☒ | 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 |
Cayman Islands | ||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
511 6th Ave #7342 New York, New York | 10011 | ||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Units, each consisting of one Class A ordinary share, $0.0001 par value, and one-third of one redeemable warrant | FPAC.U | The New York Stock Exchange | ||
Class A ordinary shares | FPAC | The New York Stock Exchange | ||
Redeemable warrants exercisable for one Class A ordinary share at an exercise price of $11.50 | FPAC.W | The New York Stock Exchange |
Large accelerated filer | ☐ | Accelerated filer | ||||
Non-accelerated filer | Smaller reporting company | ☒ | ||||
Emerging growth company | ☒ |
FAR PEAK ACQUISITION CORPORATION
Form
Table of Contents
Page No. | ||||||
Item 1. | ||||||
1 | ||||||
2 | ||||||
3 | ||||||
4 | ||||||
5 | ||||||
Item 2. | ||||||
Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||||||
Item 3. | ||||||
Item 4. | ||||||
Item 1. | ||||||
Item 1a. | ||||||
Item 2. | ||||||
Item 3. | ||||||
Item 4. | ||||||
Item 5. | ||||||
Item 6. | ||||||
December 31, 2021 | September 30, 2021 | |||||||
(unaudited) | (audited) | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash | $ | 32,928 | $ | 172,454 | ||||
Prepaid expenses | 485,417 | 642,917 | ||||||
Total current assets | 518,345 | 815,371 | ||||||
Investments held in Trust Account | 600,221,029 | 600,209,262 | ||||||
Total Assets | $ | 600,739,374 | $ | 601,024,633 | ||||
Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit: | ||||||||
Current liabilities: | ||||||||
Accrued expenses | $ | 7,182,000 | $ | 5,155,500 | ||||
Accounts payable | 67,998 | 29,474 | ||||||
Total current liabilities | 7,249,998 | 5,184,974 | ||||||
Deferred legal fees | 400,000 | 400,000 | ||||||
Deferred underwriting commissions | 15,437,500 | 15,437,500 | ||||||
Derivative warrant liabilities | 53,730,000 | 46,710,000 | ||||||
Total liabilities | 76,817,498 | 67,732,474 | ||||||
Commitments and Contingencies | 0 | |||||||
Class A ordinary shares subject to possible redemption; 60,000,000 shares at $10.00 per share | 600,000,000 | 600,000,000 | ||||||
Shareholders’ Deficit | ||||||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; NaN issued or outstanding | 0— | 0 | ||||||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 0 non-redeemable shares issued or outstanding | 0 | 0 | ||||||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 9,750,000 shares issued and outstanding | 975 | 975 | ||||||
Additional paid-in capital | 0 | 0 | ||||||
Accumulated deficit | (76,079,099 | ) | (66,708,816 | ) | ||||
Total shareholders’ deficit | (76,078,124 | ) | (66,707,841 | ) | ||||
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit | $ | 600,739,374 | $ | 601,024,633 | ||||
December 31, 2022 | September 30, 2022 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash | $ | 1,897,876 | $ | 2,220,941 | ||||
Prepaid expenses | 85,348 | 76,042 | ||||||
Total current assets | 1,983,224 | 2,296,983 | ||||||
Investments held in Trust Account | 606,938,498 | 602,690,646 | ||||||
Total Assets | $ | 608,921,722 | $ | 604,987,629 | ||||
Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit: | ||||||||
Current liabilities: | ||||||||
Accrued expenses | $ | 13,451,792 | $ | 10,436,125 | ||||
Accounts payable | 206,091 | 69,668 | ||||||
Total current liabilities | 13,657,883 | 10,505,793 | ||||||
Deferred legal fees | — | 400,000 | ||||||
Derivative warrant liabilities | — | 5,983,998 | ||||||
Total liabilities | 13,657,883 | 16,889,791 | ||||||
Commitments and Contingencies | ||||||||
Class A ordinary shares subject to possible redemption; 60,000,000 shares at approximately $10.11 and $10.04 per share as of December 31, 2022 and September 30, 2022, respectively | 606,838,498 | 602,590,646 | ||||||
