FORM 10-K/A
(Amendment No. 1)
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
of
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Units, each consisting of one | ||||
Class A ordinary share, $0.0001 par value, and one-third of one redeemable warrant | HIGA.U | New York Stock Exchange | ||
Class A ordinary shares included | ||||
as part of the units | HIGA | New York Stock Exchange | ||
Redeemable warrants included as part of the units | HIGA WS | New York Stock Exchange | ||
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
As
was approximately $353,390,595.
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Item 15. | F-1 |
EXPLANATORY NOTE
References throughout this Amendment No. 1 to the Annual Report on Form 10-K to “we,” “us,” the “Company” or “our company” are to H.I.G. Acquisition Corp. unless the context otherwise indicates.
This Amendment No. 1 (“Amendment No. 1”) to the Annual Report on Form 10-K/A amends the Annual Report on Form 10-KTable of H.I.G. Acquisition Corp. for the fiscal year ended December 31, 2020, as filed with the Securities and Exchange Commission (“SEC”) on March 30, 2021 (the “Original Filing”).
On April 12, 2021, the staff of the Securities and Exchange Commission (the “SEC Staff”) issued a public statement entitled “Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Staff Statement”). In the SEC Staff Statement, the SEC Staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPAC’s balance sheet as opposed to equity. Since issuance on October 23, 2020, our warrants were accounted for as equity within our balance sheet. After discussion and evaluation, including with our registered public accounting firm and our audit committee, and taking into consideration the SEC Staff Statement, we have concluded that our warrants should be presented as liabilities with subsequent fair value remeasurement.
As a result of the foregoing, on May 21, 2021, the Audit Committee of the Company, in consultation with its management, concluded that its previously issued Financial Statements for the period from September 2, 2020 (inception) through December 31, 2020 (collectively, the “Affected Period”), be restated because of a misapplication in the guidance around accounting for our outstanding warrants to purchase Class A ordinary shares (the “Warrants”) and should no longer be relied upon.
Historically, the Warrants were reflected as a component of equity as opposed to liabilities on the balance sheets and the statements of operations did not include the subsequent non-cash changes in estimated fair value of the Warrants, based on our application of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 815-40, Derivatives and Hedging, Contracts in Entity’s Own Equity (“ASC 815-40). The views expressed in the SEC Staff Statement were not consistent with the Company’s historical interpretation of the specific provisions within its warrant agreement and the Company’s application of ASC 815-40 to the warrant agreement. We reassessed our accounting for the Warrants issued on October 23, 2020, in light of the SEC Staff’s published views. Based on this reassessment, we determined that the Warrants should be classified as liabilities measured at fair value upon issuance, with subsequent changes in fair value reported in our Statement of Operations each reporting period.
We are filing this Amendment No. 1 to amend and restate the Original Filing with modification as necessary to reflect the restatements. The following items have been amended to reflect the restatements:
Part I, Item 1A. Risk Factors
Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations
Part II, Item 8. Financial Statements and Supplementary Data
Part II, Item 9A Controls and Procedures
In connection with the restatement, the Company’s management reassessed the effectiveness of its disclosure controls and procedures for the periods affected by the restatement. As a result of that reassessment, the Company’s management determined that its disclosure controls and procedures for such periods were not effective with respect to the classification of the Company’s warrants as components of equity instead of as derivative liabilities. For more information, see Item 9A included in this Annual Report on Form 10-K/A.
In addition, the Company’s Chief Executive Officer and Chief Financial Officer have provided new certifications dated as of the date of this filing in connection with this Form 10-K/A (Exhibits 31.1, 31.2, 32.1 and 32.2).
Except as described above, no other information included in the Original Filing is being amended or updated by this Amendment No. 1 and this Amendment No. 1 does not purport to reflect any information or events subsequent to the Original Filing. This Amendment No. 1 continues to describe the conditions as of the date of the Original Filing and, except as expressly contained herein, we have not updated, modified or supplemented the disclosures contained in the Original Filing. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Filing and with our filings with the SEC subsequent to the Original Filing.
i
CERTAIN TERMS
Unless otherwise stated in this Annual Report on Form 10-K (this “Report”), references to:
“amended and restated memorandum and articles of association” are to the amended and restated memorandum and articles of association that the company adopted;
“board of directors” are to the board of directors of the company;
“Companies Law” are to the Companies Law (2020 Revision) of the Cayman Islands as the same may be amended from time to time;
“founder shares” are to our Class B ordinary shares initially issued to our sponsor in a private placement prior to our initial public offering and the Class A ordinary shares that will be issued upon the automatic conversion of the Class B ordinary shares at the time of our initial business combination or earlier at the option of the holders thereof (for the avoidance of doubt, such Class A ordinary shares will not be “public shares”);
“H.I.G. Capital” are to H.I.G. Capital, L.L.C. and its affiliates, other than the company and the sponsor;
“initial public offering” refers to our initial public offering consummated on October 23, 2020;
“initial shareholders” refers to all of our shareholders immediately prior to the effective date of our initial public offering, including all of our officers and directors to the extent they hold such shares;
“management” or our “management team” are to our executive officers;
“ordinary shares” are to our Class A ordinary shares and our Class B ordinary shares;
“private placement warrants” are to the warrants sold in the private placement to our sponsor or that are issued upon conversion of working capital loans, if any;
“public shares” are to our Class A ordinary shares sold as part of the units in our initial public offering (whether they are purchased in our initial public offering or thereafter in the open market);
“public shareholders” are to the holders of our public shares, including our sponsor, management team and board of directors, to the extent our sponsor and/or members of our management team and/or board of directors purchase public shares, provided that our sponsor’s, each member of our management team’s and each member of our board of director’s status as a “public shareholder” will only exist with respect to such public shares;
“sponsor” are to H.I.G. Acquisition Advisors, LLC, a Cayman Islands limited liability company; and
“we,” “us,” “our,” “company” or “our company” are to H.I.G. Acquisition Corp., a Cayman Islands exempted company.
ii
acquisitions for PepsiCo and evaluating new business opportunities. Mr. Schwartz began his career with the investment banking firm of Dillon, Read and Co., where he split his time between the corporate finance group and certain private equity funds. Mr. Schwartz earned his M.B.A. from Harvard Business School and his B.S. with honors from the University of Pennsylvania.
In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which
Following the issuance
affected periods.
