☒ | 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 |
Delaware | 85-4156787 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
11th Floor
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Units, each consisting of one share of Class A Common Stock and one-sixth of one redeemable warrant | NSTD.U | The New York Stock Exchange | ||
Class A Common Stock, par value $0.0001 per share | NSTD | The New York Stock Exchange | ||
Redeemable warrants, exercisable for shares of Class A Common Stock at an exercise price of $11.50 per share | NSTD WS | The New York Stock Exchange |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
2022
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March 31, 2021 | December 31, 2020 | |||||||
(Unaudited) | (Unaudited) | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 1,351,771 | $ | 150,000 | ||||
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Total Current Assets | 1,351,771 | 150,000 | ||||||
Deferred offering costs | — | 52,500 | ||||||
Cash and marketable securities held in Trust Account | 400,004,195 | — | ||||||
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TOTAL ASSETS | $ | 401,355,966 | $ | 202,500 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued expenses | $ | 112,278 | $ | 875 | ||||
Accrued offering costs | 108,000 | 27,500 | ||||||
Promissory note — related party | — | 150,000 | ||||||
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Total Current Liabilities | 220,278 | 178,375 | ||||||
Warrant Liabilities | 15,957,000 | — | ||||||
Deferred underwriting fee payable | 14,000,000 | — | ||||||
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TOTAL LIABILITIES | 30,177,278 | 178,375 | ||||||
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Commitments and Contingencies | ||||||||
Class A common stock subject to possible redemption 36,617,868 and 0 shares at redemption value as of March 31, 2021 and December 31, 2020, respectively | 366,178,680 | — | ||||||
Stockholders’ Equity | ||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding | — | — | ||||||
Class A common stock, $0.0001 par value; 125,000,000 shares authorized; 3,382,132 and 0 shares issued and outstanding (excluding 36,617,868 and no shares subject to possible redemption) as of March 31, 2021 and December 31, 2020, respectively | 338 | — | ||||||
Class B common stock, $0.0001 par value; 25,000,000 shares authorized; 10,062,500 shares issued and outstanding, at March 31, 2021 and December 31, 2020(1) | 1,006 | 1,006 | ||||||
Additional paid-in capital | 5,483,946 | 23,994 | ||||||
Accumulated deficit | (485,282 | ) | (875 | ) | ||||
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Total Stockholders’ Equity | 5,000,008 | 24,125 | ||||||
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 401,355,966 | $ | 202,500 | ||||
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March 31, 2022 | September 30, 2021 | |||||||
(Unaudited) | (Audited) | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash | $ | 521,983 | $ | 1,029,943 | ||||
Prepaid expenses and other current assets | 29,842 | 29,842 | ||||||
Total Current Assets | 551,825 | 1,059,785 | ||||||
Marketable securities held in Trust Account | 400,045,008 | 400,021,169 | ||||||
TOTAL ASSETS | $ | 400,596,833 | $ | 401,080,954 | ||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
Current Liabilities | ||||||||
Accrued expenses | $ | 291,333 | $ | 378,535 | ||||
Accrued offering costs | 8,250 | 24,550 | ||||||
Total Current Liabilities | 299,583 | 403,085 | ||||||
Warrant Liabilities | 7,551,667 | 14,610,834 | ||||||
Deferred underwriting payable | 14,000,000 | 14,000,000 | ||||||
TOTAL LIABILITIES | 21,851,250 | 29,013,919 | ||||||
Commitments and Contingencies | 0 | 0 | ||||||
Class A common stock subject to possible redemption 40,000,000 shares at redemption value, as of March 31, 2022, and September 30, 2021 | 400,000,000 | 400,000,000 | ||||||
Stockholders’ Deficit | ||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 0 shares issued and outstanding | 0— | 0— | ||||||
Class A common stock, $0.0001 par value; 125,000,000 shares authorized; 0 shares issued and outstanding (excluding 40,000,000 shares subject to possible redemption) as of March 31, 2022, and September 30, 2021 | 0 | 0 | ||||||
