and filings related to the Business Combination. The Company will pay Roth and Craig-Hallum a marketing fee for such services upon the consummation of a Business Combination in an amount equal to, in the aggregate, 3.5% of the gross proceeds of the Proposed Public Offering, including any proceeds from the full or partial exercise of the underwriters’ over-allotment option. As a result, Roth and Craig-Hallum will not be entitled to such fee unless the Company consummates a Business Combination. |
STOCKHOLDERS' EQUITY_2
STOCKHOLDERS' EQUITY | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
STOCKHOLDERS' EQUITY | ||
STOCKHOLDERS' EQUITY | NOTE 8. STOCKHOLDERS’ EQUITY Common Stock issued outstanding | Note 7 — Stockholders’ Equity Common Stock Warrants Once the warrants become exercisable, the Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $0.01 per warrant; ● at any time after the warrants become exercisable; ● upon not less than 30 days ’ prior written notice of redemption to each warrant holder; ● if, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.00 per share, for any 20 trading days within a 30- day trading period commencing after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and ● if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants at the time of redemption and for the entire 30- day trading period referred to above and continuing each day thereafter until the date of redemption. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuances of shares of common stock at a price below their respective exercise prices. Additionally, in no event will the Company be required to net cash settle the 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 warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless. In addition, if (x) the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per share of 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 Initial Stockholders or their affiliates, without taking into account any Founder Shares held by them prior to such issuance), (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 a Business Combination on the date of the consummation of a 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 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 Market Value 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 Market Price. The Private Warrants will be identical to the Public Warrants underlying the Units being sold in the Proposed Public Offering, except that the Private Warrants and the shares of common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or saleable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. |
WARRANTS
WARRANTS | 9 Months Ended |
Sep. 30, 2021 | |
WARRANTS. | |
WARRANTS | NOTE 9. WARRANTS The Company will not issue fractional warrants. The Public Warrants will become exercisable on 30 days after the completion of a Business Combination. No warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if there is no effective registration statement covering the shares of common stock issuable upon exercise of the Public Warrants within 120 days following the consummation of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. The warrants will expire five years from the closing of a Business Combination. Once the warrants become exercisable, the Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $0.01 per warrant; ● at any time after the warrants become exercisable; ● upon not less than 30 days ’ prior written notice of redemption to each warrant holder; ● if, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.00 per share, for any 20 trading days within a 30- day trading period commencing after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and ● if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuances of shares of common stock at a price below their respective exercise prices. Additionally, in no event will the Company be required to net cash settle the 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 warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless. In addition, if (x) the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per share of 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 Initial Stockholders or their affiliates, without taking into account any Founder Shares held by them prior to such issuance), (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 a Business Combination on the date of the consummation of a 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 ending on the trading day prior to the day on which the Company consummates 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 Market Value 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 Market 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 and the shares of common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or saleable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and 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 September 30, 2021, there were 2,875,000 Public Warrants and 102,000 Private Placement Warrants outstanding. There were no Public Warrants or Private Placement Warrants outstanding as of December 31, 2020. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2021 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 10. FAIR VALUE MEASUREMENTS The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. Quoted Prices in Significant Other Significant Other September 30, Active Markets Observable Inputs Unobservable Inputs Description 2021 (Level 1) (Level 2) (Level 3) Assets: Cash and marketable securities held in Trust Account $ 115,007,452 $ 115,007,452 $ — $ — Liabilities: Warrant Liability – Private Placement Warrants $ 217,260 $ — $ — $ 217,260 The Private Placement Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liability on the accompanying condensed consolidated balance sheet. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liability in the condensed consolidated statements of operations. The Private Placement Warrants were valued using a binomial lattice model incorporating the Cox-Ross-Rubenstein methodology, which is considered to be a Level 3 fair value measurement. The binomial lattice model’s primary unobservable input utilized in determining the fair value of the Private Placement Warrants is the expected volatility of the common stock. The expected volatility as of the Initial Public Offering date was derived from observable public warrant pricing on comparable ‘blank-check’ companies without an identified target. The expected volatility as of subsequent valuation dates was implied from the Company’s own Public Warrant pricing. There were no transfers between Levels 1, 2 or 3 during the three and nine months ended September 30, 2021. The following table provides quantitative information regarding Level 3 fair value measurements: At March 5, 2021 (Initial At Measurement) September 30, 2021 Stock price $ 9.78 $ 9.94 Strike price $ 11.50 $ 11.50 Volatility 14.9 % 19.8 % Risk-free rate 0.87 % 0.95 % Probability of Business Combination occurring 75 % 90.0 % Dividend yield 0.0 % 0.0 % Fair value of Private Placement Warrants $ 0.90 $ 2.13 The following table presents the changes in the fair value of Level 3 warrant liabilities: Warrant Liabilities Fair value as of March 5, 2021 (Initial Measurement) $ 91,800 Change in fair value (9,180) Fair value as of March 31, 2021 82,620 Change in fair value 232,560 Fair value as of June 30, 2021 $ 315,180 Change in fair value (97,920) Fair value as of September 30, 2021 $ 217,260 |
SUBSEQUENT EVENTS_2
SUBSEQUENT EVENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
SUBSEQUENT EVENTS | ||
SUBSEQUENT EVENTS | NOTE 11. SUBSEQUENT EVENTS On November 3, 2021 the Company entered into a new promissory note with related parties of the Company in the aggregate principal amount of $500,000 in order to finance the Company’s working capital needs. The promissory note is non-interest bearing and is not convertible into any securities of the Company and shall be payable upon the consummation of a Business Combination. | Note 8 — Subsequent Events The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to January 8, 2021, the date that the financial statements were available to be issued. Based upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements. On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 Founder Shares outstanding. All share and per-share amounts have been retroactively restated to reflect the stock transactions. |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X 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 complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated 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 consolidated financial statements should be read in conjunction with the Company’s prospectus for its Initial Public Offering as filed with the SEC on March 2, 2021. The interim results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future periods. | |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its majority owned subsidiary where the Company has the ability to exercise control. All significant intercompany balances and transactions have been eliminated in consolidation. | |
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 statement 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 the condensed consolidated financial statements in conformity with GAAP requires the Company’s 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. One of the more significant accounting estimates included in these condensed financial statements is the determination of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly, the actual results could differ significantly from those estimates. | Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company’s 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 expenses during the reporting periods. 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 September 30, 2021 and 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 not have any cash equivalents as of December 31, 2020 and 2019. |
Marketable Securities Held in Trust Account | Marketable Securities Held in Trust Account At September 30, 2021, substantially all of the assets held in the Trust Account were held in money market funds which are invested primarily in U.S. Treasury securities. The Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these investments are included in interest earned on marketable securities held in Trust Account in the accompanying condensed consolidated statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information. | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the Company’s condensed consolidated balance sheets, primarily due to their short-term nature, with the exception of the warrant liabilities (see Note 9). | Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature. |
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 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 is 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. Accordingly, at September 30, 2021, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheets. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stocks to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable common stocks resulted in charges against additional paid-in capital. At September 30, 2021, common stock subject to possible redemption reflected in the condensed balance sheets are reconciled in the following table: Gross proceeds $ 115,000,000 Less: Common stock issuance costs (2,812,212) Plus: Accretion of carrying value to redemption value 2,812,212 Common stock subject to possible redemption $ 115,000,000 | |
Warrant Liability | Warrant Liability 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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“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 ordinary shares, 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 fair value of the Private Placement Warrants (as defined in Note 5) was estimated using a binomial lattice simulation approach (see Note 9). | |
Income Taxes | Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. 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 as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 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. The effective tax rate differs from the statutory tax rate of 21% for the three months and nine months ended September 30, 2021 and 2020, respectively, primarily due to the valuation allowance recorded on the Company’s net operating losses. | Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. 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 as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020 and 2019. 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. The provision for income taxes was deemed to be de minimis for the year ended December 31, 2020, and for the period from February 13, 2019 (inception) through December 31, 2019. |
Deferred Offering Costs | Deferred Offering Costs Deferred offering costs consist of legal, accounting and other costs incurred through the balance sheet date that are directly related to the Proposed Public Offering and that will be charged to stockholders’ equity upon the completion of the Proposed Public Offering. Should the Proposed Public Offering prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations. | |
Net Income (Loss) per Common Share | Net Income (Loss) per Common Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. Accretion associated with the redeemable shares of common stock is excluded from income (loss) per common share as the redemption value approximates fair value. The Company has not considered the effect of the warrants sold in the Initial Public Offering and private placement to purchase an aggregate of 2,977,000 shares in the calculation of diluted loss per share, since the inclusion of such warrants would be anti-dilutive. As of September 30, 2021 and 2020, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted net loss per common share is the same as basic net loss per common share for the periods presented. The following table reflects the calculation of basic and diluted net loss per common share (in dollars, except per share amounts): For the Period from 2/13/19 (Inception) Three Months Ended Nine Months Ended Through September 30, 2021 September 30, 2021 September 30, 2020 Redeemable Non-redeemable Redeemable Non-redeemable Non-redeemable common stock common stock common stock common stock common stock Basic and diluted net loss per common share Numerator: Allocation of net loss, as adjusted $ (629,913) $ (179,827) $ (1,052,069) $ (370,379) $ (800) Denominator: Basic and diluted weighted average shares outstanding 11,500,000 3,283,000 8,804,029 3,099,440 2,500,000 Basic and diluted net loss per common share $ (0.05) $ (0.05) $ (0.12) $ (0.12) $ (0.00) Three Months Ended Nine Months Ended September 30, 2020 September 30, 2020 Non-redeemable Non-redeemable common stock common stock Basic and diluted net loss per common share Numerator: Allocation of net loss, as adjusted $ (800) $ (885) Denominator: Basic and diluted weighted average shares outstanding 2,500,000 2,500,000 Basic and diluted net loss per common share $ (0.00) $ (0.00) | Net Loss Per Common Share Net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period, excluding shares of common stock subject to forfeiture by the Initial Stockholders. Weighted average shares were reduced for the effect of an aggregate of 375,000 shares of common stock that are subject to forfeiture if the over-allotment option is not exercised by the underwriters (see Notes 5 and 8). At December 31, 2020 and 2019, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into shares of common stock and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the periods presented. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts. | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations 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. At December 31, 2020 and 2019, the Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. |
Recent Accounting Standards | Recent Accounting Standards In August 2020, the FASB issued ASU No. 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): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. 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 condensed consolidated financial statements. | 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. |
REVISION OF PREVIOUSLY ISSUED_2
REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS | |
Schedule of Error Corrections and Prior Period Adjustments | The impact of the restatement on the Company’s financial statements is reflected in the following tables. As Previously Balance Sheet as of March 05, 2021 (unaudited) Reported Adjustment As Restated Common stock subject to possible redemption $ 111,197,990 $ 3,802,010 $ 115,000,000 Common stock $ 366 $ (38) $ 328 Additional paid-in capital $ 5,002,631 $ (3,801,972) $ 1,200,659 Total Stockholders’ Equity $ 5,000,008 $ (3,802,010) $ 1,197,998 Number of shares subject to redemption 11,119,799 380,201 11,500,000 Number of shares, non-redeemable common stock 3,663,201 (380,201) 3,283,000 Balance Sheet as of March 31, 2021 (unaudited) Common stock subject to possible redemption $ 111,170,039 $ 3,829,961 $ 115,000,000 Common stock $ 366 $ (38) $ 328 Additional paid-in capital $ 5,030,583 $ (3,829,923) $ 1,200,660 Total Stockholders’ Equity $ 5,000,009 $ (3,829,961) $ 1,170,048 Number of shares subject to redemption 11,117,004 382,996 11,500,000 Number of shares, non-redeemable common stock 3,665,996 (382,996) 3,283,000 Balance Sheet as of June 30, 2021 (unaudited) Common stock subject to possible redemption $ 110,586,069 $ 4,413,931 $ 115,000,000 Common stock $ 372 $ (44) $ 328 Additional paid-in capital $ 5,614,547 $ (4,413,887) $ 1,200,660 Total Stockholders’ Equity $ 5,000,011 $ (4,413,931) $ 586,080 Number of shares subject to redemption 11,058,607 441,393 11,500,000 Number of shares, non-redeemable common stock 3,724,393 (441,393) 3,283,000 Statement of Operations for the Three Months Ended March 31, 2021 (unaudited) Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption 3,212,386 109,836 3,322,222 Basic and diluted net loss per share, Common stock subject to possible redemption $ (0.00) $ — $ (0.00) Basic and diluted weighted average shares outstanding, Non-redeemable common stock 2,836,036 (109,836) $ 2,726,200 Basic and diluted net loss per share, Non-redeemable common stock $ (0.01) $ 0.01 $ (0.00) Statement of Operations for the Three Months Ended June 30, 2021 (unaudited) Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption 11,117,004 382,996 11,500,000 Basic and diluted net loss per share, Common stock subject to possible redemption $ 0.00 $ (0.04) $ (0.04) Basic and diluted weighted average shares outstanding, Non-redeemable common stock 3,665,996 (382,996) 3,283,000 Basic and diluted net loss per share, Non-redeemable common stock $ (0.16) $ 0.12 $ (0.04) Statement of Operations for the Six Months Ended June 30, 2021 (unaudited) Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption 11,117,625 (3,683,923) 7,433,702 Basic and diluted net loss per share, Common stock subject to possible redemption $ 0.00 $ (0.06) $ (0.06) Basic and diluted weighted average shares outstanding, Non-redeemable common stock 3,253,309 (247,171) 3,006,138 Basic and diluted net loss per share, Non-redeemable common stock $ (0.19) $ 0.13 $ (0.06) Statement of Cash Flows for the Three Months Ended March 31, 2021 (unaudited) Initial classification of common stock subject to possible redemption $ 111,197,990 $ 3,802,010 $ 115,000,000 Change in value of common stock subject to possible redemption $ (27,591) $ 27,591 $ — Statement of Cash Flows for the Six Months Ended June 30, 2021 (unaudited) Initial classification of common stock subject to possible redemption $ 111,197,990 $ 3,802,010 $ 115,000,000 Change in value of common stock subject to possible redemption $ (611,921) $ 611,921 $ — Statement of Changes in Stockholders’ (Deficit) Equity for the Three Months Ended March 31, 2021 (unaudited) Sale of 11,500,000 Units, net of underwriting discounts and offering expenses $ 112,187,788 $ (112,187,788) $ — Common stock subject to redemption $ (111,170,139) $ 111,170,039 $ — Accretion for common stock subject to redemption $ — $ (2,812,212) $ (2,812,212) Total shareholders’ equity $ 5,000,009 $ (3,829,961) $ 1,170,048 Shares of common stock 3,665,996 382,996 3,283,000 Common stock $ 366 $ (38) $ 328 Statement of Changes in Stockholders’ (Deficit) Equity for the Three Months Ended June 30, 2021 (unaudited) Change in value of common stock subject to redemption $ 583,970 $ (583,970) $ — Total shareholders’ equity $ 5,000,011 $ (4,413,931) $ 586,080 Shares of common stock 3,724,393 441,393 3,283,000 Common stock $ 372 $ (44) $ 328 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Summary of common stock subject to possible redemption reconciliation | At September 30, 2021, common stock subject to possible redemption reflected in the condensed balance sheets are reconciled in the following table: Gross proceeds $ 115,000,000 Less: Common stock issuance costs (2,812,212) Plus: Accretion of carrying value to redemption value 2,812,212 Common stock subject to possible redemption $ 115,000,000 |
Reconciliation of Net Loss per Common Share | The following table reflects the calculation of basic and diluted net loss per common share (in dollars, except per share amounts): For the Period from 2/13/19 (Inception) Three Months Ended Nine Months Ended Through September 30, 2021 September 30, 2021 September 30, 2020 Redeemable Non-redeemable Redeemable Non-redeemable Non-redeemable common stock common stock common stock common stock common stock Basic and diluted net loss per common share Numerator: Allocation of net loss, as adjusted $ (629,913) $ (179,827) $ (1,052,069) $ (370,379) $ (800) Denominator: Basic and diluted weighted average shares outstanding 11,500,000 3,283,000 8,804,029 3,099,440 2,500,000 Basic and diluted net loss per common share $ (0.05) $ (0.05) $ (0.12) $ (0.12) $ (0.00) Three Months Ended Nine Months Ended September 30, 2020 September 30, 2020 Non-redeemable Non-redeemable common stock common stock Basic and diluted net loss per common share Numerator: Allocation of net loss, as adjusted $ (800) $ (885) Denominator: Basic and diluted weighted average shares outstanding 2,500,000 2,500,000 Basic and diluted net loss per common share $ (0.00) $ (0.00) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
FAIR VALUE MEASUREMENTS | |
Summary of gross holding gains and fair value of held-to-maturity securities | Quoted Prices in Significant Other Significant Other September 30, Active Markets Observable Inputs Unobservable Inputs Description 2021 (Level 1) (Level 2) (Level 3) Assets: Cash and marketable securities held in Trust Account $ 115,007,452 $ 115,007,452 $ — $ — Liabilities: Warrant Liability – Private Placement Warrants $ 217,260 $ — $ — $ 217,260 |
Schedule of quantitative information regarding Level 3 fair value measurements inputs | At March 5, 2021 (Initial At Measurement) September 30, 2021 Stock price $ 9.78 $ 9.94 Strike price $ 11.50 $ 11.50 Volatility 14.9 % 19.8 % Risk-free rate 0.87 % 0.95 % Probability of Business Combination occurring 75 % 90.0 % Dividend yield 0.0 % 0.0 % Fair value of Private Placement Warrants $ 0.90 $ 2.13 |
Schedule of change in the fair value of Level 3 warrant liabilities | Warrant Liabilities Fair value as of March 5, 2021 (Initial Measurement) $ 91,800 Change in fair value (9,180) Fair value as of March 31, 2021 82,620 Change in fair value 232,560 Fair value as of June 30, 2021 $ 315,180 Change in fair value (97,920) Fair value as of September 30, 2021 $ 217,260 |
DESCRIPTION OF ORGANIZATION A_4
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details) | Mar. 05, 2021USD ($)$ / sharesshares | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)$ / sharesshares | Mar. 31, 2021shares | Dec. 31, 2019USD ($) |
Subsidiary, Sale of Stock [Line Items] | ||||||
Purchase price, per unit | $ / shares | $ 10 | |||||
Sale of Private Placement Warrants (in shares) | shares | 378,000 | |||||
Proceeds from sale of Private Placement Units | $ 4,080,000 | $ 0 | ||||
Transaction Costs | 2,812,212 | |||||
Underwriting fees | 2,300,000 | |||||
Other offering costs | 512,212 | |||||
Cash held outside the Trust Account | $ 93,594 | $ 195,758 | $ 25,000 | |||
Condition for future business combination number of businesses minimum | 1 | 1 | ||||
Payments for investment of cash in Trust Account | $ 115,000,000 | $ 0 | ||||
Condition for future business combination use of proceeds percentage | 80 | 80 | ||||
Condition for future business combination threshold Percentage Ownership | 50 | 50 | ||||
Condition for future business combination threshold Net Tangible Assets | $ 5,000,001 | $ 5,000,001 | ||||
Obligation to redeem Public Shares if entity does not complete a Business Combination (as a percent) | 100.00% | 100.00% | ||||
Redemption period upon closure | 10 days | |||||
Marketable securities held in Trust Account | $ 115,007,452 | |||||
Interest income available to pay tax obligations | $ 7,452 | |||||
Initial Public Offering | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of units sold | shares | 11,500,000 | 10,000,000 | ||||
Purchase price, per unit | $ / shares | $ 10 | $ 10 | ||||
Proceeds from issuance initial public offering | $ 115,000,000 | |||||
Payments for investment of cash in Trust Account | $ 115,000,000 | |||||
Private Placement | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Sale of Private Placement Warrants (in shares) | shares | 378,000 | |||||
Price of warrant | $ / shares | $ 10 | |||||
Proceeds from sale of Private Placement Units | $ 3,780,000 | |||||
Private Placement | Private Placement Warrants | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Sale of Private Placement Warrants (in shares) | shares | 408,000 | 408,000 | 408,000 | |||
Price of warrant | $ / shares | $ 10 | $ 10 | ||||
Proceeds from sale of Private Placement Units | $ 4,080,000 | |||||
Over-allotment option | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of units sold | shares | 1,500,000 | 11,500,000 | ||||
Purchase price, per unit | $ / shares | $ 10 | $ 10 | ||||
Sale of Private Placement Warrants (in shares) | shares | 408,000 | |||||
Proceeds from sale of Private Placement Units | $ 4,080,000 |
RESTATEMENT OF PREVIOUSLY ISSUE
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 11 Months Ended | |||||||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2019 | Mar. 05, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Feb. 12, 2019 | |||
Redemption value per share | $ 10 | ||||||||||||
Minimum net tangible assets | $ 5,000,001 | ||||||||||||
Balance Sheet (unaudited) | |||||||||||||
Common stock subject to possible redemption | 115,000,000 | ||||||||||||
Common stock | 328 | $ 288 | [1] | $ 288 | [1] | ||||||||
Additional paid-in capital | 1,200,660 | 24,712 | 24,712 | ||||||||||
Total stockholders' equity | $ 586,080 | $ 1,170,048 | $ 586,080 | $ (223,660) | $ 22,890 | $ 23,775 | $ 22,800 | $ 23,690 | $ 23,690 | $ 0 | |||
Number of shares subject to redemption | 11,500,000 | 0 | |||||||||||
Number of shares, non-redeemable common stock | 3,283,000 | 2,875,000 | 2,875,000 | ||||||||||
Statement of Cash Flows (unaudited) | |||||||||||||
Initial classification of common stock subject to possible redemption | $ 115,000,000 | 0 | |||||||||||
Statement of Changes in Stockholders' (Deficit) Equity (unaudited) | |||||||||||||
Sale of 11,500,000 Units, net of underwriting discount and offering expenses | 11,500,000 | $ 25,000 | [2] | ||||||||||
Additional paid-in capital | 1,200,660 | 24,712 | $ 24,712 | ||||||||||
Accretion for common stock subject to redemption | 2,812,212 | ||||||||||||
Accumulated deficit | (1,424,648) | (1,225) | (2,200) | ||||||||||
Total stockholders' equity | 586,080 | 1,170,048 | 586,080 | $ (223,660) | $ 22,890 | $ 23,775 | $ 22,800 | $ 23,690 | $ 23,690 | $ 0 | |||
Common shares, shares issued | 3,283,000 | 2,875,000 | 2,875,000 | ||||||||||
Common stock subject to possible redemption (in shares) | 11,500,000 | 0 | |||||||||||
Shares of common stock | 3,283,000 | 2,875,000 | 2,875,000 | ||||||||||
Common stock | $ 328 | $ 288 | [1] | $ 288 | [1] | ||||||||
As Restated | |||||||||||||
Balance Sheet (unaudited) | |||||||||||||
Common stock subject to possible redemption | 115,000,000 | 115,000,000 | 115,000,000 | $ 115,000,000 | |||||||||
Common stock | 328 | 328 | 328 | 328 | |||||||||
Additional paid-in capital | 1,200,660 | 1,200,660 | 1,200,660 | 1,200,659 | |||||||||
Total stockholders' equity | $ 586,080 | $ 1,170,048 | $ 586,080 | $ 1,197,998 | |||||||||
Number of shares subject to redemption | 11,500,000 | 11,500,000 | 11,500,000 | 11,500,000 | |||||||||
Statement of Cash Flows (unaudited) | |||||||||||||
Initial classification of common stock subject to possible redemption | $ 115,000,000 | $ 115,000,000 | |||||||||||
Statement of Changes in Stockholders' (Deficit) Equity (unaudited) | |||||||||||||
Additional paid-in capital | $ 1,200,660 | 1,200,660 | 1,200,660 | $ 1,200,659 | |||||||||
Accretion for common stock subject to redemption | (2,812,212) | ||||||||||||
Total stockholders' equity | $ 586,080 | $ 1,170,048 | $ 586,080 | $ 1,197,998 | |||||||||
Common stock subject to possible redemption (in shares) | 11,500,000 | 11,500,000 | 11,500,000 | 11,500,000 | |||||||||
Shares of common stock | 3,283,000 | 3,283,000 | 3,283,000 | ||||||||||
Common stock | $ 328 | $ 328 | $ 328 | $ 328 | |||||||||
As Restated | Common stock subject to possible redemption | |||||||||||||
Statement of Operations (unaudited) | |||||||||||||
Basic and diluted weighted average shares outstanding | 11,500,000 | 3,322,222 | 7,433,702 | ||||||||||
Basic and diluted net loss per share | $ (0.04) | $ 0 | $ (0.06) | ||||||||||
As Restated | Non-redeemable common stock | |||||||||||||
Balance Sheet (unaudited) | |||||||||||||
Number of shares, non-redeemable common stock | 3,283,000 | 3,283,000 | 3,283,000 | 3,283,000 | |||||||||
Statement of Operations (unaudited) | |||||||||||||
Basic and diluted weighted average shares outstanding | 3,283,000 | 2,726,200 | 3,006,138 | ||||||||||
Basic and diluted net loss per share | $ (0.04) | $ 0 | $ (0.06) | ||||||||||
Statement of Changes in Stockholders' (Deficit) Equity (unaudited) | |||||||||||||
Common shares, shares issued | 3,283,000 | 3,283,000 | 3,283,000 | 3,283,000 | |||||||||
As Previously Reported | |||||||||||||
Balance Sheet (unaudited) | |||||||||||||
Common stock subject to possible redemption | $ 110,586,069 | $ 111,170,039 | $ 110,586,069 | $ 111,197,990 | |||||||||
Common stock | 372 | 366 | 372 | 366 | |||||||||
Additional paid-in capital | 5,614,547 | 5,030,583 | 5,614,547 | 5,002,631 | |||||||||
Total stockholders' equity | $ 5,000,011 | $ 5,000,009 | $ 5,000,011 | $ 5,000,008 | |||||||||
Number of shares subject to redemption | 11,058,607 | 11,117,004 | 11,058,607 | 11,119,799 | |||||||||
Statement of Cash Flows (unaudited) | |||||||||||||
Initial classification of common stock subject to possible redemption | $ 111,197,990 | $ 111,197,990 | |||||||||||
Change in value of common stock subject to possible redemption | (27,591) | (611,921) | |||||||||||
Statement of Changes in Stockholders' (Deficit) Equity (unaudited) | |||||||||||||
Sale of 11,500,000 Units, net of underwriting discount and offering expenses | 112,187,788 | ||||||||||||
Additional paid-in capital | $ 5,614,547 | 5,030,583 | 5,614,547 | $ 5,002,631 | |||||||||
Common stock subject to possible redemption | 583,970 | (111,170,139) | |||||||||||
Total stockholders' equity | $ 5,000,011 | $ 5,000,009 | $ 5,000,011 | $ 5,000,008 | |||||||||
Common stock subject to possible redemption (in shares) | 11,058,607 | 11,117,004 | 11,058,607 | 11,119,799 | |||||||||
Shares of common stock | 3,724,393 | 3,665,996 | 3,724,393 | ||||||||||
Common stock | $ 372 | $ 366 | $ 372 | $ 366 | |||||||||
As Previously Reported | Common stock subject to possible redemption | |||||||||||||
Statement of Operations (unaudited) | |||||||||||||
Basic and diluted weighted average shares outstanding | 11,117,004 | 3,212,386 | 11,117,625 | ||||||||||
Basic and diluted net loss per share | $ 0 | $ 0 | $ 0 | ||||||||||
As Previously Reported | Non-redeemable common stock | |||||||||||||
Balance Sheet (unaudited) | |||||||||||||
Number of shares, non-redeemable common stock | 3,724,393 | 3,665,996 | 3,724,393 | 3,663,201 | |||||||||
Statement of Operations (unaudited) | |||||||||||||
Basic and diluted weighted average shares outstanding | 3,665,996 | 2,836,036 | 3,253,309 | ||||||||||
Basic and diluted net loss per share | $ (0.16) | $ (0.01) | $ (0.19) | ||||||||||
Statement of Changes in Stockholders' (Deficit) Equity (unaudited) | |||||||||||||
Common shares, shares issued | 3,724,393 | 3,665,996 | 3,724,393 | 3,663,201 | |||||||||
Adjustments | |||||||||||||
Balance Sheet (unaudited) | |||||||||||||
Common stock subject to possible redemption | $ 4,413,931 | $ 3,829,961 | $ 4,413,931 | $ 3,802,010 | |||||||||
Common stock | (44) | (38) | (44) | (38) | |||||||||
Additional paid-in capital | (4,413,887) | (3,829,923) | (4,413,887) | (3,801,972) | |||||||||
Total stockholders' equity | $ (4,413,931) | $ (3,829,961) | $ (4,413,931) | $ (3,802,010) | |||||||||
Number of shares subject to redemption | 441,393 | 382,996 | 441,393 | 380,201 | |||||||||
Statement of Cash Flows (unaudited) | |||||||||||||
Initial classification of common stock subject to possible redemption | $ 3,802,010 | $ 3,802,010 | |||||||||||
Change in value of common stock subject to possible redemption | 27,591 | 611,921 | |||||||||||
Statement of Changes in Stockholders' (Deficit) Equity (unaudited) | |||||||||||||
Sale of 11,500,000 Units, net of underwriting discount and offering expenses | (112,187,788) | ||||||||||||
Additional paid-in capital | $ (4,413,887) | (3,829,923) | (4,413,887) | $ (3,801,972) | |||||||||
Common stock subject to possible redemption | (583,970) | 111,170,039 | |||||||||||
Accretion for common stock subject to redemption | (2,812,212) | ||||||||||||
Total stockholders' equity | $ (4,413,931) | $ (3,829,961) | $ (4,413,931) | $ (3,802,010) | |||||||||
Common stock subject to possible redemption (in shares) | 441,393 | 382,996 | 441,393 | 380,201 | |||||||||
Shares of common stock | 441,393 | 382,996 | 441,393 | ||||||||||
Common stock | $ (44) | $ (38) | $ (44) | $ (38) | |||||||||
Adjustments | Common stock subject to possible redemption | |||||||||||||
Statement of Operations (unaudited) | |||||||||||||
Basic and diluted weighted average shares outstanding | 382,996 | 109,836 | (3,683,923) | ||||||||||
Basic and diluted net loss per share | $ (0.04) | $ (0.06) | |||||||||||
Adjustments | Non-redeemable common stock | |||||||||||||
Balance Sheet (unaudited) | |||||||||||||
Number of shares, non-redeemable common stock | (441,393) | (382,996) | (441,393) | (380,201) | |||||||||
Statement of Operations (unaudited) | |||||||||||||
Basic and diluted weighted average shares outstanding | (382,996) | (109,836) | (247,171) | ||||||||||
Basic and diluted net loss per share | $ 0.12 | $ 0.01 | $ 0.13 | ||||||||||
Statement of Changes in Stockholders' (Deficit) Equity (unaudited) | |||||||||||||
Common shares, shares issued | (441,393) | (382,996) | (441,393) | (380,201) | |||||||||
[1] | Includes up to 375,000 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 shares of common stock outstanding (see Notes 5 and 8). | ||||||||||||
[2] | Includes 375,000 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 shares of common stock outstanding (see Notes 5 and 8). |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||
Cash equivalents | $ 0 | $ 0 | ||||
Unrecognized tax benefits | $ 0 | $ 0 | 0 | 0 | ||
Unrecognized tax benefits accrued for interest and penalties | $ 0 | $ 0 | 0 | $ 0 | ||
Statutory tax rate (as a percent) | 21.00% | 21.00% | 21.00% | 21.00% | ||
Anti-dilutive securities attributable to warrants (in shares) | 2,977,000 | |||||
Federal depository insurance coverage | $ 250,000 | $ 250,000 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Common Stock Subject to Possible Redemption (Details) | 9 Months Ended |
Sep. 30, 2021USD ($) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Gross proceeds | $ 115,000,000 |
Common stock issuance costs | (2,812,212) |
Accretion of carrying value to redemption value | 2,812,212 |
Common stock subject to possible redemption | $ 115,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reconciliation of Net Loss per Common Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 11 Months Ended | 12 Months Ended | 20 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Sep. 30, 2020 | ||
Denominator: | ||||||||
Weighted-average shares outstanding, basic | [1] | 2,500,000 | 2,500,000 | |||||
Weighted-average shares outstanding, diluted | [1] | 2,500,000 | 2,500,000 | |||||
Basic net income per share | $ 0 | $ 0 | ||||||
Diluted net income per share | $ 0 | $ 0 | ||||||
Class A Common Stock Subject to Redemption | ||||||||
Numerator: | ||||||||
Allocation of net loss, as adjusted | $ (629,913) | $ (1,052,069) | ||||||
Denominator: | ||||||||
Weighted-average shares outstanding, basic | 11,500,000 | 0 | 8,804,029 | 0 | ||||
Weighted-average shares outstanding, diluted | 11,500,000 | 0 | 8,804,029 | 0 | ||||
Basic net income per share | $ (0.05) | $ 0 | $ (0.12) | $ 0 | ||||
Diluted net income per share | $ (0.05) | $ 0 | $ (0.12) | $ 0 | ||||
Class A Common Stock Not Subject to Redemption | ||||||||
Numerator: | ||||||||
Allocation of net loss, as adjusted | $ (179,827) | $ (800) | $ (370,379) | $ (885) | $ (800) | |||
Denominator: | ||||||||
Weighted-average shares outstanding, basic | 3,283,000 | 2,500,000 | 3,099,440 | 2,500,000 | 2,500,000 | |||
Weighted-average shares outstanding, diluted | 3,283,000 | 2,500,000 | 3,099,440 | 2,500,000 | 2,500,000 | |||
Basic net income per share | $ (0.05) | $ 0 | $ (0.12) | $ 0 | $ 0 | |||
Diluted net income per share | $ (0.05) | $ 0 | $ (0.12) | $ 0 | $ 0 | |||
[1] | Includes up to 375,000 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 shares of common stock outstanding (see Notes 5 and 8). |
PUBLIC OFFERING (Details)_2
PUBLIC OFFERING (Details) - $ / shares | Mar. 05, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Subsidiary, Sale of Stock [Line Items] | |||
Purchase price, per unit | $ 10 | ||
Initial Public Offering | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of units sold | 11,500,000 | 10,000,000 | |
Purchase price, per unit | $ 10 | $ 10 | |
Number of shares in a unit | 1 | ||
Number of shares issuable per warrant | 1 | ||
Exercise price of warrants | $ 11.50 | ||
Initial Public Offering | Public Warrants | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of shares in a unit | 1 | ||
Number of warrants in a unit | 0.25 | 0.25 | |
Number of shares issuable per warrant | 1 | ||
Exercise price of warrants | $ 11.50 | ||
Over-allotment option | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of units sold | 1,500,000 | 11,500,000 | |
Purchase price, per unit | $ 10 | $ 10 |
PRIVATE PLACEMENT (Details)_2
PRIVATE PLACEMENT (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Mar. 31, 2021 | |
Subsidiary, Sale of Stock [Line Items] | ||||
Number of warrants to purchase shares issued | 378,000 | |||
Aggregate purchase price | $ 4,080,000 | $ 0 | ||
Over-allotment option | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of warrants to purchase shares issued | 408,000 | |||
Aggregate purchase price | $ 4,080,000 | |||
Private Placement | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of warrants to purchase shares issued | 378,000 | |||
Price of warrants | $ 10 | |||
Aggregate purchase price | $ 3,780,000 | |||
Number of shares per unit | 1 | 1 | ||
Number of warrants per unit | 0.25 | |||
Number of shares per warrant | 1 | |||
Exercise price of warrants | $ 11.50 | |||
Private Placement | Private Placement Warrants | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of warrants to purchase shares issued | 408,000 | 408,000 | 408,000 | |
Price of warrants | $ 10 | $ 10 | ||
Aggregate purchase price | $ 4,080,000 | |||
Number of warrants per unit | 0.25 | |||
Number of shares per warrant | 1 | |||
Exercise price of warrants | $ 11.50 |
RELATED PARTY TRANSACTIONS - _2
RELATED PARTY TRANSACTIONS - Founder Shares (Details) | Feb. 24, 2021shares | Feb. 09, 2021$ / sharesshares | May 26, 2020shares | Feb. 28, 2021USD ($)$ / sharesshares | Feb. 28, 2019USD ($)shares | Mar. 31, 2021USD ($) | Sep. 30, 2021D$ / shares | Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($)$ / sharesshares | |
Related Party Transaction [Line Items] | ||||||||||
Proceeds from issuance of common stock to initial stockholders | $ | $ 25,000 | $ 0 | ||||||||
Aggregate cash amount for new issuances | $ | $ 11,500,000 | $ 25,000 | [1] | |||||||
Share dividend | 28,750 | |||||||||
Percentage of issued and outstanding shares after the Initial Public Offering collectively held by initial stockholders | 20.00% | |||||||||
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 | $ 12.50 | |||||||||
Threshold period after the business combination in which the 20 trading days within any 30 trading day period commences | 6 months | |||||||||
Class B Common Stock | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Number of shares issued | 100 | |||||||||
Proceeds from issuance of common stock to initial stockholders | $ | $ 25,000 | |||||||||
Director Nominees and Affliates | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Number of shares sold to director nominees and affliates | 194,792 | |||||||||
Fair value of shares sold | $ | $ 1,229,138 | |||||||||
Fair value per share | $ / shares | $ 6.31 | |||||||||
Founder Shares | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Number of shares issued | 35,233 | 100 | ||||||||
Proceeds from issuance of common stock to initial stockholders | $ | $ 25,000 | |||||||||
Share Price | $ / shares | $ 0.50 | |||||||||
Share dividend | 4,312,500 | 28,750 | ||||||||
Consideration paid | $ | $ 1,247 | |||||||||
Number of shares held by the initial stockholders | 2,875,000 | 2,875,000 | 89,093 | 2,875,000 | ||||||
Aggregate number of shares owned | 4,312,500 | 105,699 | ||||||||
Shares subject to forfeiture | 375,000 | 375,000 | ||||||||
Percentage of issued and outstanding shares after the Initial Public Offering collectively held by initial stockholders | 20.00% | 20.00% | ||||||||
Percentage of transfer of founder shares with certain exceptions | 50.00% | 50.00% | ||||||||
Percentage of transfer of remaining founder shares with certain exceptions | 50.00% | 50.00% | ||||||||
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 | $ 12.50 | |||||||||
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 | |||||||||
[1] | Includes 375,000 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 shares of common stock outstanding (see Notes 5 and 8). |
RELATED PARTY TRANSACTIONS - _3
RELATED PARTY TRANSACTIONS - Promissory Note and Related Party Loans (Details) - USD ($) | Mar. 09, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Nov. 03, 2021 | Dec. 15, 2020 |
Related Party Transaction [Line Items] | ||||||
Repayment of promissory note - related party | $ 200,000 | $ 0 | ||||
Outstanding balance under Working Capital Loans | 0 | $ 0 | ||||
Promissory Note with Related Party | ||||||
Related Party Transaction [Line Items] | ||||||
Aggregate principal amount | $ 200,000 | |||||
Repayment of promissory note - related party | $ 200,000 | |||||
Promissory Note with Related Party | Subsequent Event | ||||||
Related Party Transaction [Line Items] | ||||||
Aggregate principal amount | $ 500,000 | |||||
Related Party Loans | ||||||
Related Party Transaction [Line Items] | ||||||
Repayment of promissory note - related party | $ 200,000 | |||||
Loan conversion agreement warrant | $ 1,500,000 | |||||
Price of warrants ( in dollars per share) | $ 10 |
COMMITMENTS (Details)_2
COMMITMENTS (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021USD ($)D$ / sharesshares | Dec. 31, 2020item | |
Business Acquisition [Line Items] | ||
Maximum number of demands for registration of securities | item | 2 | |
Marketing fee (as a percent) | 3.50% | 3.50% |
Marketing fee | $ | $ 4,025,000 | |
Blocker Owner Consideration | ||
Business Acquisition [Line Items] | ||
Shares issued | 2,274,934 | |
Blocker Owner Earnout Shares | BCP QUALTEK HOLDCO, LLC | ||
Business Acquisition [Line Items] | ||
Shares issued | 929,582 | |
Blocker Owner Earnout Shares | BCP AIV Investor Holdings-3 | ||
Business Acquisition [Line Items] | ||
Shares issued | 626,123 | |
Blocker Owner Earnout Shares | BCP AIV Investor Holdings-2 L.P | ||
Business Acquisition [Line Items] | ||
Shares issued | 719,230 | |
Earnout Common Units | ||
Business Acquisition [Line Items] | ||
Shares issued | 3,836,177 | |
Earnout Common Units | BCP QUALTEK HOLDCO, LLC | ||
Business Acquisition [Line Items] | ||
Shares issued | 1,157,803 | |
Earnout Common Units | BCP QUALTEK LLC | ||
Business Acquisition [Line Items] | ||
Shares issued | 2,678,374 | |
Earnout Common Units | BCP QualTek II LLC,. | ||
Business Acquisition [Line Items] | ||
Shares issued | 0 | |
Earnout Voting Shares | ||
Business Acquisition [Line Items] | ||
Shares issued | 3,836,177 | |
Earnout Voting Shares | BCP QUALTEK HOLDCO, LLC | ||
Business Acquisition [Line Items] | ||
Shares issued | 1,157,803 | |
Earnout Voting Shares | BCP QUALTEK LLC | ||
Business Acquisition [Line Items] | ||
Shares issued | 2,678,374 | |
Earnout Voting Shares | BCP QualTek II LLC,. | ||
Business Acquisition [Line Items] | ||
Shares issued | 0 | |
Common Units | Flow Through Seller Consideration | ||
Business Acquisition [Line Items] | ||
Shares issued | 18,764,898 | |
Common Units | Flow Through Seller Consideration | BCP QUALTEK HOLDCO, LLC | ||
Business Acquisition [Line Items] | ||
Shares issued | 4,825,893 | |
Common Units | Flow Through Seller Consideration | BCP QUALTEK LLC | ||
Business Acquisition [Line Items] | ||
Shares issued | 11,780,782 | |
Common Units | Flow Through Seller Consideration | BCP QualTek II LLC,. | ||
Business Acquisition [Line Items] | ||
Shares issued | 2,158,223 | |
Common Stock A | Blocker Owner Consideration | ||
Business Acquisition [Line Items] | ||
Shares issued | 11,923,940 | |
Common Stock A | Blocker Owner Consideration | BCP QUALTEK HOLDCO, LLC | ||
Business Acquisition [Line Items] | ||
Shares issued | 4,096,901 | |
Common Stock A | Blocker Owner Consideration | BCP AIV Investor Holdings-3 | ||
Business Acquisition [Line Items] | ||
Shares issued | 3,642,750 | |
Common Stock A | Blocker Owner Consideration | BCP AIV Investor Holdings-2 L.P | ||
Business Acquisition [Line Items] | ||
Shares issued | 4,184,290 | |
Common Stock A | Blocker Owner Earnout Shares | ||
Business Acquisition [Line Items] | ||
Shares issued | 2,274,934 | |
Class B Common Stock | Flow Through Seller Consideration | ||
Business Acquisition [Line Items] | ||
Shares issued | 18,764,898 | |
Class B Common Stock | Flow Through Seller Consideration | BCP QUALTEK HOLDCO, LLC | ||
Business Acquisition [Line Items] | ||
Shares issued | 4,825,893 | |
Class B Common Stock | Flow Through Seller Consideration | BCP QUALTEK LLC | ||
Business Acquisition [Line Items] | ||
Shares issued | 11,780,782 | |
Class B Common Stock | Flow Through Seller Consideration | BCP QualTek II LLC,. | ||
Business Acquisition [Line Items] | ||
Shares issued | 2,158,223 | |
Business Combination Agreement | Flow Through Seller Consideration | ||
Business Acquisition [Line Items] | ||
Shares price | $ / shares | $ 10 | |
Business Combination Agreement | Earnout Shares and Earnout Common Units | Fifth Anniversary | ||
Business Acquisition [Line Items] | ||
Shares price | $ / shares | $ 15 | |
Trading days | D | 20 | |
Consecutive trading day | D | 30 | |
Earnout shares, percentage | 50.00% | |
Business Combination Agreement | Earnout Shares and Earnout Common Units | Fifth Anniversary One | ||
Business Acquisition [Line Items] | ||
Shares price | $ / shares | $ 18 | |
Trading days | D | 20 | |
Consecutive trading day | D | 30 | |
Earnout shares, percentage | 50.00% |
COMMITMENTS - Pre-PIPE Conver_2
COMMITMENTS - Pre-PIPE Convertible Notes Offering (Details) - Pre-PIPE Convertible Notes Offering - Merger Agreement with Merger Sub and Qualtek [Member] $ / shares in Units, $ in Millions | Sep. 30, 2021USD ($)$ / shares |
Business Acquisition [Line Items] | |
Aggregate principal amount issuable | $ | $ 44.4 |
Share price for conversion of notes to common stock | $ / shares | $ 8 |
COMMITMENTS - PIPE Subscripti_2
COMMITMENTS - PIPE Subscription Agreements (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 11 Months Ended | ||
Mar. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2019 | [1] | Dec. 31, 2020 | |
Business Acquisition [Line Items] | |||||
Aggregate cash amount for new issuances | $ 11,500,000 | $ 25,000 | |||
Purchase price | $ 10 | ||||
PIPE Subscription Agreements | Merger Agreement with Merger Sub and Qualtek [Member] | |||||
Business Acquisition [Line Items] | |||||
Aggregate cash amount for new issuances | $ 66,100,000 | ||||
Purchase price | $ 10 | ||||
Offering related expenses | $ 5,150,000 | ||||
[1] | Includes 375,000 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 shares of common stock outstanding (see Notes 5 and 8). |
STOCKHOLDERS' EQUITY - Common_2
STOCKHOLDERS' EQUITY - Common Stock Shares (Details) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Class of Stock [Line Items] | |||
Common shares, shares authorized (in shares) | 50,000,000 | 50,000,000 | 50,000,000 |
Common shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common shares, shares issued (in shares) | 3,283,000 | 2,875,000 | 2,875,000 |
Common shares, shares outstanding (in shares) | 3,283,000 | 2,875,000 | 2,875,000 |
Common stock subject to possible redemption (in shares) | 11,500,000 | 0 |
WARRANTS (Details)
WARRANTS (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021D$ / sharesshares | Dec. 31, 2020D$ / sharesshares | |
Private Placement Warrants | ||
Class of Warrant or Right [Line Items] | ||
Warrants outstanding | shares | 102,000 | 0 |
Public Warrants | ||
Class of Warrant or Right [Line Items] | ||
Public Warrants exercisable term after the completion of a business combination | 30 days | 30 days |
Number of days of which warrants will not be effective from the date of business combination | 120 days | 120 days |
Public Warrants expiration term | 5 years | 5 years |
Warrants outstanding | shares | 2,875,000 | 0 |
Issue price per share | $ / shares | $ 9.20 | $ 9.20 |
Percentage of gross new proceeds to total equity proceeds used to measure dilution of warrant | 60 | 60 |
Trading period after business combination used to measure dilution of warrant | D | 20 | 20 |
Warrant exercise price adjustment multiple | 115 | 115 |
Warrant redemption price adjustment multiple | 180 | 180 |
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) | $ / shares | $ 0.01 | $ 0.01 |
Warrant redemption condition minimum share price | $ / shares | $ 18 | $ 18 |
Threshold trading days for redemption of public warrants | D | 20 | 20 |
Threshold consecutive trading days for redemption of public warrants | D | 30 | 30 |
Redemption period | 30 days | 30 days |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Mar. 05, 2021 | |
Liabilities: | ||||
Warrant liability | $ 217,260 | |||
Transfer of assets from level 1 to level 2 | 0 | |||
Transfer of assets from level 2 to level 1 | 0 | |||
Transfers to / from level 3 | 0 | |||
Recurring | ||||
Assets: | ||||
Cash and marketable securities held in Trust Account | 115,007,452 | |||
Recurring | Private Placement Warrants | ||||
Liabilities: | ||||
Warrant liability | 217,260 | |||
Level 1 | Recurring | ||||
Assets: | ||||
Cash and marketable securities held in Trust Account | 115,007,452 | |||
Level 3 | ||||
Liabilities: | ||||
Warrant liability | 217,260 | $ 315,180 | $ 82,620 | $ 91,800 |
Level 3 | Recurring | Private Placement Warrants | ||||
Liabilities: | ||||
Warrant liability | $ 217,260 |
FAIR VALUE MEASUREMENTS - Level
FAIR VALUE MEASUREMENTS - Level 3 Fair Value Measurements Inputs (Details) - Level 3 | Sep. 30, 2021$ / shares | Mar. 05, 2021$ / shares |
Stock price | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement Input | 9.94 | 9.78 |
Strike price | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement Input | 11.50 | 11.50 |
Volatility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement Input | 19.8 | 14.9 |
Risk-free rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement Input | 0.95 | 0.87 |
Probability of Business Combination occurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement Input | 90 | 75 |
Dividend yield | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement Input | 0 | 0 |
Fair value of private placement warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement Input | 2.13 | 0.90 |
FAIR VALUE MEASUREMENTS - Chang
FAIR VALUE MEASUREMENTS - Change in the Fair Value of Level 3 Warrant Liabilities (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair value as of March 31, 2021 | $ 217,260 | ||
Level 3 | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair value as of March 5, 2021 (Initial Measurement) | $ 91,800 | 315,180 | $ 82,620 |
Change in fair value | (9,180) | (97,920) | 232,560 |
Fair value as of March 31, 2021 | $ 82,620 | $ 217,260 | $ 315,180 |
SUBSEQUENT EVENTS (Details)_2
SUBSEQUENT EVENTS (Details) - Promissory Note with Related Party - USD ($) | Nov. 03, 2021 | Dec. 15, 2020 |
Subsequent Event [Line Items] | ||
Aggregate principal amount | $ 200,000 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Aggregate principal amount | $ 500,000 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Oct. 02, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Oct. 03, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Feb. 12, 2019 | Dec. 31, 2018 | ||
Current assets: | ||||||||||||||
Prepaid expenses | $ 286,946 | $ 1,500 | ||||||||||||
Other current assets | 1,500 | $ 0 | ||||||||||||
Total Current Assets | 380,540 | 197,258 | 25,000 | |||||||||||
TOTAL ASSETS | 115,387,992 | 228,800 | 25,000 | |||||||||||
Current liabilities: | ||||||||||||||
Accrued expenses | 1,000 | 1,225 | ||||||||||||
Total Current Liabilities | 394,392 | 206,000 | 1,225 | |||||||||||
Total Liabilities | 611,652 | 206,000 | ||||||||||||
Commitments and contingencies (Notes 8 and 12) | ||||||||||||||
Equity: | ||||||||||||||
Common stock | 328 | 288 | [1] | 288 | [1] | |||||||||
Members' deficit | (1,424,648) | (2,200) | (1,225) | |||||||||||
Total Stockholders' (Deficit) Equity | (223,660) | $ 586,080 | $ 1,170,048 | 22,800 | $ 22,890 | $ 23,690 | $ 23,690 | 23,775 | $ 0 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY | $ 115,387,992 | 228,800 | 25,000 | |||||||||||
BCP QUALTEK HOLDCO, LLC | ||||||||||||||
Current assets: | ||||||||||||||
Cash | $ 5,405,000 | 76,000 | $ 195,000 | 91,000 | ||||||||||
Accounts receivable, net of allowance | 249,264,000 | 174,797,000 | 228,659,000 | |||||||||||
Inventories, net | 5,633,000 | 5,765,000 | 7,790,000 | |||||||||||
Prepaid expenses | 7,446,000 | 3,459,000 | 4,130,000 | |||||||||||
Other current assets | 1,952,000 | 1,592,000 | 1,608,000 | |||||||||||
Current assets of discontinued operations | 6,534,000 | 6,736,000 | ||||||||||||
Total Current Assets | 277,857,000 | 192,223,000 | 249,014,000 | |||||||||||
Property and equipment, net | 42,187,000 | 33,794,000 | 18,173,000 | |||||||||||
Intangible assets, net | 364,722,000 | 345,816,000 | 381,573,000 | |||||||||||
Goodwill | 81,775,000 | 58,522,000 | 86,503,000 | $ 41,083,000 | ||||||||||
Other long-term assets | 1,676,000 | 1,241,000 | 842,000 | |||||||||||
Non-current assets of discontinued operations | 9,272,000 | 11,125,000 | ||||||||||||
TOTAL ASSETS | 769,565,000 | 640,868,000 | 747,230,000 | |||||||||||
Current liabilities: | ||||||||||||||
Current portion of long-term debt and capital lease obligations | 119,545,000 | 27,249,000 | 13,466,000 | |||||||||||
Current portion of contingent consideration | 4,292,000 | 9,968,000 | 10,808,000 | |||||||||||
Accounts payable | 74,217,000 | 55,749,000 | 70,964,000 | |||||||||||
Accrued expenses | 60,713,000 | 65,172,000 | 61,144,000 | |||||||||||
Contract liabilities | 14,950,000 | 14,945,000 | 18,470,000 | |||||||||||
Current liabilities of discontinued operations | 3,941,000 | 3,365,000 | 2,846,000 | |||||||||||
Total Current Liabilities | 277,658,000 | 176,448,000 | 177,698,000 | |||||||||||
Capital lease obligations, net of current portion | 16,471,000 | 15,959,000 | 6,730,000 | |||||||||||
Long-term debt, net of current portion and deferred financing fees | 429,033,000 | 397,464,000 | 390,769,000 | |||||||||||
Contingent consideration, net of current portion | 24,137,000 | 8,161,000 | 29,311,000 | |||||||||||
Distributions payable | 11,409,000 | 11,409,000 | 5,930,000 | |||||||||||
Non-current liabilities of discontinued operations | 1,793,000 | 2,634,000 | ||||||||||||
Total Liabilities | 758,708,000 | 611,234,000 | 613,072,000 | |||||||||||
Commitments and contingencies (Notes 8 and 12) | ||||||||||||||
Equity: | ||||||||||||||
Preferred units, 25,000 units authorized, issued and outstanding as of December 31, 2020 | 25,000,000 | 25,000,000 | ||||||||||||
Common stock | 208,324,000 | 208,324,000 | ||||||||||||
Members' deficit | (238,209,000) | (204,086,000) | (99,323,000) | |||||||||||
Accumulated other comprehensive income | 471,000 | 396,000 | 157,000 | |||||||||||
Total Stockholders' (Deficit) Equity | 10,857,000 | 29,634,000 | 134,158,000 | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY | 769,565,000 | 640,868,000 | $ 747,230,000 | |||||||||||
Common Stock A | BCP QUALTEK HOLDCO, LLC | ||||||||||||||
Equity: | ||||||||||||||
Common stock | $ 248,595,000 | $ 208,324,000 | ||||||||||||
[1] | Includes up to 375,000 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 shares of common stock outstanding (see Notes 5 and 8). |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Oct. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Common shares, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | |
Common shares, shares issued | 3,283,000 | 2,875,000 | 2,875,000 | |
Common shares, shares outstanding | 3,283,000 | 2,875,000 | 2,875,000 | |
BCP QUALTEK HOLDCO, LLC | ||||
Preferred Stock, Shares Authorized | 25,000 | 25,000 | ||
Preferred Stock, Shares Issued | 25,000 | 25,000 | ||
Preferred Stock, Shares Outstanding | 25,000 | 25,000 | ||
Preferred Stock, Liquidation Preference Value | $ 29,029 | |||
Common Stock A | BCP QUALTEK HOLDCO, LLC | ||||
Common shares, shares authorized | 2,223,555 | 2,005,824 | 2,005,824 | |
Common shares, shares issued | 2,223,555 | 2,005,824 | 2,005,824 | |
Common shares, shares outstanding | 2,223,555 | 2,005,824 | 2,005,824 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | ||
Other income (expense): | |||