As described elsewhere in this Annual Report on Form 10K/A, we have identified a material weakness in our internal control over financial reporting related to the accounting for the warrants we issued in connection with our initial public offering in October 2020. As a result of this material weakness, our management has concluded that our internal control over financial reporting was not effective as of December 31, 2020. This material weakness resulted in a material misstatement2021.
corruption;
On September 3, 2020, our sponsor paid $25,000, or approximately $0.001 per share, to cover certain expenses on our behalf in consideration of 19,406,250 Class B ordinary shares, par value $0.0001. On September 28, 2020, our sponsor effected a surrender of 6,468,750 founder shares to the company for no consideration, resulting in a decrease in the total number of Class B ordinary shares outstanding from 19,406,250 to 12,937,500. On October 15, 2020, our sponsor effected a surrender of 3,593,750 founder shares to the company for no consideration, resulting in a decrease in the total number of Class B ordinary shares outstanding from 12,937,500 to 9,343,750. On December 4, 2020, our sponsor automatically surrendered 245,125 founder shares to the company for no consideration, triggered by the expiration of the option of the underwriter of the issuer’s initial public offering to purchase additional units, resulting in a decrease in the total number of Class B ordinary shares outstanding from 9,343,750 to 9,098,625. This total includes the transfer of an aggregate 140,000 founder shares, which were transferred from our sponsor to certain of our directors in September 2020.
On October 23, 2020, the Company consummated its initial public offering of 32,500,000 units, generating gross proceeds of $325 million. On November 25, 2020, the underwriters partially exercised the over-allotment option, and the closing of the issuance and sale of the additional 3,894,500 over-allotment units occurred on December 1, 2020. The issuance by the Company of the over-allotment units at a price of $10.00 per unit resulted in total gross proceeds of $38.9 million.
Simultaneously with the closing of the initial public offering, the Company consummated the private placement of 5,666,667 private placement warrants at a price of $1.50 per private placement warrant, generating total gross proceeds of $8.5 million (Note 5). On November 25, 2020, the underwriters partially exercised the over-allotment option and on December 1, 2020, purchased an additional 3,894,500 over-allotment units, generating gross proceeds of approximately $38.9 million. On December 1, 2020, simultaneously with the issuance and sale of the over-allotment units, the Company consummated the sale of an additional 519,267 private placement warrants, generating gross proceeds of $0.8 million. (See Note 5).
Upon the closing of the initial public offering, the over-allotment, and the private placements, $363.9 million ($10.00 per unit) of the net proceeds of the initial public offering and certain of the proceeds of the private placements were placed in a trust account established for the benefit of the Company’s public shareholders.
Use of Proceeds
On October 23, 2020, we consummated the initial public offering of 32,500,000 units, at $10.00 per unit, generating gross proceeds of $325.0 million. The underwriter was granted a 45-day option from the date of the final prospectus relating to the initial public offering to purchase up to 4,875,000 additional units to cover over- allotments, if any, at $10.00 per unit. On November 25, 2020, the underwriters partially exercised the over- allotment option and on December 1, 2020, purchased an additional 3,894,500, generating gross proceeds of approximately $38.9 million.
In connection with the initial public offering and the over-allotment, we incurred offering costs of approximately $20.7 million, inclusive of approximately $7.3 million in upfront underwriting commissions and $12.7 million in deferred underwriting commissions. Other incurred offering costs consisted principally of preparation fees related to the initial public offering. After deducting the underwriting discounts and commissions (excluding the deferred portion, which amount will be payable upon consummation of the initial business combination, if consummated) and the initial public offering expenses, $363.9 million of the net proceeds from our initial public offering, the over-allotment and certain of the proceeds from the private placements of the private placement warrants (or $10.00 per unit sold in the initial public offering) was placed in a trust account with Continental Stock Transfer & Trust Company acting as trustee. The net proceeds of the initial public offering and certain proceeds from the sale of the private placement warrants are held in the trust account and invested as described elsewhere in this Annual Report on Form 10-K. See Note 4 to the financial statements.
There has been no material change in the planned use of the proceeds from the initial public offering and private placements as is described in the Company’s final prospectus related to the initial public offering.
Not applicable.
In this Amendment No. 1 (“Amendment No. 1”) to the Annual Report on Form 10-K of H.I.G. Acquisition Corp. (the “Company”) for the fiscal year ended December 31, 2020, we are restating our audited financial statements as of December 31, 2020, and for the period from September 2, 2020 (inception) to December 31, 2020.
On April 12, 2021, the staff of the Securities and Exchange Commission (the “SEC Staff”) issued a public statement entitled “Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Staff Statement”). In the SEC Staff Statement, the SEC Staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPAC’s balance sheet as opposed to equity. Since issuance on October 23, 2020, the Warrants were accounted for as equity within our balance sheet, and after discussion and evaluation, including with our independent registered public accounting firm and our audit committee, and taking into consideration the SEC Staff Statement, we have concluded that the Warrants should be presented as liabilities with subsequent fair value remeasurement.
As a result of the foregoing, on May 21, 2021, the Audit Committee of the Company, in consultation with its management, concluded that its previously issued Financial Statements for the period from September 2, 2020 (inception) through December 31, 2020, (collectively, the “Affected Period”) should be restated because of a misapplication in the guidance around accounting for the Warrants and should no longer be relied upon.
Historically, the Warrants were reflected as a component of equity as opposed to liabilities on the balance sheets and the statements of operations did not include the subsequent non-cash changes in estimated fair value of the Warrants, based on our application of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 815-40, Derivatives and Hedging, Contracts in Entity’s Own Equity (“ASC 815-40). The views expressed in the SEC Staff Statement were not consistent with the Company’s historical interpretation of the specific provisions within its warrant agreements and the Company’s application of ASC 815-40 to the warrant agreements. We reassessed our accounting for Warrants issued on October 23, 2020 and November 25, 2020, in light of the SEC Staff’s published views. Based on this reassessment, we determined that the Warrants should be classified as liabilities measured at fair value upon issuance, with subsequent changes in fair value reported in our statement of operations each reporting period.
In connection with the restatement, our management reassessed the effectiveness of our disclosure controls and procedures for the periods affected by the restatement. As a result of that reassessment, we determined that our disclosure controls and procedures for such periods were not effective with respect to the classification of the Company’s warrants as components of equity instead of as derivative liabilities. For more information, see Item 9A included in this Annual Report on Form 10-K.
We have not amended our previously filed Quarterly Report on Form 10-Q for the period affected by the restatement. The financial information that has been previously filed or otherwise reported for these periods is superseded by the information in this Amendment No. 1, and the financial statements and related financial information contained in such previously filed reports should no longer be relied upon.