Class B common stock, $0.0001 par value; 25,000,000 shares authorized; 10,000,000 shares issued and outstanding as of March 31, 2022 and September 30, 2021 | 1,000 | 1,000 | ||||||
Additional paid-in capital | 0 | 0 | ||||||
Accumulated deficit | (21,255,417 | ) | (27,933,965 | ) | ||||
Total Stockholders’ Deficit | (21,254,417 | ) | (27,932,965 | ) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | 400,596,833 | $ | 401,080,954 | ||||
FOR THE THREE MONTHS ENDED MARCH 31, 2021
Formation and operational costs | $ | 111,519 | ||
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Loss from operations | (111,519 | ) | ||
Other income: | ||||
Interest earned on marketable securities held in Trust Account | 3,951 | |||
Transaction costs incurred at initial public offering | (377,083 | ) | ||
Unrealized gain on marketable securities held in Trust Account | 244 | |||
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Other loss, net | (372,888 | ) | ||
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Loss before provision for benefit from income taxes | (484,407 | ) | ||
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Net loss | $ | (484,407 | ) | |
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Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption | 36,628,601 | |||
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Basic and diluted net loss per share, Class A common stock subject to possible redemption | $ | 0.00 | ||
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Basic and diluted weighted average shares outstanding, Non-redeemable common stock | 10,136,420 | |||
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Basic and diluted net loss per share, Non-redeemable common stock | $ | (0.05 | ) | |
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Three Months Ended March 31, | Six Months Ended March 31, | For the Period from November 30, 2020 (Inception) through March 31, | ||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Formation and operational costs | $ | 171,648 | $ | 111,519 | $ | 404,458 | $ | 112,394 | ||||||||
Loss from operations | (171,648 | ) | (111,519 | ) | (404,458 | ) | (112,394 | ) | ||||||||
Other income (loss): | ||||||||||||||||
Interest earned on marketable securities held in Trust Account | 9,865 | 3,951 | 23,839 | 3,951 | ||||||||||||
Unrealized gain on marketable securities held in Trust Account | 0 | 244 | 0 | 244 | ||||||||||||
Transaction costs incurred at initial public offering | 0 | (377,083 | ) | 0 | (377,083 | ) | ||||||||||
Change in fair value of warrant liabilities | 6,566,667 | 0 | 7,059,167 | 0 | ||||||||||||
Total other income (loss), net | 6,576,532 | (372,888 | ) | 7,083,006 | (372,888 | ) | ||||||||||
Net income (loss) | $ | 6,404,884 | $ | (484,407 | ) | $ | 6,678,548 | $ | (485,282 | ) | ||||||
Basic and diluted weighted average shares outstanding, Class A common stock | 40,000,000 | 12,000,000 | 40,000,000 | 8,925,620 | ||||||||||||
Basic and diluted net income per share, Class A common stock | $ | 0.13 | $ | (0.02 | ) | $ | 0.13 | $ | (0.03 | ) | ||||||
Basic and diluted weighted average shares outstanding, Class B common stock | 10,000,000 | 9,125,000 | $ | 10,000,000 | 7,727,273 | |||||||||||
Basic and diluted net income per share, Class B common stock | $ | 0.13 | $ | (0.02 | ) | 0.13 | $ | (0.03 | ) | |||||||
STOCKHOLDERS’ DEFICIT
Class A Common Stock | Class B Common Stock | Additional Paid | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | in Capital | Deficit | Deficit | ||||||||||||||||||||||
Balance – September 30, 2021 | 0 | $ | 0 | 10,000,000 | $ | 1,000 | $ | 0 | $ | (27,933,965 | ) | $ | (27,932,965 | ) | ||||||||||||||
Net income | — | — | — | — | — | 273,664 | 273,664 | |||||||||||||||||||||
Balance – December 31, 2021 | 0 | $ | 0 | 10,000,000 | $ | 1,000 | $ | 0 | $ | (27,660,301 | ) | $ | (27,659,301 | ) | ||||||||||||||
Net income | — | — | — | — | — | 6,404,884 | 6,404,884 | |||||||||||||||||||||
Balance – March 31, 2022 | 0 | $ | 0 | 10,000,000 | $ | 1,000 | $ | 0 | $ | (21,255,417 | ) | $ | (21,254,417 | ) | ||||||||||||||
(UNAUDITED)
Class A Common Stock | Class B Common Stock | Additional Paid | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | in Capital | Deficit | Equity | ||||||||||||||||||||||
Balance – January 1, 2021 | — | $ | — | 10,062,500 | $ | 1,006 | $ | 23,994 | $ | (875 | ) | $ | 24,125 | |||||||||||||||
