| ☒ | QUARTERLY 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 | |||||||||||||
COLONNADE ACQUISITION CORP.
| 86-2528989 | ||||||||||||||
(State or other jurisdiction of | (I.R.S. Employer Identification No.) | |||||||||||||
1400 Centrepark Blvd, Ste 810
West Palm Beach, FL 33401
(561) 712-7860
principal executive offices) (Zip Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
| Large accelerated filer | ☒ | Accelerated filer | ☐ | |||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||||||||||
| Emerging growth company | ☐ | |||||||||||||
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| Part II - Other Information | |||||||||||||
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Item 1. | |||||||||||||
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COLONNADE ACQUISITION CORP.
ASSETS Current assets Cash Prepaid expenses Total Current Assets Marketable securities held in Trust Account TOTAL ASSETS LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities Accrued expenses Accrued offering costs Total Current Liabilities Deferred underwriting fee payable Total Liabilities Commitments Class A ordinary shares subject to possible redemption, 18,936,619 shares at redemption value 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; 1,063,381 issued and outstanding (excluding 18,936,619 shares subject to possible redemption) Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 5,750,000 shares issued and outstanding (1) Additional paid-in capital Accumulated deficit Total Shareholders’ Equity TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY SHEETSSHEETSEPEMBER 30, 2020(Unaudited) $ 1,097,447 368,756 1,466,203 200,001,752 $ 201,467,955 $ 15,000 85,100 100,100 7,000,000 7,100,100 189,367,849 — 106 575 5,058,839 (59,514 ) 5,000,006 $ 201,467,955 (1)Included an aggregate of up to 750,000 shares subject to forfeiture if the over-allotment option was not exercised in full or in part by the underwriters (see Note 5).March 31,
2022December 31,
2021Assets Current assets: Cash and cash equivalents $ 160,783 $ 182,644 Restricted cash, current 977 977 Accounts receivable, net 9,881 10,723 Inventory 11,619 7,448 Prepaid expenses and other current assets 3,006 5,566 Total current assets 186,266 207,358 Property and equipment, net 8,968 10,054 Operating lease, right-of-use assets 14,582 15,156 Goodwill 51,076 51,076 Intangible assets, net 21,530 22,652 Restricted cash, non-current 1,035 1,035 Other non-current assets 452 371 Total assets $ 283,909 $ 307,702 Liabilities, redeemable convertible preferred stock and stockholders’ equity Current liabilities: Accounts payable $ 9,469 $ 4,863 Accrued and other current liabilities 11,789 14,173 Operating lease liability, current portion 2,888 3,067 Total current liabilities 24,146 22,103 Operating lease liability, long-term portion 15,685 16,208 Warrant liabilities (At March 31, 2022 and December 31, 2021 related party $2,058 and $2,669, respectively) 5,881 7,626 Other non-current liabilities 1,018 1,065 Total liabilities 46,730 47,002 Commitments and contingencies (Note 7) 0 0 Redeemable convertible preferred stock, $0.0001 par value per share; 100,000,000 shares authorized at March 31, 2022 and December 31, 2021; Nil shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively (aggregate liquidation preference of nil at March 31, 2022 and December 31, 2021, respectively) — — Stockholders’ equity: Common stock, $0.0001 par value; 1,000,000,000 shares authorized at March 31, 2022 and December 31, 2021, respectively; 173,602,503 and 172,200,417 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively 17 17 Additional paid-in capital 572,933 564,045 Accumulated deficit (335,753) (303,356) Accumulated other comprehensive loss (18) (6) Total stockholders’ equity 237,179 260,700 Total liabilities, redeemable convertible preferred stock, and stockholders’ equity $ 283,909 $ 307,702 the unauditedthese condensed consolidated financial statements.1
COLONNADE ACQUISITION CORP.
(Unaudited)
| Three Months Ended September 30, | For the Period June 4, 2020 September 30, | |||||||
| 2020 | 2020 | |||||||
Operating costs | $ | 56,266 | $ | 61,266 | ||||
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Loss from operations | (56,266 | ) | (61,266 | ) | ||||
Other income (expense): | ||||||||
Interest earned on marketable securities held in Trust Account | 15,961 | 15,961 | ||||||
Unrealized loss on marketable securities held in Trust Account | (14,209 | ) | (14,209 | ) | ||||
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Other income, net | 1,752 | 1,752 | ||||||
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Net loss | $ | (54,514 | ) | $ | (59,514 | ) | ||
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Weighted average shares outstanding, basic and diluted (1) | 5,413,908 | 5,409,457 | ||||||
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Basic and diluted net loss per ordinary share (2) | $ | (0.01 | ) | $ | (0.01 | ) | ||
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AND COMPREHENSIVE LOSS
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Product revenue | $ | 8,558 | $ | 6,611 | |||||||
| Cost of product revenue | 5,967 | 4,868 | |||||||||
| Gross profit | 2,591 | 1,743 | |||||||||
| Operating expenses: | |||||||||||
| Research and development | 15,906 | 4,712 | |||||||||
| Sales and marketing | 7,090 | 3,426 | |||||||||
| General and administrative | 13,783 | 9,907 | |||||||||
| Total operating expenses | 36,779 | 18,045 | |||||||||
| Loss from operations | (34,188) | (16,302) | |||||||||
| Other (expense) income: | |||||||||||
| Interest income | 154 | 1 | |||||||||
| Interest expense | — | (504) | |||||||||
| Other income (expense), net | 1,684 | (4,152) | |||||||||
| Total other expense, net | 1,838 | (4,655) | |||||||||
| Loss before income taxes | (32,350) | (20,957) | |||||||||
| Provision for income tax expense | 47 | — | |||||||||
| Net loss | $ | (32,397) | $ | (20,957) | |||||||
| Other comprehensive loss | |||||||||||
| Foreign currency translation adjustments | $ | (12) | — | ||||||||
| Total comprehensive loss | $ | (32,409) | $ | (20,957) | |||||||
| Net loss per common share, basic and diluted | $ | (0.19) | $ | (0.38) | |||||||
| Weighted-average shares used to compute basic and diluted net loss per share | 170,906,196 | 55,688,281 | |||||||||
2
COLONNADE ACQUISITION CORP.