The restatement is more fully described in Note 2 of the notes to the financial statements included herein.
purchase one Class A ordinary share at an exercise price of $11.50 per share, subject to adjustment. The units were sold at a price of $10.00 per unit, generating gross proceeds to the Company of $325.0 million. We granted the underwriters in the initial public offering a
Based on the foregoing, management and our board of directors believe that we will have sufficient working capital and borrowing capacity from our sponsor or an affiliate of our sponsor, or certain of our officers and directors to meet our liquidity needs through the earlier of the consummation of a business combination or one year from this filing. Over this time period, we will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial business combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the business combination.
liquidate after October 23, 2022.
As a result of the restatement described in Note 2 of the notes to the financial statements included herein, we allocated approximately $0.6 million of offering costs to the warrant liabilities which has been recognized as expense. In addition, we classify the Warrants issued in connection with our Initial Public Offering and Private Placement as liabilities at their fair value and adjust the Warrant to fair value at each reporting period. These liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. For the periods from September 2, 2020 (inception) through December 31, 2020, the change in fair value of warrants was an increase of $8.7 million.
$8,739,000.
Our statement
redemption value approximates fair value.
Our management
See Note 2 to the audited consolidated financial statements included elsewhere in this Annual Report on Form 10 K for additional information regarding these and our other significant accounting policies.
This Report does not include a report
JOBS Act.
Name | Age | Position | ||
Brian Schwartz | Chief Executive Officer and Director | |||
Rob Wolfson | President and Director | |||
Timur Akazhanov | Chief Financial Officer | |||
Richard Siegel | Vice President and General Counsel | |||
Andreas Beroutsos | Director | |||
William E. Mitchell | Director | |||
Christopher O’Connell | Director | |||
Sidney Taurel | Director |
focusesfocused on investing in telecommunications, media and technology sectors, as well as tech- enabled services sectors. Mr. Akazhanov has more than a decade of experience in private equity in a broad range of industries, including technology, services, education, industrials, media and healthcare. Prior to joining H.I.G. Capital, Mr. Akazhanov was a Managing Director in the Private Equity Group at Blackstone for seven years, and before that worked at Bain Capital and McKinsey and Company. Mr. Akazhanov earned his M.B.A. from Harvard Business School, where he was a Baker and a Ford scholar, and his A.B. in Economics, magna cum laude, from Harvard College.
Individual | Entity | Entity’s Business | Affiliation | |||
Brian Schwartz | H.I.G. Capital, LLC | Asset Management | Co-President | |||
Investment Committees of H.I.G. Capital, LLC funds | Asset Management | Committee Member | ||||
Certain H.I.G. Capital Committees Certain | Asset Management | Committee Member | ||||
Portfolio Companies of H.I.G. Capital, LLC | Asset Management | Board Member | ||||
Rob Wolfson | H.I.G. Capital, LLC | Asset Management | Executive Managing Director; Head of H.I.G. Advantage Fund; Head of U.S. Healthcare | |||
Investment Committees of H.I.G. Capital, LLC funds | Asset Management | Committee Member | ||||
Certain H.I.G. Capital Committees Certain | Asset Management | Committee Member | ||||
Portfolio Companies of H.I.G. Capital, LLC | Asset Management | Board Member | ||||
Certain family real estate LLCs | Real Estate | Member-Manager |
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Northwestern University’s School of Education and Social Policy | Education Institution | Advisory Board Member |
Individual | Entity | Entity’s Business | Affiliation | |||
Timur Alkazhanov | H.I.G. Capital, LLC | Asset Management | Managing Director of | |||
Family-Owned LLC | Real Estate | Member Manager | ||||
Richard Siegel | H.I.G. Capital, LLC | Asset Management | General Counsel and Chief Compliance Officer | |||
Certain H.I.G. Capital Committees | Asset Management | Committee Member | ||||
Certain Portfolio Companies of H.I.G. Capital, LLC | Asset Management | Board Member | ||||
Outreach360 | Non-Profit Organization | Board Member | ||||
Andreas Beroutsos | BW Group | Maritime Transportation and Energy Company | Managing Director | |||
Cadeler A/S | Offshore Wind Turbine Transportation and Installation | Board Member | ||||
Certain BW Group Private Affiliates | Renewable Energy and Organic Fertilizers | Board Member | ||||
Navigator Holdings Ltd. | Gas Transportation | Board Member | ||||
PetSmart, Inc. | Pet Supplies Company | Board Member | ||||
William E. Mitchell | ||||||
Sequel Venture Partners | Asset Management | Founder & Managing Partner | ||||
UCLA Technology Development Group | Education and Technology Non-Profit | Chairman | ||||
C-Combinator | Sargassum Harvesting and Product Company | Advisory Board Member | ||||
4L Ultimate Topco Corp. d/b/a Clover Wireless | Communications Company | Board Member | ||||
Sage Partners | Consulting Firm | Partner | ||||
Christopher O’Connell | Northwestern University’s Weinberg College of Arts and Sciences | Education Institution | Board of Visitors Member | |||
Northwestern University’s Chemistry of Life Processes Institute | Education Institution | Board of Advisors Member | ||||
| Ron Burton Training Village | Non-Profit Leadership Academy | Board Member | |||
| New Mountain Capital | Private Equity Company | Senior Advisor | |||
Covaris, Inc. | Manufacturer of Life Sciences Technology | Executive Chairman | ||||
Aceto Corporation | Virtual Manufacturer of Chemical Compounds | Director | ||||
Revo Health | Managed-Services Company | Advisory Board Member | ||||