Sale of 40,000,000 Units, net of underwriting discounts and offering expenses | 40,000,000 | 4,000 | 371,361,970 | 371,365,970 | ||||||||||||||||||||||||
Class A common stock subject to possible redemption | (36,617,868 | ) | (3,662 | ) | — | — | (366,175,018 | ) | — | (366,178,680 | ) | |||||||||||||||||
Cash paid in excess of fair value of Private Placement Warrants | 273,000 | — | 273,000 | |||||||||||||||||||||||||
Net loss | — | — | — | — | — | (484,407 | ) | (484,407 | ) | |||||||||||||||||||
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Balance – March 31, 2021 | 3,382,132 | $ | 338 | 10,062,500 | $ | 1,006 | $ | 5,483,946 | $ | (485,282 | ) | $ | 5,000,008 | |||||||||||||||
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Class A Common Stock | Class B Common Stock | Additional Paid | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | in Capital | Deficit | Equity (Deficit) | ||||||||||||||||||||||
Balance – November 30, 2020 (inception) | 0 | $ | 0 | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||
Issuance of Class B common stock to Sponsor | — | — | 10,062,500 | 1,006 | 23,994 | 0 | 25,000 | |||||||||||||||||||||
Net loss | — | — | — | — | — | (875 | ) | (875 | ) | |||||||||||||||||||
Balance – December 31, 2020 | 0 | $ | 0 | 10,062,500 | $ | 1,006 | $ | 23,994 | $ | (875 | ) | $ | 24,125 | |||||||||||||||
Cash paid in excess of fair value | — | — | — | — | 273,000 | — | 273,000 | |||||||||||||||||||||
Remeasurement adjustment to share subject to redemption | — | — | — | — | (297,000 | ) | (28,337,030 | ) | (28,634,030 | ) | ||||||||||||||||||
Net loss | — | — | — | — | — | (484,407 | ) | (484,407 | ) | |||||||||||||||||||
Balance – March 31, 2021 | 0 | $ | 0 | 10,062,000 | $ | 1,006 | $ | (6 | ) | $ | (28,822,312 | ) | $ | (28,821,312 | ) | |||||||||||||
FOR THE THREE MONTHS ENDED MARCH 31, 2021
Cash Flows from Operating Activities: | ||||
Net loss | $ | (484,407 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Interest earned on marketable securities held in Trust Account | (3,951 | ) | ||
Transaction costs incurred in connection with IPO | 377,083 | |||
Unrealized gain on marketable securities held in Trust Account | (244 | ) | ||
Changes in operating assets and liabilities: | ||||
Accounts payable and accrued expenses | 111,403 | |||
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Net cash used in operating activities | (116 | ) | ||
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Cash Flows from Investing Activities: | ||||
Investment of cash in Trust Account | (400,000,000 | ) | ||
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Net cash used in investing activities | (400,000,000 | ) | ||
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Cash Flows from Financing Activities: | ||||
Proceeds from sale of Units, net of underwriting discounts paid | 392,000,000 | |||
Proceeds from sale of Private Placement Warrants | 9,750,000 | |||
Repayment of promissory note – related party | (150,000 | ) | ||
Payment of offering costs | (398,113 | ) | ||
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Net cash provided by financing activities | 401,201,887 | |||
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Net Change in Cash | 1,201,771 | |||
Cash – Beginning of period | 150,000 | |||
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Cash – End of period | $ | 1,351,771 | ||
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Non-Cash investing and financing activities: | ||||
Initial classification of common stock subject to possible redemption | $ | 366,286,010 | ||
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Change in value of common stock subject to possible redemption | $ | (107,330 | ) | |
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Deferred underwriting fee payable | $ | 14,000,000 | ||
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Six Months Ended March 31, 2022 | For The Period From November 30, 2020 (Inception) Through March 31, 2021 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income (loss) | $ | 6,678,548 | $ | (485,282 | ) | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
Change in fair value of warrant liability | (7,059,167 | ) | — | |||||
Transaction Costs incurred in connection with IPO | — | 377,083 | ||||||