THREE MONTHS ENDED SEPTEMBER 30, 2020 AND
FOR THE PERIOD FROM JUNE 4, 2020 (INCEPTION) THROUGH SEPTMBER 30, 2020
(Unaudited)
| Class A Ordinary Shares | Class B Ordinary Shares | Additional Paid-in | Accumulated | Total Shareholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
Balance – June 4, 2020 (inception) | — | $ | — | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Issuance of Class B ordinary shares to Sponsor (1) | — | — | 5,750,000 | 575 | 24,425 | — | 25,000 | |||||||||||||||||||||
Net loss | — | — | — | — | — | (5,000 | ) | (5,000 | ) | |||||||||||||||||||
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Balance – June 30, 2020 | — | — | 5,750,000 | 575 | 24,425 | (5,000 | ) | 20,000 | ||||||||||||||||||||
Sale of 20,000,000 Units, net of underwriting discounts | 20,000,000 | 2,000 | — | — | 188,400,369 | — | 188,402,369 | |||||||||||||||||||||
Sale of 6,000,000 Private Placement Warrants | — | — | — | — | 6,000,000 | — | 6,000,000 | |||||||||||||||||||||
Ordinary shares subject to possible redemption | (18,936,619 | ) | (1,894 | ) | — | — | (189,365,955 | ) | — | (189,367,849 | ) | |||||||||||||||||
Net loss | — | — | — | — | — | (54,514 | ) | (54,514 | ) | |||||||||||||||||||
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Balance – September 30, 2020 | 1,063,381 | $ | 106 | 5,750,000 | $ | 575 | $ | 5,058,839 | $ | (59,514 | ) | $ | 5,000,006 | |||||||||||||||
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(DEFICIT)
| Redeemable Convertible Preferred Stock | Common Stock | Additional Paid-in- Capital | Accumulated Deficit | Accumulated other comprehensive loss | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||
Shares (1) | Amount | Shares (1) | Amount | ||||||||||||||||||||||||||||||||||||||||||||
| Balance — December 31, 2021 | — | $ | — | 172,200,417 | $ | 17 | $ | 564,045 | $ | (303,356) | $ | (6) | $ | 260,700 | |||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | 822,702 | — | 209 | — | — | 209 | |||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of restricted stock awards - net of tax withholding | — | — | 812,491 | — | (59) | — | — | (59) | |||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | — | — | (233,107) | — | (31) | — | — | (31) | |||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | 8,750 | — | — | 8,750 | |||||||||||||||||||||||||||||||||||||||
| Vesting of early exercised stock options | — | — | — | — | 19 | — | — | 19 | |||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | (32,397) | — | (32,397) | |||||||||||||||||||||||||||||||||||||||
| Other Comprehensive loss | — | — | — | — | — | — | (12) | (12) | |||||||||||||||||||||||||||||||||||||||
| Balance — March 31, 2022 | — | $ | — | 173,602,503 | $ | 17 | $ | 572,933 | $ | (335,753) | $ | (18) | $ | 237,179 | |||||||||||||||||||||||||||||||||
| Redeemable Convertible Preferred Stock | Common Stock | Additional Paid-in- Capital | Accumulated Deficit | Accumulated other comprehensive loss | Total Stockholders’ Equity (Deficit) | ||||||||||||||||||||||||||||||||||||||||||
Shares (1) | Amount | Shares (1) | Amount | ||||||||||||||||||||||||||||||||||||||||||||
| Balance — December 31, 2020 | 88,434,754 | $ | 39,225 | 33,327,294 | $ | — | $ | 133,468 | $ | (209,375) | $ | — | $ | (75,907) | |||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | 727,114 | 1 | 189 | — | — | 190 | |||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | — | — | (220,561) | — | (43) | — | — | (43) | |||||||||||||||||||||||||||||||||||||||
| Issuance of redeemable convertible preferred stock upon exercise of warrants | 4,232,947 | 58,097 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Conversion of redeemable convertible preferred stock to common stock | (92,667,701) | (97,322) | 92,667,701 | 12 | 97,322 | — | — | 97,334 | |||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon merger and private offering, net of acquired private placement warrants of $19,377 | — | — | 34,947,657 | 3 | 272,061 | — | — | 272,064 | |||||||||||||||||||||||||||||||||||||||
| Offering costs in connection with the merger | — | — | — | — | (26,620) | — | — | (26,620) | |||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | 5,256 | — | — | 5,256 | |||||||||||||||||||||||||||||||||||||||
| Vesting of early exercised stock options | — | — | — | — | 438 | — | — | 438 | |||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | (20,957) | — | (20,957) | |||||||||||||||||||||||||||||||||||||||
| Balance — March 31, 2021 | — | $ | — | 161,449,205 | $ | 16 | $ | 482,071 | $ | (230,332) | $ | — | $ | 251,755 | |||||||||||||||||||||||||||||||||
3
COLONNADE ACQUISITION CORP.
FOR THE PERIOD FROM JUNE 4, 2020 (INCEPTION) THROUGH SEPTMBER 30, 2020
(Unaudited)
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| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
| Net loss | $ | (32,397) | $ | (20,957) | |||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
| Depreciation and amortization | 2,385 | 1,095 | |||||||||
| Stock-based compensation | 8,750 | 5,256 | |||||||||
| Change in right-of-use asset | 644 | 520 | |||||||||
| Interest expense on notes and convertible debt | — | 36 | |||||||||
| Amortization of debt issuance costs and debt discount | — | 250 | |||||||||
| Change in fair value of warrant liabilities | (1,745) | 4,152 | |||||||||
| Inventory write down | 203 | — | |||||||||
| Gain from disposal of property and equipment | (100) | — | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | 842 | (140) | |||||||||
| Inventory | (4,373) | (476) | |||||||||
| Prepaid expenses and other assets | 2,480 | (1,202) | |||||||||
| Accounts payable | 4,807 | (1) | |||||||||
| Accrued and other liabilities | (2,551) | (254) | |||||||||
| Operating lease liability | (772) | (678) | |||||||||
| Net cash used in operating activities | (21,827) | (12,399) | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
| Proceeds from sale of property and equipment | 275 | — | |||||||||
| Purchases of property and equipment | (416) | (597) | |||||||||
| Net cash used in investing activities | (141) | (597) | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
| Proceeds from the merger and private offering | — | 291,454 | |||||||||
| Payment of offering costs | — | (26,116) | |||||||||
| Repayment of debt | — | (7,000) | |||||||||
| Proceeds from issuance of promissory notes to related parties | — | 5,000 | |||||||||
| Repayment of promissory notes to related parties | — | (5,000) | |||||||||
| Repurchase of common stock | (31) | (43) | |||||||||
| Proceeds from exercise of stock options | 209 | 504 | |||||||||
| Taxes paid related to net share settlement of equity awards | (59) | — | |||||||||
| Net cash provided by financing activities | 119 | 258,799 | |||||||||
| Effect of exchange rates on cash and cash equivalents | (12) | — | |||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | (21,861) | 245,803 | |||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 184,656 | 12,642 | |||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 162,795 | $ | 258,445 | |||||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||||||||||
| Cash paid for interest | $ | — | $ | 635 | |||||||
| SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION: | |||||||||||
| Property and equipment purchases included in accounts payable and accrued liabilities | $ | 377 | $ | 100 | |||||||
| Private placement warrants acquired as part of the merger | $ | — | $ | 19,377 | |||||||
| Issuance of redeemable convertible preferred stock upon exercise of warrants | $ | — | $ | 58,097 | |||||||
| Conversion of redeemable convertible preferred stock to common stock | $ | — | $ | 97,322 | |||||||
| Offering costs not yet paid | $ | — | $ | 504 | |||||||
4
COLONNADE ACQUISITION CORP.
SEPTEMBER
(Unaudited)
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
2015. The Company is a leading provider of high-resolution digital lidar sensors that offer advanced 3D vision to machinery, vehicles, robots, and fixed infrastructure assets, allowing each to understand and visualize the surrounding world and ultimately enabling safe operation and ubiquitous autonomy. Unless the context otherwise requires, references in this subsection to “the Company” refer to the business and operations of OTI (formerly known as Ouster, Inc.) and its consolidated subsidiaries prior to the Merger (as defined below) and to Ouster, Inc. (formerly known as Colonnade Acquisition Corp.) and its consolidated subsidiaries following the consummation of the Merger.
Although applicable to interim periods. The functional currency for the Company is not limited tothe United States dollar. All intercompany balances and transactions have been eliminated in consolidation.
As of September 30, 2020, the Company had not commenced any operations. All activity for the period from June 4, 2020 (inception) through September 30, 2020 relates toyear ended December 31, 2021 and the Company’s formation, the initial public offering (“Initial Public Offering”), which is described below, and, subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.
The registration statement for the Company’s Initial Public Offering became effective on August 20, 2020. On August 25, 2020, the Company consummated the Initial Public Offering of 20,000,000 units (the “Units” and, with respect to the Class A ordinary sharesnotes related thereto, included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $200,000,000, which is described in Note 3.
SimultaneouslyCompany’s Annual Report on Form 10-K filed with the closing of the Initial Public Offering, the Company consummated the sale of 6,000,000 warrants (the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to Colonnade Sponsor LLC (the “Sponsor”), generating gross proceeds of $6,000,000, which is described in Note 4.
Transaction costs amounted to $11,597,631, consisting of $4,000,000 of underwriting fees, $7,000,000 of deferred underwriting fees and $597,631 of other offering costs. In addition, at September 30, 2020, cash of $1,097,447 was held outside of the Trust Account (as defined below) and is available for the payment of offering expenses and for working capital purposes.
Following the closing of the Initial Public Offering on August 25, 2020, an amount of $200,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”) invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting certain conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described below.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward completing a Business Combination. The Company must complete its initial Business Combination with one or more target businesses that together have a fair market value equal to at least 80% of the net assets held in the Trust Account (excluding the amount of any deferred underwriting commissions held in the Trust Account) at the time of the agreement to enter into a Business Combination. The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect a Business Combination.
The Company will provide its shareholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company. The shareholders will be entitled to redeem their shares for a pro rata portion of the amount held in the Trust Account (initially $10.00 per share), calculated as of two business days prior to the completion of a Business Combination, including any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations. There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.