Shareholders’ Deficit | ||||||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued or outstanding | — | — | ||||||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; no non-redeemable shares issued or outstanding | — | — | ||||||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 9,750,000 shares issued and outstanding | 975 | 975 | ||||||
Additional paid-in capital | — | — | ||||||
Accumulated deficit | (11,575,634 | ) | (14,493,783 | ) | ||||
Total shareholders’ deficit | (11,574,659 | ) | (14,492,808 | ) | ||||
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit | $ | 608,921,722 | $ | 604,987,629 | ||||
For the Three Months Ended December 31, 2021 | For the Period from October 19, 2020 (Inception) through December 31, 2020 | |||||||
General and administrative expenses | $ | 2,362,050 | $ | 662,301 | ||||
Loss on operations | (2,362,050 | ) | (662,301 | ) | ||||
Other income (expenses): | ||||||||
Change in fair value of derivative warrant liabilities | (7,020,000 | ) | 0 | |||||
Loss on sale of Private Placement Warrants | 0 | (3,500,000 | ) | |||||
Financing costs - derivative warrant liabilities | 0 | (1,684,760 | ) | |||||
Income (loss) from investments held in Trust Account | 11,767 | (23,369 | ) | |||||
Net loss | $ | (9,370,283 | ) | $ | (5,870,430 | ) | ||
Weighted average shares outstanding of Class A ordinary shares | 60,000,000 | 19,861,111 | ||||||
Basic and diluted net loss per ordinary share, Class A | $ | (0.13 | ) | $ | (0.20 | ) | ||
Weighted average shares outstanding of Class B ordinary shares | 9,750,000 | 9,750,000 | ||||||
Basic and diluted net loss per ordinary share, Class B | $ | (0.13 | ) | $ | (0.20 | ) | ||
For the Three Months Ended December 31, | ||||||||
2022 | 2021 | |||||||
General and administrative expenses | $ | 3,065,849 | $ | 2,362,050 | ||||
Loss from operations | (3,065,849 | ) | (2,362,050 | ) | ||||
Other income (expenses): | ||||||||
Change in fair value of derivative warrant liabilities | 5,983,998 | (7,020,000 | ) | |||||
Income from investments held in Trust Account | 4,247,852 | 11,767 | ||||||
Net income (loss) | $ | 7,166,001 | $ | (9,370,283 | ) | |||
Weighted average shares outstanding of Class A ordinary shares - Basic and diluted | 60,000,000 | 60,000,000 | ||||||
Basic and diluted net income (loss) per ordinary share, Class A | $ | 0.10 | $ | (0.13 | ) | |||
Weighted average shares outstanding of Class B ordinary shares - Basic and diluted | 9,750,000 | 9,750,000 | ||||||
Basic and diluted net income (loss) per ordinary share, Class B | $ | 0.10 | $ | (0.13 | ) | |||
Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||
Class A | Class B | Paid-in | Accumulated | Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
Balance - September 30, 2022 | — | $ | — | 9,750,000 | $ | 975 | $ | — | $ | (14,493,783 | ) | $ | (14,492,808 | ) | ||||||||||||||
Increase in redemption value of Class A ordinary shares subject to possible redemption | — | — | — | — | — | (4,247,852 | ) | (4,247,852 | ) | |||||||||||||||||||
Net income | — | — | — | — | — | 7,166,001 | 7,166,001 | |||||||||||||||||||||
Balance - December 31, 2022 (unaudited) | — | $ | — | 9,750,000 | $ | 975 | $ | — | $ | (11,575,634 | ) | $ | (11,574,659 | ) | ||||||||||||||
Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||
Class A | Class B | Paid-in | Accumulated | Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
Balance - September 30, 2021 | 0 | $ | 0 | 9,750,000 | $ | 975 | $ | 0 | $ | (66,708,816 | ) | $ | (66,707,841 | ) | ||||||||||||||
Net loss | — | — | — | — | — | (9,370,283 | ) | (9,370,283 | ) | |||||||||||||||||||
Balance - December 31, 2021 (unaudited) | 0 | $ | 0 | 9,750,000 | $ | 975 | $ | 0 | $ | (76,079,099 | ) | $ | (76,078,124 | ) | ||||||||||||||
Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||
Class A | Class B | Paid-in | Accumulated | Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
Balance - September 30, 2021 | — | $ | — | 9,750,000 | $ | 975 | $ | — | $ | (66,708,816 | ) | $ | (66,707,841 | ) | ||||||||||||||
Net loss | — | — | — | — | — | (9,370,283 | ) | (9,370,283 | ) | |||||||||||||||||||
Balance - December 31, 2021 (unaudited) | — | $ | — | 9,750,000 | $ | 975 | $ | — | $ | (76,079,099 | ) | $ | (76,078,124 | ) | ||||||||||||||
Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||
Class A | Class B | Paid-in | Accumulated | Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
Balance - October 19, 2020 (inception) | 0 | $ | 0 | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||
Issuance of Class B ordinary shares to Sponsor | — | — | 9,750,000 | 975 | 24,025 | 0 | 25,000 | |||||||||||||||||||||
Accretion of Class A ordinary shares to redemption value | — | — | — | — | (24,025 | ) | (62,012,620 | ) | (62,036,645 | ) | ||||||||||||||||||
Net loss | — | — | — | — | — | (5,870,430 | ) | (5,870,430 | ) | |||||||||||||||||||
Balance - December 31, 2020 (unaudited) | 0 | $ | 0 | 9,750,000 | $ | 975 | $ | 0 | $ | (67,883,050 | ) | $ | (67,882,075 | ) | ||||||||||||||
For the Three Months Ended December 31, 2021 | For the Period from October 19, 2020 (Inception) through December 31, 2020 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net loss | $ | (9,370,283 | ) | $ | (5,870,430 | ) | ||
Adjustments to reconcile net loss to cash used in operating activities: | ||||||||
General and administrative expenses paid by Sponsor under promissory note | 0 | 31,015 | ||||||
Change in fair value of derivative warrant liabilities | 7,020,000 | 0 | ||||||
Financing costs - derivative warrant liabilities | — | 1,684,760 | ||||||
Loss (income) from investments held in Trust Account | (11,767 | ) | 23,369 | |||||
Loss on sale of Private Placement warrants | 0 | 3,500,000 | ||||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | 157,500 | (857,475 | ) | |||||
Accrued expenses | 2,026,500 | 435,000 | ||||||
Accounts payable | 38,524 | 125,666 | ||||||
Net cash used in operating activities | (139,526 | ) | (928,095 | ) | ||||
Cash Flows from Investing Activities: | ||||||||
Cash deposited in Trust Account | 0 | (600,000,000 | ) | |||||
Net cash used in investing activities | 0 | (600,000,000 | ) | |||||
Cash Flows from Financing Activities: | ||||||||
Repayment of note payable to related party | 0 | (195,396 | ) | |||||
Proceeds received from initial public offering, gross | 0 | 600,000,000 | ||||||
Proceeds received from private placement | 0 | 10,500,000 | ||||||
Offering costs paid | 0 | (11,219,524 | ) | |||||
Reimbursement from underwriters | 0 | 3,600,000 | ||||||
Net cash provided by financing activities | 0 | 602,685,080 | ||||||
Net change in cash | (139,526 | ) | 1,756,985 | |||||
Cash - beginning of the period | 172,454 | 0 | ||||||
Cash - end of the period | $ | 32,928 | $ | 1,756,985 | ||||
Supplemental disclosure of noncash financing activities: | ||||||||
Offering costs paid by Sponsor in exchange for issuance of Class B ordinary shares | $ | 0 | $ | 25,000 | ||||
Offering costs included in accrued expenses | $ | 0 | $ | 750,000 | ||||
Offering costs funded with note payable - related party | $ | — | $ | 164,381 | ||||
Deferred legal fees | $ | 0 | $ | 400,000 | ||||
Deferred underwriting commissions | $ | 0 | $ | 15,437,500 |
For the Three Months Ended December 31, | ||||||||
2022 | 2021 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income (loss) | $ | 7,166,001 | $ | (9,370,283 | ) | |||
Adjustments to reconcile net income (loss) to cash used in operating activities: | ||||||||
Change in fair value of derivative warrant liabilities | (5,983,998 | ) | 7,020,000 | |||||