Unrealized gain on marketable securities held in Trust Account | 0 | (244 | ) | |||||
Interest earned on marketable securities held in Trust Account | (23,839 | ) | (3,951 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accrued expenses | (87,202 | ) | 112,278 | |||||
Net cash used in operating activities | (491,660 | ) | (116 | ) | ||||
Cash Flows from Investing Activities: | ||||||||
Investment of cash in Trust Account | 0 | (400,000,000 | ) | |||||
Net cash used in investing activities | 0 | (400,000,000 | ) | |||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from sale of Units, net of underwriting discounts paid | 0 | 392,000,000 | ||||||
Proceeds from sale of Private Placements Warrants | 0 | 9,750,000 | ||||||
Repayment of promissory note - related party | 0 | (150,000 | ) | |||||
Payment of offering costs | (16,300 | ) | (398,113 | ) | ||||
Net cash (used in) provided by financing activities | (16,300 | ) | 401,201,887 | |||||
Net Change in Cash | (507,960 | ) | 1,201,771 | |||||
Cash – Beginning of period | 1,029,943 | 150,000 | ||||||
Cash – End of period | $ | 521,983 | $ | 1,351,771 | ||||
Non-Cash investing and financing activities: | ||||||||
Offering costs included in accrued offering costs | $ | 8,250 | $ | 80,500 | ||||
Remeasurement adjustment of Class A common stock to redemption value | $ | 0 | $ | 28,634,030 | ||||
Deferred underwriting fee payable | $ | — | $ | 14,000,000 | ||||
2022
The Company has selected September 30 as its fiscal year end.
3.
4.
NORTHERN STAR INVESTMENT CORP. IV
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
NORTHERN STAR INVESTMENT CORP. IV
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH
(Unaudited)
NOTE 2. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENT
The2022, the Company previously accounted forhad $521,983 in its outstanding Public Warrants (as definedoperating bank accounts, $400,045,008 in Note 4) and Private Placement Warrants (collectively, with the Public Warrants, the “Warrants”) issued in connection with its Initial Public Offering as components of equity instead of as derivative liabilities. The warrant agreement governing the Warrants includes a provision that provides for potential changes to the settlement amounts dependent upon the characteristics of the holder of the warrant. In Addition, the warrant agreement includes a provision thatsecurities held in the event ofTrust Account to be used for a tender offerBusiness Combination or exchange offer made to and accepted by holders of more than 50% of the outstanding shares of a single class of stock, all holders of the Warrants would be entitled to receive cash for their Warrants (the “tender offer provision”).
On April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the Securities and Exchange Commission together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Statement”). Specifically, the SEC Statement focused on certain settlement terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in the warrant agreement (the “Warrant Agreement”).
In further consideration of the SEC Statement, the Company’s management further evaluated the Warrants under Accounting Standards Codification (“ASC”) Subtopic 815-40, Contracts in Entity’s Own Equity. ASC Section 815-40-15 addresses equity versus liability treatment and classification of equity-linked financial instruments, including warrants, and states that a warrant may be classified as a component of equity only if, among other things, the warrant is indexed to the issuer’s common stock. Under ASC Section 815-40-15, a warrant is not indexed to the issuer’s common stock if the terms of the warrant require an adjustment to the exercise price upon a specified event and that event is not an input to the fair value of the warrant. Based on management’s evaluation, the Company’s audit committee, in consultation with management, concluded that the Company’s Private Placement Warrants are not indexed to the Company’srepurchase or redeem its common stock in the manner contemplated by ASC Section 815-40-15 because the holderconnection therewith and working capital of $297,250. As of March 31, 2022, approximately $45,000 of the instrumentamount on deposit in the Trust Account represented interest income, which is not an input intoavailable to pay the pricingCompany’s tax obligations.
