☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934☒ March 31,June 30, 2021☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934☐ _______ to _______
incorporation or organization)
Identification No.) (§Large accelerated filer ☐ Accelerated filer ☐ ☒ Smaller reporting company ☒ Emerging growth company ☒ May 24,August 2, 2021,
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March 31, 2021 | December 31, 2020 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 425,453 | $ | 865,903 | ||||
Prepaid expenses | 352,250 | 366,647 | ||||||
Total Current Assets | 777,703 | 1,232,550 | ||||||
Investment held in Trust Account | 320,009,656 | 320,004,846 | ||||||
TOTAL ASSETS | $ | 320,787,359 | $ | 321,327,396 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Accrued expenses | $ | 1,692,954 | $ | 217,395 | ||||
Total current liabilities | 1,692,954 | 217,395 | ||||||
Warrant liabilities | 46,197,334 | 24,562,667 | ||||||
Deferred underwriting fee payable | 11,200,000 | 11,200,000 | ||||||
Total Liabilities | 59,090,288 | 35,980,062 | ||||||
Commitments and Contingencies | ||||||||
Class A ordinary shares subject to possible redemption, 25,669,707 and 28,025,733 shares at March 31, 2021 and December 31, 2020 (at $10.00 per share), respectively | 256,697,070 | 280,257,330 | ||||||
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; 450,000,000 shares authorized; 6,330,293 and 3,974,267 shares issued and outstanding (excluding 25,669,707 and 28,025,733 shares subject to possible redemption) at March 31, 2021 and December 31, 2020, respectively | 633 | 397 | ||||||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 8,000,000 shares issued and outstanding at March 31, 2021 and December 31, 2020 | 800 | 800 | ||||||
Additional paid-in capital | 40,900,782 | 17,340,758 | ||||||
Accumulated deficit | (35,902,214 | ) | (12,341,951 | ) | ||||
Total Shareholders’ Equity | 5,000,001 | 5,000,004 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 320,787,359 | $ | 321,327,396 |
June 30, 2021 | December 31, 2020 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 44,846 | $ | 865,903 | ||||
Prepaid expenses | 284,625 | 366,647 | ||||||
Total Current Assets | 329,471 | 1,232,550 | ||||||
Investment held in Trust Account | 320,014,519 | 320,004,846 | ||||||
TOTAL ASSETS | $ | 320,343,990 | $ | 321,237,396 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Accrued expenses | $ | 2,390,012 | $ | 217,395 | ||||
Total current liabilities | 2,390,012 | 217,395 | ||||||
Warrant liabilities | 46,116,001 | 24,562,667 | ||||||
Deferred underwriting fee payable | 11,200,000 | 11,200,000 | ||||||
Total Liabilities | 59,706,013 | 35,980,062 | ||||||
Commitments and Contingencies | 0 | 0 | ||||||
Class A ordinary shares subject to possible redemption, 32,000,000 and 28,025,733 shares at June 30, 2021 and December 31, 2020 (at $10.00 per share), respectively | 320,000,000 | 280,257,330 | ||||||
Shareholders’ Equity | ||||||||
Preference shares, $0.0001 par value; 1,000,000 shares authorized; 0000none issued or outstanding | 0— | 0— | ||||||
Class A ordinary shares, $0.0001 par value; 450,000,000 shares authorized; 0 and 3,974,267 shares issued and outstanding (excluding 32,000,000 and 28,025,733 shares subject to possible redemption) at June 30, 2021 and December 31, 2020, respectively | 0 | 397 | ||||||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 8,000,000 shares issued and outstanding at June 30, 2021 and December 31, 2020 | 800 | 800 | ||||||
Additional paid-in capital | 0 | 17,340,758 | ||||||
Accumulated deficit | (59,362,823 | ) | (12,341,951 | ) | ||||
Total Shareholders’ Equity | (59,362,023 | ) | 5,000,004 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 320,343,990 | $ | 321,237,396 | ||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2021 | 2021 | |||||||
Operating costs | $ | 1,145,290 | $ | 3,075,696 | ||||
Loss from operations | (1,145,290 | ) | (3,075,696 | ) | ||||
Other income (loss): | ||||||||
Interest earned on investments held in Trust Account | 4,863 | 9,673 | ||||||