Income from investments held in Trust Account | (4,247,852 | ) | (11,767 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | (9,306 | ) | 157,500 | |||||
Accrued expenses | 2,615,667 | 2,026,500 | ||||||
Accounts payable | 136,423 | 38,524 | ||||||
Net cash used in operating activities | (323,065 | ) | (139,526 | ) | ||||
Net change in cash | (323,065 | ) | (139,526 | ) | ||||
Cash - beginning of the period | 2,220,941 | 172,454 | ||||||
Cash - end of the period | $ | 1,897,876 | $ | 32,928 | ||||
For the Three Months | For the Period from October 19, 2020 | |||||||||||||||
Ended December 31, 2021 | (Inception) through December 31, 2020 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net loss per ordinary share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net loss | $ | (8,060,458 | ) | $ | (1,309,825 | ) | $ | (3,937,484 | ) | $ | (1,932,946 | ) | ||||
Denominator: | ||||||||||||||||
Basic and diluted weighted average ordinary shares outstanding | �� | 60,000,000 | 9,750,000 | 19,861,111 | 9,750,000 | |||||||||||
Basic and diluted net loss per ordinary share | $ | (0.13 | ) | $ | (0.13 | ) | $ | (0.20 | ) | $ | (0.20 | ) | ||||
For the Three Months Ended December 31, 2022 | For the Three Months Ended December 31, 2021 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net income (loss) per ordinary share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income (loss) - basic and diluted | $ | 6,164,302 | $ | 1,001,699 | $ | (8,060,458 | ) | $ | (1,309,825 | ) | ||||||
Denominator: | ||||||||||||||||
Basic weighted average ordinary shares outstanding | 60,000,000 | 9,750,000 | 60,000,000 | 9,750,000 | ||||||||||||
Basic and diluted net income (loss) per ordinary share | $ | 0.10 | $ | 0.10 | $ | (0.13 | ) | $ | (0.13 | ) | ||||||
Gross proceeds from Initial Public Offering | $ | 600,000,000 | $ | 600,000,000 | ||||
Less: | ||||||||
Fair value of Public Warrants at issuance | (40,000,000 | ) | (40,000,000 | ) | ||||
Offering costs allocated to Class A ordinary shares subject to possible redemption | (22,036,645 | ) | (22,036,645 | ) | ||||
Plus: | ||||||||
Accretion on Class A ordinary shares subject to possible redemption amount | 62,036,645 | 62,036,645 | ||||||
Class A ordinary shares subject to possible redemption | $ | 600,000,000 | ||||||
Class A ordinary shares subject to possible redemption at September 30, 2021 | 600,000,000 | |||||||
Remeasurement of redemption value of Class A ordinary shares subject to possible redemption | 2,590,646 | |||||||
Class A ordinary shares subject to possible redemption at September 30, 2022 | 602,590,646 | |||||||
Remeasurement of redemption value of Class A ordinary shares subject to possible redemption | 4,247,852 | |||||||
Class A ordinary shares subject to possible redemption at December 31, 2022 | $ | 606,838,498 | ||||||
Description | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||
Assets: | ||||||||||||
Investments held in Trust Account-money market fund | $ | 600,221,029 | $ | 0 | $ | 0 | ||||||
Liabilities: | ||||||||||||
Derivative warrant liabilities-Public warrants | $ | 39,800,000 | $ | 0 | $ | 0 | ||||||
Derivative warrant liabilities-Private warrants | $ | 0 | $ | 13,930,000 | $ | 0 |
Description | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||
Assets: | ||||||||||||
Investments held in Trust Account - money market fund | $ | 606,938,498 | $ | — | $ | — |
Description | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | ||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Investments held in Trust Account-money market fund | $ | 600,209,262 | $ | 0 | $ | 0 | ||||||||||||||||||