As a result of the above,working capital needs. Accordingly, the Company should have classified the Warrants as derivative liabilities in its previously issued financial statement as of March 4, 2021. Under this accounting treatment,may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to measuretake additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the fair valuepursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time, which is considered to be one year from the issuance date of the Warrants atfinancial statements. These financial statements do not include any adjustments relating to the end of each reporting period as well as re-evaluate the treatmentrecovery of the warrants and recognize changes inrecorded assets or the fair value fromclassification of the prior period inliabilities that might be necessary should the Company’s operating results for the current period.
The Company’s accounting for the WarrantsCompany be unable to continue as components of equity instead of as derivative liabilities did not have any effect on the Company’s previously reported investments held in trust or cash.
As Previously Reported | Adjustments | As Restated | ||||||||||
Balance sheet as of March 4, 2021 (audited) | ||||||||||||
Warrant Liability | $ | — | $ | 15,957,000 | $ | 15,957,000 | ||||||
Class A Common Stock Subject to Possible Redemption | 382,243,010 | (15,957,000 | ) | 366,286,010 | ||||||||
Class A Common Stock | 178 | 159 | 337 | |||||||||
Additional Paid-in Capital | 4,999,693 | 376,924 | 5,376,617 | |||||||||
Accumulated Deficit | (875 | ) | (377,083 | ) | (377,958 | ) |
2022
Offering Costs
Offering costs consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the Initial Public Offering. Offering costs amounting to $22,154,030 were charged to shareholders’ equity upon the completion of the Initial Public Offering, and $377,083 of the offering costs were allocated to the warrant liabilities and charged to the statement of operations.
September 30, 2021.
securities.
NORTHERN STAR INVESTMENT CORP. IV
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
Liabilities
2022
The Company’s statement of operations includes a presentation of income (loss) per share forClass A common stock subject to possible redemption in the aggregate. As of March 31, 2022 and 2021, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a manner similar to the two-class method of income (loss) per share. Netresult, diluted net income (loss) per common share is the same as basic and diluted, for Class A common stock subject to possible redemption is calculated by dividing the proportionate share of income or loss on marketable securities held by the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Class A common stock subject to possible redemption outstanding since original issuance.
Net income (loss) per share, basic and diluted, for non-redeemablecommon stock is calculated by dividing the net income (loss), adjusted for income or loss on marketable securities attributable to Class A common stock subject to possible redemption, by the weighted average number of non-redeemable common stock outstandingshare for the period.
Non-redeemable common stock includes Founder Shares and non-redeemable shares of common stock as these shares do not have any redemption features. Non-redeemable common stock participates in the income or loss on marketable securities based on non-redeemable shares’ proportionate interest.
periods presented.