Net loss | $ 975 | ||
Earnings per unit: | |||
Earnings Per Share, Basic | $ 0 | ||
Earnings Per Share, Diluted | $ 0 | ||
Weighted Average Number of Shares Outstanding, Basic | [1] | 2,500,000 | |
Weighted Average Number of Shares Outstanding, Diluted | [1] | 2,500,000 | |
BCP QUALTEK HOLDCO, LLC | |||
Revenue | $ 656,524,000 | $ 599,268,000 | |
Costs and expenses: | |||
Cost of revenues | 597,583,000 | 525,403,000 | |
General and administrative | 47,049,000 | 42,665,000 | |
Transaction expenses | 988,000 | 4,257,000 | |
Change in fair value of contingent consideration | 7,081,000 | 6,149,000 | |
Impairment of long-lived assets | 840,000 | ||
Impairment of goodwill | (28,802,000) | (8,132,000) | |
Depreciation and amortization | 46,475,000 | 40,103,000 | |
Total costs and expenses | 713,816,000 | 627,549,000 | |
Loss from operations | (57,292,000) | (28,281,000) | |
Other income (expense): | |||
Gain on sale/ disposal of property and equipment | 729,000 | 130,000 | |
Interest expense | (37,659,000) | (33,380,000) | |
Total other expense | (36,930,000) | (33,251,000) | |
Loss from continuing operations | (94,222,000) | (61,532,000) | |
Loss from discontinued operations | (3,865,000) | (6,262,000) | |
Net loss | 98,087,000 | 67,794,000 | |
Other comprehensive income: | |||
Foreign currency translation adjustments | 239,000 | 685,000 | |
Comprehensive loss | $ (97,848,000) | $ (67,109,000) | |
Earnings per unit: | |||
Earnings Per Share, Basic | $ (48.61) | $ (31.74) | |
Earnings Per Share, Diluted | $ (50.54) | $ (34.93) | |
Weighted Average Number of Shares Outstanding, Basic | 2,005,824 | 1,962,115 | |
Weighted Average Number of Shares Outstanding, Diluted | 2,005,824 | 1,962,115 | |
[1] | Includes up to 375,000 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 shares of common stock outstanding (see Notes 5 and 8). |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) | Common Stock ANon-redeemable common stockBCP QUALTEK HOLDCO, LLC | Preferred unitsBCP QUALTEK HOLDCO, LLC | Accumulated DeficitBCP QUALTEK HOLDCO, LLC | Accumulated Other Comprehensive Income (Loss)BCP QUALTEK HOLDCO, LLC | BCP QUALTEK HOLDCO, LLC | Total |
Beginning Balance at Dec. 31, 2018 | $ 194,824,000 | $ (14,925,000) | $ (528,000) | $ 179,371,000 | ||
Beginning Balance (in shares) at Dec. 31, 2018 | 1,948,237 | |||||
Acquisitions (Note 3) | $ 13,500,000 | 13,500,000 | ||||
Acquisitions (Note 3) (in shares) | 57,587 | |||||
Sale of 11,500,000 Units, net of underwriting discount and offering expenses | $ 25,000,000 | 25,000,000 | ||||
Sale of 11,500,000 Units, net of underwriting discount and offering expenses (in shares) | 25,000 | |||||
Tax distributions | (6,773,000) | (6,773,000) | ||||
Other comprehensive income | 685,000 | 685,000 | ||||
Net loss | 67,794,000 | 67,794,000 | ||||
Ending Balance (Adoption of Accounting Standards Codification Topic 606) at Dec. 31, 2019 | (9,831,000) | (9,831,000) | ||||
Ending Balance at Dec. 31, 2019 | $ 208,324,000 | $ 25,000,000 | (99,323,000) | 157,000 | 134,158,000 | |
Ending Balance (in shares) at Dec. 31, 2019 | 2,005,824 | 25,000 | ||||
Tax distributions | (6,694,000) | (6,694,000) | ||||
Other comprehensive income | (244,000) | (244,000) | ||||
Net loss | 39,624,000 | 39,624,000 | ||||
Ending Balance at Oct. 03, 2020 | $ 208,324,000 | $ 25,000,000 | (145,641,000) | (87,000) | 87,596,000 | |
Ending Balance (in shares) at Oct. 03, 2020 | 2,005,824 | 25,000 | ||||
Beginning Balance (Adoption of Accounting Standards Codification Topic 606) at Dec. 31, 2019 | (9,831,000) | (9,831,000) | ||||
Beginning Balance at Dec. 31, 2019 | $ 208,324,000 | $ 25,000,000 | (99,323,000) | 157,000 | 134,158,000 | |
Beginning Balance (in shares) at Dec. 31, 2019 | 2,005,824 | 25,000 | ||||
Tax distributions | (6,676,000) | (6,676,000) | ||||
Other comprehensive income | 239,000 | 239,000 | ||||
Net loss | 98,087,000 | 98,087,000 | $ 975 | |||
Ending Balance at Dec. 31, 2020 | $ 208,324,000 | $ 25,000,000 | (204,086,000) | 396,000 | 29,634,000 | |
Ending Balance (in shares) at Dec. 31, 2020 | 2,005,824 | 25,000 | ||||
Acquisitions (Note 3) | $ 8,000,000 | 8,000,000 | ||||
Acquisitions (Note 3) (in shares) | 67,731 | |||||
Sale of 11,500,000 Units, net of underwriting discount and offering expenses | $ 15,000,000 | 15,000,000 | ||||
Sale of 11,500,000 Units, net of underwriting discount and offering expenses (in shares) | 150,000 | |||||
Other comprehensive income | 75,000 | 75,000 | ||||
Net loss | 28,555,000 | 28,555,000 | ||||
Ending Balance at Dec. 31, 2021 | $ 248,595,000 | $ (238,209,000) | $ 471,000 | $ 10,857,000 | ||
Ending Balance (in shares) at Dec. 31, 2021 | 2,223,555 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (975) | |
Changes in assets and liabilities: | ||
Net cash used in operating activities | (2,700) | |
Net cash used in operating activities | (2,700) | |
Cash flows from financing activities: | ||
Proceeds from subordinated related party note | 200,000 | |
Net cash provided by (used in) financing activities | 173,458 | |
Net Change in Cash | 170,758 | |
Cash - Beginning of period | 25,000 | |
Cash - End of period | 195,758 | $ 25,000 |
BCP QUALTEK HOLDCO, LLC | ||
Cash flows from operating activities: | ||
Net loss | (98,087,000) | (67,794,000) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation, amortization and accretion of debt discount | 46,474,000 | 40,103,000 |
Impairment of intangible assets, including goodwill | 28,802,000 | 8,972,000 |
Amortization of debt issuance costs | 3,090,000 | 2,269,000 |
Change in fair value of contingent consideration | 7,081,000 | 6,149,000 |
Payments of acquisition related contingent consideration | (5,238,000) | |
Provision for bad debt expense | (3,619,000) | 1,139,000 |
Gain on disposal of property and equipment | (729,000) | (130,000) |
Changes in assets and liabilities: | ||
Accounts receivable | 52,524,000 | (17,897,000) |
Inventories | 2,111,000 | (296,000) |
Prepaid expenses and other assets | (262,000) | (1,043,000) |
Accounts payable and accrued liabilities | (16,244,000) | 15,546,000 |
Contract liabilities | (3,525,000) | 11,696,000 |
Net cash used in operating activities | 13,457,000 | (3,002,000) |
Net cash used in operating activities | 13,457,000 | (3,002,000) |
Net cash used in operating activities from continuing operations | 14,557,000 | (2,541,000) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (4,808,000) | (3,153,000) |
Proceeds from sale of property and equipment | 881,000 | 378,000 |
Acquisitions of businesses, see Note 3 | (76,342,000) | |
Net cash used in investing activities | 3,963,000 | 79,609,000 |
Cash flows from financing activities: | ||
Proceeds from line of credit, net of repayments | (13,283,000) | 14,844,000 |
Proceeds from long-term debt | (100,000,000) | |
Payments for financing fees | (113,000) | (6,215,000) |
Repayment of long-term debt | (9,564,000) | (8,691,000) |
Proceeds from subordinated related party note | (25,100,000) | |
Repayment of subordinated related party note | (25,100,000) | |
Payments of acquisition related contingent consideration | (6,000,000) | (7,870,000) |
Repayment of capital leases | (5,160,000) | (3,425,000) |
Proceeds from issuance of preferred equity | 25,000,000 | |
Tax distributions to members | (1,197,000) | |
Net cash provided by (used in) financing activities | (9,712,000) | 81,955,000 |
Effect of foreign currency exchange rate (translation) on cash | 59,000 | 23,000 |
Net Change in Cash | (159,000) | (633,000) |
Cash - Beginning of period | 328,000 | 961,000 |
Cash - End of period | 169,000 | 328,000 |
Supplemental disclosure of cash flow information: | ||
Interest paid | $ 34,908,000 | $ 30,185,000 |
Nature of Business and Summary
Nature of Business and Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X 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 complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated 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 consolidated financial statements should be read in conjunction with the Company’s prospectus for its Initial Public Offering as filed with the SEC on March 2, 2021. The interim results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future periods. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its majority owned subsidiary where the Company has the ability to exercise control. All significant intercompany balances and transactions have been eliminated in consolidation. 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 statement 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 the condensed consolidated financial statements in conformity with GAAP requires the Company’s 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. One of the more significant accounting estimates included in these condensed financial statements is the determination of the warrant liability. Such estimates may be subject to change as more current information becomes available and 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 September 30, 2021 and December 31, 2020. Marketable Securities Held in Trust Account At September 30, 2021, substantially all of the assets held in the Trust Account were held in money market funds which are invested primarily in U.S. Treasury securities. The Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these investments are included in interest earned on marketable securities held in Trust Account in the accompanying condensed consolidated statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information. Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the Company’s condensed consolidated balance sheets, primarily due to their short-term nature, with the exception of the warrant liabilities (see Note 9). 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 is 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. Accordingly, at September 30, 2021, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheets. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stocks to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable common stocks resulted in charges against additional paid-in capital. At September 30, 2021, common stock subject to possible redemption reflected in the condensed balance sheets are reconciled in the following table: Gross proceeds $ 115,000,000 Less: Common stock issuance costs (2,812,212) Plus: Accretion of carrying value to redemption value 2,812,212 Common stock subject to possible redemption $ 115,000,000 Warrant Liability 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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“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 ordinary shares, 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 fair value of the Private Placement Warrants (as defined in Note 5) was estimated using a binomial lattice simulation approach (see Note 9). Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. 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 as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 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. The effective tax rate differs from the statutory tax rate of 21% for the three months and nine months ended September 30, 2021 and 2020, respectively, primarily due to the valuation allowance recorded on the Company’s net operating losses. Net Income (Loss) per Common Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. Accretion associated with the redeemable shares of common stock is excluded from income (loss) per common share as the redemption value approximates fair value. The Company has not considered the effect of the warrants sold in the Initial Public Offering and private placement to purchase an aggregate of 2,977,000 shares in the calculation of diluted loss per share, since the inclusion of such warrants would be anti-dilutive. As of September 30, 2021 and 2020, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted net loss per common share is the same as basic net loss per common share for the periods presented. The following table reflects the calculation of basic and diluted net loss per common share (in dollars, except per share amounts): For the Period from 2/13/19 (Inception) Three Months Ended Nine Months Ended Through September 30, 2021 September 30, 2021 September 30, 2020 Redeemable Non-redeemable Redeemable Non-redeemable Non-redeemable common stock common stock common stock common stock common stock Basic and diluted net loss per common share Numerator: Allocation of net loss, as adjusted $ (629,913) $ (179,827) $ (1,052,069) $ (370,379) $ (800) Denominator: Basic and diluted weighted average shares outstanding 11,500,000 3,283,000 8,804,029 3,099,440 2,500,000 Basic and diluted net loss per common share $ (0.05) $ (0.05) $ (0.12) $ (0.12) $ (0.00) Three Months Ended Nine Months Ended September 30, 2020 September 30, 2020 Non-redeemable Non-redeemable common stock common stock Basic and diluted net loss per common share Numerator: Allocation of net loss, as adjusted $ (800) $ (885) Denominator: Basic and diluted weighted average shares outstanding 2,500,000 2,500,000 Basic and diluted net loss per common share $ (0.00) $ (0.00) Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts. Recent Accounting Standards In August 2020, the FASB issued ASU No. 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): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. 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 condensed consolidated financial statements. | Note 2 — Summary of Significant Accounting Policies Basis of Presentation The accompanying financial statements 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 the Company’s 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 expenses during the reporting periods. 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 and 2019. Deferred Offering Costs Deferred offering costs consist of legal, accounting and other costs incurred through the balance sheet date that are directly related to the Proposed Public Offering and that will be charged to stockholders’ equity upon the completion of the Proposed Public Offering. Should the Proposed Public Offering prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations. Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. 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 as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020 and 2019. 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. The provision for income taxes was deemed to be de minimis for the year ended December 31, 2020, and for the period from February 13, 2019 (inception) through December 31, 2019. Net Loss Per Common Share Net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period, excluding shares of common stock subject to forfeiture by the Initial Stockholders. Weighted average shares were reduced for the effect of an aggregate of 375,000 shares of common stock that are subject to forfeiture if the over-allotment option is not exercised by the underwriters (see Notes 5 and 8). At December 31, 2020 and 2019, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into shares of common stock and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the periods presented. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations 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. At December 31, 2020 and 2019, 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 fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature. 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. Risks and Uncertainties In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States and the World. As of the date the financial statements were issued, there was considerable uncertainty around the expected duration of this pandemic. The Company has concluded that while it is reasonably possible that COVID-19 could have a negative effect on identifying a target company for a Business Combination, 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. | |
BCP QUALTEK HOLDCO, LLC | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 1. Nature of Business and Summary of Significant Accounting Policies This summary of significant accounting policies of BCP QualTek Holdco, LLC (collectively with its subsidiaries, “QualTek”, “BCP QualTek”, the “Company”, “we”, “our”, or “us”) is presented to assist in understanding the Company’s unaudited condensed consolidated financial statements (financial statements). The financial statements and notes are the responsibility of the Company’s management, who is responsible for their integrity and objectivity. Nature of business: We operate in two reportable segments, which reflects the way performance is assessed and resources are allocated by our Chief Executive Officer, who is our chief operating decision maker. Our Telecom segment provides engineering, construction, installation, network design, project management, site acquisition and maintenance services to major telecommunication , utility, and cable carriers in various locations in the United States and Canada. Our Renewables and Recovery Logistics segment provides businesses with continuity and disaster recovery operations as well as new fiber optic construction services and maintenance and repair services for telecommunications, renewable energy, commercial and utilities customers across the United States. On June 16, 2021, BCP QualTek Holdco, LLC and Roth CH Acquisition III Co. (“ ROCR Principles of presentation: Each of our interim reporting periods, other than the fourth interim reporting period, ends on the Saturday closest to the last day of the corresponding quarterly calendar period. The third quarter of 2021 and the third quarter of 2020 ended on October 2, 2021 and October 3, 2020, respectively. Our fourth interim reporting period and our fiscal year end on December 31 regardless of the day of the week on which December 31 falls. Use of estimates: There have been no material changes to the Company’s significant accounting policies described in the Company’s Consolidated Financial Report for the year ended December 31, 2020, with the exception of discontinued operations discussed in Note 3. Recent accounting pronouncements: Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) — Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Revenue from Contracts with Customers Risks and uncertainties: It is unknown how long the adverse conditions associated with the coronavirus will last and what the complete financial effect will be to the Company. | Note 1. Nature of Business and Summary of Significant Accounting Policies This summary of significant accounting policies of BCP QualTek Holdco, LLC and Subsidiary (collectively, “QualTek”, “BCP QualTek”, the “Company”, “we”, “our”, or “us”) is presented to assist in understanding the Company’s consolidated financial statements (financial statements). The financial statements and notes are the responsibility of the Company’s management who is responsible for their integrity and objectivity. Nature of business: We operate in two reportable segments, which reflects the way performance is assessed and resources are allocated by our Chief Executive Officer, who is our chief operating decision maker. Our Telecom segment provides engineering, construction, installation, network design, project management, site acquisition and maintenance services to major telecommunication and cable carriers in various locations in the United States. Our Renewables and Recovery Logistics segment provides businesses with continuity and disaster recovery operations with a wide range of logistics, maintenance, and repair capabilities for telecommunications and utilities customers across the United States. Principles of presentation: Discontinued Operations: The Company presents discontinued operations when there is a disposal of a component group or a group of components that in our judgment represents a strategic shift that will have a major effect on our operations and financial results. We aggregate the results of operations for discontinued operations into a single line item in the Consolidated Statements of Operations and Comprehensive Loss for all periods presented. Assets and liabilities of the discontinued operations are aggregated and reported separately as assets and liabilities of discontinued operations in the Consolidated Balance Sheets as of December 31, 2020 and 2019. Throughout these financial statements, unless otherwise indicated, amounts and activity are presented on a continuing operations basis. See Note 14 for additional information. 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 disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant of these estimates and assumptions relate to the recognition of contract revenues under the cost-to-cost method of progress, fair value estimates, the allowance for doubtful accounts, long-lived assets and intangible assets, asset impairment (including goodwill and other long-lived assets), valuation of assets acquired and liabilities assumed in business combinations, and acquisition-related contingent consideration. These estimates are based on historical experience and various other assumptions that management believes to be reasonable under the current facts and circumstances. Actual results could differ from those estimates. Accounts receivable: The Company’s accounts receivable are due primarily from large telecommunication and cable carriers operating within the United States and are carried at original contract amount less an estimate for uncollectible amounts based on historical experience. Management determines the allowance for doubtful receivables by regularly evaluating individual customer receivables and considering a customer’s financial condition and current economic conditions. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received. The Company generally does not require collateral. Accounts receivable are considered past due if any portion of the receivables balance is outstanding for more than one day beyond the contractual due date. The Company does not charge interest on past due accounts. Contract assets: Contract liabilities: Note 1. Nature of Business and Summary of Significant Accounting Policies (continued) Cash: Sale of accounts receivable: Concentration of credit risk: The Company maintains certain cash balances with U.S. and Canadian financial institutions and, from time to time, the Company may have balances in excess of the federally insured deposit limit. Inventories: Property and equipment: Goodwill and intangible assets: year, or more frequently if events occur that would indicate a potential reduction in the fair value of a reporting unit below its carrying value. The Company performs an annual impairment review of goodwill at the reporting unit level, which is one level below the operating segment. The Company determines the fair value of the reporting units using a weighting of fair values derived in equal proportions from the income approach and market approach valuation methodologies. The income approach uses the discounted cash flow method and the market approach uses the guideline company method. If the Company determines the fair value of the reporting unit’s goodwill is less than its carrying value, an impairment loss is recognized and reflected in the operating income or loss in the consolidated statements of operations and comprehensive loss. Intangible assets consist of customer relationships, trademarks and trade names. Intangible assets that have finite useful lives are amortized on a straight-line basis over their estimated useful lives ranging from 2 years to 15 years. Impairment of long-lived and intangible assets: Note 1. Nature of Business and Summary of Significant Accounting Policies (continued) Business combinations: The Company accounts for business combinations under the acquisition method of accounting. The purchase price of each business acquired is allocated to the tangible and intangible assets acquired and the liabilities assumed based on information regarding their respective fair values on the date of acquisition. Any excess of the purchase price over the fair value of the separately identifiable assets acquired and the liabilities assumed is allocated to goodwill. Management determines the fair values used in purchase price allocations for intangible assets based on historical data, estimated discounted future cash flows, expected royalty rates for trademarks and trade names, as well as certain other information. The valuation of assets acquired, and liabilities assumed requires a number of judgments and is subject to revision as additional information about the fair value of assets and liabilities becomes available. Additional information, which existed as of the acquisition date but unknown to us at that time, may become known during the remainder of the measurement period. This measurement period may not exceed 12 months from the acquisition date. The Company recognizes any adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustments are determined. Additionally, in the same period in which adjustments are recognized, the Company records the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of any change to the provisional amounts, calculated as if the accounting adjustment had been completed at the acquisition date. Acquisition costs are expensed as incurred. The results of operations of businesses acquired are included in the consolidated statements of operations and comprehensive loss from their dates of acquisition. Deferred financing costs: Foreign currency: Income taxes: Accounting Standards Codification (ASC) Topic 740, Income Taxes Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense or benefit and liability in the current year. Based on the Company’s assessment of many factors, including past experience and complex judgments about future events, the Company does not currently anticipate significant changes in its uncertain tax positions over the next 12 months. The Company is not subject to income tax examinations by the U.S. federal, state, or local tax authorities prior to 2017. Revenue recognition: Revenue from Contracts with Customers, Under Topic 606, revenue is recognized when, or as, control of promised goods and services is transferred to customers, and the amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for the goods and services transferred. A contractual agreement exists when each party involved approves and commits to, the rights of the parties and payment terms are identified, the agreement has commercial substance, and collectability of consideration is probable. The Company’s services are performed for the sole benefit of its customers, whereby the assets being created or maintained are controlled by the customer and the services the Company performs do not have alternative benefits for the Company. Note 1. Nature of Business and Summary of Significant Accounting Policies (continued) The Company acquires revenue primarily from construction related projects under certain master service and other service agreements contracts. Portions of the contracts include one or multiple performance obligations, which is a contractual promise to deliver a distinct good or transfer of a specific service to a customer. We use different methods of revenue recognition for different types of contracts. For the Company’s projects recognized under the input method, the Company typically identifies two promised goods and services in the contract: (a) delivery of materials, which is recognized as point in time revenue, and (b) installation and construction services, which are recognized over time as related costs are incurred. The Company determined that the materials and the construction services are both considered distinct performance obligations. The Company’s customers are able to benefit from the materials and construction services both on their own and in connection with readily available resources, indicating that both promises are capable of being distinct. The Company further determined that its promises to transfer the materials and to provide the construction services are each separately identifiable from the other promises in the contract. Further, these promises do not represent inputs to a combined output which may represent a single performance obligation as no significant integration services are provided, there is not a high degree of customization, and the promises are not highly interrelated. As a result, the Company concludes that its input method contracts typically include two performance obligations: the sale of materials and construction services. Revenue for construction, project management and site acquisition services are primarily recognized by the Company over time utilizing the cost-to-cost measure of progress, which is an input method, on contracts for specific projects, and for certain master service and other service agreements. The majority of our performance obligations are completed within one year. Under Topic 606, the cost-to-cost measure of progress best depicts the continuous transfer of control of goods or services to the customer, and correspondingly, when performance obligations are satisfied, for these contracts. Revenue for engineering, aerial and underground construction projects are primarily performed under master service agreements and other contracts that contain customer-specified service requirements. The Company has identified multiple performance obligations in these contracts represented by the individual tasks included in the contract, each based on a specific unit of measure. These performance obligations include, for example, the placement of underground or aerial fiber, directional boring, and fiber splicing. The Company allocates total contract consideration to each performance obligation using the expected cost plus a margin approach to estimate the standalone selling price of each performance obligation. The Company’s customers simultaneously receive and consume the benefit provided by the Company, and revenue is recognized over time as services are performed for all performance obligations identified in the contract. Output measures such as units delivered are utilized to assess progress against specific contractual performance obligations. Revenue from fulfillment, maintenance, compliance, and recovery services provided to the telecommunication, cable and utility industries is recognized as the services are rendered. These services are generally performed under master or other service agreements and billed on a contractually agreed price per unit on a work order basis. Each service is a separate performance obligation that is recognized upon completion at a point in time as the service is delivered. Transaction prices for the Company’s contracts may include variable consideration such as contracted materials. Management estimates variable consideration for a performance obligation utilizing estimation methods that it believes best predict the amount of consideration to which the Company will be entitled. Variable consideration is included in the estimated transaction price if it is probable that when the uncertainty associated with the variable consideration is resolved, there will not be a significant reversal of the cumulative amount of revenue that has been recognized. Note 1. Nature of Business and Summary of Significant Accounting Policies (continued) Management’s estimates of variable consideration and the determination of whether to include estimated amounts in the transaction price are based largely on engineering studies, past practices with the customer, specific discussions, correspondence or preliminary negotiations with the customer and all other relevant information that is reasonably available at the time of the estimate. The effect of variable consideration on the transaction price of a performance obligation is typically recognized as an adjustment to revenue on a cumulative catch-up basis, as such variable consideration is generally for services encompassed under the existing contract. To the extent variable consideration reflected in transaction prices are not resolved in accordance with management’s estimates, there could be reductions in, or reversals of, previously recognized revenue. Sales, use and other taxes collected concurrent with revenue-producing activities are excluded from revenue. Most of the Company’s contracts include assurance warranties which do not include any additional distinct services other than the assurance that the services and materials comply with agreed-upon specifications. Therefore, there is not a separate performance obligation for these warranties. For contracts containing more than one performance obligation, the Company allocates the transaction price on a relative standalone selling price (“SSP”) basis. The Company determines SSP based on the price at which the performance obligation is sold separately. If the SSP is not observable through past transactions, the Company estimates the SSP taking into account available information, such as market conditions and internally approved pricing guidelines related to the performance obligation. Revenue generated from fulfillment, maintenance, compliance and recovery services as well as certain performance obligations related to material sales is recognized at a point in time. Point in time revenue accounted for approximately 35% and 32% of consolidated revenue for the years ended December 31, 2020 and 2019, respectively. Substantially all the Company’s other revenue is recognized over time. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the services to be provided. Equity award compensation: Recent accounting pronouncements: Leases (Topic 842) In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments Note 1. Nature of Business and Summary of Significant Accounting Policies (continued) In January 2017, the FASB issued ASU No. 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment Risks and uncertainties 11, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The coronavirus and actions taken to mitigate the spread of it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted to amongst other provisions, provide emergency assistance for individuals, families and businesses affected by the coronavirus pandemic. It is unknown how long the adverse conditions associated with the coronavirus will last and what the complete financial effect will be to the Company. |
Earnings Per Unit
Earnings Per Unit | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
BCP QUALTEK HOLDCO, LLC | ||
Earnings Per Unit | Note 2. Earnings Per Unit Basic net loss per unit is calculated by dividing net loss attributable to Class A members by the weighted average units outstanding during the period, without consideration for Class A equivalents. Diluted net loss per unit is calculated by adjusting weighted average units outstanding for the dilutive effect of common unit equivalents outstanding for the period, determined using the treasury-stock method. If the Company reports a loss, rather than income, the computation of diluted loss per unit excludes the effect of dilutive common unit equivalents, as their effect would be anti-dilutive. For the nine months ended October 2, 2021, we excluded shares that would be issuable assuming conversion of all the Convertible Notes (See Note 8) as their effect would be anti-dilutive under the if-converted method. For the nine months ended October 3, 2020, there were no existing equity units considered to be Class A equivalents and therefore, basic and diluted net loss per unit were the same for all periods presented. The performance-based Class P units (See Note 10) are omitted from the calculation of diluted Earnings Per Unit until it is determined that the performance criteria have been met at the end of the reporting period. The basic and diluted earnings per unit calculations for the periods presented (in thousands, except share and per unit amounts): For the Nine Months Ended October 2, 2021 October 3, 2020 Numerator: Loss from continuing operations $ (20,441) $ (37,916) Loss from discontinued operations (8,114) (1,708) Net loss (28,555) (39,624) Less: accrued preferred return (1,638) (2,508) Net loss attributable to Class A Units (basic) $ (30,193) $ (42,132) Denominator: Weighted-average number of units outstanding, basic and diluted Class A – basic and diluted 2,161,951 2,005,824 EPU: Continuing operations – Class A – basic and diluted $ (10.21) $ (20.15) Discontinued operations – Class A – basic and diluted $ (3.75) $ (0.85) Net loss – Class A – basic and diluted $ (13.96) $ (21.00) | Note 2. Earnings Per Unit Basic net loss per unit is calculated by dividing net loss attributable to Class A members by the weighted average units outstanding during the period, without consideration for Class A equivalents. Diluted net loss per unit is calculated by adjusting weighted average units outstanding for the dilutive effect of common unit equivalents outstanding for the period, determined using the treasury-stock method. If the Company reports a loss, rather than income, the computation of diluted loss per unit excludes the effect of dilutive common unit equivalents, as their effect would be anti-dilutive. For purposes of the diluted net loss per unit calculation, as there are no existing equity units considered to be Class A equivalents, basic and diluted net loss per unit were the same for all periods presented. The performance-based Class P units (See Note 9) are omitted from the calculation of diluted Earnings Per Unit until it is determined that the performance criteria has been met at the end of the reporting period. The basic and diluted earnings per unit calculations for the years ended December 31, 2020 and 2019 are presented below (in thousands, except for units and per unit amounts): 2020 2019 Numerator: Net loss $ (98,087) $ (67,794) Less: accrued preferred return (3,287) (742) Net loss attributable to Class A Units (101,374) (68,536) Denominator: Weighted-average number of units outstanding, basic diluted 2,005,824 1,962,115 Net loss per unit, basic diluted $ (50.54) $ (34.93) |
Acquisitions
Acquisitions | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
BCP QUALTEK HOLDCO, LLC | ||
Acquisitions | Note 4. Acquisitions On January 26, 2021, the Company purchased 100% of the membership interests of Fiber Network Solutions, LLC (“FNS”), a Texas based company that provides new fiber optic construction services, as well as maintenance and repair services to renewable energy, commercial, and utility clientele in the United States. The overall consideration transferred was $20,059 thousand of cash and rollover equity valued at $2,000 thousand. The purchase price is subject to adjustment based upon FNS exceeding pre-determined EBITDA thresholds for the years ending 2021, 2022, 2023, and 2024, as defined in the agreement, subject to a maximum additional payment of $20.0 million. As of the acquisition date, the fair value of the contingent consideration was determined to be $8,200 thousand. The cash consideration was funded by the issuance of equity, as well as, the issuance of convertible notes with the majority member. On August 6, 2021, the Company acquired certain assets and liabilities from Broken Arrow Communications, Inc. (“Broken Arrow”), a New Mexico based company that provides a wide variety of services for the installation, construction, and maintenance of wireless communication facilities. The consideration transferred was $5,000 thousand of cash. The purchase price is subject to adjustment based upon Broken Arrow exceeding pre-determined crew count and EBITDA thresholds for certain markets for the 5-month period of August 2021 through December 2021 and for the year ending December 31, 2022, as defined in the agreement, subject to a maximum additional payment of $10.0 million. As of the acquisition date, the fair value of the contingent consideration was determined to be $5,735 thousand. The cash consideration was funded by the issuance of convertible notes in June 2021. On August 30, 2021, the Company purchased 100% of the membership interests of Concurrent Group LLC (“Concurrent”), a Florida based company that provides construction, maintenance, and restoration services for utilities, electric membership co-ops, and municipally owned power providers. The overall consideration transferred was $13,828 thousand of cash, rollover equity valued at $6,000 thousand, and acquisition debt of $14,143 thousand. The purchase price is subject to adjustment based upon Concurrent exceeding pre-determined EBITDA thresholds for LTM periods ending in the third quarter of 2022, 2023 and 2024, as defined in the agreement, subject to a maximum additional payment of $30.0 million. As of the acquisition date, the fair value of the contingent consideration was determined to be $10,210 thousand. The cash consideration was funded by the issuance of convertible notes in June 2021. The acquisitions were recognized as business combinations with FNS reporting within our Renewables and Recovery Logistics Segment and Broken Arrow and Concurrent reporting within our Telecom Segment. The identifiable assets acquired and liabilities assumed were recorded at their estimated fair values on the acquisition dates. Goodwill resulted from expected synergies and revenue growth from combining operations with the Company. Due to the limited time since the closing of the Broken Arrow and Concurrent acquisitions, the valuation efforts and related acquisition accounting are incomplete for both acquisitions at the time of filing of the condensed consolidated financial statements. As a result, the Company recognized provisional amounts that are subject to adjustment as the Company obtains additional information. In particular, additional time is needed to finalize the results of the valuation of assets acquired and liabilities assumed, specifically goodwill, intangible assets, and contingent consideration. Any adjustments to the purchase price allocation will be made as soon as practicable, but no later than one year from the acquisition date. The following table summarizes the fair value of the assets and liabilities acquired at the date of the acquisitions (in thousands): FNS Broken Arrow Concurrent Purchase consideration: Cash paid $ 20,059 $ 5,000 $ 13,828 Rollover equity 2,000 — 6,000 Contingent consideration 8,200 5,735 10,210 Acquisition debt — — 14,143 $ 30,259 $ 10,735 $ 44,181 Purchase price allocations: Cash $ — $ — $ 1,830 Accounts receivable — 5,121 8,402 Inventories — 133 25 Prepaid expenses — 94 — Other current assets — — 10 Property and equipment 9,978 219 4,164 Other long-term assets — 32 60 Customer relationships 17,370 4,690 24,186 Trademarks and trade names 270 80 1,330 Goodwill 8,082 4,433 10,738 35,700 14,802 50,745 Accounts payable — (1,853) (1,932) Accrued expenses — (156) (830) Contract liabilities — (2,058) (639) Capital lease obligations (5,441) — (3,163) $ 30,259 $ 10,735 $ 44,181 | Note 3. Acquisitions Vertical Limit Acquisition On March 29, 2019, pursuant to the Asset Purchase Agreement between QualTek and Vertical Limit Construction, LLC (the “Vertical Limit Seller”), QualTek acquired certain assets and liabilities from the Vertical Limit Seller. The transaction was accounted for as a business combination within the Telecom segment, and the overall consideration transferred was $16.3 million of cash. The purchase price was subject to adjustment based upon Vertical Limit exceeding pre-determined crew counts through May 15, 2019, EBITDA thresholds for 2019 and 2020, and trained employee counts through December 31, 2021, as defined in the agreement, subject to a maximum payment of $15.7 million. As of the acquisition date, the fair value of the contingent consideration was determined to be $7.7 million. As of December 31, 2020 and 2019, results of operations subsequent to the acquisition date and changes to management’s forecasts resulted in a change in fair value of the contingent consideration of ($1.2) million and $4.2 million, respectively, which is reflected in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2020 and 2019. During the year ended December 31, 2019, the Company paid $3.0 million for the 2019 first quarter EBITDA earnout, as defined in the agreement, which was recorded as a reduction of contingent consideration on the consolidated balance sheets. As of December 31, 2020, $3.5 million of earned but unpaid consideration is included in current portion of long-term debt and capital lease obligations on the consolidated balance sheets as acquisition debt (See Note 7). Goodwill resulted from expected synergies and revenue growth from combining operations with the Company. The following table summarizes the fair value of the assets and liabilities acquired at the date of the acquisition (in thousands): Purchase consideration: Cash paid $ 16,250 Contingent consideration 7,677 $ 23,927 Purchase price allocations: Accounts receivable $ 14,815 Inventories 65 Property and equipment 1,195 Prepaid expenses 72 Trademarks and trade names 1,900 Customer relationships 6,100 Goodwill 7,093 Other long-term assets 46 31,286 Accounts payable (5,621) Accrued expenses (1,688) Capital lease obligations (50) $ 23,927 Note 3. Acquisitions (continued) Vinculums Acquisition On October 4, 2019, pursuant to the Asset Purchase Agreement between QualTek and Vinculums Services, LLC (the “Vinculums Seller”), QualTek acquired certain assets and liabilities from the Vinculums Seller. The transaction was accounted for as a business combination within the Telecom segment, and the overall consideration transferred was $43.6 million of cash and rollover equity valued at $12.5 million. The purchase price was subject to adjustment based upon Vinculums exceeding pre-determined EBITDA thresholds for 2019, 2020, and 2021, as defined in the agreement, subject to a maximum payment of $35 million. As of the acquisition date, the fair value of the contingent consideration was determined to be $22.6 million. As of December 31, 2020, results of operations subsequent to the acquisition date and changes to management’s forecasts resulted in a change in fair value of the contingent consideration of ($5.8) million, which is reflected in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2020. As of December 31, 2020, $5.0 million of earned but unpaid consideration is included in current portion of long-term debt and capital lease obligations on the consolidated balance sheets as acquisition debt (See Note 7). Goodwill resulted from expected synergies and revenue growth from combining operations with the Company. The following table summarizes the fair value of the assets and liabilities acquired at the date of the acquisition (in thousands): Purchase consideration: Cash paid $ 43,595 Rollover equity 12,500 Contingent consideration 22,615 $ 78,710 Purchase price allocations: Accounts receivable $ 37,574 Inventories 1,668 Prepaid expenses 318 Property and equipment 990 Trademarks and trade names 4,500 Customer relationships 35,100 Goodwill 32,581 Other long-term assets 79 112,810 Accounts payable (14,830) Accrued expenses (12,706) Contract liabilities (6,190) Capital lease obligations (374) $ 78,710 The Company finalized the purchase price allocation for Vinculums, which resulted in an increase in goodwill of $973 thousand during the year ended December 31, 2020. The Company made this measurement period adjustment to reflect facts and circumstances that related to accounts receivable, accounts payable, and accrued expenses that existed at the acquisition date and did not result from intervening events subsequent to such date. Note 3. Acquisitions (continued) Aerial Acquisition On October 18, 2019, pursuant to the Asset Purchase Agreement between QualTek and Aerial Wireless Services, LLC (the “Aerial Seller”), QualTek acquired certain assets and liabilities from the Aerial Seller. The transaction was accounted for as a business combination within the Telecom segment, and the overall consideration transferred was $16.5 million of cash and rollover equity valued at $1.0 million. The purchase price was subject to adjustment based upon Aerial exceeding pre-determined billing thresholds under purchased contracts for 2019 and 2020, as defined in the agreement, subject to a maximum payment of $6.0 million. The agreement also included two timing payments of $1.5 million payable through October 18, 2020. As of December 31, 2019, $1.5 million was unpaid and was included in accrued expenses on the consolidated balance sheets. The balance was subsequently paid in 2020. As of the acquisition date, the fair value of the contingent consideration was determined to be $5.8 million. The full $6.0 million was paid in 2020. Goodwill resulted from expected synergies and revenue growth from combining operations with the Company. The following table summarizes the fair value of the assets and liabilities acquired at the date of the acquisition (in thousands): Purchase consideration: Cash paid $ 16,497 Rollover equity 1,000 Contingent consideration 5,825 Timing payments 1,447 $ 24,769 Purchase price allocations: Accounts receivable $ 8,847 Inventories 150 Prepaid expenses 167 Property and equipment 1,446 Trademarks and trade names 340 Customer relationships 3,800 Goodwill 14,698 Other long-term assets 28 29,476 Accounts payable (2,254) Accrued expenses (789) Contract liabilities (648) Capital lease obligations (1,016) $ 24,769 The Company finalized the purchase price allocation for Aerial, which resulted in a decrease in goodwill of $153 thousand during the year ended December 31, 2020. The Company made this measurement period adjustment to reflect facts and circumstances that related to accounts receivable, inventory, prepaid assets, accounts payable, accrued expenses, and contract liabilities that existed at the acquisition date and did not result from intervening events subsequent to such date. Costs incurred to affect the acquisitions, as well as costs associated with failed transactions, are recognized separately rather than included in the cost allocated to the assets acquired and liabilities assumed. Total transaction related costs of $1.0 million and $4.3 million were reflected in the consolidated statements of operations and comprehensive loss during the years ended December 31, 2020 and 2019, respectively. Note 3. Acquisitions (continued) Site Resources, LLC Acquisition — 2018 Acquisition As of December 31, 2019, results of operations subsequent to the acquisition date of Site Resources, LLC resulted in a change in fair value of the contingent consideration of ($1.0) million, which is reflected in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2019. No contingent consideration payments were made. Recovery Logistics LLC Acquisition — 2018 Acquisition As of December 31, 2019, results of operations subsequent to the acquisition date of Recovery Logistics, LLC (“RLI”) resulted in a change in fair value of the contingent consideration of $2.9 million, which is reflected in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2019. During the year ended December 31, 2019, the Company paid $10.1 million to settle the RLI earnout for the specific event in 2018 which was recorded as a reduction of contingent consideration on the consolidated balance sheets. As of December 31, 2020, NX Canada, ULC Acquisition — 2018 Acquisition As of December 31, 2019, results of operations subsequent to the acquisition date of NX Canada, ULC resulted in a change in fair value of the contingent consideration of ( $266 ) thousand, which is reflected in loss from discontinued operations in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2019. No contingent consideration payments were made. |
Property and Equipment
Property and Equipment | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
BCP QUALTEK HOLDCO, LLC | ||
Property and Equipment | Note 5. Property and Equipment Property and equipment consisted of the following (in thousands): October 2, December 31, 2021 2020 Office furniture $ 1,331 $ 1,249 Computers 1,591 1,217 Machinery, equipment and vehicles 15,482 10,275 Land 140 — Leasehold improvements 4,695 3,354 Software 2,281 2,199 Assets under capital lease 41,349 32,153 Construction in process 1,263 605 68,132 51,052 Less: accumulated depreciation (25,945) (17,258) Property and equipment, net $ 42,187 $ 33,794 Property and equipment include assets acquired under capital leases of $41,349 thousand and $32,153 thousand and accumulated depreciation of $13,028 thousand and $8,062 thousand as of October 2, 2021 and December 31, 2020, respectively. Depreciation and amortization expense was $9,418 thousand and $6,584 thousand for the nine months ended October 2, 2021 and October 3, 2020, respectively. | Note 4. Property and Equipment Property and equipment consisted of the following as of December 31, 2020 and 2019 (in thousands): 2020 2019 Office furniture $ 1,249 $ 898 Computers 1,217 1,051 Machinery, equipment and vehicles 10,275 6,532 Leasehold improvements 3,354 792 Software 2,199 1,903 Assets under capital lease 32,153 15,226 Construction in process 605 246 51,052 26,648 Less: accumulated depreciation (17,258) (8,475) Property and equipment, net $ 33,794 $ 18,173 Property and equipment includes assets acquired under capital leases of $32.2 million and $15.2 million and accumulated depreciation of $8.1 million and $3.9 million as of December 31, 2020 and 2019, respectively. Depreciation and amortization expense for the years ended December 31, 2020 and 2019 was $9.0 million and $6.3 million, respectively. |
Accounts Receivable, Net of All
Accounts Receivable, Net of Allowance, Contract Assets and Liabilities, and Customer Credit Concentration | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
BCP QUALTEK HOLDCO, LLC | ||
Accounts Receivable, Net of Allowance, Contract Assets and Liabilities, and Customer Credit Concentration | Note 6. Accounts Receivable, Net of Allowance, Contract Assets and Liabilities, and Customer Credit Concentration The following provides further details on the condensed consolidated balance sheet accounts of accounts receivable, net and contract liabilities. Accounts Receivable, Net of Allowance Accounts receivable, net classified as current, consisted of the following (in thousands): October 2, December 31, 2021 2020 Trade accounts receivable $ 97,506 $ 44,419 Contract assets 157,155 134,311 254,661 178,730 Less: allowance for doubtful accounts (5,397) (3,933) Accounts receivable, net $ 249,264 $ 174,797 The Company is party to non-recourse financing arrangements in the ordinary course of business, under which certain receivables are settled with the customer’s bank in return for a nominal fee. Discount charges related to these arrangements, which are included within interest expense, totaled $770 thousand and $1,356 thousand for the nine months ended October 2, 2021 and October 3, 2020, respectively. Contract Assets and Liabilities Net contract assets consisted of the following (in thousands): October 2, December 31, 2021 2020 Contract assets $ 157,155 $ 134,311 Contract liabilities (14,950) (14,945) Contract assets, net $ 142,205 $ 119,366 The amount of revenue recognized in the nine-months ended October 2, 2021 and October 3, 2021 that was previously included in contact liabilities at the beginning of the period was $8,132 thousand and $9,589 thousand, respectively. Customer Credit Concentration Customers whose combined amounts of accounts receivable and contract assets exceeded 10% of total combined accounts receivable and contract assets were as follows (in thousands): October 2, 2021 December 31, 2020 Amounts % of Total Amounts % of Total AT&T $ 61,797 24.3 % $ 81,796 45.8 % Entergy 67,776 26.6 % * * T-Mobile 34,447 13.5 % * * Verizon 47,892 18.8 % 65,346 36.6 % Total $ 211,911 83.2 % $ 147,142 82.3 % * Accounts receivable and contract assets from Entergy and T-Mobile did not exceed 10% of total combined accounts receivable and contract assets for the year ended December 31, 2020. | Note 5. Accounts Receivable, Net of Allowance, Contract Assets and Liabilities, and Customer Credit Concentration The following provides further details on the consolidated balance sheet accounts of accounts receivable, net and contract liabilities. See Note 1 for further information on our policies related to these consolidated balance sheet accounts, as well as our revenue recognition policies. Accounts Receivable, Net of Allowance Accounts receivable, net, classified as current, consisted of the following as of December 31, 2020 and 2019 (in thousands): 2020 2019 Trade accounts receivable $ 44,419 $ 61,365 Contract assets 134,311 173,734 178,730 235,099 Less: allowance for doubtful accounts (3,933) (6,440) Accounts receivable, net $ 174,797 $ 228,659 Contract Assets and Liabilities Net contract assets consisted of the following as of December 31, 2020 and 2019 (in thousands): 2020 2019 Contract assets $ 134,311 $ 173,734 Contract liabilities (14,945) (18,470) Contract assets, net $ 119,366 $ 155,264 The amount of revenue recognized in the year ended December 31, 2020 and 2019 that was previously included in contract liabilities at the beginning of the period was $9.4 million and $5.7 million, respectively. Customer Credit Concentration Customers whose combined amounts of accounts receivable and contract assets exceeded 10% of total combined accounts receivable and contract assets as of December 31, 2020 and 2019 were as follows (in thousands): 2020 2019 Amount % of Total Amounts % of Total AT&T $ 81,796 45.8 % $ 120,145 51.1 % Verizon 65,346 36.6 % 69,552 29.6 % Total $ 147,142 82.3 % $ 189,697 80.8 % |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
BCP QUALTEK HOLDCO, LLC | ||
