(Mark One)
☒ | 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 |
________
Cayman Islands | 001-39501 | 98-1554335 | ||||
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | ( Identification | ||||
123 E San Carlos Street, Suite 12 San Jose, California | 95112 | |||||
(Address Of Principal Executive Offices) | ||||||
(Zip Code) |
codecode: (650) 825-6965 share of Class A ordinary shares, and one Warrant to acquire one-thirdClass A ordinary share and share,shares, par value $0.0001 per share
☒
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||||
Emerging growth company | ☒ |
Quarterly Report on
Table of Contents
Item 1. | ||||||
| Financial Statements (Unaudited) |
SEPTEMBER 30, 2020
Assets | ||||
Current assets: | ||||
Cash | $ | 2,563,468 | ||
Prepaid expenses | 410,350 | |||
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Total current assets | 2,973,818 | |||
Investments held in Trust Account | 299,998,798 | |||
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Total Assets | $ | 302,972,616 | ||
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Liabilities and Shareholders’ Equity | ||||
Current liabilities: | ||||
Accounts payable | $ | 526,857 | ||
Accrued expenses | 77,300 | |||
Advance - related party | 900,000 | |||
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Total current liabilities | 1,504,157 | |||
Deferred underwriting commissions | 10,500,000 | |||
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Total liabilities | 12,004,157 | |||
Commitments and Contingencies | ||||
Class A ordinary shares; 28,596,845 shares subject to possible redemption at $10.00 per share | 285,968,450 | |||
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; 200,000,000 shares authorized; 1,403,155 shares issued and outstanding (excluding 28,596,845 shares subject to possible redemption) | 140 | |||
Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 8,625,000 shares issued and outstanding (1) | 863 | |||
Additional paid-in capital | 5,060,460 | |||
Accumulated deficit | (61,454 | ) | ||
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Total shareholders’ equity | 5,000,009 | |||
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Total Liabilities and Shareholders’ Equity | $ | 302,972,616 | ||
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SHEETS
June 30, 2021 | December 31, 2020 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash | $ | 706,932 | $ | 1,600,255 | ||||
Prepaid expenses | 194,374 | 334,348 | ||||||
Total current assets | 901,306 | 1,934,603 | ||||||
Investments held in Trust Account | 324,200,159 | 324,170,661 | ||||||
Total Assets | $ | 325,101,465 | $ | 326,105,264 | ||||
Liabilities and Shareholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 230,888 | $ | 117,253 | ||||
Accrued expenses | 130,350 | 133,837 | ||||||
Due to related party | — | 419,487 | ||||||
Total current liabilities | 361,238 | 670,577 | ||||||
Derivative warrant liabilities | 16,523,926 | 25,624,874 | ||||||
Deferred underwriting commissions | 11,342,945 | 11,342,945 | ||||||
Total Liabilities | 28,228,109 | 37,638,396 | ||||||
Commitments and Contingencies | 0 | |||||||
Class A ordinary shares; 29,187,335 and 28,346,686 shares subject to possible redemption at $10.00 per share as of June 30, 2021 and December 31, 2020, respectively | 291,873,350 | 283,466,860 | ||||||
Shareholders’ Equity: | ||||||||
Preference shares, $0.0001 par value; 1,000,000 shares authorized; 0ne issued and outstanding | 0— | 0— | ||||||
Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; 3,221,079 and 4,061,728 shares issued and outstanding (excluding 29,187,335 and 28,346,686 shares subject to possible redemption) as of June 30, 2021 and December 31, 2020, respectively | 322 | 406 | ||||||
Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 8,102,103 shares issued and outstanding as of June 30, 2021 and December 31, 2020 | 810 | 810 | ||||||
Additional paid-in capital | 3,056,496 | 11,462,902 | ||||||
Retained earnings (accumulated deficit) | 1,942,378 | (6,464,110 | ) | |||||
