(MARK ONE)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
2021
¨ TRANSITION 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 |
to________________
Delaware | 84-3743013 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification |
777 Third Avenue, New York, NY | 10017 | |
(Address of principal executive offices) | (Zip Code) |
Title of | Trading Symbol(s) | Name of on Registered | ||
Units, each consisting of one share of Class A Common Stock and one-sixth of one Redeemable Warrant | SVACU | The Nasdaq Stock Market LLC | ||
Class A Common Stock, par value $0.0001 per share | SVAC | The Nasdaq Stock Market LLC | ||
Redeemable Warrants, exercisable for one share of Class A Common Stock for $11.50 per share | SVACW | The Nasdaq Stock Market LLC |
*The registrant became subject to such requirements on September 9, 2020, and it has filed all reports so required since that date.
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Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
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ITEM 1. | FINANCIAL STATEMENTS |
September 30, 2020 December 31, 2019 (Unaudited) Assets: Current assets: Cash $ 2,652,970 $ 72,751 Prepaid expenses 279,418 - Total current assets 2,932,388 72,751 Deferred offering costs associated with the initial public offering - 312,489 Investments held in Trust Account 404,261,756 - Total Assets $ 407,194,144 $ 385,240 Liabilities and Stockholders' Equity: Current liabilities: Accounts payable $ 42,363 $ 253,937 Accrued expenses 70,000 - Franchise tax payable 150,702 565 Note payable - related party - 107,062 Total current liabilities 263,065 361,564 Deferred legal fees 250,000 - Deferred underwriting commissions in connection with the initial public offering 18,190,554 - Total liabilities 18,703,619 361,564 Commitments and Contingencies Class A common stock; 38,349,052 shares subject to possible redemption at $10.00 per share 383,490,520 - Stockholders' Equity: Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding - - Class A common stock, $0.0001 par value; 200,000,000 shares authorized; 2,074,401 shares issued and outstanding (excluding 38,349,052 shares subject to possible redemption) 207 - Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 10,105,863 shares issued and outstanding (1) 1,011 1,035 Additional paid-in capital 5,175,852 23,965 Accumulated deficit (177,065 ) (1,324 ) Total stockholders' equity 5,000,005 23,676 Total Liabilities and Stockholders' Equity $ 407,194,144 $ 385,240 (1) This number includes up to 1,350,000 shares of common stock subject to forfeiture if the over-allotment option was not exercised in full or in part by the underwriters as of December 31, 2019. On September 18, 2020, the underwriters partially exercised the over-allotment option to purchase an additional 4,423,453 Units; thus, only 244,137 Class B ordinary shares were forfeited accordingly.(see Note 5)
June 30, 2021 | December 31, 2020 | |||||||
(Unaudited) | ||||||||
Assets: | ||||||||
Current assets: | ||||||||
Cash | $ | 1,405,039 | $ | 2,557,154 | ||||
Prepaid expenses | 204,970 | 223,840 | ||||||
Total current assets | 1,610,009 | 2,780,994 | ||||||
Investments held in Trust Account | 404,471,576 | 404,403,316 | ||||||
Total Assets | $ | 406,081,585 | $ | 407,184,310 | ||||
Liabilities and Stockholders’ Equity: | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 513,343 | $ | 12,223 | ||||
Accrued expenses | 1,754,370 | 70,000 | ||||||
Franchise tax payable | 20,891 | 200,841 | ||||||
Income tax payable | 1,351 | — | ||||||
Total current liabilities | 2,289,955 | 283,064 | ||||||
Deferred legal fees | 250,000 | 250,000 | ||||||
Deferred underwriting commissions in connection with the initial public offering | 18,190,554 | 18,190,554 | ||||||
Derivative liabilities | 45,566,110 | 47,320,290 | ||||||