If the Company seeks shareholder approval, the Company will complete a Business Combination only if it receives an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who vote at a general meeting of the Company. If a shareholder vote is not required under applicable law or stock exchange listing requirements and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated
5
COLONNADE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), on February 28, 2022. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by US GAAP. Certain information and file tender offer documents containing substantially the same information as would benote disclosures normally included in the audited financial statements prepared in accordance with US GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. The results of operations for any interim period are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any other future years or interim periods.
Notwithstanding the foregoing, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s Amended and Restated Memorandum and Articles of Association provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 20% of the Public Shares without the Company’s prior written consent.
marketing activities. The Sponsor has agreed (a) to waive its redemption rights with respect to any Founder Shares and Public Shares held by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Memorandum and Articles of Association (i) to modify the substance or timinglong-term continuation of the Company’s obligationbusiness plan is dependent upon the generation of sufficient revenues from its products to redeem 100% ofoffset expenses. In the Public Shares ifevent that the Company does not completegenerate sufficient cash flows from operations and is unable to obtain funding, the Company will be forced to delay, reduce, or eliminate some or all of its discretionary spending, which could adversely affect the Company’s business prospects, ability to meet long-term liquidity needs or ability to continue operations. The Company has concluded that its cash and cash equivalents as of March 31, 2022 are sufficient for the Company to continue as a Business Combination withingoing concern for at least one year from the Combination Perioddate these unaudited condensed consolidated financial statements are available for issuance.
The Company will have until August 25, 2022Public warrant pursuant to the Warrant Agreement. No fractional Public warrants were issued upon separation of the CLA units.
The Sponsor hasPIPE Investors agreed to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor acquires Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) heldpurchase, in the Trust Account in the event the Company does not completeaggregate, 10,000,000 shares of Ouster common stock at $10.00 per share for an aggregate commitment amount of $100,000,000 (the “PIPE Investment”), a Business Combination within the Combination Period and, in such event, such amounts will be includedportion of which was funded by certain affiliates of Colonnade Sponsor LLC, CLA’s sponsor (the “Sponsor”). The PIPE Investment was consummated substantially concurrently with the funds held in the Trust Account that will be available to fund the redemptionclosing of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).
The Sponsor has agreed that it will be liable to the Company, if and to the extent any claims by a third party for services rendered or products sold to the Company, or by a prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (1) $10.00 per Public Share and (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share due to reductions in the value of trust assets, less taxes payable. This liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent public accountants), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
6
COLONNADE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s prospectus for its Initial Public Offering as filed with the SEC on August 21, 2020, as well as the Company’s Current Reports on Form 8-K, as filed with the SEC on August 25, 2020 and August 31, 2020. The interim results forSignificant Accounting Policies
Emerging Growthall convertible instruments and rescinding an entity’s ability to rebut the presumption of share settlement for instruments that may be settled in cash or other assets. The new standard is effective for the Company
for annual periods beginning December 15, 2021. The Company isadopted this ASU as of January 1, 2022 using a modified retrospective method of transition, which did not have an “emerging growth company,” as defined in Section 2(a)impact on its condensed consolidated financial statements and related disclosures.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a classmaterial impact on the Company’s consolidated financial statements.
Use of Estimates
The preparation of the condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts ofmeasure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. The amendments in this ASU are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years and disclosure of contingent assets and liabilities atshould be applied prospectively to business combinations occurring on or after the effective date of the financial statements and the reported amounts of income and expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimateamendments. Early adoption of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2020.
Marketable Securities Held in Trust Account
At September 30, 2020, substantially all of the assets held in the Trust Account were held in money market funds, which primarily invest in U.S. Treasury Bills.
7
COLONNADE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
Class A Ordinary Shares Subject to Possible Redemption
The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s condensed balance sheet.
Income Taxes
The Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when itamendments is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC 740 also clarifies the accounting for uncertainty in income taxes recognizedpermitted, including adoption in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2020.interim period. The Company is currently not awareevaluating the impact of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
The Company is considered an exempted Cayman Islands Company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such,adoption of this ASU on the Company’s tax provision was zero for the periods presented.
Net Loss Per Ordinary Share
Net loss per ordinary share is computed by dividing net loss by the weighted average numberconsolidated financial statements.
Reconciliation of Net Loss Per Ordinary Share
The Company’s net loss is adjusted for the portion of income that is attributable to ordinary shares subject to possible redemption, as these shares only participate in the earnings of the Trust Account and not the income or losses of the Company. Accordingly, basic and diluted loss per ordinary share is calculated as follows:
| Three Months Ended September 30, | For the Period September 30, | |||||||
| 2020 | 2020 | |||||||
Net loss | $ | (54,514 | ) | $ | (59,514 | ) | ||
Less: Income attributable to ordinary shares subject to possible redemption | (1,659 | ) | (1,659 | ) | ||||
|
|
|
| |||||
Adjusted net loss | $ | (56,173 | ) | $ | (61,173 | ) | ||
|
|
|
| |||||
Weighted average shares outstanding, basic and diluted | 5,413,908 | 5,409,457 | ||||||
|
|
|
| |||||
Basic and diluted net loss per ordinary share | $ | (0.01 | ) | $ | (0.01 | ) | ||
|
|
|
| |||||
8
COLONNADE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of a cash, accountcash equivalents, and restricted cash, and accounts receivable. Cash, cash equivalents and restricted cash are deposited with federally insured commercial banks in a financial institution which,the United States and at times cash balances may exceedbe in excess of federal insurance limits. The Company generally does not require collateral or other security deposits for accounts receivable.
Company’s major customers representing 10% or more of total accounts receivable was as follows:
| March 31, 2022 | December 31, 2021 | ||||||||||
| Customer A | * | 11 | % | ||||||||
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Customer B | * | 28 | % | ||||||||
| March 31, 2022 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Money market funds | $ | 152,984 | $ | — | $ | — | $ | 152,984 | |||||||||||||||
| Total financial assets | $ | 152,984 | $ | — | $ | — | $ | 152,984 | |||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Warrant liabilities | $ | — | $ | — | $ | 5,881 | $ | 5,881 | |||||||||||||||
| Total financial liabilities | $ | — | $ | — | $ | 5,881 | $ | 5,881 | |||||||||||||||
| December 31, 2021 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Money market funds | $ | 177,513 | $ | — | $ | — | $ | 177,513 | |||||||||||||||
| Total financial assets | $ | 177,513 | $ | — | $ | — | $ | 177,513 | |||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Warrant liabilities | $ | — | $ | — | $ | 7,626 | $ | 7,626 | |||||||||||||||
| Total financial liabilities | $ | — | $ | — | $ | 7,626 | $ | 7,626 | |||||||||||||||
| Redeemable Convertible Preferred Stock Warrant Liability | Private Placement Warrant Liability | ||||||||||