Total Shareholders’ Equity | 5,000,006 | 5,000,008 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 325,101,465 | $ | 326,105,264 | ||||
For the Period From July 21, 2020 (Inception) through September 30, 2020 | ||||
General and administrative expenses | $ | 50,264 | ||
Administrative expenses - related party | 10,000 | |||
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Loss from operations | (60,264 | ) | ||
Interest income | 12 | |||
Net loss from investments held in Trust Account | (1,202 | ) | ||
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Net loss | (61,454 | ) | ||
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Weighted average Class A ordinary shares outstanding, basic and diluted | 30,000,000 | |||
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Basic and diluted net loss per ordinary share | $ | 0.00 | ||
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Weighted average Class B ordinary shares outstanding, basic and diluted (1) | 8,102,103 | |||
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Basic and diluted net loss per ordinary share | $ | (0.01 | ) | |
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2021
For the Three Months Ended June 30, 2021 | For the Six Months Ended June 30, 2021 | |||||||
General and administrative expenses | $ | 172,449 | $ | 664,035 | ||||
Administrative expenses - related party | 30,000 | 60,000 | ||||||
Loss from operations | (202,449 | ) | (724,035 | ) | ||||
Other income (expense) | ||||||||
Change in fair value of derivative warrant liabilities | (2,917,095 | ) | 9,100,948 | |||||
Interest income | 30 | 77 | ||||||
Income from investments held in Trust Account | 11,765 | 29,498 | ||||||
Net income (loss) | $ | (3,107,749 | ) | $ | 8,406,488 | |||
Weighted average Class A ordinary shares outstanding, basic and diluted | 32,408,414 | 32,408,414 | ||||||
Basic and diluted net income per Class A ordinary share | $ | 0.00 | $ | 0.00 | ||||
Weighted average Class B ordinary shares outstanding, basic and diluted | 8,102,103 | 8,102,103 | ||||||
Basic and diluted net income (loss) per Class B ordinary share | $ | (0.39 | ) | $ | 1.03 | |||
Ordinary Shares | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders’ Equity | |||||||||||||||||||||||||
Class A | Class B | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance - July 21, 2020 (inception) | — | $ | — | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Issuance of Class B ordinary shares to Sponsor (1) | — | — | 8,625,000 | 863 | 24,137 | — | 25,000 | |||||||||||||||||||||
Sale of units in initial public offering, gross | 30,000,000 | 3,000 | — | — | 299,997,000 | — | 300,000,000 | |||||||||||||||||||||
Offering costs | — | — | — | — | (17,095,087 | ) | — | (17,095,087 | ) | |||||||||||||||||||
Sale of private placement warrants to Sponsor | — | — | — | — | 8,100,000 | — | 8,100,000 | |||||||||||||||||||||
Shares subject to possible redemption | (28,596,845 | ) | (2,860 | ) | — | — | (285,965,590 | ) | — | (285,968,450 | ) | |||||||||||||||||
Net loss | — | — | — | — | — | (61,454 | ) | (61,454 | ) | |||||||||||||||||||
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Balance - September 30, 2020 (unaudited) | 1,403,155 | $ | 140 | 8,625,000 | $ | 863 | $ | 5,060,460 | $ | (61,454 | ) | $ | 5,000,009 | |||||||||||||||
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2021
Ordinary Shares | Additional | Retained Earnings | Total | |||||||||||||||||||||||||
Class A | Class B | Paid-in | (Accumulated | Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit) | Equity | ||||||||||||||||||||||
Balance - December 31, 2020 | 4,061,728 | $ | 406 | 8,102,103 | $ | 810 | $ | 11,462,902 | $ | (6,464,110 | ) | $ | 5,000,008 | |||||||||||||||
Shares subject to possible redemption | (1,151,424 | ) | (115 | ) | 0 | 0 | (11,462,902 | ) | (51,223 | ) | (11,514,240 | ) | ||||||||||||||||
Net income | — | 0 | — | 0 | 0 | 11,514,237 | 11,514,237 | |||||||||||||||||||||
Balance - March 31, 2021 | 2,910,304 | $ | 291 | 8,102,103 | $ | 810 | 0 | $ | 4,998,904 | $ | 5,000,005 | |||||||||||||||||