Goodwill and Intangible Assets | Note 7. Goodwill and Intangible Assets Goodwill Changes in the carrying amount of goodwill by reportable segment is as follows (in thousands): Renewables and Recovery Logistics Telecom Total Goodwill as of December 31, 2020(a) $ 13,598 $ 44,924 $ 58,522 Additions from acquisitions (Note 4) 8,082 15,171 23,253 Goodwill as of October 2, 2021(a) $ 21,680 $ 60,095 $ 81,775 (a) Goodwill is net of accumulated impairment charges of $36,934 thousand in the Telecom segment. There have been no impairment charges within the Renewables and Recovery Logistics segment. For the nine months ended October 2, 2021 and October 3, 2020, there were no goodwill impairment charges. Intangible Assets Intangible assets consisted of the following (in thousands): October 2, 2021 Weighted Average Gross Remaining carrying Accumulated Net carrying Useful Life amount amortization amount Customer relationships 9.7 $ 414,446 $ (89,681) $ 324,765 Trade names 9.7 60,200 (20,243) 39,957 $ 474,646 $ (109,924) $ 364,722 December 31, 2020 Weighted Average Gross Remaining carrying Accumulated Net carrying Useful Life amount amortization amount Customer relationships 10.8 $ 368,200 $ (65,868) $ 302,332 Trade names 9.9 58,519 (15,035) 43,484 $ 426,719 $ (80,903) $ 345,816 Amortization expense of intangible assets was $29,020 thousand and $26,818 thousand for the nine months ended October 2, 2021 and October 3, 2020, respectively. | Note 6. Goodwill and Intangible Assets Goodwill by reportable segment consisted of the following as of December 31, 2020 and 2019 (in thousands): Renewables and Recovery Logistics Telecom Total Goodwill as of January 1, 2019 $ 13,598 $ 27,485 $ 41,083 Additions from acquistions — 53,552 53,552 Impairment loss — (8,132) (8,132) Goodwill as of December 31, 2019 $ 13,598 $ 72,905 $ 86,503 Measurement period adjustments, net — 821 821 Impairment loss — (28,802) (28,802) Goodwill as of December 31, 2020 $ 13,598 $ 44,924 $ 58,522 For the years ended December 31, 2020 and 2019, the Company recognized goodwill impairment within the Telecom segment of $28.8 million and $8.1 million, respectively. Impairment resulted from a change in projected future discounted cash flows of the reporting units within the segment which resulted in an carrying value in excess of the estimated fair value. Intangible assets consisted of the following as of December 31, 2020 and 2019 (in thousands): 2020 Weighted Average Remaining Useful Gross carrying Accumulated Life amount amortization Net carrying amount Customer relationships 10.8 $ 368,200 $ (65,868) $ 302,332 Trade names 9.9 58,519 (15,035) 43,484 $ 426,719 $ (80,903) $ 345,816 2019 Weighted Average Remaining Useful Gross carrying Accumulated Life amount amortization Net carrying amount Customer relationships 11.8 $ 368,200 $ (36,782) $ 331,418 Trade names 10.5 58,519 (8,364) 50,155 $ 426,719 $ (45,146) $ 381,573 Amortization expense of intangible assets was $35.8 million and $32.9 million for the years ended December 31, 2020 and 2019, respectively. For the year ended December 31, 2019, the Company recorded $0.8 million of impairment of long-lived assets within the Telecom segment as a result of a change in projected future undiscounted cash flows of an asset group within the segment. No Note 6. Goodwill and Intangible Assets (continued) The following table provides estimated future amortization expense related to the intangible assets (in thousands): Years ending December 31: 2021 $ 35,585 2022 35,585 2023 34,294 2024 32,245 2025 31,289 Thereafter 176,818 $ 345,816 |
Long-Term Debt and Capital Leas
Long-Term Debt and Capital Lease Obligations | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
BCP QUALTEK HOLDCO, LLC | ||
Long-Term Debt and Capital Lease Obligations | Note 8. Debt and Capital Lease Obligations Convertible notes — related party: On June 16, 2021, the Company issued a convertible note “Convertible Note — Related Party — June 2021”) in the aggregate principal amount of $30,568 thousand to BCP QualTek II LLC, an affiliate of its majority member, in exchange for the 25,000 outstanding Preferred Class B Units (Preferred Units) and the associated accumulated preferred return (see Note 10). The Convertible Note — Related Party — June 2021 bears interest at an annual rate of 12.00%, which accrues and is payable together with the principal balance. The Company recorded interest expense of $1,105 thousand for the nine months ended October 2, 2021. There is no fixed maturity date, however, cash payments are required equal to tax distributions, which the note holder would be entitled if the Convertible Note — Related Party — June 2021 were a Preferred Unit. The Convertible Note — Related Party — June 2021 includes a mandatory conversion provision at the earlier of immediately prior to the consummation of the SPAC Combination, as defined in the agreement, with ROCR or March 13, 2022. Upon the consummation of the SPAC Combination, the Convertible Note — June 2021 will automatically convert into of the Company’s Class A units at a price of $83.23 per unit. If the SPAC Combination is not consummated by March 13, 2022, the Convertible Note — June 2021 — Related Party will automatically convert into Preferred Units equal to the accreted principal amount at a price of $1,000 per unit. Convertible notes — June 2021: Line of credit: Term loan: The obligations of QualTek under the PNC Credit Agreement are secured (a) on a first priority basis, by liens on the ABL Priority Collateral as defined in the ABL Intercreditor Agreement (“Intercreditor Agreement”), dated as of July 18, 2018 of QualTek including accounts receivable and inventory and (b) on a second priority basis, by liens on the Term Priority Collateral, as defined in the Intercreditor Agreement. The obligations of QualTek under the Term Loan are secured (a) on a first priority basis, by liens on the Term Priority Collateral of QualTek and (b) on a second priority basis, by liens on the ABL Priority Collateral. Generally, Term Priority Collateral includes all assets, other than the ABL Priority Collateral, and equity interests of QualTek. Acquisition debt: Debt outstanding, whose carrying value approximates fair market value due to variable interest rates based on current rates available to the Company for similar instruments, was as follows (in thousands): October 2, December 31, 2021 2020 Line of credit $ 96,242 $ 59,837 Term loan 353,872 361,045 Acquisition debt 34,718 10,575 Convertible notes – related party 30,568 — Convertible notes – June 2021 44,400 — Capital lease obligations 25,620 23,069 Less: unamortized financing fees (12,873) (13,854) Less: convertible debt discount (7,498) — 565,049 440,672 Less: current maturities of long-term debt (110,395) (20,139) Less: current portion of capital lease obligations, net of capital lease interest (9,150) (7,110) $ 445,504 $ 413,423 Debt issuance costs are presented in the condensed consolidated balance sheets as a direct reduction from the carrying amount of long-term debt and are amortized over the term of the related debt. The Company amortized $3,201 thousand and $2,307 | Note 7. Long-Term Debt and Capital Lease Obligations Line of credit: at December 31, 2020), as defined in the agreement. There was Term loan: The obligations of QualTek under the PNC Credit Agreement are secured (a) on a first priority basis, by liens on the ABL Priority Collateral, as defined in the ABL Intercreditor Agreement (“Intercreditor Agreement”), dated as of July 18, 2018 including accounts receivable and inventory and (b) on a second priority basis, by liens on the Term Priority Collateral, as defined in the Intercreditor Agreement. The obligations of QualTek under the Term Loan are secured (a) on a first priority basis, by liens on the Term Priority Collateral of QualTek and (b) on a second priority basis, by liens on the ABL Priority Collateral. Generally, Term Priority Collateral includes all assets, other than the ABL Priority Collateral, and equity interests of QualTek. Note 7. Long-Term Debt and Capital Lease Obligations (continued) Acquisition debt: Subordinated debt — related party: , Debt outstanding as of December 31, 2020 and 2019, whose carrying value approximates fair market value due to variable interest rates based on current rates available to the Company for similar instruments, was as follows (in thousands): 2020 2019 Line of credit $ 59,837 $ 46,554 Term loan 361,045 370,609 Acquistion debt 10,575 — Capital lease obligations 25,751 11,959 Less: amounts representing interest (2,682) (1,327) Less: unamortized financing fees (13,854) (16,830) 440,672 410,965 Less: current portion of long-term debt (20,139) (9,564) Less: current portion of capital lease obliations, net of capital lease interest (7,110) (3,902) $ 413,423 $ 397,499 The minimum payments of the Company’s long-term debt and capital lease obligations are as follows (in thousands): Capital Line of Term Acquisition lease credit loan debt obligations Total 2021 $ — $ 9,564 $ 10,575 $ 8,287 $ 28,426 2022 — 9,564 — 7,318 16,882 2023 59,837 9,564 — 6,397 75,798 2024 — 9,564 — 3,105 12,669 2025 — 9,564 — 644 10,208 Thereafter — 313,225 — — 313,225 Total $ 59,837 $ 361,045 $ 10,575 $ 25,751 $ 457,208 |
Fair Value Measurements_2
Fair Value Measurements | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Fair Value Measurements | NOTE 10. FAIR VALUE MEASUREMENTS The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. Quoted Prices in Significant Other Significant Other September 30, Active Markets Observable Inputs Unobservable Inputs Description 2021 (Level 1) (Level 2) (Level 3) Assets: Cash and marketable securities held in Trust Account $ 115,007,452 $ 115,007,452 $ — $ — Liabilities: Warrant Liability – Private Placement Warrants $ 217,260 $ — $ — $ 217,260 The Private Placement Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liability on the accompanying condensed consolidated balance sheet. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liability in the condensed consolidated statements of operations. The Private Placement Warrants were valued using a binomial lattice model incorporating the Cox-Ross-Rubenstein methodology, which is considered to be a Level 3 fair value measurement. The binomial lattice model’s primary unobservable input utilized in determining the fair value of the Private Placement Warrants is the expected volatility of the common stock. The expected volatility as of the Initial Public Offering date was derived from observable public warrant pricing on comparable ‘blank-check’ companies without an identified target. The expected volatility as of subsequent valuation dates was implied from the Company’s own Public Warrant pricing. There were no transfers between Levels 1, 2 or 3 during the three and nine months ended September 30, 2021. The following table provides quantitative information regarding Level 3 fair value measurements: At March 5, 2021 (Initial At Measurement) September 30, 2021 Stock price $ 9.78 $ 9.94 Strike price $ 11.50 $ 11.50 Volatility 14.9 % 19.8 % Risk-free rate 0.87 % 0.95 % Probability of Business Combination occurring 75 % 90.0 % Dividend yield 0.0 % 0.0 % Fair value of Private Placement Warrants $ 0.90 $ 2.13 The following table presents the changes in the fair value of Level 3 warrant liabilities: Warrant Liabilities Fair value as of March 5, 2021 (Initial Measurement) $ 91,800 Change in fair value (9,180) Fair value as of March 31, 2021 82,620 Change in fair value 232,560 Fair value as of June 30, 2021 $ 315,180 Change in fair value (97,920) Fair value as of September 30, 2021 $ 217,260 | ||
BCP QUALTEK HOLDCO, LLC | |||
Fair Value Measurements | Note 9. Fair Value Measurements The Company measures and reports certain financial and non-financial assets and liabilities on a fair value basis. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). GAAP specifies a three-level hierarchy that is used when measuring and disclosing fair value. The fair value hierarchy gives the highest priority to quoted prices available in active markets (i.e. observable inputs) and the lowest priority to data lacking transparency (i.e. unobservable inputs). An instrument’s categorization within the fair value hierarchy is based on the lowest level of significant inputs to its valuation. The following is a description of the three hierarchy levels. Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Active markets are considered to be those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in inactive markets. Level 3 Unobservable inputs are not corroborated by market data. This category is comprised of financial and non-financial assets and liabilities whose fair value is estimated based on internally developed models or methodologies using significant inputs that are generally less readily observable from objective sources. Transfers into or out of any hierarchy level are recognized at the end of the reporting period in which the transfers occurred. There were no transfers between any levels during the nine The information following is provided to help readers gain an understanding of the relationship between amounts reported in the accompanying financial statements and the related market or fair value. The disclosures include financial instruments. Acquisition-related contingent consideration is measured at fair value on a recurring basis using unobservable inputs such as projections of financial results and cash flows for the acquired businesses and a discount factor based on the weighted average cost of capital which fall within Level 3 of the fair value hierarchy. In accordance with the fair value hierarchy described above, the following tables show the fair value of the Company’s financial liabilities that are required to be measured at fair value on a recurring basis at October 2, 2021 and December 31, 2020 and the related activity for the nine months ended October 2, 2021 and October 3, 2020. Fair Value at October 2, 2021 (in thousands) Carrying Value Level 1 Level 2 Level 3 Financial liabilities Contingent consideration $ 28,429 $ — $ — $ 28,429 $ 28,429 $ — $ — $ 28,429 Fair Value at December 31, 2020 (in thousands) Carrying Value Level 1 Level 2 Level 3 Financial liabilities Contingent consideration $ 18,129 $ — $ — $ 18,129 $ 18,129 $ — $ — $ 18,129 The following table sets forth a summary of the changes in fair value of the Company’s Level 3 financial liabilities: January 1, 2021 18,129 Acquisitions (see Note 4) 24,145 Accretion 699 Change in fair value (4,544) Reclassification to acquisition debt (10,000) October 2, 2021 $ 28,429 January 1, 2020 $ 40,119 Payment of contingent consideration (6,000) Accretion 1,306 October 3, 2020 $ 35,425 | Note 8. Fair Value Measurements The Company measures and reports certain financial and non-financial assets and liabilities on a fair value basis. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). GAAP specifies a three-level hierarchy that is used when measuring and disclosing fair value. The fair value hierarchy gives the highest priority to quoted prices available in active markets (i.e. observable inputs) and the lowest priority to data lacking transparency (i.e. unobservable inputs). An instrument’s categorization within the fair value hierarchy is based on the lowest level of significant inputs to its valuation. The following is a description of the three hierarchy levels. Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Active markets are considered to be those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in inactive markets. Level 3 Unobservable inputs are not corroborated by market data. This category is comprised of financial and non-financial assets and liabilities whose fair value is estimated based on internally developed models or methodologies using significant inputs that are generally less readily observable from objective sources. Transfers into or out of any hierarchy level are recognized at the end of the reporting period in which the transfers occurred. There were no transfers between any levels during the years ended December 31, 2020 and 2019. The information following is provided to help readers gain an understanding of the relationship between amounts reported in the accompanying financial statements and the related market or fair value. The disclosures include financial instruments. Acquisition-related contingent consideration, which resulted from the Acquisitions in Note 3, is measured at fair value on a recurring basis using unobservable inputs such as projections of financial results and cash flows for the acquired businesses and a discount factor based on the weighted average cost of capital which fall within Level 3 of the fair value hierarchy. In accordance with the fair value hierarchy described above, the following tables show the fair value of the Company’s financial liabilities that are required to be measured at fair value on a recurring basis at December 31, 2020 and 2019 and the related activity for the years ended December 31, 2020 and 2019. Fair Value at December 31, 2020 Carrying (in thousands) Value Level 1 Level 2 Level 3 Financial liabilities Contingent consideration – Vertical Limit $ 4,711 $ — $ — $ 4,711 Contingent consideration – Vinculums 13,418 — — 13,418 $ 18,129 $ — $ — $ 18,129 Fair Value at December 31, 2019 Carrying (in thousands) Value Level 1 Level 2 Level 3 Financial liabilities Contingent consideration – RLI $ 2,075 $ — $ — $ 2,075 Contingent consideration – Vertical Limit 9,195 — — 9,195 Contingent consideration – Vinculums 22,973 — — 22,973 Contingent consideration – Aerial 5,876 — — 5,876 $ 40,119 $ — $ — $ 40,119 Note 8. Fair Value Measurements (continued) The following table sets forth a summary of the changes in fair value of the Company’s Level 3 financial liabilities: January 1, 2019 $ 10,130 Acquisitions (see Note 3) 36,117 Payment of contingent consideration (13,108) Accretion 832 Change in fair value 6,148 December 31, 2019 40,119 Payment of contingent consideration (6,000) Accretion 1,666 Reclassification to acquisition debt (10,575) Change in fair value (7,081) December 31, 2020 $ 18,129 |
Equity
Equity | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
STOCKHOLDERS' EQUITY | NOTE 8. STOCKHOLDERS’ EQUITY Common Stock issued outstanding | Note 7 — Stockholders’ Equity Common Stock Warrants Once the warrants become exercisable, the Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $0.01 per warrant; ● at any time after the warrants become exercisable; ● upon not less than 30 days ’ prior written notice of redemption to each warrant holder; ● if, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.00 per share, for any 20 trading days within a 30- day trading period commencing after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and ● if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants at the time of redemption and for the entire 30- day trading period referred to above and continuing each day thereafter until the date of redemption. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuances of shares of common stock at a price below their respective exercise prices. Additionally, in no event will the Company be required to net cash settle the 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 warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless. In addition, if (x) the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per share of 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 Initial Stockholders or their affiliates, without taking into account any Founder Shares held by them prior to such issuance), (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 a Business Combination on the date of the consummation of a 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 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 Market Value 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 Market Price. The Private Warrants will be identical to the Public Warrants underlying the Units being sold in the Proposed Public Offering, except that the Private Warrants and the shares of common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or saleable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. | |
BCP QUALTEK HOLDCO, LLC | |||
STOCKHOLDERS' EQUITY | Note 10. Equity Profits and losses of the Company are allocated to the Members in accordance with the BCP QualTek HoldCo, LLC Agreement (“HoldCo LLC Agreement”), as amended and restated on October 4, 2019. Distributions made by the Company are based on the HoldCo LLC agreement. Preferred equity: On June 16, 2021, the 25,000 Preferred Units and accumulated preferred return, which totaled $5,568 thousand was exchanged for the Convertible Note — Related Party — June 2021 (see Note 8). Profits interests: probable and therefore, the Company has not assigned any value to such Class P Units and no related expense were incurred during the nine months ended October 2, 2021 and October 3, 2020. Distributions: | Note 9. Equity Profits and losses of the Company are allocated to the Members in accordance with the BCP QualTek HoldCo, LLC Agreement (HoldCo LLC Agreement), as amended and restated on October 4, 2019. Distributions made by the Company are based on the HoldCo LLC agreement. Preferred equity: The Preferred Units have a liquidation preference equal to the initial price per unit of $1,000 plus a preferred return accrued through the date of liquidation of 12.0% per annum, compounding quarterly, as defined in the Holdco LLC Agreement. The Preferred Units have a perpetual term, with no fixed maturity date and no voting rights. The Company has the right to redeem any or all of the Preferred Units, including the accrued return, at any time. The Preferred Units are not convertible or exchangeable with any of the equity interest of the Company. Profits interests: Distributions: |
Segments and Related Informatio
Segments and Related Information | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
BCP QUALTEK HOLDCO, LLC | ||
Segments and Related Information | Note 11. Segments and Related Information The Company manages its operation under two operating segments, which represent its two reportable segments: (1) Telecom and (2) Renewables and Recovery Logistics. The Telecom segment performs site acquisition, engineering, project management, installation, testing, last mile installation, and maintenance solutions of communication infrastructure for telecommunication and cable providers, businesses, public venues, government facilities, and residential subscribers. The Renewables and Recovery Logistics segment derives its revenue from providing new fiber optic construction services, maintenance and repair services as well as businesses with continuity and disaster relief services to renewable energy, commercial, telecommunication and utility companies. The segment also provides business-as- usual services such as generator storage and repair and cell maintenance services. The accounting policies of the reportable segments are the same as those described in Note 1 . We present adjusted EBITDA as the key metric used by our management to assess the operating and financial performance of our operations in order to make decisions on allocation of resources. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management. Summarized financial information for the Company’s reportable segments is presented and reconciled to the Company’s consolidated financial information in the following tables, all of which are presented in thousands. For the Nine Months Ended Revenue: October 2, 2021 October 3, 2020 Telecom $ 360,020 $ 468,729 Renewables and Recovery Logistics 105,164 55,351 Total consolidated revenue $ 465,184 $ 524,080 October 2, December 31, Total Assets: 2021 2020 Telecom $ 602,749 $ 579,147 Renewables and Recovery Logistics 151,926 55,370 Corporate 14,890 6,351 Total consolidated assets $ 769,565 $ 640,868 For the Nine Months Ended Capital Expenditures: October 2, 2021 October 3, 2020 Telecom $ 1,843 $ 6,712 Renewables and Recovery Logistics 248 7,936 Corporate 1,059 845 Total consolidated capital expenditures $ 3,150 $ 15,493 For the Nine Months Ended Amortization and Depreciation: October 2, 2021 October 3, 2020 Amortization and depreciation Telecom $ 29,767 $ 30,539 Renewables and Recovery Logistics 8,644 3,734 Corporate 726 487 Total consolidated amortization and depreciation $ 39,136 $ 34,761 For the Nine Months Ended Adjusted EBITDA Reconciliation: October 2, 2021 October 3, 2020 Telecom adjusted EBITDA $ 26,907 $ 16,028 Renewables and Recovery Logistics adjusted EBITDA 42,181 24,227 Corporate adjusted EBITDA (13,097) (13,628) Total adjusted EBITDA $ 55,991 $ 26,627 Less: Management fees (751) (391) Transaction expenses (2,875) (567) Change in fair value of contingent consideration 4,544 — Depreciation and amortization (39,136) (34,761) Interest expense (35,778) (28,824) Loss on extinguishment of convertible notes (2,436) — $ (20,441) $ (37,916) Revenue by Service Offerings Revenue for each of the Company’s end-market services offerings is presented below: For the Nine Months Ended Revenue by Service Offerings: October 2, 2021 October 3, 2020 Telecom Wireless $ 278,125 $ 359,792 Telecom Wireline 73,296 108,937 Telecom Power 8,598 — Renewables 25,086 — Recovery Logistics 80,079 55,351 Total $ 465,184 $ 524,080 Significant Customers Revenue concentration information for significant customers as a percentage of total consolidated revenue was as follows (in thousands): For the Nine Months Ended October 2, 2021 October 3, 2020 Customers: Amount % of Total Amount % of Total AT&T $ 189,381 41 % $ 282,807 54 % Entergy 67,776 15 % * * T-Mobile 59,369 13 % * * Verizon 51,773 11 % 98,165 19 % Total $ 368,299 80 % $ 380,972 73 % * Revenue from Entergy and T-Mobile did not exceed 10% of total consolidated revenue for the nine months ended October 3, 2020. | Note 10. Segments and Related Information The Company manages its operations under two operating segments, which represent its two reportable segments: (1) Telecom and (2) Renewables and Recovery Logistics. The Telecom segment performs site acquisition, engineering, project management, installation, testing, last mile installation, and maintenance solutions of communication infrastructure for telecommunication and cable providers, businesses, public venues, government facilities, and residential subscribers. The Renewables and Recovery Logistics segment derives its revenue from providing businesses with continuity and disaster relief services to telecommunication and utility companies as well as business-as-usual services such as generator storage and repair and cell maintenance services. The accounting policies of the reportable segments are the same as those described in Note 1. All intercompany transactions and balances are eliminated in consolidation. Intercompany revenue and costs between entities within a reportable segment are eliminated to arrive at segment totals. Corporate results include amounts related to corporate functions such as administrative costs, professional fees, acquisition- related transaction costs and other discrete items. We present adjusted EBITDA as the key metric used by our management to assess the operating and financial performance of our operations in order to make decisions on allocation of resources. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management. Summarized financial information for the Company’s reportable segments is presented and reconciled to the Company’s consolidated financial information in the following tables, all of which are presented in thousands. 2020 2019 Revenue: Telecom $ 587,614 $ 568,342 Renewables and Recovery Logistics 68,910 30,926 Total consolidated revenue $ 656,524 $ 599,268 2020 2019 Total Assets: Telecom $ 579,147 $ 697,991 Renewables and Recovery Logistics 55,370 45,642 Corporate 6,351 3,597 Total consolidated assets $ 640,868 $ 747,230 2020 2019 Capital Expenditures: Telecom $ 8,831 $ 10,693 Renewables and Recovery Logistics 12,251 1,090 Corporate 2,015 957 Total consolidated capital expenditures $ 23,097 $ 12,740 2020 2019 Amortization and Depreciation: Amortization and depreciation Telecom $ 40,588 $ 35,411 Renewables and Recovery Logistics 5,259 4,250 Corporate 628 442 Total consolidated amortization and depreciation $ 46,475 $ 40,103 Note 10. Segments and Related Information (continued) 2020 2019 EBITDA Reconciliation: Telecom adjusted EBITDA $ 2,409 $ 37,063 Renewables and Recovery Logistics adjusted EBITDA 28,943 11,442 Corporate adjusted EBITDA (18,213) (16,635) Total adjusted EBITDA 13,139 31,870 Less: Management fees (518) (541) Transaction expenses (988) (4,257) Change in fair value of contingent consideration 7,081 (6,149) Impairment of goodwill (28,802) (8,132) Impairment of long-lived assets — (840) Depreciation and amortization (46,475) (40,103) Interest expense (37,659) (33,380) Net loss $ (94,222) $ (61,532) Revenue by Service Offerings Revenue for each of the Company’s end-market service offerings is presented below: 2020 2019 Revenue by Service Offerings: Telecom Wireless $ 458,155 $ 397,203 Welecom Wireline 129,459 171,139 Recovery Logistics 68,910 30,926 Total $ 656,524 $ 599,268 Significant Customers Revenue for the years ended December 31, 2020 and 2019 include revenue concentration from significant customers as follows (in thousands): 2020 2019 Amount % of Total Amount % of Total Customers: AT&T $ 356,026 54 % $ 318,913 53 % Verizon 116,444 18 % 117,927 20 % Total $ 472,470 72 % $ 436,840 73 % |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
COMMITMENTS | NOTE 7. COMMITMENTS Registration Rights Pursuant to a registration rights agreement entered into on March 2, 2021, the holders of the Founder Shares and the holders of the Private Units (and underlying securities) are entitled to registration rights. The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of the majority of the Founder Shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Private Units (and underlying securities) can elect to exercise these registration rights at any time after the Company consummates a Business Combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation 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. Notwithstanding the foregoing, the holders of the Founder Shares and the holders of the Private Units may not exercise demand or piggyback rights after seven (7) years from the effective date of the Initial Public Offering and may not exercise demand rights on more than one occasion in respect of all registrable securities. Business Combination Marketing Agreement The Company entered into a business combination marketing agreement with Roth Capital Partners, LLC (“Roth”) and Craig-Hallum Capital Group LLC (“Craig-Hallum”), the underwriters in the Initial Public Offering, to act as advisors in connection with a Business Combination, including assisting in the transaction structuring and negotiation of a definitive purchase agreement with respect to the Business Combination, holding meetings with the stockholders to discuss the Business Combination and the target’s attributes, introducing the Company to potential investors to purchase its securities in connection with the Business Combination, assisting in obtaining stockholder approval for the Business Combination, and assisting with relevant financial analysis, presentations, press releases and filings related to the Business Combination. The Company will pay Roth and Craig-Hallum a marketing fee for such services upon the consummation of a Business Combination in an amount equal to, in the aggregate, 3.5% of the gross proceeds of the Initial Public Offering, or $4,025,000. Roth and Craig-Hallum will not be entitled to such fee unless the Company consummates a Business Combination. Business Combination Agreement On June 16, 2021, (i) the Company, (ii) Blocker Merger Sub, (iii) the Blocker, (iv) Company Merger Sub, (v) QualTek, and (vi) the Equityholder Representative, entered into the Business Combination Agreement. Pursuant to the terms of the Business Combination Agreement, (i) Blocker Merger Sub will be merged with and into the Blocker, with the Blocker surviving as a wholly owned subsidiary of the Company, (ii) immediately thereafter, the Blocker will be merged with and into the Company, with the Company as the surviving company, and (iii) immediately thereafter, Company Merger Sub will be merged with and into QualTek, with QualTek as the surviving company. The Business Combination Agreement contains customary representations and warranties, covenants, and closing conditions. Consideration Subject to the terms and conditions of the Business Combination Agreement, as a result of the Business Combination, the consideration payable or issuable to the owners of such equity interests in the Blocker (“Blocker Owners”) and the equityholders of QualTek other than the Blocker (the “Flow-Through Sellers”) is set forth below. Blocker Owner Consideration The consideration to be received by the Blocker Owners at the Closing will consist of (i) 11,923,940 shares of Class A Common Stock with 3,642,750 shares of Class A Common Stock to be received by BCP AIV Investor Holdings-3, L.P., 4,184,290 shares of Class A Common Stock to be received by BCP Strategic AIV Investor Holdings-2, L.P., and 4,096,901 shares of Class A Common Stock to be received by BCP QualTek Investor Holdings L.P. and (ii) 2,274,934 Blocker Owner Earnout Shares (as defined herein) with 626,123 Blocker Owner Earnout Shares to be received by BCP AIV Investor Holdings-3, L.P., 719,230 Blocker Owner Earnout Shares to be received by BCP Strategic AIV Investor Holdings-2, L.P., and 929,582 Blocker Owner Earnout Shares to be received by BCP QualTek Investor Holdings L.P. Flow-Through Seller Consideration The consideration to be received by each Flow-Through Seller at the Closing will consist of: ● 18,764,898 Common Units, with 4,825,893 Common Units to be received by BCP QualTek Management LLC, 11,780,782 Common Units to be received by BCP QualTek, LLC and 2,158,223 Common Units to be received by BCP QualTek II, LLC; ● 18,764,898 shares of Class B Common Stock, with 4,825,893 shares of Class B Common Stock to be received by BCP QualTek Management LLC, 11,780,782 shares of Class B Common Stock to be received by BCP QualTek, LLC and 2,158,223 shares of Class B Common Stock to be received by BCP QualTek II, LLC; ● 3,836,177 Earnout Common Units, with 1,157,803 Earnout Common Units to be received by BCP QualTek Management LLC, 2,678,374 Earnout Common Units to be received by BCP QualTek, LLC and 0 Earnout Common Units to be received by BCP QualTek II, LLC; and ● 3,836,177 Earnout Voting Shares, with 1,157,803 Earnout Voting Shares to be received by BCP QualTek Management LLC, 2,678,374 Earnout Voting Shares to be received by BCP QualTek, LLC and 0 Earnout Common Units to be received by BCP QualTek II, LLC. No fractional shares will be issued pursuant to the Business Combination Agreement. In lieu of any fractional shares that would otherwise be issuable to any Blocker Owner or Flow-Through Seller, the Company will pay to such Blocker Owner or Flow-Through Seller, as applicable, cash (rounded up to the nearest cent) in an amount equal to such fraction multiplied by $10.00. The Earnout Shares and Earnout Common Units In connection with the Closing, (i) 2,274,934 shares of Class A Common Stock issued to the Blocker Owners (the “Blocker Owner Earnout Shares”), (ii) 3,836,177 Common Units issued to the Flow-Through Sellers (the “Earnout Common Units”) and (iii) an equal number of shares of Class B Common Stock issued to the Flow-Through Sellers by the Company in connection with the Business Combination (the “Earnout Voting Shares,” and together with the Blocker Owner Earnout Shares, the “Earnout Shares”), will be subject to certain restriction on transfer and voting and potential forfeiture pending the achievement (if any) of the following earnout targets pursuant to the terms of the Business Combination Agreement: ● if, on or any time prior to the fifth anniversary of the date of the Closing, the closing sale price per share of Class A Common Stock equals or exceeds $15.00 per share for 20 trading days of any 30 consecutive trading day period following the Closing, 50% of the Earnout Shares and Earnout Common Units will be earned and no longer subject to the applicable restrictions on transfer and voting; and ● if, on or any time prior to the fifth anniversary of the date of the Closing, the closing sale price per share of Class A Common Stock equals or exceeds $18.00 per share for 20 trading days of any 30 consecutive trading day period following the Closing, 50% of the Earnout Shares and Earnout Common Units will be earned and no longer subject to the applicable restrictions on transfer and voting. Pre-PIPE Convertible Notes Offering In connection with the Business Combination, accredited investors (each a “Pre-PIPE Investor”) have purchased convertible notes of QualTek, as issuer (the “Notes Issuer”), in an aggregate principal amount of $44.4 million (the “Pre-PIPE Notes”) in a private placement, issuable pursuant to Note Purchase Agreements (the “Note Purchase Agreements”), among the Notes Issuer, ROCR Unless earlier converted or redeemed in accordance with the terms of the Pre-PIPE Notes, the Pre-PIPE Notes have a perpetual maturity. The Pre-PIPE Notes will not bear interest and are subject to certain customary information rights. Pursuant to the current terms of the Pre-PIPE Notes, upon consummation of the Merger, the Pre-PIPE Notes will automatically convert into Class A Common Stock of the Company at $8.00 per share, subject to certain adjustments. However, the Note Purchase Agreements provide that the parties will use commercially reasonable efforts to amend the Pre-PIPE Notes and any other agreements deemed necessary such that upon the consummation of the Business Combination, the Pre-PIPE Notes automatically convert into Common Units of the Company (along with a corresponding number of shares of Class B Common Stock of the Company) in lieu of converting into Class A Common Stock. The number of Common Units and Class B Common Stock will be equal to the quotient that results from dividing the aggregate principal amount of the Note by $8.00, subject to certain adjustments. PIPE Subscription Agreements In connection with the Merger, the Company has obtained commitments from certain accredited investors (each a “Subscriber”) to purchase shares of Class A Common Stock which will be issued in connection with the closing of the Merger (the “PIPE Shares”), for an aggregate cash amount of $66.1 million at a purchase price of $10.00 per share, in a private placement (the “PIPE Investment”). Certain offering-related expenses are payable by the Company, including customary fees payable to the placement agents, Roth Capital Partners, LLC and Craig-Hallum, aggregating $5,150,000. Such commitments are being made by way of the subscription agreements, by and between each Subscriber and the Company (collectively, the “Subscription Agreements”). The purpose of the sale of the PIPE Shares is to raise additional capital for use in connection with the Business Combination and to meet the minimum cash requirements provided in the Business Combination Agreement. The PIPE Shares are identical to the shares of Class A Common Stock that will be held by the Company’s public stockholders at the time of the closing of the Business Combination, except that the PIPE Shares will not be entitled to any redemption rights and will not be registered with the SEC at closing of the Business Combination. | Note 6 — Commitments Registration Rights The holders of the Founder Shares, as well as the holders of the Private Units (and underlying securities), will be entitled to registration rights pursuant to an agreement to be signed prior to or on the effective date of the Proposed Public Offering. The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of the majority of the insider shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Private Units (and underlying securities) can elect to exercise these registration rights at any time after the Company consummates a Business Combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation 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. Notwithstanding the foregoing, they may not exercise demand or piggyback rights after five (5) and seven (7) years, respectively, from the effective date of the Proposed Public Offering and may not exercise demand rights on more than one occasion in respect of all registrable securities. Underwriting Agreement The Company will grant the underwriters a 45-day option from the date of Proposed Public Offering to purchase up to 1,500,000 additional Units to cover over-allotments, if any, at the Proposed Public Offering price less the underwriting discounts and commissions. The underwriters will be entitled to a cash underwriting discount of 2.0% of the gross proceeds of the Proposed Public Offering, or $2,000,000 (or up to $2,300,000 if the underwriters’ over-allotment is exercised in full). Business Combination Marketing Agreement The Company will engage Roth Capital Partners, LLC (“Roth”) and Craig-Hallum Capital Group LLC (“Craig-Hallum”), the underwriters in the Proposed Public Offering, as advisors in connection with its Business Combination Business combination to assist in the transaction structuring and negotiation of a definitive purchase agreement with respect to the Business Combination, holding meetings with the stockholders to discuss the Business Combination and the target’s attributes, introducing the Company to potential investors to purchase its securities in connection with the Business Combination, assisting in obtaining stockholder approval for the Business Combination, and assisting with financial analysis, presentations, press releases and filings related to the Business Combination. The Company will pay Roth and Craig-Hallum a marketing fee for such services upon the consummation of a Business Combination in an amount equal to, in the aggregate, 3.5% of the gross proceeds of the Proposed Public Offering, including any proceeds from the full or partial exercise of the underwriters’ over-allotment option. As a result, Roth and Craig-Hallum will not be entitled to such fee unless the Company consummates a Business Combination. | |
BCP QUALTEK HOLDCO, LLC | |||
COMMITMENTS | Note 12. Commitments and Contingencies Litigation: Operating leases: | Note 11. Commitments and Contingencies Litigation: Operating leases: The Company has entered into non-cancellable operating leases for various vehicles, equipment, office and warehouse facilities, which contain provisions for future rent increases or rent- free periods. The total amount of rental payments due over the lease terms is charged to rent expense on the straight-line method over the respective term of the lease. The leases expire at various dates through the year 2031. In addition, the agreements generally require the Company to pay executory costs (real estate taxes, insurance, and repairs). Rent expense totaled $12.4 million and $7.8 million for the years ended December 31, 2020 and 2019, respectively. The Company leases two of its locations from lessors who are partially owned by members of the Company. During the years ended December 31, 2020 and 2019, the Company had $681 thousand and $488 thousand, respectively, of rent expense related to these leases. The following is a schedule by year of future minimum rental payments required under the operating lease agreements (in thousands): Years ending December 31: 2021 $ 9,673 2022 8,048 2023 5,807 2024 3,534 2025 1,689 Thereafter 6,468 $ 35,219 |
Related Party Transactions_2_3
Related Party Transactions | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
RELATED PARTY TRANSACTIONS | NOTE 6. RELATED PARTY TRANSACTIONS Founder Shares In February 2019, the Initial Stockholders purchased an aggregate of 100 shares of the Company’s common stock for an aggregate price of $25,000. On May 26, 2020, the Company effected a stock dividend of 28,750 shares of common stock for each share of common stock outstanding, resulting in an aggregate of 2,875,000 shares of common stock being held by the Initial Stockholders (the “Founder Shares”). In February 2021, the Company sold 35,233 Founder Shares to three of the Company’s director nominees (for a total of 105,699 Founder Shares) and 89,093 Founder Shares to affiliates of its sponsor group as part of a larger purchase and resale of securities. The total consideration paid for these shares was $1,247. On February 9, 2021, the Company effected a dividend of 0.50 share for each share outstanding resulting in there being an aggregate of 4,312,500 shares outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 Founder Shares outstanding. All share and per-share amounts have been retroactively restated to reflect the stock dividend. The Founder Shares included an aggregate of up to 375,000 shares subject to forfeiture by the Initial Stockholders to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the Initial Stockholders would collectively own 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Initial Stockholders did not purchase any Public Shares in the Initial Public Offering and excluding the Private Shares). As a result of the underwriters’ election to fully exercise their over-allotment option, no Founder Shares are subject to forfeiture. The sale of the Founders Shares to the Company's director nominees and affiliates of its sponsor group, as described above, is within the scope of FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The fair value of the 194,792 shares sold to the Company’s director nominees and affiliates of its sponsor group was $1,229,138, or $6.31 per share. The Founders Shares were effectively sold subject to a performance condition (i.e., the occurrence of a Business Combination). Compensation expense related to the Founders Shares is recognized only when the performance condition is probable of occurrence. Stock-based compensation will be recognized at the date a Business Combination is considered probable in an amount equal to the number of Founders Shares times the grant date fair value per share (unless subsequently modified) less the amount initially received for the purchase of the Founders Shares. As of September 30, 2021, the Company determined that a Business Combination is not considered probable, and, therefore, no stock-based compensation expense has been recognized. The Initial Stockholders have agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until (1) with respect to 50% of the Founder Shares, the earlier of six months after the completion of a Business Combination and the date on which the closing price of the common stock equals or exceeds $12.50 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 after a Business Combination and (2) with respect to the remaining 50% of the Founder Shares, six months after the completion of a Business Combination, or earlier, in either case, if, subsequent to a Business Combination, the Company completes a liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Promissory Note — Related Party On December 15, 2020, the Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company could borrow up to an aggregate principal amount of $200,000. The Promissory Note was non-interest bearing and payable on the earlier of (i) the consummation of the Initial Public Offering or (ii) the date on which the Company determined not to proceed with the Initial Public Offering. The outstanding balance under the Promissory Note of $200,000 was repaid on March 9, 2021. Borrowings under the Promissory Note are no longer available. Related Party Loans In order to finance transaction costs in connection with a Business Combination, the Initial Stockholders, or certain of the Company’s officers and directors or their affiliates 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 be repaid upon consummation of a Business Combination, without interest. Up to $1,500,000 of such loans may be convertible into units at a price of $10.00 per unit, at the option of the lender. The units would be identical to the Private Units. As of September 30, 2021 and December 31, 2020, there were no amounts outstanding under the Working Capital Loans. On November 3, 2021 the Company entered into a new promissory note with related parties of the Company in the aggregate principal amount of $500,000 in order to finance the Company’s working capital needs (see Note 11). | Note 5 — Related Party Transactions Founder Shares In February 2019, the Initial Stockholders purchased an aggregate of 100 shares of the Company’s common stock for an aggregate price of $25,000. On May 26, 2020, the Company effected a stock dividend of 28,750 shares of common stock for each share of common stock outstanding, resulting in an aggregate of 2,875,000 shares of common stock being held by the Initial Stockholders (the “Founder Shares”). On February 9, 2021, the Company effected a dividend of 0.50 share for each share outstanding resulting in there being an aggregate of 4,312,500 shares outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 Founder Shares outstanding (see Note 8). All share and per-share amounts have been retroactively restated to reflect the stock transactions. The Founder Shares include an aggregate of up to 375,000 shares subject to forfeiture by the Initial Stockholders to the extent that the underwriters’ over-allotment is not exercised in full or in part, so that the Initial Stockholders will collectively own 20% of the Company’s issued and outstanding shares after the Proposed Public Offering (assuming the Initial Stockholders do not purchase any Public Shares in the Proposed Public Offering and excluding the Private Shares). The Initial Stockholders have agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until (1) with respect to 50% of the Founder Shares, the earlier of six months after the completion of a Business Combination and the date on which the closing price of the common stock equals or exceeds $12.50 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 after a Business Combination and (2) with respect to the remaining 50% of the Founder Shares, six months after the completion of a Business Combination, or earlier, in either case, if, subsequent to a Business Combination, the Company completes a liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Promissory Note — Related Party On December 15, 2020, the Company issued an unsecured promissory note to the sponsor (the Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal amount of $200,000. The Promissory Note is non-interest bearing and payable on the earlier of (i) the consummation of the Proposed Public Offering or (ii) the date on which the Company determines not to proceed with the Proposed Public Offering. As of December 31, 2020, there was $200,000 outstanding under the Promissory Note. Related Party Loans In addition, in order to finance transaction costs in connection with a Business Combination, the Initial Stockholders, or certain of the Company’s officers and directors or their affiliates 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 be repaid upon consummation of a Business Combination, without interest. | |
BCP QUALTEK HOLDCO, LLC | |||
RELATED PARTY TRANSACTIONS | Note 13. Related Party Transactions On July 18, 2018, the Company entered into an Advisory Services Agreement with its majority member. The agreement requires quarterly advisory fees of $125 thousand paid at the beginning of each quarter. The Company incurred $751 thousand and $391 thousand in advisory fees for the nine months ended October 2, 2021 and October 3, 2020, respectively. | Note 12. Related Party Transactions On July 18, 2018, the Company entered into an Advisory Services Agreement with its majority member. The agreement requires quarterly advisory fees of $125 thousand paid at the beginning of each quarter. The Company incurred $500 thousand in advisory fees during each of the years ended December 31, 2020 and 2019. |
Retirement Plan
Retirement Plan | 12 Months Ended |
Dec. 31, 2020 | |
BCP QUALTEK HOLDCO, LLC | |
Retirement Plan | Note 13. Retirement Plan On April 1, 2016, the Company adopted a defined contribution 401(K) plan, which covers all eligible employees. Contributions by the Company are discretionary. The Company made no contributions to the plan for the years ended December 31, 2020 and 2019. |
Discontinued Operations
Discontinued Operations | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
BCP QUALTEK HOLDCO, LLC | ||
Discontinued Operations | Note 3. Discontinued Operations At the end of the third quarter of 2021, we suspended all operations associated with our Canadian subsidiary within the Telecom segment and disposed/abandoned the subsidiary, which ceased our foreign operations. The disposition of the Canadian subsidiary was considered a strategic shift that had a major effect on our operations and financial results. As a result of the suspension of operations, any new business with customers was terminated and remaining orders were canceled/settled. As long-lived assets ceased to be used, the property and equipment was either held for sale at auction and measured at the lower of the carrying amount or fair value, or the carrying amount was reduced to the salvage value until abandoned. The intangible assets were re-measured for their useful lives and accelerated amortization charge of $5,239 thousand was recognized. The sale of the remaining property and equipment and collection of outstanding receivables are expected to be completed in the fourth quarter of 2021. The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations in the condensed consolidated balance sheets (in thousands): October 2, 2021 December 31, 2020 Carrying amounts of assets included as part of discontinued operations: Cash $ 1,272 $ 93 Accounts receivable, net of allowance 4,663 5,743 Inventories, net — 28 Prepaid expenses 177 71 Other current assets 2,045 599 Total current assets of discontinued operations $ 8,157 $ 6,534 Property and equipment, net 1,348 3,280 Intangible assets, net — 5,712 Other long-term assets — 280 Total non-current assets of discontinued operations $ 1,348 $ 9,272 Carrying amounts of liabilities included as part of discontinued operations: Current portion of long-term debt and capital lease obligations $ 1,832 $ 920 Accounts payable 519 809 Accrued expenses 1,590 1,636 Total current liabilities of discontinued operations $ 3,941 $ 3,365 Capital lease obligations, net of current portion — 1,793 Total non-current liabilities of discontinued operations $ — $ 1,793 The financial results are presented as loss from discontinued operations on our condensed consolidated statements of operations and comprehensive loss. The following table presents the financial results (in thousands): For the Nine Months Ended October 2, 2021 October 3, 2020 Revenue $ 5,850 $ 13,923 Costs and expenses: — Cost of revenues 8,025 13,222 General and administrative 275 693 Depreciation and amortization 6,667 1,566 Total costs and expenses 14,967 15,481 Loss from operations of discontinued operations (9,117) (1,558) Other income (expense): Gain on sale/ disposal of property and equipment 1,101 — Interest expense (98) (150) Loss from discontinued operations $ (8,114) $ (1,708) | Note 14. Discontinued Operations At the end of the third quarter of 2021, we suspended all operations associated with our Canadian subsidiary within the Telecom segment and disposed/abandoned the subsidiary, which ceased our foreign operations. The disposition of the Canadian subsidiary was considered a strategic shift that had a major effect on our operations and financial results. As a result of the suspension of operations, any new business with customers was terminated and remaining orders were canceled/settled. As long-lived assets ceased to be used, the property and equipment was either held for sale at auction and measured at the lower of the carrying amount or fair value, or the carrying amount was reduced to the salvage value until abandoned. The intangible assets were re-measured for their useful lives and an accelerated amortization charge was recognized in September 2021. The sale of the remaining property and equipment and collection of outstanding receivables are expected to be completed in the fourth quarter of 2021. The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations in the consolidated balance sheets as of December 31, 2020 and 2019 (in thousands): 2020 2019 Carrying amounts of assets included as part of discontinued operations: Cash $ 93 $ 237 Accounts receivable, net of allowance 5,743 6,223 Inventories, net 28 30 Prepaid expenses 71 223 Other current assets 599 23 Total current assets of discontinued operations $ 6,534 $ 6,736 Property and equipment, net 3,280 4,585 Intangible assets, net 5,712 6,275 Other long-term assets 280 265 Total non-current assets of discontinued operations $ 9,272 $ 11,125 Carrying amounts of liabilities included as part of discontinued operations: Current portion of long-term debt and capital lease obligations $ 920 $ 1,059 Accounts payable 809 1,180 Accrued expenses 1,636 607 Total current liabilities of discontinued operations $ 3,365 $ 2,846 Capital lease obligations, net of current portion 1,793 2,634 Total non-current liabilities of discontinued operations $ 1,793 $ 2,634 The financial results are presented as loss from discontinued operations on our consolidated statements of operations and comprehensive loss for the years ended December 31, 2020 and 2019. The following table presents the financial results (in thousands): 2020 2019 Revenue $ 17,481 $ 21,561 Costs and expenses: Cost of revenues 18,331 19,807 General and administrative 804 939 Change in fair value of contingent consideration — (266) Impairment of goodwill — 5,119 Depreciation and amortization 2,022 2,012 Total costs and expenses 21,157 27,611 Loss from operations of discontinued operations (3,676) (6,050) Other income (expense): Gain on sale/ disposal of property and equipment — 1 Interest expense (189) (213) Loss from discontinued operations $ (3,865) $ (6,262) |
Subsequent Events_2_3
Subsequent Events | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
SUBSEQUENT EVENTS | NOTE 11. SUBSEQUENT EVENTS On November 3, 2021 the Company entered into a new promissory note with related parties of the Company in the aggregate principal amount of $500,000 in order to finance the Company’s working capital needs. The promissory note is non-interest bearing and is not convertible into any securities of the Company and shall be payable upon the consummation of a Business Combination. | Note 8 — Subsequent Events The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to January 8, 2021, the date that the financial statements were available to be issued. Based upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements. On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 Founder Shares outstanding. All share and per-share amounts have been retroactively restated to reflect the stock transactions. | |
BCP QUALTEK HOLDCO, LLC | |||