Investments held in Trust Account - money market fund | $ | 602,690,646 | $ | — | $ | — | ||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Derivative warrant liabilities-Public warrants | $ | 34,600,000 | $ | 0 | $ | 0 | ||||||||||||||||||
Derivative warrant liabilities-Private warrants | $ | 0 | $ | 12,110,000 | $ | 0 | ||||||||||||||||||
Derivative warrant liabilities - Public Warrants | $ | 4,400,000 | $ | — | $ | — | ||||||||||||||||||
Derivative warrant liabilities - Private Warrants | $ | — | $ | 1,583,998 | $ | — |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
References in this report (the “Quarterly Report”) to “we”, “us”, “our” or the “Company” are to Far Peak Acquisition Corporation, except where the context requires otherwise. References to our “management” or our “management team” are to our officers and directors, and references to the “Sponsor” are to Far Peak LLC. The following discussion should be read in conjunction with our unaudited condensed financial statements and related notes thereto included elsewhere in this Quarterly Report.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form
Overview
We are a blank check company incorporated as a Cayman Islands exempted company on October 19, 2020. We were incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities (a “Business Combination”). We are not limited to a particular industry or sector for purposes of consummating a Business Combination. We are an early stage and emerging growth company and, as such, are subject to all of the risks associated with early stage and emerging growth companies.
Our sponsor is Far Peak LLC, a Cayman Islands exempted limited liability company (“Sponsor”). The registration statement for our Initial Public Offering was declared effective on December 2, 2020. On December 7, 2020, we consummated our Initial Public Offering of 55,000,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units being offered, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $550.0 million, and incurring offering costs of approximately $23.7 million, inclusive of $7.5 million in underwriting commissions, approximately $15.4 million in deferred underwriting commissions, (Note 7), $400,000 in deferred legal fees, approximately $4.0 million of other expenses, and net of reimbursement from the underwriters of $3.6 million. Our underwriters were granted a
Simultaneously with the closing of our Initial Public Offering, we consummated the private placement (“Private Placement”) of 7,000,000 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”), at a price of $1.50 per Private Placement Warrant with the Sponsor and certain funds and accounts managed by subsidiaries of BlackRock, Inc., who invested in us at the time of our initial public offering, (collectively, the “Anchor Investor”), generating gross proceeds of $10.5 million (and in January, March and May 2022, pursuant to commitments made the sponsor and the Anchor Investor at the time of the Initial Public Offering, the Company completed the salewe sold, in each of three similar transactions, an additional 66,66633,333 Private Placement Warrants to each of the sponsor and the Anchor Investor at a price of $1.50 per warrant for aggregate gross proceeds of approximately $100,000)$300,000).
21
Upon the closing of our Initial Public Offering, the Private Placement, and the Over-Allotment Option $600.0 million ($10.00 per Unit) of the net proceeds of the sale of the Units in the Initial Public Offering and the Private Placement were placed in a trust account (“Trust Account”) and 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 investing solely in U.S. Treasuries and meeting certain conditions under Rule
Liquidity and Going Concern
As of December 31, 2021,2022, we had approximately $33,000$1.9 million cash in cashour operating bank account and a working capital deficit of approximately $6.7$11.7 million.