Total liabilities | 66,296,619 | 66,043,908 | ||||||
Commitments and Contingencies | 0 | 0 | ||||||
Class A common stock; 33,478,496 and 33,614,040 shares subject to possible redemption at $10.00 per share at June 30, 2021 and December 31, 2020, respectively | 334,784,960 | 336,140,400 | ||||||
Stockholders’ Equity: | ||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; NaN issued and outstanding at June 30, 2021 and December 31, 2020 | 0— | 0— | ||||||
Class A common stock, $0.0001 par value; 200,000,000 shares authorized; 6,944,957 and 6,809,413 shares issued and outstanding (excluding 33,478,496 and 33,614,040 shares subject to possible redemption) at June 30, 2021 and December 31, 2020, respectively | 694 | 681 | ||||||
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 10,105,863 shares issued and outstanding at June 30, 2021 and December 31, 2020 | 1,011 | 1,011 | ||||||
Additional paid-in capital | 33,444,285 | 32,088,858 | ||||||
Accumulated deficit | (28,445,984 | ) | (27,090,548 | ) | ||||
Total stockholders’ equity | 5,000,006 | 5,000,002 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 406,081,585 | $ | 407,184,310 | ||||
For The Three Months Ended September 30, 2020 | For The Nine Months Ended September 30, 2020 | |||||||
General and administrative expenses | $ | 52,801 | $ | 52,830 | ||||
Franchise tax expense | 147,937 | 150,137 | ||||||
Loss from operations | $ | (200,738 | ) | $ | (202,967 | ) | ||
Net gain on investments held in Trust Account | 27,226 | 27,226 | ||||||
Net loss | $ | (173,512 | ) | $ | (175,741 | ) | ||
Weighted average shares outstanding of Class A common stock | 38,081,625 | 38,081,625 | ||||||
Basic and diluted net income per share | $ | - | $ | - | ||||
Weighted average shares outstanding of Class B common stock | 10,105,863 | 10,105,863 | ||||||
Basic and diluted net loss per share | $ | (0.02 | ) | $ | (0.02 | ) |
For The Three Months Ended June 30, | For The Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
General and administrative expenses | $ | 2,009,250 | $ | 43 | $ | 3,016,426 | $ | 44 | ||||||||
Administrative expenses–related party | 30,000 | — | 60,000 | — | ||||||||||||
Franchise tax expense | 50,000 | 1,100 | 100,100 | 2,200 | ||||||||||||
Loss from operations | (2,089,250 | ) | (1,143 | ) | (3,176,526 | ) | (2,244 | ) | ||||||||
Other income (expenses) | ||||||||||||||||
Change in fair value of derivative liabilities | (11,295,050 | ) | — | 1,754,180 | — | |||||||||||
Net gain from investments held in Trust Account | 10,085 | — | 68,260 | — | ||||||||||||
Interest income | — | — | — | 15 | ||||||||||||
Loss before income tax expense | (13,374,215 | ) | (1,143 | ) | (1,354,086 | ) | (2,229 | ) | ||||||||
Income tax expense | — | — | 1,350 | — | ||||||||||||
Net los s | $ | (13,374,215 | ) | $ | (1,143 | ) | $ | (1,355,436 | ) | $ | (2,229 | ) | ||||
Weighted average shares outstanding of Class A common stock | 40,423,453 | — | 40,423,453 | — | ||||||||||||
Basic and diluted net income per share, Class A common stock | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||||
Weighted average shares outstanding of Class B common stock | 10,105,863 | 9,000,000 | 10,105,863 | 9,000,000 | ||||||||||||
Basic and diluted net loss per share, Class B common stock | $ | (1.32 | ) | $ | (0.00 | ) | $ | (0.13 | ) | $ | (0.00 | ) | ||||
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020
For the Three and Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||||
Common Stock | Additional | Total | ||||||||||||||||||||||||||
Class A | Class B | Paid-In | Accumulated | Stockholders' | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
Balance - December 31, 2019 (1)(2) | - | $ | - | 10,350,000 | $ | 1,035 | $ | 23,965 | $ | (1,324 | ) | $ | 23,676 | |||||||||||||||
Net loss (unaudited) | - | - | - | - | - | (1,086 | ) | (1,086 | ) | |||||||||||||||||||