SUBSEQUENT EVENTS | Note 14. Subsequent Events The Company has evaluated events occurring after October 2, 2021 through February 2, 2022, which represents the date the financial statements were issued. On October 7, 2021, the Company executed an amendment to the Credit Agreement to temporarily increase the maximum availability of the revolving credit facility to the amount of $130.0 million until December 31, 2021. On December 31, 2021, the maximum availability will automatically be reduced to the amount of $103.5 million. On October 15, 2021, the Company purchased 100% of the membership interests of Urban Cable Technology, Inc. (“Urban Cable”), a Pennsylvania based company that provides a range of services, including aerial and underground construction, engineering, multiple dwelling units wiring and rewiring, and fiber placement to broadband and telecom cable operators. The purchase price included a mixture of cash and earn-outs based on pre-determined EBITDA for the years ending 2021, 2022, 2023, and 2024. The acquisition will be recognized as a business combination within our Telecom segment with identifiable assets acquired and liabilities assumed recorded at fair values on the acquisition date. The allocation of the purchase price to the fair value of assets acquired and liabilities assumed is not complete. | Note 15. Subsequent Events The Company has evaluated events occurring after December 31, 2020 through May 11, 2021, which represents the date the financial statements were issued. On January 26, 2021, the Company purchased 100% of the membership interests of Fiber Network Solutions, LLC (“FNS”), a Texas based company that provides new fiber optic construction services, as well as maintenance and repair services to renewable energy, commercial, and utility clientele in the United States. The overall consideration transferred was $25.5 million of cash and rollover equity valued at $2.0 million. The purchase price is subject to adjustment based upon FNS exceeding pre-determined EBITDA thresholds for 2021, 2022, 2023, and 2024, as defined in the agreement, subject to a maximum additional payment of $20.0 million. The cash consideration was funded by the issuance of preferred equity, as well as the issuance of subordinated convertible notes with the majority member. The acquisition will be recognized as a business combination within our Renewables and Recovery Logistics Segment with identifiable assets acquired and liabilities assumed recorded at their estimated fair values on the acquisition date. The allocation of the purchase price to the fair value of assets acquired and liabilities is not complete. |
Nature of Business and Summar_2
Nature of Business and Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Use of estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires the Company’s 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. One of the more significant accounting estimates included in these condensed financial statements is the determination of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly, the actual results could differ significantly from those estimates. | Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company’s 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 expenses during the reporting periods. 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 | 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 September 30, 2021 and 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 not have any cash equivalents as of December 31, 2020 and 2019. | |
Concentration of credit risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts. | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations 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. At December 31, 2020 and 2019, the Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. | |
Deferred financing costs | Deferred Offering Costs Deferred offering costs consist of legal, accounting and other costs incurred through the balance sheet date that are directly related to the Proposed Public Offering and that will be charged to stockholders’ equity upon the completion of the Proposed Public Offering. Should the Proposed Public Offering prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations. | ||
Income taxes | Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. 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 as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 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. The effective tax rate differs from the statutory tax rate of 21% for the three months and nine months ended September 30, 2021 and 2020, respectively, primarily due to the valuation allowance recorded on the Company’s net operating losses. | Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. 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 as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020 and 2019. 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. The provision for income taxes was deemed to be de minimis for the year ended December 31, 2020, and for the period from February 13, 2019 (inception) through December 31, 2019. | |
Recent accounting pronouncements | Recent Accounting Standards In August 2020, the FASB issued ASU No. 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): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. 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 condensed consolidated financial statements. | 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. | |
BCP QUALTEK HOLDCO, LLC | |||
Use of estimates | Use of estimates: There have been no material changes to the Company’s significant accounting policies described in the Company’s Consolidated Financial Report for the year ended December 31, 2020, with the exception of discontinued operations discussed in Note 3. | 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 disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant of these estimates and assumptions relate to the recognition of contract revenues under the cost-to-cost method of progress, fair value estimates, the allowance for doubtful accounts, long-lived assets and intangible assets, asset impairment (including goodwill and other long-lived assets), valuation of assets acquired and liabilities assumed in business combinations, and acquisition-related contingent consideration. These estimates are based on historical experience and various other assumptions that management believes to be reasonable under the current facts and circumstances. Actual results could differ from those estimates. | |
Accounts receivable | Accounts receivable: The Company’s accounts receivable are due primarily from large telecommunication and cable carriers operating within the United States and are carried at original contract amount less an estimate for uncollectible amounts based on historical experience. Management determines the allowance for doubtful receivables by regularly evaluating individual customer receivables and considering a customer’s financial condition and current economic conditions. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received. The Company generally does not require collateral. Accounts receivable are considered past due if any portion of the receivables balance is outstanding for more than one day beyond the contractual due date. The Company does not charge interest on past due accounts. | ||
Contract assets | Contract assets: | ||
Contract liabilities | Contract liabilities: | ||
Cash | Cash: | ||
Sale of accounts receivable | Sale of accounts receivable: | ||
Concentration of credit risk | Concentration of credit risk: The Company maintains certain cash balances with U.S. and Canadian financial institutions and, from time to time, the Company may have balances in excess of the federally insured deposit limit. | ||
Inventories | Inventories: | ||
Property and equipment | Property and equipment: | ||
Goodwill and intangible assets | Goodwill and intangible assets: year, or more frequently if events occur that would indicate a potential reduction in the fair value of a reporting unit below its carrying value. The Company performs an annual impairment review of goodwill at the reporting unit level, which is one level below the operating segment. The Company determines the fair value of the reporting units using a weighting of fair values derived in equal proportions from the income approach and market approach valuation methodologies. The income approach uses the discounted cash flow method and the market approach uses the guideline company method. If the Company determines the fair value of the reporting unit’s goodwill is less than its carrying value, an impairment loss is recognized and reflected in the operating income or loss in the consolidated statements of operations and comprehensive loss. Intangible assets consist of customer relationships, trademarks and trade names. Intangible assets that have finite useful lives are amortized on a straight-line basis over their estimated useful lives ranging from 2 years to 15 years. | ||
Impairment of long-lived and intangible assets | Impairment of long-lived and intangible assets: | ||
Business combinations | Business combinations: The Company accounts for business combinations under the acquisition method of accounting. The purchase price of each business acquired is allocated to the tangible and intangible assets acquired and the liabilities assumed based on information regarding their respective fair values on the date of acquisition. Any excess of the purchase price over the fair value of the separately identifiable assets acquired and the liabilities assumed is allocated to goodwill. Management determines the fair values used in purchase price allocations for intangible assets based on historical data, estimated discounted future cash flows, expected royalty rates for trademarks and trade names, as well as certain other information. The valuation of assets acquired, and liabilities assumed requires a number of judgments and is subject to revision as additional information about the fair value of assets and liabilities becomes available. Additional information, which existed as of the acquisition date but unknown to us at that time, may become known during the remainder of the measurement period. This measurement period may not exceed 12 months from the acquisition date. The Company recognizes any adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustments are determined. Additionally, in the same period in which adjustments are recognized, the Company records the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of any change to the provisional amounts, calculated as if the accounting adjustment had been completed at the acquisition date. Acquisition costs are expensed as incurred. The results of operations of businesses acquired are included in the consolidated statements of operations and comprehensive loss from their dates of acquisition. | ||
Deferred financing costs | Deferred financing costs: | ||
Foreign currency | Foreign currency: | ||
Income taxes | Income taxes: Accounting Standards Codification (ASC) Topic 740, Income Taxes Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense or benefit and liability in the current year. Based on the Company’s assessment of many factors, including past experience and complex judgments about future events, the Company does not currently anticipate significant changes in its uncertain tax positions over the next 12 months. The Company is not subject to income tax examinations by the U.S. federal, state, or local tax authorities prior to 2017. | ||
Revenue recognition | Revenue recognition: Revenue from Contracts with Customers, Under Topic 606, revenue is recognized when, or as, control of promised goods and services is transferred to customers, and the amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for the goods and services transferred. A contractual agreement exists when each party involved approves and commits to, the rights of the parties and payment terms are identified, the agreement has commercial substance, and collectability of consideration is probable. The Company’s services are performed for the sole benefit of its customers, whereby the assets being created or maintained are controlled by the customer and the services the Company performs do not have alternative benefits for the Company. Note 1. Nature of Business and Summary of Significant Accounting Policies (continued) The Company acquires revenue primarily from construction related projects under certain master service and other service agreements contracts. Portions of the contracts include one or multiple performance obligations, which is a contractual promise to deliver a distinct good or transfer of a specific service to a customer. We use different methods of revenue recognition for different types of contracts. For the Company’s projects recognized under the input method, the Company typically identifies two promised goods and services in the contract: (a) delivery of materials, which is recognized as point in time revenue, and (b) installation and construction services, which are recognized over time as related costs are incurred. The Company determined that the materials and the construction services are both considered distinct performance obligations. The Company’s customers are able to benefit from the materials and construction services both on their own and in connection with readily available resources, indicating that both promises are capable of being distinct. The Company further determined that its promises to transfer the materials and to provide the construction services are each separately identifiable from the other promises in the contract. Further, these promises do not represent inputs to a combined output which may represent a single performance obligation as no significant integration services are provided, there is not a high degree of customization, and the promises are not highly interrelated. As a result, the Company concludes that its input method contracts typically include two performance obligations: the sale of materials and construction services. Revenue for construction, project management and site acquisition services are primarily recognized by the Company over time utilizing the cost-to-cost measure of progress, which is an input method, on contracts for specific projects, and for certain master service and other service agreements. The majority of our performance obligations are completed within one year. Under Topic 606, the cost-to-cost measure of progress best depicts the continuous transfer of control of goods or services to the customer, and correspondingly, when performance obligations are satisfied, for these contracts. Revenue for engineering, aerial and underground construction projects are primarily performed under master service agreements and other contracts that contain customer-specified service requirements. The Company has identified multiple performance obligations in these contracts represented by the individual tasks included in the contract, each based on a specific unit of measure. These performance obligations include, for example, the placement of underground or aerial fiber, directional boring, and fiber splicing. The Company allocates total contract consideration to each performance obligation using the expected cost plus a margin approach to estimate the standalone selling price of each performance obligation. The Company’s customers simultaneously receive and consume the benefit provided by the Company, and revenue is recognized over time as services are performed for all performance obligations identified in the contract. Output measures such as units delivered are utilized to assess progress against specific contractual performance obligations. Revenue from fulfillment, maintenance, compliance, and recovery services provided to the telecommunication, cable and utility industries is recognized as the services are rendered. These services are generally performed under master or other service agreements and billed on a contractually agreed price per unit on a work order basis. Each service is a separate performance obligation that is recognized upon completion at a point in time as the service is delivered. Transaction prices for the Company’s contracts may include variable consideration such as contracted materials. Management estimates variable consideration for a performance obligation utilizing estimation methods that it believes best predict the amount of consideration to which the Company will be entitled. Variable consideration is included in the estimated transaction price if it is probable that when the uncertainty associated with the variable consideration is resolved, there will not be a significant reversal of the cumulative amount of revenue that has been recognized. Note 1. Nature of Business and Summary of Significant Accounting Policies (continued) Management’s estimates of variable consideration and the determination of whether to include estimated amounts in the transaction price are based largely on engineering studies, past practices with the customer, specific discussions, correspondence or preliminary negotiations with the customer and all other relevant information that is reasonably available at the time of the estimate. The effect of variable consideration on the transaction price of a performance obligation is typically recognized as an adjustment to revenue on a cumulative catch-up basis, as such variable consideration is generally for services encompassed under the existing contract. To the extent variable consideration reflected in transaction prices are not resolved in accordance with management’s estimates, there could be reductions in, or reversals of, previously recognized revenue. Sales, use and other taxes collected concurrent with revenue-producing activities are excluded from revenue. Most of the Company’s contracts include assurance warranties which do not include any additional distinct services other than the assurance that the services and materials comply with agreed-upon specifications. Therefore, there is not a separate performance obligation for these warranties. For contracts containing more than one performance obligation, the Company allocates the transaction price on a relative standalone selling price (“SSP”) basis. The Company determines SSP based on the price at which the performance obligation is sold separately. If the SSP is not observable through past transactions, the Company estimates the SSP taking into account available information, such as market conditions and internally approved pricing guidelines related to the performance obligation. Revenue generated from fulfillment, maintenance, compliance and recovery services as well as certain performance obligations related to material sales is recognized at a point in time. Point in time revenue accounted for approximately 35% and 32% of consolidated revenue for the years ended December 31, 2020 and 2019, respectively. Substantially all the Company’s other revenue is recognized over time. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the services to be provided. | ||
Equity award compensation | Equity award compensation: | ||
Recent accounting pronouncements | Recent accounting pronouncements: Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) — Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Revenue from Contracts with Customers | Recent accounting pronouncements: Leases (Topic 842) In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments Note 1. Nature of Business and Summary of Significant Accounting Policies (continued) In January 2017, the FASB issued ASU No. 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment | |
Risks and uncertainties | Risks and uncertainties: It is unknown how long the adverse conditions associated with the coronavirus will last and what the complete financial effect will be to the Company. | Risks and uncertainties 11, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The coronavirus and actions taken to mitigate the spread of it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted to amongst other provisions, provide emergency assistance for individuals, families and businesses affected by the coronavirus pandemic. It is unknown how long the adverse conditions associated with the coronavirus will last and what the complete financial effect will be to the Company. |
Earnings Per Unit (Tables)
Earnings Per Unit (Tables) | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Schedule of basic and diluted earnings per unit | The following table reflects the calculation of basic and diluted net loss per common share (in dollars, except per share amounts): For the Period from 2/13/19 (Inception) Three Months Ended Nine Months Ended Through September 30, 2021 September 30, 2021 September 30, 2020 Redeemable Non-redeemable Redeemable Non-redeemable Non-redeemable common stock common stock common stock common stock common stock Basic and diluted net loss per common share Numerator: Allocation of net loss, as adjusted $ (629,913) $ (179,827) $ (1,052,069) $ (370,379) $ (800) Denominator: Basic and diluted weighted average shares outstanding 11,500,000 3,283,000 8,804,029 3,099,440 2,500,000 Basic and diluted net loss per common share $ (0.05) $ (0.05) $ (0.12) $ (0.12) $ (0.00) Three Months Ended Nine Months Ended September 30, 2020 September 30, 2020 Non-redeemable Non-redeemable common stock common stock Basic and diluted net loss per common share Numerator: Allocation of net loss, as adjusted $ (800) $ (885) Denominator: Basic and diluted weighted average shares outstanding 2,500,000 2,500,000 Basic and diluted net loss per common share $ (0.00) $ (0.00) | ||
BCP QUALTEK HOLDCO, LLC | |||
Schedule of basic and diluted earnings per unit | The basic and diluted earnings per unit calculations for the periods presented (in thousands, except share and per unit amounts): For the Nine Months Ended October 2, 2021 October 3, 2020 Numerator: Loss from continuing operations $ (20,441) $ (37,916) Loss from discontinued operations (8,114) (1,708) Net loss (28,555) (39,624) Less: accrued preferred return (1,638) (2,508) Net loss attributable to Class A Units (basic) $ (30,193) $ (42,132) Denominator: Weighted-average number of units outstanding, basic and diluted Class A – basic and diluted 2,161,951 2,005,824 EPU: Continuing operations – Class A – basic and diluted $ (10.21) $ (20.15) Discontinued operations – Class A – basic and diluted $ (3.75) $ (0.85) Net loss – Class A – basic and diluted $ (13.96) $ (21.00) | 2020 2019 Numerator: Net loss $ (98,087) $ (67,794) Less: accrued preferred return (3,287) (742) Net loss attributable to Class A Units (101,374) (68,536) Denominator: Weighted-average number of units outstanding, basic diluted 2,005,824 1,962,115 Net loss per unit, basic diluted $ (50.54) $ (34.93) |
Acquisitions (Tables)
Acquisitions (Tables) - BCP QUALTEK HOLDCO, LLC | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
Schedule of fair value of the assets and liabilities | The following table summarizes the fair value of the assets and liabilities acquired at the date of the acquisitions (in thousands): FNS Broken Arrow Concurrent Purchase consideration: Cash paid $ 20,059 $ 5,000 $ 13,828 Rollover equity 2,000 — 6,000 Contingent consideration 8,200 5,735 10,210 Acquisition debt — — 14,143 $ 30,259 $ 10,735 $ 44,181 Purchase price allocations: Cash $ — $ — $ 1,830 Accounts receivable — 5,121 8,402 Inventories — 133 25 Prepaid expenses — 94 — Other current assets — — 10 Property and equipment 9,978 219 4,164 Other long-term assets — 32 60 Customer relationships 17,370 4,690 24,186 Trademarks and trade names 270 80 1,330 Goodwill 8,082 4,433 10,738 35,700 14,802 50,745 Accounts payable — (1,853) (1,932) Accrued expenses — (156) (830) Contract liabilities — (2,058) (639) Capital lease obligations (5,441) — (3,163) $ 30,259 $ 10,735 $ 44,181 | |
Vertical Limit | ||
Schedule of fair value of the assets and liabilities | The following table summarizes the fair value of the assets and liabilities acquired at the date of the acquisition (in thousands): Purchase consideration: Cash paid $ 16,250 Contingent consideration 7,677 $ 23,927 Purchase price allocations: Accounts receivable $ 14,815 Inventories 65 Property and equipment 1,195 Prepaid expenses 72 Trademarks and trade names 1,900 Customer relationships 6,100 Goodwill 7,093 Other long-term assets 46 31,286 Accounts payable (5,621) Accrued expenses (1,688) Capital lease obligations (50) $ 23,927 | |
Vinculums | ||
Schedule of fair value of the assets and liabilities | The following table summarizes the fair value of the assets and liabilities acquired at the date of the acquisition (in thousands): Purchase consideration: Cash paid $ 43,595 Rollover equity 12,500 Contingent consideration 22,615 $ 78,710 Purchase price allocations: Accounts receivable $ 37,574 Inventories 1,668 Prepaid expenses 318 Property and equipment 990 Trademarks and trade names 4,500 Customer relationships 35,100 Goodwill 32,581 Other long-term assets 79 112,810 Accounts payable (14,830) Accrued expenses (12,706) Contract liabilities (6,190) Capital lease obligations (374) $ 78,710 | |
Aerial | ||
Schedule of fair value of the assets and liabilities | The following table summarizes the fair value of the assets and liabilities acquired at the date of the acquisition (in thousands): Purchase consideration: Cash paid $ 16,497 Rollover equity 1,000 Contingent consideration 5,825 Timing payments 1,447 $ 24,769 Purchase price allocations: Accounts receivable $ 8,847 Inventories 150 Prepaid expenses 167 Property and equipment 1,446 Trademarks and trade names 340 Customer relationships 3,800 Goodwill 14,698 Other long-term assets 28 29,476 Accounts payable (2,254) Accrued expenses (789) Contract liabilities (648) Capital lease obligations (1,016) $ 24,769 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
BCP QUALTEK HOLDCO, LLC | ||
Schedule of Property and Equipment | Property and equipment consisted of the following (in thousands): October 2, December 31, 2021 2020 Office furniture $ 1,331 $ 1,249 Computers 1,591 1,217 Machinery, equipment and vehicles 15,482 10,275 Land 140 — Leasehold improvements 4,695 3,354 Software 2,281 2,199 Assets under capital lease 41,349 32,153 Construction in process 1,263 605 68,132 51,052 Less: accumulated depreciation (25,945) (17,258) Property and equipment, net $ 42,187 $ 33,794 | Property and equipment consisted of the following as of December 31, 2020 and 2019 (in thousands): 2020 2019 Office furniture $ 1,249 $ 898 Computers 1,217 1,051 Machinery, equipment and vehicles 10,275 6,532 Leasehold improvements 3,354 792 Software 2,199 1,903 Assets under capital lease 32,153 15,226 Construction in process 605 246 51,052 26,648 Less: accumulated depreciation (17,258) (8,475) Property and equipment, net $ 33,794 $ 18,173 |
Accounts Receivable, Net of A_2
Accounts Receivable, Net of Allowance, Contract Assets and Liabilities, and Customer Credit Concentration (Tables) - BCP QUALTEK HOLDCO, LLC | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
Schedule of Accounts receivable, net, classified as current | Accounts receivable, net classified as current, consisted of the following (in thousands): October 2, December 31, 2021 2020 Trade accounts receivable $ 97,506 $ 44,419 Contract assets 157,155 134,311 254,661 178,730 Less: allowance for doubtful accounts (5,397) (3,933) Accounts receivable, net $ 249,264 $ 174,797 | Accounts receivable, net, classified as current, consisted of the following as of December 31, 2020 and 2019 (in thousands): 2020 2019 Trade accounts receivable $ 44,419 $ 61,365 Contract assets 134,311 173,734 178,730 235,099 Less: allowance for doubtful accounts (3,933) (6,440) Accounts receivable, net $ 174,797 $ 228,659 |
Schedule of Net contract assets | Net contract assets consisted of the following (in thousands): October 2, December 31, 2021 2020 Contract assets $ 157,155 $ 134,311 Contract liabilities (14,950) (14,945) Contract assets, net $ 142,205 $ 119,366 | Net contract assets consisted of the following as of December 31, 2020 and 2019 (in thousands): 2020 2019 Contract assets $ 134,311 $ 173,734 Contract liabilities (14,945) (18,470) Contract assets, net $ 119,366 $ 155,264 |
Schedule of Customer Credit Concentration | Customer Credit Concentration Customers whose combined amounts of accounts receivable and contract assets exceeded 10% of total combined accounts receivable and contract assets were as follows (in thousands): October 2, 2021 December 31, 2020 Amounts % of Total Amounts % of Total AT&T $ 61,797 24.3 % $ 81,796 45.8 % Entergy 67,776 26.6 % * * T-Mobile 34,447 13.5 % * * Verizon 47,892 18.8 % 65,346 36.6 % Total $ 211,911 83.2 % $ 147,142 82.3 % * Accounts receivable and contract assets from Entergy and T-Mobile did not exceed 10% of total combined accounts receivable and contract assets for the year ended December 31, 2020. | Customers whose combined amounts of accounts receivable and contract assets exceeded 10% of total combined accounts receivable and contract assets as of December 31, 2020 and 2019 were as follows (in thousands): 2020 2019 Amount % of Total Amounts % of Total AT&T $ 81,796 45.8 % $ 120,145 51.1 % Verizon 65,346 36.6 % 69,552 29.6 % Total $ 147,142 82.3 % $ 189,697 80.8 % |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) - BCP QUALTEK HOLDCO, LLC | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
Schedule of Goodwill | Changes in the carrying amount of goodwill by reportable segment is as follows (in thousands): Renewables and Recovery Logistics Telecom Total Goodwill as of December 31, 2020(a) $ 13,598 $ 44,924 $ 58,522 Additions from acquisitions (Note 4) 8,082 15,171 23,253 Goodwill as of October 2, 2021(a) $ 21,680 $ 60,095 $ 81,775 (a) Goodwill is net of accumulated impairment charges of $36,934 thousand in the Telecom segment. There have been no impairment charges within the Renewables and Recovery Logistics segment. | Goodwill by reportable segment consisted of the following as of December 31, 2020 and 2019 (in thousands): Renewables and Recovery Logistics Telecom Total Goodwill as of January 1, 2019 $ 13,598 $ 27,485 $ 41,083 Additions from acquistions — 53,552 53,552 Impairment loss — (8,132) (8,132) Goodwill as of December 31, 2019 $ 13,598 $ 72,905 $ 86,503 Measurement period adjustments, net — 821 821 Impairment loss — (28,802) (28,802) Goodwill as of December 31, 2020 $ 13,598 $ 44,924 $ 58,522 |
Schedule of Intangible assets | Intangible Assets Intangible assets consisted of the following (in thousands): October 2, 2021 Weighted Average Gross Remaining carrying Accumulated Net carrying Useful Life amount amortization amount Customer relationships 9.7 $ 414,446 $ (89,681) $ 324,765 Trade names 9.7 60,200 (20,243) 39,957 $ 474,646 $ (109,924) $ 364,722 December 31, 2020 Weighted Average Gross Remaining carrying Accumulated Net carrying Useful Life amount amortization amount Customer relationships 10.8 $ 368,200 $ (65,868) $ 302,332 Trade names 9.9 58,519 (15,035) 43,484 $ 426,719 $ (80,903) $ 345,816 | Intangible assets consisted of the following as of December 31, 2020 and 2019 (in thousands): 2020 Weighted Average Remaining Useful Gross carrying Accumulated Life amount amortization Net carrying amount Customer relationships 10.8 $ 368,200 $ (65,868) $ 302,332 Trade names 9.9 58,519 (15,035) 43,484 $ 426,719 $ (80,903) $ 345,816 2019 Weighted Average Remaining Useful Gross carrying Accumulated Life amount amortization Net carrying amount Customer relationships 11.8 $ 368,200 $ (36,782) $ 331,418 Trade names 10.5 58,519 (8,364) 50,155 $ 426,719 $ (45,146) $ 381,573 |
Schedule of estimated future amortization expense related to the intangible assets | The following table provides estimated future amortization expense related to the intangible assets (in thousands): Years ending December 31: 2021 $ 35,585 2022 35,585 2023 34,294 2024 32,245 2025 31,289 Thereafter 176,818 $ 345,816 |
Long-Term Debt and Capital Le_2
Long-Term Debt and Capital Lease Obligations (Tables) - BCP QUALTEK HOLDCO, LLC | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
Schedule of carrying values and estimated fair values of debt instruments and capital lease obligations | Debt outstanding, whose carrying value approximates fair market value due to variable interest rates based on current rates available to the Company for similar instruments, was as follows (in thousands): October 2, December 31, 2021 2020 Line of credit $ 96,242 $ 59,837 Term loan 353,872 361,045 Acquisition debt 34,718 10,575 Convertible notes – related party 30,568 — Convertible notes – June 2021 44,400 — Capital lease obligations 25,620 23,069 Less: unamortized financing fees (12,873) (13,854) Less: convertible debt discount (7,498) — 565,049 440,672 Less: current maturities of long-term debt (110,395) (20,139) Less: current portion of capital lease obligations, net of capital lease interest (9,150) (7,110) $ 445,504 $ 413,423 | Debt outstanding as of December 31, 2020 and 2019, whose carrying value approximates fair market value due to variable interest rates based on current rates available to the Company for similar instruments, was as follows (in thousands): 2020 2019 Line of credit $ 59,837 $ 46,554 Term loan 361,045 370,609 Acquistion debt 10,575 — Capital lease obligations 25,751 11,959 Less: amounts representing interest (2,682) (1,327) Less: unamortized financing fees (13,854) (16,830) 440,672 410,965 Less: current portion of long-term debt (20,139) (9,564) Less: current portion of capital lease obliations, net of capital lease interest (7,110) (3,902) $ 413,423 $ 397,499 |
Schedule of minimum payments of long-term debt and capital lease obligations | The minimum payments of the Company’s long-term debt and capital lease obligations are as follows (in thousands): Capital Line of Term Acquisition lease credit loan debt obligations Total 2021 $ — $ 9,564 $ 10,575 $ 8,287 $ 28,426 2022 — 9,564 — 7,318 16,882 2023 59,837 9,564 — 6,397 75,798 2024 — 9,564 — 3,105 12,669 2025 — 9,564 — 644 10,208 Thereafter — 313,225 — — 313,225 Total $ 59,837 $ 361,045 $ 10,575 $ 25,751 $ 457,208 |
Fair Value Measurements (Tabl_2
Fair Value Measurements (Tables) | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Summary of changes in fair value of Level 3 financial liabilities | Warrant Liabilities Fair value as of March 5, 2021 (Initial Measurement) $ 91,800 Change in fair value (9,180) Fair value as of March 31, 2021 82,620 Change in fair value 232,560 Fair value as of June 30, 2021 $ 315,180 Change in fair value (97,920) Fair value as of September 30, 2021 $ 217,260 | ||
BCP QUALTEK HOLDCO, LLC | |||
Schedule of fair value of the Company's financial liabilities that are measured at fair value on recurring basis | Fair Value at October 2, 2021 (in thousands) Carrying Value Level 1 Level 2 Level 3 Financial liabilities Contingent consideration $ 28,429 $ — $ — $ 28,429 $ 28,429 $ — $ — $ 28,429 Fair Value at December 31, 2020 (in thousands) Carrying Value Level 1 Level 2 Level 3 Financial liabilities Contingent consideration $ 18,129 $ — $ — $ 18,129 $ 18,129 $ — $ — $ 18,129 | Fair Value at December 31, 2020 Carrying (in thousands) Value Level 1 Level 2 Level 3 Financial liabilities Contingent consideration – Vertical Limit $ 4,711 $ — $ — $ 4,711 Contingent consideration – Vinculums 13,418 — — 13,418 $ 18,129 $ — $ — $ 18,129 Fair Value at December 31, 2019 Carrying (in thousands) Value Level 1 Level 2 Level 3 Financial liabilities Contingent consideration – RLI $ 2,075 $ — $ — $ 2,075 Contingent consideration – Vertical Limit 9,195 — — 9,195 Contingent consideration – Vinculums 22,973 — — 22,973 Contingent consideration – Aerial 5,876 — — 5,876 $ 40,119 $ — $ — $ 40,119 | |
Summary of changes in fair value of Level 3 financial liabilities | The following table sets forth a summary of the changes in fair value of the Company’s Level 3 financial liabilities: January 1, 2021 18,129 Acquisitions (see Note 4) 24,145 Accretion 699 Change in fair value (4,544) Reclassification to acquisition debt (10,000) October 2, 2021 $ 28,429 January 1, 2020 $ 40,119 Payment of contingent consideration (6,000) Accretion 1,306 October 3, 2020 $ 35,425 | January 1, 2019 $ 10,130 Acquisitions (see Note 3) 36,117 Payment of contingent consideration (13,108) Accretion 832 Change in fair value 6,148 December 31, 2019 40,119 Payment of contingent consideration (6,000) Accretion 1,666 Reclassification to acquisition debt (10,575) Change in fair value (7,081) December 31, 2020 $ 18,129 |
Segments and Related Informat_2
Segments and Related Information (Tables) - BCP QUALTEK HOLDCO, LLC | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
Summarized financial information for the Company's reportable segments | For the Nine Months Ended Revenue: October 2, 2021 October 3, 2020 Telecom $ 360,020 $ 468,729 Renewables and Recovery Logistics 105,164 55,351 Total consolidated revenue $ 465,184 $ 524,080 October 2, December 31, Total Assets: 2021 2020 Telecom $ 602,749 $ 579,147 Renewables and Recovery Logistics 151,926 55,370 Corporate 14,890 6,351 Total consolidated assets $ 769,565 $ 640,868 For the Nine Months Ended Capital Expenditures: October 2, 2021 October 3, 2020 Telecom $ 1,843 $ 6,712 Renewables and Recovery Logistics 248 7,936 Corporate 1,059 845 Total consolidated capital expenditures $ 3,150 $ 15,493 | Summarized financial information for the Company’s reportable segments is presented and reconciled to the Company’s consolidated financial information in the following tables, all of which are presented in thousands. 2020 2019 Revenue: Telecom $ 587,614 $ 568,342 Renewables and Recovery Logistics 68,910 30,926 Total consolidated revenue $ 656,524 $ 599,268 2020 2019 Total Assets: Telecom $ 579,147 $ 697,991 Renewables and Recovery Logistics 55,370 45,642 Corporate 6,351 3,597 Total consolidated assets $ 640,868 $ 747,230 2020 2019 Capital Expenditures: Telecom $ 8,831 $ 10,693 Renewables and Recovery Logistics 12,251 1,090 Corporate 2,015 957 Total consolidated capital expenditures $ 23,097 $ 12,740 2020 2019 Amortization and Depreciation: Amortization and depreciation Telecom $ 40,588 $ 35,411 Renewables and Recovery Logistics 5,259 4,250 Corporate 628 442 Total consolidated amortization and depreciation $ 46,475 $ 40,103 |
Reconciliation of Net Loss from Segments to Consolidated | For the Nine Months Ended Amortization and Depreciation: October 2, 2021 October 3, 2020 Amortization and depreciation Telecom $ 29,767 $ 30,539 Renewables and Recovery Logistics 8,644 3,734 Corporate 726 487 Total consolidated amortization and depreciation $ 39,136 $ 34,761 For the Nine Months Ended Adjusted EBITDA Reconciliation: October 2, 2021 October 3, 2020 Telecom adjusted EBITDA $ 26,907 $ 16,028 Renewables and Recovery Logistics adjusted EBITDA 42,181 24,227 Corporate adjusted EBITDA (13,097) (13,628) Total adjusted EBITDA $ 55,991 $ 26,627 Less: Management fees (751) (391) Transaction expenses (2,875) (567) Change in fair value of contingent consideration 4,544 — Depreciation and amortization (39,136) (34,761) Interest expense (35,778) (28,824) Loss on extinguishment of convertible notes (2,436) — $ (20,441) $ (37,916) | 2020 2019 EBITDA Reconciliation: Telecom adjusted EBITDA $ 2,409 $ 37,063 Renewables and Recovery Logistics adjusted EBITDA 28,943 11,442 Corporate adjusted EBITDA (18,213) (16,635) Total adjusted EBITDA 13,139 31,870 Less: Management fees (518) (541) Transaction expenses (988) (4,257) Change in fair value of contingent consideration 7,081 (6,149) Impairment of goodwill (28,802) (8,132) Impairment of long-lived assets — (840) Depreciation and amortization (46,475) (40,103) Interest expense (37,659) (33,380) Net loss $ (94,222) $ (61,532) |
Schedule of Revenue and Long-lived Assets by Geography | For the Nine Months Ended Revenue by Service Offerings: October 2, 2021 October 3, 2020 Telecom Wireless $ 278,125 $ 359,792 Telecom Wireline 73,296 108,937 Telecom Power 8,598 — Renewables 25,086 — Recovery Logistics 80,079 55,351 Total $ 465,184 $ 524,080 | |
Schedule of Revenue from Significant Customers | Revenue concentration information for significant customers as a percentage of total consolidated revenue was as follows (in thousands): For the Nine Months Ended October 2, 2021 October 3, 2020 Customers: Amount % of Total Amount % of Total AT&T $ 189,381 41 % $ 282,807 54 % Entergy 67,776 15 % * * T-Mobile 59,369 13 % * * Verizon 51,773 11 % 98,165 19 % Total $ 368,299 80 % $ 380,972 73 % * Revenue from Entergy and T-Mobile did not exceed 10% of total consolidated revenue for the nine months ended October 3, 2020. | Revenue for the years ended December 31, 2020 and 2019 include revenue concentration from significant customers as follows (in thousands): 2020 2019 Amount % of Total Amount % of Total Customers: AT&T $ 356,026 54 % $ 318,913 53 % Verizon 116,444 18 % 117,927 20 % Total $ 472,470 72 % $ 436,840 73 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
BCP QUALTEK HOLDCO, LLC | |
Schedule of of future minimum rental payments under the operating lease agreements | The following is a schedule by year of future minimum rental payments required under the operating lease agreements (in thousands): Years ending December 31: 2021 $ 9,673 2022 8,048 2023 5,807 2024 3,534 2025 1,689 Thereafter 6,468 $ 35,219 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
BCP QUALTEK HOLDCO, LLC | ||
Discontinued operations in consolidated balance sheets and operations and comprehensive loss | The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations in the condensed consolidated balance sheets (in thousands): October 2, 2021 December 31, 2020 Carrying amounts of assets included as part of discontinued operations: Cash $ 1,272 $ 93 Accounts receivable, net of allowance 4,663 5,743 Inventories, net — 28 Prepaid expenses 177 71 Other current assets 2,045 599 Total current assets of discontinued operations $ 8,157 $ 6,534 Property and equipment, net 1,348 3,280 Intangible assets, net — 5,712 Other long-term assets — 280 Total non-current assets of discontinued operations $ 1,348 $ 9,272 Carrying amounts of liabilities included as part of discontinued operations: Current portion of long-term debt and capital lease obligations $ 1,832 $ 920 Accounts payable 519 809 Accrued expenses 1,590 1,636 Total current liabilities of discontinued operations $ 3,941 $ 3,365 Capital lease obligations, net of current portion — 1,793 Total non-current liabilities of discontinued operations $ — $ 1,793 The financial results are presented as loss from discontinued operations on our condensed consolidated statements of operations and comprehensive loss. The following table presents the financial results (in thousands): For the Nine Months Ended October 2, 2021 October 3, 2020 Revenue $ 5,850 $ 13,923 Costs and expenses: — Cost of revenues 8,025 13,222 General and administrative 275 693 Depreciation and amortization 6,667 1,566 Total costs and expenses 14,967 15,481 Loss from operations of discontinued operations (9,117) (1,558) Other income (expense): Gain on sale/ disposal of property and equipment 1,101 — Interest expense (98) (150) Loss from discontinued operations $ (8,114) $ (1,708) | The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations in the consolidated balance sheets as of December 31, 2020 and 2019 (in thousands): 2020 2019 Carrying amounts of assets included as part of discontinued operations: Cash $ 93 $ 237 Accounts receivable, net of allowance 5,743 6,223 Inventories, net 28 30 Prepaid expenses 71 223 Other current assets 599 23 Total current assets of discontinued operations $ 6,534 $ 6,736 Property and equipment, net 3,280 4,585 Intangible assets, net 5,712 6,275 Other long-term assets 280 265 Total non-current assets of discontinued operations $ 9,272 $ 11,125 Carrying amounts of liabilities included as part of discontinued operations: Current portion of long-term debt and capital lease obligations $ 920 $ 1,059 Accounts payable 809 1,180 Accrued expenses 1,636 607 Total current liabilities of discontinued operations $ 3,365 $ 2,846 Capital lease obligations, net of current portion 1,793 2,634 Total non-current liabilities of discontinued operations $ 1,793 $ 2,634 The financial results are presented as loss from discontinued operations on our consolidated statements of operations and comprehensive loss for the years ended December 31, 2020 and 2019. The following table presents the financial results (in thousands): 2020 2019 Revenue $ 17,481 $ 21,561 Costs and expenses: Cost of revenues 18,331 19,807 General and administrative 804 939 Change in fair value of contingent consideration — (266) Impairment of goodwill — 5,119 Depreciation and amortization 2,022 2,012 Total costs and expenses 21,157 27,611 Loss from operations of discontinued operations (3,676) (6,050) Other income (expense): Gain on sale/ disposal of property and equipment — 1 Interest expense (189) (213) Loss from discontinued operations $ (3,865) $ (6,262) |
Nature of Business and Summar_3
Nature of Business and Summary of Significant Accounting Policies (Details) - BCP QUALTEK HOLDCO, LLC $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021USD ($)segment | Oct. 03, 2020USD ($) | Dec. 31, 2020USD ($)segment | Dec. 31, 2019USD ($) | |
Number of reportable segments | segment | 2 | 2 | ||
Factoring related interest expense | $ 1,800 | $ 1,700 | ||
Deferred financing costs | $ 3,201 | $ 2,308 | $ 3,090 | $ 2,269 |
Point in time | ||||
Percentage of revenue on consolidated revenue | 35.00% | 32.00% | ||
Minimum | ||||
Property plant and equipment, Estimated useful lives | 3 | |||
Finite lived intangible asset, Useful life | 2 years | |||
Maximum | ||||
Property plant and equipment, Estimated useful lives | 7 years | |||
Finite lived intangible asset, Useful life | 15 years |
Earnings Per Unit (Details)
Earnings Per Unit (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 11 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2021 | Sep. 30, 2020 | Oct. 02, 2021 | Sep. 30, 2021 | Oct. 03, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Net Income (Loss) Available to Common Stockholders, Basic [Abstract] | |||||||||||
Net loss | $ 809,740 | $ 800 | $ 1,422,448 | $ 885 | $ 1,225 | $ 975 | |||||
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | |||||||||||
Weighted-average shares outstanding, basic | [1] | 2,500,000 | 2,500,000 | ||||||||
Diluted weighted average shares outstanding | [1] | 2,500,000 | 2,500,000 | ||||||||
Basic income (loss) per share | $ 0 | $ 0 | |||||||||
Diluted net income (loss) per share | $ 0 | $ 0 | |||||||||
BCP QUALTEK HOLDCO, LLC | |||||||||||
Net Income (Loss) Available to Common Stockholders, Basic [Abstract] | |||||||||||
Net loss | $ 28,555,000 | $ 39,624,000 | $ 28,555,000 | $ 98,087,000 | $ 67,794,000 | ||||||
Less: accrued preferred return | (1,638,000) | (2,508,000) | (3,287,000) | (742,000) | |||||||
Net loss attributable to Class A Units | $ 30,193,000 | $ 42,132,000 | $ (101,374,000) | $ (68,536,000) | |||||||
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | |||||||||||
Weighted-average shares outstanding, basic | 2,161,951 | 2,005,824 | 2,005,824 | 1,962,115 | |||||||
Diluted weighted average shares outstanding | 2,005,824 | 1,962,115 | |||||||||
Basic income (loss) per share | $ (13.96) | $ (21) | $ (48.61) | $ (31.74) | |||||||
Diluted net income (loss) per share | $ (50.54) | $ (34.93) | |||||||||
Common Stock A | BCP QUALTEK HOLDCO, LLC | |||||||||||
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | |||||||||||
Weighted-average shares outstanding, basic | 2,161,951 | 2,005,824 | |||||||||
Diluted weighted average shares outstanding | 2,161,951 | 2,005,824 | |||||||||
Basic income (loss) per share | $ (13.96) | $ (21) | |||||||||
Diluted net income (loss) per share | $ (13.96) | $ (21) | |||||||||
[1] | Includes up to 375,000 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 shares of common stock outstanding (see Notes 5 and 8). |
Acquisitions (Details)
Acquisitions (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | Oct. 18, 2020 | Dec. 31, 2019 | Oct. 18, 2019 | Oct. 04, 2019 | Mar. 29, 2019 | Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Purchase consideration: | ||||||||||
Cash paid | $ 37,057 | $ 76,342 | ||||||||
Contingent consideration | $ 6,000 | $ 6,000 | 7,870 | |||||||
Purchase price allocations: | ||||||||||
Goodwill | $ 86,503 | $ 81,775 | 58,522 | $ 86,503 | $ 41,083 | |||||
Vertical Limit | ||||||||||
Purchase consideration: | ||||||||||
Cash paid | $ 16,250 | |||||||||
Contingent consideration | $ 3,000 | 7,677 | ||||||||
Business combination consideration transferred | 23,927 | |||||||||
Purchase price allocations: | ||||||||||
Accounts receivable | 14,815 | |||||||||
Inventories | 65 | |||||||||
Property and equipment | 1,195 | |||||||||
Prepaid expenses | 72 | |||||||||
Goodwill | 7,093 | |||||||||
Other long-term assets | 46 | |||||||||
Business combination recognized identifiable assets acquired and liabilities assumed, Assets including goodwill, Total | 31,286 | |||||||||
Accounts payable | (5,621) | |||||||||
Accrued expenses | (1,688) | |||||||||
Capital lease obligations | (50) | |||||||||
Business combination recognized identifiable assets acquired goodwill and liabilities assumed, Net, Total | 23,927 | |||||||||
Vertical Limit | Trademarks and tradenames | ||||||||||
Purchase price allocations: | ||||||||||
Intangibles | 1,900 | |||||||||
Vertical Limit | Customer relationships | ||||||||||
Purchase price allocations: | ||||||||||
Intangibles | $ 6,100 | |||||||||
Vinculums | ||||||||||
Purchase consideration: | ||||||||||
Cash paid | $ 43,595 | |||||||||
Rollover equity | 12,500 | |||||||||
Contingent consideration | 22,615 | |||||||||
Business combination consideration transferred | 78,710 | |||||||||
Purchase price allocations: | ||||||||||
Accounts receivable | 37,574 | |||||||||
Inventories | 1,668 | |||||||||
Property and equipment | 990 | |||||||||
Prepaid expenses | 318 | |||||||||
Goodwill | 32,581 | |||||||||
Other long-term assets | 79 | |||||||||
Business combination recognized identifiable assets acquired and liabilities assumed, Assets including goodwill, Total | 112,810 | |||||||||
Accounts payable | (14,830) | |||||||||
Accrued expenses | (12,706) | |||||||||
Contract liabilities | (6,190) | |||||||||
Capital lease obligations | (374) | |||||||||
Business combination recognized identifiable assets acquired goodwill and liabilities assumed, Net, Total | 78,710 | |||||||||
Vinculums | Trademarks and tradenames | ||||||||||
Purchase price allocations: | ||||||||||
Intangibles | 4,500 | |||||||||
Vinculums | Customer relationships | ||||||||||
Purchase price allocations: | ||||||||||
Intangibles | $ 35,100 | |||||||||
Aerial | ||||||||||
Purchase consideration: | ||||||||||
Cash paid | $ 16,497 | |||||||||
Rollover equity | 1,000 | |||||||||
Contingent consideration | 5,825 | $ 6,000 | ||||||||
Timing payments | $ 1,500 | 1,447 | ||||||||
Business combination consideration transferred | 24,769 | |||||||||
Purchase price allocations: | ||||||||||
Accounts receivable | 8,847 | |||||||||
Inventories | 150 | |||||||||
Property and equipment | 1,446 | |||||||||
Prepaid expenses | 167 | |||||||||
Goodwill | 14,698 | |||||||||
Other long-term assets | 28 | |||||||||
Business combination recognized identifiable assets acquired and liabilities assumed, Assets including goodwill, Total | 29,476 | |||||||||
Accounts payable | (2,254) | |||||||||
Accrued expenses | (789) | |||||||||
Contract liabilities | (648) | |||||||||
Capital lease obligations | (1,016) | |||||||||
Business combination recognized identifiable assets acquired goodwill and liabilities assumed, Net, Total | 24,769 | |||||||||
Aerial | Trademarks and tradenames | ||||||||||
Purchase price allocations: | ||||||||||
Intangibles | 340 | |||||||||
Aerial | Customer relationships | ||||||||||
Purchase price allocations: | ||||||||||
Intangibles | $ 3,800 |
Acquisitions - Additional infor
Acquisitions - Additional information (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) | Oct. 18, 2020 | Dec. 31, 2019 | Oct. 18, 2019 | Oct. 04, 2019 | May 15, 2019 | Mar. 29, 2019 | Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | ||||||||||
Payments to Acquire Businesses, Gross | $ 37,057,000 | $ 76,342,000 | ||||||||
Change in fair value of contingent consideration | $ (4,544,000) | $ 7,081,000 | 6,149,000 | |||||||
Payment related to contingent consideration | $ 6,000,000 | 6,000,000 | 7,870,000 | |||||||
Goodwill increase (Decrease) | 821,000 | |||||||||
Vertical Limit | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Payments to Acquire Businesses, Gross | $ 16,250,000 | |||||||||
Business combination consideration transferred, Maximum payment | $ 15,700,000 | |||||||||
Fair value of contingent consideration | 7,700,000 | |||||||||
Change in fair value of contingent consideration | (1,200,000) | 4,200,000 | ||||||||
Payment related to contingent consideration | $ 3,000,000 | $ 7,677,000 | ||||||||
Acquisition Debt, Current | 3,500,000 | |||||||||
Vinculums | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Payments to Acquire Businesses, Gross | $ 43,595,000 | |||||||||
Business combination consideration transferred, Maximum payment | 35,000,000 | |||||||||
Fair value of contingent consideration | 22,600,000 | |||||||||
Change in fair value of contingent consideration | (5,800,000) | |||||||||
Payment related to contingent consideration | $ 22,615,000 | |||||||||
Acquisition Debt, Current | 5,000,000 | |||||||||
Goodwill increase (Decrease) | 973,000 | |||||||||
Aerial | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Payments to Acquire Businesses, Gross | $ 16,497,000 | |||||||||
Business combination consideration transferred, Maximum payment | 6,000,000 | |||||||||
Fair value of contingent consideration | 5,800,000 | |||||||||
Payment related to contingent consideration | 5,825,000 | 6,000,000 | ||||||||
Goodwill increase (Decrease) | 153,000 | |||||||||
Timing payments | $ 1,500,000 | $ 1,447,000 | ||||||||
Unpaid timing payments | 1,500,000 | 1,500,000 | ||||||||
Transaction costs | $ 4,300,000 | 1,000,000 | 4,300,000 | |||||||
Site Resources | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Change in fair value of contingent consideration | (1,000,000) | |||||||||
Payment related to contingent consideration | 0 | |||||||||
Recovery Logistics. | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Change in fair value of contingent consideration | 2,900,000 | |||||||||
Payment related to contingent consideration | 10,100,000 | |||||||||
Acquisition Debt, Current | $ 2,100,000 | |||||||||
NX Canada | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Change in fair value of contingent consideration | (266,000) | |||||||||
Payment related to contingent consideration | $ 0 |
Property and Equipment (Details
Property and Equipment (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | $ 68,132 | $ 51,052 | $ 26,648 | |
Less: accumulated depreciation | (25,945) | (17,258) | (8,475) | |
Property and equipment, net | 42,187 | 33,794 | 18,173 | |
Depreciation and amortization expense | 9,418 | $ 6,584 | 9,000 | 6,300 |
Office furniture | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 1,331 | 1,249 | 898 | |
Computers | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 1,591 | 1,217 | 1,051 | |
Machinery, equipment and vehicles | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 15,482 | 10,275 | 6,532 | |
Leasehold improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 4,695 | 3,354 | 792 | |
Software | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 2,281 | 2,199 | 1,903 | |
Assets under capital lease | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 41,349 | 32,153 | 15,226 | |
Less: accumulated depreciation | (13,028) | (8,062) | (3,900) | |
Construction in process | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | $ 1,263 | $ 605 | $ 246 |
Accounts Receivable, Net of A_3
Accounts Receivable, Net of Allowance, Contract Assets and Liabilities, and Customer Credit Concentration - Schedule of Accounts receivable, net, classified as current (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | Oct. 02, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Trade accounts receivable | $ 97,506 | $ 44,419 | $ 61,365 |
Contract assets | 157,155 | 134,311 | 173,734 |
Accounts receivables gross | 254,661 | 178,730 | 235,099 |
Less: allowance for doubtful accounts | (5,397) | (3,933) | (6,440) |
Accounts receivable, net | $ 249,264 | $ 174,797 | $ 228,659 |
Accounts Receivable, Net of A_4
Accounts Receivable, Net of Allowance, Contract Assets and Liabilities, and Customer Credit Concentration - Schedule of Net contract assets (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Dec. 31, 2019 | Dec. 31, 2020 | |
Contract assets | $ 157,155 | $ 173,734 | $ 134,311 |
Contract liabilities | (14,950) | (18,470) | (14,945) |
Contract assets, net | 142,205 | 155,264 | $ 119,366 |
Amount of revenue recognized that was included in contract liabilities | $ 9,589 | $ 5,700 |
Accounts Receivable, Net of A_5
Accounts Receivable, Net of Allowance, Contract Assets and Liabilities, and Customer Credit Concentration - Schedule of Customer Credit Concentration (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Concentration Risk [Line Items] | |||
Amounts of accounts receivable and contract assets | $ 211,911 | $ 147,142 | |
Concentration risk percentage | 10.00% | ||
AT&T | |||
Concentration Risk [Line Items] | |||
Amounts of accounts receivable and contract assets | 61,797 | $ 81,796 | |
Verizon | |||
Concentration Risk [Line Items] | |||
Amounts of accounts receivable and contract assets | $ 47,892 | 65,346 | |
Accounts receivable and Contract assets | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.00% | ||
Accounts receivable and Contract assets | Credit Concentration Risk | |||
Concentration Risk [Line Items] | |||
Amounts of accounts receivable and contract assets | $ 147,142 | $ 189,697 | |
Concentration risk percentage | 82.30% | 80.80% | |
Accounts receivable and Contract assets | Credit Concentration Risk | AT&T | |||
Concentration Risk [Line Items] | |||
Amounts of accounts receivable and contract assets | $ 81,796 | $ 120,145 | |
Credit Concentration percentage | 24.30% | 45.80% | |
Concentration risk percentage | 45.80% | 51.10% | |
Accounts receivable and Contract assets | Credit Concentration Risk | Verizon | |||
Concentration Risk [Line Items] | |||
Amounts of accounts receivable and contract assets | $ 65,346 | $ 69,552 | |
Credit Concentration percentage | 18.80% | 36.60% | |
Concentration risk percentage | 36.60% | 29.60% |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Goodwill (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill [Roll Forward] | ||||
Goodwill, Beginning Balance | $ 58,522 | $ 86,503 | $ 86,503 | $ 41,083 |
Additions from acquisitions | 23,253 | 53,552 | ||
Impairment loss(a) | 0 | 0 | (28,802) | (8,132) |
Measurement period adjustments, net | 821 | |||
Goodwill, Ending Balance | 81,775 | 58,522 | 86,503 | |
Renewables and Recovery Logistics | ||||
Goodwill [Roll Forward] | ||||
Goodwill, Beginning Balance | 13,598 | 13,598 | 13,598 | 13,598 |
Additions from acquisitions | 8,082 | |||
Impairment loss(a) | 0 | |||
Goodwill, Ending Balance | 21,680 | 13,598 | 13,598 | |
Telecom | ||||
Goodwill [Roll Forward] | ||||
Goodwill, Beginning Balance | 44,924 | $ 72,905 | 72,905 | 27,485 |
Additions from acquisitions | 15,171 | 53,552 | ||
Impairment loss(a) | (36,934,000) | (28,802) | (8,132) | |
Measurement period adjustments, net | 821 | |||
Goodwill, Ending Balance | $ 60,095 | $ 44,924 | $ 72,905 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Intangible assets (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | $ 474,646 | $ 426,719 | $ 426,719 |
Accumulated Amortization | (109,924) | (80,903) | (45,146) |
Net carrying amount | $ 364,722 | $ 345,816 | $ 381,573 |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Remaining Useful Life | 9 years 8 months 12 days | 10 years 9 months 18 days | 11 years 9 months 18 days |