Sidney Taurel | Eli Lilly & Company | Pharmaceutical Company | Chairman Emeritus | |||
Individual | Entity | Entity’s Business | Affiliation | |||
Pearson plc | Education and Publishing Company | Chairman | ||||
Columbia Business School | Education Institution | Board of Overseers Member | ||||
Taurel Associates LP | Investment Partnership | Partner | ||||
EuroCapital Investors LLC | Investment Company | Chief Operating Officer | ||||
Kathryn and Sidney Taurel Foundation Inc. | Family Foundation | Officer President | ||||
Taurel Family Management Company | Family Real Estate Company | President | ||||
Taurel Family Holdings, LLLP | Family Real Estate Company | Limited Partner |
None
Class B ordinary shares | Class A ordinary shares | |||||||||||||||
Name of Beneficial Owners(1) | Number of Shares Beneficially Owned | Approximate Percentage of Class | Number of Shares Beneficially Owned | Approximate Percentage of Class | ||||||||||||
H.I.G. Acquisition Advisors, LLC | 8,958,625 | 98.5 | % | — | — | |||||||||||
Directors and Officers | ||||||||||||||||
Brian Schwartz(2) | 8,958,625 | 98.5 | % | — | — | |||||||||||
Rob Wolfson(2) | 8,958,625 | 98.5 | % | — | — | |||||||||||
Timur Akazhanov | — | — | — | — | ||||||||||||
Richard Siegel | — | — | — | — | ||||||||||||
Andreas Beroutsos | — | — | 35,000 | * | % | |||||||||||
William E. Mitchell | — | — | 35,000 | * | % | |||||||||||
Christopher O’Connell | — | — | 35,000 | * | % | |||||||||||
Sidney Taurel | — | — | 35,000 | * | % | |||||||||||
All directors and officers as a group | 9,098,625 | 100 | % | 140,000 | * | % | ||||||||||
Other Beneficial Holders | ||||||||||||||||
Integrated Core Strategies (US) LLC(3) | — | — | 2,925,000 | 9.0 | % | |||||||||||
Linden Capital L.P. (4) | — | — | 3,000,000 | 9.2 | % | |||||||||||
BlueCrest Capital Management Limited(5) | — | — | 2,500,000 | 7.7 | % | |||||||||||
Sculptor Capital LP(6) | — | — | 1,989,785 | 5.5 | % | |||||||||||
Arena Capital Advisors, LLC—CA(7) | — | — | 2,194,503 | 6.3 | % | |||||||||||
Glazer Capital, LLC(8) | — | — | 2,290,249 | 6.3 | % |
Class B ordinary shares | Class A ordinary shares | |||||||||||||||
Name of Beneficial Owners (1) | Number of Shares Beneficially Owned | Approximate Percentage of Class | Number of Shares Beneficially Owned | Approximate Percentage of Class | ||||||||||||
H.I.G. Acquisition Advisors, LLC (our sponsor) | 8,958,625 | 98.5 | % | — | — | |||||||||||
Directors and Officers | ||||||||||||||||
Brian Schwartz(2) | 8,958,625 | 98.5 | % | — | — | |||||||||||
Rob Wolfson(2) | 8,958,625 | 98.5 | % | — | — | |||||||||||
Timur Akazhanov | — | — | — | — | ||||||||||||
Richard Siegel | — | — | — | — | ||||||||||||
Andreas Beroutsos | 35,000 | * | % | — | — | |||||||||||
William E. Mitchell | 35,000 | * | % | — | — | |||||||||||
Christopher O’Connell | 35,000 | * | % | — | — | |||||||||||
Sidney Taurel | 35,000 | * | % | — | — | |||||||||||
All directors and officers as a group (8 individuals) | 9,098,625 | 100 | % | — | — | |||||||||||
Other Beneficial Holders | ||||||||||||||||
Integrated Core Strategies (US) LLC(3) | — | — | 2,123,145 | 5.8 | % | |||||||||||
Linden Capital L.P.(4) | — | — | 2,427,842 | 6.7 | % | |||||||||||
Arena Capital Advisors, LLC—CA(5) | — | — | 2,295,280 | 5.5 | % | |||||||||||
Glazer Capital, LLC(6) | — | — | 3,006,419 | 8.3 | % |
* | Less than one percent. |
(1) | Unless otherwise noted, the business address of each of our shareholders is 1450 Brickell Avenue, 31st Floor, Miami, FL 33131. |
(2) | The shares reported above are held in the name of our sponsor. Our sponsor is controlled by a board of managers that consists of Messrs. Schwartz and Wolfson. |
(3) | Includes Class A ordinary shares beneficially held by Integrated Core Strategies (US) LLC, a Delaware limited liability company (“ICS”), Riverview Group LLC, a Delaware limited liability company (“RG”), ICS Opportunities, Ltd., a Cayman Islands exempted company (“ICSO”), ICS Opportunities II LLC, a Cayman Islands limited liability company (“ICSO II”), Integrated Assets, Ltd., a Cayman Islands exempted company (“IA”), Millennium International Management |
(4) | Includes Class A ordinary shares beneficially held by Linden Capital L.P., a Bermuda limited partnership (“LCLP”), Linden GP LLC, a Delaware limited liability company (“LGP”), Linden Advisors LP, a Delaware limited partnership (“LALP”), and Siu Min Wong, the principal owner and controlling person of LALP and LGP and a Chinese and United States Citizen (“Mr. Wong”), based solely on the Schedule |
(5) |
|
|
Includes Class A ordinary shares beneficially held by Arena Capital Advisors, LLC—CA, a Delaware limited liability corporation (“ACA”), Arena Short Duration High Yield Fund, LP—Series A, a Delaware limited partnership (“AF-A”), Arena Short Duration High Yield Fund, LP—Series B, a Delaware limited partnership(“AF-B”), Arena Short Duration High Yield Fund, LP—Series C, a Delaware limited partnership(“AF-C”), Arena Short Duration High Yield Fund, LP—Series E, a Delaware limited partnership(“AF-E”), Arena Capital Fund, LP—Series 8, a Delaware limited partnership(“ACF-8), and Arena (“ based solely on the Schedule AF-A, AF-B, AF-C, AF-E, ACF-8, andACF-16 on February AF-A, AF-B, AF-C, AF-E, ACF-8, andAF-16 is 12121 Wilshire Blvd., Ste. 1010, Los Angeles, CA 90025. |
Includes Class A ordinary shares beneficially held by Glazer Capital, LLC, a Delaware limited liability company (“GC”) with respect to Class A ordinary shares held by certain funds and managed accounts to which GC serves as investment manager (collectively, the “Glazer Funds”), and Paul J. Glazer, the Managing Member of GC with respect to the Class A ordinary shares held by the Glazer Funds and a United States Citizen (“Mr. Glazer”), based solely on the Schedule 13G filed by |
No
Additionally, effective beginning the first quarter of 2022, each of our independent directors will receive cash director fees in an annual amount of $60,000, paid quarterly in arrears for each quarter in which such director serves on our board of directors.
$112,840 and $76,735, respectively.