| Fair value as of December 31, 2021 | $ | — | $ | (7,626) | |||||||
| Change in the fair value included in other income (expense), net | — | 1,745 | |||||||||
| Fair value as of March 31, 2022 | $ | — | $ | (5,881) | |||||||
| Redeemable Convertible Preferred Stock Warrant Liability | Private Placement Warrant Liability | ||||||||||
| Fair value as of December 31, 2020 | (49,293) | — | |||||||||
| Private placement warrant liability acquired as part of the merger | — | (19,377) | |||||||||
| Change in the fair value included in other income (expense), net | (8,804) | 4,652 | |||||||||
| Issuance of preferred stock upon exercise of warrants | 58,097 | — | |||||||||
| Fair value as of March 31, 2021 | $ | — | $ | (14,725) | |||||||
| March 31, 2022 | December 31, 2021 | ||||||||||
| Cash | $ | 7,799 | $ | 5,131 | |||||||
| Cash equivalents: | |||||||||||
Money market funds(1) | 152,984 | 177,513 | |||||||||
| Total cash and cash equivalents | $ | 160,783 | $ | 182,644 | |||||||
| As of March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Cash and cash equivalents | $ | 160,783 | $ | 257,165 | |||||||
| Restricted cash, current | 977 | 276 | |||||||||
| Restricted cash, non-current | 1,035 | 1,004 | |||||||||
| Total cash, cash equivalents and restricted cash | $ | 162,795 | $ | 258,445 | |||||||
| March 31, 2022 | December 31, 2021 | ||||||||||
| Raw materials | $ | 3,288 | $ | 2,401 | |||||||
| Work in process | 2,280 | 1,951 | |||||||||
| Finished goods | 6,051 | 3,096 | |||||||||
| Total inventory | $ | 11,619 | $ | 7,448 | |||||||
| March 31, 2022 | December 31, 2021 | ||||||||||
| Prepaid expenses | $ | 1,408 | $ | 1,970 | |||||||
| Prepaid insurance | 108 | 1,355 | |||||||||
| Receivable from contract manufacturer | 1,343 | 1,344 | |||||||||
| Grant receivable | — | 779 | |||||||||
| Security deposit | 76 | 118 | |||||||||
| Value-added tax (VAT) receivable | 71 | — | |||||||||
| Total prepaid and other current assets | $ | 3,006 | $ | 5,566 | |||||||
| Estimated Useful Life (in years) | March 31, 2022 | December 31, 2021 | |||||||||||||||
| Machinery and equipment | 3 | $ | 8,593 | $ | 8,404 | ||||||||||||
| Computer equipment | 3 | 504 | 498 | ||||||||||||||
| Automotive and vehicle hardware | 5 | 93 | 93 | ||||||||||||||
| Software | 3 | 104 | 104 | ||||||||||||||
| Furniture and fixtures | 7 | 730 | 730 | ||||||||||||||
| Construction in progress | 1,923 | 1,700 | |||||||||||||||
| Leasehold improvements | Shorter of useful life or lease term | 9,310 | 9,265 | ||||||||||||||
| 21,257 | 20,794 | ||||||||||||||||
| Less: Accumulated depreciation | (12,289) | (10,740) | |||||||||||||||
| Property and equipment, net | $ | 8,968 | $ | 10,054 | |||||||||||||
| March 31, 2022 | |||||||||||||||||||||||
| Estimated Useful Life (in years) | Gross Carrying amount | Accumulated Amortization | Net Book Value | ||||||||||||||||||||
| Developed technology | 8 | $ | 15,900 | $ | (828) | $ | 15,072 | ||||||||||||||||
| Vendor relationship | 3 | 6,600 | (917) | 5,683 | |||||||||||||||||||
| Customer relationships | 3 | 900 | (125) | 775 | |||||||||||||||||||
| Intangible assets, net | $ | 23,400 | $ | (1,870) | $ | 21,530 | |||||||||||||||||
| December 31, 2021 | |||||||||||||||||||||||
| Estimated Useful Life (in years) | Gross Carrying amount | Accumulated Amortization | Net Book Value | ||||||||||||||||||||
| Developed technology | 8 | $ | 15,900 | $ | (331) | $ | 15,569 | ||||||||||||||||
| Vendor relationship | 3 | 6,600 | (367) | 6,233 | |||||||||||||||||||
| Customer relationships | 3 | 900 | (50) | 850 | |||||||||||||||||||
| Intangible assets, net | $ | 23,400 | $ | (748) | $ | 22,652 | |||||||||||||||||
| Years: | Amount | ||||
| 2022 (the remainder of 2022) | $ | 3,366 | |||
| 2023 | 4,488 | ||||
| 2024 | 4,071 | ||||
| 2025 | 1,988 | ||||
| 2026 | 1,988 | ||||
| Thereafter | 5,629 | ||||
| Total | $ | 21,530 | |||
| March 31, 2022 | December 31, 2021 | ||||||||||
| Accrued compensation | $ | 3,487 | $ | 3,229 | |||||||
| Uninvoiced receipts | 7,182 | 9,835 | |||||||||
| Other | 1,120 | 1,109 | |||||||||
| Total accrued and other current liabilities | $ | 11,789 | $ | 14,173 | |||||||
Recently Issued Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect onrespective affiliates) to help continue to fund the Company’s condensed financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
Pursuant toongoing operations through the Initial Public Offering,consummation of the Company sold 20,000,000 Units,Merger. The note accrued interest at a purchase pricerate equal to LIBOR plus 8.5% per annum and
NOTE 4. PRIVATE PLACEMENT
The Series B warrants could be exercised prior to the earliest to occur of (i) the
10-year anniversary of the date of issuance, (ii) the consummation of a liquidation transaction, or (iii) the consummation of an initial public offering. The Series B warrants included a cashless exercise provision under which their holders may, in lieu of payment of the exercise price in cash, surrender the warrant and receive a net amount of shares based on the fair market value of the Company’s stock at the time of exercise of the warrants after deduction of the aggregate exercise price. The Series B warrants contained provisions for adjustment of the exercise price and number of shares issuable upon the exercise of the Series B warrants in the event of certain stock dividends, stock splits, reorganizations, reclassifications, and consolidations.
| Initial Issuance Date | Subsequent Issuance Date | December 31, 2020 | February 11, 2021 | March 11, 2021 | |||||||||||||||||||||||||
| Stock price | $ | 5.80 | $ | 5.80 | $ | 7.11 | $ | 10.27 | $ | 8.44 | |||||||||||||||||||
| Expected term (years) | 10.00 | 9.31 | 2.00 | 2.00 | 2.00 | ||||||||||||||||||||||||
| Expected volatility | 57.81 | % | 57.35 | % | 76.00 | % | 76.00 | % | 76.00 | % | |||||||||||||||||||
| Risk-free interest rate | 3.06 | % | 1.75 | % | 0.13 | % | 0.13 | % | 0.13 | % | |||||||||||||||||||
| Dividend yield | 0 | % | 0 | % | 0 | % | 0 | % | 0 | % | |||||||||||||||||||
| March 11, 2021 | March 31, 2021 | December 31, 2021 | March 31, 2022 | ||||||||||||||||||||
| Stock price | $ | 12.00 | $ | 8.50 | $ | 5.20 | $ | 4.60 | |||||||||||||||
| Exercise price of warrant | $ | 11.50 | $ | 11.50 | $ | 11.50 | $ | 11.50 | |||||||||||||||
| Expected term (years) | 5.00 | 4.95 | 4.19 | 3.95 | |||||||||||||||||||
| Expected volatility | 27.00 | % | 43.00 | % | 57.00 | % | 56.81 | % | |||||||||||||||
| Risk-free interest rate | 0.78 | % | 0.92 | % | 1.14 | % | 2.55 | % | |||||||||||||||
| Number of Shares Underlying Outstanding Options | Weighted- Average Exercise Price per Share | Weighted- Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | ||||||||||||||||||||||||||
| Outstanding—December 31, 2021 | 24,129,096 | $ | 1.01 | 8.6 | $ | 100,992 | |||||||||||||||||||||||
| Options exercised | (797,380) | 0.20 | 0 | 0 | |||||||||||||||||||||||||
| Options cancelled | (77,753) | 4.21 | $ | — | |||||||||||||||||||||||||
| Outstanding—March 31, 2022 | 23,253,963 | $ | 1.03 | 8.3 | $ | 84,888 | |||||||||||||||||||||||
| Vested and expected to vest—March 31, 2022 | 23,253,963 | $ | 1.03 | 8.3 | $ | 84,888 | |||||||||||||||||||||||
| Exercisable—March 31, 2022 | 9,954,974 | $ | 0.80 | 8.1 | $ | 37,186 | |||||||||||||||||||||||
| Options Outstanding | Options Exercisable | |||||||||||||||||||||||||||||||
| Exercise Price | Options Outstanding | Weighted Average Remaining Contractual Life (Years) | Weighted Average Exercise Price | Options Exercisable | Weighted Average Exercise Price | |||||||||||||||||||||||||||
| $ | 0.18 | 5,037,657 | 8.3 | $ | 0.18 | 3,256,438 | $ | 0.18 | ||||||||||||||||||||||||
| $ | 0.21 | 9,300,668 | 8.5 | $ | 0.21 | 3,454,922 | $ | 0.21 | ||||||||||||||||||||||||
| $ | 1.42 | 7,524,114 | 8.5 | $ | 1.42 | 2,664,790 | $ | 1.42 | ||||||||||||||||||||||||
| $ | 1.49 | 40,581 | 5.8 | $ | 1.49 | 40,418 | $ | 1.49 | ||||||||||||||||||||||||
| $ | 5.24 | 705,146 | 4.0 | $ | 5.24 | 538,406 | $ | 5.24 | ||||||||||||||||||||||||
| $ | 10.26 | 645,797 | 9.1 | $ | 10.26 | — | $ | — | ||||||||||||||||||||||||
| 23,253,963 | 9,954,974 | |||||||||||||||||||||||||||||||
| Number of Shares | Weighted Average Grant Date Fair Value (per share) | ||||||||||
| Unvested – December 31, 2021 | 9,326,572 | $ | 7.82 | ||||||||
| Granted during the period | 3,983,474 | 4.25 | |||||||||
| Canceled during the period | (1,559,964) | 6.44 | |||||||||
| Vested during the period | (828,921) | 7.46 | |||||||||
| Unvested — March 31, 2022 | 10,921,161 | $ | 6.75 | ||||||||
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Cost of revenue | $ | 217 | $ | 118 | |||||||
| Research and development | 3,761 | 921 | |||||||||
| Sales and marketing | 1,524 | 265 | |||||||||
| General and administrative | 3,248 | 3,952 | |||||||||
| Total stock-based compensation | $ | 8,750 | $ | 5,256 | |||||||
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| RSUs | $ | 5,901 | $ | 313 | |||||||
| Stock options | 2,840 | 4,937 | |||||||||
| RSAs | 9 | 6 | |||||||||
| Total stock-based compensation | $ | 8,750 | $ | 5,256 | |||||||
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Numerator: | |||||||||||
| Net loss | $ | (32,397) | $ | (20,957) | |||||||
| Denominator: | |||||||||||