Shares subject to possible redemption | 310,775 | 31 | 0 | 0 | 3,056,496 | 51,223 | 3,107,750 | |||||||||||||||||||||
Net loss | — | 0 | — | 0 | 0 | (3,107,749 | ) | (3,107,749 | ) | |||||||||||||||||||
Balance - June 30, 2021 | 3,221,079 | $ | 322 | 8,102,103 | $ | 810 | $ | 3,056,496 | $ | 1,942,378 | $ | 5,000,006 | ||||||||||||||||
Cash Flows from Operating Activities: | ||||
Net loss | $ | (61,454 | ) | |
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 | |||
General and administrative expenses paid by Sponsor under note payable | 100 | |||
Net loss from investments held in Trust Account | 1,202 | |||
Changes in operating assets and liabilities: | ||||
Prepaid expenses | (410,350 | ) | ||
Accounts payable | 416,324 | |||
Accrued expenses | 2,300 | |||
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Net cash used in operating activities | (26,878 | ) | ||
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Cash Flows from Investing Activities: | ||||
Cash deposited in Trust Account | (300,000,000 | ) | ||
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Net cash used in investing activities | (300,000,000 | ) | ||
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Cash Flows from Financing Activities: | ||||
Advance - related party | 900,000 | |||
Repayment of note payable to Sponsor | (98,301 | ) | ||
Proceeds received from initial public offering, gross | 300,000,000 | |||
Proceeds received from private placement | 8,100,000 | |||
Offering costs paid | (6,311,353 | ) | ||
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Net cash provided by financing activities | 302,590,346 | |||
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Net increase in cash | 2,563,468 | |||
Cash - beginning of the period | — | |||
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Cash - ending of the period | $ | 2,563,468 | ||
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Supplemental disclosure of noncash investing and financing activities: | ||||
Offering costs included in accounts payable | $ | 110,533 | ||
Offering costs included in accrued expenses | $ | 75,000 | ||
Offering costs included in note payable | $ | 98,201 | ||
Deferred underwriting commissions | $ | 10,500,000 | ||
Initial value of Class A ordinary shares subject to possible redemption | $ | 286,032,440 | ||
Change in initial value of Class A ordinary shares subject to possible redemption | $ | 63,990 |
2021
Cash Flows from Operating Activities: | ||||
Net income | $ | 8,406,488 | ||
Adjustments to reconcile net income to net cash used in operating activities: | ||||
Change in fair value of derivative warrant liabilities | (9,100,948 | ) | ||
Income from investments held in Trust Account | (29,498 | ) | ||
Changes in operating assets and liabilities: | ||||
Prepaid expenses | 139,974 | |||
Accounts payable | 112,465 | |||
Accrued expenses | (3,487 | ) | ||
Net cash used in operating activities | (475,006 | ) | ||
Cash Flows Used in Financing Activities: | ||||
Repayment of advances from related party | (418,317 | ) | ||
Net cash used in financing activities | (418,317 | ) | ||
Net decrease in cash | (893,323 | ) | ||
Cash - beginning of the period | 1,600,255 | |||
Cash - end of the period | $ | 706,932 | ||
Supplemental disclosure of noncash investing and financing activities: | ||||
Change in value of Class A ordinary shares subject to possible redemption | $ | 8,406,490 |
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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.
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distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the board of directors, liquidate and dissolve, subject, in the case of clauses (ii) and (iii), to the Company’s obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law.
2021.
May 21, 2021.
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the Sarbanes-Oxley Act, of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
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.
