FORM 10-K/A
(Amendment No. 2)
☒ | 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. 2 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. 2 (“Amendment No. 2”) 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 May 24, 2021 (“First Amended Filing”).
Restatement Background
The Company has followed Accounting Standards Codification Topic 480, “Distinguishing Liabilities from Equity,” (“ASC 480”) in accounting for its redeemable Class A ordinary shares, par value $0.0001 per share (the “Public Shares”). This included recording the Public Shares in permanent equity on its balance sheet. However, the Company maintained shareholders’ equity of at least $5,000,001 as the Company will not redeem Public Shares that would cause the Company’s net tangible assets to be less than $5,000,001 following such redemptions.
In September 2021, the Company’s management re-evaluated and ultimately concluded that the classification of $5,000,001 in permanent equity was not appropriate and that the Public Shares should be reclassified as temporary equity. In connection with the preparation of the financial statements as of and for the three and nine months ended September 30, 2021 that were included in the Company’s Quarterly Report on Form 10-Q, filed with the SEC on November 5, 2021 (the “Q3 Form 10-Q”), the Company concluded that it would change its accounting and reflect the full amount of all redeemable Public Shares in temporary equity. This was a change from the Company’s previous accounting practice whereby it maintained shareholders’ equity of at least $5,000,001 as the Company will not redeem Public Shares that would cause the Company’s net tangible assets to be less than $5,000,001 following such redemptions. In connection with the change in presentation for the Public Shares subject to possible redemption, the Company also revised its earnings per share to allocate net income (loss) evenly to all Public Shares and Class B ordinary shares.
On December 14, 2021, the Company’s management and the audit committee of the Company’s board of directors (the “Audit Committee”) concluded that the Company’s previously issued (i) audited balance sheet as of October 23, 2020, (the “Post-IPO Balance Sheet”) as previously restated in the First Amended Filing, (ii) audited financial statements included in the First Amended Filing, (iii) unaudited interim financial statements as of and for the three months ended March 31, 2021 included in the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 24, 2021, (iv) unaudited interim financial statements as of and for the three and six months ended June 30, 2021 included in the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 16, 2021, and (v) unaudited interim financial statements as of and for the three and nine months ended September 30, 2021 included in the Q3 Form 10-Q (collectively, the “Affected Periods”), in each case, should be restated to classify all of the Public Shares as temporary equity and should no longer be relied upon. As a result, the Company is restating its financial statements for the Affected Periods herein for the Post-IPO Balance Sheet and the Company’s audited financial statements included in the First Amended Filing and in a Form 10-Q/A for the unaudited condensed financial statements for the periods ended March 31, 2021, June 30, 2021 and September 30, 2021.
The restatement does not have an impact on its cash position and cash held in the trust account (the “Trust Account”) established in connection with the initial public offering (the “IPO”).
The Company’s management has concluded that a material weakness had developed in the Company’s internal control over financial reporting related to the accounting for complex financial instruments and that the Company’s disclosure controls and procedures were not effective as a result. The Company’s remediation plan with respect to such material weakness is described in more detail in Item 9A of Part II hereof.
The financial information that has been previously filed or otherwise reported is superseded by the information in this Amendment No. 2, and the financial statements and related financial information contained in such previously filed report should no longer be relied upon.
The restatement is more fully described in Note 2 of the notes to the financial statements included herein.
In addition, as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, new certifications by the Company’s principal executive officer and principal financial officer are filed as exhibits (in Exhibits 31.1, 31.2, 32.1 and 32.2) to this Amendment No. 2 under Item 15 of Part IV hereof.
Internal Control and Disclosure Controls Considerations
Following the conclusion that the classification of $5,000,0001 in permanent equity was not appropriate and that the Public Shares should be reclassified as temporary equity, and in connection with the restatement, the Company’s management has re-evaluated the effectiveness of the Company’s disclosure controls and procedures and internal control over financial reporting as of December 31, 2020. The Company’s management has concluded that the Company’s disclosure controls and procedures and internal control over financial reporting were not effective as of December 31, 2020, due to the material weakness in internal controls over financial reporting related to the accounting for complex financial instruments.
The material weakness is more fully described in Item 9A: Controls and Procedures, contained herein.
For the convenience of the reader, this Amendment No. 2 sets forth the Annual Report on Form 10-K of the Company as of and for the period ended December 31, 2020, as filed with the SEC on March 30, 2021 (the “Original Filing”), as amended by the First Amended Filing, and as amended to reflect the restatement in connection with the reclassification of the Public Shares as temporary equity. No attempt has been made in this Amendment No. 2 to update other disclosures presented in the Original Filing or the First Amended Filing, except as required to reflect the effects of the restatement. The following items have been amended as a result of the restatement:
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 9A. Controls and Procedures.