| Weighted average shares used to compute basic and diluted net loss per share | 170,906,196 | 55,688,281 | |||||||||
| Net loss per common share—basic and diluted | $ | (0.19) | $ | (0.38) | |||||||
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Options to purchase common stock | 25,577,679 | 24,626,748 | |||||||||
| Public and private common stock warrants | 15,999,900 | 15,999,996 | |||||||||
| Restricted Stock Units | 8,597,445 | 959,874 | |||||||||
| Unvested early exercised common stock options | 1,595,966 | 3,935,428 | |||||||||
| Unvested RSA | 11,645 | 34,932 | |||||||||
| Vested and early exercised options subject to nonrecourse notes | — | 1,761,436 | |||||||||
| Total | 51,782,635 | 47,318,414 | |||||||||
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| United States | $ | 2,863 | $ | 1,858 | |||||||
| North and South America, excluding United States | 456 | 366 | |||||||||
| Asia and Pacific | 2,356 | 1,254 | |||||||||
| Europe, Middle East and Africa | 2,883 | 3,133 | |||||||||
| Total | $ | 8,558 | $ | 6,611 | |||||||
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On June 30, 2020, the Sponsor paid an aggregate of $25,000 to cover certain offering costs of the Company in consideration for 5,750,000 of the Company’s Class B ordinary shares (the “Founder Shares”). The Founder Shares included an aggregate of up to 750,000 shares that were subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the number of Founder Shares would collectively represent 20% of the Company’s issued and outstanding shares upon the completion of the Initial Public Offering. On October 9, 2020, the underwriters’ election to exercise their over-allotment option expired unexercised, resulting in the forfeiture of 750,000 Founder Shares. Accordingly, as of October 9, 2020, there are 5,000,000 Founder Shares issued and outstanding (see
The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination; and (B) subsequent to a Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, amalgamation, share exchange, reorganization or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.
9
COLONNADE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
Promissory Note – Related Party
On June 30, 2020, the Sponsor agreed to loan the Company up to an aggregate amount of $300,000 to be used, in part, for transaction costs incurred in connection with the Initial Public Offering (the “Promissory Note”). The Promissory Note was non-interest bearing and payable on the earlier of (i) December 31, 2020 and (ii) the completion of the Initial Public Offering. As of September 30, 2020, the outstanding balance of $126,005 under the Promissory Note was paid in full.
Due to Sponsor
The Sponsor advanced $600,000 to the Company in anticipation of the amount to be paid for the purchase of additional Private Placement Units in the event the underwriters’ exercised their over-allotment option. The advance was due on demand should the over-allotment option not be exercised by the underwriters. On September 23, 2020, the $600,000 was returned to the Sponsor as the over-allotment option was not exercised.
Administrative Services Agreement
The Company entered into an agreement whereby, commencing on August 21, 2020, the Company will pay the Sponsor $10,000 per month for office space, utilities, secretarial and administrative support services. Upon completion of a Business Combination or its liquidation, the Company will cease paying these monthly fees. For the three months ended September 30, 2020 and for the period from June 4, 2020 (inception) through September 30, 2020, the Company incurred $10,000 of such fees, of which $10,000 is included in accrued expenses in the accompanying condensed balance sheet at September 30, 2020.
13. Related Party Loans
In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliateTransactions
NOTE 6. COMMITMENTS
Registration Rights
Pursuant to a registration rights agreement entered into on August 20, 2020, the holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of the Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) are entitled to registration rights requiring the Company to register a sale of any of the securities held by them, including any other securities of the Company acquired by them prior to the consummation of the Company’s initial Business Combination. The holders of these securities will be entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriters are entitled to a deferred fee of $0.35 per Unit, or $7,000,000 in the aggregate. A portion of such amount not to exceed 40% of the total amount of deferred underwriting commissions held in the Trust Account may be paid at the sole discretion of the Company to parties who may or may not participate in the Initial Public Offering (but who are members of FINRA) that assist the Company in consummating a Business Combination. The election to make such payments to such parties will be solely at the discretion of the Company’s management team. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
NOTE 7. SHAREHOLDERS’ EQUITY
Preference Shares—The Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001. The Company’s board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. The board of directors will be able to, without shareholder approval, issue preference shares with voting and other rights that could adversely affect the voting power and other rights of the holders of the ordinary shares and could have anti-takeover effects. At September 30, 2020, there were no preference shares issued or outstanding.
10
COLONNADE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
Class A Ordinary Shares—The Company is authorized to issue 200,000,000 Class A ordinary shares, with a par value of $0.0001 per share. Holders of Class A ordinary shares are entitled to one vote for each share. At September 30, 2020, there were 1,063,381 Class A ordinary shares issued and outstanding, excluding 18,936,619 Class A ordinary shares subject to possible redemption.
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. Holders of the Class B ordinary shares are entitled to one vote for each share. At September 30, 2020, there were 5,750,000 Class B ordinary shares issued and outstanding, of which an aggregate of up to 750,000 shares were subject to forfeiture to the extent that the underwriters’ over-allotment option was not exercised in full or in part so that the number of Founder Shares would equal 20% of the Company’s issued and outstanding ordinary shares after the Initial Public Offering (see Note 9).
Only holders of the Class B ordinary shares will have the right to vote on the election of directors prior to the Business Combination. Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all other matters submitted to a vote of the Company’s shareholders except as otherwise required by law.
The Class B ordinary shares will automatically convert into Class A ordinary shares concurrently with or immediately following the completion of a Business Combination on a one-for-one basis, subject to adjustment. In the case that additional Class A ordinary shares or equity-linked securities are issued or deemed issued in connection with a Business Combination, the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, 20% of the total number of Class A ordinary shares outstanding after such conversion (after giving effect to any redemptions of Class A ordinary shares by public shareholders), including 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 a Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in a Business Combination and any Private Placement Warrants issued to the Sponsor, officers or directors upon conversion of Working Capital Loans; provided that such conversion of Founder Shares will never occur on a less than one-for-one basis.
Warrants—Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separationcertain investors of the Units and only whole warrants will trade. The Public Warrants will become exercisable on the laterCompany (or an affiliate thereof).
The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act with respect to the Class A ordinary shares underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue a Class A ordinary share upon exercise of a warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.
The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, it will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th business day after the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. In addition, if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of the Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company elects to do so, the Company will not be required to file or maintain in effect a registration statement, but it will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
11
COLONNADE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
Once the warrants become exercisable, the Company may redeem the outstanding Public Warrants:
in whole and not in part;
at a price of $0.01 per Public Warrant;
upon not less than 30 days’ prior written notice of redemption to each warrant holder; and
if, and only if, the reported closing price of the ordinary shares equals or exceeds $18.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three business days before the Company send to the notice of redemption to the warrant holders.