Risk and Uncertainties
On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus (the “COVID-19 outbreak”). In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve. The impact of the COVID-19 outbreak on the Company’s results of operations, financial position and cash flows will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of the COVID-19 outbreak on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Company’s results of operations, financial position and cash flows may be materially adversely affected. Additionally, the Company’s ability to complete an Initial Business Combination may be materially adversely affected due to significant governmental measures being implemented to contain the COVID-19 outbreak or treat its impact, including travel restrictions, the shutdown of businesses and quarantines, among others, which may limit the Company’s ability to have meetings with potential investors or affect the ability of a potential target company’s personnel, vendors and service providers to negotiate and consummate an Initial Business Combination in a timely manner. The Company’s ability to consummate an Initial Business Combination may also be dependent on the ability to raise additional equity and debt financing, which may be impacted by the COVID-19 outbreak and the resulting market downturn.
Liquidity and Capital Resources
As of September 30, 2020, the Company had $2.6 million in its operating bank account, and working capital of approximately $1.5 million.
Prior to the completion of the Initial Public Offering, the Company’s liquidity needs had been satisfied through the payment of $25,000 from the Sponsor to cover certain expenses in exchange for the issuance of the Founder Shares (as defined in Note 5), a loan of approximately $98,000 pursuant to the Note issued to the Sponsor (Note 5). The Company repaid the Note in full on September 16, 2020. Subsequent to the consummation of the Initial Public Offering and Private Placement, the Company’s liquidity needs have been satisfied with the proceeds from the consummation of the Private Placement not held in the Trust Account. In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor may, but is not obligated to, provide the Company Working Capital Loans (see Note 5). As of September 30, 2020, there were no amounts outstanding under any Working Capital Loan.
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 certain of 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 existing accounts payable, identifying
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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 does not include any adjustments that might result from the outcome of this uncertainty.
Note 2—Summary of Significant Accounting Policies
statements. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
One of the more significant accounting estimates included in these unaudited condensed financial statements is the determination of the fair value of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates.
Investment Securities As of June 30, 2021 and December 31, 2020, there were no cash equivalents held outside of the Trust Account.
Concentration
Financial Instruments
determined using quoted prices in active markets.
Measurements
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
9
As
Offering Costs Associatedconnection with the Initial Public Offering
(the “Public Warrants”) and the Private Placement Warrants are recognized as derivative liabilities in accordance with ASC 815. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are subject to
such warrants.
sheets, respectively.
exercised.
For the Three Months | For the Six Months | |||||||
Ended June 30, 2021 | Ended June 30, 2021 | |||||||
Class A ordinary shares | ||||||||
Numerator: Income allocable to Class A ordinary shares | ||||||||
Gain on investments held in Trust Account | $ | 11,765 | $ | 29,498 | ||||
Less: Company’s portion available to be withdrawn to pay taxes | 0 | 0 | ||||||
Net income attributable to Class A ordinary shares | $ | 11,765 | $ | 29,498 | ||||
Denominator: Weighted average Class A ordinary shares | ||||||||
Basic and diluted weighted average shares outstanding, Class A ordinary shares | 32,408,414 | 32,408,414 | ||||||
Basic and diluted net income per share, Class A ordinary shares | $ | 0.00 | $ | 0.00 | ||||
Class B ordinary shares | ||||||||
Numerator: Net income (loss) minus net income allocable to Class A ordinary shares | ||||||||
Net income (loss) | $ | (3,107,749 | ) | $ | 8,406,488 | |||
Net income allocable to Class A ordinary shares | (11,765 | ) | (29,498 | ) | ||||
Net income (loss) attributable | $ | (3,119,514 | ) | $ | 8,376,990 | |||
Denominator: weighted average Class B ordinary shares | ||||||||
Basic and diluted weighted average shares outstanding, Class B ordinary shares | 8,102,103 | 8,102,103 | ||||||
Basic and diluted net income per share, Class B ordinary shares | $ | (0.39 | ) | $ | 1.03 | |||
Management
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Each whole Private Placement Warrant is exercisable for one whole Class A ordinary share at a price of $11.50 per share. A portion of the proceeds from the sale of the Private Placement Warrants to the Sponsor was added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless. The Private Placement Warrants will be
The
The Sponsor had prefunded the $900,000 assuming the Over-Allotment would be exercised in full. On October 6, 2020, the underwriters elected to partially exercise the Over-Allotment resulting in the purchase of 321,122 Private Placement Warrants by the Sponsor for $481,683. The remaining $418,317
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liquidation, the Company will pay the Sponsor $10,000 per month for office space, secretarial and administrative services. The Company incurred $10,000$30,000 in expenses in connection with such services during the period from July 21, 2020 (inception) through Septemberthree and six months ended June 30, 20202021 as reflected in the administrative expenses—related party on the accompanying unaudited condensed statement of operations. As of SeptemberJune 30, 2021 and December 31, 2020, the Company had approximately $10,000$95,000 and $35,000, respectively, in accounts payableaccrued expenses in connection with such services as reflected in the accompanying unaudited condensed balance sheet.