Change in fair value of warrant liabilities | 81,333 | (21,553,334 | ) | |||||
Total other income (loss) | 86,196 | (21,543,661 | ) | |||||
Net Loss | $ | (1,059,094 | ) | $ | (24,619,357 | ) | ||
Weighted average shares outstanding of Class A redeemable ordinary shares | 32,000,000 | 32,000,000 | ||||||
Basic and diluted net income per share, Class A redeemable ordinary shares | $ | 0.00 | $ | 0.00 | ||||
Weighted average shares outstanding of Class B non-redeemable ordinary shares | 8,000,000 | 8,000,000 | ||||||
Basic and diluted net loss per share, Class B non-redeemable ordinary shares | $ | (0.13 | ) | $ | (3.08 | ) | ||
Class A Ordinary Shares | Class B Ordinary Shares | Additional Paid in | Accumulated | Total Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
Balance — January 1, 2021 | 3,974,267 | $ | 397 | 8,000,000 | $ | 800 | $ | 17,340,758 | $ | (12,341,951 | ) | $ | 5,000,004 | |||||||||||||||
Change in value Class A ordinary shares subject to possible redemption | 2,356,026 | 236 | — | — | 23,560,024 | — | 23,560,260 | |||||||||||||||||||||
Net loss | — | — | — | — | — | (23,560,263 | ) | (23,560,263 | ) | |||||||||||||||||||
Balance — March 31, 2021 (Unaudited) | 6,330,293 | $ | 633 | 8,000,000 | $ | 800 | $ | 40,900,782 | $ | (35,902,214 | ) | $ | 5,000,001 | |||||||||||||||
Change in value Class A ordinary shares subject to possible redemption | (6,330,293 | ) | (633 | ) | — | — | (40,900,782 | ) | (22,401,515 | ) | (63,302,930 | ) | ||||||||||||||||
Net income (loss) | — | — | — | — | — | (1,059,094 | ) | (1,059,094 | ) | |||||||||||||||||||
Balance — June 30, 2021 (Unaudited) | — | $ | — | 8,000,000 | $ | 800 | $ | — | $ | (59,362,823 | ) | $ | (59,362,023 | ) | ||||||||||||||
THREECASH FLOWS
Formation and operating costs | $ | 1,930,406 | ||
Loss from operations | (1,930,406 | ) | ||
Other income: | ||||
Interest earned on investment held in Trust Account | 4,810 | |||
Change in fair value of warrant liabilities | (21,634,667 | ) | ||
Net loss | $ | (23,560,263 | ) | |
Weighted average shares outstanding of Class A redeemable ordinary shares | 32,000,000 | |||
Basic and diluted net loss per share, Class A redeemable ordinary shares | $ | (0.00 | ) | |
Weighted average shares outstanding of Class B non-redeemable ordinary shares | 8,000,000 | |||
Basic and diluted net loss per share, Class B non-redeemable ordinary shares | $ | (2.95 | ) |
Cash Flows from Operating Activities: | ||||
Net loss | $ | (24,619,357 | ) | |
Adjustments to reconcile net income loss to net cash used in operating activities: | ||||
Change in fair value of warrant liabilities | 21,553,334 | |||
Interest earned on investment held in Trust Account | (9,673 | ) | ||
Changes in operating assets and liabilities: | ||||
Prepaid expenses | 82,022 | |||
Accrued expenses | 2,172,617 | |||
Net cash used in operating activities | (821,057 | ) | ||
Net Change in Cash | (821,057 | ) | ||
Cash — Beginning of period | 865,903 | |||
Cash — End of period | $ | 44,846 | ||
Non-Cash Investing and Financing Activities: | ||||
Change in value of Class A ordinary shares subject to possible redemption | $ | 39,742,670 | ||
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CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
THREE MONTHS ENDED MARCH 31, 2021
(Unaudited)
Class A Ordinary Shares | Class B Ordinary Shares | Additional Paid in | Accumulated | Total Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
Balance — January 1, 2021 | 3,974,267 | $ | 397 | 8,000,000 | $ | 800 | $ | 17,340,758 | $ | (12,341,951 | ) | $ | 5,000,004 | |||||||||||||||
Change in value Class A ordinary shares subject to possible redemption | 2,356,026 | 236 | — | — | 23,560,024 | — | 23,560,260 | |||||||||||||||||||||
Net loss | — | — | — | — | — | (23,560,263 | ) | (23,560,263 | ) | |||||||||||||||||||
Balance — March 31, 2021 | 6,330,293 | $ | 633 | 8,000,000 | $ | 800 | $ | 40,900,782 | $ | (35,902,214 | ) | $ | 5,000,001 |
The accompanying notes are an integral part of these unaudited condensed financial statements.