If and when the warrants become redeemablepartial recourse promissory notes issued by the Company the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
If the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.
In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination, and (z) the volume weighted average trading price of the Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates a Business Combination (such price, the “Market Value”) is below $9.20 per share, then 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 $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that (x) the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions, (y) the Private Placement Warrants will be exercisable on a cashless basisexecutives and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees and (z) the Private Placement Warrants and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants will be entitled to registration rights. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
NOTE 8. FAIR VALUE MEASUREMENTS
The Company follows the guidance in ASC Topic 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
12
COLONNADE ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at September 30, 2020, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
Description | Level | September 30, 2020 | ||||||
Assets: | ||||||||
Marketable securities held in Trust Account | 1 | $ | 200,001,752 | |||||
NOTE 9. SUBSEQUENT EVENTS
On October 9, 2020, the underwriters’ election to exercise their over-allotment option expired unexercised, resulting in the forfeiture$150.0 million.
various factors, including those set forth in the section titled “Risk Factors” in Ouster’s Annual Report on Form 10-K dated and filed with the SEC on February 28, 2022. we are managing our inventory and working closely with our regular suppliers and customers to minimize the potential impacts of any supply shortages including by securing additional inventory. While we do not expect the shortage to have a material near-term impact on our ability to meet existing demand for our current products, the shortage adversely impacted our gross margins for the year ended December 31, 2021 and the three months ended March 31, 2022 and may continue to do so. We anticipate fluctuation in our cost of goods sold over the next 12-18 months as a result of ongoing supply chain constraints. These constraints have caused and may in the future cause us to implement certain temporary price surcharges. Over time, we expect our overall average selling prices to decline as our volume increases. If our mitigating efforts are not successful or the shortage continues or worsens in ways we did not anticipate, our ability to supply or improve our current products as well as our development and rollout of future products could also be adversely affected. require continued investment and may expose us to additional foreign currency risk, international taxes and tariffs, legal obligations and additional operational costs, risks and challenges that may impact our ability to meet our projected sales volumes, revenue and gross margins. Company’s condensed consolidated financial statements.ITEMMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSReferences in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Colonnade Acquisition Corp. References to our “management” or our “management team” refer to our officersManagement’s Discussion and directors,Analysis of Financial Condition and references to the “Sponsor” refer to Colonnade Sponsor LLC. Results of Operationsand analysis of the Company’s financial condition and results of operations and financial condition of Ouster, Inc. (“we,” “us,” “our,” the “Company,” “Ouster”) should be read in conjunction with the information set forth in our condensed consolidated financial statements and the notes thereto containedincluded elsewhere in this Quarterly Report. Certain information contained inForm 10-Q, as well as our audited consolidated financial statements and the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.Special Note Regarding Forward-Looking StatementsThis Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regardingincluded in Ouster’s Annual Report on Form 10-K filed with the Company’s financial position, business strategySecurities and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. SuchExchange Commission (“SEC”) on February 28, 2022. This discussion may contain forward-looking statements relate to future events or future performance, but reflect management’sbased upon current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performanceexpectations that involve risks and results discussed in the forward-looking statements. For information identifying important factors that could causeuncertainties. Ouster’s actual results tomay differ materially from those anticipated in thethese forward-looking statements please refer to the Risk Factors section of this Quarterly Report and the Risk Factors section of the Registration Statements on Form S-1 (Registration No. 333-240378) filed with the SEC. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.blank check company incorporatedleading provider of high-resolution digital lidar sensors that offer advanced 3D vision to machinery, vehicles, robots, and fixed infrastructure assets, allowing each to understand and visualize the surrounding world and ultimately enabling safe operation and autonomy. We design and manufacture digital lidar sensors that we believe are the highest-performing, lowest-cost lidar solutions available today across each of our four target markets: industrial automation; smart infrastructure; robotics; and automotive. We shipped sensors to over 650 customers in the Cayman Islandstwelve months ended March 31, 2022.June 4,two semiconductor chips and are backed by a suite of patent-protected technology. We have invested heavily in patents since our inception, pursuing comprehensive coverage of invention families and use cases, with broad international coverage. We believe that our extensive patent coverage creates material barriers to entry for anyone aiming to compete in the digital lidar space.formedOTI entered into the Merger Agreement with CLA, and Merger Sub, a subsidiary of CLA. OTI’s and CLA’s board of directors unanimously approved OTI’s entry into the Merger Agreement, and on March 11, 2021, the transactions contemplated by the Merger Agreement were consummated. Pursuant to the terms of the Merger Agreement, (i) CLA domesticated as a corporation incorporated under the laws of the State of Delaware (the “Domestication”) and changed its name to “Ouster, Inc.” (with CLA after such domestication and the other transactions pursuant to the Merger Agreement being referred to as the “Company”) and (ii) Merger Sub merged with and into OTI (the “Merger”), with OTI surviving the Merger.purposeright to receive, or the reservation of, effectingan aggregate of $1.5 billion of shares of Ouster common stock (at a merger, share exchange, asset acquisition,deemed value of $10.00 per share), which, in the case of OTI Awards, were shares underlying awards based on Ouster common stock, purchase, reorganization or similar Business Combination with one or more businesses. We intend to effectuate our Business Combination using cash derivedrepresenting a fully-diluted pre-transaction shares. Upon the closing of the Merger, the Company received gross proceeds of $299.9 million from the proceedsMerger and private offering, offset by $8.5 million of pre-merger costs relating to CLA and transaction costs of $26.6 million.Initial Public Offering,merger agreement, we acquired 100% of Sense and all of its property for approximately 10 million shares of Ouster common stock or approximately $63.0 million in equity value based on the closing price of $6.55 per share as of the day the transaction closed on October 22, 2021, inclusive of 0.8 million shares underlying assumed options, after closing adjustments. This acquisition is expected to help Ouster expand its presence in the automotive vertical by executing on our shares, debthiring goals and product roadmap on a faster timeline.combinationmaterial negative impact on our future results.cash, shareschips by certain companies created disruptions in the supply chain, which has resulted in a global chip shortage impacting our industry. Some chip manufacturers are estimating that this supply shortage may continue through mid-2023. These chip manufacturers are working to increase capacity in the future, and debt.incur significant costsexperience some downward pressure on margins from signing anticipated large multi-year agreements (including our SCAs) in the pursuitnear term with multi-year negotiated pricing, as well as supply chain constraints discussed above. We expect these customer-specific selling price fluctuations combined with our volume-driven product costs may drive fluctuations in revenue and gross margins on a quarterly basis. However, notwithstanding any short-term price surcharge on our products, we expect that over time our volume-driven product costs will lead to gross margin improvement as our sales volume increases.acquisition plans. complementary metal-oxide-semiconductor (“CMOS”), digital lidar technology, we are in the position to scale more rapidly than our analog competitors and leverage our scale to deliver positive gross margins.cannot assure youbelieve that we are a leading digital lidar provider. Our financial performance is significantly dependent on our plansability to completemaintain this leading position which is further dependent on the investments we make in research and development. We believe it is essential that we continue to identify and respond to rapidly evolving customer requirements, including successfully realizing our product roadmap. If we fail to continue our innovation, our market position and revenue may be adversely affected, and our investments in that area will not be recovered.Business Combinationmultibillion dollar total addressable market (“TAM”) for our solutions in the near future. We define our TAM as automation applications in the industrial, smart infrastructure, robotics