Units.
Class A Ordinary Shares7 —The Company is authorized to issue 200,000,000 Class A ordinary shares with a par value Derivative Warrant Liabilities
Class B Ordinary Shares—The Company is authorized to issue 20,000,000 Class B ordinary shares with a par value of $0.0001 per share. On September 30, 2020, 8,625,000 Class B ordinary shares were issued2021 and outstanding including an aggregate of up to 1,125,000 Class B ordinary shares that are subject to forfeiture, toDecember 31, 2020, the Company by the Initial Shareholders for no consideration to the extent that the underwriters’ over-allotment option is not exercised in full or in part, so that the Initial Shareholders will collectively own 20% of the Company’s issuedhad 10,802,804 Public Warrants and outstanding ordinary shares after the Initial Public Offering. On October 24, 2022 (the 45th day follow the Underwriting Agreement), 522,897 Class B ordinary shares were forfeited.
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Ordinary shareholders of record are entitled to one vote for each share held on all matters to be voted on by shareholders. Except as described below, holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the shareholders except as required by law.
The Class B ordinary shares will automatically convert into Class A ordinary shares immediately upon the consummation of the initial Business Combination at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of the Initial Public Offering, plus (ii) the sum of the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial Business Combination and any5,721,122 Private Placement Warrants issued to the Sponsor, members of the Company’s founding team or any of their affiliates upon conversion of Working Capital Loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one to one.
Preference Shares—The Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001 per share. At September 30, 2020, there were no preference shares issued or outstanding.
Warrants—
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Business Combination (net of redemptions), and (z) the volume-weighted average trading price of the ordinary shares during the 20 trading day period starting on the trading day after the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $10.00 and 18.00 per share redemption trigger prices described below under “Redemption of warrants when the price per Class A ordinary share equal or exceed $10.00” and “Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00” will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the Market Value and the Newly Issued Price, respectively.
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In no event will the Company be required to net cash settle any warrant.
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 | $ | 324,200,159 | $ | 0 | $ | 0 | ||||||
Liabilities: | ||||||||||||
Derivative warrant liabilities—Public warrants | $ | 10,802,804 | $ | 0 | $ | 0 | ||||||
Derivative warrant liabilities—Private placement warrants | $ | 0 | $ | 0 | $ | 5,721,122 |
As of 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—U.S. Treasury Securities(1) | $ | 324,167,758 | $ | 0 | $ | 0 | ||||||
Liabilities: | ||||||||||||
Derivative warrant liabilities—Public warrants | $ | 16,528,290 | $ | 0 | $ | 0 | ||||||
Derivative warrant liabilities—Private placement warrants | $ | 0 | $ | 0 | $ | 9,096,584 |
(1) | Excludes $2,903 of investments in an open-ended money market fund, in which the Company uses NAV as a practical expedient to fair value |
Level 1 instruments include investments2021.