Balance - March 31, 2020 (unaudited) (1)(2) | - | $ | - | 10,350,000 | $ | 1,035 | $ | 23,965 | $ | (2,410 | ) | $ | 22,590 | |||||||||||||||
Net loss (unaudited) | - | - | - | - | - | (1,143 | ) | (1,143 | ) | |||||||||||||||||||
Balance - June 30, 2020 (unaudited) (1)(2) | - | $ | - | 10,350,000 | $ | 1,035 | $ | 23,965 | $ | (3,553 | ) | $ | 21,447 | |||||||||||||||
Sale of units in initial public offering, gross | 40,423,453 | 4,042 | - | - | 404,230,488 | - | 404,234,530 | |||||||||||||||||||||
Offering costs | - | - | - | - | (25,676,631 | ) | - | (25,676,631 | ) | |||||||||||||||||||
Sale of private placement warrants to Sponsor in private placement | - | - | - | - | 10,084,691 | - | 10,084,691 | |||||||||||||||||||||
Class B common stock forfeited | - | - | (244,137 | ) | (24 | ) | 24 | - | - | |||||||||||||||||||
Class A common stock subject to possible redemption | (38,349,052 | ) | (3,835 | ) | - | - | (383,486,685 | ) | - | (383,490,520 | ) | |||||||||||||||||
Net loss | - | - | - | - | - | (173,512 | ) | (173,512 | ) | |||||||||||||||||||
Balance - September 30, 2020 (unaudited) | 2,074,401 | $ | 207 | 10,105,863 | $ | 1,011 | $ | 5,175,852 | $ | (177,065 | ) | $ | 5,000,005 |
For the Three and Six Months Ended June 30, 2021 | ||||||||||||||||||||||||||||
Common Stock | Total Stockholders’ Equity | |||||||||||||||||||||||||||
Class A | Class B | Additional Paid-In Capital | Accumulated Deficit | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance–December 31, 2020 | 6,809,413 | $ | 681 | 10,105,863 | $ | 1,011 | $ | 32,088,858 | $ | (27,090,548 | ) | $ | 5,000,002 | |||||||||||||||
Common stock subject to possible redemption | (1,201,878 | ) | (120 | ) | — | — | (12,018,660 | ) | — | (12,018,780 | ) | |||||||||||||||||
Net income | — | — | — | — | — | 12,018,779 | 12,018,779 | |||||||||||||||||||||
Balance–March 31, 2021 (unaudited) | 5,607,535 | 561 | 10,105,863 | 1,011 | 20,070,198 | (15,071,769 | ) | 5,000,001 | ||||||||||||||||||||
Common stock subject to possible redemption | 1,337,422 | 133 | — | — | 13,374,087 | — | 13,374,220 | |||||||||||||||||||||
Net loss | — | — | — | — | — | (13,374,215 | ) | (13,374,215 | ) | |||||||||||||||||||
Balance–June 30, 2021 (unaudited) | 6,944,957 | $ | 694 | 10,105,863 | $ | 1,011 | $ | 33,444,285 | $ | (28,445,984 | ) | $ | 5,000,006 | |||||||||||||||
For The Three and Six Months Ended June 30, 2020 | ||||||||||||||||||||||||||||
Common Stock | Total Stockholders’ Equity | |||||||||||||||||||||||||||
Class A | Class B | Additional Paid-In Capital | Accumulated Deficit | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance–December 31, 2019 | — | $ | — | 10,350,000 | $ | 1,035 | $ | 23,965 | $ | (1,324 | ) | $ | 23,676 | |||||||||||||||
Net loss | — | — | — | — | — | (1,086 | ) | (1,086 | ) | |||||||||||||||||||
Balance–March 31, 2020 (unaudited) | — | — | 10,350,000 | 1,035 | 23,965 | (2,410 | ) | 22,590 | ||||||||||||||||||||
Net loss | — | — | — | — | — | (1,143 | ) | (1,143 | ) | |||||||||||||||||||
Balance–June 30, 2020 (unaudited) | — | $ | — | 10,350,000 | $ | 1,035 | $ | 23,965 | $ | (3,553 | ) | $ | 21,447 | |||||||||||||||
(1) This number includes up to 1,350,000 shares
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020
Cash Flows from Operating Activities: | ||||
Net loss | $ | (175,741 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Net gain from investments held in Trust Account | (27,226 | ) | ||
Changes in operating assets and liabilities: | ||||
Prepaid expenses | (279,418 | ) | ||
Accounts payable | 30,760 | |||
Franchise tax payable | 150,137 | |||
Net cash used in operating activities | (301,488 | ) | ||
Cash Flows from Investing Activities | ||||
Cash deposited in Trust Account | (404,234,530 | ) | ||
Net cash used in investing activities | (404,234,530 | ) | ||