and automotive end markets where we actively engage and maintain customer relationships. Each of our target markets is potentially a significant global opportunity, and these markets have historically been underserved by limited or inferior technology or not served at all. We believe we are well positioned in our market as a leading provider of high-resolution digital lidar sensors.be successful.have neither engaged in any operations nor generated any revenuesrecognize revenue from product sales when the performance obligation of transferring control of the product to date. Our only activities from June 4, 2020 (inception) through September 30, 2020 were organizational activities, those necessarythe customer has been met, generally when the product is shipped. We also recognize revenue by performing services related to prepare for the Initial Public Offering, described below,product development and the Company’s search for a target business with which to complete a Business Combination. Wevalidation, and shipping; however, we do not expect product development and validation and license and services to generate any operating revenues untilbe material components of revenue, cost of revenue or gross margin in the foreseeable future. Performance obligations related to services are generally recognized over time, based on cost-to-cost input basis or straight-line over time. Amounts billed to customers related to shipping and handling are classified as product revenue, and we have elected to recognize the cost of shipping activities that occur after control has transferred to the completioncustomer as a fulfillment cost rather than a separate performance obligation. All related costs are accrued and recognized within cost of revenue when the related revenue is recognized.initial Business Combination. We generate non-operating incomecustomers are currently in the formevaluation or early R&D stage with our products. Currently, our product revenue consists of interest incomeboth customers ordering small volumes of our products that are in an evaluation phase and customers that order larger volumes of our products and have more predictable long-term production schedules. However, we are still at the very beginning of the lidar adoption curve, and some customers are still learning their ramp rates which can impact the timing of purchase orders quarter to quarter. As we grow our business we expect to improve predictability into our customers’ needs and timelines, and expect the timing of orders will have a less notable impact on marketable securities. We are incurringour quarterly results. Over the coming years, as more of our customers move into their respective production phases, we expect the majority of our product revenue to shift to larger volume orders based on predictable production schedules.resultpercentage of beingtotal revenue. Subject to quarterly fluctuations and volatility, we expect unit costs to improve as we manufacture higher unit volumes of sensors and a public company (forgreater portion of our sensors are produced by our contract manufacturer in Thailand.financial reporting, accounting and auditing compliance),departments as well as fees related to legal fees, patent prosecution, accounting, finance and professional services as well as insurance, and bank fees. Our absolute amount of general and administrative expense will grow over time; however, we expect the general and administrative spend as a percentage of revenue to decrease annually as our business grows. Near term increases in general and administrative expenses are expected to be related to hiring more personnel and consultants to support our growing international expansion and compliance with the applicable provisions of the Sarbanes-Oxley Act (“SOX”) and other U.S. Securities and Exchange Commission (“SEC”) rules and regulations.due diligence expensesstock-based awards over the requisite service periods based on the estimated grant date fair value using the Black-Scholes-Merton option pricing model.completing a Business Combination.Fordebt agreement, and Private Placement warrants acquired as part of the Merger.September March 31, 2022 and 2021, respectively, was not material to the Company’s condensed consolidated financial statements. Three Months Ended March 31, 2022 2021 (dollars in thousands) Product revenue $ 8,558 $ 6,611 5,967 4,868 Gross profit 2,591 1,743 Research and development 15,906 4,712 Sales and marketing 7,090 3,426 General and administrative 13,783 9,907 Total operating expenses 36,779 18,045 Loss from operations (34,188) (16,302) Other (expense) income: Interest income 154 1 Interest expense — (504) Other income (expense), net 1,684 (4,152) Total other expense, net 1,838 (4,655) Loss before income taxes (32,350) (20,957) Provision for income tax expense 47 — Net loss $ (32,397) $ (20,957) Three Months Ended March 31, 2022 2021 (% of total revenue) Product revenue 100 % 100 % 70 74 Gross profit 30 26 Research and development 186 71 Sales and marketing 83 52 General and administrative 161 150 Total operating expenses 430 273 Loss from operations (400) (247) Other (expense) income: Interest income 2 — Interest expense — (8) Other income (expense), net 20 (63) Total other expense, net 22 (71) Loss before income taxes (378) (318) Provision for income tax expense 1 — Net loss (379) % (318) % 2020,Three Months Ended March 31, 2022 2021 Cost of revenue $ 217 $ 118 Research and development 3,761 921 Sales and marketing 1,524 265 General and administrative 3,248 3,952 Total stock-based compensation $ 8,750 $ 5,256 Three Months Ended March 31, Change Change 2022 2021 $ % (dollars in thousands) Product revenue $ 8,558 $ 6,611 $ 1,947 29 % Revenue by geographic location: United States $ 2,863 $ 1,858 $ 1,005 54 % North and South America, excluding United States 456 366 90 25 Asia and Pacific 2,356 1,254 1,102 88 Europe, Middle East and Africa 2,883 3,133 (250) (8) Total $ 8,558 $ 6,611 $ 1,947 29 % hadattribute primarily to the expansion of our sales team into new geographic regions and the increase of high volume, long-term deals as some of our customers begin to move into a production stage with their autonomous products. Our average selling price declined by 20% as we moved towards negotiated customer pricing with customers reaching the production stage with their autonomous products and we expect reductions in the cost of goods sold as we grow our volumes. Three Months Ended March 31, Change Change 2022 2021 $ % (dollars in thousands) Cost of product revenue $ 5,967 $ 4,868 $ 1,099 23 % Three Months Ended March 31, Change Change 2022 2021 $ % (dollars in thousands) Operating expenses: Research and development $ 15,906 $ 4,712 $ 11,194 238 % Sales and marketing 7,090 3,426 3,664 107 General and administrative 13,783 9,907 3,876 39 Total operating expenses: $ 36,779 $ 18,045 $ 18,734 104 % Three Months Ended March 31, Change Change 2022 2021 $ % (dollars in thousands) Interest income $ 154 $ 1 $ 153 * Interest expense — (504) 504 (100) Other income (expense), net 1,684 (4,152) 5,836 (141) $54,514,$8.8 million for the fair value change of redeemable convertible preferred stock warrant liability, partially offset by a gain of $4.7 million for the fair value change of Private Placement warrant liability which consisted of operating costs of $56,266 and an unrealized loss on marketable securities heldwas recorded as other income.Trust Account of $14,209, offset by interestUnited States, California, and miscellaneous foreign jurisdictions for the three months ended March 31, 2022 and 2021. Our income on marketable securities held intax expense for three months ended March 31, 2022 and 2021 was not material to the Trust Account of $15,961.For the period from June 4, 2020 (inception) through September 30, 2020, we had a net loss of $59,514, which consisted of operating costs of $61,266 and an unrealized loss on marketable securities held in the Trust Account of $14,209, offset by interest income on marketable securities held in the Trust Account of $15,961.UntilconsummationMerger, we primarily funded our operations from the net proceeds from sales of our preferred convertible stock and convertible notes, borrowing under our loan and security agreement with Runway Growth Credit Fund, Inc. and product revenue. Upon closing of the Initial Public Offering, the Company’s only source of liquidity was an initial purchase of ordinary shares by the Sponsor and loans from our Sponsor.On August 25, 2020,Merger, we consummated the Initial Public Offering of 20,000,000 Units, at a price of $10.00 per Unit, generatingreceived gross proceeds of $200,000,000. Simultaneously$299.9 million from the Merger and private offering, offset by $8.5 million of pre-merger costs relating to CLA and transactions costs of $26.6 million.Initial Public Offering,Merger.consummatedentered into a Loan and Security Agreement with Runway Growth Credit Fund, Inc. (“Runway Loan and Security Agreement”) and borrowed $10.0 million per the saleterms of 6,000,000 Private Placement Warrantsthat agreement with a loan maturity date of November 15, 2021. The loan carried an interest rate equal to the Sponsor at a price of $1.00 per warrant, generating gross proceeds of $6,000,000.14
Following the Initial Public Offering, and the saleLIBOR plus 8.50%. We repaid $3.0 million of the Private Placement Warrants, a total of $200,000,000 was placedloan in August 2020. On March 26, 2021 we terminated the Trust Account.Runway Loan and Security Agreement and repaid the $7.0 million principal amount outstanding as well as interest and fees amounting to $0.4 million. We incurred $11,597,631 in transaction costs, including $4,000,000 of underwritingno prepayment fees $7,000,000 of deferred underwriting fees and $597,631 of other costs.
For the period from June 4, 2020 (inception) through September 30, 2020, cash used in operating activities was $415,022, which consisted of our net loss of $59,514, interest earned on marketable securities held in the Trust Account of $15,961, an unrealized loss on marketable securities of $14,209 and changes in operating assets and liabilities, which used $353,756 of cash.