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
June 30, 2021 | December 31, 2020 | |||||||
Exercise price | $ | 11.50 | $ | 11.50 | ||||
Stock price | $ | 9.75 | $ | 10.10 | ||||
Volatility | 15.2 | % | 21.8 | % | ||||
Term | 5.75 | 6.25 | ||||||
Risk-free rate | 0.99 | % | 0.54 | % | ||||
Dividend yield | 0.0 | % | 0.0 | % |
Level 3 derivative warrant liabilities at January 1, 2021 | $ | 9,096,584 | ||
Change in fair value of derivative warrant liabilities | (4,348,053 | ) | ||
Level 3 derivative warrant liabilities at March 31, 2021 | $ | 4,748,531 | ||
Change in fair value of derivative warrant liabilities | 972,591 | |||
Level 3 derivative warrant liabilities at June 30, 2021 | $ | 5,721,122 | ||
The Company
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Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Our The registration statement for ourthe initial public offering (the “Initial Public Offering”) was declared effective on September 9, 2020.2020 (the “Initial Public Offering”). On September 14, 2020, we consummated the Initial Public Offering of 30,000,000 units (the(each, a “Unit” and collectively, the “Units” and, with respect to the Class A ordinary shares included in the Units, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $300.0 million, and incurring offering costs of approximately $17.1 million, inclusive of approximately $10.5 million in deferred underwriting commissions.commissions (Note 6). The underwriters were granted a
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Company Act of 1940, as amended, or the Investment Company Act, having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule
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 period from July 21, 2020 (inception) through September 30, 2020, we had net loss of approximately $61,400, which consisted of approximately $60,200 in general and administrative costs and approximately $1,200 net loss on investments held in Trust Account.
$0.5 million.
Loans.
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We continueManagement continues to evaluate the impact of thebalance sheet.unaudited condensed financial statements. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
underwriting discounts and commissions of 5.5%, of which 2.0% (approximately $6.5 million) was paid at the closing of the Initial Public Offering and closing of sale of the Over-Allotment Units and 3.5% (approximately $11.3 million) was deferred. The deferred underwriting discounts and commissions will become payable to the underwriters upon the consummation of the Initial Business Combination and will be paid from the amounts held in the Trust Account. The underwriters are not entitled to any interest accrued on the deferred underwriting discounts and commissions.
Shares
exercised.
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Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
not effective, due solely to the material weakness in our internal control over financial reporting described below in “Changes in Internal Control Over Financial Reporting”. In light of this material weakness, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the financial statements included in this Quarterly Report on FormSeptemberJune 30, 2020,2021, as such term is defined in Rules 13a-15(e)13a15(e) andeffective.period from July 21, 2020 (inception) through Septemberthree and six months ended June 30, 2020,2021, covered by this Quarterly Report on Form20
Item 1. | Legal Proceedings |
Item 1A. | Risk |
Item 2. | Unregistered Sales of Equity Securities and Use of |
On July 23, 2020, the Sponsor paid an aggregate of $25,000 for certain expenses on behalf of the Company in exchange for issuance of 8,625,000 Class B ordinary shares (the “Founder Shares”). The holders of the Founder Shares have agreed to forfeit up to an aggregate of 1,125,000 Founder Shares, on a pro rata basis, to the extent that the option to purchase additional units is not exercised in full by the underwriters, so that the Founder Shares will represent 20% of the Company’s issued and outstanding shares after the Initial Public Offering. On September 3, 2020, the Sponsor transferred 20,000 Founder Shares to each of Cathleen Benko, Roger Crockett, Dixon Doll, Keyur Patel and Joanna Strober.