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VECTOR ACQUISITION CORPORATION
CONDENSED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2021
(Unaudited)
Cash Flows from Operating Activities: | ||||
Net loss | $ | (23,560,263 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Change in fair value of warrant liabilities | 21,634,667 | |||
Interest earned on investment held in Trust Account | (4,810 | ) | ||
Changes in operating assets and liabilities: | ||||
Prepaid expenses | 14,397 | |||
Accrued expenses | 1,475,559 | |||
Net cash used in operating activities | (440,450 | ) | ||
Net Change in Cash | (440,450 | ) | ||
Cash — Beginning | 865,903 | |||
Cash — Ending | $ | 425,453 | ||
Non-Cash Investing and Financing Activities: | ||||
Change in value of Class A ordinary shares subject to possible redemption | $ | 23,560,260 |
The accompanying notes are an integral part of these unaudited condensed financial statements.
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VECTOR ACQUISITION CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31,
Marketable Securities Held in Trust Account
The Company classifies its U.S. Treasury and equivalent securities as held-to-maturity in accordance with ASC Topic 320 “Investments — Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying balance sheets and adjusted for the amortization or accretion of premiums or discounts.
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Three Months Ended March 31, 2021 | ||||
Redeemable Class A Ordinary Shares | ||||
Numerator: Earnings allocable to Redeemable Class A Ordinary Shares | ||||
Interest Income | $ | 4,810 | ||
Net Earnings | $ | 4,810 | ||
Denominator: Weighted Average Redeemable Class A Ordinary Shares | ||||
Redeemable Class A Ordinary Shares, Basic and Diluted | 32,000,000 | |||
Earnings/Basic and Diluted Redeemable Class A Ordinary Shares | $ | 0.00 | ||
Non-Redeemable Class B Ordinary Shares | ||||
Numerator: Net Loss minus Redeemable Net Earnings | ||||
Net Loss | $ | (23,560,263 | ) | |
Redeemable Net Earnings | $ | (4,810 | ) | |
Non-Redeemable Net Loss | $ | (23,565,073 | ) | |
Denominator: Weighted Average Non-Redeemable Class B Ordinary Shares | ||||
Non-Redeemable Class B Ordinary Shares, Basic and Diluted(1) | 8,000,000 | |||
Loss/Basic and Diluted Non-Redeemable Class B Ordinary Shares | $ | (2.95 | ) |
As of March 31,
Three Months Ended June 30, 2021 | Six Months Ended June 30, 2021 | |||||||
Redeemable Class A Ordinary Shares | ||||||||
Numerator: Earnings allocable to Redeemable Class A Ordinary Shares | ||||||||
Interest Income | $ | 4,863 | $ | 9,673 | ||||
Redeemable Net Earnings | $ | 4,863 | $ | 9,673 | ||||
Denominator: Weighted Average Redeemable Class A Ordinary Shares | ||||||||
Redeemable Class A Ordinary Shares, Basic and Diluted | 32,000,000 | 32,000,000 | ||||||
Earnings/Basic and Diluted Redeemable Class A Ordinary Shares | $ | 0.00 | $ | 0.00 | ||||
Non-Redeemable Class B Ordinary Shares | ||||||||
Numerator: Net Loss minus Redeemable Net Earnings | ||||||||
Net Loss | $ | (1,059,094 | ) | $ | (24,619,357 | ) | ||
Less: Redeemable Net Earnings | (4,863 | ) | (9,673 | ) | ||||
Non-Redeemable Net Loss | $ | (1,063,957 | ) | $ | (24,629,030 | ) | ||
Denominator: Weighted Average Non-Redeemable Class B Ordinary Shares | ||||||||
Non-Redeemable Class B Ordinary Shares, Basic and Diluted | 8,000,000 | 8,000,000 | ||||||
Loss/Basic and Diluted Non-Redeemable Class B Ordinary Shares | $ | (0.13 | ) | $ | (3.08 | ) | ||
Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | |
Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |
Level 3: | Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. |
Description | Level | March 31, | December 31, | |||||||
Assets: | ||||||||||
Cash and marketable securities held in Trust Account | 1 | $ | 320,009,656 | $ | 320,004,846 | |||||
Liabilities: | ||||||||||
Warrant Liability – Public Warrants | 1 | $ | 30,293,334 | $ | 16,106,667 | |||||
Warrant Liability – Private Placement Warrants | 2 | $ | 15,904,000 | $ | 8,456,000 |
Description | Level | June 30, 2021 | December 31, 2020 | |||||||||
Assets: | ||||||||||||
Cash and marketable securities held in Trust Account | 1 | $ | 320,014,519 | $ | 320,004,846 | |||||||
Liabilities: | ||||||||||||
Warrant Liabilities – Public Warrants | 1 | $ | 30,240,001 | $ | 16,106,667 | |||||||
Warrant Liabilities – Private Placement Warrants | 2 | $ | 15,876,000 | $ | 8,456,000 |
| Private Placement | Public | Warrant Liabilities | |||||||||
January 1, 2021 | $ | 8,456,000 | $ | 16,106,667 | $ | 24,562,667 | ||||||
Change in valuation inputs or other assumptions | 7,448,000 | 14,186,667 | 21,634,667 | |||||||||