Part IV - Item 15. Exhibits, Financial Statement Schedules.
Except as described above, no other information included in the Original Filing or the First Amended Filing is being amended or updated by this Amendment No. 2, and accordingly, this Amendment No. 2 does not reflect or purport to reflect any information or events occurring after the filing dates of the Original Filing or the First Amended Filing or modify or update those disclosures affected by subsequent events. Accordingly, this Amendment No. 2 should be read in conjunction with the First Amended Filing and the Company’s other filings with the SEC.
This Amendment No. 2 does not reflect adjustments for events occurring after March 30, 2021, the date of the filing of the Original Filing, or events occurring after May 24, 2021, the date of the filing of the First Amended Filing, except to the extent they are otherwise required to be included and discussed herein and did not substantively modify or update the disclosures herein other than as required to reflect the adjustments described above. This Amendment No. 2 should be read in conjunction with the Company’s Current Reports on Form 8-K filed with the SEC since the date of filing of the Original Filing and all of the Company’s filings after the date hereof.
In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which
Additionally, we re-evaluated our application of ASC 480-10-S99-3A to our accounting classification of the Class A ordinary shares. Our management2020 and our audit committee concluded that it was appropriate to restate previously issuedrestated financial statements for the Affected Periods, respectively, to classify all Class A ordinary shares subject to possible redemption in temporary equity.
affected periods.
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.
Our management and
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. 2 (“Amendment No. 2”) 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 (i) audited balance sheet as of October 23, 2020, (as previously restated in the First Amended Filing and (ii) audited financial statements as of December 31, 2020, and for the period from September 2, 2020 (inception) to December 31, 2020.
We have re-evaluated our application of ASC 480-10-S99-3A to our accounting and classification of the Public Shares, issued as part of the units sold in the IPO on October 23, 2020. Historically, a portion of the Public Shares was classified as permanent equity to maintain shareholders’ equity greater than $5 million on the basis that we will not redeem our Public Shares in an amount that would cause our net tangible assets to be less than $5,000,001, as described in the Amended and Restated Memorandum and Articles of Association. Pursuant to such re-evaluation, our management has determined that the Public Shares include certain provisions that require classification of all of the Public Shares as temporary equity regardless of the net tangible assets redemption limitation contained in the Amended and Restated Memorandum and Articles of Association. In addition, in connection with the change in presentation for the Public Shares, management determined it should restate earnings per share calculation to allocate income and losses shared pro rata between the two classes of shares. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of shares share pro rata in the income and losses of our Company.
As a result of the foregoing, on December [ ], 2021, the Audit Committee of the Company, in consultation with its management, concluded that its previously issued (i) audited balance sheet as of October 23, 2020, as previously restated in the First Amended Filing and (ii) Financial Statements for the period from September 2, 2020 (inception) through December 31, 2020, as previously restated in the First Amended Filing, should be restated and should no longer be relied upon.
The restatement does not have an impact on our cash position and cash held in the Trust Account.
In connection with the classification error described above and the resulting material weakness in internal control over financial reporting, 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 our internal controls around the proper accounting and classification of complex financial instruments. For more information, see Item 9A included in this Annual Report on Form 10-K.
The financial information that has been previously filed or otherwise reported for these periods is superseded by the information in this Amendment No. 2, 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 do not 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.
Restatements BackgroundWe identified a material weakness in our internal control over financial reporting related to the accounting of complex financial instruments including for warrants we issued in connection with our initial public offering in October 2020. As a result, the Warrants were recorded as liabilities on the balance sheet and measured at fair value at inception and on a recurring basis in accordance with ASC 820, Fair Value Measurement, with changes in fair value recognized in the statement of operations. This was reflected in the First Amended Filing.The Company has followed ASC 480 in accounting for its Public Shares. This included recording the Public Shares in permanent equity on its balance sheet. However, the Company maintained shareholders’ equity of at least $5,000,001 as the Company will not redeem Public Shares that would cause the Company’s net tangible assets to be less than $5,000,001 following such redemptions. In September 2021, the Company’s management re-evaluated and ultimately concluded that the classification of $5,000,001 in permanent equity was not appropriate and that the Public Shares should be reclassified as temporary equity. In connection with the preparation of the financial statements as of and for the three and nine months ended September 30, 2021 that were included in the Company’s Q3 Form 10-Q, the Company concluded that it would change its accounting and reflect the full amount of all redeemable Public Shares in temporary equity. This was a change from the Company’s previous accounting practice whereby it maintained shareholders’ equity of at least $5,000,001 as the Company will not redeem Public Shares that would cause the Company’s net tangible assets to be less than $5,000,001 following such redemptions. In connection with the change in presentation for the Public Shares subject to possible redemption, the Company also revised its earnings per share to allocate net income (loss) evenly to all Public Shares and Class B ordinary shares.On December 14, 2021, the Company’s management and the Audit Committee concluded that the Company’s previously issued financial statements for the Affected Periods, in each case, should be restated to classify all of the Public Shares as temporary equity and should no longer be relied upon. As a result, the Company is restating its financial statements for the Affected Periods herein for the Post-IPO Balance Sheet and the Company’s audited financial statements included in the First Amended Filing and in a Form 10-Q/A for the unaudited condensed financial statements for the periods ended March 31, 2021, June 30, 2021 and September 30, 2021.