Cash Flows from Financing Activities: | ||||
Proceeds from note payable to related parties | 41,500 | |||
Repayment of note payable to related party | (141,500 | ) | ||
Proceeds received from initial public offering, gross | 404,234,530 | |||
Proceeds received from private placement | 10,084,691 | |||
Offering costs paid | (7,102,984 | ) | ||
Net cash provided by financing activities | 407,116,237 | |||
Net change in cash | 2,580,219 | |||
Cash - beginning of the period | 72,751 | |||
Cash - end of the period | $ | 2,652,970 | ||
Supplemental disclosure of noncash financing activities: | ||||
Offering costs included in accounts payable | $ | 7,666 | ||
Offering costs included in accrued expenses | $ | 70,000 | ||
Offering costs funded with note payable | $ | 7,062 | ||
Deferred underwriting commissions in connection with the initial public offering | $ | 18,190,554 | ||
Deferred legal fees | $ | 250,000 | ||
Initial value of Class A common stock subject to possible redemption | $ | 341,051,610 | ||
Change in initial value of Class A common stock subject to possible redemption | $ | 42,438,910 | ||
Forfeiture of Class B common stock | $ | 24 |
For The Six Months Ended June 30, | ||||||||
2021 | 2020 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net loss | $ | (1,355,436 | ) | $ | (2,229 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Change in fair value of derivative liabilities | (1,754,180 | ) | — | |||||
Net gain from investments held in Trust Account | (68,260 | ) | — | |||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | 18,870 | — | ||||||
Accounts payable | 501,120 | 43 | ||||||
Accrued expenses | 1,684,370 | — | ||||||
Franchise tax payable | (179,950 | ) | 2,200 | |||||
Income tax payable | 1,351 | — | ||||||
Net cash provided by (used in) operating activities | (1,152,115 | ) | 14 | |||||
Net change in cash | (1,152,115 | ) | 14 | |||||
Cash – beginning of the period | 2,557,154 | 72,751 | ||||||
Cash – end of the period | $ | 1,405,039 | $ | 72,765 | ||||
Supplemental disclosure of noncash financing activities: | ||||||||
Offering costs included in accounts payable | $ | — | $ | 291,365 | ||||
Offering costs included in accrued expenses | $ | — | $ | 388,500 | ||||
Change in value of Class A common stock subject to possible redemption | $ | (1,355,440 | ) | $ | — |
Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).
Offerin
2021.
its wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.
STARBOARD VALUE ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
This may make comparison of the Company’s financial statements 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.
Liquidity and Capital Resources
As of September 30, 2020, the Company had approximately $2.7 million in its operating bank account, and working capital of approximately $2.7 million.
The Company’s liquidity needs to date have been satisfied through the payment of $25,000 from the Sponsor to purchase the Founder Shares, the loan under the Note (as defined below) of approximately $141,000 (see Note 4) from the Sponsor, and the net proceeds from the consummation of the Private Placement not held in the Trust Account. The Company fully repaid the Note on September 14, 2020. In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or the Company’s officers and directors may, but are not obligated to, provide the Company Working Capital Loans (as defined below in Note 4). As of September 30, 2020, there were no Working Capital Loans outstanding.
Based on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity from the Sponsor or an affiliate of the Sponsor, or the Company’s officers and directors to meet its needs through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, the Company will be using these funds for paying 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.
Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that the specific impact is not readily determinable as of the date of the balance sheet. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Note 2—Summary of Significant Accounting Policies
2021 and December 31, 2020
STARBOARD VALUE ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000, and investments held in Trust Account. At September 30, 2020, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
consist of:
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Class A common stock | ||||||||||||||||
Numerator: Income allocable to Class A common stock | ||||||||||||||||
Income from investments held in Trust Account | $ | 10,085 | $ | — | $ | 68,260 | $ | — | ||||||||
Less: Company’s portion available to be withdrawn to pay taxes | (10,085 | ) | — | (68,260 | ) | — | ||||||||||
Net income attributable to Class A common stock | $ | — | $ | — | $ | — | $ | — | ||||||||
Denominator: Weighted average Class A common stock | ||||||||||||||||
Basic and diluted weighted average shares outstanding, Class A common stock | 40,423,453 | — | 40,423,453 | — | ||||||||||||
Basic and diluted net income per share, Class A common stock | $ | 0.00 | $ | — | $ | 0.00 | $ | — | ||||||||
Class B common stock | ||||||||||||||||
Numerator: Net income (loss) minus net income allocable to Class A common stock | ||||||||||||||||
Net income (loss) | $ | (13,374,215 | ) | $ | (1,144 | ) | $ | (1,355,436 | ) | $ | (2,229 | ) | ||||
Net income allocable to Class A common stock | — | — | — | — | ||||||||||||
Net income (loss) attributable to Class B common stock | $ | (13,374,215 | ) | $ | (1,144 | ) | $ | (1,355,436 | ) | $ | (2,229 | ) | ||||
Denominator: Weighted average Class B common stock | ||||||||||||||||
Basic and diluted weighted average shares outstanding, Class B common stock | 10,105,863 | 9,000,000 | 10,105,863 | 9,000,000 | ||||||||||||
Basic and diluted net loss per share, Class B common stock | $ | (1.32 | ) | $ | (0.00 | ) | $ | (0.13 | ) | $ | (0.00 | ) | ||||
positions taken or expected to be taken in a tax return. For taxthose benefits to be recognized, a tax position must be more likely than not
Net Income (Loss) Per Common Share
Net loss per share is computed by dividing net income byearly adopted the weighted-average number of common stock outstanding during the periods. The Company has not considered the effectASU on January 1, 2021. Adoption of the warrants sold in the Initial Public Offering and the Private Placement to purchase up to an aggregate of 20,197,611 shares ofASU 2020-06 did not impact the Company’s Class A common stock in the calculationfinancial position, results of diluted income per share, since their inclusion would be anti-dilutive under the treasury stock method.
operations or cash flows.
Recent Accounting Pronouncements
Managementmanagement does not believe that any recently issued, but not yet effective, accounting pronouncementstandards updates, if currently adopted, would have a material effect on the Company’saccompanying condensed consolidated financial statements.
STARBOARD VALUE ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Combination
The Sponsor and the Company'sCompany’s Chief Executive Officer agreed to forfeit up to 1,350,000 Founder Shares to the extent that the over-allotment option was not exercised in full by the underwriters, so that the Founder Shares would represent 20.0% of the Company’s issued and outstanding shares after the Initial Public Offering. On September 23, 2020, upon the underwriters'underwriters’ partial exercise of the over-allotment, an aggregate of 244,137 Founder Shares were forfeited by the Sponsor and the Company’s Chief Executive Officer.
STARBOARD VALUE ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Subsequent to the repayment, the facility was no
For the three and six months ended June 30, 2021, the Company incurred $30,000 and $60,000
STARBOARD VALUE ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 5—CommitmentsContingencies
advisors, including attorneys, investment banks, etc., pursuant to which certain fees incurred by the Company will be deferred and become payable only if the Company consummates a Business Combination. If a Business Combination does not occur, the Company will not be required to pay these contingent fees. There can be no assurances that the Company will complete a Business Combination.
STARBOARD VALUE ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 6—Stockholders’ Equity
Preferred stock — The Company is authorized to issue 1,000,000 sharesCombination which was included on the condensed consolidated balance sheets as of preferred stock, par value $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of SeptemberJune 30, 20202021 and December 31, 2019, there were no shares of preferred stock issued or outstanding.