Fair value as of March 31, 2021 | 15,904,000 | 30,293,334 | 46,197,334 |
Private Placement | Public | Warrant Liabilities | ||||||||||
January 1, 2021 | $ | 8,456,000 | $ | 16,106,667 | $ | 24,562,667 | ||||||
Change in fair value | 7,420,000 | 14,133,334 | 21,553,334 | |||||||||
Fair value as of June 30, 2021 | 15,876,000 | 30,240,001 | 46,116,001 | |||||||||
$81,333.
Liabilities
The subsequent measurement of the Public Warrants are classified as Level 1 due to the use of an observable market quote in an active market and the subsequent measurement of the Private Placement Warrants are classified Level 2 due to the use of observable inputs other than Level 1.
The calculation of diluted loss per ordinary share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) Private Placement Warrants since inclusion of such warrants would be anti-dilutive.
We performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the financial statements included in this Quarterly Report on
Management’s Report on Internal Controls Over Financial Reporting
This Quarterly Report on Form 10-Q does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.
Our warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results and thus may have an adverse effect on the market price of our securities.
On April 12, 2021, the SEC Staff issued the SEC Staff Statement. In the SEC Staff Statement, the SEC Staff expressed its 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. As a result of the SEC Staff Statement, we reevaluated the accounting treatment of our 10,666,667 Public Warrants and 5,600,000 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. As a result, included on our condensed balance sheet as of March 31, 2021 contained elsewhere in this Quarterly Report are derivative liabilities related to embedded features contained within our warrants. ASC 815, Derivatives and Hedging, provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of operations. As a result of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly, based on factors, which are outside of our control. Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on our warrants each reporting period and that the amount of such gains or losses could be material. The impact of changes in fair value on earnings may have an adverse effect on the market price of our securities.
We have identified a material weakness in our internal control over financial reporting as of March 31, 2021. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.
Following the issuance of the SEC Staff Statement, after consultation with our independent registered public accounting firm, management identified a material weakness in our internal control over financial reporting related to the accounting for the warrants issued in connection with our Initial Public Offering. Our internal control over financial reporting did not result in the proper accounting classification of the warrants, which, due to its impact on our financial statements, we determined to be a material weakness. 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 our annual or interim financial statements will not be prevented or detected on a timely basis. Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. We continue to evaluate steps to remediate the material weakness. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.
We may face litigation and other risks as a result of the material weakness in our internal control over financial reporting.
As a result of such material weakness, the change in accounting for our warrants, and other matters raised or that may in the future be raised by the SEC, we face potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the material weakness in our internal control over financial reporting and the preparation of our financial statements. As of the date of this report, we have no knowledge of any such litigation or dispute. However, we can provide no assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could have a material adverse effect on our business, results of operations and financial condition or our ability to complete a Business Combination.
* | Filed herewith. |
** | Furnished. |
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VECTOR ACQUISITION CORPORATION | ||||||
Date: | /s/ Alex Slusky | |||||
Name: | Alex Slusky | |||||
Title: | Chief Executive Officer and Chairman | |||||
(Principal Executive Officer) | ||||||
Date: | /s/ David Baylor | |||||
Name: | David Baylor | |||||
Title: | Chief Financial Officer | |||||
(Principal Financial and Accounting Officer) |
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