* | Filed herewith |
** | Furnished herewith |
(1) | Incorporated by reference to the registrant’s Registration Statement on Form S-1, filed with the SEC on September 28, 2020 |
(2) | Incorporated by reference to the registrant’s Current Report on Form 8-K, filed with the SEC on October 26, 2020. |
(3) | Incorporated by reference to the registrant’s Annual Report on Form 10-K, filed with the SEC on March 30, 2021. |
H.I.G. ACQUISITION CORP. | ||||||
/s/ Brian D. Schwartz | ||||||
Name: | Brian D. Schwartz | |||||
Title: | Chief Executive Officer | |||||
(Principal Executive Officer) |
/s/ Brian D. Schwartz | Chief Executive Officer and Director | |||
Brian D. Schwartz | (Principal Executive Officer) | |||
/s/ Timur Akazhanov | Chief Financial Officer | |||
Timur Akazhanov | (Principal Financial Officer and Principal Accounting Officer) | |||
/s/ Rob Wolfson | President and Director | |||
Rob Wolfson | ||||
/s/ William E. Mitchell | Director | |||
William E. Mitchell | ||||
/s/ Andreas Beroutsos | Director | |||
Andreas Beroutsos | ||||
/s/ Christopher O’Connell | Director | |||
Christopher O’Connell | ||||
/s/ Sidney Taurel | Director | |||
Sidney Taurel |
F-2 | ||||
Financial Statements: | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-7 |
December 31, | December 31, | |||||||
2021 | 2020 | |||||||
ASSETS | ||||||||
Cash | $ | 4,311 | $ | 30,103 | ||||
Prepaid expenses | 495,072 | 1,096,949 | ||||||
Total current assets | 499,383 | 1,127,052 | ||||||
Investments held in Trust Account | 363,987,687 | 363,951,287 | ||||||
Total Assets | $ | 364,487,070 | $ | 365,078,339 | ||||
LIABILITIES , CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ DEFICIT | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 645,385 | $ | 58,206 | ||||
Accrued expenses | 579,866 | 98,579 | ||||||
Due to related party | 1,202,797 | 0 | ||||||
Total current liabilities | 2,428,048 | 156,785 | ||||||
Deferred underwriting commissions | 12,738,075 | 12,738,075 | ||||||
Derivative warrant liabilities | 12,822,204 | 23,995,840 | ||||||
Total liabilities | 27,988,327 | 36,890,700 | ||||||
Commitments and Contingencies (Note 5) | 0 | 0 | ||||||
Class A ordinary shares subject to possible redemption, 36,394,500 shares at $10.00 per share | 363,945,000 | 363,945,000 | ||||||
Shareholders’ deficit | ||||||||
Preference shares, $0.0001 par value; 1,000,000 shares authorized; NaN issued and outstanding | 0— | 0— | ||||||
Class A ordinary shares, $0.0001 par value; 950,000,000 shares authorized; NaN 36,394,500 shares subject to possible redemption) | 0 | 0 | ||||||
Class B ordinary shares, $0.0001 par value; 95,000,000 shares authorized; 9,098,625 shares issued and outstanding | 910 | 910 | ||||||
Additional paid-in capital | 0 | 0 | ||||||
Accumulated deficit | (27,447,167 | ) | (35,758,271 | ) | ||||
Total shareholders’ deficit | (27,446,257 | ) | (35,757,361 | ) | ||||
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit | $ | 364,487,070 | $ | 365,078,339 | ||||
For The Period From | ||||||||
September 2, 2020 | ||||||||
For The Year Ended | (Inception) Through | |||||||
December 31, 2021 | December 31, 2020 | |||||||
Formation and operating costs | $ | 2,898,932 | $ | 323,233 | ||||
Loss from operations | (2,898,932 | ) | (323,233 | ) | ||||
Change in fair value of derivative warrant liabilities | 11,173,636 | (8,739,000 | ) | |||||
Financing costs - derivative warrant liabilities | 0 | (586,610 | ) | |||||
Net gain from investments held in Trust Account | 36,400 | 6,287 | ||||||
Net income (loss) | $ | 8,311,104 | $ | (9,642,556 | ) | |||
Weighted average shares outstanding of Class A ordinary shares subject to possible redemption, basic and diluted | 36,394,500 | 11,128,897 | ||||||
Basic and diluted net income (loss) per share, Class A ordinary s subject to possible redemptionhares | $ | 0.18 | $ | (0.49 | ) | |||
Weighted average shares outstanding of Class B non-redeemable ordinary shares, basic and diluted | 9,098,625 | 8,519,814 | ||||||
Basic and diluted net income (loss) per share, Class B non-redeemable ordinary shares | $ | 0.18 | $ | (0.49 | ) | |||
Ordinary Shares | Additional | Total | ||||||||||||||||||
Class B | Paid-In | Accumulated | Shareholders’ | |||||||||||||||||
Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||
Balance as of January 1, 2021 | 9,098,625 | $ | 910 | $ | 0 | $ | (35,758,271 | ) | $ | (35,757,361 | ) | |||||||||
Net incom e | — | — | — | 8,311,104 | 8,311,104 | |||||||||||||||
Balance as of December 31, 2021 | 9,098,625 | $ | 910 | $ | — | $ | (27,447,167 | ) | $ | (27,446,257 | ) | |||||||||
Ordinary Shares | Additional | Total | ||||||||||||||||||
Class B | Paid-In | Accumulated | Shareholders’ | |||||||||||||||||
Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||
Balance as of September 2, 2020 | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||
Issuance of ordinary shares to Sponso r | 9,098,625 | 910 | 24,090 | — | 25,000 | |||||||||||||||
Accretion of Class A ordinary shares to redemption value | — | — | �� | (24,090 | ) | (26,115,715 | ) | (26,139,805 | ) | |||||||||||
Net loss | — | — | — | (9,642,556 | ) | (9,642,556 | ) | |||||||||||||
Balance as of December 31, 2020 | 9,098,625 | $ | 910 | $ | — | $ | (35,758,271 | ) | $ | (35,757,361 | ) | |||||||||
For The Year Ended December 31, 2021 | For The Period From September 2, 2020 (Inception) Through December 31, 2020 | |||||||
Cash Flows from Operating Activities | ||||||||
Net Income (Loss) | $ | 8,311,104 | $ | (9,642,556 | ) | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
General and administrative expenses paid by Sponsor in exchange for issuance of Class B ordinary shares | 0 | 25,000 | ||||||
Net gain from investments held in Trust Account | (36,400 | ) | (6,287 | ) | ||||
Change in fair value of derivative warrant liabilities | (11,173,636 | ) | 8,739,000 | |||||
Financing costs allocated to derivative warrant liabilities | 0 | 586,610 | ||||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | 601,877 | (1,096,949 | ) | |||||
Accounts payable | 587,179 | 58,206 | ||||||
Accrued expenses | 481,287 | 13,579 | ||||||
Net cash used by operating activities | (1,228,589 | ) | (1,323,397 | ) | ||||
Cash Flows from Investing Activities | ||||||||
Cash deposited in Trust Account | 0 | (363,945,000 | ) | |||||
Net cash provided by investing activities | 0 | (363,945,000 | ) | |||||
Cash Flows from Financing Activities | ||||||||
Advances from related party | 1,202,797 | 0 | ||||||
Repayment of note payable to related party | 0 | (236,755 | ) | |||||
Proceeds received from initial public offering, gross | 0 | 363,945,000 | ||||||
Proceeds received from private placement | 0 | 9,278,900 | ||||||
Offering costs paid | 0 | (7,688,645 | ) | |||||
Net cash provided by financing activities | 1,202,797 | 365,298,500 | ||||||
Net increase (decrease) in cash | (25,792 | ) | 30,103 | |||||
Cash - beginning of period | 30,103 | 0 | ||||||
Cash - end of period | $ | 4,311 | $ | 30,103 | ||||
Supplemental disclosure of noncash investing and financing activities: | ||||||||
Offering costs included in accrued expenses | $ | 0 | $ | 85,000 | ||||
Deferred offering costs paid through promissory note - related party | $ | 0 | $ | 236,755 | ||||
Deferred underwriting fees payable | $ | 0 | $ | 12,738,075 | ||||
Item 15. Exhibits, Financial Statement Schedules
The following documents are filed as part of this report:
(1) Financial Statements (As Restated)
| ||||
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of
H.I.G. Acquisition Corp.