Our liquidity needs have been satisfied through a payment of $25,000 from our Sponsor to cover certain offering costs in exchange for the issuance of the Founder Shares (as defined below), a loan of approximately $195,000 to us under a promissory note from our Sponsor (the “Promissory Note”), the reimbursement of certain offering costs from the underwriters of $3.6 million, and the net proceeds from the consummation of the Private Placement not held in the Trust Account. We fully repaid(including the Promissory Noteadditional Private Placements completed in January, March and May 2022). Additionally, the Sponsor and the Anchor Investor have agreed to provide to the Company an aggregate of $1,000,000 of proceeds from the purchase of additional private placement warrants, at $1.50 per warrant, split between them pro rata in relation to their holdings of private placement warrants as necessary for working capital (or in lieu of such warrant purchase, the Sponsor will lend up to such amount to the Company) ($300,000 of this commitment has been funded to date). Liquidity needs have also been met through the $2.5 million extension fee paid by Bullish Global on December 7, 2020.June 29, 2022. In addition, in order to finance transaction costs in connection with a Business Combination, our officers, directors and Initial Shareholders may, but are not obligated to, provide us Working Capital Loans. As of December 31, 2021,2022 and September 30, 2022, there were no amounts outstanding under any Working Capital Loans.
In connection with ourthe assessment of going concern considerations in accordance with FASBthe Financial Accounting Standard Board (“FASB”) ASC Topic“Presentation “Presentation of Financial Statement—Statements—Going Concern,” we have until March 7, 2023 to consummate a Business Combination. We do not expect that we will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. We have determined that the liquidity condition and mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution raises substantial doubt about our ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should we have accessbe required to fundsliquidate after March 7, 2023.
Results of Operations
Our entire activity for the period from October 19, 2020 (inception) through December 31, 2022 relates to our Sponsor or an affiliate of our Sponsor, or certain of our officersformation, the initial public offering (“Initial Public Offering”), and directors to meet its needs through the earliersince closing of the consummationInitial Public Offering, our search for a prospective initial Business Combination. We will not generate any operating revenues until after the completion of a Business Combination, or one yearat the earliest. We generate non-operating income in the form of interest income from this filing. Over this time period,the proceeds derived from the Initial Public Offering.
22
For the three months ended December 31, 2022, we will be using these funds for paying existing accounts payable, identifyinghad net income of approximately $7.2 million, which consisted of approximately $6.0 million gain change in fair value of derivative warrant liabilities and evaluating prospective initial Business Combination candidates, performing due diligenceapproximately $4.2 million in gain on prospective target businesses, paying for travel expenditures, selectinginvestments held in Trust Account, offset by approximately $3.1 million in general and administrative expenses.
For the target business to merge with or acquire,three months ended December 31, 2021, we had net loss of approximately $9.4 million, which consisted of approximately $7.0 million change in fair value of derivative warrant liabilities and structuring, negotiatingapproximately $2.4 million in general and consummating the Business Combination.