Aeffective, due solely to the material weakness is a deficiency, or a combination of deficiencies, in disclosure controls and procedures orour internal control over financial reporting suchrelated to the Company’s accounting for complex financial instruments. As a result, we performed additional analysis as deemed necessary to ensure that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented, or detected and corrected on a timely basis.
Effective disclosure controls and internal control are necessary for us to provide reliablewere prepared in accordance with GAAP. Accordingly, management believes that the financial reports and prevent fraud. We continue to evaluate steps to remediate thestatements included in this Report present fairly in all material weakness. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects.
Management has implemented remediation steps to improve our disclosure controls and procedures and our internal control over financial reporting. Specifically, we expanded and improved our review process for complex securities and related accounting standards. We plan to further improve this process by enhancing access to accounting literature, identification of third-party professionals with whom to consult regarding complex accounting applications and consideration of additional staff with the requisite experience and training to supplement existing accounting professionals.
If we identify any new material weakness in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence inrespects our financial reportingposition, results of operations and our stock price may decline as a result. We cannot assure you thatcash flows for the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses.
period presented.
This annual report on Form 10-K does not include a report
JOBS Act.
Name | Age | Position | ||||
Brian Schwartz | 55 | Chief Executive Officer and Director | ||||
Rob Wolfson | 50 | President and Director | ||||
Timur Akazhanov | 41 | Chief Financial Officer | ||||
Richard Siegel | 57 | Vice President and General Counsel | ||||
Andreas Beroutsos | 56 | Director | ||||
William E. Mitchell | 78 | Director | ||||
Christopher O’Connell | 56 | Director | ||||
Sidney Taurel | 74 | 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 (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 | % | 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) |
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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)
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 |
Corp.
Restatement of Financial Statements
As discussed in Note 2 to the financial statements, the 2020 financial statements have been restated to correct certain misstatements.
May 21, 2021, except for the effects
(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 | |||
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Total assets | $ | 365,078,339 | ||
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| |||
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; 36,394,500 shares subject to possible redemption at $10.00 per share | 363,945,000 | |||
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; 950,000,000 shares authorized; none issued or outstanding (excluding 36,394,500 shares subject to possible redemption) | — | |||
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 | — | |||
Accumulated deficit | (35,758,271 | ) | ||
|
| |||
Total shareholders’ equity | (35,757,361 | ) | ||
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| |||
Total Liabilities and Shareholders’ Equity | $ | 365,078,339 | ||
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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 | |||
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| |||
Net loss | $ | (9,642,556 | ) | |
|
| |||
Basic and diluted weighted average shares outstanding of Class A ordinary shares | 22,696,153 | |||
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| |||
Basic and diluted net income per share, Class A ordinary shares | $ | (0.30 | ) | |
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| |||
Basic and diluted weighted average shares outstanding of Class B ordinary shares | 9,023,430 | |||
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Basic and diluted net loss per share, Class B ordinary shares | $ | (0.30 | ) | |
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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 (inception) through December 31, 2020
Ordinary Shares | Additional Paid-In Capital | Accumulated Deficit | Shareholders’ Equity | |||||||||||||||||
Class B | ||||||||||||||||||||
Shares | Amount | |||||||||||||||||||
Balance as of September 2, 2020 (inception) | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
Issuance of ordinary shares to Sponsor | 9,098,625 | 910 | 24,090 | — | 25,000 | |||||||||||||||
Accretion of Class A ordinary shares subject to redemption | — | — | (24,090 | ) | (26,115,715 | ) | (26,139,805 | ) | ||||||||||||
Net loss | — | — | — | (9,642,556 | ) | (9,642,556 | ) | |||||||||||||
|
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| |||||||||||
Balance as of December 31, 2020 | 9,098,625 | $ | 910 | $ | — | $ | (35,758,271 | ) | $ | (35,757,361 | ) | |||||||||
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OPERATIONS
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 | ) | |||
CHANGES IN SHAREHOLDERS’ DEFICIT
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 | ) | |||||||||
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 | ) | ||
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| |||
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 | |||
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| |||
Net change in cash | 30,103 | |||
Cash - beginning of the period | — | |||
|
| |||
Cash - end of the period | $ | 30,103 | ||
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| |||
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 |
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 | ||||
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
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 Class A ordinary shares subject to possible redemption in temporary equity 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
The Company has followed ASC 480 in accounting for its Class A ordinary shares subject to redemption. This included recording the Public Shares in permanent equity on its balance sheet. However, the Company maintained shareholders’ equity of at least $5,000,001 as the Company will not redeem Public Shares that would cause the Company’s net tangible assets to be less than $5,000,001 following such redemptions.