Opinion on the Financial Statements
We have audited the accompanying balance sheet of H.I.G. Acquisition Corp. (the “Company”), as of December 31, 2020, the related statements of operations, changes in shareholders’ equity and cash flows for the period from September 2, 2020 (inception) through December 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the period from September 2, 2020 (inception) through December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.
Restatement of Financial Statements
As discussed in Note 2 to the financial statements, the Securities and Exchange Commission issued a public statement entitled Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”) (the “Public Statement”) on April 12, 2021, which discusses the accounting for certain warrants as liabilities. The Company previously accounted for its warrants as equity instruments. Management evaluated its warrants against the Public Statement, and determined that the warrants should be accounted for as liabilities. Accordingly, the 2020 financial statements have been restated to correct the accounting and related disclosure for the warrants.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ WithumSmith+Brown, PC
We have served as the Company’s auditor since 2020.
New York, New York
May 21, 2021
H.I.G. ACQUISITION CORP.
(As Restated - See Note 2)
December 31, 2020
Assets | ||||
Current assets: | ||||
Cash | $ | 30,103 | ||
Prepaid expenses | 1,096,949 | |||
|
| |||
Total current assets | 1,127,052 | |||
Investments held in Trust Account | 363,951,287 | |||
|
| |||
Total assets | $ | 365,078,339 | ||
|
| |||
Liabilities and Shareholders’ Equity | ||||
Liabilities | ||||
Current liabilities: | ||||
Accounts payable | $ | 58,206 | ||
Accrued expenses | 98,579 | |||
|
| |||
Total current liabilities | 156,785 | |||
Deferred underwriting commissions | 12,738,075 | |||
Derivative warrant liabilities | 23,995,840 | |||
|
| |||
Total liabilities | 36,890,700 | |||
Commitments and Contingencies (Note 6) | ||||
Class A ordinary shares; 32,318,763 shares subject to possible redemption at $10.00 per share | 323,187,630 | |||
Shareholders’ Equity | ||||
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding | — | |||
Class A ordinary shares, $0.0001 par value; 400,000,000 shares authorized; 4,075,737 shares issued and outstanding (excluding 32,318,763 shares subject to possible redemption) | 408 | |||
Class B ordinary shares, $0.0001 par value; 40,000,000 shares authorized; 9,098,625 shares issued and outstanding | 910 | |||
Additional paid-in capital | 14,641,247 | |||
Accumulated deficit | (9,642,556 | ) | ||
|
| |||
Total shareholders’ equity | 5,000,009 | |||
|
| |||
Total Liabilities and Shareholders’ Equity | $ | 365,078,339 | ||
|
|
H.I.G. Acquisition Corp.
As Restated - See Note 2
For The Period From September 2, 2020 (inception) through December 31, 2020
General and administrative expenses | $ | 299,362 | ||
Administrative expenses - related party | 23,871 | |||
|
| |||
Loss from operations | (323,233 | ) | ||
Other income (expenses) | ||||
Change in fair value of derivative warrant liabilities | (8,739,000 | ) | ||
Financing costs - derivative warrant liabilities | (586,610 | ) | ||
Net gain from investments held in Trust Account | 6,287 | |||
|
| |||
Net loss | $ | (9,642,556 | ) | |
|
| |||
Basic and diluted weighted average shares outstanding of Class A ordinary shares | 34,280,343 | |||
|
| |||
Basic and diluted net income per share, Class A ordinary shares | $ | 0.00 | ||
|
| |||
Basic and diluted weighted average shares outstanding of Class B ordinary shares | 8,425,201 | |||
|
| |||
Basic and diluted net loss per share, Class B ordinary shares | $ | (1.11 | ) | |
|
|
The accompanying notes are an integral part of these financial statements.
H.I.G. ACQUISITION CORP.
STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
For the Period from September 2, 2020 (inception) through December 31, 2020
Ordinary Shares | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders’ Equity | |||||||||||||||||||||||||
Class A | Class B | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance - September 2, 2020 (inception) | — | $ | — | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Issuance of Class B ordinary shares to Sponsor | — | — | 9,343,750 | 934 | 24,066 | — | 25,000 | |||||||||||||||||||||
Sale of units in initial public offering, less fair value of public warrants | 36,394,500 | 3,639 | — | — | 353,818,841 | — | 353,822,480 | |||||||||||||||||||||
Offering proceeds | — | — | — | — | (20,161,865 | ) | — | (20,161,865 | ) | |||||||||||||||||||
Excess of cash received over fair value of private placement warrants | — | — | — | — | 4,144,580 | — | 4,144,580 | |||||||||||||||||||||
Forfeiture of Class B ordinary shares | — | — | (245,125 | ) | (24 | ) | 24 | — | — | |||||||||||||||||||
Class A shares subject to possible redemption | (32,318,763 | ) | (3,231 | ) | — | — | (323,184,399 | ) | — | (323,187,630 | ) | |||||||||||||||||
Net loss | — | — | — | — | — | (9,642,556 | ) | (9,642,556 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Balance - December 31, 2020 | 4,075,737 | $ | 408.47 | 9,098,625 | $ | 910 | $ | 14,641,247 | $ | (9,642,556 | ) | $ | 5,000,009 | |||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
H.I.G. ACQUISITION CORP.