Three Months Ended March 31, 2021 | ||||
Class A common stock subject to possible redemption | ||||
Numerator: Earnings allocable to Class A common stock subject to possible redemption | ||||
Interest earned on marketable securities held in Trust Account | $ | 3,951 |
NORTHERN STAR INVESTMENT CORP. IV
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
Three Months Ended March 31, 2021 | ||||
Unrealized gain on marketable securities held | 244 | |||
Less: interest available to be withdrawn for payment of taxes | (4,195 | ) | ||
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Net income attributable | $ | — | ||
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Denominator: Weighted Average Class A common stock subject to possible redemption | ||||
Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption | 36,628,601 | |||
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Basic and diluted net income per share, Class A common stock subject to possible redemption | $ | 0.00 | ||
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Non-Redeemable Common Stock | ||||
Numerator: Net Loss minus Net Earnings | ||||
Net loss | $ | (484,407 | ) | |
Less: Net income allocable to Class A common stock subject to possible redemption | — | |||
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Non-Redeemable Net Loss | $ | (484,407 | ) | |
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Denominator: Weighted Average Non-redeemable Common stock | ||||
Basic and diluted weighted average shares outstanding, Non-redeemable Common stock | 10,136,420 | |||
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Basic and diluted net loss per share, Non-redeemable Common stock | $ | (0.05 | ) | |
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Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Six Months Ended March 31, 2022 | For the Period from November 30, 2020 (Inception) Through March 31, 2021 | |||||||||||||||||||||||||||||
Class A | Class B | Class A | Class B | Class A | Class B | Class A | Class B | |||||||||||||||||||||||||
Basic and diluted net income (loss) per common stock | ||||||||||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||||||||||
Allocation of net income (loss), as adjusted | $ | 5,123,907 | $ | 1,280,977 | $ | (275,166 | ) | $ | (209,241 | ) | $ | 5,342,838 | $ | 1,335,710 | $ | (260,102 | ) | $ | (225,180 | ) | ||||||||||||
Denominator: | ||||||||||||||||||||||||||||||||
Basic and diluted weighted average shares outstanding | 40,000,000 | 10,000,000 | 12,000,000 | 9,125,000 | 40,000,000 | 10,000,000 | 8,925,620 | 7,727,273 | ||||||||||||||||||||||||
Basic and diluted net income (loss) per common stock | $ | 0.13 | $ | 0.13 | $ | (0.02 | ) | $ | (0.02 | ) | $ | 0.13 | $ | 0.13 | $ | (0.03 | ) | $ | (0.03 | ) |
2022
The underwriters’ over-allotment option expired unexercised on April 18, 2021, and, accordingly, 62,500 Founder Shares were forfeited, resulting in an aggregate of 10,000,000 Founder Shares outstanding.
Promissory Note — Related Party
On November 30, 2020, the Company issued an unsecured promissory note (the “Promissory Note”) to the Sponsor pursuant to which the Company could borrow up to an aggregate principal amount of $150,000. The Promissory Note was non-interest bearing and payable on the earlier of (i) June 30, 2021, (ii) the completion of the Initial Public Offering and (iii) the date on which the Company determined not to proceed with the Initial Public Offering. As of March 4, 2021, there was $150,000 outstanding under the Promissory Note. The Company repaid in full the Promissory Note on March 9, 2021.
statements
The underwriters elected not to exercise the over-allotment option to purchase such additional 250,000 Units at a price of $10.00 per Unit. The over-allotment option expired on April 18, 2021.
NORTHERN STAR INVESTMENT CORP. IV
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
DEFICIT
Class
outstanding.
NOTE 9. WARRANTS
The Public Warrants will become exercisable on the later
in whole and not in part;
at a price of $0.01 per warrant;
upon not less than 30 days’ prior written notice of redemption; and
if, and only if, the reported last sale price of the Company’s Class A common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrant holders.
If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the 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 warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
NORTHERN STAR INVESTMENT CORP. IV
2022
The Private Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Warrants and the Class A common stock issuable upon the exercise of the Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of an initial Business Combination at an issue price or effective issue price of less than $9.20 per share of common stock (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, initial stockholders or their affiliates, without taking into account any Founder Shares held by them 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 an initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Class A common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates the initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater of (i) the Market Value or (ii) the Newly Issued Price, and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the greater of the Market Value and the Newly Issued Price.
Additionally, commencing ninety days after the Warrants become exercisable, the Company may redeem the outstanding Warrants:
in whole and not in part;
at $0.10 per Warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their Warrants on a cashless basis prior to redemption and receive that number of shares of Class A common stock to be determined by reference to an agreed table based on the redemption date and the “fair market value” of the Company’s Class A common stock;
if, and only if, the last reported sale price of the Company’s Class A common stock equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) on the trading day prior to the date on which the Company sends the notice of redemption to the Warrant holders;
if, and only if, the Private Placement Warrants are also concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above; and
if, and only if, there is an effective registration statement covering the issuance of the shares of Class A common stock (or a security other than the Class A common stock into which the Class A common stock has been converted or exchanged for in the event the Company is not the surviving company in the initial Business Combination) issuable upon exercise of the Warrants and a current prospectus relating thereto available throughout the 30-day period after written notice of redemption is given.