Gross carrying amount | $ 414,446 | $ 368,200 | $ 368,200 |
Accumulated Amortization | (89,681) | (65,868) | (36,782) |
Net carrying amount | $ 324,765 | $ 302,332 | $ 331,418 |
Trade names | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Remaining Useful Life | 9 years 8 months 12 days | 9 years 10 months 24 days | 10 years 6 months |
Gross carrying amount | $ 60,200 | $ 58,519 | $ 58,519 |
Accumulated Amortization | (20,243) | (15,035) | (8,364) |
Net carrying amount | $ 39,957 | $ 43,484 | $ 50,155 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of estimated future amortization expense related to the intangible assets (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | Oct. 02, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
2021 | $ 35,585 | ||
2022 | 35,585 | ||
2023 | 34,294 | ||
2024 | 32,245 | ||
2025 | 31,289 | ||
Thereafter | 176,818 | ||
Finite-Lived Intangible Assets, Net | $ 364,722 | $ 345,816 | $ 381,573 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Narrative (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | ||||
Impairment of goodwill | $ 0 | $ 0 | $ 28,802 | $ 8,132 |
Amortization expense of intangible assets | 29,020,000 | $ 26,818,000 | 35,800 | 32,900 |
Telecom | ||||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | ||||
Impairment of goodwill | $ 36,934,000 | 28,802 | 8,132 | |
Impairment of long- lived assets | $ 0 | $ 800 |
Long-Term Debt and Capital Le_3
Long-Term Debt and Capital Lease Obligations - Line of credit (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Dec. 31, 2020 | Sep. 08, 2020 | Dec. 31, 2019 | |
Line of Credit Facility [Line Items] | ||||
Current borrowing capacity | $ 90,000 | |||
Maximum borrowing capacity | $ 103,500 | |||
Stand by letters of credit outstanding | $ 3,977 | $ 801 | ||
Revolving credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Current borrowing capacity | 103,500 | |||
Amount available under credit facility | $ 2,198,000 | 37,900 | ||
Stand by letters of credit outstanding | $ 801 | $ 357 | ||
Revolving credit facility | Base rate | ||||
Line of Credit Facility [Line Items] | ||||
Applicable interest rate margin | 4.75% | 4.75% | ||
Revolving credit facility | Eurodollar rate | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Applicable interest rate margin | 2.59% | 2.77% | ||
Revolving credit facility | Eurodollar rate | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Applicable interest rate margin | 2.63% | 2.87% |
Long-Term Debt and Capital Le_4
Long-Term Debt and Capital Lease Obligations - Term Loan (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Oct. 04, 2019 | |
Debt Instrument [Line Items] | ||||
Term loan | $ 380 | $ 280 | $ 380 | |
Additional term loan | $ 100 | |||
Principal payments | $ 2.4 | |||
Term loan | ||||
Debt Instrument [Line Items] | ||||
Principal payments | $ 2.4 | |||
Term loan | Base rate | ||||
Debt Instrument [Line Items] | ||||
Applicable interest rate margin | 8.50% | 8.50% | ||
Term loan | Eurodollar rate | ||||
Debt Instrument [Line Items] | ||||
Applicable interest rate margin | 7.25% | 7.25% |
Long-Term Debt and Capital Le_5
Long-Term Debt and Capital Lease Obligations - Acquisition debt and Subordinated debt (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Acquisition Debt. | |||
Debt Instrument [Line Items] | |||
Interest expense | $ 68 | $ 0 | |
Subordinated Debt | |||
Debt Instrument [Line Items] | |||
Interest expense | 241 | ||
Subordinated debt with related party | $ 25,100 | ||
Minimum | Acquisition Debt. | |||
Debt Instrument [Line Items] | |||
Debt interest rate | 18.00% | 1.00% | |
Maximum | Acquisition Debt. | |||
Debt Instrument [Line Items] | |||
Debt interest rate | 3.25% | 3.25% | |
Interest expense | $ 606 |
Long-Term Debt and Capital Le_6
Long-Term Debt and Capital Lease Obligations - Fair Market Value Due to Variable Interest Rates Based on Current Rates (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) | Oct. 02, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Acquisition debt | $ 34,718,000 | $ 10,575,000 | |
Capital lease obligations | 25,620,000 | 23,069,000 | |
Less: amounts representing interest | (2,682,000) | $ (1,327,000) | |
Less: unamortized financing fees | (13,854,000) | (16,830,000) | |
Debt and capital lease obligations | 565,049,000 | 440,672,000 | 410,965,000 |
Less: current portion of long-term debt | (110,395,000) | (20,139,000) | (9,564,000) |
Less: current portion of capital lease obligations, net of capital lease interest | (9,150,000) | (7,110,000) | (3,902,000) |
Non current portion of long-term debt and capital lease obligations | 445,504,000 | 413,423,000 | 397,499,000 |
Line of credit | |||
Debt, Carrying amount | 96,242,000 | 59,837,000 | 46,554,000 |
Term loan | |||
Debt, Carrying amount | $ 353,872,000 | $ 361,045,000 | $ 370,609,000 |
Long-Term Debt and Capital Le_7
Long-Term Debt and Capital Lease Obligations - Minimum Payments of the Company's Long-term Debt and Capital Lease Obligations (Details) - BCP QUALTEK HOLDCO, LLC $ in Thousands | Dec. 31, 2020USD ($) |
Long-term debt | |
2021 | $ 10,575 |
Total | 10,575 |
Capital lease obligations | |
2021 | 8,287 |
2022 | 7,318 |
2023 | 6,397 |
2024 | 3,105 |
2025 | 644 |
Total | 25,751 |
Long-term debt and capital lease obligations | |
2021 | 28,426 |
2022 | 16,882 |
2023 | 75,798 |
2024 | 12,669 |
2025 | 10,208 |
Thereafter | 313,225 |
Total | 457,208 |
Line of credit | |
Long-term debt | |
2023 | 59,837 |
Total | 59,837 |
Term loan | |
Long-term debt | |
2021 | 9,564 |
2022 | 9,564 |
2023 | 9,564 |
2024 | 9,564 |
2025 | 9,564 |
Thereafter | 313,225 |
Total | $ 361,045 |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Oct. 02, 2021 | |
Fair value assets, Transfers from level 2 to level 1 | $ 0 | |||
Fair value liabilities, Transfers from level 1 to level 2 | 0 | |||
Fair value assets, Transfers net | $ 0 | |||
BCP QUALTEK HOLDCO, LLC | ||||
Fair value assets, Transfers from level 1 to level 2 | $ 0 | $ 0 | $ 0 | |
Fair value assets, Transfers from level 2 to level 1 | 0 | 0 | 0 | |
Fair value liabilities, Transfers from level 1 to level 2 | 0 | 0 | 0 | |
Fair value liabilities, Transfers from level 2 to level 1 | 0 | 0 | $ 0 | |
Fair value assets, Transfers net | 0 | 0 | ||
Fair value liabilities, Transfers net | $ 0 | $ 0 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair value of the Company Financial Liabilities (Details) - Recurring - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | Oct. 02, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Carrying value of contingent consideration | $ 28,429 | $ 18,129 | $ 40,119 |
Recovery Logistics. | |||
Carrying value of contingent consideration | 2,075 | ||
Vertical Limit | |||
Carrying value of contingent consideration | 4,711 | 9,195 | |
Vinculums | |||
Carrying value of contingent consideration | 13,418 | 22,973 | |
Aerial | |||
Carrying value of contingent consideration | 5,876 | ||
Level 3 | |||
Financial liabilities | |||
Contingent consideration | $ 28,429 | 18,129 | 40,119 |
Level 3 | Recovery Logistics. | |||
Financial liabilities | |||
Contingent consideration | 2,075 | ||
Level 3 | Vertical Limit | |||
Financial liabilities | |||
Contingent consideration | 4,711 | 9,195 | |
Level 3 | Vinculums | |||
Financial liabilities | |||
Contingent consideration | $ 13,418 | 22,973 | |
Level 3 | Aerial | |||
Financial liabilities | |||
Contingent consideration | $ 5,876 |
Fair Value Measurements - Fai_2
Fair Value Measurements - Fair Value of the Company Level 3 Financial Liabilities (Details) - Level 3 - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at the beginning | $ 18,129 | $ (6,000) | $ (6,000) | $ 10,130 |
Acquisitions (see Note 3) | 24,145 | 36,117 | ||
Payment of contingent consideration | 1,666 | (13,108) | ||
Accretion | 699 | (6,000) | (10,575) | 832 |
Change in fair value | (4,544) | 18,129 | 6,148 | |
Foreign currency translation adjustments | (10,000) | 40,119 | ||
Reclassification to acquisition debt | (7,081) | |||
Balance at the end | $ 28,429 | $ 1,306 | $ 18,129 | $ (6,000) |
Equity (Details)
Equity (Details) - USD ($) | Oct. 04, 2019 | Mar. 31, 2021 | Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Class of Stock [Line Items] | |||||||||
Sale of 11,500,000 Units, net of underwriting discount and offering expenses | $ 11,500,000 | $ 25,000 | [1] | ||||||
BCP QUALTEK HOLDCO, LLC | |||||||||
Class of Stock [Line Items] | |||||||||
Sale of 11,500,000 Units, net of underwriting discount and offering expenses | $ 15,000,000 | $ 25,000,000 | |||||||
Tax Distributions payable | $ 11,409,000 | 5,930,000 | $ 11,409,000 | 5,930,000 | |||||
Preferred units | BCP QUALTEK HOLDCO, LLC | |||||||||
Class of Stock [Line Items] | |||||||||
Sale of 11,500,000 Units, net of underwriting discount and offering expenses | $ 25,000,000 | ||||||||
Sale of 11,500,000 Units, net of underwriting discount and offering expenses (in shares) | 25,000 | ||||||||
Tax Distributions | 0 | $ 6,694,000 | 6,800,000 | 6,700,000 | $ 6,800,000 | ||||
Tax Distributions payable | $ 5,900,000 | 11,400,000 | 5,900,000 | ||||||
Preferred units | HoldCo LLC Agreement | BCP QUALTEK HOLDCO, LLC | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred stock, Liquidation preference per share | $ 1,000 | ||||||||
Preferred stock, Additional return (in percentage) | 12.00% | ||||||||
Preferred units | BCP QualTek II LLC,. | HoldCo LLC Agreement | BCP QUALTEK HOLDCO, LLC | |||||||||
Class of Stock [Line Items] | |||||||||
Sale of 11,500,000 Units, net of underwriting discount and offering expenses | $ 25,000,000 | ||||||||
Sale of 11,500,000 Units, net of underwriting discount and offering expenses (in shares) | 25,000 | ||||||||
Class P Units | BCP QualTek II LLC,. | BCP QUALTEK HOLDCO, LLC | |||||||||
Class of Stock [Line Items] | |||||||||
Profit interests related expense | $ 0 | $ 0 | $ 0 | $ 0 | |||||
[1] | Includes 375,000 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 shares of common stock outstanding (see Notes 5 and 8). |
Segments and Related Informat_3
Segments and Related Information - Summarized financial information for the Company's reportable segments (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |||
Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | |||||
Total assets | $ 228,800 | $ 25,000 | $ 115,387,992 | ||
BCP QUALTEK HOLDCO, LLC | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | $ 465,184,000 | $ 524,080,000 | 656,524,000 | 599,268,000 | |
Total assets | 769,565,000 | 640,868,000 | 747,230,000 | ||
Capital Expenditures | 3,150,000 | 15,493,000 | 23,097,000 | 12,740,000 | |
Amortization and Depreciation | 39,136,000 | 34,761,000 | 46,475,000 | 40,103,000 | |
Telecom | BCP QUALTEK HOLDCO, LLC | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 360,020,000 | 468,729,000 | 587,614,000 | 568,342,000 | |
Total assets | 602,749,000 | 579,147,000 | 697,991,000 | ||
Capital Expenditures | 1,843,000 | 6,712,000 | 8,831,000 | 10,693,000 | |
Amortization and Depreciation | 29,767,000 | 30,539,000 | 40,588,000 | 35,411,000 | |
Renewables and Recovery Logistics | BCP QUALTEK HOLDCO, LLC | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 105,164,000 | 55,351,000 | 68,910,000 | 30,926,000 | |
Total assets | 151,926,000 | 55,370,000 | 45,642,000 | ||
Capital Expenditures | 248,000 | 7,936,000 | 12,251,000 | 1,090,000 | |
Amortization and Depreciation | 8,644,000 | 3,734,000 | 5,259,000 | 4,250,000 | |
Corporate | BCP QUALTEK HOLDCO, LLC | |||||
Segment Reporting Information [Line Items] | |||||
Total assets | 14,890,000 | 6,351,000 | 3,597,000 | ||
Capital Expenditures | 1,059,000 | 845,000 | 2,015,000 | 957,000 | |
Amortization and Depreciation | $ 726,000 | $ 487,000 | $ 628,000 | $ 442,000 |
Segments and Related Informat_4
Segments and Related Information - Reconciliation of Net Loss from Segments to Consolidated (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 11 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2021 | Sep. 30, 2020 | Oct. 02, 2021 | Sep. 30, 2021 | Oct. 03, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | ||||||||||
Net loss | $ (809,740) | $ (800) | $ (1,422,448) | $ (885) | $ (1,225) | $ (975) | ||||
BCP QUALTEK HOLDCO, LLC | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Adjusted EBITDA | $ 55,991,000 | $ 26,627,000 | 13,139,000 | $ 31,870,000 | ||||||
Management fees | (751,000) | (391,000) | (518,000) | (541,000) | ||||||
Transaction expenses | (2,875,000) | (567,000) | (988,000) | (4,257,000) | ||||||
Change in fair value of contingent consideration | 4,544,000 | (7,081,000) | (6,149,000) | |||||||
Impairment of goodwill | 0 | 0 | (28,802,000) | (8,132,000) | ||||||
Impairment of long-lived assets | (840,000) | |||||||||
Depreciation and amortization | (39,136,000) | (34,761,000) | (46,475,000) | (40,103,000) | ||||||
Interest expense | (35,778,000) | (28,824,000) | (37,659,000) | (33,380,000) | ||||||
Net loss | (28,555,000) | (39,624,000) | $ (28,555,000) | (98,087,000) | (67,794,000) | |||||
Telecom | BCP QUALTEK HOLDCO, LLC | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Adjusted EBITDA | 26,907,000 | 16,028,000 | 2,409,000 | 37,063,000 | ||||||
Impairment of goodwill | (36,934,000,000) | (28,802,000) | (8,132,000) | |||||||
Depreciation and amortization | (29,767,000) | (30,539,000) | (40,588,000) | (35,411,000) | ||||||
Renewables and Recovery Logistics | BCP QUALTEK HOLDCO, LLC | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Adjusted EBITDA | 42,181,000 | 24,227,000 | 28,943,000 | 11,442,000 | ||||||
Impairment of goodwill | 0 | |||||||||
Depreciation and amortization | (8,644,000) | (3,734,000) | (5,259,000) | (4,250,000) | ||||||
Corporate | BCP QUALTEK HOLDCO, LLC | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Adjusted EBITDA | (13,097,000) | (13,628,000) | (18,213,000) | (16,635,000) | ||||||
Depreciation and amortization | $ (726,000) | $ (487,000) | $ (628,000) | $ (442,000) |
Segments and Related Informat_5
Segments and Related Information - Schedule of Revenue and Long-lived Assets by Geography (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
BCP QUALTEK HOLDCO, LLC | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | $ 465,184 | $ 524,080 | $ 656,524 | $ 599,268 |
Segments and Related Informat_6
Segments and Related Information - Schedule of Revenue by Service Offerings (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
BCP QUALTEK HOLDCO, LLC | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | $ 465,184 | $ 524,080 | $ 656,524 | $ 599,268 |
Segments and Related Informat_7
Segments and Related Information - Schedule of Revenue from Significant Customers (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jul. 03, 2021 | Jul. 04, 2020 | Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue, Major Customer [Line Items] | ||||||
Revenues | $ 465,184 | $ 524,080 | $ 656,524 | $ 599,268 | ||
Concentration risk percentage | 10.00% | |||||
Revenue | Customer Concentration Risk | ||||||
Revenue, Major Customer [Line Items] | ||||||
Revenues | $ 368,299 | $ 380,972 | $ 472,470 | $ 436,840 | ||
Concentration risk percentage | 72.00% | 73.00% | ||||
Revenue | Customer Concentration Risk | AT&T | ||||||
Revenue, Major Customer [Line Items] | ||||||
Revenues | $ 189,381 | $ 282,807 | $ 356,026 | $ 318,913 | ||
Risk percentage of Revenue | 41.00% | 54.00% | ||||
Concentration risk percentage | 54.00% | 53.00% | ||||
Revenue | Customer Concentration Risk | Verizon | ||||||
Revenue, Major Customer [Line Items] | ||||||
Revenues | $ 51,773 | $ 98,165 | $ 116,444 | $ 117,927 | ||
Risk percentage of Revenue | 11.00% | 19.00% | ||||
Concentration risk percentage | 18.00% | 20.00% |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - BCP QUALTEK HOLDCO, LLC $ in Thousands | Dec. 31, 2020USD ($) |
Operating Lease Liabilities : | |
2021 | $ 9,673 |
2022 | 8,048 |
2023 | 5,807 |
2024 | 3,534 |
2025 | 1,689 |
Thereafter | 6,468 |
Total | $ 35,219 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Lease agreement | ||||
Other Commitments [Line Items] | ||||
Rent expense of Operating lease | $ 7,517,000 | $ 7,686,000 | ||
Operating Lease, Expense | $ 12,400 | $ 7,800 | ||
Members of the Company | ||||
Other Commitments [Line Items] | ||||
Rent expense of Operating lease | $ 503 | $ 393 | ||
Members of the Company | Lease agreement | ||||
Other Commitments [Line Items] | ||||
Operating Lease, Expense | $ 681 | $ 488 |
Related Party Transactions (Det
Related Party Transactions (Details) - Majority members - Advisory Services Agreement - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | Jul. 18, 2018 | Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | |||||
Quarterly Advisory fees | $ 125 | $ 125 | |||
Advisory Fees | $ 751 | $ 391 | $ 500 | $ 500 |
Retirement Plan (Details)
Retirement Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
BCP QUALTEK HOLDCO, LLC | ||
Related Party Transaction [Line Items] | ||
Employer contribution | $ 0 | $ 0 |
Discontinued Operations - Class
Discontinued Operations - Classes of assets and liabilities of discontinued operations in consolidated balance sheets (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | Oct. 02, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Carrying amounts of assets included as part of discontinued operations: | |||
Other current assets | $ 6,534 | $ 6,736 | |
Total current assets of discontinued operations | $ 8,157 | 6,534 | |
Other long-term assets | 9,272 | 11,125 | |
Total non-current assets of discontinued operations | 1,348 | 9,272 | |
Carrying amounts of liabilities included as part of discontinued operations: | |||
Total current liabilities of discontinued operations | $ 3,941 | 3,365 | 2,846 |
Total non-current liabilities of discontinued operations | 1,793 | 2,634 | |
Discontinued Operations, Disposed of by Sale | |||
Carrying amounts of assets included as part of discontinued operations: | |||
Cash | 93 | 237 | |
Accounts receivable, net of allowance | 5,743 | 6,223 | |
Inventories, net | 28 | 30 | |
Prepaid expenses | 71 | 223 | |
Other current assets | 599 | 23 | |
Total current assets of discontinued operations | 6,534 | 6,736 | |
Property and equipment, net | 3,280 | 4,585 | |
Intangible assets, net | 5,712 | 6,275 | |
Other long-term assets | 280 | 265 | |
Total non-current assets of discontinued operations | 9,272 | 11,125 | |
Carrying amounts of liabilities included as part of discontinued operations: | |||
Current portion of long-term debt and capital lease obligations | 920 | 1,059 | |
Accounts payable | 809 | 1,180 | |
Accrued expenses | 1,636 | 607 | |
Total current liabilities of discontinued operations | 3,365 | 2,846 | |
Capital lease obligations, net of current portion | 1,793 | 2,634 | |
Total non-current liabilities of discontinued operations | $ 1,793 | $ 2,634 |
Discontinued Operations - Loss
Discontinued Operations - Loss from discontinued operations on consolidated statements of operations and comprehensive loss (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Other income (expense): | ||||
Loss from discontinued operations | $ 8,114 | $ 1,708 | $ 3,865 | $ 6,262 |
Discontinued Operations, Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenue | 17,481 | 21,561 | ||
Costs and expenses: | ||||
Cost of revenues | 18,331 | 19,807 | ||
General and administrative | 804 | 939 | ||
Change in fair value of contingent consideration | (266) | |||
Impairment of goodwill | 5,119 | |||
Depreciation and amortization | 2,022 | 2,012 | ||
Total costs and expenses | 21,157 | 27,611 | ||
Loss from operations of discontinued operations | (3,676) | (6,050) | ||
Other income (expense): | ||||
Gain on sale/ disposal of property and equipment | 1 | |||
Interest expense | (189) | (213) | ||
Loss from discontinued operations | $ (3,865) | $ (6,262) |
Subsequent Events (Details)_2_3
Subsequent Events (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | Jan. 26, 2021 | Oct. 02, 2021 | Dec. 31, 2019 | Oct. 15, 2021 |
Cash consideration | $ 37,057 | $ 76,342 | ||
Subsequent Event | FNS | ||||
Percentage of interests acquired | 100.00% | 100.00% | ||
Cash consideration | $ 25,500 | |||
Consideration transferred, Equity value | 2,000 | |||
Maximum additional payment | $ 20,000 |
CONDENSED CONSOLIDATED BALANC_3
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Oct. 02, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Oct. 03, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Feb. 12, 2019 | Dec. 31, 2018 | ||
Current assets: | ||||||||||||||
Prepaid expenses | $ 286,946 | $ 1,500 | ||||||||||||
Other current assets | 1,500 | $ 0 | ||||||||||||
Total Current Assets | 380,540 | 197,258 | 25,000 | |||||||||||
TOTAL ASSETS | 115,387,992 | 228,800 | 25,000 | |||||||||||
Current liabilities: | ||||||||||||||
Accrued expenses | 1,000 | 1,225 | ||||||||||||
Total Current Liabilities | 394,392 | 206,000 | 1,225 | |||||||||||
Total Liabilities | 611,652 | 206,000 | ||||||||||||
Commitments and contingencies (Notes 8 and 12) | ||||||||||||||
(Deficit) / Equity: | ||||||||||||||
Common stock, $0.0001 par value; 50,000,000 shares authorized; 3,283,000 and 2,875,000 shares issued and outstanding (excluding 11,500,000 and no shares subject to possible redemption) as of September 30, 2021 and December 31, 2020, respectively | 328 | 288 | [1] | 288 | [1] | |||||||||
Members' deficit | (1,424,648) | (2,200) | (1,225) | |||||||||||
Total Stockholders' (Deficit) Equity | (223,660) | $ 586,080 | $ 1,170,048 | 22,800 | $ 22,890 | $ 23,690 | $ 23,690 | 23,775 | $ 0 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY | $ 115,387,992 | 228,800 | 25,000 | |||||||||||
BCP QUALTEK HOLDCO, LLC | ||||||||||||||
Current assets: | ||||||||||||||
Cash | $ 5,405,000 | 76,000 | $ 195,000 | 91,000 | ||||||||||
Accounts receivable, net of allowance | 249,264,000 | 174,797,000 | 228,659,000 | |||||||||||
Inventories, net | 5,633,000 | 5,765,000 | 7,790,000 | |||||||||||
Prepaid expenses | 7,446,000 | 3,459,000 | 4,130,000 | |||||||||||
Other current assets | 1,952,000 | 1,592,000 | 1,608,000 | |||||||||||
Current assets of discontinued operations | 8,157,000 | 6,534,000 | ||||||||||||
Total Current Assets | 277,857,000 | 192,223,000 | 249,014,000 | |||||||||||
Property and equipment, net | 42,187,000 | 33,794,000 | 18,173,000 | |||||||||||
Intangible assets, net | 364,722,000 | 345,816,000 | 381,573,000 | |||||||||||
Goodwill | 81,775,000 | 58,522,000 | 86,503,000 | $ 41,083,000 | ||||||||||
Other long-term assets | 1,676,000 | 1,241,000 | 842,000 | |||||||||||
Non-current assets of discontinued operations | 1,348,000 | 9,272,000 | ||||||||||||
TOTAL ASSETS | 769,565,000 | 640,868,000 | 747,230,000 | |||||||||||
Current liabilities: | ||||||||||||||
Current portion of long-term debt and capital lease obligations | 119,545,000 | 27,249,000 | 13,466,000 | |||||||||||
Current portion of contingent consideration | 4,292,000 | 9,968,000 | 10,808,000 | |||||||||||
Accounts payable | 74,217,000 | 55,749,000 | 70,964,000 | |||||||||||
Accrued expenses | 60,713,000 | 65,172,000 | 61,144,000 | |||||||||||
Contract liabilities | 14,950,000 | 14,945,000 | 18,470,000 | |||||||||||
Current liabilities of discontinued operations | 3,941,000 | 3,365,000 | 2,846,000 | |||||||||||
Total Current Liabilities | 277,658,000 | 176,448,000 | 177,698,000 | |||||||||||
Capital lease obligations, net of current portion | 16,471,000 | 15,959,000 | 6,730,000 | |||||||||||
Long-term debt, net of current portion and deferred financing fees | 429,033,000 | 397,464,000 | 390,769,000 | |||||||||||
Contingent consideration, net of current portion | 24,137,000 | 8,161,000 | 29,311,000 | |||||||||||
Distributions payable | 11,409,000 | 11,409,000 | 5,930,000 | |||||||||||
Non-current liabilities of discontinued operations | 1,793,000 | 2,634,000 | ||||||||||||
Total Liabilities | 758,708,000 | 611,234,000 | 613,072,000 | |||||||||||
Commitments and contingencies (Notes 8 and 12) | ||||||||||||||
(Deficit) / Equity: | ||||||||||||||
Preferred units, 25,000 units authorized, issued and outstanding as of December 31, 2020 | 25,000,000 | 25,000,000 | ||||||||||||
Common stock, $0.0001 par value; 50,000,000 shares authorized; 3,283,000 and 2,875,000 shares issued and outstanding (excluding 11,500,000 and no shares subject to possible redemption) as of September 30, 2021 and December 31, 2020, respectively | 208,324,000 | 208,324,000 | ||||||||||||
Members' deficit | (238,209,000) | (204,086,000) | (99,323,000) | |||||||||||
Accumulated other comprehensive income | 471,000 | 396,000 | 157,000 | |||||||||||
Total Stockholders' (Deficit) Equity | 10,857,000 | 29,634,000 | 134,158,000 | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY | 769,565,000 | 640,868,000 | $ 747,230,000 | |||||||||||
Common Stock A | BCP QUALTEK HOLDCO, LLC | ||||||||||||||
(Deficit) / Equity: | ||||||||||||||
Common stock, $0.0001 par value; 50,000,000 shares authorized; 3,283,000 and 2,875,000 shares issued and outstanding (excluding 11,500,000 and no shares subject to possible redemption) as of September 30, 2021 and December 31, 2020, respectively | $ 248,595,000 | $ 208,324,000 | ||||||||||||
[1] | Includes up to 375,000 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 shares of common stock outstanding (see Notes 5 and 8). |
CONDENSED CONSOLIDATED BALANC_4
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Oct. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Common shares, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | |
Common shares, shares issued | 3,283,000 | 2,875,000 | 2,875,000 | |
Common shares, shares outstanding | 3,283,000 | 2,875,000 | 2,875,000 | |
BCP QUALTEK HOLDCO, LLC | ||||
Preferred Stock, Shares Authorized | 25,000 | 25,000 | ||
Preferred Stock, Shares Issued | 25,000 | 25,000 | ||
Preferred Stock, Shares Outstanding | 25,000 | 25,000 | ||
Preferred Stock, Liquidation Preference Value | $ 29,029 | |||
Common Stock A | BCP QUALTEK HOLDCO, LLC | ||||
Common shares, shares authorized | 2,223,555 | 2,005,824 | 2,005,824 | |
Common shares, shares issued | 2,223,555 | 2,005,824 | 2,005,824 | |
Common shares, shares outstanding | 2,223,555 | 2,005,824 | 2,005,824 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 9 Months Ended | 12 Months Ended | |||
Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Costs and expenses: | |||||
Total costs and expenses | $ 975 | ||||
Other income (expense): | |||||
Net loss | $ 975 | ||||
Earnings per unit: | |||||
Basic income (loss) per share | $ 0 | ||||
Weighted Average Number of Shares Outstanding, Basic | [1] | 2,500,000 | |||
BCP QUALTEK HOLDCO, LLC | |||||
Revenue | $ 465,184,000 | $ 524,080,000 | $ 656,524,000 | $ 599,268,000 | |
Costs and expenses: | |||||
Cost of revenues | 372,496,000 | 462,760,000 | |||
General and administrative | 37,962,000 | 35,660,000 | 47,049,000 | 42,665,000 | |
Transaction expenses | 2,875,000 | 567,000 | 988,000 | 4,257,000 | |
Change in fair value of contingent consideration | (4,544,000) | 7,081,000 | 6,149,000 | ||
Impairment of long-lived assets | 840,000 | ||||
Depreciation and amortization | 39,136,000 | 34,761,000 | 46,475,000 | 40,103,000 | |
Total costs and expenses | 447,925,000 | 533,748,000 | |||
Loss from operations | 17,259,000 | (9,668,000) | (57,292,000) | (28,281,000) | |
Other income (expense): | |||||
Gain on sale/ disposal of property and equipment | 514,000 | 576,000 | 729,000 | 130,000 | |
Interest expense | (35,778,000) | (28,824,000) | (37,659,000) | (33,380,000) | |
Loss on extinguishment of convertible notes | (2,436,000) | ||||
Total other expense | (37,700,000) | (28,248,000) | (36,930,000) | (33,251,000) | |
Loss from continuing operations | (20,441,000) | (37,916,000) | 94,222,000 | 61,532,000 | |
Loss from discontinued operations | (8,114,000) | (1,708,000) | 3,865,000 | 6,262,000 | |
Net loss | 28,555,000 | 39,624,000 | 98,087,000 | 67,794,000 | |
Other comprehensive income (loss): | |||||
Foreign currency translation adjustments | 75,000 | (244,000) | 239,000 | 685,000 | |
Comprehensive loss | $ (28,480,000) | $ (39,868,000) | $ (97,848,000) | $ (67,109,000) | |
Earnings per unit: | |||||
Basic net loss per unit from continuing operations | $ (10.21) | $ (20.15) | |||
Diluted net loss per unit from continuing operations | (10.21) | (20.15) | |||
Basic net loss per unit from discontinued operations | (3.75) | (0.85) | |||
Diluted net loss per unit from discontinued operations | (3.75) | (0.85) | |||
Basic income (loss) per share | $ (13.96) | $ (21) | $ (48.61) | $ (31.74) | |
Weighted Average Number of Shares Outstanding, Basic | 2,161,951 | 2,005,824 | 2,005,824 | 1,962,115 | |
Diluted weighted average common units outstanding | 2,161,951 | 2,005,824 | |||
[1] | Includes up to 375,000 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 shares of common stock outstanding (see Notes 5 and 8). |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) | BCP QUALTEK HOLDCO, LLCCommon Stock ANon-redeemable common stock | BCP QUALTEK HOLDCO, LLCPreferred units | BCP QUALTEK HOLDCO, LLCAccumulated Deficit | BCP QUALTEK HOLDCO, LLCAccumulated Other Comprehensive Income (Loss) | BCP QUALTEK HOLDCO, LLC | Total |
Beginning Balance at Dec. 31, 2018 | $ 194,824,000 | $ (14,925,000) | $ (528,000) | $ 179,371,000 | ||
Beginning Balance (in shares) at Dec. 31, 2018 | 1,948,237 | |||||
Sale of 11,500,000 Units, net of underwriting discount and offering expenses | $ 25,000,000 | 25,000,000 | ||||
Sale of 11,500,000 Units, net of underwriting discount and offering expenses (in shares) | 25,000 | |||||
Acquisitions (see Note 4) | $ 13,500,000 | 13,500,000 | ||||
Acquisitions (see Note 4) (in shares) | 57,587 | |||||
Other comprehensive income (loss) | 685,000 | 685,000 | ||||
Tax distributions | (6,773,000) | (6,773,000) | ||||
Net loss | (67,794,000) | (67,794,000) | ||||
Ending Balance (Adoption of Accounting Standards Codification Topic 606) at Dec. 31, 2019 | (9,831,000) | (9,831,000) | ||||
Ending Balance at Dec. 31, 2019 | $ 208,324,000 | $ 25,000,000 | (99,323,000) | 157,000 | 134,158,000 | |
Ending Balance (in shares) at Dec. 31, 2019 | 2,005,824 | 25,000 | ||||
Other comprehensive income (loss) | (244,000) | (244,000) | ||||
Tax distributions | (6,694,000) | (6,694,000) | ||||
Net loss | (39,624,000) | (39,624,000) | ||||
Ending Balance at Oct. 03, 2020 | $ 208,324,000 | $ 25,000,000 | (145,641,000) | (87,000) | 87,596,000 | |
Ending Balance (in shares) at Oct. 03, 2020 | 2,005,824 | 25,000 | ||||
Beginning Balance (Adoption of Accounting Standards Codification Topic 606) at Dec. 31, 2019 | (9,831,000) | (9,831,000) | ||||
Beginning Balance at Dec. 31, 2019 | $ 208,324,000 | $ 25,000,000 | (99,323,000) | 157,000 | 134,158,000 | |
Beginning Balance (in shares) at Dec. 31, 2019 | 2,005,824 | 25,000 | ||||
Other comprehensive income (loss) | 239,000 | 239,000 | ||||
Tax distributions | (6,676,000) | (6,676,000) | ||||
Net loss | (98,087,000) | (98,087,000) | $ (975) | |||
Ending Balance at Dec. 31, 2020 | $ 208,324,000 | $ 25,000,000 | (204,086,000) | 396,000 | 29,634,000 | |
Ending Balance (in shares) at Dec. 31, 2020 | 2,005,824 | 25,000 | ||||
Sale of 11,500,000 Units, net of underwriting discount and offering expenses | $ 15,000,000 | 15,000,000 | ||||
Sale of 11,500,000 Units, net of underwriting discount and offering expenses (in shares) | 150,000 | |||||
Issuance of class A units-non-return | $ 367,000 | 367,000 | ||||
Beneficial conversion feature on convertible notes | 16,904,000 | 16,904,000 | ||||
Acquisitions (see Note 4) | $ 8,000,000 | 8,000,000 | ||||
Acquisitions (see Note 4) (in shares) | 67,731 | |||||
Paid in kind preferred unit distribution | $ 5,568,000 | (5,568,000) | ||||
Preferred units exchanged for convertible notes | $ (30,568,000) | (30,568,000) | ||||
Preferred units exchanged for convertible notes (in shares) | (25,000) | |||||
Other comprehensive income (loss) | 75,000 | 75,000 | ||||
Net loss | (28,555,000) | (28,555,000) | ||||
Ending Balance at Dec. 31, 2021 | $ 248,595,000 | $ (238,209,000) | $ 471,000 | $ 10,857,000 | ||
Ending Balance (in shares) at Dec. 31, 2021 | 2,223,555 |
CONDENSED CONSOLIDATED STATEM_7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | 11 Months Ended | 12 Months Ended | ||||||
Oct. 02, 2021 | Sep. 30, 2021 | Oct. 03, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||||||||
Net loss | $ (1,422,448) | $ (885) | $ (1,225) | $ (975) | |||||
Changes in assets and liabilities: | |||||||||
Net cash used in operating activities | (1,197,599) | (1,110) | 0 | (2,700) | |||||
Cash flows from investing activities: | |||||||||
Net cash used in investing activities | (115,000,000) | 0 | |||||||
Cash flows from financing activities: | |||||||||
Net cash provided by (used in) financing activities | 116,095,435 | (723) | 25,000 | 173,458 | |||||
Net Change in Cash | (102,164) | (1,833) | 25,000 | 170,758 | |||||
Cash - Beginning of period | $ 195,758 | 195,758 | $ 25,000 | 25,000 | 0 | $ 195,758 | 25,000 | ||
Cash - End of period | 93,594 | 23,167 | 25,000 | 195,758 | $ 25,000 | ||||
BCP QUALTEK HOLDCO, LLC | |||||||||
Cash flows from operating activities: | |||||||||
Net loss | (28,555,000) | (39,624,000) | (28,555,000) | (98,087,000) | (67,794,000) | ||||
Loss from discontinued operations | 8,114,000 | 1,708,000 | 3,865,000 | 6,262,000 | |||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||
Depreciation, amortization and accretion of debt discount | 46,106,000 | 34,761,000 | 46,474,000 | 40,103,000 | |||||
Loss on extinguishment of convertible notes | 2,436,000 | ||||||||
Impairment of intangible assets, including goodwill | 28,802,000 | 8,972,000 | |||||||
Amortization of debt issuance costs | 3,201,000 | 2,308,000 | 3,090,000 | 2,269,000 | |||||
Change in fair value of contingent consideration | (4,544,000) | 7,081,000 | 6,149,000 | ||||||
Payments of acquisition related contingent consideration | (5,238,000) | ||||||||
Provision for bad debt expense | 2,539,000 | 2,295,000 | (3,619,000) | 1,139,000 | |||||
Gain on disposal of property and equipment | (514,000) | (576,000) | (729,000) | (130,000) | |||||
Changes in assets and liabilities: | |||||||||
Accounts receivable | (63,484,000) | 5,717,000 | 52,524,000 | (17,897,000) | |||||
Inventories | 290,000 | 2,483,000 | 2,111,000 | (296,000) | |||||
Prepaid expenses and other assets | (4,586,000) | (1,278,000) | (262,000) | (1,043,000) | |||||
Accounts payable and accrued liabilities | 8,729,000 | (9,639,000) | (16,244,000) | 15,546,000 | |||||
Contract liabilities | (2,691,000) | (5,731,000) | (3,525,000) | 11,696,000 | |||||
Net cash used in operating activities from continuing operations | (32,959,000) | (7,576,000) | 14,557,000 | (2,541,000) | |||||
Net cash used in operating activities from discontinued operations | (3,011,000) | (885,000) | 1,100,000 | 461,000 | |||||
Net cash used in operating activities | (35,970,000) | (8,461,000) | 13,457,000 | (3,002,000) | |||||
Cash flows from investing activities: | |||||||||
Purchases of property and equipment | (2,202,000) | (3,863,000) | (4,808,000) | (3,153,000) | |||||
Proceeds from sale of property and equipment | 726,000 | 645,000 | 881,000 | 378,000 | |||||
Acquisition of businesses, net of cash acquired (see Note 4) | (37,057,000) | (76,342,000) | |||||||
Net cash used in investing activities from continuing operations | (38,533,000) | (3,218,000) | (3,927,000) | (79,117,000) | |||||
Net cash provided by (used in) investing activities from discontinued operations | 2,178,000 | (36,000) | 36,000 | 492,000 | |||||
Net cash used in investing activities | (36,355,000) | (3,254,000) | 3,963,000 | 79,609,000 | |||||
Cash flows from financing activities: | |||||||||
Proceeds from line of credit, net of repayments | 36,405,000 | 32,575,000 | |||||||
Proceeds from convertible notes-related party | 5,000,000 | ||||||||
Repayment of convertible notes-related party | (5,000,000) | ||||||||
Proceeds from convertible notes | 44,400,000 | ||||||||
Repayment of long-term debt | (7,173,000) | (7,173,000) | |||||||
Payments for financing fees | (2,220,000) | (113,000) | (6,215,000) | ||||||
Payments of acquisition related contingent consideration | (6,000,000) | (6,000,000) | (7,870,000) | ||||||
Repayment of capital leases | (7,000,000) | (3,694,000) | (5,160,000) | (3,425,000) | |||||
Proceeds from issuance of equity | 15,367,000 | 25,000,000 | |||||||
Tax distributions to members | (1,213,000) | (1,197,000) | $ (843,000) | ||||||
Net cash provided by financing activities from continuing operations | 79,779,000 | 14,495,000 | (8,751,000) | 83,112,000 | |||||
Net cash used in financing activities from discontinued operations | (911,000) | (767,000) | (961,000) | (1,157,000) | |||||
Net cash provided by (used in) financing activities | 78,868,000 | 13,728,000 | (9,712,000) | 81,955,000 | |||||
Effect of foreign currency exchange rate (translation) on cash | (35,000) | 21,000 | 59,000 | 23,000 | |||||
Net Change in Cash | 6,508,000 | 2,034,000 | (159,000) | (633,000) | |||||
Cash - Beginning of period | 169,000 | $ 169,000 | 328,000 | $ 328,000 | $ 169,000 | 328,000 | 961,000 | ||
Cash - End of period | 6,677,000 | 2,362,000 | 328,000 | 169,000 | 328,000 | $ 961,000 | |||
Balances included in the condensed consolidated balance sheets: | |||||||||
Cash | 5,405,000 | 195,000 | 91,000 | 76,000 | 91,000 | ||||
Cash included in current assets of discontinued operations | 1,272,000 | 2,167,000 | 237,000 | 93,000 | 237,000 | ||||
Cash at end of period | 6,677,000 | 2,362,000 | $ 328,000 | 169,000 | 328,000 | ||||
Cash paid for: | |||||||||
Interest from continuing operations | 24,041,000 | 27,147,000 | 34,908,000 | 30,185,000 | |||||
Interest from discontinued operations | 98,000 | 150,000 | 189,000 | 213,000 | |||||
Supplemental disclosure of non-cash investing and financing activities: | |||||||||
Assets acquired under capital leases from continuing operations | $ 948,000 | $ 11,630,000 | $ 18,289,000 | $ 9,587,000 |
Nature of Business and Summar_4
Nature of Business and Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X 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 complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated 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 consolidated financial statements should be read in conjunction with the Company’s prospectus for its Initial Public Offering as filed with the SEC on March 2, 2021. The interim results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future periods. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its majority owned subsidiary where the Company has the ability to exercise control. All significant intercompany balances and transactions have been eliminated in consolidation. 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 statement 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 the condensed consolidated financial statements in conformity with GAAP requires the Company’s 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. One of the more significant accounting estimates included in these condensed financial statements is the determination of the warrant liability. Such estimates may be subject to change as more current information becomes available and 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 September 30, 2021 and December 31, 2020. Marketable Securities Held in Trust Account At September 30, 2021, substantially all of the assets held in the Trust Account were held in money market funds which are invested primarily in U.S. Treasury securities. The Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these investments are included in interest earned on marketable securities held in Trust Account in the accompanying condensed consolidated statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information. Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the Company’s condensed consolidated balance sheets, primarily due to their short-term nature, with the exception of the warrant liabilities (see Note 9). 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 is 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. Accordingly, at September 30, 2021, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheets. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stocks to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable common stocks resulted in charges against additional paid-in capital. At September 30, 2021, common stock subject to possible redemption reflected in the condensed balance sheets are reconciled in the following table: Gross proceeds $ 115,000,000 Less: Common stock issuance costs (2,812,212) Plus: Accretion of carrying value to redemption value 2,812,212 Common stock subject to possible redemption $ 115,000,000 Warrant Liability 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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“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 ordinary shares, 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 fair value of the Private Placement Warrants (as defined in Note 5) was estimated using a binomial lattice simulation approach (see Note 9). Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. 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 as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 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. The effective tax rate differs from the statutory tax rate of 21% for the three months and nine months ended September 30, 2021 and 2020, respectively, primarily due to the valuation allowance recorded on the Company’s net operating losses. Net Income (Loss) per Common Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. Accretion associated with the redeemable shares of common stock is excluded from income (loss) per common share as the redemption value approximates fair value. The Company has not considered the effect of the warrants sold in the Initial Public Offering and private placement to purchase an aggregate of 2,977,000 shares in the calculation of diluted loss per share, since the inclusion of such warrants would be anti-dilutive. As of September 30, 2021 and 2020, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted net loss per common share is the same as basic net loss per common share for the periods presented. The following table reflects the calculation of basic and diluted net loss per common share (in dollars, except per share amounts): For the Period from 2/13/19 (Inception) Three Months Ended Nine Months Ended Through September 30, 2021 September 30, 2021 September 30, 2020 Redeemable Non-redeemable Redeemable Non-redeemable Non-redeemable common stock common stock common stock common stock common stock Basic and diluted net loss per common share Numerator: Allocation of net loss, as adjusted $ (629,913) $ (179,827) $ (1,052,069) $ (370,379) $ (800) Denominator: Basic and diluted weighted average shares outstanding 11,500,000 3,283,000 8,804,029 3,099,440 2,500,000 Basic and diluted net loss per common share $ (0.05) $ (0.05) $ (0.12) $ (0.12) $ (0.00) Three Months Ended Nine Months Ended September 30, 2020 September 30, 2020 Non-redeemable Non-redeemable common stock common stock Basic and diluted net loss per common share Numerator: Allocation of net loss, as adjusted $ (800) $ (885) Denominator: Basic and diluted weighted average shares outstanding 2,500,000 2,500,000 Basic and diluted net loss per common share $ (0.00) $ (0.00) Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts. Recent Accounting Standards In August 2020, the FASB issued ASU No. 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): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. 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 condensed consolidated financial statements. | Note 2 — Summary of Significant Accounting Policies Basis of Presentation The accompanying financial statements 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 the Company’s 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 expenses during the reporting periods. 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 and 2019. Deferred Offering Costs Deferred offering costs consist of legal, accounting and other costs incurred through the balance sheet date that are directly related to the Proposed Public Offering and that will be charged to stockholders’ equity upon the completion of the Proposed Public Offering. Should the Proposed Public Offering prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations. Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. 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 as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020 and 2019. 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. The provision for income taxes was deemed to be de minimis for the year ended December 31, 2020, and for the period from February 13, 2019 (inception) through December 31, 2019. Net Loss Per Common Share Net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period, excluding shares of common stock subject to forfeiture by the Initial Stockholders. Weighted average shares were reduced for the effect of an aggregate of 375,000 shares of common stock that are subject to forfeiture if the over-allotment option is not exercised by the underwriters (see Notes 5 and 8). At December 31, 2020 and 2019, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into shares of common stock and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the periods presented. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations 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. At December 31, 2020 and 2019, 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 fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature. 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. Risks and Uncertainties In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States and the World. As of the date the financial statements were issued, there was considerable uncertainty around the expected duration of this pandemic. The Company has concluded that while it is reasonably possible that COVID-19 could have a negative effect on identifying a target company for a Business Combination, 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. | |
BCP QUALTEK HOLDCO, LLC | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 1. Nature of Business and Summary of Significant Accounting Policies This summary of significant accounting policies of BCP QualTek Holdco, LLC (collectively with its subsidiaries, “QualTek”, “BCP QualTek”, the “Company”, “we”, “our”, or “us”) is presented to assist in understanding the Company’s unaudited condensed consolidated financial statements (financial statements). The financial statements and notes are the responsibility of the Company’s management, who is responsible for their integrity and objectivity. Nature of business: We operate in two reportable segments, which reflects the way performance is assessed and resources are allocated by our Chief Executive Officer, who is our chief operating decision maker. Our Telecom segment provides engineering, construction, installation, network design, project management, site acquisition and maintenance services to major telecommunication , utility, and cable carriers in various locations in the United States and Canada. Our Renewables and Recovery Logistics segment provides businesses with continuity and disaster recovery operations as well as new fiber optic construction services and maintenance and repair services for telecommunications, renewable energy, commercial and utilities customers across the United States. On June 16, 2021, BCP QualTek Holdco, LLC and Roth CH Acquisition III Co. (“ ROCR Principles of presentation: Each of our interim reporting periods, other than the fourth interim reporting period, ends on the Saturday closest to the last day of the corresponding quarterly calendar period. The third quarter of 2021 and the third quarter of 2020 ended on October 2, 2021 and October 3, 2020, respectively. Our fourth interim reporting period and our fiscal year end on December 31 regardless of the day of the week on which December 31 falls. Use of estimates: There have been no material changes to the Company’s significant accounting policies described in the Company’s Consolidated Financial Report for the year ended December 31, 2020, with the exception of discontinued operations discussed in Note 3. Recent accounting pronouncements: Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) — Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Revenue from Contracts with Customers Risks and uncertainties: It is unknown how long the adverse conditions associated with the coronavirus will last and what the complete financial effect will be to the Company. | Note 1. Nature of Business and Summary of Significant Accounting Policies This summary of significant accounting policies of BCP QualTek Holdco, LLC and Subsidiary (collectively, “QualTek”, “BCP QualTek”, the “Company”, “we”, “our”, or “us”) is presented to assist in understanding the Company’s consolidated financial statements (financial statements). The financial statements and notes are the responsibility of the Company’s management who is responsible for their integrity and objectivity. Nature of business: We operate in two reportable segments, which reflects the way performance is assessed and resources are allocated by our Chief Executive Officer, who is our chief operating decision maker. Our Telecom segment provides engineering, construction, installation, network design, project management, site acquisition and maintenance services to major telecommunication and cable carriers in various locations in the United States. Our Renewables and Recovery Logistics segment provides businesses with continuity and disaster recovery operations with a wide range of logistics, maintenance, and repair capabilities for telecommunications and utilities customers across the United States. Principles of presentation: Discontinued Operations: The Company presents discontinued operations when there is a disposal of a component group or a group of components that in our judgment represents a strategic shift that will have a major effect on our operations and financial results. We aggregate the results of operations for discontinued operations into a single line item in the Consolidated Statements of Operations and Comprehensive Loss for all periods presented. Assets and liabilities of the discontinued operations are aggregated and reported separately as assets and liabilities of discontinued operations in the Consolidated Balance Sheets as of December 31, 2020 and 2019. Throughout these financial statements, unless otherwise indicated, amounts and activity are presented on a continuing operations basis. See Note 14 for additional information. 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 disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant of these estimates and assumptions relate to the recognition of contract revenues under the cost-to-cost method of progress, fair value estimates, the allowance for doubtful accounts, long-lived assets and intangible assets, asset impairment (including goodwill and other long-lived assets), valuation of assets acquired and liabilities assumed in business combinations, and acquisition-related contingent consideration. These estimates are based on historical experience and various other assumptions that management believes to be reasonable under the current facts and circumstances. Actual results could differ from those estimates. Accounts receivable: The Company’s accounts receivable are due primarily from large telecommunication and cable carriers operating within the United States and are carried at original contract amount less an estimate for uncollectible amounts based on historical experience. Management determines the allowance for doubtful receivables by regularly evaluating individual customer receivables and considering a customer’s financial condition and current economic conditions. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received. The Company generally does not require collateral. Accounts receivable are considered past due if any portion of the receivables balance is outstanding for more than one day beyond the contractual due date. The Company does not charge interest on past due accounts. Contract assets: Contract liabilities: Note 1. Nature of Business and Summary of Significant Accounting Policies (continued) Cash: Sale of accounts receivable: Concentration of credit risk: The Company maintains certain cash balances with U.S. and Canadian financial institutions and, from time to time, the Company may have balances in excess of the federally insured deposit limit. Inventories: Property and equipment: Goodwill and intangible assets: year, or more frequently if events occur that would indicate a potential reduction in the fair value of a reporting unit below its carrying value. The Company performs an annual impairment review of goodwill at the reporting unit level, which is one level below the operating segment. The Company determines the fair value of the reporting units using a weighting of fair values derived in equal proportions from the income approach and market approach valuation methodologies. The income approach uses the discounted cash flow method and the market approach uses the guideline company method. If the Company determines the fair value of the reporting unit’s goodwill is less than its carrying value, an impairment loss is recognized and reflected in the operating income or loss in the consolidated statements of operations and comprehensive loss. Intangible assets consist of customer relationships, trademarks and trade names. Intangible assets that have finite useful lives are amortized on a straight-line basis over their estimated useful lives ranging from 2 years to 15 years. Impairment of long-lived and intangible assets: Note 1. Nature of Business and Summary of Significant Accounting Policies (continued) Business combinations: The Company accounts for business combinations under the acquisition method of accounting. The purchase price of each business acquired is allocated to the tangible and intangible assets acquired and the liabilities assumed based on information regarding their respective fair values on the date of acquisition. Any excess of the purchase price over the fair value of the separately identifiable assets acquired and the liabilities assumed is allocated to goodwill. Management determines the fair values used in purchase price allocations for intangible assets based on historical data, estimated discounted future cash flows, expected royalty rates for trademarks and trade names, as well as certain other information. The valuation of assets acquired, and liabilities assumed requires a number of judgments and is subject to revision as additional information about the fair value of assets and liabilities becomes available. Additional information, which existed as of the acquisition date but unknown to us at that time, may become known during the remainder of the measurement period. This measurement period may not exceed 12 months from the acquisition date. The Company recognizes any adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustments are determined. Additionally, in the same period in which adjustments are recognized, the Company records the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of any change to the provisional amounts, calculated as if the accounting adjustment had been completed at the acquisition date. Acquisition costs are expensed as incurred. The results of operations of businesses acquired are included in the consolidated statements of operations and comprehensive loss from their dates of acquisition. Deferred financing costs: Foreign currency: Income taxes: Accounting Standards Codification (ASC) Topic 740, Income Taxes Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense or benefit and liability in the current year. Based on the Company’s assessment of many factors, including past experience and complex judgments about future events, the Company does not currently anticipate significant changes in its uncertain tax positions over the next 12 months. The Company is not subject to income tax examinations by the U.S. federal, state, or local tax authorities prior to 2017. Revenue recognition: Revenue from Contracts with Customers, Under Topic 606, revenue is recognized when, or as, control of promised goods and services is transferred to customers, and the amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for the goods and services transferred. A contractual agreement exists when each party involved approves and commits to, the rights of the parties and payment terms are identified, the agreement has commercial substance, and collectability of consideration is probable. The Company’s services are performed for the sole benefit of its customers, whereby the assets being created or maintained are controlled by the customer and the services the Company performs do not have alternative benefits for the Company. Note 1. Nature of Business and Summary of Significant Accounting Policies (continued) The Company acquires revenue primarily from construction related projects under certain master service and other service agreements contracts. Portions of the contracts include one or multiple performance obligations, which is a contractual promise to deliver a distinct good or transfer of a specific service to a customer. We use different methods of revenue recognition for different types of contracts. For the Company’s projects recognized under the input method, the Company typically identifies two promised goods and services in the contract: (a) delivery of materials, which is recognized as point in time revenue, and (b) installation and construction services, which are recognized over time as related costs are incurred. The Company determined that the materials and the construction services are both considered distinct performance obligations. The Company’s customers are able to benefit from the materials and construction services both on their own and in connection with readily available resources, indicating that both promises are capable of being distinct. The Company further determined that its promises to transfer the materials and to provide the construction services are each separately identifiable from the other promises in the contract. Further, these promises do not represent inputs to a combined output which may represent a single performance obligation as no significant integration services are provided, there is not a high degree of customization, and the promises are not highly interrelated. As a result, the Company concludes that its input method contracts typically include two performance obligations: the sale of materials and construction services. Revenue for construction, project management and site acquisition services are primarily recognized by the Company over time utilizing the cost-to-cost measure of progress, which is an input method, on contracts for specific projects, and for certain master service and other service agreements. The majority of our performance obligations are completed within one year. Under Topic 606, the cost-to-cost measure of progress best depicts the continuous transfer of control of goods or services to the customer, and correspondingly, when performance obligations are satisfied, for these contracts. Revenue for engineering, aerial and underground construction projects are primarily performed under master service agreements and other contracts that contain customer-specified service requirements. The Company has identified multiple performance obligations in these contracts represented by the individual tasks included in the contract, each based on a specific unit of measure. These performance obligations include, for example, the placement of underground or aerial fiber, directional boring, and fiber splicing. The Company allocates total contract consideration to each performance obligation using the expected cost plus a margin approach to estimate the standalone selling price of each performance obligation. The Company’s customers simultaneously receive and consume the benefit provided by the Company, and revenue is recognized over time as services are performed for all performance obligations identified in the contract. Output measures such as units delivered are utilized to assess progress against specific contractual performance obligations. Revenue from fulfillment, maintenance, compliance, and recovery services provided to the telecommunication, cable and utility industries is recognized as the services are rendered. These services are generally performed under master or other service agreements and billed on a contractually agreed price per unit on a work order basis. Each service is a separate performance obligation that is recognized upon completion at a point in time as the service is delivered. Transaction prices for the Company’s contracts may include variable consideration such as contracted materials. Management estimates variable consideration for a performance obligation utilizing estimation methods that it believes best predict the amount of consideration to which the Company will be entitled. Variable consideration is included in the estimated transaction price if it is probable that when the uncertainty associated with the variable consideration is resolved, there will not be a significant reversal of the cumulative amount of revenue that has been recognized. Note 1. Nature of Business and Summary of Significant Accounting Policies (continued) Management’s estimates of variable consideration and the determination of whether to include estimated amounts in the transaction price are based largely on engineering studies, past practices with the customer, specific discussions, correspondence or preliminary negotiations with the customer and all other relevant information that is reasonably available at the time of the estimate. The effect of variable consideration on the transaction price of a performance obligation is typically recognized as an adjustment to revenue on a cumulative catch-up basis, as such variable consideration is generally for services encompassed under the existing contract. To the extent variable consideration reflected in transaction prices are not resolved in accordance with management’s estimates, there could be reductions in, or reversals of, previously recognized revenue. Sales, use and other taxes collected concurrent with revenue-producing activities are excluded from revenue. Most of the Company’s contracts include assurance warranties which do not include any additional distinct services other than the assurance that the services and materials comply with agreed-upon specifications. Therefore, there is not a separate performance obligation for these warranties. For contracts containing more than one performance obligation, the Company allocates the transaction price on a relative standalone selling price (“SSP”) basis. The Company determines SSP based on the price at which the performance obligation is sold separately. If the SSP is not observable through past transactions, the Company estimates the SSP taking into account available information, such as market conditions and internally approved pricing guidelines related to the performance obligation. Revenue generated from fulfillment, maintenance, compliance and recovery services as well as certain performance obligations related to material sales is recognized at a point in time. Point in time revenue accounted for approximately 35% and 32% of consolidated revenue for the years ended December 31, 2020 and 2019, respectively. Substantially all the Company’s other revenue is recognized over time. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the services to be provided. Equity award compensation: Recent accounting pronouncements: Leases (Topic 842) In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments Note 1. Nature of Business and Summary of Significant Accounting Policies (continued) In January 2017, the FASB issued ASU No. 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment Risks and uncertainties 11, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The coronavirus and actions taken to mitigate the spread of it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted to amongst other provisions, provide emergency assistance for individuals, families and businesses affected by the coronavirus pandemic. It is unknown how long the adverse conditions associated with the coronavirus will last and what the complete financial effect will be to the Company. |