In September 2021, the Company’s management re-evaluated and ultimately concluded that the classification of $5,000,001 in permanent equity was not appropriate and that the Class A ordinary shares should be reclassified as temporary equity. In connection with the preparation of the financial statements as of and for the three and nine months ended September 30, 2021 that were included in the Company’s Q3 Form 10-Q, the Company concluded that it would change its accounting and reflect the full amount of all redeemable Class A ordinary shares in temporary equity. This was a change from the Company’s previous accounting practice whereby it maintained shareholders’ equity of at least $5,000,001 as the Company will not redeem Class A ordinary shares that would cause the Company’s net tangible assets to be less than $5,000,001 following such redemptions. In connection with the change in presentation for the Class A ordinary shares subject to possible redemption, the Company also revised its earnings per share to allocate net income (loss) evenly to all Class A ordinary shares and Class B ordinary shares.
On December 14, 2021, the Company’s management and the Audit Committee concluded that the Company’s previously issued financial statements for the Affected Periods, in each case, should be restated to classify all of the Class A ordinary shares as temporary equity and should no longer be relied upon. As a result, the Company is restating its financial statements for the Affected Periods herein for the Post-IPO Balance Sheet and the Company’s audited financial statements included in the First Amended Filing and for the unaudited condensed financial statements for the periods ended March 31, 2021, June 30, 2021 and September 30, 2021, which will be amended in separate Form 10-Q/A filings. See Note 1 regarding the ability of the Company to continue as a going concern as a result of the restatements.
Impact of the Restatement
The impact of the restatement on the balance sheet, statement of operations and statement of cash flows for the Affected Periods is presented below.
As of October 23, 2020 | ||||||||||||
Balance Sheet | As Reported | Restatement Adjustment | As Restated | |||||||||
Class A ordinary shares subject to possible redemption | $ | 294,579,620 | $ | 69,365,380 | $ | 363,945,000 | ||||||
Shareholders’ equity (deficit) | ||||||||||||
Class A ordinary shares, $0.0001 par value | 1,736 | (1,736 | ) | — | ||||||||
Additional paid-in capital | 5,662,890 | (5,662,890 | ) | — | ||||||||
Accumulated deficit | (665,558 | ) | (63,700,754 | ) | (64,366,312 | ) | ||||||
As of December 31, 2020 | ||||||||||||
Balance Sheet | As Reported As Previously Restated in the First Amended Filing | Restatement Adjustment | As Restated | |||||||||
Class A ordinary shares subject to possible redemption | $ | 323,187,630 | $ | 40,757,370 | $ | 363,945,000 | ||||||
Shareholders’ Equity (Deficit) | ||||||||||||
Class A ordinary shares, $0.0001 par value | 408 | (408 | ) | — | ||||||||
Additional paid-in capital | 14,641,247 | (14,641,247 | ) | — | ||||||||
Accumulated deficit | (9,642,556 | ) | (26,115,715 | ) | (35,758,271 | ) | ||||||
For the Period from September 2, 2020 (inception) through December 31, 2020 | ||||||||||||
Statement of Operations | As Reported As Previously Restated in the First Amended Filing | Restatement Adjustment | As Restated | |||||||||
Weighted average shares outstanding of Class A ordinary shares | 34,280,343 | (11,584,190 | ) | 22,696,153 | ||||||||
Basic and diluted net income per ordinary share, Class A | $ | — | $ | (0.30 | ) | $ | (0.30 | ) | ||||
Weighted average shares outstanding of Class B ordinary shares | 8,684,834 | 338,596 | 9,023,430 | |||||||||
Basic and diluted net loss per ordinary share, Class B | $ | (1.11 | ) | $ | 0.81 | $ | (0.30 | ) |
For the Period from September 2, 2020 (inception) through December 31, 2020 | ||||||||||||
Statement of Cash Flows | As Reported As Previously Restated in the First Amended Filing | Restatement Adjustment | As Restated | |||||||||
Initial value of Class A ordinary shares subject to possible redemption | $ | 332,161,540 | $ | (332,161,540 | ) | $ | — |
2021 and December 31, 2020.
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
those instruments are not dilutive.
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