As of September 30, 2020, we had cash and marketable securities held in the Trust Account of $200,001,752. We may withdraw interest to pay our taxes, if any. Through September 30,2020, we have not withdrawn any amounts to pay for our tax obligations. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (which interest shall be net of taxes payable) to complete our Business Combination. To the extent that our share capital is used, in whole or in part, as consideration to complete a Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
As of September 30, 2020, we had cash of $1,097,447. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a Business Combination.
In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, our Sponsor or an affiliatethe termination and all liens and security interests securing the loan made pursuant to the Runway Loan and Security Agreement were released upon termination. As of our Sponsor or certain of our officersMarch 31, 2022 and directors may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such loaned amounts. InDecember 31, 2021, the event that a Business Combination does not close, we may use a portionoutstanding principal balance of the working capital held outsideloan was nil.
We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligenceWall Street Journal plus (y) 6.15%, and negotiating a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our public shares upon consummation of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject(ii) 9.40%, subject to compliance with applicable securities laws, we would only complete such financing simultaneously withfinancial covenants and other conditions. The Loan Agreement includes covenants, limitations, and events of default customary for similar facilities. The Loan Agreement matures on May 1, 2026.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of September 30, 2020. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreementalso required to pay Hercules an end of term charge from $1.5 million to $3.7 million, depending on the Sponsor a monthly feeamount borrowed.
The underwriters are entitled to a deferred fee of $0.35 per Unit, or $7,000,000 in the aggregate (or $8,050,000 if the underwriters’ over-allotment is exercised in full). A portion of such amount not to exceed 40% of the total amount of deferred underwriting commissions held in the Trust Account may be paid at the sole discretion of the Company to parties who may or may not participate in the Initial Public Offering (but who are members of FINRA) that assist us in consummating a Business Combination. The election to make such payments to such parties will be solely at the discretion of our management team. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subjectany advance made pursuant to the terms of the underwriting agreement.
15
Critical Accounting Policies
If the Company fails to maintain an unrestricted cash balance of $60 million, the Loan Agreement has a revenue financial covenant that requires the Company to achieve certain trailing twelve-month revenue targets tested quarterly.
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| (dollars in thousands) | |||||||||||
| Net cash provided by (used in): | |||||||||||
| Operating activities | $ | (21,827) | $ | (12,399) | |||||||
| Investing activities | (141) | (597) | |||||||||
| Financing activities | 119 | 258,799 | |||||||||
Class A Ordinary Shares Subject to Possible Redemption
The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s condensed balance sheet.
Net Loss Per Ordinary Share
We apply the two-class method in calculating earnings per share. Ordinary shares subject to possible redemption, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic net loss per ordinary share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. Our net income is adjusted for the portion of income that is attributable to ordinary shares subject to redemption, as these shares only participate in the earnings of the Trust Account and not our income or losses.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effectthis Quarterly Report on our condensed financial statements.
Quantitative and Qualitative Disclosures about Market RiskITEMQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKsmaller reporting company as defined by Rule 12b-2material effect on our business, results of operations or financial condition. Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs. Our inability or failure to do so could harm our business, results of operations or financial condition.Exchange Actjurisdictions in which we conduct our operations, which are primarily in the U.S. and to a lesser extent in Asia and Europe. Our results of operations and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign exchange rates. The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would not requiredhave a material impact on our historical consolidated financial statements. To date, we have not engaged in any hedging strategies. As our international operations grow, we will continue to provide the information otherwise required under this item.reassess our approach to manage our risk relating to fluctuations in currency rates.
disclosures. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well-designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. following additional material weaknesses:ITEMCONTROLS AND PROCEDURESDisclosureControls and Procedures areother procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controlsforms, and procedures include, without limitation, controls and procedures designed to ensure that such information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.Disclosure Controlsdisclosure controls and ProceduresAs required by Rules 13a-15procedures15d-15 under the Exchange Act, our Chief Executive Officer carried out an evaluationprincipal financial officer, evaluated, as of the effectivenessend of the design and operationperiod covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures as of September 30, 2020.(as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based upon hison that evaluation, our Chief Executive Officerprincipal executive officer and principal financial officer concluded that our disclosure controls and procedures (as definedwere not effective as of March 31, 2022 due to the material weaknesses in Rules 13a-15 (e)our internal control over financial reporting described below.15d-15 (e) underRemediation PlanExchange Act) were effective.Overover Financial ReportingDuringmost recently completed fiscal quarter,material weakness remediation plan activities described above, there has been no change in our internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended March 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.16
ITEMLEGAL PROCEEDINGS.None.
ITEMRISK FACTORS.Except as set forth below, as of the date of this Quarterly Report, thereRisk Factorswith respect to thosefrom the risk factors previously disclosed in our Registration Statementthe Company’s Annual Report on Form 10-K filed with the SEC. Any of these factors could result in a significant or material adverse effectSEC on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.The securities in which we invest the funds held in the Trust Account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.00 per share.The proceeds held in the Trust Account are invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that we are unable to complete our initial business combination or make certain amendments to our Amended and Restated Certificate of Incorporation, our public stockholders are entitled to receive their pro-rata share of the proceeds held in the Trust Account, plus any interest income not released to us, net of taxes payable. Negative interest rates could impact the per-share redemption amount that may be received by public stockholders.
ITEMUNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.On August 25, 2020, we consummatedUnregistered Sales of Equity Securities and Use of ProceedsInitial Public Offering of 20,000,000 Units. The Units sold in the Initial Public Offeringthree months ended March 31, 2022 that were sold at an offering price of $10.00 per unit, generating total gross proceeds of $200,000,000. BTIG acted as sole book-running manager, of the Initial Public Offering. The securities in the offering werenot registered under the Securities Act on a registration statement on Form S-1 (No. 333-240378). TheAct. and Exchange Commission declared the registration statement effective on August 20, 2020.Simultaneously with the consummationInitial Public Offering,Exchange Act during the Sponsor consummated the private placement of an aggregate of 6,000,000 warrants at a price of $1.00 per Private Placement Warrant, generating total proceeds of $6,000,000. The issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.The Private Placement Warrants are identical to the warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants are not transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions.Of the gross proceeds received from the Initial Public Offering and the Private Placement Warrants, $200,000,000 was placed in the Trust Account.We paid a total of $4,000,000 in underwriting discounts and commissions and $597,631 for other costs and expenses related to the Initial Public Offering. In addition, the underwriters agreed to defer up to $7,000,000 in underwriting discounts and commissions.For a description of the use of the proceeds generated in our Initial Public Offering, see Part I, Item 2 of this Form 10-Q.
Defaults Upon Senior SecuritiesITEMDEFAULTS UPON SENIOR SECURITIES.
Mine Safety DisclosuresITEMMINE SAFETY DISCLOSURES.
/s/ ITEMOTHER INFORMATION.On November 13, 2020, the Company’s boardOther InformationITEMEXHIBITS.The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.Exhibit Number Description Incorporated by Reference Form File No. Exhibit Filing Date Filed/ Furnished herewith S-4/A 333-251611 2.1 2/10/2021 S-4 POS 333-251611 3.1 3/10/2021 S-4 POS 333-251611 3.2 3/10/2021 * * * ** ** 101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document. * 101.SCH Inline XBRL Taxonomy Extension Schema Document * 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document * 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document * 101.LAB Inline XBRL Taxonomy Label Linkbase Document * 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document * 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) *Filed herewith.**This certification is furnishedany omitted annex, schedule or exhibit to the SEC upon request.^ Certain portions of this exhibit have been omitted pursuant to Section 906Item 601(a)(5) of the Sarbanes-Oxley ActRegulation S-K or redacted pursuant to Item 601(b)(10)(iv) of 2002 and is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it 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.Regulation S-K.* Filed herewith. ** Furnished herewith. (1)Previously filed as an exhibit to our Current Report on Form 8-K filed on August 25, 2020 and incorporated by reference herein.18SIGNATURESCOLONNADE ACQUISITION CORP.Date: November 13, 2020May 6, 2022By: Remy W. TrafeletName: Name:Remy W. TrafeletAnna BrunelleTitle: Title:ExecutiveFinancial Officer (principal financial officer and Director(Principal Executive Officer and Principal Financial and Accounting Officer)principal accounting officer)19