Earnings Per Unit_2
Earnings Per Unit | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
BCP QUALTEK HOLDCO, LLC | ||
Earnings Per Unit | Note 2. Earnings Per Unit Basic net loss per unit is calculated by dividing net loss attributable to Class A members by the weighted average units outstanding during the period, without consideration for Class A equivalents. Diluted net loss per unit is calculated by adjusting weighted average units outstanding for the dilutive effect of common unit equivalents outstanding for the period, determined using the treasury-stock method. If the Company reports a loss, rather than income, the computation of diluted loss per unit excludes the effect of dilutive common unit equivalents, as their effect would be anti-dilutive. For the nine months ended October 2, 2021, we excluded shares that would be issuable assuming conversion of all the Convertible Notes (See Note 8) as their effect would be anti-dilutive under the if-converted method. For the nine months ended October 3, 2020, there were no existing equity units considered to be Class A equivalents and therefore, basic and diluted net loss per unit were the same for all periods presented. The performance-based Class P units (See Note 10) are omitted from the calculation of diluted Earnings Per Unit until it is determined that the performance criteria have been met at the end of the reporting period. The basic and diluted earnings per unit calculations for the periods presented (in thousands, except share and per unit amounts): For the Nine Months Ended October 2, 2021 October 3, 2020 Numerator: Loss from continuing operations $ (20,441) $ (37,916) Loss from discontinued operations (8,114) (1,708) Net loss (28,555) (39,624) Less: accrued preferred return (1,638) (2,508) Net loss attributable to Class A Units (basic) $ (30,193) $ (42,132) Denominator: Weighted-average number of units outstanding, basic and diluted Class A – basic and diluted 2,161,951 2,005,824 EPU: Continuing operations – Class A – basic and diluted $ (10.21) $ (20.15) Discontinued operations – Class A – basic and diluted $ (3.75) $ (0.85) Net loss – Class A – basic and diluted $ (13.96) $ (21.00) | Note 2. Earnings Per Unit Basic net loss per unit is calculated by dividing net loss attributable to Class A members by the weighted average units outstanding during the period, without consideration for Class A equivalents. Diluted net loss per unit is calculated by adjusting weighted average units outstanding for the dilutive effect of common unit equivalents outstanding for the period, determined using the treasury-stock method. If the Company reports a loss, rather than income, the computation of diluted loss per unit excludes the effect of dilutive common unit equivalents, as their effect would be anti-dilutive. For purposes of the diluted net loss per unit calculation, as there are no existing equity units considered to be Class A equivalents, basic and diluted net loss per unit were the same for all periods presented. The performance-based Class P units (See Note 9) are omitted from the calculation of diluted Earnings Per Unit until it is determined that the performance criteria has been met at the end of the reporting period. The basic and diluted earnings per unit calculations for the years ended December 31, 2020 and 2019 are presented below (in thousands, except for units and per unit amounts): 2020 2019 Numerator: Net loss $ (98,087) $ (67,794) Less: accrued preferred return (3,287) (742) Net loss attributable to Class A Units (101,374) (68,536) Denominator: Weighted-average number of units outstanding, basic diluted 2,005,824 1,962,115 Net loss per unit, basic diluted $ (50.54) $ (34.93) |
Discontinued Operations_2
Discontinued Operations | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
BCP QUALTEK HOLDCO, LLC | ||
Discontinued Operations | Note 3. Discontinued Operations At the end of the third quarter of 2021, we suspended all operations associated with our Canadian subsidiary within the Telecom segment and disposed/abandoned the subsidiary, which ceased our foreign operations. The disposition of the Canadian subsidiary was considered a strategic shift that had a major effect on our operations and financial results. As a result of the suspension of operations, any new business with customers was terminated and remaining orders were canceled/settled. As long-lived assets ceased to be used, the property and equipment was either held for sale at auction and measured at the lower of the carrying amount or fair value, or the carrying amount was reduced to the salvage value until abandoned. The intangible assets were re-measured for their useful lives and accelerated amortization charge of $5,239 thousand was recognized. The sale of the remaining property and equipment and collection of outstanding receivables are expected to be completed in the fourth quarter of 2021. The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations in the condensed consolidated balance sheets (in thousands): October 2, 2021 December 31, 2020 Carrying amounts of assets included as part of discontinued operations: Cash $ 1,272 $ 93 Accounts receivable, net of allowance 4,663 5,743 Inventories, net — 28 Prepaid expenses 177 71 Other current assets 2,045 599 Total current assets of discontinued operations $ 8,157 $ 6,534 Property and equipment, net 1,348 3,280 Intangible assets, net — 5,712 Other long-term assets — 280 Total non-current assets of discontinued operations $ 1,348 $ 9,272 Carrying amounts of liabilities included as part of discontinued operations: Current portion of long-term debt and capital lease obligations $ 1,832 $ 920 Accounts payable 519 809 Accrued expenses 1,590 1,636 Total current liabilities of discontinued operations $ 3,941 $ 3,365 Capital lease obligations, net of current portion — 1,793 Total non-current liabilities of discontinued operations $ — $ 1,793 The financial results are presented as loss from discontinued operations on our condensed consolidated statements of operations and comprehensive loss. The following table presents the financial results (in thousands): For the Nine Months Ended October 2, 2021 October 3, 2020 Revenue $ 5,850 $ 13,923 Costs and expenses: — Cost of revenues 8,025 13,222 General and administrative 275 693 Depreciation and amortization 6,667 1,566 Total costs and expenses 14,967 15,481 Loss from operations of discontinued operations (9,117) (1,558) Other income (expense): Gain on sale/ disposal of property and equipment 1,101 — Interest expense (98) (150) Loss from discontinued operations $ (8,114) $ (1,708) | Note 14. Discontinued Operations At the end of the third quarter of 2021, we suspended all operations associated with our Canadian subsidiary within the Telecom segment and disposed/abandoned the subsidiary, which ceased our foreign operations. The disposition of the Canadian subsidiary was considered a strategic shift that had a major effect on our operations and financial results. As a result of the suspension of operations, any new business with customers was terminated and remaining orders were canceled/settled. As long-lived assets ceased to be used, the property and equipment was either held for sale at auction and measured at the lower of the carrying amount or fair value, or the carrying amount was reduced to the salvage value until abandoned. The intangible assets were re-measured for their useful lives and an accelerated amortization charge was recognized in September 2021. The sale of the remaining property and equipment and collection of outstanding receivables are expected to be completed in the fourth quarter of 2021. The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations in the consolidated balance sheets as of December 31, 2020 and 2019 (in thousands): 2020 2019 Carrying amounts of assets included as part of discontinued operations: Cash $ 93 $ 237 Accounts receivable, net of allowance 5,743 6,223 Inventories, net 28 30 Prepaid expenses 71 223 Other current assets 599 23 Total current assets of discontinued operations $ 6,534 $ 6,736 Property and equipment, net 3,280 4,585 Intangible assets, net 5,712 6,275 Other long-term assets 280 265 Total non-current assets of discontinued operations $ 9,272 $ 11,125 Carrying amounts of liabilities included as part of discontinued operations: Current portion of long-term debt and capital lease obligations $ 920 $ 1,059 Accounts payable 809 1,180 Accrued expenses 1,636 607 Total current liabilities of discontinued operations $ 3,365 $ 2,846 Capital lease obligations, net of current portion 1,793 2,634 Total non-current liabilities of discontinued operations $ 1,793 $ 2,634 The financial results are presented as loss from discontinued operations on our consolidated statements of operations and comprehensive loss for the years ended December 31, 2020 and 2019. The following table presents the financial results (in thousands): 2020 2019 Revenue $ 17,481 $ 21,561 Costs and expenses: Cost of revenues 18,331 19,807 General and administrative 804 939 Change in fair value of contingent consideration — (266) Impairment of goodwill — 5,119 Depreciation and amortization 2,022 2,012 Total costs and expenses 21,157 27,611 Loss from operations of discontinued operations (3,676) (6,050) Other income (expense): Gain on sale/ disposal of property and equipment — 1 Interest expense (189) (213) Loss from discontinued operations $ (3,865) $ (6,262) |
Acquisitions_2
Acquisitions | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
BCP QUALTEK HOLDCO, LLC | ||
Acquisitions | Note 4. Acquisitions On January 26, 2021, the Company purchased 100% of the membership interests of Fiber Network Solutions, LLC (“FNS”), a Texas based company that provides new fiber optic construction services, as well as maintenance and repair services to renewable energy, commercial, and utility clientele in the United States. The overall consideration transferred was $20,059 thousand of cash and rollover equity valued at $2,000 thousand. The purchase price is subject to adjustment based upon FNS exceeding pre-determined EBITDA thresholds for the years ending 2021, 2022, 2023, and 2024, as defined in the agreement, subject to a maximum additional payment of $20.0 million. As of the acquisition date, the fair value of the contingent consideration was determined to be $8,200 thousand. The cash consideration was funded by the issuance of equity, as well as, the issuance of convertible notes with the majority member. On August 6, 2021, the Company acquired certain assets and liabilities from Broken Arrow Communications, Inc. (“Broken Arrow”), a New Mexico based company that provides a wide variety of services for the installation, construction, and maintenance of wireless communication facilities. The consideration transferred was $5,000 thousand of cash. The purchase price is subject to adjustment based upon Broken Arrow exceeding pre-determined crew count and EBITDA thresholds for certain markets for the 5-month period of August 2021 through December 2021 and for the year ending December 31, 2022, as defined in the agreement, subject to a maximum additional payment of $10.0 million. As of the acquisition date, the fair value of the contingent consideration was determined to be $5,735 thousand. The cash consideration was funded by the issuance of convertible notes in June 2021. On August 30, 2021, the Company purchased 100% of the membership interests of Concurrent Group LLC (“Concurrent”), a Florida based company that provides construction, maintenance, and restoration services for utilities, electric membership co-ops, and municipally owned power providers. The overall consideration transferred was $13,828 thousand of cash, rollover equity valued at $6,000 thousand, and acquisition debt of $14,143 thousand. The purchase price is subject to adjustment based upon Concurrent exceeding pre-determined EBITDA thresholds for LTM periods ending in the third quarter of 2022, 2023 and 2024, as defined in the agreement, subject to a maximum additional payment of $30.0 million. As of the acquisition date, the fair value of the contingent consideration was determined to be $10,210 thousand. The cash consideration was funded by the issuance of convertible notes in June 2021. The acquisitions were recognized as business combinations with FNS reporting within our Renewables and Recovery Logistics Segment and Broken Arrow and Concurrent reporting within our Telecom Segment. The identifiable assets acquired and liabilities assumed were recorded at their estimated fair values on the acquisition dates. Goodwill resulted from expected synergies and revenue growth from combining operations with the Company. Due to the limited time since the closing of the Broken Arrow and Concurrent acquisitions, the valuation efforts and related acquisition accounting are incomplete for both acquisitions at the time of filing of the condensed consolidated financial statements. As a result, the Company recognized provisional amounts that are subject to adjustment as the Company obtains additional information. In particular, additional time is needed to finalize the results of the valuation of assets acquired and liabilities assumed, specifically goodwill, intangible assets, and contingent consideration. Any adjustments to the purchase price allocation will be made as soon as practicable, but no later than one year from the acquisition date. The following table summarizes the fair value of the assets and liabilities acquired at the date of the acquisitions (in thousands): FNS Broken Arrow Concurrent Purchase consideration: Cash paid $ 20,059 $ 5,000 $ 13,828 Rollover equity 2,000 — 6,000 Contingent consideration 8,200 5,735 10,210 Acquisition debt — — 14,143 $ 30,259 $ 10,735 $ 44,181 Purchase price allocations: Cash $ — $ — $ 1,830 Accounts receivable — 5,121 8,402 Inventories — 133 25 Prepaid expenses — 94 — Other current assets — — 10 Property and equipment 9,978 219 4,164 Other long-term assets — 32 60 Customer relationships 17,370 4,690 24,186 Trademarks and trade names 270 80 1,330 Goodwill 8,082 4,433 10,738 35,700 14,802 50,745 Accounts payable — (1,853) (1,932) Accrued expenses — (156) (830) Contract liabilities — (2,058) (639) Capital lease obligations (5,441) — (3,163) $ 30,259 $ 10,735 $ 44,181 | Note 3. Acquisitions Vertical Limit Acquisition On March 29, 2019, pursuant to the Asset Purchase Agreement between QualTek and Vertical Limit Construction, LLC (the “Vertical Limit Seller”), QualTek acquired certain assets and liabilities from the Vertical Limit Seller. The transaction was accounted for as a business combination within the Telecom segment, and the overall consideration transferred was $16.3 million of cash. The purchase price was subject to adjustment based upon Vertical Limit exceeding pre-determined crew counts through May 15, 2019, EBITDA thresholds for 2019 and 2020, and trained employee counts through December 31, 2021, as defined in the agreement, subject to a maximum payment of $15.7 million. As of the acquisition date, the fair value of the contingent consideration was determined to be $7.7 million. As of December 31, 2020 and 2019, results of operations subsequent to the acquisition date and changes to management’s forecasts resulted in a change in fair value of the contingent consideration of ($1.2) million and $4.2 million, respectively, which is reflected in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2020 and 2019. During the year ended December 31, 2019, the Company paid $3.0 million for the 2019 first quarter EBITDA earnout, as defined in the agreement, which was recorded as a reduction of contingent consideration on the consolidated balance sheets. As of December 31, 2020, $3.5 million of earned but unpaid consideration is included in current portion of long-term debt and capital lease obligations on the consolidated balance sheets as acquisition debt (See Note 7). Goodwill resulted from expected synergies and revenue growth from combining operations with the Company. The following table summarizes the fair value of the assets and liabilities acquired at the date of the acquisition (in thousands): Purchase consideration: Cash paid $ 16,250 Contingent consideration 7,677 $ 23,927 Purchase price allocations: Accounts receivable $ 14,815 Inventories 65 Property and equipment 1,195 Prepaid expenses 72 Trademarks and trade names 1,900 Customer relationships 6,100 Goodwill 7,093 Other long-term assets 46 31,286 Accounts payable (5,621) Accrued expenses (1,688) Capital lease obligations (50) $ 23,927 Note 3. Acquisitions (continued) Vinculums Acquisition On October 4, 2019, pursuant to the Asset Purchase Agreement between QualTek and Vinculums Services, LLC (the “Vinculums Seller”), QualTek acquired certain assets and liabilities from the Vinculums Seller. The transaction was accounted for as a business combination within the Telecom segment, and the overall consideration transferred was $43.6 million of cash and rollover equity valued at $12.5 million. The purchase price was subject to adjustment based upon Vinculums exceeding pre-determined EBITDA thresholds for 2019, 2020, and 2021, as defined in the agreement, subject to a maximum payment of $35 million. As of the acquisition date, the fair value of the contingent consideration was determined to be $22.6 million. As of December 31, 2020, results of operations subsequent to the acquisition date and changes to management’s forecasts resulted in a change in fair value of the contingent consideration of ($5.8) million, which is reflected in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2020. As of December 31, 2020, $5.0 million of earned but unpaid consideration is included in current portion of long-term debt and capital lease obligations on the consolidated balance sheets as acquisition debt (See Note 7). Goodwill resulted from expected synergies and revenue growth from combining operations with the Company. The following table summarizes the fair value of the assets and liabilities acquired at the date of the acquisition (in thousands): Purchase consideration: Cash paid $ 43,595 Rollover equity 12,500 Contingent consideration 22,615 $ 78,710 Purchase price allocations: Accounts receivable $ 37,574 Inventories 1,668 Prepaid expenses 318 Property and equipment 990 Trademarks and trade names 4,500 Customer relationships 35,100 Goodwill 32,581 Other long-term assets 79 112,810 Accounts payable (14,830) Accrued expenses (12,706) Contract liabilities (6,190) Capital lease obligations (374) $ 78,710 The Company finalized the purchase price allocation for Vinculums, which resulted in an increase in goodwill of $973 thousand during the year ended December 31, 2020. The Company made this measurement period adjustment to reflect facts and circumstances that related to accounts receivable, accounts payable, and accrued expenses that existed at the acquisition date and did not result from intervening events subsequent to such date. Note 3. Acquisitions (continued) Aerial Acquisition On October 18, 2019, pursuant to the Asset Purchase Agreement between QualTek and Aerial Wireless Services, LLC (the “Aerial Seller”), QualTek acquired certain assets and liabilities from the Aerial Seller. The transaction was accounted for as a business combination within the Telecom segment, and the overall consideration transferred was $16.5 million of cash and rollover equity valued at $1.0 million. The purchase price was subject to adjustment based upon Aerial exceeding pre-determined billing thresholds under purchased contracts for 2019 and 2020, as defined in the agreement, subject to a maximum payment of $6.0 million. The agreement also included two timing payments of $1.5 million payable through October 18, 2020. As of December 31, 2019, $1.5 million was unpaid and was included in accrued expenses on the consolidated balance sheets. The balance was subsequently paid in 2020. As of the acquisition date, the fair value of the contingent consideration was determined to be $5.8 million. The full $6.0 million was paid in 2020. Goodwill resulted from expected synergies and revenue growth from combining operations with the Company. The following table summarizes the fair value of the assets and liabilities acquired at the date of the acquisition (in thousands): Purchase consideration: Cash paid $ 16,497 Rollover equity 1,000 Contingent consideration 5,825 Timing payments 1,447 $ 24,769 Purchase price allocations: Accounts receivable $ 8,847 Inventories 150 Prepaid expenses 167 Property and equipment 1,446 Trademarks and trade names 340 Customer relationships 3,800 Goodwill 14,698 Other long-term assets 28 29,476 Accounts payable (2,254) Accrued expenses (789) Contract liabilities (648) Capital lease obligations (1,016) $ 24,769 The Company finalized the purchase price allocation for Aerial, which resulted in a decrease in goodwill of $153 thousand during the year ended December 31, 2020. The Company made this measurement period adjustment to reflect facts and circumstances that related to accounts receivable, inventory, prepaid assets, accounts payable, accrued expenses, and contract liabilities that existed at the acquisition date and did not result from intervening events subsequent to such date. Costs incurred to affect the acquisitions, as well as costs associated with failed transactions, are recognized separately rather than included in the cost allocated to the assets acquired and liabilities assumed. Total transaction related costs of $1.0 million and $4.3 million were reflected in the consolidated statements of operations and comprehensive loss during the years ended December 31, 2020 and 2019, respectively. Note 3. Acquisitions (continued) Site Resources, LLC Acquisition — 2018 Acquisition As of December 31, 2019, results of operations subsequent to the acquisition date of Site Resources, LLC resulted in a change in fair value of the contingent consideration of ($1.0) million, which is reflected in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2019. No contingent consideration payments were made. Recovery Logistics LLC Acquisition — 2018 Acquisition As of December 31, 2019, results of operations subsequent to the acquisition date of Recovery Logistics, LLC (“RLI”) resulted in a change in fair value of the contingent consideration of $2.9 million, which is reflected in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2019. During the year ended December 31, 2019, the Company paid $10.1 million to settle the RLI earnout for the specific event in 2018 which was recorded as a reduction of contingent consideration on the consolidated balance sheets. As of December 31, 2020, NX Canada, ULC Acquisition — 2018 Acquisition As of December 31, 2019, results of operations subsequent to the acquisition date of NX Canada, ULC resulted in a change in fair value of the contingent consideration of ( $266 ) thousand, which is reflected in loss from discontinued operations in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2019. No contingent consideration payments were made. |
Property and Equipment_2
Property and Equipment | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
BCP QUALTEK HOLDCO, LLC | ||
Property and Equipment | Note 5. Property and Equipment Property and equipment consisted of the following (in thousands): October 2, December 31, 2021 2020 Office furniture $ 1,331 $ 1,249 Computers 1,591 1,217 Machinery, equipment and vehicles 15,482 10,275 Land 140 — Leasehold improvements 4,695 3,354 Software 2,281 2,199 Assets under capital lease 41,349 32,153 Construction in process 1,263 605 68,132 51,052 Less: accumulated depreciation (25,945) (17,258) Property and equipment, net $ 42,187 $ 33,794 Property and equipment include assets acquired under capital leases of $41,349 thousand and $32,153 thousand and accumulated depreciation of $13,028 thousand and $8,062 thousand as of October 2, 2021 and December 31, 2020, respectively. Depreciation and amortization expense was $9,418 thousand and $6,584 thousand for the nine months ended October 2, 2021 and October 3, 2020, respectively. | Note 4. Property and Equipment Property and equipment consisted of the following as of December 31, 2020 and 2019 (in thousands): 2020 2019 Office furniture $ 1,249 $ 898 Computers 1,217 1,051 Machinery, equipment and vehicles 10,275 6,532 Leasehold improvements 3,354 792 Software 2,199 1,903 Assets under capital lease 32,153 15,226 Construction in process 605 246 51,052 26,648 Less: accumulated depreciation (17,258) (8,475) Property and equipment, net $ 33,794 $ 18,173 Property and equipment includes assets acquired under capital leases of $32.2 million and $15.2 million and accumulated depreciation of $8.1 million and $3.9 million as of December 31, 2020 and 2019, respectively. Depreciation and amortization expense for the years ended December 31, 2020 and 2019 was $9.0 million and $6.3 million, respectively. |
Accounts Receivable, Net of A_6
Accounts Receivable, Net of Allowance, Contract Assets and Liabilities, and Customer Credit Concentration | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
BCP QUALTEK HOLDCO, LLC | ||
Accounts Receivable, Net of Allowance, Contract Assets and Liabilities, and Customer Credit Concentration | Note 6. Accounts Receivable, Net of Allowance, Contract Assets and Liabilities, and Customer Credit Concentration The following provides further details on the condensed consolidated balance sheet accounts of accounts receivable, net and contract liabilities. Accounts Receivable, Net of Allowance Accounts receivable, net classified as current, consisted of the following (in thousands): October 2, December 31, 2021 2020 Trade accounts receivable $ 97,506 $ 44,419 Contract assets 157,155 134,311 254,661 178,730 Less: allowance for doubtful accounts (5,397) (3,933) Accounts receivable, net $ 249,264 $ 174,797 The Company is party to non-recourse financing arrangements in the ordinary course of business, under which certain receivables are settled with the customer’s bank in return for a nominal fee. Discount charges related to these arrangements, which are included within interest expense, totaled $770 thousand and $1,356 thousand for the nine months ended October 2, 2021 and October 3, 2020, respectively. Contract Assets and Liabilities Net contract assets consisted of the following (in thousands): October 2, December 31, 2021 2020 Contract assets $ 157,155 $ 134,311 Contract liabilities (14,950) (14,945) Contract assets, net $ 142,205 $ 119,366 The amount of revenue recognized in the nine-months ended October 2, 2021 and October 3, 2021 that was previously included in contact liabilities at the beginning of the period was $8,132 thousand and $9,589 thousand, respectively. Customer Credit Concentration Customers whose combined amounts of accounts receivable and contract assets exceeded 10% of total combined accounts receivable and contract assets were as follows (in thousands): October 2, 2021 December 31, 2020 Amounts % of Total Amounts % of Total AT&T $ 61,797 24.3 % $ 81,796 45.8 % Entergy 67,776 26.6 % * * T-Mobile 34,447 13.5 % * * Verizon 47,892 18.8 % 65,346 36.6 % Total $ 211,911 83.2 % $ 147,142 82.3 % * Accounts receivable and contract assets from Entergy and T-Mobile did not exceed 10% of total combined accounts receivable and contract assets for the year ended December 31, 2020. | Note 5. Accounts Receivable, Net of Allowance, Contract Assets and Liabilities, and Customer Credit Concentration The following provides further details on the consolidated balance sheet accounts of accounts receivable, net and contract liabilities. See Note 1 for further information on our policies related to these consolidated balance sheet accounts, as well as our revenue recognition policies. Accounts Receivable, Net of Allowance Accounts receivable, net, classified as current, consisted of the following as of December 31, 2020 and 2019 (in thousands): 2020 2019 Trade accounts receivable $ 44,419 $ 61,365 Contract assets 134,311 173,734 178,730 235,099 Less: allowance for doubtful accounts (3,933) (6,440) Accounts receivable, net $ 174,797 $ 228,659 Contract Assets and Liabilities Net contract assets consisted of the following as of December 31, 2020 and 2019 (in thousands): 2020 2019 Contract assets $ 134,311 $ 173,734 Contract liabilities (14,945) (18,470) Contract assets, net $ 119,366 $ 155,264 The amount of revenue recognized in the year ended December 31, 2020 and 2019 that was previously included in contract liabilities at the beginning of the period was $9.4 million and $5.7 million, respectively. Customer Credit Concentration Customers whose combined amounts of accounts receivable and contract assets exceeded 10% of total combined accounts receivable and contract assets as of December 31, 2020 and 2019 were as follows (in thousands): 2020 2019 Amount % of Total Amounts % of Total AT&T $ 81,796 45.8 % $ 120,145 51.1 % Verizon 65,346 36.6 % 69,552 29.6 % Total $ 147,142 82.3 % $ 189,697 80.8 % |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
BCP QUALTEK HOLDCO, LLC | ||
Goodwill and Intangible Assets | Note 7. Goodwill and Intangible Assets Goodwill Changes in the carrying amount of goodwill by reportable segment is as follows (in thousands): Renewables and Recovery Logistics Telecom Total Goodwill as of December 31, 2020(a) $ 13,598 $ 44,924 $ 58,522 Additions from acquisitions (Note 4) 8,082 15,171 23,253 Goodwill as of October 2, 2021(a) $ 21,680 $ 60,095 $ 81,775 (a) Goodwill is net of accumulated impairment charges of $36,934 thousand in the Telecom segment. There have been no impairment charges within the Renewables and Recovery Logistics segment. For the nine months ended October 2, 2021 and October 3, 2020, there were no goodwill impairment charges. Intangible Assets Intangible assets consisted of the following (in thousands): October 2, 2021 Weighted Average Gross Remaining carrying Accumulated Net carrying Useful Life amount amortization amount Customer relationships 9.7 $ 414,446 $ (89,681) $ 324,765 Trade names 9.7 60,200 (20,243) 39,957 $ 474,646 $ (109,924) $ 364,722 December 31, 2020 Weighted Average Gross Remaining carrying Accumulated Net carrying Useful Life amount amortization amount Customer relationships 10.8 $ 368,200 $ (65,868) $ 302,332 Trade names 9.9 58,519 (15,035) 43,484 $ 426,719 $ (80,903) $ 345,816 Amortization expense of intangible assets was $29,020 thousand and $26,818 thousand for the nine months ended October 2, 2021 and October 3, 2020, respectively. | Note 6. Goodwill and Intangible Assets Goodwill by reportable segment consisted of the following as of December 31, 2020 and 2019 (in thousands): Renewables and Recovery Logistics Telecom Total Goodwill as of January 1, 2019 $ 13,598 $ 27,485 $ 41,083 Additions from acquistions — 53,552 53,552 Impairment loss — (8,132) (8,132) Goodwill as of December 31, 2019 $ 13,598 $ 72,905 $ 86,503 Measurement period adjustments, net — 821 821 Impairment loss — (28,802) (28,802) Goodwill as of December 31, 2020 $ 13,598 $ 44,924 $ 58,522 For the years ended December 31, 2020 and 2019, the Company recognized goodwill impairment within the Telecom segment of $28.8 million and $8.1 million, respectively. Impairment resulted from a change in projected future discounted cash flows of the reporting units within the segment which resulted in an carrying value in excess of the estimated fair value. Intangible assets consisted of the following as of December 31, 2020 and 2019 (in thousands): 2020 Weighted Average Remaining Useful Gross carrying Accumulated Life amount amortization Net carrying amount Customer relationships 10.8 $ 368,200 $ (65,868) $ 302,332 Trade names 9.9 58,519 (15,035) 43,484 $ 426,719 $ (80,903) $ 345,816 2019 Weighted Average Remaining Useful Gross carrying Accumulated Life amount amortization Net carrying amount Customer relationships 11.8 $ 368,200 $ (36,782) $ 331,418 Trade names 10.5 58,519 (8,364) 50,155 $ 426,719 $ (45,146) $ 381,573 Amortization expense of intangible assets was $35.8 million and $32.9 million for the years ended December 31, 2020 and 2019, respectively. For the year ended December 31, 2019, the Company recorded $0.8 million of impairment of long-lived assets within the Telecom segment as a result of a change in projected future undiscounted cash flows of an asset group within the segment. No Note 6. Goodwill and Intangible Assets (continued) The following table provides estimated future amortization expense related to the intangible assets (in thousands): Years ending December 31: 2021 $ 35,585 2022 35,585 2023 34,294 2024 32,245 2025 31,289 Thereafter 176,818 $ 345,816 |
Debt and Capital Lease Obligati
Debt and Capital Lease Obligations | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
BCP QUALTEK HOLDCO, LLC | ||
Debt and Capital Lease Obligations | Note 8. Debt and Capital Lease Obligations Convertible notes — related party: On June 16, 2021, the Company issued a convertible note “Convertible Note — Related Party — June 2021”) in the aggregate principal amount of $30,568 thousand to BCP QualTek II LLC, an affiliate of its majority member, in exchange for the 25,000 outstanding Preferred Class B Units (Preferred Units) and the associated accumulated preferred return (see Note 10). The Convertible Note — Related Party — June 2021 bears interest at an annual rate of 12.00%, which accrues and is payable together with the principal balance. The Company recorded interest expense of $1,105 thousand for the nine months ended October 2, 2021. There is no fixed maturity date, however, cash payments are required equal to tax distributions, which the note holder would be entitled if the Convertible Note — Related Party — June 2021 were a Preferred Unit. The Convertible Note — Related Party — June 2021 includes a mandatory conversion provision at the earlier of immediately prior to the consummation of the SPAC Combination, as defined in the agreement, with ROCR or March 13, 2022. Upon the consummation of the SPAC Combination, the Convertible Note — June 2021 will automatically convert into of the Company’s Class A units at a price of $83.23 per unit. If the SPAC Combination is not consummated by March 13, 2022, the Convertible Note — June 2021 — Related Party will automatically convert into Preferred Units equal to the accreted principal amount at a price of $1,000 per unit. Convertible notes — June 2021: Line of credit: Term loan: The obligations of QualTek under the PNC Credit Agreement are secured (a) on a first priority basis, by liens on the ABL Priority Collateral as defined in the ABL Intercreditor Agreement (“Intercreditor Agreement”), dated as of July 18, 2018 of QualTek including accounts receivable and inventory and (b) on a second priority basis, by liens on the Term Priority Collateral, as defined in the Intercreditor Agreement. The obligations of QualTek under the Term Loan are secured (a) on a first priority basis, by liens on the Term Priority Collateral of QualTek and (b) on a second priority basis, by liens on the ABL Priority Collateral. Generally, Term Priority Collateral includes all assets, other than the ABL Priority Collateral, and equity interests of QualTek. Acquisition debt: Debt outstanding, whose carrying value approximates fair market value due to variable interest rates based on current rates available to the Company for similar instruments, was as follows (in thousands): October 2, December 31, 2021 2020 Line of credit $ 96,242 $ 59,837 Term loan 353,872 361,045 Acquisition debt 34,718 10,575 Convertible notes – related party 30,568 — Convertible notes – June 2021 44,400 — Capital lease obligations 25,620 23,069 Less: unamortized financing fees (12,873) (13,854) Less: convertible debt discount (7,498) — 565,049 440,672 Less: current maturities of long-term debt (110,395) (20,139) Less: current portion of capital lease obligations, net of capital lease interest (9,150) (7,110) $ 445,504 $ 413,423 Debt issuance costs are presented in the condensed consolidated balance sheets as a direct reduction from the carrying amount of long-term debt and are amortized over the term of the related debt. The Company amortized $3,201 thousand and $2,307 | Note 7. Long-Term Debt and Capital Lease Obligations Line of credit: at December 31, 2020), as defined in the agreement. There was Term loan: The obligations of QualTek under the PNC Credit Agreement are secured (a) on a first priority basis, by liens on the ABL Priority Collateral, as defined in the ABL Intercreditor Agreement (“Intercreditor Agreement”), dated as of July 18, 2018 including accounts receivable and inventory and (b) on a second priority basis, by liens on the Term Priority Collateral, as defined in the Intercreditor Agreement. The obligations of QualTek under the Term Loan are secured (a) on a first priority basis, by liens on the Term Priority Collateral of QualTek and (b) on a second priority basis, by liens on the ABL Priority Collateral. Generally, Term Priority Collateral includes all assets, other than the ABL Priority Collateral, and equity interests of QualTek. Note 7. Long-Term Debt and Capital Lease Obligations (continued) Acquisition debt: Subordinated debt — related party: , Debt outstanding as of December 31, 2020 and 2019, whose carrying value approximates fair market value due to variable interest rates based on current rates available to the Company for similar instruments, was as follows (in thousands): 2020 2019 Line of credit $ 59,837 $ 46,554 Term loan 361,045 370,609 Acquistion debt 10,575 — Capital lease obligations 25,751 11,959 Less: amounts representing interest (2,682) (1,327) Less: unamortized financing fees (13,854) (16,830) 440,672 410,965 Less: current portion of long-term debt (20,139) (9,564) Less: current portion of capital lease obliations, net of capital lease interest (7,110) (3,902) $ 413,423 $ 397,499 The minimum payments of the Company’s long-term debt and capital lease obligations are as follows (in thousands): Capital Line of Term Acquisition lease credit loan debt obligations Total 2021 $ — $ 9,564 $ 10,575 $ 8,287 $ 28,426 2022 — 9,564 — 7,318 16,882 2023 59,837 9,564 — 6,397 75,798 2024 — 9,564 — 3,105 12,669 2025 — 9,564 — 644 10,208 Thereafter — 313,225 — — 313,225 Total $ 59,837 $ 361,045 $ 10,575 $ 25,751 $ 457,208 |
Fair Value Measurements_2_3
Fair Value Measurements | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Fair Value Measurements | NOTE 10. FAIR VALUE MEASUREMENTS The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. Quoted Prices in Significant Other Significant Other September 30, Active Markets Observable Inputs Unobservable Inputs Description 2021 (Level 1) (Level 2) (Level 3) Assets: Cash and marketable securities held in Trust Account $ 115,007,452 $ 115,007,452 $ — $ — Liabilities: Warrant Liability – Private Placement Warrants $ 217,260 $ — $ — $ 217,260 The Private Placement Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liability on the accompanying condensed consolidated balance sheet. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liability in the condensed consolidated statements of operations. The Private Placement Warrants were valued using a binomial lattice model incorporating the Cox-Ross-Rubenstein methodology, which is considered to be a Level 3 fair value measurement. The binomial lattice model’s primary unobservable input utilized in determining the fair value of the Private Placement Warrants is the expected volatility of the common stock. The expected volatility as of the Initial Public Offering date was derived from observable public warrant pricing on comparable ‘blank-check’ companies without an identified target. The expected volatility as of subsequent valuation dates was implied from the Company’s own Public Warrant pricing. There were no transfers between Levels 1, 2 or 3 during the three and nine months ended September 30, 2021. The following table provides quantitative information regarding Level 3 fair value measurements: At March 5, 2021 (Initial At Measurement) September 30, 2021 Stock price $ 9.78 $ 9.94 Strike price $ 11.50 $ 11.50 Volatility 14.9 % 19.8 % Risk-free rate 0.87 % 0.95 % Probability of Business Combination occurring 75 % 90.0 % Dividend yield 0.0 % 0.0 % Fair value of Private Placement Warrants $ 0.90 $ 2.13 The following table presents the changes in the fair value of Level 3 warrant liabilities: Warrant Liabilities Fair value as of March 5, 2021 (Initial Measurement) $ 91,800 Change in fair value (9,180) Fair value as of March 31, 2021 82,620 Change in fair value 232,560 Fair value as of June 30, 2021 $ 315,180 Change in fair value (97,920) Fair value as of September 30, 2021 $ 217,260 | ||
BCP QUALTEK HOLDCO, LLC | |||
Fair Value Measurements | Note 9. Fair Value Measurements The Company measures and reports certain financial and non-financial assets and liabilities on a fair value basis. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). GAAP specifies a three-level hierarchy that is used when measuring and disclosing fair value. The fair value hierarchy gives the highest priority to quoted prices available in active markets (i.e. observable inputs) and the lowest priority to data lacking transparency (i.e. unobservable inputs). An instrument’s categorization within the fair value hierarchy is based on the lowest level of significant inputs to its valuation. The following is a description of the three hierarchy levels. Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Active markets are considered to be those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in inactive markets. Level 3 Unobservable inputs are not corroborated by market data. This category is comprised of financial and non-financial assets and liabilities whose fair value is estimated based on internally developed models or methodologies using significant inputs that are generally less readily observable from objective sources. Transfers into or out of any hierarchy level are recognized at the end of the reporting period in which the transfers occurred. There were no transfers between any levels during the nine The information following is provided to help readers gain an understanding of the relationship between amounts reported in the accompanying financial statements and the related market or fair value. The disclosures include financial instruments. Acquisition-related contingent consideration is measured at fair value on a recurring basis using unobservable inputs such as projections of financial results and cash flows for the acquired businesses and a discount factor based on the weighted average cost of capital which fall within Level 3 of the fair value hierarchy. In accordance with the fair value hierarchy described above, the following tables show the fair value of the Company’s financial liabilities that are required to be measured at fair value on a recurring basis at October 2, 2021 and December 31, 2020 and the related activity for the nine months ended October 2, 2021 and October 3, 2020. Fair Value at October 2, 2021 (in thousands) Carrying Value Level 1 Level 2 Level 3 Financial liabilities Contingent consideration $ 28,429 $ — $ — $ 28,429 $ 28,429 $ — $ — $ 28,429 Fair Value at December 31, 2020 (in thousands) Carrying Value Level 1 Level 2 Level 3 Financial liabilities Contingent consideration $ 18,129 $ — $ — $ 18,129 $ 18,129 $ — $ — $ 18,129 The following table sets forth a summary of the changes in fair value of the Company’s Level 3 financial liabilities: January 1, 2021 18,129 Acquisitions (see Note 4) 24,145 Accretion 699 Change in fair value (4,544) Reclassification to acquisition debt (10,000) October 2, 2021 $ 28,429 January 1, 2020 $ 40,119 Payment of contingent consideration (6,000) Accretion 1,306 October 3, 2020 $ 35,425 | Note 8. Fair Value Measurements The Company measures and reports certain financial and non-financial assets and liabilities on a fair value basis. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). GAAP specifies a three-level hierarchy that is used when measuring and disclosing fair value. The fair value hierarchy gives the highest priority to quoted prices available in active markets (i.e. observable inputs) and the lowest priority to data lacking transparency (i.e. unobservable inputs). An instrument’s categorization within the fair value hierarchy is based on the lowest level of significant inputs to its valuation. The following is a description of the three hierarchy levels. Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Active markets are considered to be those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in inactive markets. Level 3 Unobservable inputs are not corroborated by market data. This category is comprised of financial and non-financial assets and liabilities whose fair value is estimated based on internally developed models or methodologies using significant inputs that are generally less readily observable from objective sources. Transfers into or out of any hierarchy level are recognized at the end of the reporting period in which the transfers occurred. There were no transfers between any levels during the years ended December 31, 2020 and 2019. The information following is provided to help readers gain an understanding of the relationship between amounts reported in the accompanying financial statements and the related market or fair value. The disclosures include financial instruments. Acquisition-related contingent consideration, which resulted from the Acquisitions in Note 3, is measured at fair value on a recurring basis using unobservable inputs such as projections of financial results and cash flows for the acquired businesses and a discount factor based on the weighted average cost of capital which fall within Level 3 of the fair value hierarchy. In accordance with the fair value hierarchy described above, the following tables show the fair value of the Company’s financial liabilities that are required to be measured at fair value on a recurring basis at December 31, 2020 and 2019 and the related activity for the years ended December 31, 2020 and 2019. Fair Value at December 31, 2020 Carrying (in thousands) Value Level 1 Level 2 Level 3 Financial liabilities Contingent consideration – Vertical Limit $ 4,711 $ — $ — $ 4,711 Contingent consideration – Vinculums 13,418 — — 13,418 $ 18,129 $ — $ — $ 18,129 Fair Value at December 31, 2019 Carrying (in thousands) Value Level 1 Level 2 Level 3 Financial liabilities Contingent consideration – RLI $ 2,075 $ — $ — $ 2,075 Contingent consideration – Vertical Limit 9,195 — — 9,195 Contingent consideration – Vinculums 22,973 — — 22,973 Contingent consideration – Aerial 5,876 — — 5,876 $ 40,119 $ — $ — $ 40,119 Note 8. Fair Value Measurements (continued) The following table sets forth a summary of the changes in fair value of the Company’s Level 3 financial liabilities: January 1, 2019 $ 10,130 Acquisitions (see Note 3) 36,117 Payment of contingent consideration (13,108) Accretion 832 Change in fair value 6,148 December 31, 2019 40,119 Payment of contingent consideration (6,000) Accretion 1,666 Reclassification to acquisition debt (10,575) Change in fair value (7,081) December 31, 2020 $ 18,129 |
Equity_2
Equity | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
STOCKHOLDERS' EQUITY | NOTE 8. STOCKHOLDERS’ EQUITY Common Stock issued outstanding | Note 7 — Stockholders’ Equity Common Stock Warrants Once the warrants become exercisable, the Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $0.01 per warrant; ● at any time after the warrants become exercisable; ● upon not less than 30 days ’ prior written notice of redemption to each warrant holder; ● if, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.00 per share, for any 20 trading days within a 30- day trading period commencing after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and ● if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants at the time of redemption and for the entire 30- day trading period referred to above and continuing each day thereafter until the date of redemption. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuances of shares of common stock at a price below their respective exercise prices. Additionally, in no event will the Company be required to net cash settle the 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 warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless. In addition, if (x) the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per share of 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 Initial Stockholders or their affiliates, without taking into account any Founder Shares held by them prior to such issuance), (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 a Business Combination on the date of the consummation of a 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 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 Market Value 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 Market Price. The Private Warrants will be identical to the Public Warrants underlying the Units being sold in the Proposed Public Offering, except that the Private Warrants and the shares of common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or saleable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. | |
BCP QUALTEK HOLDCO, LLC | |||
STOCKHOLDERS' EQUITY | Note 10. Equity Profits and losses of the Company are allocated to the Members in accordance with the BCP QualTek HoldCo, LLC Agreement (“HoldCo LLC Agreement”), as amended and restated on October 4, 2019. Distributions made by the Company are based on the HoldCo LLC agreement. Preferred equity: On June 16, 2021, the 25,000 Preferred Units and accumulated preferred return, which totaled $5,568 thousand was exchanged for the Convertible Note — Related Party — June 2021 (see Note 8). Profits interests: probable and therefore, the Company has not assigned any value to such Class P Units and no related expense were incurred during the nine months ended October 2, 2021 and October 3, 2020. Distributions: | Note 9. Equity Profits and losses of the Company are allocated to the Members in accordance with the BCP QualTek HoldCo, LLC Agreement (HoldCo LLC Agreement), as amended and restated on October 4, 2019. Distributions made by the Company are based on the HoldCo LLC agreement. Preferred equity: The Preferred Units have a liquidation preference equal to the initial price per unit of $1,000 plus a preferred return accrued through the date of liquidation of 12.0% per annum, compounding quarterly, as defined in the Holdco LLC Agreement. The Preferred Units have a perpetual term, with no fixed maturity date and no voting rights. The Company has the right to redeem any or all of the Preferred Units, including the accrued return, at any time. The Preferred Units are not convertible or exchangeable with any of the equity interest of the Company. Profits interests: Distributions: |
Segments and Related Informat_8
Segments and Related Information | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
BCP QUALTEK HOLDCO, LLC | ||