For the Period from September 2, 2020 (inception) through December 31, 2020
Cash Flows from Operating Activities: | ||||
Net loss | $ | (9,642,556 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
General and administrative expenses paid by Sponsor in exchange for issuance of Class B ordinary shares | 25,000 | |||
Net gain from investments held in Trust Account | (6,287 | ) | ||
Change in fair value of derivative warrant liabilities | 8,739,000 | |||
Financing costs - derivative warrant liabilities | 586,610 | |||
Changes in operating assets and liabilities: | ||||
Prepaid expenses | (1,096,949 | ) | ||
Accounts payable | 58,206 | |||
Accrued expenses | 13,579 | |||
|
| |||
Net cash used in operating activities | (1,323,397 | ) | ||
|
| |||
Cash Flows from Investing Activities: | ||||
Cash deposited in Trust Account | (363,945,000 | ) | ||
|
| |||
Net cash used in investing activities | (363,945,000 | ) | ||
|
| |||
Cash Flows from Financing Activities: | ||||
Repayment of note payable to related party | (236,755 | ) | ||
Proceeds received from initial public offering, gross | 363,945,000 | |||
Proceeds received from private placement | 9,278,900 | |||
Offering costs paid | (7,688,645 | ) | ||
|
| |||
Net cash provided by financing activities | 365,298,500 | |||
|
| |||
Net change in cash | 30,103 | |||
Cash - beginning of the period | — | |||
|
| |||
Cash - end of the period | $ | 30,103 | ||
|
| |||
Supplemental disclosure of noncash investing and financing activities: | ||||
Offering costs included in accrued expenses | $ | 85,000 | ||
Payment of offering costs through note payable - related party | $ | 236,755 | ||
Deferred underwriting commissions | $ | 12,738,075 | ||
Initial value of Class A ordinary shares subject to possible redemption | $ | 332,161,540 | ||
Change in initial value of Class A ordinary shares subject to possible redemption | $ | (8,973,910 | ) |
The accompanying notes are an integral part of these financial statements.
of the net assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on income earned on the Trust Account) at the time of the signing of a definitive agreement in connection with the initial Business Combination. However, 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 1940, as amended, (the “Investment Company Act”).
If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a
Based on the foregoing, management believes that the Company will have sufficient working capitalliquidity condition and borrowing capacity from the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors to meet its needs through the earlier of the consummation ofmandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or one year from this filing. Over this time period,liabilities should the Company will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target businessrequired to merge with or acquire, and structuring, negotiating and consummating the Business Combination.
liquidate after October 23, 2022.
As described in Note 2—Restatement of Previously Issued Financial Statements the Company’s financial statements for the period from September 2, 2020 (inception) through December 31, 2020, (collectively, the “Affected Period”), are restated to correct the misapplication of accounting guidance related to the Company’s warrants in the Company’s previously issued audited financial statements for such periods.
This may make comparison of the Company’s financial statement with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
NOTE 2 —RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
In May 2021, the Audit Committee of the Company, in consultation with management, concluded that, because of a misapplication of the accounting guidance related to its public and private placement warrants to purchase Class A ordinary shares that the Company issued in October and November 2020 (the “Warrants”), the Company’s previously issued financial statements for the Affected Period should no longer be relied upon. As such, the Company is restating its financial statements for the Affected Period included in this Annual Report.
On April 12, 2021, the staff of the Securities and Exchange Commission (the “SEC Staff”) issued a public statement entitled “Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Staff Statement”). In the SEC Staff Statement, the SEC Staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPAC’s balance sheet as opposed to equity. Since issuance on October 23, 2020, the Company’s Warrants were accounted for as equity within the Company’s previously reported balance sheets. After discussion and evaluation, including with the Company’s audit committee, management concluded that the warrants should be presented as liabilities with subsequent fair value remeasurement.
Historically, the Warrants were reflected as a component of equity as opposed to liabilities on the balance sheets and the statements of operations did not include the subsequent non-cash changes in estimated fair value of the Warrants, based on our application of FASB ASC Topic 815-40, Derivatives and Hedging, Contracts in Entity’s Own Equity (“ASC 815-40). The views expressed in the SEC Staff Statement were not consistent with the Company’s historical interpretation of the specific provisions within its warrant agreement and the Company’s application of ASC 815-40 to the warrant agreement. The Company reassessed its accounting for Warrants issued on October 23, 2020, in light of the SEC Staff’s published views. Based on this reassessment, management determined that the Warrants should be classified as liabilities measured at fair value upon issuance, with subsequent changes in fair value reported in the Company Statement of Operations each reporting period.
Impact of the Restatement
The impact of the restatement on the balance sheet, statement of operations and statement of cash flows for the Affected Period is presented below.
As of December 31, 2020 | ||||||||||||
As Previously | Restatement | |||||||||||
Reported | Adjustment | As Restated | ||||||||||
Balance Sheet | ||||||||||||
Total assets | $ | 365,078,339 | $ | — | $ | 365,078,339 | ||||||
|
|
|
|
|
| |||||||
Liabilities and shareholders’ equity | ||||||||||||
Total current liabilities | $ | 156,785 | $ | — | $ | 156,785 | ||||||
Deferred legal fees | — | — | ||||||||||
Deferred underwriting commissions | 12,738,075 | — | 12,738,075 | |||||||||
Derivative warrant liabilities | — | 23,995,840 | 23,995,840 | |||||||||
|
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| |||||||
Total liabilities | 12,894,860 | 23,995,840 | 36,890,700 | |||||||||
Class A ordinary shares, $0.0001 par value; shares subject to possible redemption | 347,183,470 | (23,995,840 | ) | 323,187,630 | ||||||||
Shareholders’ equity | ||||||||||||
Preference shares - $0.0001 par value | — | — | — | |||||||||
Class A ordinary shares - $0.0001 par value | 168 | 240 | 408 | |||||||||
Class B ordinary shares - $0.0001 par value | 910 | — | 910 | |||||||||
Additional paid-in-capital | 5,315,877 | 9,325,370 | 14,641,247 | |||||||||
Accumulated deficit | (316,946 | ) | (9,325,610 | ) | (9,642,556 | ) | ||||||
|
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|
|
| |||||||
Total shareholders’ equity | 5,000,009 | — | 5,000,009 | |||||||||
|
|
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|
|
| |||||||
Total liabilities and shareholders’ equity | $ | 365,078,339 | $ | — | $ | 365,078,339 | ||||||
|
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|
Period From September 2, 2020 (Inception) Through December 31, 2020 | ||||||||||||
As Previously Reported | Restatement Adjustment | As Restated | ||||||||||
Statement of Operations | ||||||||||||
Loss from operations | $ | (323,233 | ) | $ | — | $ | (323,233 | ) | ||||
Other (expense) income: | ||||||||||||
Change in fair value of derivative warrant liabilities | — | (8,739,000 | ) | (8,739,000 | ) | |||||||
Financing costs - derivative warrant liabilities | — | (586,610 | ) | (586,610 | ) | |||||||
Net gain from investments held in Trust Account | 6,287 | — | 6,287 | |||||||||
|
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|
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| |||||||
Total other (expense) income | 6,287 | (9,325,610 | ) | (9,319,323 | ) | |||||||
|
|
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| |||||||
Net loss | $ | (316,946 | ) | $ | (9,325,610 | ) | $ | (9,642,556 | ) | |||
|
|
|
|
|
| |||||||
Basic and Diluted weighted-average Class A ordinary shares outstanding | 34,280,343 | — | 34,280,343 | |||||||||
Basic and Diluted net loss per Class A share | $ | 0.00 | — | $ | 0.00 | |||||||
Basic and Diluted weighted-average Class B ordinary shares outstanding | 8,684,834 | — | 8,684,834 | |||||||||
Basic and Diluted net loss per Class B share | $ | (0.04 | ) | $ | (1.07 | ) | $ | (1.11 | ) |
Period From September 2, 2020 (Inception) Through December 31, 2020 | ||||||||||||
As Previously Reported | Restatement Adjustment | As Restated | ||||||||||
Statement of Cash Flows | ||||||||||||
Net loss | $ | (316,946 | ) | $ | (9,325,610 | ) | $ | (9,642,556 | ) | |||
Adjustment to reconcile net loss to net cash used in operating activities | 18,713 | 9,325,610 | 9,344,323 | |||||||||
Net cash used in operating activities | (1,323,397 | ) | — | (1,323,397 | ) | |||||||
Net cash used in investing activities | (363,945,000 | ) | — | (363,945,000 | ) | |||||||
Net cash provided by financing activities | 365,298,500 | — | 365,298,500 | |||||||||
|
|
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|
|
| |||||||
Net change in cash | $ | 30,103 | $ | — | $ | 30,103 | ||||||
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|
In addition, the impact to the balance sheet dated October 23, 2020, filed on Form 8-K on October 29, 2020 related to the impact of accounting for the public and private warrants as liabilities at fair value resulted in a $13.7 million increase to the derivative warrant liabilities line item at October 23, 2020 and offsetting decrease to the Class A ordinary shares subject to possible redemption mezzanine equity line item. There is no change to total shareholders’ equity at the reported balance sheet date.