The “fair market value” of our Class A common stock for the above purpose shall mean the volume weighted average price of our Class A common stock during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants.
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts thatthose securities which the Company would have receivedhas the ability and intent to hold until maturity.
NORTHERN STAR INVESTMENT CORP. IV
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
Description | Level | March 31, 2021 | ||||||
Assets: | ||||||||
Marketable securities held in Trust Account | 1 | $ | 400,004,195 | |||||
Liabilities: | ||||||||
Warrant Liability – Public Warrants | 3 | 6,480,000 | ||||||
Warrant Liability – Private Placement Warrants | 3 | 9,477,000 |
Description | Level | March 31, 2022 | Level | September 30, 2021 | ||||||||||||
Assets: | ||||||||||||||||
Investments held in Trust Account – U.S Treasury Securities Money Market Fund | 1 | $ | 400,045,008 | 1 | $ | 400,021,169 | ||||||||||
Liabilities: | ||||||||||||||||
Warrant Liability – Public | 1 | $ | 3,066,667 | 1 | $ | 5,933,334 | ||||||||||
Warrant Liability – Private Placement | 2 | 4,485,000 | 2 | 8,677,500 |
Initial Measurement
The key inputs intoan observable market quote in an active market under the binomial lattice simulation model forticker NSTD.WS. For periods subsequent to the Private Placement Warrants and Public Warrants were as follows at initial measurement and March 31, 2021:
March 31, 2021 | March 4, 2021 | |||||||
Input |
| (Initial Measurement) | ||||||
Risk-free interest rate | 1.13 | % | 0.91 | % | ||||
Trading days per year | 252 | 252 | ||||||
Expected volatility | 15.0 | % | 15.0 | % | ||||
Probability of acquisition | 90 | % | 90 | % | ||||
Exercise price | $ | 11.50 | $ | 11.50 | ||||
Stock Price | $ | 9.92 | $ | 10.00 |
On March 4, 2021, the Private Placement Warrants and Public Warrants were determined to be $0.972 per warrant for aggregate values of $6.48 million and $9.48 million, respectively.
As of March 31, 2021, the aggregate valuesdetachment of the Public Warrants from the Units, the close price of the Public Warrant price was used as the fair value of the Warrants as of each relevant date.
March 31, 2022.
Private | Public | Warrant Liabilities | ||||||||||
Fair value as of January 1, 2021 | $ | — | $ | — | $ | — | ||||||
Initial measurement on March 4, 2021 | 9,477,000 | 6,480,000 | 15,957,000 | |||||||||
Change in valuation inputs or other assumptions | — | — | — | |||||||||
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Fair value as of March 31, 2021 | $ | 9,477,000 | $ | 6,480,000 | $ | 15,957,000 | ||||||
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Level 3 financial liabilities consist of Public Warrants and the Private Placement Warrant liabilities for which there is no current market for these securities such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate. There were no transfers in or out of Level 3 from other levels of the fair value hierarchy during the quarter ended March 31, 2021.
Private Placement | Public | Warrant Liabilities | ||||||||||
Fair value as of September 30, 2021 | $ | 8,677,500 | $ | 5,933,334 | $ | 14,610,834 | ||||||
Change in fair value | (292,500 | ) | (200,000 | ) | (492,500 | ) | ||||||
Fair value as of December 31, 2021 | $ | 8,385,000 | $ | 5,733,334 | $ | 14,118,334 | ||||||
Change in fair value | (3,900,000 | ) | (2,666,667 | ) | (6,566,667 | ) | ||||||
Fair value as of March 31, 2022 | $ | 4,485,000 | $ | 3,066,667 | $ | 7,551,667 | ||||||
We do not believe we will
continue as a going concern.