Segments and Related Information | Note 11. Segments and Related Information The Company manages its operation under two operating segments, which represent its two reportable segments: (1) Telecom and (2) Renewables and Recovery Logistics. The Telecom segment performs site acquisition, engineering, project management, installation, testing, last mile installation, and maintenance solutions of communication infrastructure for telecommunication and cable providers, businesses, public venues, government facilities, and residential subscribers. The Renewables and Recovery Logistics segment derives its revenue from providing new fiber optic construction services, maintenance and repair services as well as businesses with continuity and disaster relief services to renewable energy, commercial, telecommunication and utility companies. The segment also provides business-as- usual services such as generator storage and repair and cell maintenance services. The accounting policies of the reportable segments are the same as those described in Note 1 . We present adjusted EBITDA as the key metric used by our management to assess the operating and financial performance of our operations in order to make decisions on allocation of resources. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management. Summarized financial information for the Company’s reportable segments is presented and reconciled to the Company’s consolidated financial information in the following tables, all of which are presented in thousands. For the Nine Months Ended Revenue: October 2, 2021 October 3, 2020 Telecom $ 360,020 $ 468,729 Renewables and Recovery Logistics 105,164 55,351 Total consolidated revenue $ 465,184 $ 524,080 October 2, December 31, Total Assets: 2021 2020 Telecom $ 602,749 $ 579,147 Renewables and Recovery Logistics 151,926 55,370 Corporate 14,890 6,351 Total consolidated assets $ 769,565 $ 640,868 For the Nine Months Ended Capital Expenditures: October 2, 2021 October 3, 2020 Telecom $ 1,843 $ 6,712 Renewables and Recovery Logistics 248 7,936 Corporate 1,059 845 Total consolidated capital expenditures $ 3,150 $ 15,493 For the Nine Months Ended Amortization and Depreciation: October 2, 2021 October 3, 2020 Amortization and depreciation Telecom $ 29,767 $ 30,539 Renewables and Recovery Logistics 8,644 3,734 Corporate 726 487 Total consolidated amortization and depreciation $ 39,136 $ 34,761 For the Nine Months Ended Adjusted EBITDA Reconciliation: October 2, 2021 October 3, 2020 Telecom adjusted EBITDA $ 26,907 $ 16,028 Renewables and Recovery Logistics adjusted EBITDA 42,181 24,227 Corporate adjusted EBITDA (13,097) (13,628) Total adjusted EBITDA $ 55,991 $ 26,627 Less: Management fees (751) (391) Transaction expenses (2,875) (567) Change in fair value of contingent consideration 4,544 — Depreciation and amortization (39,136) (34,761) Interest expense (35,778) (28,824) Loss on extinguishment of convertible notes (2,436) — $ (20,441) $ (37,916) Revenue by Service Offerings Revenue for each of the Company’s end-market services offerings is presented below: For the Nine Months Ended Revenue by Service Offerings: October 2, 2021 October 3, 2020 Telecom Wireless $ 278,125 $ 359,792 Telecom Wireline 73,296 108,937 Telecom Power 8,598 — Renewables 25,086 — Recovery Logistics 80,079 55,351 Total $ 465,184 $ 524,080 Significant Customers Revenue concentration information for significant customers as a percentage of total consolidated revenue was as follows (in thousands): For the Nine Months Ended October 2, 2021 October 3, 2020 Customers: Amount % of Total Amount % of Total AT&T $ 189,381 41 % $ 282,807 54 % Entergy 67,776 15 % * * T-Mobile 59,369 13 % * * Verizon 51,773 11 % 98,165 19 % Total $ 368,299 80 % $ 380,972 73 % * Revenue from Entergy and T-Mobile did not exceed 10% of total consolidated revenue for the nine months ended October 3, 2020. | Note 10. Segments and Related Information The Company manages its operations under two operating segments, which represent its two reportable segments: (1) Telecom and (2) Renewables and Recovery Logistics. The Telecom segment performs site acquisition, engineering, project management, installation, testing, last mile installation, and maintenance solutions of communication infrastructure for telecommunication and cable providers, businesses, public venues, government facilities, and residential subscribers. The Renewables and Recovery Logistics segment derives its revenue from providing businesses with continuity and disaster relief services to telecommunication and utility companies as well as business-as-usual services such as generator storage and repair and cell maintenance services. The accounting policies of the reportable segments are the same as those described in Note 1. All intercompany transactions and balances are eliminated in consolidation. Intercompany revenue and costs between entities within a reportable segment are eliminated to arrive at segment totals. Corporate results include amounts related to corporate functions such as administrative costs, professional fees, acquisition- related transaction costs and other discrete items. We present adjusted EBITDA as the key metric used by our management to assess the operating and financial performance of our operations in order to make decisions on allocation of resources. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management. Summarized financial information for the Company’s reportable segments is presented and reconciled to the Company’s consolidated financial information in the following tables, all of which are presented in thousands. 2020 2019 Revenue: Telecom $ 587,614 $ 568,342 Renewables and Recovery Logistics 68,910 30,926 Total consolidated revenue $ 656,524 $ 599,268 2020 2019 Total Assets: Telecom $ 579,147 $ 697,991 Renewables and Recovery Logistics 55,370 45,642 Corporate 6,351 3,597 Total consolidated assets $ 640,868 $ 747,230 2020 2019 Capital Expenditures: Telecom $ 8,831 $ 10,693 Renewables and Recovery Logistics 12,251 1,090 Corporate 2,015 957 Total consolidated capital expenditures $ 23,097 $ 12,740 2020 2019 Amortization and Depreciation: Amortization and depreciation Telecom $ 40,588 $ 35,411 Renewables and Recovery Logistics 5,259 4,250 Corporate 628 442 Total consolidated amortization and depreciation $ 46,475 $ 40,103 Note 10. Segments and Related Information (continued) 2020 2019 EBITDA Reconciliation: Telecom adjusted EBITDA $ 2,409 $ 37,063 Renewables and Recovery Logistics adjusted EBITDA 28,943 11,442 Corporate adjusted EBITDA (18,213) (16,635) Total adjusted EBITDA 13,139 31,870 Less: Management fees (518) (541) Transaction expenses (988) (4,257) Change in fair value of contingent consideration 7,081 (6,149) Impairment of goodwill (28,802) (8,132) Impairment of long-lived assets — (840) Depreciation and amortization (46,475) (40,103) Interest expense (37,659) (33,380) Net loss $ (94,222) $ (61,532) Revenue by Service Offerings Revenue for each of the Company’s end-market service offerings is presented below: 2020 2019 Revenue by Service Offerings: Telecom Wireless $ 458,155 $ 397,203 Welecom Wireline 129,459 171,139 Recovery Logistics 68,910 30,926 Total $ 656,524 $ 599,268 Significant Customers Revenue for the years ended December 31, 2020 and 2019 include revenue concentration from significant customers as follows (in thousands): 2020 2019 Amount % of Total Amount % of Total Customers: AT&T $ 356,026 54 % $ 318,913 53 % Verizon 116,444 18 % 117,927 20 % Total $ 472,470 72 % $ 436,840 73 % |
Commitments and Contingencies_3
Commitments and Contingencies | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
COMMITMENTS | NOTE 7. COMMITMENTS Registration Rights Pursuant to a registration rights agreement entered into on March 2, 2021, the holders of the Founder Shares and the holders of the Private Units (and underlying securities) are entitled to registration rights. The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of the majority of the Founder Shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Private Units (and underlying securities) can elect to exercise these registration rights at any time after the Company consummates a Business Combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation 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. Notwithstanding the foregoing, the holders of the Founder Shares and the holders of the Private Units may not exercise demand or piggyback rights after seven (7) years from the effective date of the Initial Public Offering and may not exercise demand rights on more than one occasion in respect of all registrable securities. Business Combination Marketing Agreement The Company entered into a business combination marketing agreement with Roth Capital Partners, LLC (“Roth”) and Craig-Hallum Capital Group LLC (“Craig-Hallum”), the underwriters in the Initial Public Offering, to act as advisors in connection with a Business Combination, including assisting in the transaction structuring and negotiation of a definitive purchase agreement with respect to the Business Combination, holding meetings with the stockholders to discuss the Business Combination and the target’s attributes, introducing the Company to potential investors to purchase its securities in connection with the Business Combination, assisting in obtaining stockholder approval for the Business Combination, and assisting with relevant financial analysis, presentations, press releases and filings related to the Business Combination. The Company will pay Roth and Craig-Hallum a marketing fee for such services upon the consummation of a Business Combination in an amount equal to, in the aggregate, 3.5% of the gross proceeds of the Initial Public Offering, or $4,025,000. Roth and Craig-Hallum will not be entitled to such fee unless the Company consummates a Business Combination. Business Combination Agreement On June 16, 2021, (i) the Company, (ii) Blocker Merger Sub, (iii) the Blocker, (iv) Company Merger Sub, (v) QualTek, and (vi) the Equityholder Representative, entered into the Business Combination Agreement. Pursuant to the terms of the Business Combination Agreement, (i) Blocker Merger Sub will be merged with and into the Blocker, with the Blocker surviving as a wholly owned subsidiary of the Company, (ii) immediately thereafter, the Blocker will be merged with and into the Company, with the Company as the surviving company, and (iii) immediately thereafter, Company Merger Sub will be merged with and into QualTek, with QualTek as the surviving company. The Business Combination Agreement contains customary representations and warranties, covenants, and closing conditions. Consideration Subject to the terms and conditions of the Business Combination Agreement, as a result of the Business Combination, the consideration payable or issuable to the owners of such equity interests in the Blocker (“Blocker Owners”) and the equityholders of QualTek other than the Blocker (the “Flow-Through Sellers”) is set forth below. Blocker Owner Consideration The consideration to be received by the Blocker Owners at the Closing will consist of (i) 11,923,940 shares of Class A Common Stock with 3,642,750 shares of Class A Common Stock to be received by BCP AIV Investor Holdings-3, L.P., 4,184,290 shares of Class A Common Stock to be received by BCP Strategic AIV Investor Holdings-2, L.P., and 4,096,901 shares of Class A Common Stock to be received by BCP QualTek Investor Holdings L.P. and (ii) 2,274,934 Blocker Owner Earnout Shares (as defined herein) with 626,123 Blocker Owner Earnout Shares to be received by BCP AIV Investor Holdings-3, L.P., 719,230 Blocker Owner Earnout Shares to be received by BCP Strategic AIV Investor Holdings-2, L.P., and 929,582 Blocker Owner Earnout Shares to be received by BCP QualTek Investor Holdings L.P. Flow-Through Seller Consideration The consideration to be received by each Flow-Through Seller at the Closing will consist of: ● 18,764,898 Common Units, with 4,825,893 Common Units to be received by BCP QualTek Management LLC, 11,780,782 Common Units to be received by BCP QualTek, LLC and 2,158,223 Common Units to be received by BCP QualTek II, LLC; ● 18,764,898 shares of Class B Common Stock, with 4,825,893 shares of Class B Common Stock to be received by BCP QualTek Management LLC, 11,780,782 shares of Class B Common Stock to be received by BCP QualTek, LLC and 2,158,223 shares of Class B Common Stock to be received by BCP QualTek II, LLC; ● 3,836,177 Earnout Common Units, with 1,157,803 Earnout Common Units to be received by BCP QualTek Management LLC, 2,678,374 Earnout Common Units to be received by BCP QualTek, LLC and 0 Earnout Common Units to be received by BCP QualTek II, LLC; and ● 3,836,177 Earnout Voting Shares, with 1,157,803 Earnout Voting Shares to be received by BCP QualTek Management LLC, 2,678,374 Earnout Voting Shares to be received by BCP QualTek, LLC and 0 Earnout Common Units to be received by BCP QualTek II, LLC. No fractional shares will be issued pursuant to the Business Combination Agreement. In lieu of any fractional shares that would otherwise be issuable to any Blocker Owner or Flow-Through Seller, the Company will pay to such Blocker Owner or Flow-Through Seller, as applicable, cash (rounded up to the nearest cent) in an amount equal to such fraction multiplied by $10.00. The Earnout Shares and Earnout Common Units In connection with the Closing, (i) 2,274,934 shares of Class A Common Stock issued to the Blocker Owners (the “Blocker Owner Earnout Shares”), (ii) 3,836,177 Common Units issued to the Flow-Through Sellers (the “Earnout Common Units”) and (iii) an equal number of shares of Class B Common Stock issued to the Flow-Through Sellers by the Company in connection with the Business Combination (the “Earnout Voting Shares,” and together with the Blocker Owner Earnout Shares, the “Earnout Shares”), will be subject to certain restriction on transfer and voting and potential forfeiture pending the achievement (if any) of the following earnout targets pursuant to the terms of the Business Combination Agreement: ● if, on or any time prior to the fifth anniversary of the date of the Closing, the closing sale price per share of Class A Common Stock equals or exceeds $15.00 per share for 20 trading days of any 30 consecutive trading day period following the Closing, 50% of the Earnout Shares and Earnout Common Units will be earned and no longer subject to the applicable restrictions on transfer and voting; and ● if, on or any time prior to the fifth anniversary of the date of the Closing, the closing sale price per share of Class A Common Stock equals or exceeds $18.00 per share for 20 trading days of any 30 consecutive trading day period following the Closing, 50% of the Earnout Shares and Earnout Common Units will be earned and no longer subject to the applicable restrictions on transfer and voting. Pre-PIPE Convertible Notes Offering In connection with the Business Combination, accredited investors (each a “Pre-PIPE Investor”) have purchased convertible notes of QualTek, as issuer (the “Notes Issuer”), in an aggregate principal amount of $44.4 million (the “Pre-PIPE Notes”) in a private placement, issuable pursuant to Note Purchase Agreements (the “Note Purchase Agreements”), among the Notes Issuer, ROCR Unless earlier converted or redeemed in accordance with the terms of the Pre-PIPE Notes, the Pre-PIPE Notes have a perpetual maturity. The Pre-PIPE Notes will not bear interest and are subject to certain customary information rights. Pursuant to the current terms of the Pre-PIPE Notes, upon consummation of the Merger, the Pre-PIPE Notes will automatically convert into Class A Common Stock of the Company at $8.00 per share, subject to certain adjustments. However, the Note Purchase Agreements provide that the parties will use commercially reasonable efforts to amend the Pre-PIPE Notes and any other agreements deemed necessary such that upon the consummation of the Business Combination, the Pre-PIPE Notes automatically convert into Common Units of the Company (along with a corresponding number of shares of Class B Common Stock of the Company) in lieu of converting into Class A Common Stock. The number of Common Units and Class B Common Stock will be equal to the quotient that results from dividing the aggregate principal amount of the Note by $8.00, subject to certain adjustments. PIPE Subscription Agreements In connection with the Merger, the Company has obtained commitments from certain accredited investors (each a “Subscriber”) to purchase shares of Class A Common Stock which will be issued in connection with the closing of the Merger (the “PIPE Shares”), for an aggregate cash amount of $66.1 million at a purchase price of $10.00 per share, in a private placement (the “PIPE Investment”). Certain offering-related expenses are payable by the Company, including customary fees payable to the placement agents, Roth Capital Partners, LLC and Craig-Hallum, aggregating $5,150,000. Such commitments are being made by way of the subscription agreements, by and between each Subscriber and the Company (collectively, the “Subscription Agreements”). The purpose of the sale of the PIPE Shares is to raise additional capital for use in connection with the Business Combination and to meet the minimum cash requirements provided in the Business Combination Agreement. The PIPE Shares are identical to the shares of Class A Common Stock that will be held by the Company’s public stockholders at the time of the closing of the Business Combination, except that the PIPE Shares will not be entitled to any redemption rights and will not be registered with the SEC at closing of the Business Combination. | Note 6 — Commitments Registration Rights The holders of the Founder Shares, as well as the holders of the Private Units (and underlying securities), will be entitled to registration rights pursuant to an agreement to be signed prior to or on the effective date of the Proposed Public Offering. The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of the majority of the insider shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Private Units (and underlying securities) can elect to exercise these registration rights at any time after the Company consummates a Business Combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation 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. Notwithstanding the foregoing, they may not exercise demand or piggyback rights after five (5) and seven (7) years, respectively, from the effective date of the Proposed Public Offering and may not exercise demand rights on more than one occasion in respect of all registrable securities. Underwriting Agreement The Company will grant the underwriters a 45-day option from the date of Proposed Public Offering to purchase up to 1,500,000 additional Units to cover over-allotments, if any, at the Proposed Public Offering price less the underwriting discounts and commissions. The underwriters will be entitled to a cash underwriting discount of 2.0% of the gross proceeds of the Proposed Public Offering, or $2,000,000 (or up to $2,300,000 if the underwriters’ over-allotment is exercised in full). Business Combination Marketing Agreement The Company will engage Roth Capital Partners, LLC (“Roth”) and Craig-Hallum Capital Group LLC (“Craig-Hallum”), the underwriters in the Proposed Public Offering, as advisors in connection with its Business Combination Business combination to assist in the transaction structuring and negotiation of a definitive purchase agreement with respect to the Business Combination, holding meetings with the stockholders to discuss the Business Combination and the target’s attributes, introducing the Company to potential investors to purchase its securities in connection with the Business Combination, assisting in obtaining stockholder approval for the Business Combination, and assisting with financial analysis, presentations, press releases and filings related to the Business Combination. The Company will pay Roth and Craig-Hallum a marketing fee for such services upon the consummation of a Business Combination in an amount equal to, in the aggregate, 3.5% of the gross proceeds of the Proposed Public Offering, including any proceeds from the full or partial exercise of the underwriters’ over-allotment option. As a result, Roth and Craig-Hallum will not be entitled to such fee unless the Company consummates a Business Combination. | |
BCP QUALTEK HOLDCO, LLC | |||
COMMITMENTS | Note 12. Commitments and Contingencies Litigation: Operating leases: | Note 11. Commitments and Contingencies Litigation: Operating leases: The Company has entered into non-cancellable operating leases for various vehicles, equipment, office and warehouse facilities, which contain provisions for future rent increases or rent- free periods. The total amount of rental payments due over the lease terms is charged to rent expense on the straight-line method over the respective term of the lease. The leases expire at various dates through the year 2031. In addition, the agreements generally require the Company to pay executory costs (real estate taxes, insurance, and repairs). Rent expense totaled $12.4 million and $7.8 million for the years ended December 31, 2020 and 2019, respectively. The Company leases two of its locations from lessors who are partially owned by members of the Company. During the years ended December 31, 2020 and 2019, the Company had $681 thousand and $488 thousand, respectively, of rent expense related to these leases. The following is a schedule by year of future minimum rental payments required under the operating lease agreements (in thousands): Years ending December 31: 2021 $ 9,673 2022 8,048 2023 5,807 2024 3,534 2025 1,689 Thereafter 6,468 $ 35,219 |
Related Party Transactions_2__4
Related Party Transactions | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
RELATED PARTY TRANSACTIONS | NOTE 6. RELATED PARTY TRANSACTIONS Founder Shares In February 2019, the Initial Stockholders purchased an aggregate of 100 shares of the Company’s common stock for an aggregate price of $25,000. On May 26, 2020, the Company effected a stock dividend of 28,750 shares of common stock for each share of common stock outstanding, resulting in an aggregate of 2,875,000 shares of common stock being held by the Initial Stockholders (the “Founder Shares”). In February 2021, the Company sold 35,233 Founder Shares to three of the Company’s director nominees (for a total of 105,699 Founder Shares) and 89,093 Founder Shares to affiliates of its sponsor group as part of a larger purchase and resale of securities. The total consideration paid for these shares was $1,247. On February 9, 2021, the Company effected a dividend of 0.50 share for each share outstanding resulting in there being an aggregate of 4,312,500 shares outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 Founder Shares outstanding. All share and per-share amounts have been retroactively restated to reflect the stock dividend. The Founder Shares included an aggregate of up to 375,000 shares subject to forfeiture by the Initial Stockholders to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the Initial Stockholders would collectively own 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Initial Stockholders did not purchase any Public Shares in the Initial Public Offering and excluding the Private Shares). As a result of the underwriters’ election to fully exercise their over-allotment option, no Founder Shares are subject to forfeiture. The sale of the Founders Shares to the Company's director nominees and affiliates of its sponsor group, as described above, is within the scope of FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The fair value of the 194,792 shares sold to the Company’s director nominees and affiliates of its sponsor group was $1,229,138, or $6.31 per share. The Founders Shares were effectively sold subject to a performance condition (i.e., the occurrence of a Business Combination). Compensation expense related to the Founders Shares is recognized only when the performance condition is probable of occurrence. Stock-based compensation will be recognized at the date a Business Combination is considered probable in an amount equal to the number of Founders Shares times the grant date fair value per share (unless subsequently modified) less the amount initially received for the purchase of the Founders Shares. As of September 30, 2021, the Company determined that a Business Combination is not considered probable, and, therefore, no stock-based compensation expense has been recognized. The Initial Stockholders have agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until (1) with respect to 50% of the Founder Shares, the earlier of six months after the completion of a Business Combination and the date on which the closing price of the common stock equals or exceeds $12.50 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 after a Business Combination and (2) with respect to the remaining 50% of the Founder Shares, six months after the completion of a Business Combination, or earlier, in either case, if, subsequent to a Business Combination, the Company completes a liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Promissory Note — Related Party On December 15, 2020, the Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company could borrow up to an aggregate principal amount of $200,000. The Promissory Note was non-interest bearing and payable on the earlier of (i) the consummation of the Initial Public Offering or (ii) the date on which the Company determined not to proceed with the Initial Public Offering. The outstanding balance under the Promissory Note of $200,000 was repaid on March 9, 2021. Borrowings under the Promissory Note are no longer available. Related Party Loans In order to finance transaction costs in connection with a Business Combination, the Initial Stockholders, or certain of the Company’s officers and directors or their affiliates 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 be repaid upon consummation of a Business Combination, without interest. Up to $1,500,000 of such loans may be convertible into units at a price of $10.00 per unit, at the option of the lender. The units would be identical to the Private Units. As of September 30, 2021 and December 31, 2020, there were no amounts outstanding under the Working Capital Loans. On November 3, 2021 the Company entered into a new promissory note with related parties of the Company in the aggregate principal amount of $500,000 in order to finance the Company’s working capital needs (see Note 11). | Note 5 — Related Party Transactions Founder Shares In February 2019, the Initial Stockholders purchased an aggregate of 100 shares of the Company’s common stock for an aggregate price of $25,000. On May 26, 2020, the Company effected a stock dividend of 28,750 shares of common stock for each share of common stock outstanding, resulting in an aggregate of 2,875,000 shares of common stock being held by the Initial Stockholders (the “Founder Shares”). On February 9, 2021, the Company effected a dividend of 0.50 share for each share outstanding resulting in there being an aggregate of 4,312,500 shares outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 Founder Shares outstanding (see Note 8). All share and per-share amounts have been retroactively restated to reflect the stock transactions. The Founder Shares include an aggregate of up to 375,000 shares subject to forfeiture by the Initial Stockholders to the extent that the underwriters’ over-allotment is not exercised in full or in part, so that the Initial Stockholders will collectively own 20% of the Company’s issued and outstanding shares after the Proposed Public Offering (assuming the Initial Stockholders do not purchase any Public Shares in the Proposed Public Offering and excluding the Private Shares). The Initial Stockholders have agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until (1) with respect to 50% of the Founder Shares, the earlier of six months after the completion of a Business Combination and the date on which the closing price of the common stock equals or exceeds $12.50 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 after a Business Combination and (2) with respect to the remaining 50% of the Founder Shares, six months after the completion of a Business Combination, or earlier, in either case, if, subsequent to a Business Combination, the Company completes a liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Promissory Note — Related Party On December 15, 2020, the Company issued an unsecured promissory note to the sponsor (the Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal amount of $200,000. The Promissory Note is non-interest bearing and payable on the earlier of (i) the consummation of the Proposed Public Offering or (ii) the date on which the Company determines not to proceed with the Proposed Public Offering. As of December 31, 2020, there was $200,000 outstanding under the Promissory Note. Related Party Loans In addition, in order to finance transaction costs in connection with a Business Combination, the Initial Stockholders, or certain of the Company’s officers and directors or their affiliates 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 be repaid upon consummation of a Business Combination, without interest. | |
BCP QUALTEK HOLDCO, LLC | |||
RELATED PARTY TRANSACTIONS | Note 13. Related Party Transactions On July 18, 2018, the Company entered into an Advisory Services Agreement with its majority member. The agreement requires quarterly advisory fees of $125 thousand paid at the beginning of each quarter. The Company incurred $751 thousand and $391 thousand in advisory fees for the nine months ended October 2, 2021 and October 3, 2020, respectively. | Note 12. Related Party Transactions On July 18, 2018, the Company entered into an Advisory Services Agreement with its majority member. The agreement requires quarterly advisory fees of $125 thousand paid at the beginning of each quarter. The Company incurred $500 thousand in advisory fees during each of the years ended December 31, 2020 and 2019. |
Subsequent Events_2_3_4
Subsequent Events | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
SUBSEQUENT EVENTS | NOTE 11. SUBSEQUENT EVENTS On November 3, 2021 the Company entered into a new promissory note with related parties of the Company in the aggregate principal amount of $500,000 in order to finance the Company’s working capital needs. The promissory note is non-interest bearing and is not convertible into any securities of the Company and shall be payable upon the consummation of a Business Combination. | Note 8 — Subsequent Events The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to January 8, 2021, the date that the financial statements were available to be issued. Based upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements. On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 Founder Shares outstanding. All share and per-share amounts have been retroactively restated to reflect the stock transactions. | |
BCP QUALTEK HOLDCO, LLC | |||
SUBSEQUENT EVENTS | Note 14. Subsequent Events The Company has evaluated events occurring after October 2, 2021 through February 2, 2022, which represents the date the financial statements were issued. On October 7, 2021, the Company executed an amendment to the Credit Agreement to temporarily increase the maximum availability of the revolving credit facility to the amount of $130.0 million until December 31, 2021. On December 31, 2021, the maximum availability will automatically be reduced to the amount of $103.5 million. On October 15, 2021, the Company purchased 100% of the membership interests of Urban Cable Technology, Inc. (“Urban Cable”), a Pennsylvania based company that provides a range of services, including aerial and underground construction, engineering, multiple dwelling units wiring and rewiring, and fiber placement to broadband and telecom cable operators. The purchase price included a mixture of cash and earn-outs based on pre-determined EBITDA for the years ending 2021, 2022, 2023, and 2024. The acquisition will be recognized as a business combination within our Telecom segment with identifiable assets acquired and liabilities assumed recorded at fair values on the acquisition date. The allocation of the purchase price to the fair value of assets acquired and liabilities assumed is not complete. | Note 15. Subsequent Events The Company has evaluated events occurring after December 31, 2020 through May 11, 2021, which represents the date the financial statements were issued. On January 26, 2021, the Company purchased 100% of the membership interests of Fiber Network Solutions, LLC (“FNS”), a Texas based company that provides new fiber optic construction services, as well as maintenance and repair services to renewable energy, commercial, and utility clientele in the United States. The overall consideration transferred was $25.5 million of cash and rollover equity valued at $2.0 million. The purchase price is subject to adjustment based upon FNS exceeding pre-determined EBITDA thresholds for 2021, 2022, 2023, and 2024, as defined in the agreement, subject to a maximum additional payment of $20.0 million. The cash consideration was funded by the issuance of preferred equity, as well as the issuance of subordinated convertible notes with the majority member. The acquisition will be recognized as a business combination within our Renewables and Recovery Logistics Segment with identifiable assets acquired and liabilities assumed recorded at their estimated fair values on the acquisition date. The allocation of the purchase price to the fair value of assets acquired and liabilities is not complete. |
Nature of Business and Summar_5
Nature of Business and Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Use of estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires the Company’s 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. One of the more significant accounting estimates included in these condensed financial statements is the determination of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly, the actual results could differ significantly from those estimates. | Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company’s 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 expenses during the reporting periods. 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. | |
Recent accounting pronouncements | Recent Accounting Standards In August 2020, the FASB issued ASU No. 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): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. 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 condensed consolidated financial statements. | 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. | |
Income taxes | Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. 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 as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 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. The effective tax rate differs from the statutory tax rate of 21% for the three months and nine months ended September 30, 2021 and 2020, respectively, primarily due to the valuation allowance recorded on the Company’s net operating losses. | Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. 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 as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020 and 2019. 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. The provision for income taxes was deemed to be de minimis for the year ended December 31, 2020, and for the period from February 13, 2019 (inception) through December 31, 2019. | |
Deferred financing costs | Deferred Offering Costs Deferred offering costs consist of legal, accounting and other costs incurred through the balance sheet date that are directly related to the Proposed Public Offering and that will be charged to stockholders’ equity upon the completion of the Proposed Public Offering. Should the Proposed Public Offering prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations. | ||
Concentration of credit risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts. | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations 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. At December 31, 2020 and 2019, the Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. | |
Cash | 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 September 30, 2021 and 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 not have any cash equivalents as of December 31, 2020 and 2019. | |
BCP QUALTEK HOLDCO, LLC | |||
Use of estimates | Use of estimates: There have been no material changes to the Company’s significant accounting policies described in the Company’s Consolidated Financial Report for the year ended December 31, 2020, with the exception of discontinued operations discussed in Note 3. | 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 disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant of these estimates and assumptions relate to the recognition of contract revenues under the cost-to-cost method of progress, fair value estimates, the allowance for doubtful accounts, long-lived assets and intangible assets, asset impairment (including goodwill and other long-lived assets), valuation of assets acquired and liabilities assumed in business combinations, and acquisition-related contingent consideration. These estimates are based on historical experience and various other assumptions that management believes to be reasonable under the current facts and circumstances. Actual results could differ from those estimates. | |
Recent accounting pronouncements | Recent accounting pronouncements: Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) — Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Revenue from Contracts with Customers | Recent accounting pronouncements: Leases (Topic 842) In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments Note 1. Nature of Business and Summary of Significant Accounting Policies (continued) In January 2017, the FASB issued ASU No. 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment | |
Risks and uncertainties | Risks and uncertainties: It is unknown how long the adverse conditions associated with the coronavirus will last and what the complete financial effect will be to the Company. | Risks and uncertainties 11, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The coronavirus and actions taken to mitigate the spread of it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted to amongst other provisions, provide emergency assistance for individuals, families and businesses affected by the coronavirus pandemic. It is unknown how long the adverse conditions associated with the coronavirus will last and what the complete financial effect will be to the Company. | |
Equity award compensation | Equity award compensation: | ||
Revenue recognition | Revenue recognition: Revenue from Contracts with Customers, Under Topic 606, revenue is recognized when, or as, control of promised goods and services is transferred to customers, and the amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for the goods and services transferred. A contractual agreement exists when each party involved approves and commits to, the rights of the parties and payment terms are identified, the agreement has commercial substance, and collectability of consideration is probable. The Company’s services are performed for the sole benefit of its customers, whereby the assets being created or maintained are controlled by the customer and the services the Company performs do not have alternative benefits for the Company. Note 1. Nature of Business and Summary of Significant Accounting Policies (continued) The Company acquires revenue primarily from construction related projects under certain master service and other service agreements contracts. Portions of the contracts include one or multiple performance obligations, which is a contractual promise to deliver a distinct good or transfer of a specific service to a customer. We use different methods of revenue recognition for different types of contracts. For the Company’s projects recognized under the input method, the Company typically identifies two promised goods and services in the contract: (a) delivery of materials, which is recognized as point in time revenue, and (b) installation and construction services, which are recognized over time as related costs are incurred. The Company determined that the materials and the construction services are both considered distinct performance obligations. The Company’s customers are able to benefit from the materials and construction services both on their own and in connection with readily available resources, indicating that both promises are capable of being distinct. The Company further determined that its promises to transfer the materials and to provide the construction services are each separately identifiable from the other promises in the contract. Further, these promises do not represent inputs to a combined output which may represent a single performance obligation as no significant integration services are provided, there is not a high degree of customization, and the promises are not highly interrelated. As a result, the Company concludes that its input method contracts typically include two performance obligations: the sale of materials and construction services. Revenue for construction, project management and site acquisition services are primarily recognized by the Company over time utilizing the cost-to-cost measure of progress, which is an input method, on contracts for specific projects, and for certain master service and other service agreements. The majority of our performance obligations are completed within one year. Under Topic 606, the cost-to-cost measure of progress best depicts the continuous transfer of control of goods or services to the customer, and correspondingly, when performance obligations are satisfied, for these contracts. Revenue for engineering, aerial and underground construction projects are primarily performed under master service agreements and other contracts that contain customer-specified service requirements. The Company has identified multiple performance obligations in these contracts represented by the individual tasks included in the contract, each based on a specific unit of measure. These performance obligations include, for example, the placement of underground or aerial fiber, directional boring, and fiber splicing. The Company allocates total contract consideration to each performance obligation using the expected cost plus a margin approach to estimate the standalone selling price of each performance obligation. The Company’s customers simultaneously receive and consume the benefit provided by the Company, and revenue is recognized over time as services are performed for all performance obligations identified in the contract. Output measures such as units delivered are utilized to assess progress against specific contractual performance obligations. Revenue from fulfillment, maintenance, compliance, and recovery services provided to the telecommunication, cable and utility industries is recognized as the services are rendered. These services are generally performed under master or other service agreements and billed on a contractually agreed price per unit on a work order basis. Each service is a separate performance obligation that is recognized upon completion at a point in time as the service is delivered. Transaction prices for the Company’s contracts may include variable consideration such as contracted materials. Management estimates variable consideration for a performance obligation utilizing estimation methods that it believes best predict the amount of consideration to which the Company will be entitled. Variable consideration is included in the estimated transaction price if it is probable that when the uncertainty associated with the variable consideration is resolved, there will not be a significant reversal of the cumulative amount of revenue that has been recognized. Note 1. Nature of Business and Summary of Significant Accounting Policies (continued) Management’s estimates of variable consideration and the determination of whether to include estimated amounts in the transaction price are based largely on engineering studies, past practices with the customer, specific discussions, correspondence or preliminary negotiations with the customer and all other relevant information that is reasonably available at the time of the estimate. The effect of variable consideration on the transaction price of a performance obligation is typically recognized as an adjustment to revenue on a cumulative catch-up basis, as such variable consideration is generally for services encompassed under the existing contract. To the extent variable consideration reflected in transaction prices are not resolved in accordance with management’s estimates, there could be reductions in, or reversals of, previously recognized revenue. Sales, use and other taxes collected concurrent with revenue-producing activities are excluded from revenue. Most of the Company’s contracts include assurance warranties which do not include any additional distinct services other than the assurance that the services and materials comply with agreed-upon specifications. Therefore, there is not a separate performance obligation for these warranties. For contracts containing more than one performance obligation, the Company allocates the transaction price on a relative standalone selling price (“SSP”) basis. The Company determines SSP based on the price at which the performance obligation is sold separately. If the SSP is not observable through past transactions, the Company estimates the SSP taking into account available information, such as market conditions and internally approved pricing guidelines related to the performance obligation. Revenue generated from fulfillment, maintenance, compliance and recovery services as well as certain performance obligations related to material sales is recognized at a point in time. Point in time revenue accounted for approximately 35% and 32% of consolidated revenue for the years ended December 31, 2020 and 2019, respectively. Substantially all the Company’s other revenue is recognized over time. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the services to be provided. | ||
Income taxes | Income taxes: Accounting Standards Codification (ASC) Topic 740, Income Taxes Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense or benefit and liability in the current year. Based on the Company’s assessment of many factors, including past experience and complex judgments about future events, the Company does not currently anticipate significant changes in its uncertain tax positions over the next 12 months. The Company is not subject to income tax examinations by the U.S. federal, state, or local tax authorities prior to 2017. | ||
Foreign currency | Foreign currency: | ||
Deferred financing costs | Deferred financing costs: | ||
Business combinations | Business combinations: The Company accounts for business combinations under the acquisition method of accounting. The purchase price of each business acquired is allocated to the tangible and intangible assets acquired and the liabilities assumed based on information regarding their respective fair values on the date of acquisition. Any excess of the purchase price over the fair value of the separately identifiable assets acquired and the liabilities assumed is allocated to goodwill. Management determines the fair values used in purchase price allocations for intangible assets based on historical data, estimated discounted future cash flows, expected royalty rates for trademarks and trade names, as well as certain other information. The valuation of assets acquired, and liabilities assumed requires a number of judgments and is subject to revision as additional information about the fair value of assets and liabilities becomes available. Additional information, which existed as of the acquisition date but unknown to us at that time, may become known during the remainder of the measurement period. This measurement period may not exceed 12 months from the acquisition date. The Company recognizes any adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustments are determined. Additionally, in the same period in which adjustments are recognized, the Company records the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of any change to the provisional amounts, calculated as if the accounting adjustment had been completed at the acquisition date. Acquisition costs are expensed as incurred. The results of operations of businesses acquired are included in the consolidated statements of operations and comprehensive loss from their dates of acquisition. | ||
Impairment of long-lived and intangible assets | Impairment of long-lived and intangible assets: | ||
Goodwill and intangible assets | Goodwill and intangible assets: year, or more frequently if events occur that would indicate a potential reduction in the fair value of a reporting unit below its carrying value. The Company performs an annual impairment review of goodwill at the reporting unit level, which is one level below the operating segment. The Company determines the fair value of the reporting units using a weighting of fair values derived in equal proportions from the income approach and market approach valuation methodologies. The income approach uses the discounted cash flow method and the market approach uses the guideline company method. If the Company determines the fair value of the reporting unit’s goodwill is less than its carrying value, an impairment loss is recognized and reflected in the operating income or loss in the consolidated statements of operations and comprehensive loss. Intangible assets consist of customer relationships, trademarks and trade names. Intangible assets that have finite useful lives are amortized on a straight-line basis over their estimated useful lives ranging from 2 years to 15 years. | ||
Property and equipment | Property and equipment: | ||
Inventories | Inventories: | ||
Concentration of credit risk | Concentration of credit risk: The Company maintains certain cash balances with U.S. and Canadian financial institutions and, from time to time, the Company may have balances in excess of the federally insured deposit limit. | ||
Sale of accounts receivable | Sale of accounts receivable: | ||
Contract liabilities | Contract liabilities: | ||
Cash | Cash: | ||
Accounts receivable | Accounts receivable: The Company’s accounts receivable are due primarily from large telecommunication and cable carriers operating within the United States and are carried at original contract amount less an estimate for uncollectible amounts based on historical experience. Management determines the allowance for doubtful receivables by regularly evaluating individual customer receivables and considering a customer’s financial condition and current economic conditions. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received. The Company generally does not require collateral. Accounts receivable are considered past due if any portion of the receivables balance is outstanding for more than one day beyond the contractual due date. The Company does not charge interest on past due accounts. | ||
Contract assets | Contract assets: |
Earnings Per Unit (Tables)_2
Earnings Per Unit (Tables) | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Schedule of basic and diluted earnings per unit | The following table reflects the calculation of basic and diluted net loss per common share (in dollars, except per share amounts): For the Period from 2/13/19 (Inception) Three Months Ended Nine Months Ended Through September 30, 2021 September 30, 2021 September 30, 2020 Redeemable Non-redeemable Redeemable Non-redeemable Non-redeemable common stock common stock common stock common stock common stock Basic and diluted net loss per common share Numerator: Allocation of net loss, as adjusted $ (629,913) $ (179,827) $ (1,052,069) $ (370,379) $ (800) Denominator: Basic and diluted weighted average shares outstanding 11,500,000 3,283,000 8,804,029 3,099,440 2,500,000 Basic and diluted net loss per common share $ (0.05) $ (0.05) $ (0.12) $ (0.12) $ (0.00) Three Months Ended Nine Months Ended September 30, 2020 September 30, 2020 Non-redeemable Non-redeemable common stock common stock Basic and diluted net loss per common share Numerator: Allocation of net loss, as adjusted $ (800) $ (885) Denominator: Basic and diluted weighted average shares outstanding 2,500,000 2,500,000 Basic and diluted net loss per common share $ (0.00) $ (0.00) | ||
BCP QUALTEK HOLDCO, LLC | |||
Schedule of basic and diluted earnings per unit | The basic and diluted earnings per unit calculations for the periods presented (in thousands, except share and per unit amounts): For the Nine Months Ended October 2, 2021 October 3, 2020 Numerator: Loss from continuing operations $ (20,441) $ (37,916) Loss from discontinued operations (8,114) (1,708) Net loss (28,555) (39,624) Less: accrued preferred return (1,638) (2,508) Net loss attributable to Class A Units (basic) $ (30,193) $ (42,132) Denominator: Weighted-average number of units outstanding, basic and diluted Class A – basic and diluted 2,161,951 2,005,824 EPU: Continuing operations – Class A – basic and diluted $ (10.21) $ (20.15) Discontinued operations – Class A – basic and diluted $ (3.75) $ (0.85) Net loss – Class A – basic and diluted $ (13.96) $ (21.00) | 2020 2019 Numerator: Net loss $ (98,087) $ (67,794) Less: accrued preferred return (3,287) (742) Net loss attributable to Class A Units (101,374) (68,536) Denominator: Weighted-average number of units outstanding, basic diluted 2,005,824 1,962,115 Net loss per unit, basic diluted $ (50.54) $ (34.93) |
Discontinued Operations (Tabl_2
Discontinued Operations (Tables) | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
BCP QUALTEK HOLDCO, LLC | ||
Disposal Groups, Including Discontinued Operations [Table Text Block] | The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations in the condensed consolidated balance sheets (in thousands): October 2, 2021 December 31, 2020 Carrying amounts of assets included as part of discontinued operations: Cash $ 1,272 $ 93 Accounts receivable, net of allowance 4,663 5,743 Inventories, net — 28 Prepaid expenses 177 71 Other current assets 2,045 599 Total current assets of discontinued operations $ 8,157 $ 6,534 Property and equipment, net 1,348 3,280 Intangible assets, net — 5,712 Other long-term assets — 280 Total non-current assets of discontinued operations $ 1,348 $ 9,272 Carrying amounts of liabilities included as part of discontinued operations: Current portion of long-term debt and capital lease obligations $ 1,832 $ 920 Accounts payable 519 809 Accrued expenses 1,590 1,636 Total current liabilities of discontinued operations $ 3,941 $ 3,365 Capital lease obligations, net of current portion — 1,793 Total non-current liabilities of discontinued operations $ — $ 1,793 The financial results are presented as loss from discontinued operations on our condensed consolidated statements of operations and comprehensive loss. The following table presents the financial results (in thousands): For the Nine Months Ended October 2, 2021 October 3, 2020 Revenue $ 5,850 $ 13,923 Costs and expenses: — Cost of revenues 8,025 13,222 General and administrative 275 693 Depreciation and amortization 6,667 1,566 Total costs and expenses 14,967 15,481 Loss from operations of discontinued operations (9,117) (1,558) Other income (expense): Gain on sale/ disposal of property and equipment 1,101 — Interest expense (98) (150) Loss from discontinued operations $ (8,114) $ (1,708) | The following table presents the aggregate carrying amounts of the classes of assets and liabilities of discontinued operations in the consolidated balance sheets as of December 31, 2020 and 2019 (in thousands): 2020 2019 Carrying amounts of assets included as part of discontinued operations: Cash $ 93 $ 237 Accounts receivable, net of allowance 5,743 6,223 Inventories, net 28 30 Prepaid expenses 71 223 Other current assets 599 23 Total current assets of discontinued operations $ 6,534 $ 6,736 Property and equipment, net 3,280 4,585 Intangible assets, net 5,712 6,275 Other long-term assets 280 265 Total non-current assets of discontinued operations $ 9,272 $ 11,125 Carrying amounts of liabilities included as part of discontinued operations: Current portion of long-term debt and capital lease obligations $ 920 $ 1,059 Accounts payable 809 1,180 Accrued expenses 1,636 607 Total current liabilities of discontinued operations $ 3,365 $ 2,846 Capital lease obligations, net of current portion 1,793 2,634 Total non-current liabilities of discontinued operations $ 1,793 $ 2,634 The financial results are presented as loss from discontinued operations on our consolidated statements of operations and comprehensive loss for the years ended December 31, 2020 and 2019. The following table presents the financial results (in thousands): 2020 2019 Revenue $ 17,481 $ 21,561 Costs and expenses: Cost of revenues 18,331 19,807 General and administrative 804 939 Change in fair value of contingent consideration — (266) Impairment of goodwill — 5,119 Depreciation and amortization 2,022 2,012 Total costs and expenses 21,157 27,611 Loss from operations of discontinued operations (3,676) (6,050) Other income (expense): Gain on sale/ disposal of property and equipment — 1 Interest expense (189) (213) Loss from discontinued operations $ (3,865) $ (6,262) |
Acquisitions (Tables)_2
Acquisitions (Tables) - BCP QUALTEK HOLDCO, LLC | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
Schedule of fair value of the assets and liabilities | The following table summarizes the fair value of the assets and liabilities acquired at the date of the acquisitions (in thousands): FNS Broken Arrow Concurrent Purchase consideration: Cash paid $ 20,059 $ 5,000 $ 13,828 Rollover equity 2,000 — 6,000 Contingent consideration 8,200 5,735 10,210 Acquisition debt — — 14,143 $ 30,259 $ 10,735 $ 44,181 Purchase price allocations: Cash $ — $ — $ 1,830 Accounts receivable — 5,121 8,402 Inventories — 133 25 Prepaid expenses — 94 — Other current assets — — 10 Property and equipment 9,978 219 4,164 Other long-term assets — 32 60 Customer relationships 17,370 4,690 24,186 Trademarks and trade names 270 80 1,330 Goodwill 8,082 4,433 10,738 35,700 14,802 50,745 Accounts payable — (1,853) (1,932) Accrued expenses — (156) (830) Contract liabilities — (2,058) (639) Capital lease obligations (5,441) — (3,163) $ 30,259 $ 10,735 $ 44,181 | |
Vertical Limit | ||
Schedule of fair value of the assets and liabilities | The following table summarizes the fair value of the assets and liabilities acquired at the date of the acquisition (in thousands): Purchase consideration: Cash paid $ 16,250 Contingent consideration 7,677 $ 23,927 Purchase price allocations: Accounts receivable $ 14,815 Inventories 65 Property and equipment 1,195 Prepaid expenses 72 Trademarks and trade names 1,900 Customer relationships 6,100 Goodwill 7,093 Other long-term assets 46 31,286 Accounts payable (5,621) Accrued expenses (1,688) Capital lease obligations (50) $ 23,927 | |
Vinculums | ||
Schedule of fair value of the assets and liabilities | The following table summarizes the fair value of the assets and liabilities acquired at the date of the acquisition (in thousands): Purchase consideration: Cash paid $ 43,595 Rollover equity 12,500 Contingent consideration 22,615 $ 78,710 Purchase price allocations: Accounts receivable $ 37,574 Inventories 1,668 Prepaid expenses 318 Property and equipment 990 Trademarks and trade names 4,500 Customer relationships 35,100 Goodwill 32,581 Other long-term assets 79 112,810 Accounts payable (14,830) Accrued expenses (12,706) Contract liabilities (6,190) Capital lease obligations (374) $ 78,710 | |
Aerial | ||
Schedule of fair value of the assets and liabilities | The following table summarizes the fair value of the assets and liabilities acquired at the date of the acquisition (in thousands): Purchase consideration: Cash paid $ 16,497 Rollover equity 1,000 Contingent consideration 5,825 Timing payments 1,447 $ 24,769 Purchase price allocations: Accounts receivable $ 8,847 Inventories 150 Prepaid expenses 167 Property and equipment 1,446 Trademarks and trade names 340 Customer relationships 3,800 Goodwill 14,698 Other long-term assets 28 29,476 Accounts payable (2,254) Accrued expenses (789) Contract liabilities (648) Capital lease obligations (1,016) $ 24,769 |
Property and Equipment (Table_2
Property and Equipment (Tables) | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
BCP QUALTEK HOLDCO, LLC | ||