Class A common stock — The Company is authorized to issue 200,000,000 shares of Class A common stock with a par value of $0.0001 per share. 2020.
Class B common stock — The Company is authorized to issue 20,000,000 shares of Class B common stock with a par value of $0.0001 per share. In November 2019, the Company issued 8,625,000 shares of Class B common stock. On September 9, 2020, the Company effected a share capitalization, resulting in an aggregate of 10,350,000 shares of Class B common stock outstanding. All shareshad 6,737,242 Detachable Redeemable Warrants and associated amounts have been retroactively restated to reflect the share capitalization. The Sponsor and the Company's Chief Executive Officer agreed to forfeit up to 1,350,000 Founder Shares to the extent that the over-allotment option was not exercised in full by the underwriters so that the Founder Shares would represent 20.0% of the Company’s issued and outstanding shares after the Initial Public Offering. On September 23, 2020, upon the underwriters' partial exercise of the over-allotment, an aggregate of 244,137 Founder Shares were forfeited by the Sponsor and the Company’s Chief Executive Officer. As of September 30, 2020 and December 31, 2019, there were 10,105,863 and 10,350,000 shares of Class B common stock outstanding, respectively.
Prior to the initial Business Combination, only holders of the Company’s Class B common stock will have the right to vote on the election of directors. Holders of the Class A common stock will not be entitled to vote on the election of directors during such time. These provisions of the Certificate of Incorporation may only be amended if approved by the holders of at least 90% of the Company’s common stock entitled to vote thereon. With respect to any other matter submitted to a vote of the Company’s stockholders, including any vote in connection with the initial Business Combination, except as required by applicable law or stock exchange rule, holders of the Company’s Class A common stock and holders of the Company’s Class B common stock will vote together as a single class, with each share entitling the holder to one vote.
The Class B common stock will automatically convert into Class A common stock at the time of the initial Business Combination on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts sold in the Initial Public Offering and related to the closing of the initial Business Combination (other than the forward purchase shares and the private placement warrants delivered pursuant to the forward purchase agreement), the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the total number of all shares of common stock outstanding upon completion of the Initial Public Offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with the initial Business Combination (net of the number of shares of Class A common stock redeemed in connection with the initial Business Combination), excluding the forward purchase shares and private placement warrants delivered pursuant to the forward purchase agreement, any shares or equity-linked securities issued, or to be issued, to any seller in the initial Business Combination and any 6,723,127
Quoted Prices in Active Markets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | ||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | |||||||||
Investments held in Trust Account: | ||||||||||||
U.S. Treasury Securities | $ | 404,258,816 | $ | - | $ | - | ||||||
$ | 404,258,816 | $ | - | $ | - |
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: | ||||||||||||
U.S. Treasury Securities (1) | $ | 404,470,636 | $ | — | $ | — | ||||||
Liabilities: | ||||||||||||
Derivative warrant liabilities | $ | 13,676,602 | $ | — | $ | 28,937,428 | ||||||
Forward purchase agreement | $ | — | $ | — | $ | 2,952,080 |
(1) | Excludes $940 of cash held in the Trust Account as of June 30, 2021. |
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: | ||||||||||||
U.S. Treasury Securities (1) | $ | 404,400,376 | $ | — | $ | — | ||||||
Liabilities: | ||||||||||||
Derivative warrant liabilities | $ | 13,272,368 | $ | — | $ | 27,244,372 | ||||||
Forward purchase agreement | $ | — | $ | — | $ | 6,803,550 |
(1) | Excludes $2,940 of cash held in the Trust Account as of December 31, 2020. |
Transfers to/from Levels 1, 2, and 3 are recognized at the endinvestment
As of June 30, 2021 | As of December 31, 2020 | |||||||
Warrants: | ||||||||
Option term (in years) | 5.17 | 5.60 | ||||||
Volatility | 31.30 | % | 27.00 | % | ||||
Risk-free interest rate | 0.90 | % | 0.45 | % | ||||
Expected dividends | 0.00 | % | 0.00 | % | ||||
Stock price | $ | 9.69 | $ | 10.06 | ||||
Forward purchase agreement: | ||||||||
Expected term | 0.17 | 0.60 | ||||||
Risk-free interest rate | 0.05 | % | 0.09 | % | ||||
Stock price | $ | 9.69 | $ | 10.06 |
Investments held2021 is summarized as follows:
Level 3—Derivative liabilities at December 31, 2020 | $ | 34,047,922 | ||
Change in fair value of derivative warrant liabilities | (9,882,725 | ) | ||
Level 3—Derivative liabilities at March 31, 2021 | 24,165,197 | |||
Change in fair value of derivative warrant liabilities | 7,724,311 | |||
Level 3—Derivative liabilities at June 30, 202 1 | $ | 31,889,508 | ||
Note 8—Subsequent Events
$37,500,000.