The fair value of warrants issued in connection with the Initial Public Offering were initially and subsequently measured at fair value using a Monte Carlo simulation model for the Public Warrants and Private Placement Warrants. Beginning as of December 31, 2020, the fair value of Public Warrants and Private Placement Warrants have been measured based on the listed market price of the Public Warrants
charged against the carrying value of the Public Shares.
Class A
Gross proceeds | $ | 363,945,000 | ||
Less: | ||||
Deferred underwriting fees and other offering costs | (20,748,475 | ) | ||
Proceeds allocated to public warrants | (9,535,910 | ) | ||
Plus: | ||||
Total accretion of carrying value to redemption value | 30,284,385 | |||
Class A ordinary shares subject to possible redemption | $ | 363,945,000 | ||
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net income
The Company’s statement
For The Year Ended December 31, 2021 | For The Period From September 2, 2020 (Inception) Through December 31, 2020 | |||||||
Redeemable Class A Ordinary Shares | ||||||||
Numerator: Net income (loss) allocable to Redeemable Class A Ordinary Shares | $ | 6,648,883 | $ | (5,461,478 | ) | |||
Denominator: Weighted Average Share Outstanding, Redeemable Class A Ordinary Shares | 36,394,500 | 11,128,897 | ||||||
Basic and diluted net income (loss) per share, Redeemable Class A Ordinary Shares | $ | 0.18 | $ | (0.49 | ) | |||
Non-Redeemable Class B Ordinary Shares | ||||||||
Numerator: Net income (loss) allocable to non-redeemable Class B Ordinary Shares | $ | 1,662,221 | $ | (4,181,078 | ) | |||
Denominator: Weighted Average Non-Redeemable Class B Ordinary Shares | 9,098,625 | 8,519,814 | ||||||
Basic and diluted net income (loss) per share, Non-Redeemable Class B Ordinary Share s | $ | 0.18 | $ | (0.49 | ) | |||
FASB
There
Recent accounting pronouncements
Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’saccompanying financial statements.
2020 and borrowings under the Note are no longer available to the Company.
DEFICIT
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets | ||||||||||||||||
Marketable securities held in Trust Account | $ | 363,987,687 | $ | — | $ | — | $ | 363,987,687 | ||||||||
Liabilities: | ||||||||||||||||
Public Warrants | $ | 8,492,050 | $ | — | $ | — | $ | 8,492,050 | ||||||||
Private Placement Warrants | — | 4,330,154 | — | 4,330,154 | ||||||||||||
Total liabilities | $ | 8,492,050 | $ | 4,330,154 | $ | — | $ | 12,822,204 | ||||||||
December 31, 2020 | ||||||||||||
Description | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||
Assets: | ||||||||||||
Investments held in Trust Account | $ | 363,951,287 | $ | — | $ | — | ||||||
Liabilities: | ||||||||||||
Derivative warrant liabilities - Public | $ | 15,892,270 | $ | — | $ | — | ||||||
Derivative warrant liabilities - Private | $ | — | $ | 8,103,570 | $ | — |
Transfers to/from Levels 1, 2, and 3 are recognized at the end of the reporting period. The estimated fair value of the Public Warrants transferred from a Level 3 measurement to a Level 1 fair value measurement in December 2020, when the Public Warrants were separately listed and traded. The estimated fair value of the Private Warrants transferred to a Level 2 measurement by referring to the market price of the Public Warrants.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets | ||||||||||||||||
Marketable securities held in Trust Account | $ | 363,951,287 | $ | — | $ | — | $ | 363,951,287 | ||||||||
Liabilities: | ||||||||||||||||
Public Warrants | $ | 16,223,222 | $ | — | $ | — | $ | 16,223,222 | ||||||||
Private Placement Warrants | — | 7,772,618 | — | 7,772,618 | ||||||||||||
Total liabilities | $ | 16,223,222 | $ | 7,772,618 | $ | — | $ | 23,995,840 | ||||||||
The estimated fair value ofoperations for the Private Placement Warrants, andperiod ended December 31, 2020. For the Public Warrants prior to being separately listed and traded, is determined using Level 3 inputs. Inherent inyear ended December 31, 2021, the Company recognized a Monte Carlo simulation are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimated the volatility of its Class A ordinary shares warrants based on implied volatility from the Company’s traded warrants and from historical volatility of select peer company’s Class A ordinary shares that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similargain to the expected remaining lifestatement of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero.
The following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement:
As of October 23, 2020 | ||||
Volatility | 15.7 | % | ||
Stock price | $ | 9.72 | ||
Expected life of the options to convert | 1.50 | |||
Risk-free rate | 0.55 | % | ||
Dividend yield | 0.0 | % |
The changeoperations resulting from a decrease in the fair value of theliabilities of approximately
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F-21