2022. 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
Liabilities
We apply
On April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Statement”). Specifically, the SEC Statement focused on certain settlement terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in the warrant agreement governing our warrants. As a result of the SEC Statement, we reevaluated the accounting treatment of our Public Warrants and our Private Placement Warrants and determined to classify the warrants as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings. Further, the Company corrected certain line items related to the previously audited balance sheet as of March 4, 2021 in the Form 8-K filed with the SEC on March 10, 2021 related to misstatements identified in improperly applying accounting guidance on certain warrants, recognizing them as components of equity instead of a derivative liability. These corrections are described in Note 2, summary of significant accounting policies.
Notwithstanding the material weakness, management has concluded that the financial statements included elsewhere in this Quarterly Report present fairly, in all material respects, our financial position, results of operations and cash flows in conformity with GAAP.
applications.
Other than as described below,
Item 1. Legal Proceedings
None
Recent SEC guidance required us to reconsider the accounting of warrants and led us to conclude that our warrants be accounted for as liabilities rather than as equity and such requirement resulted in a restatement of our previously issued financial statements.
On April 12, 2021, the staff of the SEC issued a public statement entitled “Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies (“SPACs”) (the “Statement”). In the Statement, the SEC staff expressed it view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPAC’s balance sheet as opposed to equity. Since issuance, our warrants were accounted for as equity within our balance sheet, and after discussion and evaluation, including with our independent auditors, we have concluded that our warrants should be presented as liabilities with subsequent and periodic fair value re-measurement. Therefore, we conducted a valuation of our warrants and restated our previously issued financial statements, which resulted in unanticipated costs and diversion of management resources and may result in potential loss of investor confidence. Although we have now completed the restatement, we cannot guarantee that we will have no further inquiries from the SEC or the NYSE regarding our restated financial statements or matters relating thereto.
Any future inquiries from the SEC or the NYSE as a result of the restatement of our historical financial statements will, regardless of the outcome, likely consume a significant amount of our resources in addition to those resources already consumed in connection with the restatement itself.
Our warrants are accounted for as warrant liabilities and are recorded at fair value upon issuance with changes in fair value each reporting period to be reported in earnings, which may haveadverse effect on the market price of our Common Stock.We now account for our warrants as warrant liabilities and recorded at fair value upon issuance with any changes in fair value each reporting period to be reported in earnings as determined by the Company based the available publicly traded warrant price or based on a valuation report obtained from its independent third party valuation firm. The impact of changes in fair value on earnings may have an adverse effect on the market price of our common stock.We have identified aadditional material weakness in our internal control over financial reporting.reporting relating to our complex financial instruments. This material weakness could continue to adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner.
To respond to thisClass A common stock. Management concluded that the foregoing constituted a material weakness as of March 31, 2022.
Any failure to maintain such internal control could adversely impact our ability to report our financial position and results from operations on a timely and accurate basis. If our financial statements are not accurate, investors may not have a complete understanding of our operations. Likewise, if our financial statements are not filed on a timely basis, we could be subject to sanctions or investigations by the stock exchange on which our common stock is listed, the SEC or other regulatory authorities. In either case, there could result a material adverse effect on our business. Failure to timely file will cause us to be ineligible to utilize short form registration statements on Form S-3 or Form S-4, which may impair our ability to obtain capital in a timely fashion to execute our business strategies or issue shares to effect an acquisition. Ineffective internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock.
We can give no assurance that the measures we have taken and plan to take in the future will remediate the material weakness identified or that any additional material weaknesses or restatements of financial results will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting or circumvention of these controls. In addition, even if we are successful in strengtheningstrengthened our controls and procedures, in the future those controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our financial statements.
* | Filed herewith. |
** | Furnished. |
|
NORTHERN STAR INVESTMENT CORP. IV | ||||||
Date: | By: | /s/ Joanna Coles | ||||
Name: | Joanna Coles | |||||
Title: | Chief Executive Officer | |||||
(Principal Executive Officer) | ||||||
Date: | By: | /s/ James Brady | ||||
Name: | James Brady | |||||
Title: | Chief Financial Officer | |||||
(Principal Financial and Accounting Officer) |
20