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Our The registration statements for our initial public offering (the “Initial Public Offering”) became effective on September 9, 2020. On September 14, 2020,, we consummated theour Initial Public Offering of 36,000,000 units (the(the “Units” and, with respect to the Class A common stock, par value $0.0001 per share, included in the Units offered, the “Public Shares”) at $10.00 per Unit, generating gross proceeds of $360.0 million, and incurring offering costs of approximately $23.0 million, inclusive of $16.2 million in deferred underwriting commissions. The underwriters were granted a Commencing on November 2, 2020, holders of the Units may elect to separately trade the Public Shares and the Detachable Redeemable Warrants (as defined below) included in the Units.
Results of Operations
Our entire activity since inception through September 30, 2020 related to our formation, the preparation for the Initial Public Offering, and since the closing of the Initial Public Offering, the search for a prospective initial Business Combination. We have neither engaged in any operations nor generated any revenues to date. We will not generate any operating revenues until after completion of our initial Business Combination. We will generate non-operating income in the form of interest income on cash and cash equivalents. We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
For the three months ended September 30, 2020, we had a net loss of approximately $174,000, which consisted of approximately $27,000 of net gain on investments held in Trust Account, offset by approximately $53,000 in general and administrative expenses and approximately $148,000 in franchise tax expense.
For the nine months ended September 30, 2020, we had a net loss of approximately $176,000, which consisted of approximately $27,000 of net gain on investments held in Trust Account, offset by approximately $53,000 in general and administrative expenses and approximately $150,000 in franchise tax expense.
$680,000 (not taking into account approximately $22,000 of taxes that may be paid using interest income from the Trust Account).
We continueThe Company’s management continues to evaluate the impact of the
We do
$250,000 solely in the event that we complete an Initial Business Combination.
This management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The Company has identified the following as its critical accounting policies:
Accordingly, as of June 30, 2021 and December 31, 2020, 33,478,496 and 33,614,040 shares of Class A common stock subject to possible redemption are presented as temporary equity, outside of the stockholders’ equity section of our condensed consolidated balance sheets.
Net loss per share is computed by dividing net loss by the weighted-average number of common stock outstanding during the periods. We have not considered the effect of the warrants sold in the Initial Public Offering and the Private Placement to purchase the
Our unaudited condensed consolidated statements of operations include a presentation of net income (loss) per share for Class A common stock subject to possible redemption in a manner similar to the
Standards
Off-Balance Sheet Arrangements
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. | CONTROLS AND PROCEDURES |
Our management evaluated, with the participation of our principal executive officer and principal financial and accounting officer (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of June 30, 2021, pursuant to RuleUnder the supervision andparticipationobjective of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended September 30, 2020, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our chief executive officer and chief financial officer have concluded that during the period covered by this Quarterly Report, our disclosure controls and procedures were effective.Disclosure controls and procedures are designed to ensureensuring that information required to be disclosed by us in our reports filed under the Exchange Act, reportssuch as this Quarterly Report, is recorded, processed, summarized, and reported within the time periodsperiod specified in the SEC’sSEC rules and forms, andforms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including our principalthe chief executive officer and principalchief financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.Therenine monthsfiscal quarter ended SeptemberJune 30, 2020,2021 covered by this Quarterly Report on Form
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 1A. | RISK FACTORS |
None.