Schedule of Property and Equipment | Property and equipment consisted of the following (in thousands): October 2, December 31, 2021 2020 Office furniture $ 1,331 $ 1,249 Computers 1,591 1,217 Machinery, equipment and vehicles 15,482 10,275 Land 140 — Leasehold improvements 4,695 3,354 Software 2,281 2,199 Assets under capital lease 41,349 32,153 Construction in process 1,263 605 68,132 51,052 Less: accumulated depreciation (25,945) (17,258) Property and equipment, net $ 42,187 $ 33,794 | Property and equipment consisted of the following as of December 31, 2020 and 2019 (in thousands): 2020 2019 Office furniture $ 1,249 $ 898 Computers 1,217 1,051 Machinery, equipment and vehicles 10,275 6,532 Leasehold improvements 3,354 792 Software 2,199 1,903 Assets under capital lease 32,153 15,226 Construction in process 605 246 51,052 26,648 Less: accumulated depreciation (17,258) (8,475) Property and equipment, net $ 33,794 $ 18,173 |
Accounts Receivable, Net of A_7
Accounts Receivable, Net of Allowance, Contract Assets and Liabilities, and Customer Credit Concentration (Tables) - BCP QUALTEK HOLDCO, LLC | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
Schedule of Accounts receivable, net, classified as current | Accounts receivable, net classified as current, consisted of the following (in thousands): October 2, December 31, 2021 2020 Trade accounts receivable $ 97,506 $ 44,419 Contract assets 157,155 134,311 254,661 178,730 Less: allowance for doubtful accounts (5,397) (3,933) Accounts receivable, net $ 249,264 $ 174,797 | Accounts receivable, net, classified as current, consisted of the following as of December 31, 2020 and 2019 (in thousands): 2020 2019 Trade accounts receivable $ 44,419 $ 61,365 Contract assets 134,311 173,734 178,730 235,099 Less: allowance for doubtful accounts (3,933) (6,440) Accounts receivable, net $ 174,797 $ 228,659 |
Schedule of Net contract assets | Net contract assets consisted of the following (in thousands): October 2, December 31, 2021 2020 Contract assets $ 157,155 $ 134,311 Contract liabilities (14,950) (14,945) Contract assets, net $ 142,205 $ 119,366 | Net contract assets consisted of the following as of December 31, 2020 and 2019 (in thousands): 2020 2019 Contract assets $ 134,311 $ 173,734 Contract liabilities (14,945) (18,470) Contract assets, net $ 119,366 $ 155,264 |
Schedule of Customer Credit Concentration | Customer Credit Concentration Customers whose combined amounts of accounts receivable and contract assets exceeded 10% of total combined accounts receivable and contract assets were as follows (in thousands): October 2, 2021 December 31, 2020 Amounts % of Total Amounts % of Total AT&T $ 61,797 24.3 % $ 81,796 45.8 % Entergy 67,776 26.6 % * * T-Mobile 34,447 13.5 % * * Verizon 47,892 18.8 % 65,346 36.6 % Total $ 211,911 83.2 % $ 147,142 82.3 % * Accounts receivable and contract assets from Entergy and T-Mobile did not exceed 10% of total combined accounts receivable and contract assets for the year ended December 31, 2020. | Customers whose combined amounts of accounts receivable and contract assets exceeded 10% of total combined accounts receivable and contract assets as of December 31, 2020 and 2019 were as follows (in thousands): 2020 2019 Amount % of Total Amounts % of Total AT&T $ 81,796 45.8 % $ 120,145 51.1 % Verizon 65,346 36.6 % 69,552 29.6 % Total $ 147,142 82.3 % $ 189,697 80.8 % |
Goodwill and Intangible Asset_7
Goodwill and Intangible Assets (Tables) - BCP QUALTEK HOLDCO, LLC | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
Schedule of Goodwill | Changes in the carrying amount of goodwill by reportable segment is as follows (in thousands): Renewables and Recovery Logistics Telecom Total Goodwill as of December 31, 2020(a) $ 13,598 $ 44,924 $ 58,522 Additions from acquisitions (Note 4) 8,082 15,171 23,253 Goodwill as of October 2, 2021(a) $ 21,680 $ 60,095 $ 81,775 (a) Goodwill is net of accumulated impairment charges of $36,934 thousand in the Telecom segment. There have been no impairment charges within the Renewables and Recovery Logistics segment. | Goodwill by reportable segment consisted of the following as of December 31, 2020 and 2019 (in thousands): Renewables and Recovery Logistics Telecom Total Goodwill as of January 1, 2019 $ 13,598 $ 27,485 $ 41,083 Additions from acquistions — 53,552 53,552 Impairment loss — (8,132) (8,132) Goodwill as of December 31, 2019 $ 13,598 $ 72,905 $ 86,503 Measurement period adjustments, net — 821 821 Impairment loss — (28,802) (28,802) Goodwill as of December 31, 2020 $ 13,598 $ 44,924 $ 58,522 |
Schedule of Intangible assets | Intangible Assets Intangible assets consisted of the following (in thousands): October 2, 2021 Weighted Average Gross Remaining carrying Accumulated Net carrying Useful Life amount amortization amount Customer relationships 9.7 $ 414,446 $ (89,681) $ 324,765 Trade names 9.7 60,200 (20,243) 39,957 $ 474,646 $ (109,924) $ 364,722 December 31, 2020 Weighted Average Gross Remaining carrying Accumulated Net carrying Useful Life amount amortization amount Customer relationships 10.8 $ 368,200 $ (65,868) $ 302,332 Trade names 9.9 58,519 (15,035) 43,484 $ 426,719 $ (80,903) $ 345,816 | Intangible assets consisted of the following as of December 31, 2020 and 2019 (in thousands): 2020 Weighted Average Remaining Useful Gross carrying Accumulated Life amount amortization Net carrying amount Customer relationships 10.8 $ 368,200 $ (65,868) $ 302,332 Trade names 9.9 58,519 (15,035) 43,484 $ 426,719 $ (80,903) $ 345,816 2019 Weighted Average Remaining Useful Gross carrying Accumulated Life amount amortization Net carrying amount Customer relationships 11.8 $ 368,200 $ (36,782) $ 331,418 Trade names 10.5 58,519 (8,364) 50,155 $ 426,719 $ (45,146) $ 381,573 |
Schedule of estimated future amortization expense related to the intangible assets | The following table provides estimated future amortization expense related to the intangible assets (in thousands): Years ending December 31: 2021 $ 35,585 2022 35,585 2023 34,294 2024 32,245 2025 31,289 Thereafter 176,818 $ 345,816 |
Debt and Capital Lease Obliga_2
Debt and Capital Lease Obligations (Tables) - BCP QUALTEK HOLDCO, LLC | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
Schedule of carrying values and estimated fair values of debt instruments and capital lease obligations | Debt outstanding, whose carrying value approximates fair market value due to variable interest rates based on current rates available to the Company for similar instruments, was as follows (in thousands): October 2, December 31, 2021 2020 Line of credit $ 96,242 $ 59,837 Term loan 353,872 361,045 Acquisition debt 34,718 10,575 Convertible notes – related party 30,568 — Convertible notes – June 2021 44,400 — Capital lease obligations 25,620 23,069 Less: unamortized financing fees (12,873) (13,854) Less: convertible debt discount (7,498) — 565,049 440,672 Less: current maturities of long-term debt (110,395) (20,139) Less: current portion of capital lease obligations, net of capital lease interest (9,150) (7,110) $ 445,504 $ 413,423 | Debt outstanding as of December 31, 2020 and 2019, whose carrying value approximates fair market value due to variable interest rates based on current rates available to the Company for similar instruments, was as follows (in thousands): 2020 2019 Line of credit $ 59,837 $ 46,554 Term loan 361,045 370,609 Acquistion debt 10,575 — Capital lease obligations 25,751 11,959 Less: amounts representing interest (2,682) (1,327) Less: unamortized financing fees (13,854) (16,830) 440,672 410,965 Less: current portion of long-term debt (20,139) (9,564) Less: current portion of capital lease obliations, net of capital lease interest (7,110) (3,902) $ 413,423 $ 397,499 |
Schedule of minimum payments of long-term debt and capital lease obligations | The minimum payments of the Company’s long-term debt and capital lease obligations are as follows (in thousands): Capital Line of Term Acquisition lease credit loan debt obligations Total 2021 $ — $ 9,564 $ 10,575 $ 8,287 $ 28,426 2022 — 9,564 — 7,318 16,882 2023 59,837 9,564 — 6,397 75,798 2024 — 9,564 — 3,105 12,669 2025 — 9,564 — 644 10,208 Thereafter — 313,225 — — 313,225 Total $ 59,837 $ 361,045 $ 10,575 $ 25,751 $ 457,208 |
Fair Value Measurements (Tabl_3
Fair Value Measurements (Tables) | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Summary of changes in fair value of Level 3 financial liabilities | Warrant Liabilities Fair value as of March 5, 2021 (Initial Measurement) $ 91,800 Change in fair value (9,180) Fair value as of March 31, 2021 82,620 Change in fair value 232,560 Fair value as of June 30, 2021 $ 315,180 Change in fair value (97,920) Fair value as of September 30, 2021 $ 217,260 | ||
BCP QUALTEK HOLDCO, LLC | |||
Schedule of fair value of the Company's financial liabilities that are measured at fair value on recurring basis | Fair Value at October 2, 2021 (in thousands) Carrying Value Level 1 Level 2 Level 3 Financial liabilities Contingent consideration $ 28,429 $ — $ — $ 28,429 $ 28,429 $ — $ — $ 28,429 Fair Value at December 31, 2020 (in thousands) Carrying Value Level 1 Level 2 Level 3 Financial liabilities Contingent consideration $ 18,129 $ — $ — $ 18,129 $ 18,129 $ — $ — $ 18,129 | Fair Value at December 31, 2020 Carrying (in thousands) Value Level 1 Level 2 Level 3 Financial liabilities Contingent consideration – Vertical Limit $ 4,711 $ — $ — $ 4,711 Contingent consideration – Vinculums 13,418 — — 13,418 $ 18,129 $ — $ — $ 18,129 Fair Value at December 31, 2019 Carrying (in thousands) Value Level 1 Level 2 Level 3 Financial liabilities Contingent consideration – RLI $ 2,075 $ — $ — $ 2,075 Contingent consideration – Vertical Limit 9,195 — — 9,195 Contingent consideration – Vinculums 22,973 — — 22,973 Contingent consideration – Aerial 5,876 — — 5,876 $ 40,119 $ — $ — $ 40,119 | |
Summary of changes in fair value of Level 3 financial liabilities | The following table sets forth a summary of the changes in fair value of the Company’s Level 3 financial liabilities: January 1, 2021 18,129 Acquisitions (see Note 4) 24,145 Accretion 699 Change in fair value (4,544) Reclassification to acquisition debt (10,000) October 2, 2021 $ 28,429 January 1, 2020 $ 40,119 Payment of contingent consideration (6,000) Accretion 1,306 October 3, 2020 $ 35,425 | January 1, 2019 $ 10,130 Acquisitions (see Note 3) 36,117 Payment of contingent consideration (13,108) Accretion 832 Change in fair value 6,148 December 31, 2019 40,119 Payment of contingent consideration (6,000) Accretion 1,666 Reclassification to acquisition debt (10,575) Change in fair value (7,081) December 31, 2020 $ 18,129 |
Segments and Related Informat_9
Segments and Related Information (Tables) - BCP QUALTEK HOLDCO, LLC | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Dec. 31, 2020 | |
Summarized financial information for the Company's reportable segments | For the Nine Months Ended Revenue: October 2, 2021 October 3, 2020 Telecom $ 360,020 $ 468,729 Renewables and Recovery Logistics 105,164 55,351 Total consolidated revenue $ 465,184 $ 524,080 October 2, December 31, Total Assets: 2021 2020 Telecom $ 602,749 $ 579,147 Renewables and Recovery Logistics 151,926 55,370 Corporate 14,890 6,351 Total consolidated assets $ 769,565 $ 640,868 For the Nine Months Ended Capital Expenditures: October 2, 2021 October 3, 2020 Telecom $ 1,843 $ 6,712 Renewables and Recovery Logistics 248 7,936 Corporate 1,059 845 Total consolidated capital expenditures $ 3,150 $ 15,493 | Summarized financial information for the Company’s reportable segments is presented and reconciled to the Company’s consolidated financial information in the following tables, all of which are presented in thousands. 2020 2019 Revenue: Telecom $ 587,614 $ 568,342 Renewables and Recovery Logistics 68,910 30,926 Total consolidated revenue $ 656,524 $ 599,268 2020 2019 Total Assets: Telecom $ 579,147 $ 697,991 Renewables and Recovery Logistics 55,370 45,642 Corporate 6,351 3,597 Total consolidated assets $ 640,868 $ 747,230 2020 2019 Capital Expenditures: Telecom $ 8,831 $ 10,693 Renewables and Recovery Logistics 12,251 1,090 Corporate 2,015 957 Total consolidated capital expenditures $ 23,097 $ 12,740 2020 2019 Amortization and Depreciation: Amortization and depreciation Telecom $ 40,588 $ 35,411 Renewables and Recovery Logistics 5,259 4,250 Corporate 628 442 Total consolidated amortization and depreciation $ 46,475 $ 40,103 |
Reconciliation of Net Loss from Segments to Consolidated | For the Nine Months Ended Amortization and Depreciation: October 2, 2021 October 3, 2020 Amortization and depreciation Telecom $ 29,767 $ 30,539 Renewables and Recovery Logistics 8,644 3,734 Corporate 726 487 Total consolidated amortization and depreciation $ 39,136 $ 34,761 For the Nine Months Ended Adjusted EBITDA Reconciliation: October 2, 2021 October 3, 2020 Telecom adjusted EBITDA $ 26,907 $ 16,028 Renewables and Recovery Logistics adjusted EBITDA 42,181 24,227 Corporate adjusted EBITDA (13,097) (13,628) Total adjusted EBITDA $ 55,991 $ 26,627 Less: Management fees (751) (391) Transaction expenses (2,875) (567) Change in fair value of contingent consideration 4,544 — Depreciation and amortization (39,136) (34,761) Interest expense (35,778) (28,824) Loss on extinguishment of convertible notes (2,436) — $ (20,441) $ (37,916) | 2020 2019 EBITDA Reconciliation: Telecom adjusted EBITDA $ 2,409 $ 37,063 Renewables and Recovery Logistics adjusted EBITDA 28,943 11,442 Corporate adjusted EBITDA (18,213) (16,635) Total adjusted EBITDA 13,139 31,870 Less: Management fees (518) (541) Transaction expenses (988) (4,257) Change in fair value of contingent consideration 7,081 (6,149) Impairment of goodwill (28,802) (8,132) Impairment of long-lived assets — (840) Depreciation and amortization (46,475) (40,103) Interest expense (37,659) (33,380) Net loss $ (94,222) $ (61,532) |
Schedule of Revenue and Long-lived Assets by Geography | For the Nine Months Ended Revenue by Service Offerings: October 2, 2021 October 3, 2020 Telecom Wireless $ 278,125 $ 359,792 Telecom Wireline 73,296 108,937 Telecom Power 8,598 — Renewables 25,086 — Recovery Logistics 80,079 55,351 Total $ 465,184 $ 524,080 | |
Schedule of Revenue from Significant Customers | Revenue concentration information for significant customers as a percentage of total consolidated revenue was as follows (in thousands): For the Nine Months Ended October 2, 2021 October 3, 2020 Customers: Amount % of Total Amount % of Total AT&T $ 189,381 41 % $ 282,807 54 % Entergy 67,776 15 % * * T-Mobile 59,369 13 % * * Verizon 51,773 11 % 98,165 19 % Total $ 368,299 80 % $ 380,972 73 % * Revenue from Entergy and T-Mobile did not exceed 10% of total consolidated revenue for the nine months ended October 3, 2020. | Revenue for the years ended December 31, 2020 and 2019 include revenue concentration from significant customers as follows (in thousands): 2020 2019 Amount % of Total Amount % of Total Customers: AT&T $ 356,026 54 % $ 318,913 53 % Verizon 116,444 18 % 117,927 20 % Total $ 472,470 72 % $ 436,840 73 % |
Commitments and Contingencies_4
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
BCP QUALTEK HOLDCO, LLC | |
Schedule of of future minimum rental payments under the operating lease agreements | The following is a schedule by year of future minimum rental payments required under the operating lease agreements (in thousands): Years ending December 31: 2021 $ 9,673 2022 8,048 2023 5,807 2024 3,534 2025 1,689 Thereafter 6,468 $ 35,219 |
Nature of Business and Summar_6
Nature of Business and Summary of Significant Accounting Policies (Details) - BCP QUALTEK HOLDCO, LLC $ in Millions | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021segment | Dec. 31, 2020USD ($)segment | Dec. 31, 2019USD ($) | |
Number of reportable segments | segment | 2 | 2 | |
Factoring related interest expense | $ | $ 1.8 | $ 1.7 | |
Point in time | |||
Percentage of revenue on consolidated revenue | 35.00% | 32.00% |
Earnings Per Unit (Details)_2
Earnings Per Unit (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 11 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2021 | Sep. 30, 2020 | Oct. 02, 2021 | Sep. 30, 2021 | Oct. 03, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Net Income (Loss) Available to Common Stockholders, Basic [Abstract] | |||||||||||
Net loss | $ (809,740) | $ (800) | $ (1,422,448) | $ (885) | $ (1,225) | $ (975) | |||||
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | |||||||||||
Basic weighted average shares outstanding | [1] | 2,500,000 | 2,500,000 | ||||||||
Diluted weighted average shares outstanding | [1] | 2,500,000 | 2,500,000 | ||||||||
Basic net income per share | $ 0 | $ 0 | |||||||||
Diluted net income per share | $ 0 | $ 0 | |||||||||
BCP QUALTEK HOLDCO, LLC | |||||||||||
Net Income (Loss) Available to Common Stockholders, Basic [Abstract] | |||||||||||
Loss from continuing operations | $ (20,441,000) | $ (37,916,000) | $ 94,222,000 | $ 61,532,000 | |||||||
Loss from discontinued operations | (8,114,000) | (1,708,000) | 3,865,000 | 6,262,000 | |||||||
Net loss | (28,555,000) | (39,624,000) | $ (28,555,000) | (98,087,000) | (67,794,000) | ||||||
Less: accrued preferred return | (1,638,000) | (2,508,000) | (3,287,000) | (742,000) | |||||||
Net loss attributable to Class A Units (basic) | $ (30,193,000) | $ (42,132,000) | $ 101,374,000 | $ 68,536,000 | |||||||
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | |||||||||||
Basic weighted average shares outstanding | 2,161,951 | 2,005,824 | 2,005,824 | 1,962,115 | |||||||
Diluted weighted average shares outstanding | 2,005,824 | 1,962,115 | |||||||||
Continuing operations - basic | $ (10.21) | $ (20.15) | |||||||||
Continuing operations - diluted | (10.21) | (20.15) | |||||||||
Discontinued operations - basic | (3.75) | (0.85) | |||||||||
Discontinued operations - diluted | (3.75) | (0.85) | |||||||||
Basic net income per share | $ (13.96) | $ (21) | $ (48.61) | $ (31.74) | |||||||
Diluted net income per share | $ (50.54) | $ (34.93) | |||||||||
BCP QUALTEK HOLDCO, LLC | Common Stock A | |||||||||||
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | |||||||||||
Basic weighted average shares outstanding | 2,161,951 | 2,005,824 | |||||||||
Diluted weighted average shares outstanding | 2,161,951 | 2,005,824 | |||||||||
Continuing operations - basic | $ (10.21) | $ (20.15) | |||||||||
Continuing operations - diluted | (10.21) | (20.15) | |||||||||
Discontinued operations - basic | (3.75) | (0.85) | |||||||||
Discontinued operations - diluted | (3.75) | (0.85) | |||||||||
Basic net income per share | (13.96) | (21) | |||||||||
Diluted net income per share | $ (13.96) | $ (21) | |||||||||
[1] | Includes up to 375,000 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 shares of common stock outstanding (see Notes 5 and 8). |
Discontinued Operations (Detail
Discontinued Operations (Details) $ in Thousands | 9 Months Ended |
Oct. 02, 2021USD ($) | |
Canadian subsidiary | Discontinued Operations, Disposed of by Sale | BCP QUALTEK HOLDCO, LLC | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Accelerated amortization charge recognized | $ 5,239 |
Discontinued Operations - Conde
Discontinued Operations - Condensed consolidated balance sheets (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | Oct. 02, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Carrying amounts of assets included as part of discontinued operations: | |||
Other current assets | $ 6,534 | $ 6,736 | |
Total current assets of discontinued operations | $ 8,157 | 6,534 | |
Other long-term assets | 9,272 | 11,125 | |
Total non-current assets of discontinued operations | 1,348 | 9,272 | |
Carrying amounts of liabilities included as part of discontinued operations: | |||
Total current liabilities of discontinued operations | 3,941 | 3,365 | 2,846 |
Total non-current liabilities of discontinued operations | 1,793 | 2,634 | |
Discontinued Operations, Disposed of by Sale | |||
Carrying amounts of assets included as part of discontinued operations: | |||
Cash | 93 | 237 | |
Accounts receivable, net of allowance | 5,743 | 6,223 | |
Inventories, net | 28 | 30 | |
Prepaid expenses | 71 | 223 | |
Other current assets | 599 | 23 | |
Total current assets of discontinued operations | 6,534 | 6,736 | |
Property and equipment, net | 3,280 | 4,585 | |
Intangible assets, net | 5,712 | 6,275 | |
Other long-term assets | 280 | 265 | |
Total non-current assets of discontinued operations | 9,272 | 11,125 | |
Carrying amounts of liabilities included as part of discontinued operations: | |||
Current portion of long-term debt and capital lease obligations | 920 | 1,059 | |
Accounts payable | 809 | 1,180 | |
Accrued expenses | 1,636 | 607 | |
Total current liabilities of discontinued operations | 3,365 | 2,846 | |
Capital lease obligations, net of current portion | 1,793 | 2,634 | |
Total non-current liabilities of discontinued operations | 1,793 | $ 2,634 | |
Canadian subsidiary | Discontinued Operations, Disposed of by Sale | |||
Carrying amounts of assets included as part of discontinued operations: | |||
Cash | 1,272 | 93 | |
Accounts receivable, net of allowance | 4,663 | 5,743 | |
Inventories, net | 28 | ||
Prepaid expenses | 177 | 71 | |
Other current assets | 2,045 | 599 | |
Total current assets of discontinued operations | 8,157 | 6,534 | |
Property and equipment, net | 1,348 | 3,280 | |
Intangible assets, net | 5,712 | ||
Other long-term assets | 280 | ||
Total non-current assets of discontinued operations | 1,348 | 9,272 | |
Carrying amounts of liabilities included as part of discontinued operations: | |||
Current portion of long-term debt and capital lease obligations | 1,832 | 920 | |
Accounts payable | 519 | 809 | |
Accrued expenses | 1,590 | 1,636 | |
Total current liabilities of discontinued operations | $ 3,941 | 3,365 | |
Capital lease obligations, net of current portion | 1,793 | ||
Total non-current liabilities of discontinued operations | $ 1,793 |
Discontinued Operations - Con_2
Discontinued Operations - Condensed consolidated statements of operations and comprehensive loss (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Other income (expense): | ||||
Loss from discontinued operations | $ (8,114) | $ (1,708) | $ (3,865) | $ (6,262) |
Discontinued Operations, Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenue | 17,481 | 21,561 | ||
Costs and expenses: | ||||
Cost of revenues | 18,331 | 19,807 | ||
General and administrative | 804 | 939 | ||
Depreciation and amortization | 2,022 | 2,012 | ||
Total costs and expenses | 21,157 | 27,611 | ||
Loss from operations of discontinued operations | (3,676) | (6,050) | ||
Other income (expense): | ||||
Gain on sale/ disposal of property and equipment | 1 | |||
Interest expense | (189) | (213) | ||
Loss from discontinued operations | $ 3,865 | $ 6,262 | ||
Canadian subsidiary | Discontinued Operations, Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenue | 5,850 | 13,923 | ||
Costs and expenses: | ||||
Cost of revenues | 8,025 | 13,222 | ||
General and administrative | 275 | 693 | ||
Depreciation and amortization | 6,667 | 1,566 | ||
Total costs and expenses | 14,967 | 15,481 | ||
Loss from operations of discontinued operations | (9,117) | (1,558) | ||
Other income (expense): | ||||
Gain on sale/ disposal of property and equipment | 1,101 | |||
Interest expense | (98) | (150) | ||
Loss from discontinued operations | $ (8,114) | $ (1,708) |
Acquisitions (Details)_2
Acquisitions (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | Aug. 30, 2021 | Aug. 06, 2021 | Jan. 26, 2021 | Oct. 18, 2020 | Dec. 31, 2019 | Oct. 18, 2019 | Oct. 04, 2019 | Mar. 29, 2019 | Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Purchase consideration: | |||||||||||||
Cash paid | $ 37,057 | $ 76,342 | |||||||||||
Contingent consideration | $ 6,000 | $ 6,000 | 7,870 | ||||||||||
Purchase price allocations: | |||||||||||||
Goodwill | $ 86,503 | $ 81,775 | 58,522 | $ 86,503 | $ 41,083 | ||||||||
Vertical Limit | |||||||||||||
Purchase consideration: | |||||||||||||
Cash paid | $ 16,250 | ||||||||||||
Contingent consideration | $ 3,000 | 7,677 | |||||||||||
Business combination consideration transferred | 23,927 | ||||||||||||
Purchase price allocations: | |||||||||||||
Cash | 14,815 | ||||||||||||
Inventories | 65 | ||||||||||||
Prepaid expenses | 72 | ||||||||||||
Property and equipment | 1,195 | ||||||||||||
Other long-term assets | 46 | ||||||||||||
Goodwill | 7,093 | ||||||||||||
Business combination recognized identifiable assets acquired and liabilities assumed, Assets including goodwill, Total | 31,286 | ||||||||||||
Accounts payable | (5,621) | ||||||||||||
Accrued expenses | 1,688 | ||||||||||||
Capital lease obligations | (50) | ||||||||||||
Business combination recognized identifiable assets acquired goodwill and liabilities assumed, Net, Total | 23,927 | ||||||||||||
Vertical Limit | Customer relationships | |||||||||||||
Purchase price allocations: | |||||||||||||
Intangibles | 6,100 | ||||||||||||
Vertical Limit | Trademarks and tradenames | |||||||||||||
Purchase price allocations: | |||||||||||||
Intangibles | $ 1,900 | ||||||||||||
Vinculums | |||||||||||||
Purchase consideration: | |||||||||||||
Cash paid | $ 43,595 | ||||||||||||
Rollover equity | 12,500 | ||||||||||||
Contingent consideration | 22,615 | ||||||||||||
Business combination consideration transferred | 78,710 | ||||||||||||
Purchase price allocations: | |||||||||||||
Cash | 37,574 | ||||||||||||
Inventories | 1,668 | ||||||||||||
Prepaid expenses | 318 | ||||||||||||
Property and equipment | 990 | ||||||||||||
Other long-term assets | 79 | ||||||||||||
Goodwill | 32,581 | ||||||||||||
Business combination recognized identifiable assets acquired and liabilities assumed, Assets including goodwill, Total | 112,810 | ||||||||||||
Accounts payable | (14,830) | ||||||||||||
Accrued expenses | 12,706 | ||||||||||||
Capital lease obligations | (374) | ||||||||||||
Business combination recognized identifiable assets acquired goodwill and liabilities assumed, Net, Total | 78,710 | ||||||||||||
Vinculums | Customer relationships | |||||||||||||
Purchase price allocations: | |||||||||||||
Intangibles | 35,100 | ||||||||||||
Vinculums | Trademarks and tradenames | |||||||||||||
Purchase price allocations: | |||||||||||||
Intangibles | $ 4,500 | ||||||||||||
Aerial | |||||||||||||
Purchase consideration: | |||||||||||||
Cash paid | $ 16,497 | ||||||||||||
Rollover equity | 1,000 | ||||||||||||
Contingent consideration | 5,825 | $ 6,000 | |||||||||||
Timing payments | $ 1,500 | 1,447 | |||||||||||
Business combination consideration transferred | 24,769 | ||||||||||||
Purchase price allocations: | |||||||||||||
Cash | 8,847 | ||||||||||||
Inventories | 150 | ||||||||||||
Prepaid expenses | 167 | ||||||||||||
Property and equipment | 1,446 | ||||||||||||
Other long-term assets | 28 | ||||||||||||
Goodwill | 14,698 | ||||||||||||
Business combination recognized identifiable assets acquired and liabilities assumed, Assets including goodwill, Total | 29,476 | ||||||||||||
Accounts payable | (2,254) | ||||||||||||
Accrued expenses | 789 | ||||||||||||
Capital lease obligations | (1,016) | ||||||||||||
Business combination recognized identifiable assets acquired goodwill and liabilities assumed, Net, Total | 24,769 | ||||||||||||
Aerial | Customer relationships | |||||||||||||
Purchase price allocations: | |||||||||||||
Intangibles | 3,800 | ||||||||||||
Aerial | Trademarks and tradenames | |||||||||||||
Purchase price allocations: | |||||||||||||
Intangibles | $ 340 | ||||||||||||
Fiber Network Solutions Acquisition | |||||||||||||
Purchase consideration: | |||||||||||||
Cash paid | $ 20,059 | ||||||||||||
Rollover equity | 2,000 | ||||||||||||
Contingent consideration | 8,200 | ||||||||||||
Business combination consideration transferred | 30,259 | ||||||||||||
Purchase price allocations: | |||||||||||||
Property and equipment | 9,978 | ||||||||||||
Goodwill | 8,082 | ||||||||||||
Business combination recognized identifiable assets acquired and liabilities assumed, Assets including goodwill, Total | 35,700 | ||||||||||||
Capital lease obligations | (5,441) | ||||||||||||
Business combination recognized identifiable assets acquired goodwill and liabilities assumed, Net, Total | 30,259 | ||||||||||||
Fiber Network Solutions Acquisition | Customer relationships | |||||||||||||
Purchase price allocations: | |||||||||||||
Intangibles | 17,370 | ||||||||||||
Fiber Network Solutions Acquisition | Trademarks and tradenames | |||||||||||||
Purchase price allocations: | |||||||||||||
Intangibles | $ 270 | ||||||||||||
Broken Arrow | |||||||||||||
Purchase consideration: | |||||||||||||
Cash paid | $ 5,000 | ||||||||||||
Contingent consideration | 5,735 | ||||||||||||
Business combination consideration transferred | 10,735 | ||||||||||||
Purchase price allocations: | |||||||||||||
Accounts receivable | 5,121 | ||||||||||||
Inventories | 133 | ||||||||||||
Prepaid expenses | 94 | ||||||||||||
Property and equipment | 219 | ||||||||||||
Other long-term assets | 32 | ||||||||||||
Goodwill | 4,433 | ||||||||||||
Business combination recognized identifiable assets acquired and liabilities assumed, Assets including goodwill, Total | 14,802 | ||||||||||||
Accounts payable | (1,853) | ||||||||||||
Accrued expenses | (156) | ||||||||||||
Contract liabilities | (2,058) | ||||||||||||
Business combination recognized identifiable assets acquired goodwill and liabilities assumed, Net, Total | 10,735 | ||||||||||||
Broken Arrow | Customer relationships | |||||||||||||
Purchase price allocations: | |||||||||||||
Intangibles | 4,690 | ||||||||||||
Broken Arrow | Trademarks and tradenames | |||||||||||||
Purchase price allocations: | |||||||||||||
Intangibles | $ 80 | ||||||||||||
Concurrent Group LLC | |||||||||||||
Purchase consideration: | |||||||||||||
Cash paid | $ 13,828 | ||||||||||||
Rollover equity | 6,000 | ||||||||||||
Contingent consideration | 10,210 | ||||||||||||
Acquisition debt | 14,143 | ||||||||||||
Business combination consideration transferred | 44,181 | ||||||||||||
Purchase price allocations: | |||||||||||||
Cash | 1,830 | ||||||||||||
Accounts receivable | 8,402 | ||||||||||||
Inventories | 25 | ||||||||||||
Other current assets | 10 | ||||||||||||
Property and equipment | 4,164 | ||||||||||||
Other long-term assets | 60 | ||||||||||||
Goodwill | 10,738 | ||||||||||||
Business combination recognized identifiable assets acquired and liabilities assumed, Assets including goodwill, Total | 50,745 | ||||||||||||
Accounts payable | (1,932) | ||||||||||||
Accrued expenses | (830) | ||||||||||||
Contract liabilities | (639) | ||||||||||||
Capital lease obligations | (3,163) | ||||||||||||
Business combination recognized identifiable assets acquired goodwill and liabilities assumed, Net, Total | 44,181 | ||||||||||||
Concurrent Group LLC | Customer relationships | |||||||||||||
Purchase price allocations: | |||||||||||||
Intangibles | 24,186 | ||||||||||||
Concurrent Group LLC | Trademarks and tradenames | |||||||||||||
Purchase price allocations: | |||||||||||||
Intangibles | $ 1,330 |
Acquisitions - Fiber Network So
Acquisitions - Fiber Network Solutions, LLC (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | Jan. 26, 2021 | Oct. 18, 2020 | Oct. 18, 2019 | Oct. 04, 2019 | May 15, 2019 | Mar. 29, 2019 | Oct. 02, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||||||||
Cash consideration | $ 37,057 | $ 76,342 | |||||||
Goodwill increase (Decrease) | $ 821 | ||||||||
Vertical Limit | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash consideration | $ 16,250 | ||||||||
Maximum additional payment | $ 15,700 | ||||||||
Fair value of contingent consideration | $ 7,700 | ||||||||
Acquisition Debt, Current | 3,500 | ||||||||
Vinculums | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash consideration | $ 43,595 | ||||||||
Rollover equity | 12,500 | ||||||||
Maximum additional payment | 35,000 | ||||||||
Fair value of contingent consideration | $ 22,600 | ||||||||
Acquisition Debt, Current | 5,000 | ||||||||
Goodwill increase (Decrease) | 973 | ||||||||
Aerial | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash consideration | $ 16,497 | ||||||||
Rollover equity | 1,000 | ||||||||
Maximum additional payment | 6,000 | ||||||||
Fair value of contingent consideration | 5,800 | ||||||||
Goodwill increase (Decrease) | 153 | ||||||||
Timing payments | $ 1,500 | $ 1,447 | |||||||
Unpaid timing payments | 1,500 | ||||||||
Transaction costs | 1,000 | $ 4,300 | |||||||
Recovery Logistics. | |||||||||
Business Acquisition [Line Items] | |||||||||
Acquisition Debt, Current | $ 2,100 | ||||||||
Fiber Network Solutions Acquisition | |||||||||
Business Acquisition [Line Items] | |||||||||
Percentage of interests acquired | 100.00% | ||||||||
Cash consideration | $ 20,059 | ||||||||
Rollover equity | 2,000 | ||||||||
Maximum additional payment | 20,000 | ||||||||
Fair value of contingent consideration | $ 8,200 |
Acquisitions - Broken Arrow Com
Acquisitions - Broken Arrow Communications, Inc (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | Aug. 06, 2021 | Oct. 02, 2021 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||
Cash paid | $ 37,057 | $ 76,342 | |
Broken Arrow | |||
Business Acquisition [Line Items] | |||
Cash paid | $ 5,000 | ||
Maximum additional payment | 10,000 | ||
Fair value of contingent consideration | $ 5,735 |
Acquisitions - Concurrent Group
Acquisitions - Concurrent Group LLC (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | Aug. 30, 2021 | Oct. 02, 2021 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||
Cash paid | $ 37,057 | $ 76,342 | |
Concurrent Group LLC | |||
Business Acquisition [Line Items] | |||
Percentage of interests acquired | 100.00% | ||
Cash paid | $ 13,828 | ||
Rollover equity | 6,000 | ||
Acquisition debt | 14,143 | ||
Maximum additional payment | 30,000 | ||
Fair value of contingent consideration | $ 10,210 |
Property and Equipment (Detai_2
Property and Equipment (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | $ 68,132 | $ 51,052 | $ 26,648 | |
Less: accumulated depreciation | (25,945) | (17,258) | (8,475) | |
Property and equipment, net | 42,187 | 33,794 | 18,173 | |
Accumulated depreciation | 25,945 | 17,258 | 8,475 | |
Depreciation and amortization expense | 9,418 | $ 6,584 | 9,000 | 6,300 |
Office furniture | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 1,331 | 1,249 | 898 | |
Computers | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 1,591 | 1,217 | 1,051 | |
Machinery, equipment and vehicles | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 15,482 | 10,275 | 6,532 | |
Land | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 140 | |||
Leasehold improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 4,695 | 3,354 | 792 | |
Software | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 2,281 | 2,199 | 1,903 | |
Assets under capital lease | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 41,349 | 32,153 | 15,226 | |
Less: accumulated depreciation | (13,028) | (8,062) | (3,900) | |
Accumulated depreciation | 13,028 | 8,062 | 3,900 | |
Construction in process | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | $ 1,263 | $ 605 | $ 246 |
Accounts Receivable, Net of A_8
Accounts Receivable, Net of Allowance, Contract Assets and Liabilities, and Customer Credit Concentration - Schedule of Accounts receivable, net, classified as current (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 9 Months Ended | |||
Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Trade accounts receivable | $ 97,506 | $ 44,419 | $ 61,365 | |
Contract assets | 157,155 | 134,311 | 173,734 | |
Accounts receivables gross | 254,661 | 178,730 | 235,099 | |
Less: allowance for doubtful accounts | (5,397) | (3,933) | (6,440) | |
Accounts receivable, net | 249,264 | $ 174,797 | $ 228,659 | |
Discount charges | $ 770 | $ 1,356 |
Accounts Receivable, Net of A_9
Accounts Receivable, Net of Allowance, Contract Assets and Liabilities, and Customer Credit Concentration - Schedule of Net contract assets (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Dec. 31, 2019 | Dec. 31, 2020 | |
Contract assets | $ 157,155 | $ 173,734 | $ 134,311 |
Contract liabilities | (14,950) | (18,470) | (14,945) |
Contract assets, net | 142,205 | 155,264 | $ 119,366 |
Amount of revenue recognized that was included in contract liabilities | $ 9,589 | $ 5,700 |
Accounts Receivable, Net of _10
Accounts Receivable, Net of Allowance, Contract Assets and Liabilities, and Customer Credit Concentration - Schedule of Customer Credit Concentration (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Concentration Risk [Line Items] | |||
Amounts of accounts receivable and contract assets | $ 211,911 | $ 147,142 | |
Concentration risk percentage | 10.00% | ||
AT&T | |||
Concentration Risk [Line Items] | |||
Amounts of accounts receivable and contract assets | 61,797 | $ 81,796 | |
Verizon | |||
Concentration Risk [Line Items] | |||
Amounts of accounts receivable and contract assets | 47,892 | 65,346 | |
Entergy | |||
Concentration Risk [Line Items] | |||
Amounts of accounts receivable and contract assets | 67,776 | ||
T- Mobile | |||
Concentration Risk [Line Items] | |||
Amounts of accounts receivable and contract assets | $ 34,447 | ||
Accounts receivable and Contract assets | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.00% | ||
Accounts receivable and Contract assets | Credit Concentration Risk | |||
Concentration Risk [Line Items] | |||
Amounts of accounts receivable and contract assets | $ 147,142 | $ 189,697 | |
Concentration risk percentage | 82.30% | 80.80% | |
Accounts receivable and Contract assets | Customer | Credit Concentration Risk | |||
Concentration Risk [Line Items] | |||
Credit Concentration percentage | 83.20% | 82.30% | |
Accounts receivable and Contract assets | AT&T | Credit Concentration Risk | |||
Concentration Risk [Line Items] | |||
Amounts of accounts receivable and contract assets | $ 81,796 | $ 120,145 | |
Credit Concentration percentage | 24.30% | 45.80% | |
Concentration risk percentage | 45.80% | 51.10% | |
Accounts receivable and Contract assets | Verizon | Credit Concentration Risk | |||
Concentration Risk [Line Items] | |||
Amounts of accounts receivable and contract assets | $ 65,346 | $ 69,552 | |
Credit Concentration percentage | 18.80% | 36.60% | |
Concentration risk percentage | 36.60% | 29.60% | |
Accounts receivable and Contract assets | Entergy | Credit Concentration Risk | |||
Concentration Risk [Line Items] | |||
Credit Concentration percentage | 26.60% | ||
Accounts receivable and Contract assets | T- Mobile | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.00% | ||
Accounts receivable and Contract assets | T- Mobile | Credit Concentration Risk | |||
Concentration Risk [Line Items] | |||
Credit Concentration percentage | 13.50% |
Goodwill and Intangible Asset_8
Goodwill and Intangible Assets - Schedule of Goodwill (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill [Roll Forward] | ||||
Goodwill, Beginning Balance | $ 58,522 | $ 86,503 | $ 86,503 | $ 41,083 |
Additions from acquisitions | 23,253 | 53,552 | ||
Measurement period adjustments, net | 821 | |||
Goodwill, Ending Balance | 81,775 | 58,522 | 86,503 | |
Impairment loss(a) | 0 | 0 | 28,802 | 8,132 |
Renewables and Recovery Logistics | ||||
Goodwill [Roll Forward] | ||||
Goodwill, Beginning Balance | 13,598 | 13,598 | 13,598 | 13,598 |
Additions from acquisitions | 8,082 | |||
Goodwill, Ending Balance | 21,680 | 13,598 | 13,598 | |
Impairment loss(a) | 0 | |||
Telecom | ||||
Goodwill [Roll Forward] | ||||
Goodwill, Beginning Balance | 44,924 | $ 72,905 | 72,905 | 27,485 |
Additions from acquisitions | 15,171 | 53,552 | ||
Measurement period adjustments, net | 821 | |||
Goodwill, Ending Balance | 60,095 | 44,924 | 72,905 | |
Impairment loss(a) | $ 36,934,000 | $ 28,802 | $ 8,132 |
Goodwill and Intangible Asset_9
Goodwill and Intangible Assets - Schedule of Intangible assets (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | $ 474,646 | $ 426,719 | $ 426,719 |
Accumulated Amortization | (109,924) | (80,903) | (45,146) |
Net carrying amount | $ 364,722 | $ 345,816 | $ 381,573 |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Remaining Useful Life | 9 years 8 months 12 days | 10 years 9 months 18 days | 11 years 9 months 18 days |
Gross carrying amount | $ 414,446 | $ 368,200 | $ 368,200 |
Accumulated Amortization | (89,681) | (65,868) | (36,782) |
Net carrying amount | $ 324,765 | $ 302,332 | $ 331,418 |
Trade names | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Remaining Useful Life | 9 years 8 months 12 days | 9 years 10 months 24 days | 10 years 6 months |
Gross carrying amount | $ 60,200 | $ 58,519 | $ 58,519 |
Accumulated Amortization | (20,243) | (15,035) | (8,364) |
Net carrying amount | $ 39,957 | $ 43,484 | $ 50,155 |
Goodwill and Intangible Asse_10
Goodwill and Intangible Assets - Narrative (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Finite Lived And Indefinite Lived Intangible Assets By Major Class | ||||
Impairment of goodwill | $ 0 | $ 0 | $ 28,802 | $ 8,132 |
Amortization expense of intangible assets | 29,020,000 | $ 26,818,000 | 35,800 | 32,900 |
Telecom | ||||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | ||||
Impairment of goodwill | $ 36,934,000 | 28,802 | 8,132 | |
Impairment of long- lived assets | $ 0 | $ 800 |
Debt and Capital Lease Obliga_3
Debt and Capital Lease Obligations - Related party & Convertible notes (Details) - USD ($) | Jun. 16, 2021 | Jan. 20, 2021 | Jul. 03, 2021 | Oct. 02, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Subscription price | $ 10 | |||||
BCP QUALTEK HOLDCO, LLC | ||||||
Loss on extinguishment of convertible notes | $ (2,436,000) | |||||
Preferred units exchanged for convertible notes (in shares) | 25,000 | |||||
Convertible units, conversion price | $ 83.23 | |||||
Preferred stock liquidation preference, Percentage | 8.00% | |||||
BCP QUALTEK HOLDCO, LLC | Common Stock A | ||||||
Debt instrument, Conversion price | $ 8 | |||||
Conversion of units | $ 533,461 | |||||
BCP QUALTEK HOLDCO, LLC | Preferred units | ||||||
Preferred units exchanged for convertible notes (in shares) | (25,000) | |||||
BCP QUALTEK HOLDCO, LLC | Non-redeemable common stock | Maximum | ||||||
Subscription price | $ 10 | |||||
BCP QUALTEK HOLDCO, LLC | Convertible debt | ||||||
Aggregate principal amount of convertible debt | $ 44,400,000 | |||||
Amount of convertible debt, beneficial conversion feature | $ 12,269,000 | |||||
Accretion of discount | 4,771,000 | |||||
Percentage of purchase price | 80.00% | |||||
Convertible debt, Discount | 7,498,000 | |||||
BCP QUALTEK HOLDCO, LLC | Convertible debt | Majority members | ||||||
Aggregate principal amount of convertible debt | $ 5,000,000 | |||||
Amount of convertible debt, beneficial conversion feature | $ 4,946,000 | |||||
Loss on extinguishment of convertible notes | 2,436,000 | |||||
Accretion of discount | 2,198,000 | |||||
Interest expense, Related party | $ 70,000 | |||||
BCP QUALTEK HOLDCO, LLC | Convertible debt | BCP QualTek II LLC | ||||||
Aggregate principal amount of convertible debt | $ 30,568,000,000 | |||||
Interest expense, Related party | $ 1,105,000 | |||||
Preferred units exchanged for convertible notes (in shares) | 25,000 | |||||
Convertible debt, Interest rate | 12.00% | |||||
Debt instrument, Conversion price | $ 1,000 |
Debt and Capital Lease Obliga_4
Debt and Capital Lease Obligations - Line of credit (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Dec. 31, 2020 | Sep. 08, 2020 | Dec. 31, 2019 | |
Line of Credit Facility [Line Items] | ||||
Current borrowing capacity | $ 90,000 | |||
Maximum borrowing capacity | $ 103,500 | |||
Stand by letters of credit outstanding | $ 3,977 | $ 801 | ||
Revolving credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Current borrowing capacity | 103,500 | |||
Amount available under credit facility | $ 2,198,000 | 37,900 | ||
Stand by letters of credit outstanding | $ 801 | $ 357 | ||
Revolving credit facility | Base rate | ||||
Line of Credit Facility [Line Items] | ||||
Applicable interest rate margin | 4.75% | 4.75% | ||
Revolving credit facility | Eurodollar rate | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Applicable interest rate margin | 2.59% | 2.77% | ||
Revolving credit facility | Eurodollar rate | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Applicable interest rate margin | 2.63% | 2.87% |
Debt and Capital Lease Obliga_5
Debt and Capital Lease Obligations - Term Loan (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Oct. 04, 2019 | |
Debt Instrument [Line Items] | ||||
Term loan | $ 380 | $ 280 | $ 380 | |
Additional term loan | $ 100 | |||
Principal payments | $ 2.4 | |||
Term loan | ||||
Debt Instrument [Line Items] | ||||
Principal payments | $ 2.4 | |||
Term loan | Base rate | ||||
Debt Instrument [Line Items] | ||||
Applicable interest rate margin | 8.50% | 8.50% | ||
Term loan | Eurodollar rate | ||||
Debt Instrument [Line Items] | ||||
Applicable interest rate margin | 7.25% | 7.25% |
Debt and Capital Lease Obliga_6
Debt and Capital Lease Obligations - Acquisition debt (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Oct. 02, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Acquisition Debt. | |||
Debt Instrument [Line Items] | |||
Interest expense | $ 68 | $ 0 | |
Subordinated Debt | |||
Debt Instrument [Line Items] | |||
Interest expense | 241 | ||
Subordinated debt with related party | $ 25,100 | ||
Minimum | Acquisition Debt. | |||
Debt Instrument [Line Items] | |||
Debt interest rate | 18.00% | 1.00% | |
Maximum | Acquisition Debt. | |||
Debt Instrument [Line Items] | |||
Debt interest rate | 3.25% | 3.25% | |
Interest expense | $ 606 |
Debt and Capital Lease Obliga_7
Debt and Capital Lease Obligations - Fair Market Value Due to Variable Interest Rates Based on Current Rates (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) | Oct. 02, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Acquisition debt | $ 34,718,000 | $ 10,575,000 | |
Convertible notes-related party | 30,568,000 | 0 | |
Convertible notes-June 2021 | 44,400,000 | 0 | |
Capital lease obligations | 25,620,000 | 23,069,000 | |
Less: unamortized financing fees | (2,682,000) | $ (1,327,000) | |
Less: convertible debt discount | (13,854,000) | (16,830,000) | |
Debt and capital lease obligations | 565,049,000 | 440,672,000 | 410,965,000 |
Less: current maturities of long-term debt | (110,395,000) | (20,139,000) | (9,564,000) |
Less: current portion of capital lease obligations, net of interest | (9,150,000) | (7,110,000) | (3,902,000) |
Non current portion of long-term debt and capital lease obligations | 445,504,000 | 413,423,000 | 397,499,000 |
Line of credit | |||
Debt, Carrying amount | 96,242,000 | 59,837,000 | 46,554,000 |
Term loan | |||
Debt, Carrying amount | $ 353,872,000 | $ 361,045,000 | $ 370,609,000 |
Debt and Capital Lease Obliga_8
Debt and Capital Lease Obligations - Additional information (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
BCP QUALTEK HOLDCO, LLC | ||||
Amortization of debt issuance costs | $ 3,201 | $ 2,308 | $ 3,090 | $ 2,269 |
Fair Value Measurements (Deta_3
Fair Value Measurements (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Fair value assets, Transfers from level 2 to level 1 | $ 0 | |||
Fair value liabilities, Transfers from level 1 to level 2 | 0 | |||
Fair value assets, Transfers net | $ 0 | |||
BCP QUALTEK HOLDCO, LLC | ||||
Fair value assets, Transfers from level 1 to level 2 | $ 0 | $ 0 | $ 0 | |
Fair value assets, Transfers from level 2 to level 1 | 0 | 0 | 0 | |
Fair value liabilities, Transfers from level 1 to level 2 | 0 | 0 | 0 | |
Fair value liabilities, Transfers from level 2 to level 1 | 0 | 0 | 0 | |
Fair value assets, Transfers into level 3 | 0 | |||
Fair value assets, Transfers out of level 3 | 0 | |||
Fair value liabilities, Transfers into level 3 | 0 | |||
Fair value liabilities, Transfers out of level 3 | $ 0 | |||
Fair value assets, Transfers net | 0 | 0 | ||
Fair value liabilities, Transfers net | $ 0 | $ 0 |
Fair Value Measurements - Fai_3
Fair Value Measurements - Fair value of the Company Financial Liabilities (Details) - BCP QUALTEK HOLDCO, LLC - Recurring - USD ($) $ in Thousands | Oct. 02, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Carrying value of contingent consideration | $ 28,429 | $ 18,129 | $ 40,119 |
Recovery Logistics. | |||
Carrying value of contingent consideration | 2,075 | ||
Vertical Limit | |||
Carrying value of contingent consideration | 4,711 | 9,195 | |
Vinculums | |||
Carrying value of contingent consideration | 13,418 | 22,973 | |
Aerial | |||
Carrying value of contingent consideration | 5,876 | ||
Level 3 | |||
Financial liabilities | |||
Contingent consideration | $ 28,429 | 18,129 | 40,119 |
Level 3 | Recovery Logistics. | |||
Financial liabilities | |||
Contingent consideration | 2,075 | ||
Level 3 | Vertical Limit | |||
Financial liabilities | |||
Contingent consideration | 4,711 | 9,195 | |
Level 3 | Vinculums | |||
Financial liabilities | |||
Contingent consideration | $ 13,418 | 22,973 | |
Level 3 | Aerial | |||
Financial liabilities | |||
Contingent consideration | $ 5,876 |
Fair Value Measurements - Fai_4
Fair Value Measurements - Fair Value of the Company Level 3 Financial Liabilities (Details) - BCP QUALTEK HOLDCO, LLC - Level 3 - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at the beginning | $ 18,129 | $ (6,000) | $ (6,000) | $ 10,130 |
Acquisitions (see Note 3) | 24,145 | 36,117 | ||
Payment of contingent consideration | 1,666 | (13,108) | ||
Accretion | 699 | (6,000) | (10,575) | 832 |
Change in fair value | (4,544) | 18,129 | 6,148 | |
Foreign currency translation adjustments | (10,000) | 40,119 | ||
Reclassification to acquisition debt | (7,081) | |||
Balance at the end | $ 28,429 | $ 1,306 | $ 18,129 | $ (6,000) |
Equity (Details)_2
Equity (Details) - USD ($) | Jun. 16, 2021 | Oct. 04, 2019 | Mar. 31, 2021 | Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Class of Stock [Line Items] | ||||||||||
Aggregate cash amount for new issuances | $ 11,500,000 | $ 25,000 | [1] | |||||||
BCP QUALTEK HOLDCO, LLC | ||||||||||
Class of Stock [Line Items] | ||||||||||
Aggregate cash amount for new issuances | $ 15,000,000 | $ 25,000,000 | ||||||||
Preferred units exchanged for convertible notes (in shares) | 25,000 | |||||||||
Preferred units exchanged for convertible notes | $ 5,568,000 | $ (30,568,000) | ||||||||
Tax Distributions payable | $ 11,409,000 | 5,930,000 | $ 11,409,000 | 5,930,000 | ||||||
BCP QUALTEK HOLDCO, LLC | Preferred units | ||||||||||
Class of Stock [Line Items] | ||||||||||
Aggregate cash amount for new issuances | $ 25,000,000 | |||||||||
Number of shares issued | 25,000 | |||||||||
Preferred units exchanged for convertible notes (in shares) | (25,000) | |||||||||
Preferred units exchanged for convertible notes | $ (30,568,000) | |||||||||
Tax Distributions | 0 | $ 6,694,000 | 6,800,000 | 6,700,000 | $ 6,800,000 | |||||
Tax Distributions payable | $ 5,900,000 | 11,400,000 | 5,900,000 | |||||||
BCP QUALTEK HOLDCO, LLC | Preferred units | HoldCo LLC Agreement | ||||||||||
Class of Stock [Line Items] | ||||||||||
Preferred stock, Liquidation preference per share | $ 1,000 | |||||||||
Preferred stock, Additional return (in percentage) | 12.00% | |||||||||
BCP QUALTEK HOLDCO, LLC | Preferred units | BCP QualTek II LLC,. | HoldCo LLC Agreement | ||||||||||
Class of Stock [Line Items] | ||||||||||
Aggregate cash amount for new issuances | $ 25,000,000 | |||||||||
Number of shares issued | 25,000 | |||||||||
BCP QUALTEK HOLDCO, LLC | Class P Units | BCP QualTek II LLC,. | ||||||||||
Class of Stock [Line Items] | ||||||||||
Profit interests related expense | $ 0 | $ 0 | $ 0 | $ 0 | ||||||
[1] | Includes 375,000 shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). On February 9, 2021, the Company effected a dividend of 0.50 share for each share of common stock outstanding resulting in there being an aggregate of 4,312,500 shares of common stock outstanding, and on February 24, 2021, the Company rescinded and cancelled the dividend, resulting in there being an aggregate of 2,875,000 shares of common stock outstanding (see Notes 5 and 8). |
Segments and Related Informa_10
Segments and Related Information - Summarized financial information for the Company's reportable segments (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |||
Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | |||||
Total assets | $ 228,800 | $ 25,000 | $ 115,387,992 | ||
BCP QUALTEK HOLDCO, LLC | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | $ 465,184,000 | $ 524,080,000 | 656,524,000 | 599,268,000 | |
Total assets | 769,565,000 | 640,868,000 | 747,230,000 | ||
Capital Expenditures | 3,150,000 | 15,493,000 | 23,097,000 | 12,740,000 | |
Amortization and Depreciation | 39,136,000 | 34,761,000 | 46,475,000 | 40,103,000 | |
BCP QUALTEK HOLDCO, LLC | Telecom | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 360,020,000 | 468,729,000 | 587,614,000 | 568,342,000 | |
Total assets | 602,749,000 | 579,147,000 | 697,991,000 | ||
Capital Expenditures | 1,843,000 | 6,712,000 | 8,831,000 | 10,693,000 | |
Amortization and Depreciation | 29,767,000 | 30,539,000 | 40,588,000 | 35,411,000 | |
BCP QUALTEK HOLDCO, LLC | Renewables and Recovery Logistics | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 105,164,000 | 55,351,000 | 68,910,000 | 30,926,000 | |
Total assets | 151,926,000 | 55,370,000 | 45,642,000 | ||
Capital Expenditures | 248,000 | 7,936,000 | 12,251,000 | 1,090,000 | |
Amortization and Depreciation | 8,644,000 | 3,734,000 | 5,259,000 | 4,250,000 | |
BCP QUALTEK HOLDCO, LLC | Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Total assets | 14,890,000 | 6,351,000 | 3,597,000 | ||
Capital Expenditures | 1,059,000 | 845,000 | 2,015,000 | 957,000 | |
Amortization and Depreciation | $ 726,000 | $ 487,000 | $ 628,000 | $ 442,000 |
Segments and Related Informa_11
Segments and Related Information - Reconciliation of Net Loss from Segments to Consolidated (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 11 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||||||||||
Net Loss | $ (809,740) | $ (583,968) | $ (28,740) | $ (800) | $ 0 | $ (85) | $ (1,225) | $ (975) | |||
BCP QUALTEK HOLDCO, LLC | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Adjusted EBITDA | $ 55,991,000 | $ 26,627,000 | 13,139,000 | $ 31,870,000 | |||||||
Management fees | (751,000) | (391,000) | (518,000) | (541,000) | |||||||
Transaction expenses | (2,875,000) | (567,000) | (988,000) | (4,257,000) | |||||||
Change in fair value of contingent consideration | 4,544,000 | (7,081,000) | (6,149,000) | ||||||||
Impairment of long-lived assets | (840,000) | ||||||||||
Depreciation and amortization | (39,136,000) | (34,761,000) | (46,475,000) | (40,103,000) | |||||||
Interest expense | (35,778,000) | (28,824,000) | (37,659,000) | (33,380,000) | |||||||
Loss on extinguishment of convertible notes | (2,436,000) | ||||||||||
Net Loss | (20,441,000) | (37,916,000) | |||||||||
BCP QUALTEK HOLDCO, LLC | Telecom | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Adjusted EBITDA | 26,907,000 | 16,028,000 | 2,409,000 | 37,063,000 | |||||||
Depreciation and amortization | (29,767,000) | (30,539,000) | (40,588,000) | (35,411,000) | |||||||
BCP QUALTEK HOLDCO, LLC | Renewables and Recovery Logistics | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Adjusted EBITDA | 42,181,000 | 24,227,000 | 28,943,000 | 11,442,000 | |||||||
Depreciation and amortization | (8,644,000) | (3,734,000) | (5,259,000) | (4,250,000) | |||||||
BCP QUALTEK HOLDCO, LLC | Corporate | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Adjusted EBITDA | (13,097,000) | (13,628,000) | (18,213,000) | (16,635,000) | |||||||
Depreciation and amortization | $ (726,000) | $ (487,000) | $ (628,000) | $ (442,000) |
Segments and Related Informa_12
Segments and Related Information - Schedule of Revenue and Long-lived Assets by Geography (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 465,184 | $ 524,080 | $ 656,524 | $ 599,268 |
Telecom Wireless | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 278,125 | 359,792 | ||
Telecom Power | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 8,598 | 0 | ||
Renewables | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 25,086 | |||
Recovery Logistics | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 80,079 | 55,351 | ||
Telecom Wireline | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 73,296 | $ 108,937 |
Segments and Related Informa_13
Segments and Related Information - Schedule of Revenue from Significant Customers (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jul. 03, 2021 | Jul. 04, 2020 | Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue, Major Customer [Line Items] | ||||||
Revenues | $ 465,184 | $ 524,080 | $ 656,524 | $ 599,268 | ||
Concentration risk percentage | 10.00% | |||||
Revenue | Customer Concentration Risk | ||||||
Revenue, Major Customer [Line Items] | ||||||
Revenues | $ 368,299 | $ 380,972 | $ 472,470 | $ 436,840 | ||
Concentration risk percentage | 72.00% | 73.00% | ||||
Revenue | Customer Concentration Risk | Customer | ||||||
Revenue, Major Customer [Line Items] | ||||||
Risk percentage of Revenue | 80.00% | 73.00% | ||||
Revenue | Customer Concentration Risk | AT&T | ||||||
Revenue, Major Customer [Line Items] | ||||||
Revenues | $ 189,381 | $ 282,807 | $ 356,026 | $ 318,913 | ||
Risk percentage of Revenue | 41.00% | 54.00% | ||||
Concentration risk percentage | 54.00% | 53.00% | ||||
Revenue | Customer Concentration Risk | Verizon | ||||||
Revenue, Major Customer [Line Items] | ||||||
Revenues | $ 51,773 | $ 98,165 | $ 116,444 | $ 117,927 | ||
Risk percentage of Revenue | 11.00% | 19.00% | ||||
Concentration risk percentage | 18.00% | 20.00% | ||||
Revenue | Customer Concentration Risk | Entergy | ||||||
Revenue, Major Customer [Line Items] | ||||||
Revenues | $ 67,776 | |||||
Risk percentage of Revenue | 15.00% | |||||
Revenue | Customer Concentration Risk | T- Mobile | ||||||
Revenue, Major Customer [Line Items] | ||||||
Revenues | $ 59,369 | |||||
Risk percentage of Revenue | 13.00% | |||||
Concentration risk percentage | 10.00% |
Commitments and Contingencies_5
Commitments and Contingencies (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 02, 2021 | Oct. 03, 2020 | |
Lease agreement | ||
Other Commitments [Line Items] | ||
Rent expense of Operating lease | $ 7,517,000 | $ 7,686,000 |
Members of the Company | ||
Other Commitments [Line Items] | ||
Rent expense of Operating lease | $ 503 | $ 393 |
Related Party Transactions (D_2
Related Party Transactions (Details) - BCP QUALTEK HOLDCO, LLC - Majority members - Advisory Services Agreement - USD ($) $ in Thousands | Jul. 18, 2018 | Oct. 02, 2021 | Oct. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | |||||
Quarterly Advisory fees | $ 125 | $ 125 | |||
Advisory Fees | $ 751 | $ 391 | $ 500 | $ 500 |
Subsequent Events (Details)_2_4
Subsequent Events (Details) - BCP QUALTEK HOLDCO, LLC - USD ($) $ in Millions | Dec. 31, 2021 | Oct. 15, 2021 | Oct. 07, 2021 | Jan. 26, 2021 | Sep. 08, 2020 |
Maximum borrowing capacity | $ 103.5 | ||||
Subsequent Event | |||||
Maximum borrowing capacity | $ 103.5 | ||||
Subsequent Event | Revolving credit facility | |||||
Maximum borrowing capacity | $ 130 | ||||
Subsequent Event | FNS | |||||
Percentage of interests acquired | 100.00% | 100.00% |