Related Party Transactions
Founder Shares
On October 21, 2020, our Sponsor paid $25,000 to cover certain offering costs in consideration for 9,750,000 Class B ordinary shares (the “Founder Shares”). Our Sponsor agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earliest 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
Promissory Note – Related Party
On October 21, 2020, we issued a Promissory Note to our Sponsor, pursuant to which we may borrow up to an aggregate principal amount of $300,000. The Promissory Note was
In order to finance transaction costs in connection with a Business Combination, our Sponsor or an affiliate of the Sponsor, or certain of our officers and directors may, but are not obligated to, loan us funds as may be required (“Working Capital Loans”). Such Working Capital Loans will be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of notes may be converted upon completion of a Business Combination into warrants at a price of $1.50 per warrant. Such warrants would be identical to the Private Placement Warrants. In the event that a Business Combination does not close, we may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Additionally, our Sponsor and the Anchor Investor have agreed to provide to us an aggregate of $1,000,000 of proceeds from the purchase of additional private placement warrants, at $1.50 per warrant, split between them
Additional Private Placements – Related Party
Additionally, our Sponsor and Anchor Investor have agreed to provide to us an aggregate of $1,000,000 of proceeds from the purchase of additional private placement warrants, at $1.50 per warrant, split between them pro rata in relation to their holdings of private placement warrants as necessary for working capital (or in lieu of such warrant purchase, the Sponsor will lend up to such amount to us) ($300,000 of this commitment has been funded to date). In January 2022 and March 2022, pursuant to this commitment, the Sponsor and the Anchor Investor purchased (in each private placement transaction), an additional 66,666 Private Placement Warrant (33,333 each) for aggregate gross
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proceeds of approximately $100,000. On May 13, 2022, pursuant to commitments made at the time of the Initial Public Offering, we completed the sale of an additional 66,666 Private Placement Warrants at $1.50 per warrant for aggregate gross proceeds of approximately $100,000) to the Sponsor and the Anchor Investor (33,333 each).
Services Agreement – Related Party
On July 5, 2022, we entered into a Services Agreement with Far Peak Management Company LLC (“Management Company”), an affiliate of the Sponsor, pursuant to which Management Company provides certain services necessary for the conduct of our business, and we agreed to reimburse Management Company for its reasonable and documented out-of-pocket costs (including without limitation, reasonable out-of-pocket costs of salary and benefits to Service Provider’s employees) incurred in providing the services in amounts not to exceed $70,000 per calendar quarter. For the three months ended December 31, 2022, we incurred approximately $64,000 in such costs and there was approximately $21,000 outstanding as of December 31, 2022 payable to Management Company.
Commitments and Contingencies
Registration Rights
The holders of our Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of 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 the Working Capital Loans) will be entitled to registration rights pursuant to a registration rights agreement signed on the effective date of the Initial Public Offering. 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. However, the registration rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lockup period.
Deferred Legal Fees
We entered into an engagement letter with legal counsel to obtain legal advisory services, related to our Initial Public Offering, pursuant to which the legal counsel agreed to defer their fees (“deferred legal fees”). The deferred legal fees will become payable solely in the event that we complete a Business Combination, subject to the terms of the engagement letter. On December 7, 2020, we recorded deferred legal fees of $400,000 in connection with legal services received for the Initial Public Offering in the accompanying unaudited condensed balance sheet.
Lease Agreement
On January 12, 2021, we executed a lease agreement with an affiliate of the Sponsor, subleasing office approximately 2,300 square feet space in New York, New York. The lease calls for monthly minimum lease payments of $12,500 during the term of the sublease, which endsended on January 30, 2022. On July 27, 2021, we amended the lease agreement to a lease payment of $37,500 during the term of the sublease, which endsended on April 30, 2022.
Litigation
From time to time, we may be subject to legal proceedings and claims that arise in the search for a potential target business; however, we are not aware of any pending or threatened litigation that it believes is reasonably likely to have a material adverse effect on its results of operations, financial position, or cash flows.
Critical Accounting Policies and Estimates
This management’s discussion and analysis of our financial condition and results of operations is based on our unaudited condensed financial statements, which have been prepared in accordance with United States generally accepted accounting principles. The preparation of these unaudited condensed financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure
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of contingent assets and liabilities in our unaudited condensed financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Management has identified the following as its critical accounting policies:
Derivative Warrant liabilities
We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued ordinary share purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC
The Public Warrants issued in connection with the Initial Public Offering and the Private Placement Warrants are recognized as derivative liabilities in accordance with ASC
Class A Ordinary Shares Subject to Possible Redemption
We account for our Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A 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 our control) are classified as temporary equity. At all other times, Class A ordinary shares are classified as shareholders’ equity. Our Class A ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, as of Initial Public Offering, 60,000,000 Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ equity section of our balance sheet.