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Unregistered Sales
On September 14, 2020, we consummated our Initial Public Offering of 36,000,000 Units. On September 23, 2020, in connection with underwriters’ election to partially exercise their over-allotment option, we sold an additional 4,423,453 Units. The Units were sold at an offering price of $10.00 per Unit, generating total gross proceeds of $404,234,530. Each Unit consists of one share of Class A common stock and one-sixth of one redeemable warrant (the “Detachable Redeemable Warrants”). In addition, each share of Class A common stock issued in the Initial Public Offering carries a contingent right to receive at least one-sixth of one redeemable warrant following the Initial Business Combination Redemption Time under certain circumstances and subject to adjustment (the “Distributable Redeemable Warrants”, and with the Detachable Redeemable Warrants, the “Redeemable Warrants”). UBS Securities LLC, Stifel, Nicolaus & Company, Incorporated and Cowen and Company, LLC acted as the book running managers of the offering. The securities sold in the offering were registered under the Securities Act on a registration statement on Form S-1 (No. 333-248094), which the SEC declared effective on September 9, 2020, and a related registration statement on Form S-1MEF (No. 333-248699), which became effective on the same date.
Simultaneously with the closing of the Initial Public Offering, the Company completed the private sale of an aggregate of 6,133,333 Private Placement Warrants to the Sponsor, at a purchase price of $1.50 per Private Placement Warrant, generating gross proceeds to the Company of $9,200,000. In connection with the underwriters’ partial exercise of their over-allotment option, the Sponsor purchased an additional 589,794 Private Placement Warrants, generating gross proceeds to the Company of $884,691. Such securities were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
The Private Placement Warrants are identical to the Redeemable Warrants underlying the Units sold in the Initial Public Offering, except that, so long as they are held by the Sponsor or its permitted transferees: (1) they will not be redeemable by the Company, except as otherwise set forth in the Company’s prospectus; (2) they (including the Class A common stock issuable upon exercise of the Private Placement Warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by the Sponsor, until 30 days after the completion of the Company’s initial business combination; (3) they may be exercised by the holders on a cashless basis; and (4) the holders thereof (including with respect to the shares of common stock issuable upon exercise of the Private Placement Warrants) are entitled to registration rights.
Of the gross proceeds received from the Initial Public Offering, the partial exercise of the over-allotment option and the Private Placement Warrants, $404,234,530 was placed in the Trust Account.
Use of Proceeds
We paid a total of approximately $7.9 million underwriting discounts and commissions (excluding the deferred portion) and approximately $7.1 million for other offering costs and expenses related to the Initial Public Offering. In connection with the Initial Public Offering, we incurred offering costs of approximately $25.7 million, inclusive of $18.2 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, approximately $404.2 million of the net proceeds of the sale of the Units in the Initial Public Offering, the Private Placement, the Over-Allotment Units and the additional Private Placement Warrants were placed in the Trust Account. 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 Quarterly Report.
There has been no material change in the planned use of the proceeds from the Initial Public Offering and Private Placement as is described in the Company’s final prospectus related to the Initial Public Offering.
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
ITEM 4. | MINE SAFETY DISCLOSURES |
ITEM 5. | OTHER INFORMATION |
ITEM 6. | EXHIBITS |
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report.
104* | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
* | Filed herewith. |
** | Furnished. |
† | Certain schedules and exhibits omitted pursuant to S-K. The registrant agrees to furnish supplementally a copy of any omitted schedules and |
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Dated: July 29, 2021 | STARBOARD VALUE ACQUISITION | |||||
By: | /s/ Martin D. McNulty, Jr. | |||||
Name: | Martin D. McNulty, Jr. | |||||
Title: | Chief Executive Officer | |||||
(Principal Executive Officer) | ||||||
Dated: July 29, 2021 | ||||||
By: | /s/ Kenneth R. Marlin | |||||
Name: | Kenneth R. Marlin | |||||
Title: | Chief Financial Officer | |||||
(Principal Financial and Accounting Officer) |