On September 9, 2020, Prime Impact Acquisition I (the “Company”) entered into an Underwriting Agreement (the “Underwriting Agreement”) with Goldman Sachs & Co. LLC and BofA Securities, Inc. (the “Underwriters”), pursuant to which the Company agreed to issue and sell 30,000,000 units (the “Units”), with each Unit consisting of one Class A ordinary share, $0.0001 par value per share (the “Class A Ordinary Shares”), and one-third of one redeemable warrant (the “Public Warrants”), each whole Public Warrant entitling the holder thereof to purchase one Class A Ordinary Share at an exercise price of $11.50 per share, subject to adjustment, to the Underwriters in its initial public offering (“IPO”). On September 14, 2020, the Company consummated the IPO. Pursuant to the Underwriting Agreement, the Company also granted the Underwriters a 45-day option from the date of the Underwriting Agreement to purchase up to 4,500,000 additional Units to cover over-allotments, if any (the “Over-allotment Option”). On October 2, 2020, the Underwriters partially exercised the Over-allotment Option to purchase as additional 2,408,414 units (the “Option Units”). Each Option Unit consists of one Class A Ordinary Share and one-third of one Public Warrant. On October 6, 2020, the Company completed the sale of the Option Units to Underwriters for net proceeds of approximately $23,602,457 in the aggregate after deducting the underwriter discount (the “Option Unit Proceeds”). As thus, on October 24, 2022 (the 45th day follow the Underwriting Agreement), 522,897 Class B ordinary shares were forfeited.
Simultaneously with the issuance and sale of the Option Units, the Company consummated the private placement with Prime Impact Cayman, LLC (the “Sponsor”) of 321,122 warrants to purchase Class A Ordinary Shares for $1.50 per warrant in a private placement with each whole warrant entitling the holder thereof to purchase one Class A Ordinary Share at $11.50 per share, subject to adjustment (the “Additional Private Placement Warrants”), generating total proceeds of $481,683 (the “Private Placement Proceeds” and, together with the “Option Unit Proceeds”, the “Proceeds”). The Additional Private Placement Warrants have been issued pursuant to that certain Private Placement Warrant Purchase Agreement, dated September 9, 2020, between the Company and the Sponsor and the Additional Private Placement Warrants are governed by that certain Warrant Agreement, dated September 9, 2020, between the Company and Continental Stock Transfer & Trust Company, as warrant agent.
The Proceeds were placed in a U.S.-based trust account at J.P. Morgan Chase Bank, N.A., maintained by Continental Stock Transfer & Trust Company, acting as trustee. Except with respect to interest earned on the funds in the trust account that may be released to the Company to pay its income taxes, if any, the Proceeds held in the trust account will not be released from the trust account (1) to the Company until the completion of its initial business combination, or (2) to the Company’s public shareholders, until the earliest of: (a) the completion of the Company’s initial business combination, and then only in connection with those Class A Ordinary Shares that such shareholders properly elect to redeem, subject to certain limitations, (b) the redemption of any public shares properly tendered in
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connection with a (i) shareholder vote to amend the Company’s amended and restated memorandum and articles of association to modify the substance or timing of its obligation to provide holders of its Class A Ordinary Shares the right to have their shares redeemed in connection with its initial business combination within 24 months from the closing of the IPO or (ii) with respect to any other provisions relating to shareholders’ rights of holders of the Company’s Class A Ordinary Shares or pre-initial business combination activity and (c) the redemption of all of the Company’s public shares if the Company has not completed its initial business combination within 24 months from the closing of the IPO, subject to applicable law.
Item 3. | Defaults |
Item 4. | Mine Safety |
Item 5. | Other |
Item 6. | Exhibits. |
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* | These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. |
SIGNATURES
Dated: | PRIME IMPACT ACQUISITION I | |||||
By: | /s/ Michael Cordano | |||||
Name: | Michael Cordano | |||||
Title: |
| |||||
(Principal Executive Officer) | ||||||
By: | /s/ Mark Long | |||||
Name: | Mark Long | |||||
Title: |
| |||||
(Principal Financial and Accounting Officer) |