We recognize changes in redemption value immediately as they occur and adjusts the carrying value of the Class A ordinary shares subject to possible redemption to equal the redemption value at the end of each reporting period. This method would view the end of the reporting period as if it were also the redemption date for the security. Effective with the closing of the Initial Public Offering (including exercise of the over-allotment option), we recognized the accretion from initial book value to redemption amount, which resulted in charges against additional
Net Income (Loss) Per Ordinary Share
We comply with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share. We have two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of shares. Net lossincome (loss) per ordinary share is calculated by dividing the net lossincome (loss) by the weighted average ordinary shares outstanding for the respective period.
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The calculation of diluted net lossincome (loss) per ordinary shares does not consider the effect of the warrants issued in connection with the Initial Public Offering (including exercise of the over-allotment option) and the Private Placement to purchase an aggregate of 27,000,000 ordinary shares in the calculation of diluted lossincome (loss) per share, because their exercise is contingent upon future events and their inclusion would be anti-dilutive under the treasury stock method.events. As a result, diluted net lossincome (loss) per share is the same as basic net lossincome (loss) per share for the three months ended December 31, 2022 and 2021. Accretion associated with the redeemable Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value.
Recent Accounting Pronouncements
In June 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-03, ASC Subtopic 820, “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The ASU amends ASC 820 to clarify that a contractual sales restriction is not considered in measuring an equity security at fair value and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. The ASU applies to both holders and issuers of equity and equity-linked securities measured at fair value. The amendments in this ASU are effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company is still evaluating the impact of this pronouncement on the financial statements.
Our management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying unaudited condensed financial statements.
Off-Balance
As of December 31, 20212022 and September 30, 2021,2022, we did not have any
JOBS Act
The Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of
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Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
We are a smaller reporting company as defined by Rule
Item 4. | Controls and Procedures |
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of December 31, 2021,2022, as such term is defined in Ruleshavehas concluded that during the period covered by this report, our disclosure controls and procedures were not effective as of December 31, 2021, because of a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Specifically, the Company’s management has concluded that our control around the interpretation and accounting for certain complex financial instrument issued by the Company was not effectively designed or maintained. This material weakness resulted in the restatement of the Company’s balance sheet as of December 7, 2020, and its interim financial statements for the quarters ended December 31, 2020, March 31, 2021 and June 30, 2021. Additionally, this material weakness could result in a misstatement of the warrant liability, Class A ordinary shares and related accounts and disclosures, and presentation of earnings per share that would result in a material misstatement of the financial statements that would not be prevented or detected on a timely basis.
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There werewas no changeschange in our internal control over financial reporting (as such term is defined in Rules
PART II—OTHER INFORMATION
Item 1. | Legal Proceedings |
None.
Item 1A. | Risk Factors. |
There have been no material changes in our risk factors from those included in our Annual Report on Form
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
None. .
Item 3. | Defaults Upon Senior Securities |
None.
Item 4. | Mine Safety Disclosures |
None.
Item 5. | Other Information |
None.
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Item 6. | Exhibits |
101.INS | XBRL Instance Document | ||
101.SCH | XBRL Taxonomy Extension Schema Document | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | ||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | ||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
* | Filed herewith. |
** | Furnished. |
(1) | Previously filed as an exhibit to our Current Report on Form 8-K filed on December 7, 2020 and incorporated by reference herein. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on this 11th9 day of February 2022.
Far Peak Acquisition Corporation | ||
By: | /s/ Thomas W. Farley | |
Name: | Thomas W. Farley | |
Title: | Chief Executive Officer | |
By: | /s/ David W. Bonanno | |
Name: | David W. Bonanno | |
Title: | Chief Financial Officer |
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